þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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47-0248710
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois
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60654
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $5.00 par value
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CAG
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New York Stock Exchange
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Item 1
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Item 1A
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Item 1B
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Item 2
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Item 3
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Item 4
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Item 5
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Item 6
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Item 7
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Item 7A
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Item 8
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Item 9
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Item 9A
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Item 9B
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Item 10
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Item 11
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Item 12
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Item 13
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Item 14
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Item 15
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Item 16
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Name
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Title & Capacity
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Age
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Year First
Appointed an
Executive
Officer
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Sean M. Connolly
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President and Chief Executive Officer
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53
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2015
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David S. Marberger
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Executive Vice President and Chief Financial Officer
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54
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2016
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Colleen R. Batcheler
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Executive Vice President, General Counsel and Corporate Secretary
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45
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|
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2008
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David B. Biegger
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Executive Vice President, Chief Supply Chain Officer
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60
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2015
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Charisse Brock
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Executive Vice President, Chief Human Resources Officer
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57
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2015
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Thomas M. McGough
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Executive Vice President and Co-Chief Operating Officer
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54
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2013
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Darren C. Serrao
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Executive Vice President and Co-Chief Operating Officer
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53
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|
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2015
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Robert G. Wise
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Senior Vice President, Corporate Controller
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51
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2012
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•
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consumers may shift purchases to more generic, lower-priced, or other value offerings, or may forego certain purchases altogether during economic downturns, which could result in a reduction in sales of higher margin products or a shift in our product mix to lower margin offerings adversely affecting the results of our operations;
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•
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decreased demand in the restaurant business, particularly casual and fine dining, may adversely affect our Foodservice operations;
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•
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volatility in commodity and other input costs could substantially impact our result of operations;
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•
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volatility in the equity markets or interest rates could substantially impact our pension costs and required pension contributions; and
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•
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it may become more costly or difficult to obtain debt or equity financing to fund operations or investment opportunities, or to refinance our debt in the future, in each case on terms and within a time period acceptable to us.
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•
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limit flexibility to plan for, or react to, changes in the businesses and industries in which we operate, which may adversely affect our operating results and ability to meet our debt service obligations;
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•
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require us to dedicate a substantial portion of our cash flow from operations to the payment of debt service, reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, dividends, and other general corporate purposes;
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•
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limit our ability to obtain additional financing in the future to fund our working capital requirements, capital expenditures, acquisitions, investment, debt service obligations, and other general operating requirements or to enable us to react to changes in our business; or
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For the Fiscal Years Ended May
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2019
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2018
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2017
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2016
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2015
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||||||||||
Dollars in millions, except per share amounts
|
|
|
|
|
|
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|
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||||||||||
Net sales
(1)
|
|
$
|
9,538.4
|
|
|
$
|
7,938.3
|
|
|
$
|
7,826.9
|
|
|
$
|
8,664.1
|
|
|
$
|
9,034.0
|
|
Income from continuing operations
(1)
|
|
$
|
680.3
|
|
|
$
|
797.5
|
|
|
$
|
546.0
|
|
|
$
|
128.5
|
|
|
$
|
451.3
|
|
Net income (loss) attributable to Conagra Brands, Inc.
(2)
|
|
$
|
678.3
|
|
|
$
|
808.4
|
|
|
$
|
639.3
|
|
|
$
|
(677.0
|
)
|
|
$
|
(252.6
|
)
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
(1)
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$
|
1.53
|
|
|
$
|
1.97
|
|
|
$
|
1.26
|
|
|
$
|
0.29
|
|
|
$
|
1.05
|
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Net income (loss) attributable to Conagra Brands, Inc. common stockholders
(2)
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|
$
|
1.53
|
|
|
$
|
2.00
|
|
|
$
|
1.48
|
|
|
$
|
(1.57
|
)
|
|
$
|
(0.60
|
)
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
(1)
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|
$
|
1.53
|
|
|
$
|
1.95
|
|
|
$
|
1.25
|
|
|
$
|
0.29
|
|
|
$
|
1.04
|
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Net income (loss) attributable to Conagra Brands, Inc. common stockholders
(2)
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|
$
|
1.52
|
|
|
$
|
1.98
|
|
|
$
|
1.46
|
|
|
$
|
(1.56
|
)
|
|
$
|
(0.59
|
)
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Cash dividends declared per share of common stock
|
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$
|
0.85
|
|
|
$
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0.85
|
|
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$
|
0.90
|
|
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$
|
1.00
|
|
|
$
|
1.00
|
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At Year-End
|
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||||||||||
Total assets
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$
|
22,213.8
|
|
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$
|
10,389.5
|
|
|
$
|
10,096.3
|
|
|
$
|
13,390.6
|
|
|
$
|
17,437.8
|
|
Senior long-term debt (noncurrent)
(1)
|
|
$
|
10,459.8
|
|
|
$
|
3,035.6
|
|
|
$
|
2,573.3
|
|
|
$
|
4,685.5
|
|
|
$
|
6,676.0
|
|
Subordinated long-term debt (noncurrent)
|
|
$
|
195.9
|
|
|
$
|
195.9
|
|
|
$
|
195.9
|
|
|
$
|
195.9
|
|
|
$
|
195.9
|
|
(1)
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Amounts exclude the impact of discontinued operations of the ConAgra Mills operations, the Private Brands operations, and the Lamb Weston operations.
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(2)
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Amounts include aggregate pre-tax goodwill and certain long-lived asset impairment charges in discontinued operations of $1.92 billion and $1.56 billion for fiscal 2016 and 2015, respectively.
|
•
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charges totaling $180.8 million ($138.9 million after-tax) in connection with our restructuring plans,
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•
|
charges totaling $118.1 million ($94.8 million after-tax) associated with costs incurred for acquisitions and divestitures,
|
•
|
charges totaling $89.6 million ($66.9 million after-tax and net of non-controlling interest) related to the impairment of other intangible assets,
|
•
|
gains of $69.4 million ($35.1 million after-tax) from the sales of the
Del Monte
®
Canada business, the
Wesson
®
oil business, and the Gelit pasta business,
|
•
|
incremental cost of goods sold of $53.0 million ($39.5 million after-tax) due to the fair value adjustment to inventory resulting from acquisition accounting for the Pinnacle acquisition,
|
•
|
a gain of $39.1 million ($29.1 million after-tax) related to legal matters,
|
•
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an income tax benefit of $32.4 million associated with a change in a valuation allowance on a deferred tax asset due to the divestitures of the
Wesson
®
oil business and the Gelit pasta business,
|
•
|
a gain of $27.3 million ($27.3 million after-tax) related to the novation of a legacy guarantee,
|
•
|
a gain of $15.1 million ($12.2 million after-tax) related to the fair value adjustment of cash settleable equity awards issued in connection with, and included in the acquisition consideration of, the Pinnacle acquisition,
|
•
|
a gain of $15.1 million ($11.6 million after-tax) related to the sale of an asset within the Ardent Mills joint venture,
|
•
|
an income tax charge of $10.4 million associated with unusual tax items primarily related to legal entity restructuring activity,
|
•
|
charges totaling $8.9 million ($6.6 million after-tax) associated with costs incurred for integration activities related to the Pinnacle acquisition, and
|
•
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charges totaling $4.3 million ($3.2 million after-tax) related to pension plan lump-sum settlements and a remeasurement of our salaried and non-qualified pension plan liability.
|
•
|
an income tax benefit of $233.3 million related to the enactment of the Tax Act,
|
•
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charges totaling $151.0 million ($113.3 million after-tax) related to certain litigation matters,
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•
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an income tax expense of $78.6 million associated with a change in a valuation allowance on a deferred tax asset due to the termination of the initial agreement for the proposed sale of our
Wesson
®
oil business,
|
•
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an income tax charge of $42.1 million associated with unusual tax items related to the repatriation of cash during the second quarter from foreign subsidiaries, the tax expense related to the earnings of foreign subsidiaries previously deemed to be permanently invested, a pension contribution, and the effect of a law change in Mexico requiring deconsolidation for tax reporting purposes,
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•
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charges totaling $34.9 million ($25.6 million after-tax) related to the early termination of an unfavorable lease contract by purchasing the property subject to the lease,
|
•
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charges totaling $38.0 million ($27.0 million after-tax) in connection with our SCAE Plan (as defined below),
|
•
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charges totaling $15.7 million ($10.9 million after-tax) associated with costs incurred for acquisitions and divestitures,
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•
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charges totaling $5.4 million ($3.7 million after-tax) related to pension plan lump-sum settlements and a remeasurement of our salaried and non-qualified pension plan liability,
|
•
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charges totaling $4.8 million ($3.7 million after-tax) related to the impairment of other intangible assets, and
|
•
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a benefit of $4.3 million ($2.9 million after-tax) related to the substantial liquidation of an international joint venture (recorded in equity method investment earnings).
|
|
Fiscal Years Ended
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||||||||||
($ in millions)
|
May 26,
2019 |
|
May 27,
2018 |
|
May 28,
2017 |
||||||
Net derivative gains (losses) incurred
|
$
|
(3.6
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
0.6
|
|
Less: Net derivative gains (losses) allocated to reporting segments
|
(1.8
|
)
|
|
(7.1
|
)
|
|
5.7
|
|
|||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
(1.8
|
)
|
|
$
|
6.2
|
|
|
$
|
(5.1
|
)
|
Net derivative gains (losses) allocated to Grocery & Snacks
|
$
|
(2.1
|
)
|
|
$
|
0.2
|
|
|
$
|
3.4
|
|
Net derivative gains (losses) allocated to Refrigerated & Frozen
|
(1.1
|
)
|
|
(0.3
|
)
|
|
0.8
|
|
|||
Net derivative gains (losses) allocated to International Foods
|
2.8
|
|
|
(6.9
|
)
|
|
1.6
|
|
|||
Net derivative losses allocated to Foodservice
|
(0.6
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Net derivative losses allocated to Pinnacle Foods
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|||
Net derivative losses allocated to Commercial
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Net derivative gains (losses) included in segment operating profit
|
$
|
(1.8
|
)
|
|
$
|
(7.1
|
)
|
|
$
|
5.7
|
|
($ in millions)
Reporting Segment
|
Fiscal 2019 Net Sales
|
|
Fiscal 2018 Net Sales
|
|
% Inc
(Dec)
|
|||||
Grocery & Snacks
|
$
|
3,279.2
|
|
|
$
|
3,287.0
|
|
|
—
|
%
|
Refrigerated & Frozen
|
2,804.0
|
|
|
2,753.0
|
|
|
2
|
%
|
||
International
|
793.4
|
|
|
843.5
|
|
|
(6
|
)%
|
||
Foodservice
|
934.2
|
|
|
1,054.8
|
|
|
(11
|
)%
|
||
Pinnacle Foods
|
1,727.6
|
|
|
—
|
|
|
100
|
%
|
||
Total
|
$
|
9,538.4
|
|
|
$
|
7,938.3
|
|
|
20
|
%
|
•
|
expenses of $170.3 million in connection with our restructuring plans,
|
•
|
expenses of $106.2 million associated with costs incurred for acquisitions and divestitures,
|
•
|
expenses of $89.6 million related to intangible impairments,
|
•
|
gains of $69.4 million related to the divestitures of businesses,
|
•
|
a benefit of $39.1 million related to legal matters,
|
•
|
a benefit of $27.3 million related to the novation of a legacy guarantee,
|
•
|
a benefit of $15.1 million related to the fair value adjustment of cash settleable equity awards issued in connection with, and included in the consideration for the Pinnacle acquisition, and
|
•
|
expenses of $8.9 million related to costs associated with the integration of Pinnacle.
|
•
|
an increase of $81.9 million related to Pinnacle SG&A expenses not included in other items noted herein, representing such costs incurred from October 26, 2018 through May 26, 2019,
|
•
|
a decrease in advertising and promotion expense of $25.2 million, including $34.0 million of expense attributable to Pinnacle,
|
•
|
an increase in salary and wage expense of $61.6 million, including $60.2 million attributable to Pinnacle,
|
•
|
a decrease in share-based payment and deferred compensation expense of $13.1 million due to lower share price and market declines, including $1.0 million of expense attributable to Pinnacle,
|
•
|
a decrease in pension and postretirement service expense of $9.6 million,
|
•
|
an increase in defined contribution plan expense of $6.9 million, including $2.4 million attributable to Pinnacle,
|
•
|
a decrease in charitable contributions of $5.4 million,
|
•
|
a decrease in incentive compensation expense of $4.3 million, including $6.4 million attributable to Pinnacle,
|
•
|
an increase in self-insured workers' compensation and product liability expense of $3.3 million, and
|
•
|
a decrease in transaction services agreement income of $2.9 million.
|
•
|
charges totaling $151.0 million related to certain litigation matters,
|
•
|
a charge of $34.9 million related to the early termination of an unfavorable lease contract,
|
•
|
expenses of $30.2 million in connection with our SCAE Plan,
|
•
|
expenses of $15.1 million associated with costs incurred for acquisitions and divestitures, and
|
•
|
charges totaling $4.8 million related to the impairment of other intangible assets.
