|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
47-0248710
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
222 W. Merchandise Mart Plaza, Suite 1300
Chicago, Illinois
|
|
60654
|
(Address of principal executive offices)
|
|
(Zip Code)
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Large accelerated filer
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x
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|
Accelerated filer
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¨
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|
|
|
|
|
Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
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|
Item 1
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||
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||
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||
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Item 2
|
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Item 3
|
||
Item 4
|
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Item 1
|
||
Item 1A
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Item 2
|
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Item 6
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||
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||
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||
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Exhibit 101.1
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Net sales
|
$
|
2,088.4
|
|
|
$
|
2,358.8
|
|
|
$
|
3,984.0
|
|
|
$
|
4,411.8
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
1,440.9
|
|
|
1,690.8
|
|
|
2,791.9
|
|
|
3,182.5
|
|
||||
Selling, general and administrative expenses
|
417.9
|
|
|
483.2
|
|
|
649.6
|
|
|
846.0
|
|
||||
Interest expense, net
|
54.1
|
|
|
79.2
|
|
|
112.3
|
|
|
159.3
|
|
||||
Income from continuing operations before income taxes and equity method investment earnings
|
175.5
|
|
|
105.6
|
|
|
430.2
|
|
|
224.0
|
|
||||
Income tax expense
|
78.4
|
|
|
43.1
|
|
|
247.6
|
|
|
92.4
|
|
||||
Equity method investment earnings
|
17.2
|
|
|
17.6
|
|
|
30.3
|
|
|
42.1
|
|
||||
Income from continuing operations
|
114.3
|
|
|
80.1
|
|
|
212.9
|
|
|
173.7
|
|
||||
Income (loss) from discontinued operations, net of tax
|
11.6
|
|
|
79.2
|
|
|
103.0
|
|
|
(1,166.8
|
)
|
||||
Net income (loss)
|
$
|
125.9
|
|
|
$
|
159.3
|
|
|
$
|
315.9
|
|
|
$
|
(993.1
|
)
|
Less: Net income attributable to noncontrolling interests
|
3.8
|
|
|
4.4
|
|
|
7.6
|
|
|
6.1
|
|
||||
Net income (loss) attributable to Conagra Brands, Inc.
|
$
|
122.1
|
|
|
$
|
154.9
|
|
|
$
|
308.3
|
|
|
$
|
(999.2
|
)
|
Earnings (loss) per share — basic
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.26
|
|
|
$
|
0.18
|
|
|
$
|
0.48
|
|
|
$
|
0.40
|
|
Income (loss) from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
0.02
|
|
|
0.18
|
|
|
0.22
|
|
|
(2.71
|
)
|
||||
Net income (loss) attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.28
|
|
|
$
|
0.36
|
|
|
$
|
0.70
|
|
|
$
|
(2.31
|
)
|
Earnings (loss) per share — diluted
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.26
|
|
|
$
|
0.18
|
|
|
$
|
0.48
|
|
|
$
|
0.40
|
|
Income (loss) from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
0.02
|
|
|
0.17
|
|
|
0.22
|
|
|
(2.69
|
)
|
||||
Net income (loss) attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.28
|
|
|
$
|
0.35
|
|
|
$
|
0.70
|
|
|
$
|
(2.29
|
)
|
Cash dividends declared per common share
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
Thirteen weeks ended
|
||||||||||||||||||
|
November 27, 2016
|
|
November 29, 2015
|
||||||||||||||||
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
||||||||||||
Net income
|
$
|
243.2
|
|
$
|
(117.3
|
)
|
$
|
125.9
|
|
|
$
|
248.3
|
|
$
|
(89.0
|
)
|
$
|
159.3
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized derivative adjustments
|
2.2
|
|
(0.9
|
)
|
1.3
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Unrealized gains on available-for-sale securities
|
0.2
|
|
—
|
|
0.2
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Unrealized currency translation losses
|
(14.1
|
)
|
—
|
|
(14.1
|
)
|
|
(18.4
|
)
|
—
|
|
(18.4
|
)
|
||||||
Pension and post-employment benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized pension and post-employment benefit obligations
|
66.8
|
|
(25.6
|
)
|
41.2
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Reclassification for pension and post-employment benefit obligations included in net income
|
(0.9
|
)
|
0.4
|
|
(0.5
|
)
|
|
(1.3
|
)
|
0.5
|
|
(0.8
|
)
|
||||||
Comprehensive income
|
297.4
|
|
(143.4
|
)
|
154.0
|
|
|
228.6
|
|
(88.5
|
)
|
140.1
|
|
||||||
Comprehensive income attributable to noncontrolling interests
|
2.2
|
|
(0.1
|
)
|
2.1
|
|
|
3.7
|
|
(0.2
|
)
|
3.5
|
|
||||||
Comprehensive income attributable to Conagra Brands, Inc.
|
$
|
295.2
|
|
$
|
(143.3
|
)
|
$
|
151.9
|
|
|
$
|
224.9
|
|
$
|
(88.3
|
)
|
$
|
136.6
|
|
|
Twenty-six weeks ended
|
||||||||||||||||||
|
November 27, 2016
|
|
November 29, 2015
|
||||||||||||||||
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
||||||||||||
Net income (loss)
|
$
|
651.2
|
|
$
|
(335.3
|
)
|
$
|
315.9
|
|
|
$
|
(1,291.2
|
)
|
$
|
298.1
|
|
$
|
(993.1
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||||||
Unrealized derivative adjustments
|
(5.8
|
)
|
2.2
|
|
(3.6
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Unrealized gains on available-for-sale securities
|
0.4
|
|
(0.1
|
)
|
0.3
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Unrealized currency translation losses
|
(26.0
|
)
|
0.2
|
|
(25.8
|
)
|
|
(56.0
|
)
|
—
|
|
(56.0
|
)
|
||||||
Pension and post-employment benefit obligations:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized pension and post-employment benefit obligations
|
64.7
|
|
(25.5
|
)
|
39.2
|
|
|
6.6
|
|
(1.6
|
)
|
5.0
|
|
||||||
Reclassification for pension and post-employment benefit obligations included in net income
|
(1.8
|
)
|
0.7
|
|
(1.1
|
)
|
|
(2.6
|
)
|
1.0
|
|
(1.6
|
)
|
||||||
Comprehensive income (loss)
|
682.7
|
|
(357.8
|
)
|
324.9
|
|
|
(1,343.2
|
)
|
297.5
|
|
(1,045.7
|
)
|
||||||
Comprehensive income attributable to noncontrolling interests
|
6.0
|
|
(0.2
|
)
|
5.8
|
|
|
2.6
|
|
(0.5
|
)
|
2.1
|
|
||||||
Comprehensive income (loss) attributable to Conagra Brands, Inc.
