|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
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
|
||
|
||
|
||
|
||
|
||
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
Item 1
|
||
Item 1A
|
||
Item 6
|
||
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||
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||
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||
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||
|
||
Exhibit 101
|
|
|
Thirteen weeks ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Net sales
|
$
|
1,834.4
|
|
|
$
|
1,804.2
|
|
Costs and expenses:
|
|
|
|
||||
Cost of goods sold
|
1,318.9
|
|
|
1,285.2
|
|
||
Selling, general and administrative expenses
|
257.3
|
|
|
259.6
|
|
||
Pension and postretirement non-service income
|
(10.2
|
)
|
|
(20.6
|
)
|
||
Interest expense, net
|
49.0
|
|
|
36.4
|
|
||
Income from continuing operations before income taxes and equity method investment earnings
|
219.4
|
|
|
243.6
|
|
||
Income tax expense
|
57.4
|
|
|
120.0
|
|
||
Equity method investment earnings
|
16.2
|
|
|
30.0
|
|
||
Income from continuing operations
|
178.2
|
|
|
153.6
|
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
(0.3
|
)
|
||
Net income
|
$
|
178.2
|
|
|
$
|
153.3
|
|
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
0.8
|
|
||
Net income attributable to Conagra Brands, Inc.
|
$
|
178.2
|
|
|
$
|
152.5
|
|
Earnings per share — basic
|
|
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.45
|
|
|
$
|
0.37
|
|
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
—
|
|
||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.45
|
|
|
$
|
0.37
|
|
Earnings per share — diluted
|
|
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.45
|
|
|
$
|
0.36
|
|
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
—
|
|
||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.45
|
|
|
$
|
0.36
|
|
Cash dividends declared per common share
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
|
Thirteen weeks ended
|
||||||||||||||||||
|
August 26, 2018
|
|
August 27, 2017
|
||||||||||||||||
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
||||||||||||
Net income
|
$
|
235.6
|
|
$
|
(57.4
|
)
|
$
|
178.2
|
|
|
$
|
273.4
|
|
$
|
(120.1
|
)
|
$
|
153.3
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized derivative adjustments
|
(57.9
|
)
|
14.5
|
|
(43.4
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Unrealized gains on available-for-sale securities
|
—
|
|
—
|
|
—
|
|
|
0.3
|
|
(0.1
|
)
|
0.2
|
|
||||||
Unrealized currency translation gains (losses)
|
(3.0
|
)
|
—
|
|
(3.0
|
)
|
|
32.6
|
|
(0.1
|
)
|
32.5
|
|
||||||
Pension and post-employment benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized pension and post-employment benefit obligations
|
(0.4
|
)
|
—
|
|
(0.4
|
)
|
|
0.1
|
|
—
|
|
0.1
|
|
||||||
Reclassification for pension and post-employment benefit obligations included in net income
|
(0.2
|
)
|
0.1
|
|
(0.1
|
)
|
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
||||||
Comprehensive income
|
174.1
|
|
(42.8
|
)
|
131.3
|
|
|
306.3
|
|
(120.3
|
)
|
186.0
|
|
||||||
Comprehensive income (loss) attributable to noncontrolling interests
|
(2.1
|
)
|
(0.2
|
)
|
(2.3
|
)
|
|
2.0
|
|
(0.2
|
)
|
1.8
|
|
||||||
Comprehensive income attributable to Conagra Brands, Inc.
|
$
|
176.2
|
|
$
|
(42.6
|
)
|
$
|
133.6
|
|
|
$
|
304.3
|
|
$
|
(120.1
|
)
|
$
|
184.2
|
|
|
August 26,
2018 |
|
May 27,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
74.8
|
|
|
$
|
128.0
|
|
Receivables, less allowance for doubtful accounts of $1.7 and $2.0
|
599.2
|
|
|
582.6
|
|
||
Inventories
|
1,108.5
|
|
|
997.1
|
|
||
Prepaid expenses and other current assets
|
224.7
|
|
|
186.8
|
|
||
Current assets held for sale
|
39.3
|
|
|
44.4
|
|
||
Total current assets
|
2,046.5
|
|
|
1,938.9
|
|
||
Property, plant and equipment
|
4,111.8
|
|
|
4,062.2
|
|
||
Less accumulated depreciation
|
(2,475.5
|
)
|
|
(2,442.1
|
)
|
||
Property, plant and equipment, net
|
1,636.3
|
|
|
1,620.1
|
|
||
Goodwill
|
4,499.4
|
|
|
4,502.5
|
|
||
Brands, trademarks and other intangibles, net
|
1,275.2
|
|
|
1,284.5
|
|
||
Other assets
|
915.9
|
|
|
906.3
|
|
||
Noncurrent assets held for sale
|
111.7
|
|
|
137.2
|
|
||
|
$
|
10,485.0
|
|
|
$
|
10,389.5
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable
|
$
|
304.1
|
|
|
$
|
277.3
|
|
Current installments of long-term debt
|
307.5
|
|
|
307.0
|
|
||
Accounts payable
|
984.0
|
|
|
915.1
|
|
||
Accrued payroll
|
93.9
|
|
|
163.9
|
|
||
Other accrued liabilities
|
743.9
|
|
|
672.9
|
|
||
Total current liabilities
|
2,433.4
|
|
|
2,336.2
|
|
||
Senior long-term debt, excluding current installments
|
3,037.8
|
|
|
3,035.6
|
|
||
Subordinated debt
|
195.9
|
|
|
195.9
|
|
||
Other noncurrent liabilities