|
($ in millions)
Reporting Segment
|
Fiscal 2019 Operating Profit
|
|
Fiscal 2018 Operating Profit
|
|
% Inc
(Dec)
|
|||||
Grocery & Snacks
|
$
|
689.2
|
|
|
$
|
724.8
|
|
|
(5
|
)%
|
Refrigerated & Frozen
|
502.2
|
|
|
479.4
|
|
|
5
|
%
|
||
International
|
94.5
|
|
|
86.5
|
|
|
9
|
%
|
||
Foodservice
|
117.7
|
|
|
121.8
|
|
|
(3
|
)%
|
||
Pinnacle Foods
|
238.2
|
|
|
—
|
|
|
100
|
%
|
•
|
the issuance of $7.025 billion aggregate principal amount of unsecured senior notes and borrowings of $1.30 billion under our new unsecured term loan agreement with a syndicate of financial institutions providing for a
$650.0
million tranche of three-year term loans and a
$650.0 million
tranche of five-year term loans to the Company (the "Term Loan Agreement"), in each case in connection with the Pinnacle acquisition,
|
•
|
the repayment of a total of $900.0 million of our borrowings under the Term Loan Agreement in the third and fourth quarters of fiscal 2019,
|
•
|
the borrowing of $300.0 million under our prior term loan agreement during the fourth quarter of fiscal 2018, which borrowing was subsequently repaid in connection with the Pinnacle acquisition,
|
•
|
the issuance of $500.0 million aggregate principal amount of floating rate notes due 2020 during the second quarter of fiscal 2018,
|
•
|
the repayment of $70.0 million aggregate principal amount of outstanding senior notes in the fourth quarter of fiscal 2018, and
|
•
|
the repayment of $119.6 million aggregate principal amount of outstanding notes in the third quarter of fiscal 2018.
|
•
|
the impact of legal entity reorganization resulting in a benefit related to undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made,
|
•
|
additional tax expense on the repatriation of certain foreign earnings,
|
•
|
an adjustment of valuation allowance associated with the expected capital gains from the divestiture of the
Wesson
®
oil and Gelit businesses,
|
•
|
additional tax expense on non-deductible facilitative costs associated with the Pinnacle acquisition,
|
•
|
a benefit recognized due to the non-taxability of the novation of a legacy guarantee,
|
•
|
a benefit recognized due to a reduction in the fair value of equity awards subject to limitations on deductibility that were issued to Pinnacle executives as replacement awards at the time of the acquisition,
|
•
|
an increase to the deemed repatriation tax liability,
|
•
|
additional tax expense due to foreign and domestic restructuring, and
|
•
|
a state tax benefit from integration of the Pinnacle business.
|
•
|
the impact of the Tax Act,
|
•
|
an adjustment of valuation allowance associated with the termination of the agreement for the proposed divestiture of our
Wesson
®
oil business,
|
•
|
an indirect cost of the pension contribution made on February 26, 2018,
|
•
|
additional expense related to the settlement of an audit of the impact of a law change in Mexico,
|
•
|
an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant, and
|
•
|
additional expense related to undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made.
|
($ in millions)
Reporting Segment
|
Fiscal 2018 Net Sales
|
|
Fiscal 2017 Net Sales
|
|
% Inc
(Dec)
|
|||||
Grocery & Snacks
|
$
|
3,287.0
|
|
|
$
|
3,208.8
|
|
|
2
|
%
|
Refrigerated & Frozen
|
2,753.0
|
|
|
2,652.7
|
|
|
4
|
%
|
||
International
|
843.5
|
|
|
816.0
|
|
|
3
|
%
|
||
Foodservice
|
1,054.8
|
|
|
1,078.3
|
|
|
(2
|
)%
|
||
Commercial
|
—
|
|
|
71.1
|
|
|
(100
|
)%
|
||
Total
|
$
|
7,938.3
|
|
|
$
|
7,826.9
|
|
|
1
|
%
|
•
|
charges totaling $151.0 million related to certain litigation matters,
|
•
|
a charge of $34.9 million related to the early termination of an unfavorable lease contract,
|
•
|
expenses of $30.2 million in connection with our SCAE Plan,
|
•
|
expenses of $15.1 million associated with costs incurred for acquisitions and divestitures, and
|
•
|
charges totaling $4.8 million related to the impairment of other intangible assets.
|
•
|
a decrease in advertising and promotion expense of $49.7 million,
|
•
|
a decrease in transaction services agreement income of $18.3 million,
|
•
|
a decrease in incentive compensation expense of $14.6 million,
|
•
|
a decrease in stock-based compensation expense of $10.4 million,
|
•
|
a decrease in contract services of $9.4 million,
|
•
|
a decrease in charitable contributions of $6.7,
|
•
|
a decrease in pension and postretirement service expense of $4.2 million,
|
•
|
an increase in salaries expense of $19.4 million, and
|
•
|
an increase in self-insured workers' compensation and product liability expense of $7.0 million.
|
•
|
charges totaling $237.1 million related to the impairment of goodwill and other intangible assets, primarily in the International segment,
|
•
|
gains totaling $197.4 million, from the divestiture of the Spicetec and JM Swank businesses,
|
•
|
charges totaling $93.3 million related to the early retirement of debt,
|
•
|
a charge of $67.1 million related to the impairment of the
Chef Boyardee
®
brand intangible,
|
•
|
expenses of $46.4 million in connection with our SCAE Plan,
|
•
|
charges of $30.9 million related to the planned divestiture of our
Wesson
®
oil business, including an impairment charge of
$27.6 million
related to the production assets of the business that were not initially included in the assets held for sale, and
|
•
|
a benefit of $5.7 million in connection with a legal matter.
|
•
|
repealing the exception for deductibility of performance-based compensation to covered employees, along with expanding the number of covered employees;
|
•
|
changing taxation of multinational companies, including a new minimum tax on Global Intangible Low-Taxed Income, a new Base Erosion Anti-Abuse Tax, and a new U.S. corporate deduction for Foreign-Derived Intangible Income, all of which became effective for us beginning in 2019.
|
•
|
the impact of U.S. tax reform, as noted above,
|
•
|
an adjustment of valuation allowance associated with the termination of the agreement for the proposed sale of our
Wesson
®
oil business,
|
•
|
an indirect cost of the pension contribution made on February 26, 2018,
|
•
|
additional expense related to the settlement of an audit of the impact of a law change in Mexico,
|
•
|
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, and
|
•
|
additional expense related to undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made.
|
•
|
additional tax expense associated with non-deductible goodwill sold in connection with the divestitures of the Spicetec and JM Swank businesses,
|
•
|
additional tax expense associated with non-deductible goodwill in our Mexican and Canadian businesses, for which an impairment charge was recognized,
|
•
|
an income tax benefit for the adjustment of a valuation allowance associated with the planned divestiture of the
Wesson
®
oil business,
|
•
|
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 and certain foreign incentives.
|
|
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
|
$
|
10,556.6
|
|
|
$
|
—
|
|
|
$
|
2,747.6
|
|
|
$
|
2,287.0
|
|
|
$
|
5,522.0
|
|
Capital lease obligations
|
165.4
|
|
|
20.6
|
|
|
41.0
|
|
|
29.4
|
|
|
74.4
|
|
|||||
Operating lease obligations
|
312.6
|
|
|
52.1
|
|
|
86.4
|
|
|
59.7
|
|
|
114.4
|
|
|||||
Purchase obligations
1
and other contracts
|
1,483.5
|
|
|
1,195.3
|
|
|
223.4
|
|
|
53.2
|
|
|
11.6
|
|
|||||
Notes payable
|
1.0
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
12,519.1
|
|
|
$
|
1,269.0
|
|
|
$
|
3,098.4
|
|
|
$
|
2,429.3
|
|
|
$
|
5,722.4
|
|
($ in millions)
|
|
One Percent
Increase
|
|
One Percent
Decrease
|
||||
Effect on total service and interest cost
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
Effect on postretirement benefit obligation
|
|
1.5
|
|
|
(1.3
|
)
|
|
Fair Value Impact
|
||||||
In Millions
|
Average
During the Fiscal Year Ended May 26, 2019
|
|
Average
During the Fiscal Year Ended May 27, 2018
|
||||
Processing Activities
|
|
|
|
||||
Energy commodities
|
$
|
0.4
|
|
|
$
|
0.2
|
|
Agriculture commodities
|
0.4
|
|
|
0.4
|
|
||
Other commodities
|
0.1
|
|
|
—
|
|
||
Foreign exchange
|
0.7
|
|
|
0.7
|
|
|
For the Fiscal Years Ended May
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
9,538.4
|
|
|
$
|
7,938.3
|
|
|
$
|
7,826.9
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of goods sold
|
6,885.4
|
|
|
5,586.8
|
|
|
5,483.1
|
|
|||
Selling, general and administrative expenses
|
1,473.4
|
|
|
1,398.4
|
|
|
1,474.0
|
|
|||
Pension and postretirement non-service income
|
(35.1
|
)
|
|
(80.4
|
)
|
|
(55.2
|
)
|
|||
Interest expense, net
|
391.4
|
|
|
158.7
|
|
|
195.5
|
|
|||
Income from continuing operations before income taxes and equity method investment earnings
|
823.3
|
|
|
874.8
|
|
|
729.5
|
|
|||
Income tax expense
|
218.8
|
|
|
174.6
|
|
|
254.7
|
|
|||
Equity method investment earnings
|
75.8
|
|
|
97.3
|
|
|
71.2
|
|
|||
Income from continuing operations
|
680.3
|
|
|
797.5
|
|
|
546.0
|
|
|||
Income (loss) from discontinued operations, net of tax
|
(1.9
|
)
|
|
14.3
|
|
|
102.0
|
|
|||
Net income
|
$
|
678.4
|
|
|
$
|
811.8
|
|
|
$
|
648.0
|
|
Less: Net income attributable to noncontrolling interests
|
0.1
|
|
|
3.4
|
|
|
8.7
|
|
|||
Net income attributable to Conagra Brands, Inc.
|
$
|
678.3
|
|
|
$
|
808.4
|
|
|
$
|
639.3
|
|
Earnings per share — basic
|
|
|
|
|
|
||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
1.53
|
|
|
$
|
1.97
|
|
|
$
|
1.26
|
|
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
0.03
|
|
|
0.22
|
|
|||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
1.53
|
|
|
$
|
2.00
|
|
|
$
|
1.48
|
|
Earnings per share — diluted
|
|
|
|
|
|
||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
1.53
|
|
|
$
|
1.95
|
|
|
$
|
1.25
|
|
Income (loss) from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
(0.01
|
)
|
|
0.03
|
|
|
0.21
|
|
|||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
1.52
|
|
|
$
|
1.98
|
|
|
$
|
1.46
|
|
|
For the Fiscal Years Ended May
|
||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
||||||||||||||||||
Net income
|
$
|
900.0
|
|
$
|
(221.6
|
)
|
$
|
678.4
|
|
|
$
|
972.3
|
|
$
|
(160.5
|
)
|
$
|
811.8
|
|
|
$
|
989.2
|
|
$
|
(341.2
|
)
|
$
|
648.0
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Derivative adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized derivative adjustments
|
45.5
|
|
(11.4
|
)
|
34.1
|
|
|
2.9
|
|
(0.9
|
)
|
2.0
|
|
|
(1.0
|
)
|
0.4
|
|
(0.6
|
)
|
|||||||||
Reclassification for derivative adjustments included in net income
|
(1.9
|
)
|
0.5
|
|
(1.4
|
)
|
|
0.1
|
|
—
|
|
0.1
|
|
|
(0.2
|
)
|
0.1
|
|
(0.1
|
)
|
|||||||||
Unrealized gains on available-for-sale securities
|
—
|
|
—
|
|
—
|
|
|
1.1
|
|
(0.3
|
)
|
0.8
|
|
|
0.5
|
|
(0.2
|
)
|
0.3
|
|
|||||||||
Currency translation adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized currency translation gains (losses)
|
(10.2
|
)
|
—
|
|
(10.2
|
)
|
|
0.8
|
|
(0.1
|
)
|
0.7
|
|
|
(13.6
|
)
|
0.2
|
|
(13.4
|
)
|
|||||||||
Reclassification for currency translation losses included in net income
|
10.4
|
|
—
|
|
10.4
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Pension and post-employment benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Unrealized pension and post-employment benefit obligations
|
(43.8
|
)
|
10.9
|
|
(32.9
|
)
|
|
157.3
|
|
(45.0
|
)
|
112.3
|
|
|
209.2
|
|
(80.6
|
)
|
128.6
|
|
|||||||||
Reclassification for pension and post-employment benefit obligations included in net income
|
(1.5
|
)
|
0.4
|
|
(1.1
|
)
|
|
0.9
|
|
(0.2
|
)
|
0.7
|
|
|
10.4
|
|
(4.0
|
)
|
6.4
|
|
|||||||||
Comprehensive income
|
898.5
|
|
(221.2
|
)
|
677.3
|
|
|
1,135.4
|
|
(207.0
|
)
|
928.4
|
|
|
1,194.5
|
|
(425.3
|
)
|
769.2
|
|
|||||||||
Comprehensive income (loss) attributable to noncontrolling interests
|
(1.7
|
)
|
(0.1
|
)
|
(1.8
|
)
|
|
0.7
|
|
(1.2
|
)
|
(0.5
|
)
|
|
12.6
|
|
(0.7
|
)
|
11.9
|
|
|||||||||
Comprehensive income attributable to Conagra Brands, Inc.