|
$
|
676.7
|
|
$
|
(357.6
|
)
|
$
|
319.1
|
|
|
$
|
(1,345.8
|
)
|
$
|
298.0
|
|
$
|
(1,047.8
|
)
|
|
November 27,
2016 |
|
May 29,
2016 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,442.5
|
|
|
$
|
798.1
|
|
Receivables, less allowance for doubtful accounts of $4.1 and $3.2
|
699.5
|
|
|
650.1
|
|
||
Inventories
|
1,113.7
|
|
|
1,083.2
|
|
||
Prepaid expenses and other current assets
|
89.3
|
|
|
148.6
|
|
||
Current assets of discontinued operations
|
—
|
|
|
779.7
|
|
||
Current assets held for sale
|
—
|
|
|
117.0
|
|
||
Total current assets
|
3,345.0
|
|
|
3,576.7
|
|
||
Property, plant and equipment
|
4,229.7
|
|
|
4,213.3
|
|
||
Less accumulated depreciation
|
(2,560.4
|
)
|
|
(2,511.7
|
)
|
||
Property, plant and equipment, net
|
1,669.3
|
|
|
1,701.6
|
|
||
Goodwill
|
4,248.7
|
|
|
4,396.2
|
|
||
Brands, trademarks and other intangibles, net
|
1,260.9
|
|
|
1,237.2
|
|
||
Other assets
|
899.4
|
|
|
905.5
|
|
||
Noncurrent assets of discontinued operations
|
—
|
|
|
1,339.3
|
|
||
Noncurrent assets held for sale
|
1.7
|
|
|
234.1
|
|
||
|
$
|
11,425.0
|
|
|
$
|
13,390.6
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable
|
$
|
6.7
|
|
|
$
|
13.9
|
|
Current installments of long-term debt
|
231.0
|
|
|
559.4
|
|
||
Accounts payable
|
784.1
|
|
|
706.7
|
|
||
Accrued payroll
|
124.9
|
|
|
220.8
|
|
||
Other accrued liabilities
|
598.7
|
|
|
567.7
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
409.2
|
|
||
Current liabilities held for sale
|
—
|
|
|
54.7
|
|
||
Total current liabilities
|
1,745.4
|
|
|
2,532.4
|
|
||
Senior long-term debt, excluding current installments
|
3,018.4
|
|
|
4,685.5
|
|
||
Subordinated debt
|
195.9
|
|
|
195.9
|
|
||
Other noncurrent liabilities
|
1,938.5
|
|
|
1,875.7
|
|
||
Noncurrent liabilities of discontinued operations
|
—
|
|
|
304.8
|
|
||
Noncurrent liabilities held for sale
|
—
|
|
|
1.5
|
|
||
Total liabilities
|
6,898.2
|
|
|
9,595.8
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
||||
Common stockholders' equity
|
|
|
|
||||
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 567,907,172
|
2,839.7
|
|
|
2,839.7
|
|
||
Additional paid-in capital
|
1,158.0
|
|
|
1,136.3
|
|
||
Retained earnings
|
4,077.3
|
|
|
3,218.3
|
|
||
Accumulated other comprehensive loss
|
(333.7
|
)
|
|
(344.5
|
)
|
||
Less treasury stock, at cost, 132,694,762 and 129,842,206 common shares
|
(3,294.6
|
)
|
|
(3,136.2
|
)
|
||
Total Conagra Brands, Inc. common stockholders' equity
|
4,446.7
|
|
|
3,713.6
|
|
||
Noncontrolling interests
|
80.1
|
|
|
81.2
|
|
||
Total stockholders' equity
|
4,526.8
|
|
|
3,794.8
|
|
||
|
$
|
11,425.0
|
|
|
$
|
13,390.6
|
|
|
Twenty-six weeks ended
|
||||||
|
November 27,
2016 |
|
November 29,
2015 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
315.9
|
|
|
$
|
(993.1
|
)
|
Income (loss) from discontinued operations
|
103.0
|
|
|
(1,166.8
|
)
|
||
Income from continuing operations
|
212.9
|
|
|
173.7
|
|
||
Adjustments to reconcile income from continuing operations to net cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
133.5
|
|
|
141.2
|
|
||
Asset impairment charges
|
211.9
|
|
|
1.7
|
|
||
Gain on divestitures
|
(197.5
|
)
|
|
—
|
|
||
Loss on extinguishment of debt
|
60.6
|
|
|
—
|
|
||
Lease cancellation expense
|
—
|
|
|
48.5
|
|
||
Earnings of affiliates in excess of distributions
|
(23.4
|
)
|
|
(41.6
|
)
|
||
Share-based payments expense
|
18.3
|
|
|
16.7
|
|
||
Contributions to pension plans
|
(5.9
|
)
|
|
(6.0
|
)
|
||
Pension benefit
|
(20.6
|
)
|
|
(7.9
|
)
|
||
Other items
|
23.9
|
|
|
(13.7
|
)
|
||
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
|
|
|
|
||||
Accounts receivable
|
(49.2
|
)
|
|
(98.6
|
)
|
||
Inventory
|
(32.2
|
)
|
|
(165.0
|
)
|
||
Deferred income taxes and income taxes payable, net
|
183.5
|
|
|
(100.2
|
)
|
||
Prepaid expenses and other current assets
|
0.2
|
|
|
(2.3
|
)
|
||
Accounts payable
|
71.7
|
|
|
(10.2
|
)
|
||
Accrued payroll
|
(95.5
|
)
|
|
(1.7
|
)
|
||
Other accrued liabilities
|
(31.6
|
)
|
|
82.0
|
|
||
Net cash flows from operating activities — continuing operations
|
460.6
|
|
|
16.6
|
|
||
Net cash flows from operating activities — discontinued operations
|
81.6
|
|
|
335.5
|
|
||
Net cash flows from operating activities
|
542.2
|
|
|
352.1
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(118.3
|
)
|
|
(110.4
|
)
|
||
Sale of property, plant and equipment
|
11.3
|
|
|
16.2
|
|
||
Proceeds from divestitures
|
489.1
|
|
|
—
|
|
||
Purchase of business and intangible assets
|
(108.2
|
)
|
|
(10.1
|
)
|
||
Net cash flows from investing activities — continuing operations
|
273.9
|
|
|
(104.3
|
)
|
||
Net cash flows from investing activities — discontinued operations
|
(123.7
|
)
|
|
(132.7
|
)
|
||
Net cash flows from investing activities
|
150.2
|
|
|
(237.0
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net short-term borrowings
|
(7.2
|
)
|
|
177.3
|
|
||
Repayment of long-term debt
|
(555.8
|
)
|
|
(254.5
|
)
|
||
Payment of intangible asset financing arrangement
|
(14.9
|
)
|
|
—
|
|
||
Repurchase of Conagra Brands, Inc. common shares
|
(170.1
|
)
|
|
—
|
|
||
Cash dividends paid
|
(219.4
|
)
|
|
(215.0
|
)
|
||
Exercise of stock options and issuance of other stock awards
|
47.4
|
|
|
119.2
|
|
||
Net cash flows from financing activities — continuing operations
|
(920.0
|
)
|
|
(173.0
|
)
|
||
Net cash flows from financing activities — discontinued operations
|
839.1
|
|
|
6.2
|
|
||
Net cash flows from financing activities
|
(80.9
|
)
|
|
(166.8
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(3.5
|
)
|
|
(3.0
|
)
|
||
Net change in cash and cash equivalents
|
608.0
|
|
|
(54.7
|
)
|
||
Discontinued operations cash activity included above:
|
|
|
|
||||
Add: Cash balance included in assets held for sale and discontinued operations at beginning of period
|
36.4
|
|
|
49.0
|
|
||
Less: Cash balance included in assets held for sale and discontinued operations at end of period
|
—
|
|
|
56.4
|
|
||
Cash and cash equivalents at beginning of period
|
798.1
|
|
|
134.1
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,442.5
|
|
|
$
|
72.0
|
|
|
|
Thirteen weeks ended
|
|
Affected Line Item in the Condensed Consolidated Statement of Operations
|
||||||
|
|
November 27, 2016
|
|
November 29, 2015
|
|
|
||||
Amortization of pension and postretirement liabilities:
|
|
|
|
|
|
|
||||
Net prior service benefit
|
|
$
|
(0.9
|
)
|
|
$
|
(1.3
|
)
|
|
Selling, general and administrative expenses
|
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|
Total before tax
|
||
|
|
0.4
|
|
|
0.5
|
|
|
Income tax expense
|
||
|
|
$
|
(0.5
|
)
|
|
$
|
(0.8
|
)
|
|
Net of tax
|
|
|
Twenty-six weeks ended
|
|
Affected Line Item in the Condensed Consolidated Statement of Operations
|
||||||
|
|
November 27, 2016
|
|
November 29, 2015
|
|
|
||||
Amortization of pension and postretirement liabilities:
|
|
|
|
|
|
|
||||
Net prior service benefit
|
|
$
|
(1.8
|
)
|
|
$
|
(2.6
|
)
|
|
Selling, general and administrative expenses
|
|
|
(1.8
|
)
|
|
(2.6
|
)
|
|
Total before tax
|
||
|
|
0.7
|
|
|
1.0
|
|
|
Income tax expense
|
||
|
|
$
|
(1.1
|
)
|
|
$
|
(1.6
|
)
|
|
Net of tax
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27, 2016
|
|
November 29, 2015
|
|
November 27, 2016
|
|
November 29, 2015
|
||||||||
Net sales
|
$
|
636.0
|
|
|
$
|
735.2
|
|
|
$
|
1,407.9
|
|
|
$
|
1,477.1
|
|
Income from discontinued operations before income taxes and equity method investment earnings
|
$
|
46.3
|
|
|
$
|
118.4
|
|
|
$
|
175.1
|
|
|
$
|
215.5
|
|