|
1,002.9
|
|
|
1,065.2
|
|
||
Total liabilities
|
6,670.0
|
|
|
6,632.9
|
|
||
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
|
1,165.6
|
|
|
1,180.0
|
|
||
Retained earnings
|
4,841.5
|
|
|
4,744.9
|
|
||
Accumulated other comprehensive loss
|
(155.7
|
)
|
|
(110.5
|
)
|
||
Less treasury stock, at cost, 176,167,229 and 177,078,193 common shares
|
(4,954.6
|
)
|
|
(4,977.9
|
)
|
||
Total Conagra Brands, Inc. common stockholders' equity
|
3,736.5
|
|
|
3,676.2
|
|
||
Noncontrolling interests
|
78.5
|
|
|
80.4
|
|
||
Total stockholders' equity
|
3,815.0
|
|
|
3,756.6
|
|
||
|
$
|
10,485.0
|
|
|
$
|
10,389.5
|
|
|
Thirteen Weeks Ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
178.2
|
|
|
$
|
153.3
|
|
Loss from discontinued operations
|
—
|
|
|
(0.3
|
)
|
||
Income from continuing operations
|
178.2
|
|
|
153.6
|
|
||
Adjustments to reconcile income from continuing operations to net cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
63.7
|
|
|
64.7
|
|
||
Asset impairment charges
|
0.5
|
|
|
6.0
|
|
||
Gain on divestiture
|
(13.3
|
)
|
|
—
|
|
||
Earnings of affiliates in excess of distributions
|
(3.0
|
)
|
|
(30.0
|
)
|
||
Stock-settled share-based payments expense
|
11.4
|
|
|
8.2
|
|
||
Contributions to pension plans
|
(4.2
|
)
|
|
(3.8
|
)
|
||
Pension benefit
|
(6.9
|
)
|
|
(12.6
|
)
|
||
Other items
|
7.4
|
|
|
5.5
|
|
||
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
|
|
|
|
||||
Receivables
|
(18.9
|
)
|
|
(13.7
|
)
|
||
Inventories
|
(115.1
|
)
|
|
(138.4
|
)
|
||
Deferred income taxes and income taxes payable, net
|
49.4
|
|
|
132.1
|
|
||
Prepaid expenses and other current assets
|
(24.1
|
)
|
|
(6.5
|
)
|
||
Accounts payable
|
50.4
|
|
|
67.8
|
|
||
Accrued payroll
|
(70.0
|
)
|
|
(72.1
|
)
|
||
Other accrued liabilities
|
(10.8
|
)
|
|
(19.3
|
)
|
||
Net cash flows from operating activities — continuing operations
|
94.7
|
|
|
141.5
|
|
||
Net cash flows from operating activities — discontinued operations
|
—
|
|
|
(5.5
|
)
|
||
Net cash flows from operating activities
|
94.7
|
|
|
136.0
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(86.1
|
)
|
|
(42.6
|
)
|
||
Sale of property, plant and equipment
|
17.2
|
|
|
4.0
|
|
||
Proceeds from divestiture
|
30.3
|
|
|
—
|
|
||
Other items
|
0.1
|
|
|
—
|
|
||
Net cash flows from investing activities
|
(38.5
|
)
|
|
(38.6
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net short-term borrowings
|
26.8
|
|
|
295.3
|
|
||
Bridge financing fees and other
|
(35.1
|
)
|
|
—
|
|
||
Payment of intangible asset financing arrangement
|
(14.0
|
)
|
|
(14.4
|
)
|
||
Repurchase of Conagra Brands, Inc. common shares
|
—
|
|
|
(300.0
|
)
|
||
Cash dividends paid
|
(83.0
|
)
|
|
(83.3
|
)
|
||
Exercise of stock options and issuance of other stock awards, including tax withholdings
|
(2.4
|
)
|
|
(2.4
|
)
|
||
Other items
|
(1.9
|
)
|
|
(2.3
|
)
|
||
Net cash flows from financing activities
|
(109.6
|
)
|
|
(107.1
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
0.2
|
|
|
9.7
|
|
||
Net change in cash and cash equivalents and restricted cash
|
(53.2
|
)
|
|
—
|
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
129.0
|
|
|
252.4
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
75.8
|
|
|
$
|
252.4
|
|
|
August 26, 2018
|
|
May 27, 2018
|
||||
Currency translation losses, net of reclassification adjustments
|
$
|
(95.4
|
)
|
|
$
|
(94.7
|
)
|
Derivative adjustments, net of reclassification adjustments
|
(42.4
|
)
|
|
1.0
|
|
||
Unrealized gains on available-for-sale securities
|
—
|
|
|
0.6
|
|
||
Pension and post-employment benefit obligations, net of reclassification adjustments
|
(17.9
|
)
|
|
(17.4
|
)
|
||
Accumulated other comprehensive loss
1
|
$
|
(155.7
|
)
|
|
$
|
(110.5
|
)
|
|
|
Thirteen weeks ended
|
|
Affected Line Item in the Condensed Consolidated Statement of Earnings
1
|
||||||
|
|
August 26, 2018
|
|
August 27, 2017
|
|
|
||||
Pension and postretirement liabilities:
|
|
|
|
|
|
|
||||
Net prior service cost (benefit)
|
|
$
|
0.2
|
|
|
$
|
(0.1
|
)
|
|
Pension and postretirement non-service income
|
Net actuarial gain
|
|
(0.4
|
)
|
|
—
|
|
|
Pension and postretirement non-service income
|
||
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
Total before tax
|
||
|
|
0.1
|
|
|
—
|
|
|
Income tax expense
|
||
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
Net of tax
|
|
As Reported
|
|
Adjustments
|
|
Balances without Adoption of Topic 606
|
||||||
Current assets
|
|
|
|
|
|
||||||
Receivables, less allowance for doubtful accounts
|
$
|
599.2
|
|
|
$
|
7.9
|
|
|
$
|
607.1
|
|
Inventories
|
1,108.5
|
|
|
(3.2
|
)
|
|
1,105.3
|
|
|||
Prepaid expenses and other current assets
|
224.7
|
|
|
(22.5
|
)
|
|
202.2
|
|
|||
Current liabilities
|
|
|
|
|
|
||||||
Other accrued liabilities
|