|
$
|
900.2
|
|
$
|
(221.1
|
)
|
$
|
679.1
|
|
|
$
|
1,134.7
|
|
$
|
(205.8
|
)
|
$
|
928.9
|
|
|
$
|
1,181.9
|
|
$
|
(424.6
|
)
|
$
|
757.3
|
|
|
May 26,
2019 |
|
May 27,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
236.6
|
|
|
$
|
128.0
|
|
Receivables, less allowance for doubtful accounts of $3.3 and $1.7
|
831.7
|
|
|
569.4
|
|
||
Inventories
|
1,571.7
|
|
|
988.7
|
|
||
Prepaid expenses and other current assets
|
93.8
|
|
|
184.9
|
|
||
Current assets held for sale
|
—
|
|
|
67.9
|
|
||
Total current assets
|
2,733.8
|
|
|
1,938.9
|
|
||
Property, plant and equipment
|
|
|
|
||||
Land and land improvements
|
144.1
|
|
|
107.1
|
|
||
Buildings, machinery and equipment
|
4,013.9
|
|
|
3,205.9
|
|
||
Furniture, fixtures, office equipment and other
|
678.2
|
|
|
610.2
|
|
||
Construction in progress
|
173.9
|
|
|
85.3
|
|
||
|
5,010.1
|
|
|
4,008.5
|
|
||
Less accumulated depreciation
|
(2,614.8
|
)
|
|
(2,419.0
|
)
|
||
Property, plant and equipment, net
|
2,395.3
|
|
|
1,589.5
|
|
||
Goodwill
|
11,499.6
|
|
|
4,487.4
|
|
||
Brands, trademarks and other intangibles, net
|
4,661.4
|
|
|
1,282.8
|
|
||
Other assets
|
915.5
|
|
|
906.3
|
|
||
Noncurrent assets held for sale
|
8.2
|
|
|
184.6
|
|
||
|
$
|
22,213.8
|
|
|
$
|
10,389.5
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable
|
$
|
1.0
|
|
|
$
|
277.3
|
|
Current installments of long-term debt
|
20.6
|
|
|
307.0
|
|
||
Accounts payable
|
1,255.3
|
|
|
905.3
|
|
||
Accrued payroll
|
174.1
|
|
|
161.7
|
|
||
Other accrued liabilities
|
691.6
|
|
|
671.0
|
|
||
Current liabilities held for sale
|
—
|
|
|
13.9
|
|
||
Total current liabilities
|
2,142.6
|
|
|
2,336.2
|
|
||
Senior long-term debt, excluding current installments
|
10,459.8
|
|
|
3,035.6
|
|
||
Subordinated debt
|
195.9
|
|
|
195.9
|
|
||
Other noncurrent liabilities
|
1,951.8
|
|
|
1,060.8
|
|
||
Noncurrent liabilities held for sale
|
—
|
|
|
4.4
|
|
||
Total liabilities
|
14,750.1
|
|
|
6,632.9
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Common stockholders' equity
|
|
|
|
||||
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 584,219,229
|
2,921.2
|
|
|
2,839.7
|
|
||
Additional paid-in capital
|
2,286.0
|
|
|
1,180.0
|
|
||
Retained earnings
|
5,047.9
|
|
|
4,744.9
|
|
||
Accumulated other comprehensive loss
|
(110.3
|
)
|
|
(110.5
|
)
|
||
Less treasury stock, at cost, 98,133,747 and 177,078,193 common shares
|
(2,760.2
|
)
|
|
(4,977.9
|
)
|
||
Total Conagra Brands, Inc. common stockholders' equity
|
7,384.6
|
|
|
3,676.2
|
|
||
Noncontrolling interests
|
79.1
|
|
|
80.4
|
|
||
Total stockholders' equity
|
7,463.7
|
|
|
3,756.6
|
|
||
|
$
|
22,213.8
|
|
|
$
|
10,389.5
|
|
|
|
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 29, 2016
|
|
567.9
|
|
|
$
|
2,839.7
|
|
|
$
|
1,136.3
|
|
|
$
|
3,218.3
|
|
|
$
|
(344.5
|
)
|
|
$
|
(3,136.2
|
)
|
|
$
|
81.2
|
|
|
$
|
3,794.8
|
|
Stock option and incentive plans
|
|
|
|
|
|
36.4
|
|
|
(1.3
|
)
|
|
|
|
81.3
|
|
|
|
|
116.4
|
|
|||||||||||
Adoption of ASU 2016-09
|
|
|
|
|
|
|
|
(3.9
|
)
|
|
|
|
|
|
|
|
(3.9
|
)
|
|||||||||||||
Spinoff of Lamb Weston
|
|
|
|
|
|
|
|
783.3
|
|
|
13.6
|
|
|
|
|
|
|
796.9
|
|
||||||||||||
Currency translation adjustment, net
|
|
|
|
|
|
|
|
|
|
(16.6
|
)
|
|
|
|
3.2
|
|
|
(13.4
|
)
|
||||||||||||
Repurchase of common shares
|
|
|
|
|
|
|
|
|
|
|
|
(1,000.0
|
)
|
|
|
|
(1,000.0
|
)
|
|||||||||||||
Unrealized gain on securities
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
0.3
|
|
|||||||||||||
Derivative adjustment, net of reclassification adjustment
|
|
|
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
(0.7
|
)
|
|||||||||||||
Activities of noncontrolling interests
|
|
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
2.6
|
|
|
1.8
|
|
||||||||||||
Pension and postretirement healthcare benefits
|
|
|
|
|
|
|
|
|
|
135.0
|
|
|
|
|
|
|
135.0
|
|
|||||||||||||
Dividends declared on common stock; $0.90 per share
|
|
|
|
|
|
|
|
(388.7
|
)
|
|
|
|
|
|
|
|
(388.7
|
)
|
|||||||||||||
Net income attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
|
639.3
|
|
|
|
|
|
|
|
|
639.3
|
|
|||||||||||||
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
|
|
|
|
|
|
10.0
|
|
|
(0.8
|
)
|
|
|
|
44.3
|
|
|
0.2
|
|
|
53.7
|
|
||||||||||
Spinoff of Lamb Weston
|
|
|
|
|
|
|
|
14.8
|
|
|
|
|
|
|
|
|
14.8
|
|
|||||||||||||
Adoption of ASU 2018-02
|
|
|
|
|
|
|
|
17.4
|
|
|
(17.4
|
)
|
|
|
|
|
|
—
|
|
||||||||||||
Currency translation adjustment, net
|
|
|
|
|
|
|
|
|
|
4.6
|
|
|
|
|
(3.9
|
)
|
|
0.7
|
|
||||||||||||
Repurchase of common shares
|
|
|
|
|
|
|
|
|
|
|
|
(967.3
|
)
|
|
|
|
(967.3
|
)
|
|||||||||||||
Unrealized gain on securities
|
|
|
|
|
|
|
|
|
|
0.8
|
|
|
|
|
|
|
0.8
|
|
|||||||||||||
Derivative adjustment, net of reclassification adjustment
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|
|
|
|
|
2.1
|
|
|||||||||||||
Activities of noncontrolling interests
|
|
|
|
|
|
(1.9
|
)
|
|
|
|
(0.7
|
)
|
|
|
|
(2.9
|
)
|
|
(5.5
|
)
|
|||||||||||
Pension and postretirement healthcare benefits
|
|
|
|
|
|
|
|
|
|
113.0
|
|
|
|
|
|
|
113.0
|
|
|||||||||||||
Dividends declared on common stock; $0.85 per share
|
|
|
|
|
|
|
|
(341.9
|
)
|
|
|
|
|
|
|
|
(341.9
|
)
|
|||||||||||||
Net income attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
|
808.4
|
|
|
|
|
|
|
|
|
808.4
|
|
|||||||||||||
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
|
|
|
|
|
|
(6.7
|
)
|
|
0.1
|
|
|
|
|
39.6
|
|
|
0.1
|
|
|
33.1
|
|
||||||||||
Adoption of ASU 2016-01
|
|
|
|
|
|
|
|
0.6
|
|
|
(0.6
|
)
|
|
|
|
|
|
—
|
|
||||||||||||
Adoption of ASU 2014-09
|
|
|
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
0.5
|
|
|||||||||||||
Currency translation adjustment, net
|
|
|
|
|
|
|
|
|
|
2.1
|
|
|
|
|
(1.9
|
)
|
|
0.2
|
|
||||||||||||
Issuance of treasury shares
|
|
|
|
|
|
638.2
|
|
|
|
|
|
|
2,178.1
|
|
|
|
|
2,816.3
|
|
||||||||||||
Issuance of common stock
|
|
16.3
|
|
|
81.5
|
|
|
474.2
|
|
|
|
|
|
|
|
|
|
|
555.7
|
|
|||||||||||
Derivative adjustment, net of reclassification adjustment
|
|
|
|
|
|
|
|
|
|
32.7
|
|
|
|
|
|
|
32.7
|
|
|||||||||||||
Activities of noncontrolling interests
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
0.5
|
|
|
0.8
|
|
||||||||||||
Pension and postretirement healthcare benefits
|
|
|
|
|
|
|
|
|
|
(34.0
|
)
|
|
|
|
|
|
(34.0
|
)
|
|||||||||||||
Dividends declared on common stock; $0.85 per share
|
|
|
|
|
|
|
|
(376.5
|
)
|
|
|
|
|
|
|
|
(376.5
|
)
|
|||||||||||||
Net income attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
|
678.3
|
|
|
|
|
|
|
|
|
678.3
|
|
|||||||||||||
Balance at May 26, 2019
|
|
584.2
|
|
|
$
|
2,921.2
|
|
|
$
|
2,286.0
|
|
|
$
|
5,047.9
|
|
|
$
|
(110.3
|
)
|
|
$
|
(2,760.2
|
)
|
|
$
|
79.1
|
|
|
$
|
7,463.7
|
|
|
For the Fiscal Years Ended May
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
678.4
|
|
|
$
|
811.8
|
|
|
$
|
648.0
|
|
Income (loss) from discontinued operations
|
(1.9
|
)
|
|
14.3
|
|
|
102.0
|
|
|||
Income from continuing operations
|
680.3
|
|
|
797.5
|
|
|
546.0
|
|
|||
Adjustments to reconcile income from continuing operations to net cash flows from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
333.0
|
|
|
257.0
|
|
|
268.0
|
|
|||
Asset impairment charges
|
93.8
|
|
|
14.7
|
|
|
343.3
|
|
|||
Gain on divestitures
|
(69.4
|
)
|
|
—
|
|
|
(197.4
|
)
|
|||
Lease cancellation expense
|
—
|
|
|
48.2
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
5.5
|
|
|
—
|
|
|
93.3
|
|
|||
Significant litigation accruals
|
(39.3
|
)
|
|
151.0
|
|
|
—
|
|
|||
Proceeds from the settlement of interest rate swaps
|
47.5
|
|
|
—
|
|
|
—
|
|
|||
Novation of a legacy guarantee
|
(27.3
|
)
|
|
—
|
|
|
—
|
|
|||
Earnings of affiliates in excess of distributions
|
(20.8
|
)
|
|
(34.8
|
)
|
|
(3.0
|
)
|
|||
Stock-settled share-based payments expense
|
33.7
|
|
|
37.9
|
|
|
36.1
|
|
|||
Contributions to pension plans
|
(14.7
|
)
|
|
(312.6
|
)
|
|
(163.0
|
)
|
|||
Pension benefit
|
(22.7
|
)
|
|
(56.1
|
)
|
|
(21.4
|
)
|
|||
Other items
|
12.3
|
|
|
(34.0
|
)
|
|
34.6
|
|
|||
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
|
|
|
|
|
|
||||||
Receivables
|
(69.1
|
)
|
|
(4.7
|
)
|
|
104.7
|
|
|||
Inventories
|
78.0
|
|
|
(62.8
|
)
|
|
123.3
|
|
|||
Deferred income taxes and income taxes payable, net
|
83.7
|
|
|
10.5
|
|
|
52.3
|
|
|||
Prepaid expenses and other current assets
|
(19.1
|
)
|
|
3.2
|
|
|
15.0
|
|
|||
Accounts payable
|
38.2
|
|
|
144.9
|
|
|
71.0
|
|
|||
Accrued payroll
|
0.1
|
|
|
(8.0
|
)