Income before income taxes and equity method investment earnings
|
46.3
|
|
|
118.4
|
|
|
175.1
|
|
|
215.5
|
|
||||
Income tax expense
|
39.1
|
|
|
40.3
|
|
|
88.6
|
|
|
76.0
|
|
||||
Equity method investment earnings
|
5.3
|
|
|
7.8
|
|
|
15.9
|
|
|
20.2
|
|
||||
Income from discontinued operations, net of tax
|
12.5
|
|
|
85.9
|
|
|
102.4
|
|
|
159.7
|
|
||||
Less: Net income attributable to noncontrolling interests
|
3.2
|
|
|
3.7
|
|
|
6.8
|
|
|
5.2
|
|
||||
Net income from discontinued operations attributable to CAG
|
$
|
9.3
|
|
|
$
|
82.2
|
|
|
$
|
95.6
|
|
|
$
|
154.5
|
|
|
May 29, 2016
|
||
Cash and cash equivalents
|
$
|
36.4
|
|
Receivables, less allowance for doubtful accounts of $0.5
|
186.5
|
|
|
Inventories
|
498.9
|
|
|
Prepaid expenses and other current assets
|
57.9
|
|
|
Total current assets of discontinued operations
|
$
|
779.7
|
|
Property, plant and equipment, net
|
$
|
1,004.1
|
|
Goodwill
|
133.9
|
|
|
Brands, trademarks and other intangibles, net
|
39.6
|
|
|
Other assets
|
161.7
|
|
|
Total noncurrent assets of discontinued operations
|
$
|
1,339.3
|
|
Notes payable
|
$
|
24.9
|
|
Current installments of long-term debt
|
12.0
|
|
|
Accounts payable
|
238.7
|
|
|
Accrued payroll
|
50.3
|
|
|
Other accrued liabilities
|
83.3
|
|
|
Total current liabilities of discontinued operations
|
$
|
409.2
|
|
Senior long-term debt, excluding current installments
|
$
|
36.4
|
|
Other noncurrent liabilities
|
268.4
|
|
|
Total noncurrent liabilities of discontinued operations
|
$
|
304.8
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27, 2016
|
|
November 29, 2015
|
|
November 27, 2016
|
|
November 29, 2015
|
||||||||
Net sales
|
$
|
(0.9
|
)
|
|
$
|
958.9
|
|
|
$
|
(0.9
|
)
|
|
$
|
1,850.7
|
|
Gain (loss) on sale of businesses
|
$
|
(0.5
|
)
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
Goodwill and long-lived asset impairment charges
|
—
|
|
|
(86.3
|
)
|
|
—
|
|
|
(1,898.6
|
)
|
||||
Income (loss) from operations of discontinued operations before income taxes and equity method investment earnings
|
(0.6
|
)
|
|
85.3
|
|
|
(1.3
|
)
|
|
105.7
|
|
||||
Loss before income taxes
|
(1.1
|
)
|
|
(1.0
|
)
|
|
(0.3
|
)
|
|
(1,792.9
|
)
|
||||
Income tax expense (benefit)
|
(0.2
|
)
|
|
5.7
|
|
|
(0.9
|
)
|
|
(466.4
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
$
|
(0.9
|
)
|
|
$
|
(6.7
|
)
|
|
$
|
0.6
|
|
|
$
|
(1,326.5
|
)
|
|
May 29, 2016
|
||
Spicetec:
|
|
||
Current assets
|
$
|
43.3
|
|
Noncurrent assets (including goodwill of $104.7 million)
|
148.3
|
|
|
Current liabilities
|
10.3
|
|
|
Noncurrent liabilities
|
1.2
|
|
|
JM Swank:
|
|
||
Current assets
|
$
|
73.7
|
|
Noncurrent assets (including goodwill of $53.8 million)
|
74.3
|
|
|
Current liabilities
|
44.3
|
|
|
Noncurrent liabilities
|
0.4
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Multi-employer pension costs
|
$
|
29.8
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31.3
|
|
Accelerated depreciation
|
36.6
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
56.4
|
|
||||||
Other cost of goods sold
|
5.5
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
||||||
Total cost of goods sold
|
71.9
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
95.3
|
|
||||||
Severance and related costs, net
|
22.4
|
|
|
10.4
|
|
|
2.4
|
|
|
7.9
|
|
|
98.9
|
|
|
142.0
|
|
||||||
Fixed asset impairment (Net of gains on disposal)
|
6.9
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
19.5
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
1.8
|
|
||||||
Contract/Lease cancellation expenses
|
0.9
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
73.8
|
|
|
75.2
|
|
||||||
Consulting/Professional fees
|
0.6
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
52.0
|
|
|
53.1
|
|
||||||
Other selling, general and administrative expenses
|
11.6
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
30.8
|
|
|
45.9
|
|
||||||
Total selling, general and administrative expenses
|
42.4
|
|
|
23.0
|
|
|
2.5
|
|
|
7.9
|
|
|
261.7
|
|
|
337.5
|
|
||||||
Consolidated total
|
$
|
114.3
|
|
|
$
|
45.2
|
|
|
$
|
2.5
|
|
|
$
|
7.9
|
|
|
$
|
262.9
|
|
|
$
|
432.8
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Accelerated depreciation
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
Other cost of goods sold
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||||
Total cost of goods sold
|
1.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
||||||
Severance and related costs, net
|
0.8
|
|
|
(0.2
|
)
|
|
0.3
|
|
|
—
|
|
|
2.1
|
|
|
3.0
|
|
||||||
Fixed asset impairment (Net of gains on disposal)
|
(2.7
|
)
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
2.2
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||
Contract/Lease cancellation expenses
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
8.9
|
|
|
9.0
|
|
||||||
Consulting/Professional fees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
||||||
Other selling, general and administrative expenses
|
1.5
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
3.3
|
|
||||||
Total selling, general and administrative expenses
|
(0.4
|
)
|
|
2.2
|
|
|
0.4
|
|
|
—
|
|
|
15.8
|
|
|
18.0
|
|
||||||
Consolidated total
|
$
|
1.4
|
|
|
$
|
2.2
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
15.8
|
|
|
$
|
19.8
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Accelerated depreciation
|
$
|
3.7
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.9
|
|
Other cost of goods sold
|
1.9
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
||||||
Total cost of goods sold
|
5.6
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
||||||
Severance and related costs, net
|
0.6
|
|
|
(0.2
|
)
|
|
0.5
|
|
|
1.8
|
|
|
2.1
|
|
|
4.8
|
|
||||||
Fixed asset impairment (Net of gains on disposal)
|
(2.1
|
)
|
|
4.6
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
5.4
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.5
|
|
||||||
Contract/Lease cancellation expenses
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
7.4
|
|
|
7.5
|
|
||||||
Consulting/Professional fees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||
Other selling, general and administrative expenses
|
2.2
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
|
8.4
|
|
||||||
Total selling, general and administrative expenses
|
0.7
|
|
|
5.8
|
|
|
0.6
|
|
|
1.8
|
|
|
18.0
|
|
|
26.9
|
|
||||||
Consolidated total
|
$
|
6.3
|
|
|
$
|
7.2
|
|
|
$
|
0.6
|
|
|
$
|
1.8
|
|
|
$
|
18.0
|
|
|
$
|
33.9
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Multi-employer pension costs
|
$
|
29.8
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31.3
|
|
Accelerated depreciation
|
25.1
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
44.9
|
|
||||||
Other cost of goods sold
|
3.8
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
||||||
Total cost of goods sold
|
58.7
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
82.1
|
|
||||||
Severance and related costs, net
|
21.2
|
|
|
10.3
|
|
|
2.7
|
|
|
7.9
|
|
|
98.5
|
|
|
140.6
|
|
||||||
Fixed asset impairment (Net of gains on disposal)
|
5.1
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
3.7
|
|
|
17.0
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
1.8
|
|
||||||
Contract/Lease cancellation expenses
|
0.8
|
|
|
0.5
|
|
|
0.1
|
|
|
—
|
|
|
69.1
|
|
|
70.5
|
|
||||||
Consulting/Professional fees
|
0.6
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
51.1
|
|
|
52.2
|
|
||||||
Other selling, general and administrative expenses
|
7.6
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
17.8