743.9
|
|
|
(1.1
|
)
|
|
742.8
|
|
|||
Other noncurrent liabilities
|
1,002.9
|
|
|
(4.2
|
)
|
|
998.7
|
|
|
Thirteen weeks ended August 26, 2018
|
||||||||||
|
As Reported
|
|
Adjustments
|
|
Balances without Adoption of Topic 606
|
||||||
Net sales
|
$
|
1,834.4
|
|
|
$
|
(9.3
|
)
|
|
$
|
1,825.1
|
|
Cost of goods sold
|
1,318.9
|
|
|
6.8
|
|
|
1,325.7
|
|
|||
Income from continuing operations before income taxes and equity method investment earnings
|
219.4
|
|
|
(16.1
|
)
|
|
203.3
|
|
|
Thirteen weeks ended
|
||
|
August 27, 2017
|
||
Reclassified from Selling, general and administrative expense
|
$
|
20.6
|
|
Reclassified to Pension and postretirement non-service income
|
$
|
20.6
|
|
|
May 27, 2018
|
||
Current assets
|
$
|
6.1
|
|
Noncurrent assets (including goodwill of $5.8 million)
|
11.5
|
|
|
August 26, 2018
|
|
May 27, 2018
|
||||
Current assets
|
$
|
39.3
|
|
|
$
|
37.7
|
|
Noncurrent assets (including goodwill of $74.5 million)
|
101.3
|
|
|
101.0
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Multi-employer pension costs
|
$
|
32.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32.5
|
|
Accelerated depreciation
|
37.2
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
57.0
|
|
||||||
Other cost of goods sold
|
11.6
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.7
|
|
||||||
Total cost of goods sold
|
81.3
|
|
|
20.7
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
103.2
|
|
||||||
Severance and related costs, net
|
26.3
|
|
|
10.3
|
|
|
3.9
|
|
|
7.9
|
|
|
102.1
|
|
|
150.5
|
|
||||||
Fixed asset impairment (net of gains on disposal)
|
5.2
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|
23.3
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
|
4.1
|
|
||||||
Contract/lease termination expenses
|
1.0
|
|
|
0.6
|
|
|
0.9
|
|
|
—
|
|
|
85.0
|
|
|
87.5
|
|
||||||
Consulting/professional fees
|
1.0
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
53.8
|
|
|
55.3
|
|
||||||
Other selling, general and administrative expenses
|
16.3
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
23.8
|
|
|
43.6
|
|
||||||
Total selling, general and administrative expenses
|
49.8
|
|
|
21.7
|
|
|
4.9
|
|
|
7.9
|
|
|
280.0
|
|
|
364.3
|
|
||||||
Total
|
$
|
131.1
|
|
|
$
|
42.4
|
|
|
$
|
4.9
|
|
|
$
|
7.9
|
|
|
$
|
281.2
|
|
|
$
|
467.5
|
|
Pension and postretirement non-service income
|
|
|
|
|
|
|
|
|
|
|
2.3
|
|
|||||||||||
Consolidated total
|
|
|
|
|
|
|
|
|
|
|
$
|
469.8
|
|
|
Grocery & Snacks
|
|
International
|
|
Corporate
|
|
Total
|
||||||||
Multi-employer pension costs
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
Accelerated depreciation
|
1.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
||||
Other cost of goods sold
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||
Total cost of goods sold
|
2.3
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
||||
Severance and related costs, net
|
(1.3
|
)
|
|
0.2
|
|
|
(0.6
|
)
|
|
(1.7
|
)
|
||||
Fixed asset impairment (net of gains on disposal)
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
||||
Contract/lease termination expenses
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||
Consulting/professional fees
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||
Other selling, general and administrative expenses
|
—
|
|
|
—
|
|
|
0.9
|
|
|
0.9
|
|
||||
Total selling, general and administrative expenses
|
(2.2
|
)
|
|
0.2
|
|
|
0.9
|
|
|
(1.1
|
)
|
||||
Total
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.9
|
|
|
$
|
1.2
|
|
Pension and postretirement non-service income
|
|
|
|
|
|
|
(0.6
|
)
|
|||||||
Consolidated total
|
|
|
|
|
|
|
$
|
0.6
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Multi-employer pension costs
|
$
|
32.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32.5
|
|
Accelerated depreciation
|
34.4
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
54.2
|
|
||||||
Other cost of goods sold
|
11.0
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.1
|
|
||||||
Total cost of goods sold
|
77.9
|
|
|
20.7
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
99.8
|
|
||||||
Severance and related costs, net
|
25.2
|
|
|
10.3
|
|
|
3.9
|
|
|
7.9
|
|
|
101.3
|
|
|
148.6
|
|
||||||
Fixed asset impairment (net of gains on disposal)
|
5.2
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|
23.3
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
|
4.1
|
|
||||||
Contract/lease termination expenses
|
1.0
|
|
|
0.6
|
|
|
0.9
|
|
|
—
|
|
|
84.8
|
|
|
87.3
|
|
||||||
Consulting/professional fees
|
1.0
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
52.3
|
|
|
53.8
|
|
||||||
Other selling, general and administrative expenses
|
15.8
|
|
|
3.3
|
|
|
—
|
|
|
—
|
|
|
22.6
|
|
|
41.7
|
|
||||||
Total selling, general and administrative expenses