|
|
(52.4
|
)
|
|||
Other accrued liabilities
|
(9.4
|
)
|
|
(32.2
|
)
|
|
(114.9
|
)
|
|||
Net cash flows from operating activities - continuing operations
|
1,114.3
|
|
|
919.7
|
|
|
1,135.5
|
|
|||
Net cash flows from operating activities - discontinued operations
|
11.2
|
|
|
34.5
|
|
|
34.7
|
|
|||
Net cash flows from operating activities
|
1,125.5
|
|
|
954.2
|
|
|
1,170.2
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(353.1
|
)
|
|
(251.6
|
)
|
|
(242.1
|
)
|
|||
Sale of property, plant and equipment
|
22.5
|
|
|
8.0
|
|
|
13.2
|
|
|||
Purchase of business, net of cash acquired
|
(5,119.2
|
)
|
|
(337.1
|
)
|
|
(325.7
|
)
|
|||
Proceeds from divestitures, net of cash divested
|
281.5
|
|
|
—
|
|
|
489.0
|
|
|||
Purchase of marketable securities
|
(61.0
|
)
|
|
—
|
|
|
—
|
|
|||
Sales of marketable securities
|
52.2
|
|
|
—
|
|
|
—
|
|
|||
Other items
|
11.1
|
|
|
4.5
|
|
|
5.3
|
|
|||
Net cash flows from investing activities - continuing operations
|
(5,166.0
|
)
|
|
(576.2
|
)
|
|
(60.3
|
)
|
|||
Net cash flows from investing activities - discontinued operations
|
—
|
|
|
—
|
|
|
(123.7
|
)
|
|||
Net cash flows from investing activities
|
(5,166.0
|
)
|
|
(576.2
|
)
|
|
(184.0
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net short-term borrowings (repayments)
|
(277.3
|
)
|
|
249.1
|
|
|
14.3
|
|
|||
Issuance of long-term debt
|
8,310.5
|
|
|
800.0
|
|
|
—
|
|
|||
Repayment of long-term debt
|
(3,972.7
|
)
|
|
(242.3
|
)
|
|
(1,064.5
|
)
|
|||
Debt issuance costs and bridge financing fees
|
(95.2
|
)
|
|
(3.0
|
)
|
|
—
|
|
|||
Payment of intangible asset financing arrangement
|
(14.0
|
)
|
|
(14.4
|
)
|
|
(14.9
|
)
|
|||
Issuance of Conagra Brands, Inc. common shares, net
|
555.7
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of Conagra Brands, Inc. common shares
|
—
|
|
|
(967.3
|
)
|
|
(1,000.0
|
)
|
|||
Cash dividends paid
|
(356.2
|
)
|
|
(342.3
|
)
|
|
(415.0
|
)
|
|||
Exercise of stock options and issuance of other stock awards, including tax withholdings
|
(1.6
|
)
|
|
14.9
|
|
|
73.8
|
|
|||
Other items
|
0.6
|
|
|
(1.6
|
)
|
|
(1.9
|
)
|
|||
Net cash flows from financing activities - continuing operations
|
4,149.8
|
|
|
(506.9
|
)
|
|
(2,408.2
|
)
|
|||
Net cash flows from financing activities - discontinued operations
|
—
|
|
|
—
|
|
|
839.1
|
|
|||
Net cash flows from financing activities
|
4,149.8
|
|
|
(506.9
|
)
|
|
(1,569.1
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(0.7
|
)
|
|
5.5
|
|
|
(0.2
|
)
|
|||
Net change in cash and cash equivalents and restricted cash
|
108.6
|
|
|
(123.4
|
)
|
|
(583.1
|
)
|
|||
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 and restricted cash at beginning of year
|
129.0
|
|
|
252.4
|
|
|
799.1
|
|
|||
Cash and cash equivalents and restricted cash at end of year
|
$
|
237.6
|
|
|
$
|
129.0
|
|
|
$
|
252.4
|
|
|
|
Balance at
Beginning
of Period
|
|
Additions
Charged
to Costs and
Expenses
|
|
Other
|
|
Deductions
from
Reserves
|
|
Balance at
Close of
Period
|
|||||||
Year ended May 26, 2019
|
|
$
|
1.7
|
|
|
0.6
|
|
|
1.6
|
|
(1)
|
0.6
|
|
(2)
|
$
|
3.3
|
|
Year ended May 27, 2018
|
|
$
|
2.9
|
|
|
0.8
|
|
|
—
|
|
|
2.0
|
|
(2)
|
$
|
1.7
|
|
Year ended May 28, 2017
|
|
$
|
3.0
|
|
|
1.0
|
|
|
—
|
|
|
1.1
|
|
(2)
|
$
|
2.9
|
|
(1)
|
Primarily relates to the acquisition of Pinnacle.
|
(2)
|
Bad debts charged off and adjustments to previous reserves, less recoveries.
|
|
|
|
Land improvements
|
|
1 - 40 years
|
Buildings
|
|
15 - 40 years
|
Machinery and equipment
|
|
3 - 20 years
|
Furniture, fixtures, office equipment and other
|
|
5 - 15 years
|
|
2019
|
|
2018
|
|
2017
|
||||||
Currency translation losses, net of reclassification adjustments
|
$
|
(90.9
|
)
|
|
$
|
(94.7
|
)
|
|
$
|
(98.6
|
)
|
Derivative adjustments, net of reclassification adjustments
|
34.0
|
|
|
1.0
|
|
|
(1.1
|
)
|
|||
Unrealized gains (losses) on available-for-sale securities
|
—
|
|
|
0.6
|
|
|
(0.3
|
)
|
|||
Pension and post-employment benefit obligations, net of reclassification adjustments
|
(53.4
|
)
|
|
(17.4
|
)
|
|
(112.9
|
)
|
|||
Accumulated other comprehensive loss
1
|
$
|
(110.3
|
)
|
|
$
|
(110.5
|
)
|
|
$
|
(212.9
|
)
|
|
|
|
|
|
|
|
Affected Line Item in the Consolidated Statement of Operations
1
|
||||||
|
2019
|
|
2018
|
|
2017
|
|
|
||||||
Net derivative adjustment, net of tax:
|
|
|
|
|
|
|
|
||||||
Cash flow hedges
|
$
|
(1.9
|
)
|
|
$
|
0.1
|
|
|
$
|
(0.2
|
)
|
|
Interest expense, net
|
|
(1.9
|
)
|
|
0.1
|
|
|
(0.2
|
)
|
|
Total before tax
|
|||
|
0.5
|
|
|
—
|
|
|
0.1
|
|
|
Income tax expense
|
|||
|
$
|
(1.4
|
)
|
|
$
|
0.1
|
|
|
$
|
(0.1
|
)
|
|
Net of tax
|
Amortization of pension and postretirement healthcare liabilities:
|
|
|
|
|
|
|
|
||||||
Net prior service cost (benefit)
|
$
|
0.9
|
|
|
$
|
(0.4
|
)
|
|
$
|
(3.9
|
)
|
|
Pension and postretirement non-service income
|
Pension settlement
|
—
|
|
|
1.3
|
|
|
13.8
|
|
|
Pension and postretirement non-service income
|
|||
Postretirement healthcare settlement
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
Pension and postretirement non-service income
|
|||
Net actuarial loss (gain)
|
(1.4
|
)
|
|
—
|
|
|
0.5
|
|
|
Pension and postretirement non-service income
|
|||
|
(1.5
|
)
|
|
0.9
|
|
|
10.4
|
|
|
Total before tax
|
|||
|
0.4
|
|
|
(0.2
|
)
|
|
(4.0
|
)
|
|
Income tax expense
|
|||
|
$
|
(1.1
|
)
|
|
$
|
0.7
|
|
|
$
|
6.4
|
|
|
Net of tax
|
Currency translation losses
|
$
|
10.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Selling, general and administrative expenses
|
|
10.4
|
|
|
—
|
|
|
—
|
|
|
Total before tax
|
|||
|
—
|
|
|
—
|
|
|
—
|
|
|
Income tax expense
|
|||
|
$
|
10.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Net of tax
|
|
As Reported
|
|
Adjustments
|
|
Balances without Adoption of Topic 606
|
||||||||||||
Current assets
|
|
|
|
|
|
||||||||||||
Receivables, less allowance for doubtful accounts
|
$
|
831.7
|
|
|
$
|
8.7
|
|
|
$
|
840.4
|
|
||||||
Inventories
|
1,571.7
|
|
|
(3.1
|
)
|
|
1,568.6
|
|
|||||||||
Prepaid expenses and other current assets
|
93.8
|
|
|
(16.6
|
)
|
|
77.2
|
|
|||||||||
Current liabilities
|
|
|
|
|
|
||||||||||||
Other accrued liabilities
|
691.6
|
|
|
(1.1
|
)
|
|
690.5
|
|
|||||||||
Other noncurrent liabilities
|
1,951.8
|
|
|
(2.5
|
)
|
|
1,949.3
|
|
|
Fiscal 2019
|
||||||||||||||||
|
As Reported
|
|
Adjustments
|
|
Balances without Adoption of Topic 606
|
||||||||||||
Net sales
|
$
|
9,538.4
|
|
|
$
|
15.5
|
|
|
$
|
9,553.9
|
|
||||||
Cost of goods sold
|
6,885.4
|
|
|
24.5
|
|
|
6,909.9
|
|
|||||||||
Income from continuing operations before income taxes and equity method investment earnings
|
823.3
|
|
|
(9.0
|
)
|
|
814.3
|
|
|
2018
|
|
2017
|
||||||||
Reclassified from Cost of goods sold
|
$
|
—
|
|
|
$
|
1.7
|
|
||||
Reclassified from Selling, general and administrative expense
|
80.4
|
|
|
53.5
|
|
||||||
Reclassified to Pension and postretirement non-service income
|
$
|
80.4
|
|
|
$
|
55.2
|
|
|
October 26,
2018 |
||
Cash and cash equivalents
|
$
|
47.2
|
|
Receivables
|
202.8
|
|
|
Inventories
|
653.7
|
|
|
Prepaid expenses and other current assets
|
14.9
|
|
|
Property, plant and equipment
|
721.2
|
|
|
Goodwill
|
7,015.9
|
|
|
Brands, trademarks and other intangibles
|
3,519.5
|
|
|
Other assets
|
24.3
|
|
|
Current liabilities
|
(605.5
|
)
|
|
Senior long-term debt, excluding current installments
|
(2,671.3
|
)
|
|
Noncurrent deferred tax liabilities
|
(814.1
|
)
|
|
Other noncurrent liabilities
|
(74.6
|
)
|
|
Total assets acquired and liabilities assumed
|
$
|
8,034.0
|
|
|
2019
|
|
2018
|
||||
Pro forma net sales
|
$
|
10,788.1
|
|
|
$
|
11,034.2
|
|
Pro forma net income from continuing operations attributable to Conagra Brands, Inc.
|
$
|
803.8
|
|
|
$
|
1,089.7
|
|
•
|
Acquisition related costs incurred by the Company of
$62.7 million
during fiscal 2019 were excluded and assumed to have been incurred at the beginning of fiscal 2018. Acquisition related costs incurred by Pinnacle of
$66.8 million
during fiscal 2019 were excluded from the pro forma results.
|
•
|
Non-recurring expense of
$53.0 million
for fiscal 2019 related to the fair value adjustment to acquisition-date inventory estimated to have been sold was removed and
$54.1 million
of expense was included in the results for fiscal 2018.
|
•
|
Non-recurring expense of
$45.7 million
for fiscal 2019 related to securing bridge financing for the acquisition were excluded and assumed to have been incurred at the beginning of fiscal 2018.