|
|
|
28.4
|
|
||||||
Total selling, general and administrative expenses
|
35.3
|
|
|
22.4
|
|
|
2.9
|
|
|
7.9
|
|
|
242.0
|
|
|
310.5
|
|
||||||
Consolidated total
|
$
|
94.0
|
|
|
$
|
44.6
|
|
|
$
|
2.9
|
|
|
$
|
7.9
|
|
|
$
|
243.2
|
|
|
$
|
392.6
|
|
|
Balance at May 29,
2016 |
|
Costs Incurred
and Charged
to Expense
|
|
Costs Paid
or Otherwise Settled
|
|
Changes in Estimates
|
|
Balance at November 27,
2016 |
||||||||||
Multi-employer pension costs
|
$
|
40.7
|
|
|
$
|
—
|
|
|
$
|
(10.9
|
)
|
|
$
|
—
|
|
|
$
|
29.8
|
|
Severance
|
47.2
|
|
|
6.5
|
|
|
(31.3
|
)
|
|
(1.7
|
)
|
|
20.7
|
|
|||||
Consulting
|
4.7
|
|
|
0.3
|
|
|
(4.6
|
)
|
|
—
|
|
|
0.4
|
|
|||||
Contract termination
|
6.3
|
|
|
11.4
|
|
|
(2.2
|
)
|
|
(1.3
|
)
|
|
14.2
|
|
|||||
Other costs
|
0.5
|
|
|
8.5
|
|
|
(7.9
|
)
|
|
—
|
|
|
1.1
|
|
|||||
Total
|
$
|
99.4
|
|
|
$
|
26.7
|
|
|
$
|
(56.9
|
)
|
|
$
|
(3.0
|
)
|
|
$
|
66.2
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Long-term debt
|
$
|
56.6
|
|
|
$
|
80.2
|
|
|
$
|
117.5
|
|
|
$
|
162.2
|
|
Short-term debt
|
0.2
|
|
|
0.6
|
|
|
0.4
|
|
|
0.8
|
|
||||
Interest income
|
(0.8
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
(0.1
|
)
|
||||
Interest capitalized
|
(1.9
|
)
|
|
(1.6
|
)
|
|
(4.1
|
)
|
|
(3.6
|
)
|
||||
|
$
|
54.1
|
|
|
$
|
79.2
|
|
|
$
|
112.3
|
|
|
$
|
159.3
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Total
|
||||||||||
Balance as of May 29, 2016
|
$
|
2,337.4
|
|
|
$
|
1,028.9
|
|
|
$
|
448.6
|
|
|
$
|
581.3
|
|
|
$
|
4,396.2
|
|
Impairment
|
—
|
|
|
—
|
|
|
(183.1
|
)
|
|
—
|
|
|
(183.1
|
)
|
|||||
Acquisitions
|
38.4
|
|
|
—
|
|
|
|
|
|
|
38.4
|
|
|||||||
Currency translation
|
—
|
|
|
(0.6
|
)
|
|
(2.2
|
)
|
|
—
|
|
|
(2.8
|
)
|
|||||
Balance as of November 27, 2016
|
$
|
2,375.8
|
|
|
$
|
1,028.3
|
|
|
$
|
263.3
|
|
|
$
|
581.3
|
|
|
$
|
4,248.7
|
|
|
November 27, 2016
|
|
May 29, 2016
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Non-amortizing intangible assets
|
$
|
861.6
|
|
|
$
|
—
|
|
|
$
|
839.2
|
|
|
$
|
—
|
|
Amortizing intangible assets
|
563.1
|
|
|
163.8
|
|
|
543.9
|
|
|
145.9
|
|
||||
|
$
|
1,424.7
|
|
|
$
|
163.8
|
|
|
$
|
1,383.1
|
|
|
$
|
145.9
|
|
|
November 27,
2016 |
|
May 29,
2016 |
||||
Prepaid expenses and other current assets
|
$
|
26.0
|
|
|
$
|
24.1
|
|
Other accrued liabilities
|
0.7
|
|
|
0.6
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
4.0
|
|
|
Other accrued liabilities
|
|
$
|
0.7
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
23.2
|
|
|
Other accrued liabilities
|
|
0.3
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other accrued liabilities
|
|
0.4
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
27.2
|
|
|
|
|
$
|
1.4
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
5.0
|
|
|
Other accrued liabilities
|
|
$
|
2.1
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
20.8
|
|
|
Other accrued liabilities
|
|
0.2
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other accrued liabilities
|
|
0.3
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
25.8
|
|
|
|
|
$
|
2.6
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Location in Condensed Consolidated Statement of Operations of
Gain (Loss) Recognized on Derivatives
|
|
Amount of Gain (Loss)
Recognized on Derivatives
in Condensed Consolidated
Statement of Operations for
the Thirteen Weeks Ended
|
||||||
November 27, 2016
|
|
November 29, 2015
|
||||||||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
1.6
|
|
|
$
|
(3.8
|
)
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
1.4
|
|
|
—
|
|
||
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
2.5
|
|
|
0.3
|
|
||
Total gain (loss) from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
5.5
|
|
|
$
|
(3.5
|
)
|
Derivatives Not Designated as Hedging Instruments
|
|
Location in Condensed Consolidated Statement of Operations of
Gain (Loss) Recognized on Derivatives
|
|
Amount of Gain (Loss)
Recognized on Derivatives
in Condensed Consolidated
Statement of Operations for
the Twenty-six Weeks Ended
|
||||||
November 27, 2016
|
|
November 29, 2015
|
||||||||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
1.2
|
|
|
$
|
(9.7
|
)
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
1.5
|
|
|
—
|
|
||
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
1.3
|
|
|
4.7
|
|
||
Total gain (loss) from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
4.0
|
|
|
$
|
(5.0
|
)
|
•
|
The number of shares of common stock subject to each outstanding stock option was increased and the corresponding exercise price was decreased to maintain the intrinsic value of each outstanding stock option immediately before and after the Spinoff. A comparison of the fair value of the outstanding stock option awards immediately before and after the Spinoff resulted in no incremental expense.
|
•
|
The number of shares of common stock underlying each outstanding restricted stock unit and performance share, and the value of each outstanding cash-settled restricted stock was increased to preserve the intrinsic value of such award immediately prior to the Spinoff. The Company did not record any incremental compensation expense related to the adjustment of these awards.
|
Expected volatility (%)
|
19.15
|
Dividend yield (%)
|
2.33
|
Risk-free interest rate (%)
|
1.03
|
Expected life of stock option (years)
|
4.94
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Net income (loss) available to Conagra Brands, Inc. common stockholders:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
113.7
|
|
|
$
|
79.4
|
|
|
$
|
212.1
|
|
|
$
|
172.8
|
|
Income (loss) from discontinued operations, net of tax, attributable to Conagra Brands, Inc. common stockholders
|
8.4
|
|
|
75.5
|
|
|
96.2
|
|
|
(1,172.0
|
)
|
||||
Net income (loss) attributable to Conagra Brands, Inc. common stockholders
|
$
|
122.1
|
|
|
$
|
154.9
|
|
|
$
|
308.3
|
|
|
$
|
(999.2
|
)
|
Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated
|
0.3
|
|
|
0.5
|
|
|
0.8
|
|
|
0.9
|
|
||||
Net income (loss) available to Conagra Brands, Inc. common stockholders
|
$
|
121.8
|
|
|
$
|
154.4
|
|
|
$
|
307.5
|
|
|
$
|
(1,000.1
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
437.7
|
|
|
433.8
|
|
|
438.4
|
|
|
432.1
|
|
||||
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities
|
3.6
|
|
|
4.1
|
|
|
3.7
|
|
|
4.6
|
|
||||
Diluted weighted average shares outstanding
|
441.3
|
|
|
437.9
|
|
|
442.1
|
|
|
436.7
|
|
|
November 27,
2016 |
|
May 29,
2016 |
||||
Raw materials and packaging
|
$
|
187.2
|
|
|
$
|
214.3
|
|
Work in process
|
140.0
|
|
|
119.4
|
|
||
Finished goods
|
736.8
|
|
|
698.6
|
|
||
Supplies and other
|
49.7
|
|
|
50.9
|
|
||
Total
|
$
|
1,113.7
|
|
|
$
|
1,083.2
|
|
•
|
additional tax expense associated with non-deductible goodwill in our Mexican business, for which an impairment charge was recognized and
|
•
|
additional tax expense associated with a change in estimate regarding the tax basis of the Spicetec business that was sold in the first quarter of fiscal 2017.
|
•
|
additional tax expense associated with non-deductible goodwill sold in connection with the dispositions of the Spicetec and JM Swank businesses,
|
•
|
additional tax expense associated with non-deductible goodwill in our Canadian business, for which an impairment charge was recognized,
|
•
|
an income tax benefit for excess tax benefits allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant, and
|
•
|
an income tax benefit associated with a tax planning strategy that allowed us to utilize certain state tax attributes.