|
48.2
|
|
|
21.5
|
|
|
4.9
|
|
|
7.9
|
|
|
276.3
|
|
|
358.8
|
|
||||||
Total
|
$
|
126.1
|
|
|
$
|
42.2
|
|
|
$
|
4.9
|
|
|
$
|
7.9
|
|
|
$
|
277.5
|
|
|
$
|
458.6
|
|
Pension and postretirement non-service income
|
|
|
|
|
|
|
|
|
|
|
2.3
|
|
|||||||||||
Consolidated total
|
|
|
|
|
|
|
|
|
|
|
$
|
460.9
|
|
|
Balance at May 27, 2018
|
|
Costs Incurred
and Charged
to Expense
|
|
Costs Paid
or Otherwise Settled
|
|
Changes in Estimates
|
|
Balance at August 26, 2018
|
||||||||||
Multi-employer pension costs
|
$
|
32.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
32.5
|
|
Severance and related costs
|
6.3
|
|
|
—
|
|
|
(3.6
|
)
|
|
(1.7
|
)
|
|
1.0
|
|
|||||
Consulting/professional fees
|
0.1
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|||||
Contract/lease termination
|
4.9
|
|
|
—
|
|
|
(1.6
|
)
|
|
0.5
|
|
|
3.8
|
|
|||||
Other costs
|
0.2
|
|
|
1.6
|
|
|
(1.1
|
)
|
|
—
|
|
|
0.7
|
|
|||||
Total
|
$
|
43.8
|
|
|
$
|
1.7
|
|
|
$
|
(6.5
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
38.0
|
|
|
Thirteen weeks ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Long-term debt
|
$
|
42.9
|
|
|
$
|
38.1
|
|
Short-term debt
|
7.5
|
|
|
0.4
|
|
||
Interest income
|
(0.6
|
)
|
|
(0.9
|
)
|
||
Interest capitalized
|
(0.8
|
)
|
|
(1.2
|
)
|
||
|
$
|
49.0
|
|
|
$
|
36.4
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Total
|
||||||||||
Balance as of May 27, 2018
|
$
|
2,592.8
|
|
|
$
|
1,095.7
|
|
|
$
|
242.9
|
|
|
$
|
571.1
|
|
|
$
|
4,502.5
|
|
Purchase accounting adjustments
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
Currency translation
|
—
|
|
|
(0.1
|
)
|
|
(2.9
|
)
|
|
—
|
|
|
(3.0
|
)
|
|||||
Balance as of August 26, 2018
|
$
|
2,592.7
|
|
|
$
|
1,095.6
|
|
|
$
|
240.0
|
|
|
$
|
571.1
|
|
|
$
|
4,499.4
|
|
|
August 26, 2018
|
|
May 27, 2018
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Non-amortizing intangible assets
|
$
|
917.3
|
|
|
$
|
—
|
|
|
$
|
918.3
|
|
|
$
|
—
|
|
Amortizing intangible assets
|
579.3
|
|
|
221.4
|
|
|
579.4
|
|
|
213.2
|
|
||||
|
$
|
1,496.6
|
|
|
$
|
221.4
|
|
|
$
|
1,497.7
|
|
|
$
|
213.2
|
|
|
August 26,
2018 |
|
May 27,
2018 |
||||
Prepaid expenses and other current assets
|
$
|
4.4
|
|
|
$
|
4.4
|
|
Other accrued liabilities
|
58.6
|
|
|
0.1
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Interest rate swap contracts
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
Other accrued liabilities
|
|
$
|
58.1
|
|
Total derivatives designated as hedging instruments
|
|
$
|
—
|
|
|
|
|
$
|
58.1
|
|
|
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
1.0
|
|
|
Other accrued liabilities
|
|
$
|
4.0
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
1.8
|
|
|
Other accrued liabilities
|
|
0.5
|
|
||
Total derivatives not designated as hedging instruments
|
|
$
|
2.8
|
|
|
|
|
$
|
4.5
|
|
|
Total derivatives
|
|
|
$
|
2.8
|
|
|
|
|
$
|
62.6
|
|
|
Thirteen weeks ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Net income attributable to Conagra Brands, Inc. common stockholders:
|
|
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
178.2
|
|
|
$
|
152.8
|
|
Loss from discontinued operations, net of tax, attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
(0.3
|
)
|
||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
178.2
|
|
|
$
|
152.5
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic weighted average shares outstanding
|
391.7
|
|
|
415.1
|
|
||
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities
|
2.4
|
|
|
4.1
|
|
||
Diluted weighted average shares outstanding
|
394.1
|
|
|
419.2
|
|
|
August 26,
2018 |
|
May 27,
2018 |
||||
Raw materials and packaging
|
$
|
189.4
|
|
|
$
|
206.2
|
|
Work in process
|
94.8
|
|
|
92.4
|
|
||
Finished goods
|
776.6
|
|
|
651.1
|
|
||
Supplies and other
|
47.7
|
|
|
47.4
|
|
||
Total
|
$
|
1,108.5
|
|
|
$
|
997.1
|
|
•
|
the impact of the Tax Act, including a reduction in the statutory federal income tax rate to 21%, partially offset by the repeal of the deduction for domestic manufacturing activities, changes in deductibility of executive compensation and the effect of the GILTI inclusion,
|
•
|
the impact of foreign restructuring resulting in a benefit related to undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made,
|
•
|
additional tax expense on the repatriation of certain foreign earnings,
|
•
|
additional tax expense on non-deductible facilitative costs associated with the planned acquisition of Pinnacle, and
|
•
|
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 related to the repatriation of cash from foreign subsidiaries,
|
•
|
additional tax expense related to undistributed foreign earnings for which the indefinite reinvestment assertion was no longer made, and
|
•
|
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.