|
|
International
|
|
Pinnacle Foods
|
|
Corporate
|
|
Total
|
||||||||
Other cost of goods sold
|
$
|
—
|
|
|
$
|
5.7
|
|
|
$
|
—
|
|
|
$
|
5.7
|
|
Total cost of goods sold
|
—
|
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
||||
Severance and related costs
|
0.7
|
|
|
0.6
|
|
|
116.8
|
|
|
118.1
|
|
||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
6.1
|
|
|
6.1
|
|
||||
Contract/lease termination
|
—
|
|
|
0.8
|
|
|
19.8
|
|
|
20.6
|
|
||||
Consulting/professional fees
|
0.2
|
|
|
—
|
|
|
96.1
|
|
|
96.3
|
|
||||
Other selling, general and administrative expenses
|
0.1
|
|
|
—
|
|
|
13.2
|
|
|
13.3
|
|
||||
Total selling, general and administrative expenses
|
1.0
|
|
|
1.4
|
|
|
252.0
|
|
|
254.4
|
|
||||
Consolidated total
|
$
|
1.0
|
|
|
$
|
7.1
|
|
|
$
|
252.0
|
|
|
$
|
260.1
|
|
|
International
|
|
Pinnacle Foods
|
|
Corporate
|
|
Total
|
||||||||
Other cost of goods sold
|
$
|
—
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
3.7
|
|
Total cost of goods sold
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
||||
Severance and related costs
|
0.7
|
|
|
0.6
|
|
|
110.8
|
|
|
112.1
|
|
||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
4.7
|
|
|
4.7
|
|
||||
Contract/lease termination
|
—
|
|
|
0.8
|
|
|
0.3
|
|
|
1.1
|
|
||||
Consulting/professional fees
|
0.2
|
|
|
—
|
|
|
38.1
|
|
|
38.3
|
|
||||
Other selling, general and administrative expenses
|
0.1
|
|
|
—
|
|
|
8.2
|
|
|
8.3
|
|
||||
Total selling, general and administrative expenses
|
1.0
|
|
|
1.4
|
|
|
162.1
|
|
|
164.5
|
|
||||
Consolidated total
|
$
|
1.0
|
|
|
$
|
5.1
|
|
|
$
|
162.1
|
|
|
$
|
168.2
|
|
|
Balance at
May 27,
2018
|
|
Costs Incurred
and Charged
to Expense
|
|
Costs Paid
or Otherwise Settled
|
|
Changes in
Estimates
|
|
Balance at
May 26,
2019
|
||||||||||
Severance and related costs
|
$
|
—
|
|
|
$
|
121.2
|
|
|
$
|
(35.2
|
)
|
|
$
|
(9.1
|
)
|
|
$
|
76.9
|
|
Contract/lease termination
|
—
|
|
|
1.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
1.0
|
|
|||||
Consulting/professional fees
|
—
|
|
|
38.3
|
|
|
(19.9
|
)
|
|
—
|
|
|
18.4
|
|
|||||
Other costs
|
—
|
|
|
12.0
|
|
|
(10.8
|
)
|
|
—
|
|
|
1.2
|
|
|||||
Total
|
$
|
—
|
|
|
$
|
172.6
|
|
|
$
|
(66.0
|
)
|
|
$
|
(9.1
|
)
|
|
$
|
97.5
|
|
|
May 26, 2019
|
|
May 27, 2018
|
||||
5.4% senior debt due November 2048
|
$
|
1,000.0
|
|
|
$
|
—
|
|
4.65% senior debt due January 2043
|
176.7
|
|
|
176.7
|
|
||
6.625% senior debt due August 2039
|
91.4
|
|
|
91.4
|
|
||
5.3% senior debt due November 2038
|
1,000.0
|
|
|
—
|
|
||
8.25% senior debt due September 2030
|
300.0
|
|
|
300.0
|
|
||
4.85% senior debt due November 2028
|
1,300.0
|
|
|
—
|
|
||
7.0% senior debt due October 2028
|
382.2
|
|
|
382.2
|
|
||
6.7% senior debt due August 2027
|
9.2
|
|
|
9.2
|
|
||
7.125% senior debt due October 2026
|
262.5
|
|
|
262.5
|
|
||
4.6% senior debt due November 2025
|
1,000.0
|
|
|
—
|
|
||
4.3% senior debt due May 2024
|
1,000.0
|
|
|
—
|
|
||
LIBOR plus 1.50% term loan due October 2023
|
200.0
|
|
|
—
|
|
||
3.2% senior debt due January 2023
|
837.0
|
|
|
837.0
|
|
||
3.25% senior debt due September 2022
|
250.0
|
|
|
250.0
|
|
||
LIBOR plus 1.375% term loan due October 2021
|
200.0
|
|
|
—
|
|
||
3.8% senior debt due October 2021
|
1,200.0
|
|
|
—
|
|
||
9.75% subordinated debt due March 2021
|
195.9
|
|
|
195.9
|
|
||
LIBOR plus 0.75% senior debt due October 2020
|
525.0
|
|
|
—
|
|
||
LIBOR plus 0.50% senior debt due October 2020
|
500.0
|
|
|
500.0
|
|
||
4.95% senior debt due August 2020
|
126.6
|
|
|
126.6
|
|
||
LIBOR plus 0.75% term loan due February 2019
|
—
|
|
|
300.0
|
|
||
2.00% to 9.59% lease financing obligations due on various dates through 2033
|
165.4
|
|
|
94.7
|
|
||
Other indebtedness
|
0.1
|
|
|
0.2
|
|
||
Total face value of debt
|
10,722.0
|
|
|
3,526.4
|
|
||
Unamortized fair value adjustment
|
24.5
|
|
|
27.6
|
|
||
Unamortized discounts
|
(19.0
|
)
|
|
(5.8
|
)
|
||
Unamortized debt issuance costs
|
(52.1
|
)
|
|
(11.3
|
)
|
||
Adjustment due to hedging activity
|
0.9
|
|
|
1.6
|
|
||
Less current installments
|
(20.6
|
)
|
|
(307.0
|
)
|
||
Total long-term debt
|
$
|
10,655.7
|
|
|
$
|
3,231.5
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Long-term debt
|
$
|
385.9
|
|
|
$
|
161.2
|
|
|
$
|
203.6
|
|
Short-term debt
|
15.0
|
|
|
4.8
|
|
|
0.6
|
|
|||
Interest income
|
(6.8
|
)
|
|
(3.8
|
)
|
|
(3.7
|
)
|
|||
Interest capitalized
|
(2.7
|
)
|
|
(3.5
|
)
|
|
(5.0
|
)
|
|||
|
$
|
391.4
|
|
|
$
|
158.7
|
|
|
$
|
195.5
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,407.9
|
|
Income (loss) from discontinued operations before income taxes and equity method investment earnings
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
172.3
|
|
Income (loss) before income taxes and equity method investment earnings
|
—
|
|
|
(0.3
|
)
|
|
172.3
|
|
|||
Income tax expense (benefit)
|
2.8
|
|
|
(14.6
|
)
|
|
87.5
|
|
|||
Equity method investment earnings
|
—
|
|
|
—
|
|
|
15.9
|
|
|||
Income (loss) from discontinued operations, net of tax
|
(2.8
|
)
|
|
14.3
|
|
|
100.7
|
|
|||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
6.8
|
|
|||
Net income (loss) from discontinued operations attributable to Conagra Brands, Inc.
|
$
|
(2.8
|
)
|
|
$
|
14.3
|
|
|
$
|
93.9
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Loss on sale of business
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1.6
|
)
|
Income from discontinued operations before income taxes and equity method investment earnings
|
0.9
|
|
|
0.4
|
|
|
3.9
|
|
|||
Income before income taxes and equity method investment earnings
|
0.9
|
|
|
0.4
|
|
|
2.3
|
|
|||
Income tax expense (benefit)
|
—
|
|
|
0.5
|
|
|
(0.3
|
)
|
|||
Income (loss) from discontinued operations, net of tax
|
$
|
0.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.6
|
|
|
May 27, 2018
|
||
Current assets
|
$
|
6.1
|
|
Noncurrent assets (including goodwill of $5.8 million)
|
11.5
|
|
|
May 27, 2018
|
||
Current assets
|
$
|
37.7
|
|
Noncurrent assets (including goodwill of $74.5 million)
|
101.0
|
|
|
May 27, 2018
|
||
Current assets
|
$
|
23.5
|
|
Noncurrent assets (including goodwill of $15.1 million)
|
43.3
|
|
|
Current liabilities
|
13.9
|
|
|
Noncurrent liabilities
|
4.4
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales:
|
|
|
|
|
|
||||||
Ardent Mills
|
$
|
3,476.0
|
|
|
$
|
3,344.1
|
|
|
$
|
3,180.0
|
|
Others
|
195.4
|
|
|
198.8
|
|
|
177.7
|
|
|||
Total net sales
|
$
|
3,671.4
|
|
|
$
|
3,542.9
|
|
|
$
|
3,357.7
|
|
Gross margin:
|
|
|
|
|
|
|
|||||
Ardent Mills
|
$
|
281.9
|
|
|
$
|
386.5
|
|
|
$
|
340.3
|
|
Others
|
45.5
|
|
|
34.8
|
|
|
34.6
|
|
|||
Total gross margin
|
$
|
327.4
|
|
|
$
|
421.3
|
|
|
$
|
374.9
|
|
Earnings after income taxes:
|
|
|
|
|
|
|
|||||
Ardent Mills
|
$
|
151.9
|
|
|
$
|
197.0
|
|
|
$
|
152.0
|
|
Others
|
18.1
|
|
|
10.1
|
|
|
10.1
|
|
|||
Total earnings after income taxes
|
$
|
170.0
|
|
|
$
|
207.1
|
|
|
$
|
162.1
|
|
|
May 26, 2019
|
|
May 27, 2018
|
||||
Ardent Mills:
|
|
|
|
||||
Current assets
|
$
|
952.6
|
|
|
$
|
974.6
|
|
Noncurrent assets
|
1,669.8
|
|
|
1,675.7
|
|
||
Current liabilities
|
361.2
|
|
|
355.6
|
|
||
Noncurrent liabilities
|
496.9
|
|
|
510.9
|
|
||
Others:
|
|
|
|
||||
Current assets
|
$
|
89.2
|
|
|
$
|
76.4
|
|
Noncurrent assets
|
19.0
|
|
|
15.5
|
|
||
Current liabilities
|
43.4
|
|
|
37.5
|
|
||
Noncurrent liabilities
|
0.7
|
|
|
0.1
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Pinnacle Foods
|
|
Total
|
||||||||||||
Balance as of May 28, 2017
|
$
|
2,439.1
|
|
|
$
|
1,022.8
|
|
|
$
|
247.8
|
|
|
$
|
571.1
|
|
|
$
|
—
|
|
|
$
|
4,280.8
|
|
Acquisitions
|
155.2
|
|
|
57.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
213.0
|
|
||||||
Purchase accounting adjustments
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
||||||
Currency translation
|
—
|
|
|
—
|
|
|
(4.9
|
)
|
|
—
|
|
|
—
|
|
|
(4.9
|
)
|
||||||
Balance as of May 27, 2018
|
$
|
2,592.8
|
|
|
$
|
1,080.6
|
|
|
$
|
242.9
|
|
|
$
|
571.1
|
|
|
$
|
—
|
|
|
$
|
4,487.4
|
|
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,015.9
|
|
|
7,015.9
|
|
||||||
Purchase accounting adjustments
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
|
||||||
Currency translation
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
(5.2
|
)
|
||||||
Balance as of May 26, 2019
|
$
|
2,594.3
|
|
|
$
|
1,080.6
|
|
|
$
|
240.5
|
|
|
$
|
571.1
|
|
|
$
|
7,013.1
|
|
|
$
|
11,499.6
|
|
|
2019
|
|
2018
|
||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
||||||||
Non-amortizing intangible assets
|
$
|
3,678.0
|
|
|
$
|
—
|
|
|
$
|
918.3
|
|
|
$
|
—
|
|
Amortizing intangible assets
|
1,244.2
|
|
|
260.8
|
|
|
576.6
|
|
|
212.1
|
|
||||
|
$
|
4,922.2
|
|
|
$
|
260.8
|
|
|
$
|
1,494.9
|
|
|
$
|
212.1
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income available to Conagra Brands, Inc. common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
680.2
|
|
|
$
|
794.1
|
|
|
$
|
544.1
|
|
Income (loss) from discontinued operations, net of tax, attributable to Conagra Brands, Inc. common stockholders
|
(1.9
|
)
|
|
14.3
|
|
|
95.2
|
|
|||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
678.3
|
|
|
$
|
808.4
|
|
|
$
|
639.3
|
|
Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated
|
—
|
|
|
—
|
|
|
0.8
|
|
|||
Net income available to Conagra Brands, Inc. common stockholders
|
$
|
678.3
|
|
|
$
|
808.4
|
|
|
$
|
638.5
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
444.0
|
|
|
403.9
|
|
|
431.9
|
|
|||
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities
|
1.6
|
|
|
3.5
|
|
|
4.1
|
|
|||
Diluted weighted average shares outstanding
|
445.6
|
|
|
407.4
|
|
|
436.0
|
|
|
May 26, 2019
|
|
May 27, 2018
|
||||
Raw materials and packaging
|
$
|
276.5
|
|
|
$
|
202.9
|
|
Work in process
|
126.9
|
|
|
91.8
|
|
||
Finished goods
|
1,099.1
|
|
|
647.8
|
|
||
Supplies and other
|
69.2
|
|
|
46.2
|
|
||
Total
|
$
|
1,571.7
|
|
|
$
|
988.7
|
|
|
May 26, 2019
|
|
May 27, 2018
|
||||
Postretirement health care and pension obligations
|
$
|
262.5
|
|
|
$
|
261.7
|
|
Noncurrent income tax liabilities
|
1,349.0
|
|
|
487.3
|
|
||
Self-insurance liabilities
|
42.9
|
|
|
27.1
|
|
||
Environmental liabilities (see Note 17)
|
56.8
|
|
|
56.0
|
|
||
Technology agreement liability
|
28.7
|
|
|
42.7
|
|
||
Other
|
211.9
|
|
|
186.0
|
|
||
|
$
|
1,951.8
|
|
|
$
|
1,060.8
|
|
|
Stock-Settled
|
|
Cash-Settled
|
||||||||||
Share Units
|
Share Units
(in Millions)
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Share Units
(in Millions)
|
|
Weighted
Average
Grant-Date
Fair Value
|
||||||
Nonvested share units at May 27, 2018
|
1.78
|
|
|
$
|
34.20
|
|
|
0.71
|
|
|
$
|
34.58
|
|
Granted
|
0.89
|
|
|
$
|
35.43
|
|
|
1.95
|
|
|
$
|
36.37
|
|
Vested/Issued
|
(0.72
|
)
|
|
$
|
33.29
|
|
|
(1.64
|
)
|
|
$
|
35.55
|
|
Forfeited
|
(0.14
|
)
|