|
|
Pension Benefits
|
||||||||||||||
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Service cost
|
$
|
15.9
|
|
|
$
|
23.8
|
|
|
$
|
32.6
|
|
|
$
|
47.6
|
|
Interest cost
|
29.9
|
|
|
41.0
|
|
|
59.9
|
|
|
82.0
|
|
||||
Expected return on plan assets
|
(53.9
|
)
|
|
(66.8
|
)
|
|
(107.7
|
)
|
|
(133.7
|
)
|
||||
Amortization of prior service cost
|
0.7
|
|
|
0.7
|
|
|
1.3
|
|
|
1.4
|
|
||||
Special termination benefits
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||
Benefit cost — Company plans
|
(5.9
|
)
|
|
(1.3
|
)
|
|
(12.4
|
)
|
|
(2.7
|
)
|
||||
Pension benefit cost — multi-employer plans
|
2.8
|
|
|
4.1
|
|
|
5.1
|
|
|
6.4
|
|
||||
Total benefit cost (benefit)
|
$
|
(3.1
|
)
|
|
$
|
2.8
|
|
|
$
|
(7.3
|
)
|
|
$
|
3.7
|
|
|
Postretirement Benefits
|
||||||||||||||
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
Interest cost
|
1.0
|
|
|
1.9
|
|
|
2.1
|
|
|
3.9
|
|
||||
Amortization of prior service benefit
|
(1.6
|
)
|
|
(2.0
|
)
|
|
(3.3
|
)
|
|
(4.0
|
)
|
||||
Recognized net actuarial loss
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Total cost (benefit)
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
0.1
|
|
|
Conagra Brands, Inc. Stockholders' Equity
|
|
|
|
|
|||||||||||||||||||||||||
|
Common
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|||||||||||||||
Balance at May 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
|
|
|
|
|
22.5
|
|
|
(0.4
|
)
|
|
|
|
49.2
|
|
|
|
|
71.3
|
|
|||||||||||
Adoption of ASU 2016-09
|
|
|
|
|
|
|
(3.9
|
)
|
|
|
|
|
|
|
|
(3.9
|
)
|
|||||||||||||
Spin-off of Lamb Weston
|
|
|
|
|
|
|
774.3
|
|
|
13.6
|
|
|
|
|
|
|
787.9
|
|
||||||||||||
Currency translation adjustment, net
|
|
|
|
|
|
|
|
|
(37.2
|
)
|
|
|
|
(1.8
|
)
|
|
(39.0
|
)
|
||||||||||||
Repurchase of common shares
|
|
|
|
|
|
|
|
|
|
|
(207.6
|
)
|
|
|
|
(207.6
|
)
|
|||||||||||||
Unrealized gain on securities
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
|
0.3
|
|
|||||||||||||
Derivative adjustment, net
|
|
|
|
|
|
|
|
|
(3.6
|
)
|
|
|
|
|
|
(3.6
|
)
|
|||||||||||||
Activities of noncontrolling interests
|
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
0.7
|
|
|
(0.1
|
)
|
||||||||||||
Pension and postretirement healthcare benefits
|
|
|
|
|
|
|
|
|
37.7
|
|
|
|
|
|
|
37.7
|
|
|||||||||||||
Dividends declared on common stock; $0.50 per share
|
|
|
|
|
|
|
(219.3
|
)
|
|
|
|
|
|
|
|
(219.3
|
)
|
|||||||||||||
Net income attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
308.3
|
|
|
|
|
|
|
|
|
308.3
|
|
|||||||||||||
Balance at November 27, 2016
|
567.9
|
|
|
$
|
2,839.7
|
|
|
$
|
1,158.0
|
|
|
$
|
4,077.3
|
|
|
$
|
(333.7
|
)
|
|
$
|
(3,294.6
|
)
|
|
$
|
80.1
|
|
|
$
|
4,526.8
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
2.6
|
|
|
$
|
23.4
|
|
|
$
|
—
|
|
|
$
|
26.0
|
|
Available-for-sale securities
|
3.4
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
||||
Total assets
|
$
|
6.0
|
|
|
$
|
23.4
|
|
|
$
|
—
|
|
|
$
|
29.4
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
Deferred compensation liabilities
|
48.9
|
|
|
—
|
|
|
—
|
|
|
48.9
|
|
||||
Total liabilities
|
$
|
48.9
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
49.6
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
3.3
|
|
|
$
|
20.8
|
|
|
$
|
—
|
|
|
$
|
24.1
|
|
Available-for-sale securities
|
3.0
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
||||
Total assets
|
$
|
6.3
|
|
|
$
|
20.8
|
|
|
$
|
—
|
|
|
$
|
27.1
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
Deferred compensation liabilities
|
40.0
|
|
|
—
|
|
|
—
|
|
|
40.0
|
|
||||
Total liabilities
|
$
|
40.0
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
40.6
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Net sales
|
|
|
|
|
|
|
|
||||||||
Grocery & Snacks
|
$
|
853.9
|
|
|
$
|
906.1
|
|
|
$
|
1,611.1
|
|
|
$
|
1,706.6
|
|
Refrigerated & Frozen
|
740.0
|
|
|
826.8
|
|
|
1,344.6
|
|
|
1,484.4
|
|
||||
International
|
211.4
|
|
|
221.3
|
|
|
406.1
|
|
|
427.7
|
|
||||
Foodservice
|
283.1
|
|
|
285.0
|
|
|
551.1
|
|
|
555.6
|
|
||||
Commercial
|
—
|
|
|
119.6
|
|
|
71.1
|
|
|
237.5
|
|
||||
Total net sales
|
$
|
2,088.4
|
|
|
$
|
2,358.8
|
|
|
$
|
3,984.0
|
|
|
$
|
4,411.8
|
|
Operating profit
|
|
|
|
|
|
|
|
||||||||
Grocery & Snacks
|
$
|
220.3
|
|
|
$
|
185.7
|
|
|
$
|
400.8
|
|
|
$
|
325.2
|
|
Refrigerated & Frozen
|
117.9
|
|
|
123.8
|
|
|
210.1
|
|
|
204.9
|
|
||||
International
|
(26.7
|
)
|
|
20.1
|
|
|
(175.9
|
)
|
|
36.6
|
|
||||
Foodservice
|
31.9
|
|
|
20.4
|
|
|
53.6
|
|
|
46.6
|
|
||||
Commercial
|
(0.5
|
)
|
|
13.0
|
|
|
202.8
|
|
|
25.1
|
|
||||
Total operating profit
|
$
|
342.9
|
|
|
$
|
363.0
|
|
|
$
|
691.4
|
|
|
$
|
638.4
|
|
Equity method investment earnings
|
17.2
|
|
|
17.6
|
|
|
30.3
|
|
|
42.1
|
|
||||
General corporate expense
|
113.3
|
|
|
178.2
|
|
|
148.9
|
|
|
255.1
|
|
||||
Interest expense, net
|
54.1
|
|
|
79.2
|
|
|
112.3
|
|
|
159.3
|
|
||||
Income tax expense
|
78.4
|
|
|
43.1
|
|
|
247.6
|
|
|
92.4
|
|
||||
Income from continuing operations
|
$
|
114.3
|
|
|
$
|
80.1
|
|
|
$
|
212.9
|
|
|
$
|
173.7
|
|
Less: Net income attributable to noncontrolling interests of continuing operations
|
0.6
|
|
|
0.7
|
|
|
0.8
|
|
|
0.9
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc.
|
$
|
113.7
|
|
|
$
|
79.4
|
|
|
$
|
212.1
|
|
|
$
|
172.8
|
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Net derivative gains (losses) incurred
|
$
|
3.0
|
|
|
$
|
(3.8
|
)
|
|
$
|
2.7
|
|
|
$
|
(9.7
|
)
|
Less: Net derivative gains (losses) allocated to reporting segments
|
3.8
|
|
|
(3.2
|
)
|
|
2.8
|
|
|
(9.9
|
)
|
||||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
(0.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
0.2
|
|
Net derivative gains (losses) allocated to Grocery & Snacks
|
$
|
2.4
|
|
|
$
|
(1.3
|
)
|
|
$
|
2.0
|
|
|
$
|
(5.4
|
)
|
Net derivative gains (losses) allocated to Refrigerated & Frozen
|
0.7
|
|
|
(0.8
|
)
|
|
0.5
|
|
|
(2.5
|
)
|
||||
Net derivative gains allocated to International Foods
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Net derivative gains (losses) allocated to Foodservice
|
0.5
|
|
|
(0.5
|
)
|
|
0.2
|
|
|
(1.0
|
)
|
||||
Net derivative losses allocated to Commercial
|
—
|
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(1.0
|
)
|
||||
Net derivative gains (losses) included in segment operating profit
|
$
|
3.8
|
|
|
$
|
(3.2
|
)
|
|
$
|
2.8
|
|
|
$
|
(9.9
|
)
|
•
|
charges totaling $60.6 million ($39.2 million after-tax) related to the early retirement of debt,
|
•
|
charges totaling $43.9 million ($40.7 million after-tax) related to the impairment of goodwill and other intangible assets,
|
•
|
charges totaling $19.8 million ($12.9 million after-tax) in connection with our Supply Chain and Administrative Efficiency Plan (the "SCAE Plan"), and
|
•
|
an income tax expense of $7.4 million associated with a change in a valuation allowance on a deferred tax asset due to a change in the estimated capital gain on the Spicetec divestiture.