|
|
Pension Benefits
|
||||||
|
Thirteen weeks ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Service cost
|
$
|
2.7
|
|
|
$
|
12.7
|
|
Interest cost
|
32.0
|
|
|
28.2
|
|
||
Expected return on plan assets
|
(42.3
|
)
|
|
(54.2
|
)
|
||
Amortization of prior service cost
|
0.7
|
|
|
0.7
|
|
||
Benefit cost (benefit) — Company plans
|
(6.9
|
)
|
|
(12.6
|
)
|
||
Pension benefit cost — multi-employer plans
|
1.7
|
|
|
1.5
|
|
||
Total benefit cost (benefit)
|
$
|
(5.2
|
)
|
|
$
|
(11.1
|
)
|
|
Postretirement Benefits
|
||||||
|
Thirteen weeks ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Service cost
|
$
|
0.1
|
|
|
$
|
—
|
|
Interest cost
|
0.9
|
|
|
0.9
|
|
||
Amortization of prior service benefit
|
(0.5
|
)
|
|
(0.8
|
)
|
||
Recognized net actuarial gain
|
(0.4
|
)
|
|
—
|
|
||
Curtailment gain
|
(0.6
|
)
|
|
—
|
|
||
Total cost (benefit)
|
$
|
(0.5
|
)
|
|
$
|
0.1
|
|
|
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 27, 2018
|
567.9
|
|
|
$
|
2,839.7
|
|
|
$
|
1,180.0
|
|
|
$
|
4,744.9
|
|
|
$
|
(110.5
|
)
|
|
$
|
(4,977.9
|
)
|
|
$
|
80.4
|
|
|
$
|
3,756.6
|
|
Stock option and incentive plans
|
|
|
|
|
(14.1
|
)
|
|
0.5
|
|
|
|
|
23.3
|
|
|
0.1
|
|
|
9.8
|
|
||||||||||
Adoption of ASU 2016-01
|
|
|
|
|
|
|
0.6
|
|
|
(0.6
|
)
|
|
|
|
|
|
—
|
|
||||||||||||
Adoption of ASU 2014-09
|
|
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
0.5
|
|
|||||||||||||
Currency translation adjustment, net
|
|
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
|
(2.3
|
)
|
|
(3.0
|
)
|
||||||||||||
Derivative adjustment, net
|
|
|
|
|
|
|
|
|
(43.4
|
)
|
|
|
|
|
|
(43.4
|
)
|
|||||||||||||
Activities of noncontrolling interests
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
0.3
|
|
|
—
|
|
||||||||||||
Pension and postretirement healthcare benefits
|
|
|
|
|
|
|
|
|
(0.5
|
)
|
|
|
|
|
|
(0.5
|
)
|
|||||||||||||
Dividends declared on common stock; $0.2125 per share
|
|
|
|
|
|
|
(83.2
|
)
|
|
|
|
|
|
|
|
(83.2
|
)
|
|||||||||||||
Net income attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
178.2
|
|
|
|
|
|
|
|
|
178.2
|
|
|||||||||||||
Balance at August 26, 2018
|
567.9
|
|
|
$
|
2,839.7
|
|
|
$
|
1,165.6
|
|
|
$
|
4,841.5
|
|
|
$
|
(155.7
|
)
|
|
$
|
(4,954.6
|
)
|
|
$
|
78.5
|
|
|
$
|
3,815.0
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
2.6
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
4.4
|
|
Equity securities
|
5.1
|
|
|
—
|
|
|
—
|
|
|
5.1
|
|
||||
Total assets
|
$
|
7.7
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
9.5
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
58.6
|
|
|
$
|
—
|
|
|
$
|
58.6
|
|
Deferred compensation liabilities
|
56.4
|
|
|
—
|
|
|
—
|
|
|
56.4
|
|
||||
Total liabilities
|
$
|
56.4
|
|
|
$
|
58.6
|
|
|
$
|
—
|
|
|
$
|
115.0
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
1.7
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
4.4
|
|
Equity securities
|
4.8
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
||||
Total assets
|
$
|
6.5
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
9.2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Deferred compensation liabilities
|
51.6
|
|
|
—
|
|
|
—
|
|
|
51.6
|
|
||||
Total liabilities
|
$
|
51.6
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
51.7
|
|
|
Thirteen Weeks Ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Net sales
|
|
|
|
||||
Grocery & Snacks
|
$
|
771.1
|
|
|
$
|
745.8
|
|
Refrigerated & Frozen
|
635.2
|
|
|
615.7
|
|
||
International
|
193.8
|
|
|
190.9
|
|
||
Foodservice
|
234.3
|
|
|
251.8
|
|
||
Total net sales
|
$
|
1,834.4
|
|
|
$
|
1,804.2
|
|
Operating profit
|
|
|
|
||||
Grocery & Snacks
|
$
|
178.7
|
|
|
$
|
176.2
|
|
Refrigerated & Frozen
|
95.5
|
|
|
101.9
|
|
||
International
|
37.3
|
|
|
18.9
|
|
||
Foodservice
|
27.5
|
|
|
23.2
|
|
||
Total operating profit
|
$
|
339.0
|
|
|
$
|
320.2
|
|
Equity method investment earnings
|
16.2
|
|
|
30.0
|
|
||
General corporate expense
|
80.8
|
|
|
60.8
|
|
||
Pension and postretirement non-service income
|
(10.2
|
)
|
|
(20.6
|
)
|
||
Interest expense, net
|
49.0
|
|
|
36.4
|
|
||
Income tax expense
|
57.4
|
|
|
120.0
|
|
||
Income from continuing operations
|
$
|
178.2
|
|
|
$
|
153.6
|
|
Less: Net income attributable to noncontrolling interests of continuing operations
|
—
|
|
|
0.8
|
|
||
Income from continuing operations attributable to Conagra Brands, Inc.
|
$
|
178.2
|
|
|
$
|
152.8
|
|
|
Thirteen Weeks Ended
|
||||||
|
August 26,
2018 |
|
August 27,
2017 |
||||
Gross derivative losses incurred
|
$
|
(6.5
|
)
|
|
$
|
(7.4
|
)
|
Less: Net derivative losses allocated to reporting segments
|
(0.1
|
)
|
|
(1.4
|
)
|
||
Net derivative losses recognized in general corporate expenses
|
$
|
(6.4
|
)
|
|
$
|
(6.0
|
)
|
Net derivative losses allocated to Grocery & Snacks
|
$
|
(0.2
|
)
|
|
$
|
(0.6
|
)
|
Net derivative losses allocated to Refrigerated & Frozen
|
(0.1
|
)
|
|
—
|
|
||
Net derivative gains (losses) allocated to International
|
0.3
|
|
|
(0.7
|
)
|
||
Net derivative losses allocated to Foodservice
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Net derivative losses included in segment operating profit
|
$
|
(0.1
|
)
|
|
$
|
(1.4
|
)
|
•
|
charges totaling $16.6 million ($14.3 million after-tax) associated with costs incurred for acquisitions and planned divestitures,
|
•
|
charges totaling $4.3 million ($3.2 million after-tax) associated with costs incurred for integration activities related to the planned acquisition of Pinnacle,
|
•
|
a gain of $13.3 million ($9.7 million after-tax) from the sale of the
Del Monte
®
Canada business, and
|
•
|
an income tax benefit of $4.8 million associated with a release of a Mexican tax reserve.