|
$
|
35.08
|
|
|
(0.05
|
)
|
|
$
|
36.07
|
|
Nonvested share units at May 26, 2019
|
1.81
|
|
|
$
|
34.89
|
|
|
0.97
|
|
|
$
|
36.20
|
|
Performance Shares
|
Share Units
(in Millions)
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||
Nonvested performance shares at May 27, 2018
|
1.00
|
|
|
$
|
33.40
|
|
Granted
|
0.45
|
|
|
$
|
35.96
|
|
Adjustments for performance results attained and dividend equivalents
|
0.18
|
|
|
$
|
31.03
|
|
Vested/Issued
|
(0.43
|
)
|
|
$
|
31.03
|
|
Forfeited
|
(0.05
|
)
|
|
$
|
34.54
|
|
Nonvested performance shares at May 26, 2019
|
1.15
|
|
|
$
|
34.89
|
|
|
2017
|
Expected volatility (%)
|
19.15
|
Dividend yield (%)
|
2.33
|
Risk-free interest rates (%)
|
1.03
|
Expected life of stock option (years)
|
4.94
|
Options
|
Number
of Options
(in Millions)
|
|
Weighted
Average
Exercise
Price
|
|
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value (in
Millions)
|
|||||
Outstanding at May 27, 2018
|
5.1
|
|
|
$
|
28.11
|
|
|
|
|
|
||
Exercised
|
(0.6
|
)
|
|
$
|
20.75
|
|
|
|
|
$
|
7.9
|
|
Expired
|
(0.1
|
)
|
|
$
|
29.84
|
|
|
|
|
|
||
Outstanding at May 26, 2019
|
4.4
|
|
|
$
|
29.00
|
|
|
5.47
|
|
$
|
9.9
|
|
Exercisable at May 26, 2019
|
4.1
|
|
|
$
|
28.38
|
|
|
5.32
|
|
$
|
9.9
|
|
Stock Appreciation Rights
|
Number
of Options
(in Millions)
|
|
Weighted
Average
Exercise
Price
|
|
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value (in
Millions)
|
|||||
Granted
|
2.3
|
|
|
$
|
27.09
|
|
|
|
|
|
||
Exercised
|
(0.1
|
)
|
|
$
|
24.79
|
|
|
|
|
$
|
0.1
|
|
Expired
|
(1.8
|
)
|
|
$
|
26.92
|
|
|
|
|
|
||
Outstanding at May 26, 2019
|
0.4
|
|
|
$
|
28.13
|
|
|
0.16
|
|
$
|
0.6
|
|
Exercisable at May 26, 2019
|
0.4
|
|
|
$
|
28.13
|
|
|
0.16
|
|
$
|
0.6
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
826.6
|
|
|
$
|
902.5
|
|
|
$
|
883.5
|
|
Foreign
|
72.5
|
|
|
69.6
|
|
|
(82.8
|
)
|
|||
|
$
|
899.1
|
|
|
$
|
972.1
|
|
|
$
|
800.7
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
125.4
|
|
|
$
|
153.1
|
|
|
$
|
201.5
|
|
State
|
22.6
|
|
|
17.8
|
|
|
6.7
|
|
|||
Foreign
|
21.6
|
|
|
32.5
|
|
|
6.5
|
|
|||
|
169.6
|
|
|
203.4
|
|
|
214.7
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
40.1
|
|
|
(43.7
|
)
|
|
62.1
|
|
|||
State
|
19.0
|
|
|
17.4
|
|
|
(5.3
|
)
|
|||
Foreign
|
(9.9
|
)
|
|
(2.5
|
)
|
|
(16.8
|
)
|
|||
|
49.2
|
|
|
(28.8
|
)
|
|
40.0
|
|
|||
|
$
|
218.8
|
|
|
$
|
174.6
|
|
|
$
|
254.7
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Computed U.S. Federal income taxes
|
$
|
188.8
|
|
|
$
|
285.3
|
|
|
$
|
280.2
|
|
State income taxes, net of U.S. Federal tax impact
|
34.1
|
|
|
18.0
|
|
|
22.4
|
|
|||
Remeasurement of U.S. deferred taxes
|
—
|
|
|
(241.6
|
)
|
|
—
|
|
|||
Transition tax on foreign earnings
|
(4.6
|
)
|
|
19.8
|
|
|
—
|
|
|||
Tax credits and domestic manufacturing deduction
|
(5.6
|
)
|
|
(20.6
|
)
|
|
(19.8
|
)
|
|||
Federal rate differential on legal reserve
|
—
|
|
|
12.6
|
|
|
—
|
|
|||
Goodwill and intangible impairments
|
12.5
|
|
|
—
|
|
|
104.7
|
|
|||
Stock compensation
|
(2.1
|
)
|
|
(5.7
|
)
|
|
(18.8
|
)
|
|||
Legal entity reorganization
|
16.9
|
|
|
—
|
|
|
—
|
|
|||
State tax impact of combining Pinnacle business
|
(12.0
|
)
|
|
—
|
|
|
—
|
|
|||
Change of valuation allowance on capital loss carryforward
|
(32.2
|
)
|
|
78.6
|
|
|
(84.1
|
)
|
|||
Change in estimate related to tax methods used for certain international sales, federal credits, and state credits
|
—
|
|
|
—
|
|
|
(8.0
|
)
|
|||
Other
|
23.0
|
|
|
28.2
|
|
|
(21.9
|
)
|
|||
|
$
|
218.8
|
|
|
$
|
174.6
|
|
|
$
|
254.7
|
|
|
May 26, 2019
|
|
May 27, 2018
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Property, plant and equipment
|
$
|
—
|
|
|
$
|
240.7
|
|
|
$
|
—
|
|
|
$
|
141.0
|
|
Inventory
|
15.2
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
||||
Goodwill, trademarks and other intangible assets
|
—
|
|
|
1,187.0
|
|
|
—
|
|
|
406.2
|
|
||||
Accrued expenses
|
11.8
|
|
|
—
|
|
|
15.5
|
|
|
—
|
|
||||
Compensation related liabilities
|
35.9
|
|
|
—
|
|
|
34.1
|
|
|
—
|
|
||||
Pension and other postretirement benefits
|
54.6
|
|
|
—
|
|
|
45.8
|
|
|
—
|
|
||||
Investment in unconsolidated subsidiaries
|
—
|
|
|
185.4
|
|
|
—
|
|
|
165.8
|
|
||||
Other liabilities that will give rise to future tax deductions
|
123.5
|
|
|
—
|
|
|
109.7
|
|
|
—
|
|
||||
Net capital and operating loss carryforwards
|
766.5
|
|
|
—
|
|
|
762.5
|
|
|
—
|
|
||||
Federal credits
|
18.0
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
||||
Other
|
37.6
|
|
|
24.0
|
|
|
23.6
|
|
|
9.5
|
|
||||
|
1,063.1
|
|
|
1,637.1
|
|
|
997.3
|
|
|
722.5
|
|
||||
Less: Valuation allowance
|
(738.1
|
)
|
|
—
|
|
|
(739.6
|
)
|
|
—
|
|
||||
Net deferred taxes
|
$
|
325.0
|
|
|
$
|
1,637.1
|
|
|
$
|
257.7
|
|
|
$
|
722.5
|
|
Beginning balance on May 27, 2018
|
$
|
32.5
|
|
Acquired business positions
|
10.6
|
|
|
Increases from positions established during prior periods
|
7.7
|
|
|
Decreases from positions established during prior periods
|
(3.4
|
)
|
|
Increases from positions established during the current period
|
4.2
|
|
|
Decreases relating to settlements with taxing authorities
|
(5.2
|
)
|
|
Reductions resulting from lapse of applicable statute of limitation
|
(3.3
|
)
|
|
Other adjustments to liability
|
1.0
|
|
|
Ending balance on May 26, 2019
|
$
|
44.1
|
|
2020
|
$
|
52.1
|
|
2021
|
48.4
|
|
|
2022
|
38.0
|
|
|
2023
|
34.1
|
|
|
2024
|
25.6
|
|
|
Later years
|
114.4
|
|
|
|
$
|
312.6
|
|
|
May 26, 2019
|
|
May 27, 2018
|
||||
Prepaid expenses and other current assets
|
$
|
5.9
|
|
|
$
|
4.4
|
|
Other accrued liabilities
|
1.4
|
|
|
0.1
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
4.9
|
|
|
Other accrued liabilities
|
|
$
|
0.9
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
1.4
|
|
|
Other accrued liabilities
|
|
0.9
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
0.1
|
|
|
Other accrued liabilities
|
|
—
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
6.4
|
|
|
|
|
$
|
1.8
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
3.7
|
|
|
Other accrued liabilities
|
|
$
|
0.4
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
2.1
|
|
|
Other accrued liabilities
|
|
—
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other accrued liabilities
|
|
0.1
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
5.8
|
|
|
|
|
$
|
0.5
|
|
|
|
For the Fiscal Year Ended May 26, 2019
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
Location in Consolidated Statement of Operations of
Gain (Loss) Recognized on Derivatives
|
|
Amount of Gain (Loss)
Recognized on Derivatives
in Consolidated
Statement of Operations
|
||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
(5.3
|
)
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
1.7
|
|
|
Total loss from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
(3.6
|
)
|
|
|
For the Fiscal Year Ended May 27, 2018
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
Location in Consolidated Statement of Operations of
Gain (Loss) Recognized on Derivatives
|
|
Amount of Gain (Loss)
Recognized on Derivatives
in Consolidated
Statement of Operations
|
||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
3.0
|
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
(3.9
|
)
|
|
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
0.3
|
|
|
Total loss from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
(0.6
|
)
|
|
|
For the Fiscal Year Ended May 28, 2017
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
Location in Consolidated Statement of Operations of
Gain (Loss) Recognized on Derivatives
|
|
Amount of Gain (Loss)
Recognized on Derivatives
in Consolidated
Statement of Operations
|
||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
0.9
|
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
(0.3
|
)
|
|
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
0.2
|
|
|
Total gain from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
0.8
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
3,423.6
|
|
|
$
|
3,548.7
|
|
|
$
|
119.3
|
|
|
$
|
156.9
|
|
Service cost
|
10.9
|
|
|
42.8
|
|
|
0.1
|
|
|
0.2
|
|
||||
Interest cost
|
132.6
|
|
|
111.1
|
|
|
3.8
|
|
|
3.9
|
|
||||
Plan participants' contributions
|
—
|
|
|
—
|
|
|
2.5
|
|
|
4.7
|
|
||||
Amendments
|
1.4
|
|
|
0.6
|
|
|
(0.8
|
)
|
|
(17.2
|
)
|
||||
Actuarial loss (gain)
|
150.1
|
|
|
(9.4
|
)
|
|
(24.3
|
)
|
|
(13.2
|
)
|
||||
Plan settlements
|
—
|
|
|
(10.2
|
)
|
|
(0.5
|
)
|
|
—
|
|
||||
Curtailments
|
—
|
|
|
(79.5
|
)
|
|
(0.6
|
)
|
|
—
|
|
||||
Benefits paid
|
(191.2
|
)
|
|
(181.3
|
)
|
|
(9.8
|
)
|
|
(16.2
|
)
|
||||
Currency
|
(0.6
|
)
|
|
0.8
|
|
|
(0.2
|
)
|
|
0.2
|
|
||||
Business acquisitions and divestitures
|
206.4
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
||||
Benefit obligation at end of year
|
$
|
3,733.2
|
|
|
$
|
3,423.6
|
|
|
$
|
91.2
|
|
|
$
|
119.3
|
|
Change in Plan Assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
3,355.1
|
|
|
$
|
2,983.6
|
|
|
$
|
3.7
|
|
|
$
|
—
|
|
Actual return on plan assets
|
252.2
|
|
|
249.6
|
|
|
0.2
|
|
|
3.7
|
|
||||
Employer contributions
|
14.7
|
|
|
312.6
|
|
|
7.3
|
|
|
11.5
|
|
||||
Plan participants' contributions
|
—
|
|
|
—
|
|
|
2.5
|
|
|
4.7
|
|
||||
Plan settlements
|
—
|
|
|
(10.2
|
)
|
|
(0.5
|
)
|
|
—
|
|
||||
Benefits paid
|
(191.2
|
)
|
|
(181.3
|
)
|
|
(9.8
|
)
|
|
(16.2
|
)
|
||||
Currency
|
(0.6
|
)
|
|
0.8
|
|
|
—
|
|
|
—
|
|
||||
Business acquisitions and divestitures
|
171.3
|
|
|
—
|
|
|
|
|
—
|
|
|||||
Fair value of plan assets at end of year
|
$
|
3,601.5
|
|
|
$
|
3,355.1
|
|
|
$
|
3.4
|
|
|
$
|
3.7
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Funded Status
|
|
$
|
(131.7
|
)
|
|
$
|
(68.5
|
)
|
|
$
|
(87.8
|
)
|
|
$
|
(115.6
|
)
|
Amounts Recognized in Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
||||||||
Other assets
|
|
$
|
61.2
|
|
|
$
|
103.0
|
|
|
$
|
2.8
|
|
|
$
|
2.6
|
|
Other accrued liabilities
|
|
(10.2
|
)
|
|
(11.8
|
)
|
|
(10.8
|
)
|
|
(16.2
|
)
|
||||
Other noncurrent liabilities
|
|
(182.7
|
)
|
|
(159.7
|
)
|
|
(79.8
|
)
|
|
(102.0
|
)
|
||||
Net Amount Recognized
|
|
$
|
(131.7
|
)
|
|
$
|
(68.5
|
)
|
|
$
|
(87.8
|
)
|
|
$
|
(115.6
|
)
|
Amounts Recognized in Accumulated Other Comprehensive (Income) Loss (Pre-tax)
|
|
|
|
|
|
|
|
|
||||||||
Actuarial net loss (gain)
|
|
$
|
115.8
|
|
|
$
|
48.8
|
|
|
$
|
(47.8
|
)
|
|
$
|
(25.8
|
)
|
Net prior service cost (benefit)
|
|
12.1
|
|
|
13.8
|
|
|
(17.1
|
)
|
|
(18.4
|
)
|
||||
Total
|
|
$
|
127.9
|
|
|
$
|
62.6
|
|
|
$
|
(64.9
|
)
|
|
$
|
(44.2
|
)
|
Weighted-Average Actuarial Assumptions Used to Determine Benefit Obligations at May 26, 2019 and May 27, 2018
|
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
|
3.88
|
%
|
|
4.14
|
%
|
|
3.48
|
%
|
|
3.81
|
%
|
||||
Long-term rate of compensation increase