|
•
|
charges totaling $207.5 million ($190.2 million after-tax) related to the impairment of goodwill and other intangible assets in our International segment,
|
•
|
gains totaling $197.7 million ($67.6 million after-tax) from the sales of the Spicetec and JM Swank businesses,
|
•
|
charges totaling $60.6 million ($39.2 million after-tax) related to the early retirement of debt,
|
•
|
charges totaling $33.9 million ($22.0 million after-tax) in connection with our SCAE Plan, and
|
•
|
an income tax benefit of $7.5 million associated with a tax planning strategy that allowed us to utilize certain state tax attributes.
|
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||
($ in millions)
|
November 27,
2016 |
|
November 29,
2015 |
|
November 27,
2016 |
|
November 29,
2015 |
||||||||
Net derivative gains (losses) incurred
|
$
|
3.0
|
|
|
$
|
(3.8
|
)
|
|
$
|
2.7
|
|
|
$
|
(9.7
|
)
|
Less: Net derivative gains (losses) allocated to reporting segments
|
3.8
|
|
|
(3.2
|
)
|
|
2.8
|
|
|
(9.9
|
)
|
||||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
(0.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
0.2
|
|
Net derivative gains (losses) allocated to Grocery & Snacks
|
$
|
2.4
|
|
|
$
|
(1.3
|
)
|
|
$
|
2.0
|
|
|
$
|
(5.4
|
)
|
Net derivative gains (losses) allocated to Refrigerated & Frozen
|
0.7
|
|
|
(0.8
|
)
|
|
0.5
|
|
|
(2.5
|
)
|
||||
Net derivative gains allocated to International Foods
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Net derivative gains (losses) allocated to Foodservice
|
0.5
|
|
|
(0.5
|
)
|
|
0.2
|
|
|
(1.0
|
)
|
||||
Net derivative losses allocated to Commercial
|
—
|
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|
(1.0
|
)
|
||||
Net derivative gains (losses) included in segment operating profit
|
$
|
3.8
|
|
|
$
|
(3.2
|
)
|
|
$
|
2.8
|
|
|
$
|
(9.9
|
)
|
|
Net Sales
|
||||||||||||||||||||
($ in millions)
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||||||||
Reporting Segment
|
November 27,
2016 |
|
November 29,
2015 |
|
% Inc
(Dec)
|
|
November 27,
2016 |
|
November 29,
2015 |
|
% Inc
(Dec)
|
||||||||||
Grocery & Snacks
|
$
|
853.9
|
|
|
$
|
906.1
|
|
|
(6
|
)%
|
|
$
|
1,611.1
|
|
|
$
|
1,706.6
|
|
|
(6
|
)%
|
Refrigerated & Frozen
|
740.0
|
|
|
826.8
|
|
|
(11
|
)%
|
|
1,344.6
|
|
|
1,484.4
|
|
|
(9
|
)%
|
||||
International
|
211.4
|
|
|
221.3
|
|
|
(5
|
)%
|
|
406.1
|
|
|
427.7
|
|
|
(5
|
)%
|
||||
Foodservice
|
283.1
|
|
|
285.0
|
|
|
(1
|
)%
|
|
551.1
|
|
|
555.6
|
|
|
(1
|
)%
|
||||
Commercial
|
—
|
|
|
119.6
|
|
|
(100
|
)%
|
|
71.1
|
|
|
237.5
|
|
|
(70
|
)%
|
||||
Total
|
$
|
2,088.4
|
|
|
$
|
2,358.8
|
|
|
(11
|
)%
|
|
$
|
3,984.0
|
|
|
$
|
4,411.8
|
|
|
(10
|
)%
|
|
Operating Profit
|
||||||||||||||||||||
($ in millions)
|
Thirteen weeks ended
|
|
Twenty-six weeks ended
|
||||||||||||||||||
Reporting Segment
|
November 27,
2016 |
|
November 29,
2015 |
|
% Inc
(Dec)
|
|
November 27,
2016 |
|
November 29,
2015 |
|
% Inc
(Dec)
|
||||||||||
Grocery & Snacks
|
$
|
220.3
|
|
|
$
|
185.7
|
|
|
19
|
%
|
|
$
|
400.8
|
|
|
$
|
325.2
|
|
|
23
|
%
|
Refrigerated & Frozen
|
117.9
|
|
|
123.8
|
|
|
(5
|
)%
|
|
210.1
|
|
|
204.9
|
|
|
3
|
%
|
||||
International
|
(26.7
|
)
|
|
20.1
|
|
|
N/A
|
|
|
(175.9
|
)
|
|
36.6
|
|
|
N/A
|
|
||||
Foodservice
|
31.9
|
|
|
20.4
|
|
|
56
|
%
|
|
53.6
|
|
|
46.6
|
|
|
15
|
%
|
||||
Commercial
|
(0.5
|
)
|
|
13.0
|
|
|
N/A
|
|
|
202.8
|
|
|
25.1
|
|
|
708
|
%
|
•
|
additional tax expense associated with non-deductible goodwill in our Mexican business, for which an impairment charge was recognized and
|
•
|
additional tax expense associated with a change in estimate regarding the tax basis of the Spicetec business that was sold in the first quarter of fiscal 2017.
|
•
|
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 Canadian business, for which an impairment charge was recognized,
|
•
|
an income tax benefit for excess tax benefits allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant, and
|
•
|
an income tax benefit associated with a tax planning strategy that allowed us to utilize certain state tax attributes.
|
|
Payments Due by Period
(in millions)
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5
Years
|
||||||||||
Long-term debt
|
$
|
3,294.3
|
|
|
$
|
224.8
|
|
|
$
|
438.0
|
|
|
$
|
322.6
|
|
|
$
|
2,308.9
|
|
Capital lease obligations
|
135.3
|
|
|
9.3
|
|
|
17.2
|
|
|
17.0
|
|
|
91.8
|
|
|||||
Operating lease obligations
|
225.7
|
|
|
37.1
|
|
|
59.6
|
|
|
30.1
|
|
|
98.9
|
|
|||||
Purchase obligations
1
and other contracts
|
995.3
|
|
|
889.4
|
|
|
67.6
|
|
|
36.4
|
|
|
1.9
|
|
|||||
Notes payable
|
6.7
|
|
|
6.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
4,657.3
|
|
|
$
|
1,167.3
|
|
|
$
|
582.4
|
|
|
$
|
406.1
|
|
|
$
|
2,501.5
|
|
|
Amount of Commitment Expiration Per Period
(in millions)
|
||||||||||||||||||
Other Commercial Commitments
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5
Years
|
||||||||||
Standby repurchase obligations
|
$
|
1.9
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
0.4
|
|
Other commitments
|
1.6
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
3.5
|
|
|
$
|
2.1
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
0.4
|
|
|
Fair Value Impact
|
||||||
In Millions
|
Average
During Twenty-six Weeks
Ended November 27, 2016
|
|
Average
During Twenty-six Weeks
Ended November 29, 2015
|
||||
Energy commodities
|
$
|
0.4
|
|
|
$
|
0.9
|
|
Agriculture commodities
|
0.7
|
|
|
2.2
|
|
||
Foreign exchange
|
0.3
|
|
|
0.1
|
|
Period
|
Total Number
of Shares (or
units)
Purchased
|
|
Average
Price Paid
per Share
(or unit)
|
|
Total Number of
Shares
Purchased as Part of
Publicly Announced
Plans or Programs
(1)
|
|
Approximate Dollar
Value of Maximum
Number of Shares that
may yet be Purchased
under the Program (1)
|
||||||
August 29 through September 25, 2016
|
130,749
|
|
|
$
|
46.44
|
|
|
130,749
|
|
|
$
|
31,967,000
|
|
September 26 through October 23, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
1,281,967,000
|
|
||
October 24 through November 27, 2016
|
2,935,980
|
|
|
36.65
|
|
|
2,935,980
|
|
|
1,174,351,000
|
|
||
Total Fiscal 2017 Second Quarter Activity
|
3,066,729
|
|
|
37.07
|
|
|
3,066,729
|
|
|
1,174,351,000
|
|
(1)
|
Pursuant to publicly announced share repurchase programs from December 2003, we have repurchased approximately 173.2 million shares at a cost of $4.4 billion through
November 27, 2016
. On December 14, 2011, we announced that our Board of Directors approved a $750.0 million increase to our share repurchase authorization, and on October 11, 2016, we announced that our Board of Directors approved a further increase of $1.25 billion. This authorization was contingent on the completion of the Spinoff. The increased share repurchase program is effective and has no expiration date.
|
|
CONAGRA BRANDS, INC.