|
•
|
charges totaling $11.4 million ($7.3 million after-tax) in connection with our SCAE Plan (as defined below) and
|
•
|
an income tax charge of $27.8 million associated with the planned repatriation of cash from foreign subsidiaries and the tax expense related to the earnings of foreign subsidiaries previously deemed to be permanently invested.
|
|
Thirteen Weeks Ended
|
||||||
($ in millions)
|
August 26,
2018 |
|
August 27,
2017 |
||||
Gross derivative losses incurred
|
$
|
(6.5
|
)
|
|
$
|
(7.4
|
)
|
Less: Net derivative losses allocated to reporting segments
|
(0.1
|
)
|
|
(1.4
|
)
|
||
Net derivative losses recognized in general corporate expenses
|
$
|
(6.4
|
)
|
|
$
|
(6.0
|
)
|
Net derivative losses allocated to Grocery & Snacks
|
$
|
(0.2
|
)
|
|
$
|
(0.6
|
)
|
Net derivative losses allocated to Refrigerated & Frozen
|
(0.1
|
)
|
|
—
|
|
||
Net derivative gains (losses) allocated to International
|
0.3
|
|
|
(0.7
|
)
|
||
Net derivative losses allocated to Foodservice
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Net derivative losses included in segment operating profit
|
$
|
(0.1
|
)
|
|
$
|
(1.4
|
)
|
|
Net Sales
|
|||||||||
($ in millions)
|
Thirteen Weeks Ended
|
|||||||||
Reporting Segment
|
August 26,
2018 |
|
August 27,
2017 |
|
% Inc
(Dec)
|
|||||
Grocery & Snacks
|
$
|
771.1
|
|
|
$
|
745.8
|
|
|
3
|
%
|
Refrigerated & Frozen
|
635.2
|
|
|
615.7
|
|
|
3
|
%
|
||
International
|
193.8
|
|
|
190.9
|
|
|
2
|
%
|
||
Foodservice
|
234.3
|
|
|
251.8
|
|
|
(7
|
)%
|
||
Total
|
$
|
1,834.4
|
|
|
$
|
1,804.2
|
|
|
2
|
%
|
•
|
a gain of $13.3 million related to the sale of our
Del Monte
®
processed fruit and vegetable business in Canada,
|
•
|
expenses of $11.0 million associated with costs incurred for acquisitions and planned divestitures,
|
•
|
expenses of $4.3 million related to costs associated with preparing for the integration of Pinnacle, and
|
•
|
income of $1.1 million in connection with our SCAE Plan.
|
•
|
a decrease in advertising and promotion spending of $12.2 million,
|
•
|
an increase in share-based payment expense of $6.0 million,
|
•
|
an increase in salary and wage expense of $4.9 million, and
|
•
|
a decrease in transition services agreement income of $3.2 million.
|
•
|
expenses of $9.1 million in connection with our SCAE plan and
|
•
|
expenses of $0.8 million associated with costs incurred for acquisitions and planned divestitures.
|
|
Operating Profit
|
|||||||||
($ in millions)
|
Thirteen Weeks Ended
|
|||||||||
Reporting Segment
|
August 26,
2018 |
|
August 27,
2017 |
|
% Inc
(Dec)
|
|||||
Grocery & Snacks
|
$
|
178.7
|
|
|
$
|
176.2
|
|
|
2
|
%
|
Refrigerated & Frozen
|
95.5
|
|
|
101.9
|
|
|
(6
|
)%
|
||
International
|
37.3
|
|
|
18.9
|
|
|
97
|
%
|
||
Foodservice
|
27.5
|
|
|
23.2
|
|
|
19
|
%
|
•
|
the impact of the Tax Act, including a reduction in the statutory federal income tax rate to 21%, partially offset by the repeal of the deduction for domestic manufacturing activities, changes in deductibility of executive compensation and the effect of the global intangible low-tax income inclusion,
|
•
|
the impact of foreign restructuring resulting in a benefit related to undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made,
|
•
|
additional tax expense on the repatriation of certain foreign earnings,
|
•
|
additional tax expense on non-deductible facilitative costs associated with the planned acquisition of Pinnacle, and
|
•
|
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 related to the repatriation of cash from foreign subsidiaries,
|
•
|
additional tax expense related to undistributed foreign earnings for which the indefinite reinvestment assertion was no longer made, and
|
•
|
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.
|
|
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
|
$
|
3,431.6
|
|
|
$
|
300.0
|
|
|
$
|
822.6
|
|
|
$
|
1,087.0
|
|
|
$
|
1,222.0
|
|
Capital lease obligations
|
96.0
|
|
|
7.5
|
|
|
14.8
|
|
|
14.5
|
|
|
59.2
|
|
|||||
Operating lease obligations
|
206.4
|
|
|
35.2
|
|
|
51.0
|
|
|
36.9
|
|
|
83.3
|
|
|||||
Purchase obligations
1
and other contracts
|
1,060.5
|
|
|
931.6
|
|
|
97.0
|
|
|
30.6
|
|
|
1.3
|
|
|||||
Notes payable
|
304.1
|
|
|
304.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
5,098.6
|
|
|
$
|
1,578.4
|
|
|
$
|
985.4
|
|
|
$
|
1,169.0
|
|
|
$
|
1,365.8
|
|
|
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
|
$
|
0.7
|
|
|
$
|
0.5
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other commitments
|
5.0
|
|
|
3.7
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
5.7
|
|
|
$
|
4.2
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Impact
|
||||||
In Millions
|
Average
During Thirteen Weeks
Ended August 26, 2018
|
|
Average
During Thirteen Weeks
Ended August 27, 2017
|
||||
Energy commodities
|
$
|
0.1
|
|
|
$
|
0.4
|
|
Agriculture commodities
|
0.7
|
|
|
0.5
|
|
||
Foreign exchange
|
0.8
|
|
|
0.7
|
|
|
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
|
1.
|
Award Grant.