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
|
$
|
964.3
|
|
|
$
|
951.1
|
|
Accumulated benefit obligation
|
|
963.7
|
|
|
950.1
|
|
||
Fair value of plan assets
|
|
771.4
|
|
|
779.5
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost
|
$
|
10.9
|
|
|
$
|
42.8
|
|
|
$
|
56.9
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
Interest cost
|
132.6
|
|
|
111.1
|
|
|
116.8
|
|
|
3.8
|
|
|
3.9
|
|
|
4.6
|
|
||||||
Expected return on plan assets
|
(174.4
|
)
|
|
(218.3
|
)
|
|
(207.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (benefit)
|
3.1
|
|
|
2.9
|
|
|
2.6
|
|
|
(2.2
|
)
|
|
(3.4
|
)
|
|
(6.6
|
)
|
||||||
Special termination benefits
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognized net actuarial loss (gain)
|
5.1
|
|
|
3.4
|
|
|
1.2
|
|
|
(1.4
|
)
|
|
—
|
|
|
0.5
|
|
||||||
Settlement loss (gain)
|
—
|
|
|
1.3
|
|
|
13.8
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
||||||
Curtailment loss (gain)
|
—
|
|
|
0.7
|
|
|
1.7
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefit cost — Company plans
|
(22.7
|
)
|
|
(56.1
|
)
|
|
(12.9
|
)
|
|
(1.3
|
)
|
|
0.7
|
|
|
(1.2
|
)
|
||||||
Pension benefit cost — multi-employer plans
|
6.3
|
|
|
7.1
|
|
|
12.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total benefit (income) cost
|
$
|
(16.4
|
)
|
|
$
|
(49.0
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
0.7
|
|
|
$
|
(1.2
|
)
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net actuarial gain (loss)
|
|
$
|
(72.1
|
)
|
|
$
|
120.0
|
|
|
$
|
25.1
|
|
|
$
|
16.8
|
|
Amendments
|
|
(1.4
|
)
|
|
(0.6
|
)
|
|
0.8
|
|
|
17.2
|
|
||||
Amortization of prior service cost (benefit)
|
|
3.1
|
|
|
2.9
|
|
|
(2.2
|
)
|
|
(3.4
|
)
|
||||
Settlement and curtailment loss (gain)
|
|
—
|
|
|
2.0
|
|
|
(1.6
|
)
|
|
—
|
|
||||
Recognized net actuarial loss (gain)
|
|
5.1
|
|
|
3.4
|
|
|
(1.4
|
)
|
|
—
|
|
||||
Net amount recognized
|
|
$
|
(65.3
|
)
|
|
$
|
127.7
|
|
|
$
|
20.7
|
|
|
$
|
30.6
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
Discount rate
|
|
4.15
|
%
|
|
3.90
|
%
|
|
3.83
|
%
|
|
3.81
|
%
|
|
3.33
|
%
|
|
3.18
|
%
|
Long-term rate of return on plan assets
|
|
5.17
|
%
|
|
7.50
|
%
|
|
7.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Long-term rate of compensation increase
|
|
3.63
|
%
|
|
3.63
|
%
|
|
3.66
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
|
$
|
0.7
|
|
|
$
|
77.7
|
|
|
$
|
—
|
|
|
$
|
78.4
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. equity securities
|
|
56.3
|
|
|
91.8
|
|
|
—
|
|
|
148.1
|
|
||||
International equity securities
|
|
87.8
|
|
|
0.4
|
|
|
—
|
|
|
88.2
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Government bonds
|
|
—
|
|
|
748.3
|
|
|
—
|
|
|
748.3
|
|
||||
Corporate bonds
|
|
—
|
|
|
2,255.5
|
|
|
—
|
|
|
2,255.5
|
|
||||
Mortgage-backed bonds
|
|
—
|
|
|
31.1
|
|
|
—
|
|
|
31.1
|
|
||||
Real estate funds
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||
Net receivables for unsettled transactions
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
||||
Fair value measurement of pension plan assets in the fair value hierarchy
|
|
$
|
150.8
|
|
|
$
|
3,204.8
|
|
|
$
|
—
|
|
|
$
|
3,355.6
|
|
Investments measured at net asset value
|
|
|
|
|
|
|
|
245.9
|
|
|||||||
Total pension plan assets
|
|
|
|
|
|
|
|
|
|
|
$
|
3,601.5
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
|
$
|
1.0
|
|
|
$
|
65.0
|
|
|
$
|
—
|
|
|
$
|
66.0
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. equity securities
|
|
319.8
|
|
|
124.0
|
|
|
—
|
|
|
443.8
|
|
||||
International equity securities
|
|
256.5
|
|
|
1.0
|
|
|
—
|
|
|
257.5
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Government bonds
|
|
—
|
|
|
1,854.8
|
|
|
—
|
|
|
1,854.8
|
|
||||
Corporate bonds
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
4.7
|
|
||||
Mortgage-backed bonds
|
|
—
|
|
|
9.3
|
|
|
—
|
|
|
9.3
|
|
||||
Real estate funds
|
|
7.7
|
|
|
—
|
|
|
—
|
|
|
7.7
|
|
||||
Master limited partnerships
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||
Net receivables for unsettled transactions
|
|
10.9
|
|
|
—
|
|
|
—
|
|
|
10.9
|
|
||||
Fair value measurement of pension plan assets in the fair value hierarchy
|
|
$
|
596.3
|
|
|
$
|
2,058.8
|
|
|
$
|
—
|
|
|
$
|
2,655.1
|
|
Investments measured at net asset value
|
|
|
|
|
|
|
|
700.0
|
|
|||||||
Total pension plan assets
|
|
|
|
|
|
|
|
$
|
3,355.1
|
|
|
|
May 26, 2019
|
|
May 27, 2018
|
||
Equity securities
|
|
7
|
%
|
|
21
|
%
|
Debt securities
|
|
85
|
%
|
|
58
|
%
|
Real estate funds
|
|
1
|
%
|
|
10
|
%
|
Multi-strategy hedge funds
|
|
—
|
%
|
|
4
|
%
|
Private equity
|
|
3
|
%
|
|
4
|
%
|
Other
|
|
4
|
%
|
|
3
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
Assumed Health Care Cost Trend Rates at:
|
|
May 26, 2019
|
|
May 27, 2018
|
||
Initial health care cost trend rate
|
|
7.20
|
%
|
|
7.87
|
%
|
Ultimate health care cost trend rate
|
|
4.5
|
%
|
|
4.5
|
%
|
Year that the rate reaches the ultimate trend rate
|
|
2024
|
|
|
2024
|
|
|
|
Pension Benefits
|
|
Health Care and Life Insurance
Benefits
|
||||
2020
|
|
$
|
200.7
|
|
|
$
|
10.9
|
|
2021
|
|
201.3
|
|
|
10.1
|
|
||
2022
|
|
203.9
|
|
|
9.3
|
|
||
2023
|
|
207.1
|
|
|
8.5
|
|
||
2024
|
|
210.0
|
|
|
7.8
|
|
||
Succeeding 5 years
|
|
1,074.8
|
|
|
30.2
|
|
a.
|
Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
|
b.
|
If a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
c.
|
If the Company ceases to have an obligation to contribute to a multiemployer plan in which it had been a contributing employer, it may be required to pay to the plan an amount based on the underfunded status of the plan and on the history of the Company's participation in the plan prior to the cessation of its obligation to contribute. The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.
|
•
|
The "EIN / PN" column provides the Employer Identification Number and the three-digit plan number assigned to a plan by the Internal Revenue Service.
|
•
|
The most recent Pension Protection Act Zone Status available for 2018 and 2017 is for plan years that ended in calendar years 2018 and 2017, respectively. The zone status is based on information provided to the Company by each plan. A plan in the "red" zone has been determined to be in "critical status", based on criteria established under the Internal Revenue Code ("Code"), and is generally less than
65%
funded. A plan in the "yellow" zone has been determined to be in "endangered status", based on criteria established under the Code, and is generally less than
80%
funded. A plan in the "green" zone has been determined to be neither in "critical status" nor in "endangered status", and is generally at least
80%
funded.
|
•
|
The "FIP/RP Status Pending/Implemented" column indicates whether a Funding Improvement Plan, as required under the Code to be adopted by plans in the "yellow" zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the "red" zone, is pending or has been implemented by the plan as of the end of the plan year that ended in calendar year 2018.
|
•
|
Contributions by the Company are the amounts contributed in the Company's fiscal periods ending in the specified year.
|
•
|
The "Surcharge Imposed" column indicates whether the Company contribution rate for its fiscal year that ended on
May 26, 2019
included an amount in addition to the contribution rate specified in the applicable collective bargaining agreement, as imposed by a plan in "critical status", in accordance with the requirements of the Code.
|
•
|
The last column lists the expiration dates of the collective bargaining agreements pursuant to which the Company contributes to the plans.
|
|
|
Pension Protection Act
Zone Status
|
FIP /
RP Status Pending / Implemented |
Contributions by
the Company
(millions)
|
|
Expiration
Dates of
Collective
Bargaining
Agreements
|
|||||||
Pension Fund
|
EIN / PN
|
2018
|
2017
|
FY19
|
FY18
|
FY17
|
Surcharge
Imposed
|
||||||
Bakery and Confectionary Union and Industry International Pension Plan
|
52-6118572
/ 001 |
Red, Critical and Declining
|
Red, Critical and Declining
|
RP Implemented
|
$
|
0.1
|
|
$
|
1.5
|
|
$1.8
|
No
|
2/29/2020
|
Central States, Southeast and Southwest Areas Pension Fund
|
36-6044243
/ 001 |
Red, Critical and Declining
|
Red
|
RP Implemented
|
1.8
|
|
1.8
|
|
1.8
|
No
|
5/31/2020
|
||
Western Conference of Teamsters Pension Plan
|
91-6145047
/ 001 |
Green
|
Green
|
N/A
|
3.2
|
|
2.8
|
|
4.0
|
No
|
06/30/2021
|
||
Other Plans
|
0.9
|
|
0.4
|
|
0.4
|
|
|
||||||
Total Contributions
|
$
|
6.0
|
|
$6.5
|
$8.0
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
3.0
|
|
|
$
|
2.9
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
Marketable securities
|
15.7
|
|
|
—
|
|
|
—
|
|
|
15.7
|
|
||||
Deferred compensation assets
|
10.7
|
|
|
—
|
|
|
—
|
|
|
10.7
|
|
||||
Total assets
|
$
|
29.4
|
|
|
$
|
2.9
|
|
|
$
|
—
|
|
|
$
|
32.3
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
Deferred compensation liabilities
|
70.4
|
|
|
—
|
|
|
—
|
|
|
70.4
|
|
||||
Total liabilities
|
$
|
70.4
|
|
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
71.8
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
1.7
|
|
|
$
|
2.7
|
|
|
$
|
—
|
|
|
$
|
4.4
|
|
Marketable 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
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
|
|
|
|
|
||||||
Grocery & Snacks
|
$
|
3,279.2
|
|
|
$
|
3,287.0
|
|
|
$
|
3,208.8
|
|
Refrigerated & Frozen
|
2,804.0
|
|
|
2,753.0
|
|
|
2,652.7
|
|
|||
International
|
793.4
|
|
|
843.5
|
|
|
816.0
|
|
|||
Foodservice
|
934.2
|
|
|
1,054.8
|
|
|
1,078.3
|
|
|||
Pinnacle Foods
|
1,727.6
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
—
|
|
|
—
|
|
|
71.1
|
|
|||
Total net sales
|
$
|
9,538.4
|
|
|
$
|
7,938.3
|
|
|
$
|
7,826.9
|
|
Operating profit
|
|
|
|
|
|
||||||
Grocery & Snacks
|
$
|
689.2
|
|
|
$
|
724.8
|
|
|
$
|
655.4
|
|
Refrigerated & Frozen
|
502.2
|
|
|
479.4
|
|
|
445.8
|
|
|||
International
|
94.5
|
|
|
86.5
|
|
|
(168.9
|
)
|
|||
Foodservice
|
117.7
|
|
|
121.8
|
|
|
105.1
|
|
|||
Pinnacle Foods
|
238.2
|
|
|
—
|
|
|
—
|
|
|||
Commercial
|
—
|
|
|
—
|
|
|
202.6
|
|
|||
Total operating profit
|
$
|
1,641.8
|
|
|
$
|
1,412.5
|
|
|
$
|
1,240.0
|
|
Equity method investment earnings
|
75.8
|
|
|
97.3
|
|
|
71.2
|
|
|||
General corporate expenses
|
462.2
|
|
|
459.4
|
|
|
370.2
|
|
|||
Pension and postretirement non-service income
|
35.1
|
|
|
80.4
|
|
|
55.2
|
|
|||
Interest expense, net
|
391.4
|
|
|
158.7
|
|
|
195.5
|
|
|||
Income tax expense
|
218.8
|
|
|
174.6
|
|
|
254.7
|
|
|||
Income from continuing operations
|
$
|
680.3
|
|
|
$
|
797.5
|
|
|
$
|
546.0
|
|
Less: Net income attributable to noncontrolling interests of continuing operations
|
0.1
|
|
|
3.4
|
|
|
1.9
|
|
|||
Income from continuing operations attributable to Conagra Brands, Inc.