|
|
|
|
|
|
By:
|
/s/ DAVID S. MARBERGER
|
|
|
David S. Marberger
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
By:
|
/s/ ROBERT G. WISE
|
|
|
Robert G. Wise
|
|
|
Senior Vice President and Corporate Controller
|
EXHIBIT
|
|
DESCRIPTION
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2.1*
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Separation and Distribution Agreement, dated as of November 8, 2016, by and between Conagra Brands, Inc. (formerly known as ConAgra Foods, Inc.) and Lamb Weston Holdings, Inc., incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2016
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3.1
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Amended and Restated Certificate of Incorporation of Conagra Brands, Inc., incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2016
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3.2
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Amended and Restated Bylaws of Conagra Brands, Inc., as amended, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 1, 2015
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10.1
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Transition and Non-Competition Agreement, dated August 29, 2016, by and between Conagra Brands, Inc. and John F. Gehring, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 2, 2016
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10.2
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Interim Position and Non-Compete Agreement, dated as of September 28, 2016, by and between Conagra Brands, Inc. and John Gehring
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10.3
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Tax Matters Agreement, dated as of November 8, 2016, by and between Conagra Brands, Inc. and Lamb Weston Holdings, Inc., incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2016
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10.4
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Employee Matters Agreement, dated as of November 8, 2016, by and between Conagra Brands, Inc. and Lamb Weston Holdings, Inc., incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2016
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10.5
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Transition Services Agreement, dated as of November 8, 2016, by and between Conagra Brands, Inc. and Lamb Weston Holdings, Inc., incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2016
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10.6
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Trademark License Agreement, dated as of November 8, 2016, by and between Conagra Brands, Inc. and Lamb Weston Holdings, Inc., incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on November 10, 2016
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12
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Statement regarding computation of ratio of earnings to fixed charges
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31.1
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Section 302 Certificate of Chief Executive Officer
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31.2
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Section 302 Certificate of Chief Financial Officer
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32.1
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Section 906 Certificates
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101.1
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The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 27, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) Notes to Condensed Consolidated Financial Statements, and (vi) document and entity information.
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Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with respect to long-term debt of Conagra Brands, Inc. are not filed with this Quarterly Report on Form 10-Q. The Company will furnish a copy of any such long-term debt agreement to the Securities and Exchange Commission upon request.
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* Certain exhibits and schedules have been omitted and the Company agrees to furnish supplementally to the SEC a copy of any omitted exhibits and schedules upon request.
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(1)
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Position, Term, Reporting, Location, Schedule
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a.
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The Company hereby employs Gehring and Gehring hereby accepts employment with the Company as Vice President and interim Chief Financial Officer (“CFO”) of Lamb Weston. Gehring will be employed by ConAgra Foods, Inc. until the last business day immediately preceding the completion of the Lamb Weston spin off (the date on which the completion occurs, the “Spin-Off Date”), subject to earlier termination in accordance with Section 3 of the Agreement. Effective as of the last business day immediately preceding the Spin-Off Date (the “Transfer Date”), Gehring will be employed by Lamb Weston. As Vice President and interim CFO of Lamb Weston, Gehring will have no further formal responsibilities related to the transition of the ConAgra Foods, Inc. Chief Financial Officer role. Gehring shall be the principal financial officer for Lamb Weston.
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b.
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Gehring’s employment under this Agreement shall commence on the Effective Date and shall continue until December 15, 2016, unless terminated on an earlier date in accordance with Section 3 of the Agreement (such period, the “Term”). As used in this Agreement, “Employer” means the Company prior to the Transfer Date and means Lamb Weston on and after the Transfer Date. The occurrence of the Transfer Date or Spin-Off Date after December 15, 2016 shall not extend the Term.
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c.
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Gehring shall report to ConAgra’s Chief Executive Officer, Sean Connolly, until the Spin-Off Date. Effective as of the Spin-Off Date, Gehring shall report to Chief Executive Officer of Lamb Weston, Thomas Werner. Gehring will not have any direct reports until the Lamb Weston Controller commences employment, at which time s/he will report to Gehring.
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d.
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Gehring will be officed in Omaha, Nebraska. Gehring will commute to Boise, Idaho as necessary to perform the duties of his position. Gehring will be entitled to use Company-owned or Lamb-Weston-owned corporate aircraft for his commute or, if corporate aircraft is unavailable, the highest class of service available on the commercial flight of his choice.
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e.
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Gehring will be expected to work 80 percent of his current schedule. The Company will honor Gehring’s family commitments related to his daughter’s college visits. Gehring will be entitled to participate in company-recognized holidays.
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(2)
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Compensation, Benefits and Related Matters
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a.
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Salary
. During the Term, the Company shall continue to pay Gehring at the current rate of his base annual salary of Six Hundred Fifty Thousand Dollars ($650,000.00), less applicable taxes and withholdings required by law or deductions authorized by Gehring pursuant to the Company’s normal payroll procedures.
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b.
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Benefits
. During the Term and prior to the Spin-Off Date, Gehring shall continue to participate in all Company benefit plans, as in effect or amended from time to time, in which he participates as of the date of this Agreement, subject to the terms of such benefit plans;
provided
that Gehring will not be eligible for new equity grants in the fiscal year 2017 grant cycle. On and after the Spin-Off Date during the Term, except with respect to equity awards, Gehring shall cease active participation in the Company’s benefit plans (including The ConAgra Foods, Inc. Pension Plan for Salaried Employees) and shall be eligible to participate in all Lamb Weston benefit plans, as in effect or amended from time to time, in which officers of Lamb Weston participate. In connection with the spin off of Lamb Weston, the liabilities associated with Gehring’s accounts under the ConAgra Foods, Inc. Amended and Restated Non-Qualified CRISP Plan and the ConAgra Foods, Inc. Amended and Restated Voluntary Deferred Compensation Plan will not be transferred to Lamb Weston or any nonqualified deferred compensation plan of Lamb Weston.
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c.
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Equity Awards
. Gehring’s outstanding equity awards granted under any of the ConAgra Foods 2009 Stock Plan, the ConAgra Foods, Inc. 2014 Stock Plan, the ConAgra Foods, Inc. 2008 Performance Share Plan, and or other applicable plans of the Company under which Gehring received an equity award (the “Company Equity Awards”) shall continue in effect under their existing terms until the Spin-Off Date. In connection with the spin off, the Company Equity Awards will be equitably adjusted to reflect the spin off substantially in the manner determined by the Company’s Human Resources Committee,
provided
that the Company Equity Awards will remain awards under the Company Equity Plans and will not transfer to Lamb Weston equity plans, and
provided further
that on and after the Spin-Off Date service or employment requirements under the Company Equity Awards will be based on Gehring’s service or employment with Lamb Weston. Where applicable under the terms of the Company Equity Awards, Gehring shall remain eligible for “early retirement” equity award treatment upon his separation from service with Lamb Weston.
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d.
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Annual Bonus
. During the Term and prior to the Spin-Off Date, Gehring shall continue to participate in the Company’s FY17 Management Incentive Plan (the “ConAgra MIP”). Gehring’s ConAgra MIP award shall be based on the number of days employed with the Company during FY17 through the Spin-Off Date, and shall be based on a target of 100% of salary actually received from the Company during FY17 and the funded percentage for then-active members of the Company’s senior leadership team (
i.e.,
no individual modifier will be applied to reduce the award). Gehring’s ConAgra MIP award, if earned, shall be payable at the time other ConAgra MIP awards are paid for other eligible participants. On and after the Spin-Off Date during the Term, Gehring shall be eligible to participate in the Lamb Weston FY17 Management Incentive Plan (the “Lamb Weston MIP”). Gehring’s Lamb Weston MIP award shall be based on the number of days employed with Lamb Weston on and after the Spin-Off Date and shall be subject to all other terms of the Lamb Weston MIP.
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(3)
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Termination of Agreement
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a.
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The Employer may terminate this Agreement at any time, by giving written notice of such termination to Gehring, upon one of the following events: (i) the Company decides not to go forward with the spin off of Lamb Weston; (ii) upon a mutually agreed upon date following the identification and onboarding of a permanent Lamb Weston Chief Financial Officer; (iii) the knowing engagement of Gehring in serious misconduct that is monetarily or otherwise materially injurious to the Company or Lamb Weston; (iv) the failure of Gehring to follow any reasonable or lawful directive of the Board of Directors of the Employer; (v) the admission to, conviction of, or entering of a plea of nolo contendere to any felony or any lesser crime involving moral turpitude, fraud, embezzlement or theft by Gehring: (vi) act by Gehring of fraud, embezzlement, theft or intentional misrepresentation in connection with Gehring’s duties or in the course of Gehring’s engagement with the Company or Lamb Weston; (vii) the material breach of any Company or Lamb Weston policies or rules or any provision of this Agreement; and (viii) any breach of Gehring’s fiduciary responsibility to the Company or Lamb Weston. In the event of a termination for one of the above-listed reasons, the Employer shall pay to Gehring the compensation payable to Gehring for the payroll period in which such termination occurs, prorated to the day of termination. A termination of the Agreement for one of the above-listed reasons will not cause Gehring to forfeit any benefits to which he is otherwise entitled to receive after his termination of employment by reason of the terms of such benefits.