Conagra hereby grants Restricted Stock Units ("RSUs", and each such unit an “RSU”) to the Participant under the ConAgra Foods, Inc. 2014 Stock Plan (the “Plan”), as follows, effective as of the Date of Grant set forth below:
|
(i)
|
Leaves of Absence
. The employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or, if longer, so long as the Participant retains a right to reemployment with the Company under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Company. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six‑month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 12‑month period of absence shall be substituted for such six-month period.
|
(ii)
|
Dual Status
. Generally, if a Participant performs services both as an employee and an independent contractor, such Participant must separate from service both as an employee and as an independent contractor, pursuant to standards set forth in Treasury Regulations, to be treated as having a separation from service. However, if a Participant provides services to the Company as an employee and as a member of the Board, and if any plan in which such person participates as a Board member is not aggregated with this Agreement pursuant to Treasury Regulation Section 1.409A-1(c)(2)(ii), then the services provided as a director are not taken into account in determining whether the Participant has a separation from service as an employee for purposes of this Agreement.
|
(iii)
|
Termination of Employment
. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Company and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an employee or as an independent contractor except as provided in (ii) above) would permanently decrease to no more than 20% of the average level of bona fide services performed (whether as an employee or an independent contractor, except as provided in (ii) above) over the immediately preceding 36‑month period (or the full period of services to the Company if the Participant has been providing services to the Company less than 36 months). For periods during which a Participant is on a paid bona fide leave of absence and has not otherwise terminated employment as described above, for purposes of this paragraph (iii), the Participant is treated as providing bona fide services at a level equal to the level of services that the Participant would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which a Participant is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this paragraph (iii) (including for purposes of determining the applicable 36‑month (or shorter) period).
|
(i)
|
by reason of death, then all unvested RSUs evidenced by this Agreement shall, to the extent such RSUs have not previously been forfeited, become 100% Vested.
|
(ii)
|
by reason of Normal Retirement, then all unvested RSUs evidenced by this Agreement shall, to the extent such RSUs have not previously been forfeited, [
NON-CEO
: become 100% Vested] [
CEO
: continue to Vest following such Normal Retirement to the same extent that the unvested RSUs would Vest had the Participant remained Continuously Employed by the Company through the Vesting Date].
|
(iii)
|
by reason of Early Retirement, [
NON-CEO
: Disability, involuntary termination that results in severance or supplemental unemployment payments from the Company or Divestiture, then the Participant shall Vest in a pro rata portion of the RSUs] [
CEO
: then a pro rata portion of the RSUs shall continue to Vest following such Early Retirement on the same schedule that the RSUs would Vest had the Participant remained Continuously Employed by the Company through the Vesting Date, with such pro rata portion] determined by multiplying the number of RSUs evidenced by this Agreement, to the extent not previously Vested or forfeited, by a fraction, the numerator of which is the total number of calendar days during which the Participant was employed by the Company during the period beginning on the Date of Grant and ending on the Participant’s Separation from Service and the denominator of which is the total number of calendar days beginning on the Date of Grant and ending on the final Vesting Date, rounded to the nearest whole number of RSUs.
|
(iv)
|
for Cause prior to the final Vesting Date, then all RSUs, whether Vested or unvested prior to the final Vesting Date, shall be immediately forfeited without further consideration to the Participant.
|
(i)
|
If a Change of Control occurs prior to the final Vesting Date, and the Participant has been in Continuous Employment between the Date of Grant and the date of such Change of Control, then all unvested RSUs evidenced by this Agreement shall become 100% Vested, except (A) to the extent such RSUs have previously been forfeited, or (B) to the extent that a Replacement Award is provided to the Participant to replace, continue or adjust the outstanding RSUs (the “Replaced Award”). If the Participant’s employment with the Company (or any of its successors after the Change of Control) (as applicable, the “Successor Company”) is terminated by the Participant for Good Reason or by the Successor Company other than for Cause, in each case within a period of two years after the Change of Control but prior to the final Vesting Date, to the extent that the Replacement Award has not previously been Vested or forfeited, the Replacement Award shall become 100% Vested (and become entitled to settlement as specified in [
NON-CEO
: Section 4(b)(ii)] [
CEO
: Section 4(b)(iv)]).
|
(ii)
|
For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (
i.e.
, time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to U.S. publicly traded equity securities of the Successor Company in the Change of Control (or another U.S. publicly traded entity that is affiliated with the Successor Company following the Change of Control), (D) the tax consequences of which for such Participant under the Code, if the Participant is subject to U.S. federal income tax under the Code, are not less favorable to the Participant than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Participant than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent change of control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or ceasing to be exempt from Code Section 409A. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding two sentences are satisfied. The determination of whether the conditions of this Section 3(c)(ii) are satisfied will be made in good faith by the Committee, as constituted immediately before the Change of Control, in its sole discretion.
|
(iii)
|
For purposes of this Agreement, “Cause” means: (A) the willful and continued failure by the Participant to substantially perform the Participant’s duties with the Successor Company (other than any such failure resulting from termination by the Participant for Good Reason) after a demand for substantial performance is delivered to the Participant that specifically identifies the manner in which the Successor Company believes that the Participant has not substantially performed the Participant’s duties, and the Participant has failed to resume substantial performance of the Participant’s duties on a continuous basis within five days of receiving such demand; (B) the willful engaging by the Participant in conduct that is demonstrably and materially injurious to the Successor Company, monetarily or otherwise; or (C) the Participant’s conviction of a felony or conviction of a misdemeanor that impairs the Participant’s ability substantially to perform the Participant’s duties with the Successor Company. For the purposes of this definition, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Successor Company.