|
$
|
680.2
|
|
|
$
|
794.1
|
|
|
$
|
544.1
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Snacks
|
$
|
1,363.4
|
|
|
$
|
1,199.0
|
|
|
$
|
1,046.7
|
|
Other shelf-stable
|
2,567.1
|
|
|
2,088.0
|
|
|
2,162.1
|
|
|||
Frozen
|
2,968.4
|
|
|
2,014.8
|
|
|
1,886.1
|
|
|||
Refrigerated
|
788.0
|
|
|
738.2
|
|
|
766.5
|
|
|||
International
|
846.2
|
|
|
843.5
|
|
|
816.0
|
|
|||
Foodservice
|
1,005.3
|
|
|
1,054.8
|
|
|
1,078.4
|
|
|||
Commercial
|
—
|
|
|
—
|
|
|
71.1
|
|
|||
Total net sales
|
$
|
9,538.4
|
|
|
$
|
7,938.3
|
|
|
$
|
7,826.9
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net derivative gains (losses) incurred
|
$
|
(3.6
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
0.6
|
|
Less: Net derivative gains (losses) allocated to reporting segments
|
(1.8
|
)
|
|
(7.1
|
)
|
|
5.7
|
|
|||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
(1.8
|
)
|
|
$
|
6.2
|
|
|
$
|
(5.1
|
)
|
Net derivative gains (losses) allocated to Grocery & Snacks
|
$
|
(2.1
|
)
|
|
$
|
0.2
|
|
|
$
|
3.4
|
|
Net derivative gains (losses) allocated to Refrigerated & Frozen
|
(1.1
|
)
|
|
(0.3
|
)
|
|
0.8
|
|
|||
Net derivative gains (losses) allocated to International
|
2.8
|
|
|
(6.9
|
)
|
|
1.6
|
|
|||
Net derivative losses allocated to Foodservice
|
(0.6
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Net derivative losses allocated to Pinnacle Foods
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|||
Net derivative losses allocated to Commercial
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Net derivative gains (losses) included in segment operating profit
|
$
|
(1.8
|
)
|
|
$
|
(7.1
|
)
|
|
$
|
5.7
|
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||||||||||
Net sales
|
$
|
1,834.4
|
|
|
$
|
2,383.7
|
|
|
$
|
2,707.1
|
|
|
$
|
2,613.2
|
|
|
$
|
1,804.2
|
|
|
$
|
2,173.4
|
|
|
$
|
1,994.5
|
|
|
$
|
1,966.2
|
|
Gross profit
|
515.5
|
|
|
677.2
|
|
|
752.3
|
|
|
708.0
|
|
|
519.0
|
|
|
658.3
|
|
|
598.8
|
|
|
575.4
|
|
||||||||
Income from continuing operations, net of tax
|
178.2
|
|
|
134.3
|
|
|
242.6
|
|
|
125.2
|
|
|
153.6
|
|
|
224.1
|
|
|
349.2
|
|
|
70.6
|
|
||||||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
0.4
|
|
|
14.5
|
|
|
(0.3
|
)
|
||||||||
Net income attributable to Conagra Brands, Inc.
|
178.2
|
|
|
131.6
|
|
|
242.0
|
|
|
126.5
|
|
|
152.5
|
|
|
223.5
|
|
|
362.8
|
|
|
69.6
|
|
||||||||
Earnings per share
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.45
|
|
|
$
|
0.31
|
|
|
$
|
0.50
|
|
|
$
|
0.26
|
|
|
$
|
0.37
|
|
|
$
|
0.55
|
|
|
$
|
0.91
|
|
|
$
|
0.18
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.45
|
|
|
$
|
0.31
|
|
|
$
|
0.50
|
|
|
$
|
0.26
|
|
|
$
|
0.36
|
|
|
$
|
0.54
|
|
|
$
|
0.90
|
|
|
$
|
0.18
|
|
Dividends declared per common share
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
|
$
|
0.2125
|
|
Share price:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
High
|
$
|
38.94
|
|
|
$
|
38.25
|
|
|
$
|
32.60
|
|
|
$
|
31.28
|
|
|
$
|
39.95
|
|
|
$
|
35.87
|
|
|
$
|
38.50
|
|
|
$
|
38.29
|
|
Low
|
34.64
|
|
|
32.42
|
|
|
20.85
|
|
|
22.37
|
|
|
33.07
|
|
|
32.43
|
|
|
35.47
|
|
|
35.34
|
|
(1)
|
Basic and diluted earnings per share are calculated independently for each of the quarters presented. Accordingly, the sum of the quarterly earnings per share amounts may not agree with the total year.
|
/s/ SEAN M. CONNOLLY
Sean M. Connolly
President and Chief Executive Officer
July 19, 2019
|
/s/ DAVID S. MARBERGER
David S. Marberger
Executive Vice President and Chief Financial Officer
July 19, 2019
|
Plan Category
|
|
Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants, and Rights
(a)
|
|
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants, and
Rights
(b)
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
(c)
|
||||
Equity compensation plans approved by security holders (1)
|
|
7,867,712
|
|
|
$
|
29.00
|
|
|
40,897,313
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
7,867,712
|
|
|
$
|
29.00
|
|
|
40,897,313
|
|
(1)
|
Column (a) includes 1,169,063 shares that could be issued under performance shares outstanding at
May 26, 2019
. The performance shares are earned and common stock issued if pre-set financial objectives are met. Included are 95,909 shares for one-third of the fiscal 2017 through 2019 performance period, for which the performance has been determined. For the remaining performance periods, actual shares issued may be equal to, less than, or greater than the number of outstanding performance shares included in column (a), depending on actual performance. Column (b) does not take these awards into account because they do not have an exercise price. The number of shares reflected in column (a) with respect to these performance shares for which the performance has not been determined assumes the vesting criteria will be achieved at target levels. Column (c) has not been reduced for the performance shares outstanding. Column (a) also includes 184,686 shares that could be issued under performance-based restricted stock units outstanding at
May 26, 2019
. The performance-based restricted stock units are earned and common stock issued if pre-set market-based objectives are met. Actual shares issued may be equal to, less than, or greater than the number of outstanding performance-based restricted stock units included in column (a), depending on actual performance. Column (b) does not take these awards into account because they do not have an exercise price. Column (c) has not been reduced for the performance-based restricted stock units outstanding. The number of shares reflected in column (a) with respect to these performance-based restricted stock units assumes the vesting criteria will be achieved at target levels. Column (b) also excludes 1,810,201 restricted stock units and 278,432 deferral interests in deferred compensation plans that are included in column (a) but do not have an exercise price. The units vest and are payable in common stock after expiration of the time periods set forth in the related agreements. The interests in the deferred compensation plans are settled in common stock on the schedules selected by the participants.
|
EXHIBIT
|
|
DESCRIPTION
|
|
|
|
*2.1
|
|
|
|
|
|
*2.1.1
|
|
|
|
|
|
*2.1.2
|
|
|
|
|
|
*2.1.3
|
|
|
|
|
|
*2.1.4
|
|
|
|
|
|
*2.1.5
|
|
|
|
|
|
*2.2
|
|
|
|
|
|
*2.2.1
|
|
|
|
|
|
2.2.2
|
|
|
|
|
*2.3
|
|
|
|
|
|
*2.4
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
Indenture, dated as of October 8, 1990, between Conagra Brands, Inc. (formerly ConAgra Foods, Inc.) and The Bank of New York Mellon (as successor to JPMorgan Chase Bank, N.A. and The Chase Manhattan Bank (National Association)), as trustee, incorporated by reference to Exhibit 4.1 of Conagra Brands’ Registration Statement on Form S-3 (Registration No. 033-36967)
|
|
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4.2
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4.2.1
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4.2.2
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4.3
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**10.1
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**10.1.1
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**10.1.2
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**10.1.3
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**10.1.4
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**10.2
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**10.3
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**10.3.1
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**10.3.2
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**10.4
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**10.4.1
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**10.4.2
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**10.4.3
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**10.5
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**10.5.1
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**10.5.2
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**10.5.3
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**10.5.4
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**10.5.5
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**10.5.6
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**10.5.7
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**10.5.8
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**10.5.9
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**10.5.10
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CONAGRA BRANDS, INC.
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By:
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/s/ SEAN M. CONNOLLY
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Sean M. Connolly
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President and Chief Executive Officer
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July 19, 2019
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By:
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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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July 19, 2019
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By:
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/s/ ROBERT G. WISE
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Robert G. Wise
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Senior Vice President and Corporate Controller
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July 19, 2019
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Sean M. Connolly*
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Director
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Anil Arora*
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Director
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Thomas K. Brown*
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Director
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Stephen G. Butler*
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Director
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Joie A. Gregor*
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Director
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Rajive Johri*
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Director
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Richard H. Lenny*
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Director
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Melissa Lora*
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Director
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Ruth Ann Marshall*
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Director
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Craig P. Omtvedt*
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Director
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Scott Ostfeld*
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Director
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By:
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/s/ DAVID S. MARBERGER
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David S. Marberger
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Attorney-In-Fact
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•
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the title of the series;
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•
|
the voting rights of the holders of the preferred stock;
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•
|
the dividends, if any, which will be payable with regard to the series;
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•
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the terms, if any, on which the series may or will be redeemed;
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•
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the preference, if any, to which holders of the series will be entitled upon our liquidation;
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•
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the right, if any, of holders of the series to convert them into another class of our stock or securities; and
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•
|
any other material terms of the series.
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•
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prior to the time that the person became an interested stockholder the corporation’s board of directors approved either the business combination or the transaction that resulted in the stockholder’s becoming an interested stockholder;
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•
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upon consummation of the transaction which resulted in the stockholder’s becoming an interested stockholder, the stockholder owned at least 85% of the outstanding voting stock of the corporation at the time the transaction commenced, excluding for the purpose of determining the number of shares outstanding those shares owned by the corporation’s officers and directors and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
|
•
|
at or subsequent to the time, the business combination is approved by the corporation’s board of directors and authorized at an annual or special meeting of its stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of its outstanding voting stock that is not owned by the interested stockholder.
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1.
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Award Grant.
Conagra hereby grants Restricted Stock Units ("RSUs", and each such unit an “RSU”) to the Participant under the Conagra Brands, Inc. 2014 Stock Plan (the “Plan”), as follows, effective as of the Date of Grant set forth below:
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(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)
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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.
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(iii)
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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)
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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.
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(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, 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.
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(iii)
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by reason of Early Retirement, 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.
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(iv)
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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.
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(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 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), Section 3(c), 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)
|
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)
|
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) (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)
|
Separation from Service Following Change of 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.
|
Subsidiary
|
Jurisdiction of Formation
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Angie's Artisan Treats, LLC
|
Delaware
|
Birds Eye Foods LLC
|
Delaware
|
Boulder Brands USA, Inc.
|
Delaware
|
ConAgra Foods AM Holding S.a.r.l.
|
Luxembourg
|
ConAgra Foods Canada, Inc. / Aliments ConAgra Canada, Inc.
|
Canada
|
ConAgra Foods Enterprise Services, Inc.
|
Delaware
|
ConAgra Foods Packaged Foods, LLC
|
Delaware
|
ConAgra Foods RDM, Inc.
|
Delaware
|
ConAgra Foods Sales, LLC
|
Delaware
|
ConAgra Funding, LLC
|
Delaware
|
Kennedy Endeavors, Incorporated
|
Washington
|
Pinnacle Foods Group LLC
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended
May 26, 2019
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: July 19, 2019
|
|
|
|
/s/ SEAN M. CONNOLLY
|
|
Sean M. Connolly
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended
May 26, 2019
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: July 19, 2019
|
|
|
|
/s/ David S. Marberger
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|
David S. Marberger
|
|
Executive Vice President and Chief Financial Officer
|
|
July 19, 2019
|
|
|
|
/s/ SEAN M. CONNOLLY
|
|
Sean M. Connolly
|
|
Chief Executive Officer
|
|
July 19, 2019
|
|
|
|
/s/ David S. Marberger
|
|
David S. Marberger
|
|
Executive Vice President and Chief Financial Officer
|
|