|
(iv)
|
For purposes of this Agreement, “Good Reason” means: (A) any material failure of the Successor Company to comply with and satisfy any of the terms of any employment or change of control (or similar) agreement between the Successor Company and the Participant pursuant to which the Participant provides services to the Successor Company; (B) any significant involuntary reduction of the authority, duties or responsibilities held by the Participant immediately prior to the Change of Control (and, for the avoidance of doubt, involuntary removal of the Participant from an officer position that the Participant holds immediately prior to the Change of Control will not, by itself, constitute a significant involuntary reduction of the authority, duties or responsibilities held by the Participant immediately prior to the Change of Control); (C) any material involuntary reduction in the aggregate remuneration of the Participant as in effect immediately prior to the Change of Control; or (D) requiring the Participant to become based at any office or location more than the minimum number of miles required by the Code for the Participant to claim a moving expense deduction, from the office or location at which the Participant was based immediately prior to such Change of Control, except for travel reasonably required in the performance of the Participant’s responsibilities; provided, however, that no termination shall be deemed to be for Good Reason unless (x) the Participant provides the Successor Company with written notice setting forth the specific facts or circumstances constituting Good Reason within 90 days after the initial existence of the occurrence of such facts or circumstances, and (y) the Successor Company has failed to cure such facts or circumstances within 30 days of its receipt of such written notice.
|
(v)
|
If a Replacement Award is provided, notwithstanding anything in this Agreement to the contrary, any outstanding RSUs that, at the time of the Change of Control, are not subject to a "substantial risk of forfeiture" (within the meaning of Code Section 409A) shall be deemed to be Vested at the time of such Change of Control.
|
(d)
|
Forfeiture of Unvested RSUs
. Subject to Section 3(b)(iv), any RSUs that have not Vested pursuant to Section 3(a), Section 3(b), [
NON-CEO
: or] Section 3(c)[
CEO
: , or Section 3(e)] as of the final Vesting Date shall be forfeited automatically and without further notice on such date (or earlier if, and on such date that, the Participant ceases to be in Continuous Employment prior to the final Vesting Date for any reason other than as described in Section 3(b) or Section 3(c)).
|
(e)
|
[
CEO
:
Disability
. If, prior to the Vesting Date set forth in Section 1, the Participant becomes Disabled, then the Participant shall immediately Vest in a pro rata portion of the unvested RSUs evidenced by this Agreement determined by multiplying the number of RSUs evidenced by this Agreement, to the extent not previously forfeited, by a fraction, the numerator of which is the total number of calendar days during which the Participant was employed by the Company during the period beginning on the Date of Grant and ending on the date the Participant becomes Disabled and the denominator of which is the total number of calendar days beginning on the Date of Grant and ending on the Vesting Date, rounded to the nearest whole number of RSUs.]
|
(i)
|
Death
. Within 30 days of the Participant's death, the Company will pay, to the person entitled by will or the applicable laws of descent and distribution to such Vested RSUs, the Settlement Amount for each such Vested RSU.
|
(ii)
|
[
NON-CEO
:
Separation from Service
. Within 30 days of the Participant’s Separation from Service,] [
CEO
:
Disability
. Within 30 days of the Participant’s Disability,] the Company will pay to the Participant the Settlement Amount for each such Vested RSU.
|
(iii)
|
Change of Control
. The Participant is entitled to receive payment of the Settlement Amount for each Vested RSU on the date of the Change of Control; provided, however, that if such Change of Control would not qualify as a permissible date of distribution under Code Section 409A(a)(2)(A) [
CEO
: (such qualifying date of distribution, a “409A Change of Control”)], and the regulations thereunder, and where Code Section 409A applies to such distribution, the Participant is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Section 4 as though such Change of Control had not occurred.
|
(iv)
|
[
CEO
:
Separation from Service Following Change in Control
. Within 30 days of the Participant's Separation from Service that occurs within a period of two years after a 409A Change of Control, the Company will pay to the Participant the Settlement Amount for each such Vested RSU.]
|
|
Thirteen Weeks Ended
|
||
August 26, 2018
|
|||
Earnings:
|
|
||
Income from continuing operations before income taxes and equity method investment earnings
|
$
|
219.4
|
|
Add (deduct):
|
|
||
Fixed charges
|
55.6
|
|
|
Distributed income of equity method investees
|
13.2
|
|
|
Capitalized interest
|
(0.8
|
)
|
|
Earnings available for fixed charges (a)
|
$
|
287.4
|
|
|
|
||
Fixed charges:
|
|
||
Interest expense
|
$
|
49.6
|
|
Capitalized interest
|
0.8
|
|
|
One third of rental expense
(1)
|
5.2
|
|
|
Total fixed charges (b)
|
$
|
55.6
|
|
|
|
||
Ratio of earnings to fixed charges (a/b)
|
5.2
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended
August 26, 2018
of Conagra Brands, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
Date: October 2, 2018
|
|
|
|
/s/ SEAN M. CONNOLLY
|
|
Sean M. Connolly
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended
August 26, 2018
of Conagra Brands, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
Date: October 2, 2018
|
|
|
|
/s/ DAVID S. MARBERGER
|
|
David S. Marberger
|
|
Executive Vice President and Chief Financial Officer
|
|
October 2, 2018
|
|
|
|
/s/ SEAN M. CONNOLLY
|
|
Sean M. Connolly
|
|
Chief Executive Officer
|
|
October 2, 2018
|
|
|
|
/s/ DAVID S. MARBERGER
|
|
David S. Marberger
|
|
Executive Vice President and Chief Financial Officer
|
|