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b.
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Gehring may terminate this Agreement at any time by giving written notice of such termination to the Employer at least thirty (30) days prior to the effective date of such termination; provided, however, that such period may be reduced by the Employer in its sole and absolute discretion. During such period, it is understood Gehring shall continue to perform relevant duties for the Employer and will assist the Employer with transferring Gehring’s responsibilities in an appropriate manner and take such reasonable actions to assure a smooth transition. In the event of a termination by Gehring, the Employer shall pay to Gehring the compensation payable to Gehring for the payroll period in which such termination occurs, prorated to the day of termination.
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a.
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Two Hundred Thousand Dollars ($200,000.00), less applicable withholdings, six months after his separation from service with the Company and Lamb Weston (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended).
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b.
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Two Hundred Thousand Dollars ($200,000.00), less applicable withholdings, twelve months after his separation from service with the Company and Lamb Weston (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended).
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a.
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Personally provide reasonable assistance and cooperation in providing information for the Company, and its representatives, concerning any ConAgra Foods matter of which Gehring is knowledgeable.
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b.
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Personally provide to the Company, and its representatives, reasonable assistance and cooperation relating to any pending or future lawsuits or claims, about which Gehring are knowledgeable.
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c.
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Promptly notify the Company, in writing, if Gehring receives any request from anyone other than the Company for information regarding any potential claims or proposed litigation against the Company or any of its affiliates.
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d.
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Refrain from providing any information related to any matter, claim or potential litigation against the Company, or its affiliates to any non-Con Agra Foods representatives, without either the Company’s written permission or being required to provide information pursuant to legal process. Nothing in this Agreement prohibits Gehring from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. No prior authorization of the Company is necessary to make any such reports or disclosures, and no requirement exists to notify the Company of such reports or disclosures.
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e.
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If required by law to provide sworn testimony on ConAgra Foods or affiliate-related matters, to the extent legally permitted, consult with and, to the extent legally permitted, have ConAgra Foods-designated legal counsel present (in addition to any personal counsel) for such testimony. The Company will be responsible for the costs of Company designated counsel (but not personal counsel). Any testimony will be confined to items about which Gehring has actual knowledge rather than speculation, unless otherwise directed by legal process.
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f.
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Gehring will be reimbursed after an expense statement is received for reasonable travel, food, lodging and similar out-of-pocket expenses required to fulfill the cooperation provisions above.
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John Gehring
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ConAgra Foods, Inc.
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By:
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/s/ John Gehring
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By:
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/s/ Charisse Brock
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Date:
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9/27/16
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Date: 9/28/16
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1.
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Claims Released
. Gehring, for himself and on behalf of anyone claiming through Gehring including each and all of Gehring’s legal representatives, administrators, executors, heirs, successors and assigns (collectively, the “
Gehring Releasors
”), does hereby fully, finally and forever release, absolve and discharge the Company and each and all of its legal predecessors, successors, assigns, fiduciaries, parents, subsidiaries, divisions and other affiliates, and each of the foregoing’s respective past, present and future principals, partners, shareholders, directors, officers, employees, agents, consultants, attorneys, trustees, administrators, executors and representatives (collectively, the “
Company Released Parties
”), of, from and for any and all claims, causes of action, lawsuits, controversies, liabilities, losses, damages, costs, expenses and demands of any nature whatsoever, at law or in equity, whether known or unknown, asserted or unasserted, foreseen or unforeseen, that the Gehring Releasors (or any of them) now have, have ever had, or may have against the Company Released Parties (or any of them) based upon, arising out of, concerning, relating to or resulting from any act, omission, matter, fact, occurrence, transaction, claim, contention, statement or event occurring or existing at any time in the past up to and including the date on which Gehring signs this Release, including, without limitation, (i) all claims arising out of or in any way relating to Gehring’s employment with or separation of employment from the Company or its affiliates; (ii) all claims for compensation or benefits, including salary, commissions, bonuses, vacation pay, expense reimbursements, severance pay, fringe benefits, stock options, restricted stock units or any other ownership interests in the Company Released Parties; (iii) all claims for breach of contract, wrongful termination and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation, invasion of privacy and emotional distress; (v) all other common law claims; and (vi) all claims (including claims for discrimination, harassment, retaliation, attorneys’ fees, expenses or otherwise) that were or could have been asserted by Gehring or on his behalf in any federal, state, or local court, commission, or agency, or under any federal, state, local, employment, services or other law, regulation, ordinance, constitutional provision, executive order or other source of law, including without limitation under any of the following laws, as amended from time to time: the Age Discrimination in Employment Act (the “ADEA”), as amended by the Older Workers’ Benefit Protection Act of 1990 (the “OWBPA”), Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981 & 1981a, the Americans with Disabilities Act, the Equal Pay Act, the Employee Retirement Income Security Act, the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act, Sarbanes-Oxley Act of 2002, the National Labor Relations Act, the Rehabilitation Act of 1973, the WARN Act, Federal Executive Order 11246, the Genetic Information Nondiscrimination Act, the Illinois Human Rights Act, and the Illinois Wage Payment and Collection Act.
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2.
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Scope of Release
. Nothing in this Release (i) shall release the Company from any of its obligations set forth in the Agreement or any claim that by law is non-waivable, (ii) shall release the Company from any obligation to defend and/or indemnify Gehring against any third party claims arising out of any action or inaction by Gehring during the time of his employment and within the scope of his duties with the Company to the extent Gehring has any such defense or indemnification right, and to the extent permitted by applicable law and to the extent the claims are covered by the Company’s director & officer liability insurance or (iii) shall affect Gehring’s right to file a claim for workers’ compensation or unemployment insurance benefits.
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3.
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Knowing and Voluntary ADEA Waiver
. In compliance with the requirements of the OWBPA, Gehring acknowledges by his signature below that, with respect to the rights and claims waived and released in this Release under the ADEA, Gehring specifically acknowledges and agrees as follows: (i) Gehring has read and understands the terms of this Release; (ii) Gehring has been advised and hereby is advised, and has had the opportunity, to consult with an attorney before signing this Release; (iii) Gehring is releasing the Company and the other Company Released Parties from, among other things, any claims that Gehring may have against them pursuant to the ADEA; (iv) the releases contained in this Release do not cover rights or claims that may arise after Gehring signs this Release; (v) Gehring has been given a period of twenty-one (21) days in which to consider and execute this Release (although Gehring may elect not to use the full twenty-one (21)-day period at Gehring’s option); (vi) Gehring may revoke this Release during the seven (7) day period following the date on which Gehring signs this Release, and this Release will not become effective and enforceable until the seven (7) day revocation period has expired (the date such revocation period expires, the “Effective Date”); and (vii) any such revocation must be submitted in writing to the Company c/o William J. Daley, Chief Counsel-Labor, Employment & Compliance, Con-Agra Foods, Inc., 222 Merchandise Mart Plaza, Suite 13, Chicago, IL prior to the expiration of such seven (7)-day revocation period. If Gehring revokes this Release within such seven (7)-day revocation period, it shall be null and void.
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4.
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Reaffirmation of Restrictive Covenants.
Gehring agrees to and reaffirms his obligations as outlined in Sections 6, 7 and 8 of the Agreement (“Restrictive Covenants”), and acknowledges that the Restrictive Covenants remain in full force and effect.
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5.
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Entire Agreement
. This Release, the Agreement, and the documents referenced therein contain the entire agreement between Gehring and the Company, and take priority over any other written or oral understanding or agreement that may have existed in the past. Gehring acknowledges that no other promises or agreements have been offered for this Release (other than those described above) and that no other promises or agreements will be binding unless they are in writing and signed by Gehring and the Company.
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JOHN GEHRING
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Date:
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Twenty-six weeks ended
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November 27, 2016
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Earnings:
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Income from continuing operations before income taxes and equity method investment earnings
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$
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430.2
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Add (deduct):
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Fixed charges
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131.5
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Distributed income of equity method investees
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7.0
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Capitalized interest
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(4.1
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)
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Earnings available for fixed charges (a)
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$
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564.6
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Fixed charges:
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Interest expense
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$
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113.9
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Capitalized interest
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4.1
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One third of rental expense
(1)
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13.5
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Total fixed charges (b)
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$
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131.5
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Ratio of earnings to fixed charges (a/b)
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4.3
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1.
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I have reviewed this quarterly report on Form 10-Q for the quarter ended
November 27, 2016
of Conagra Brands, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: January 4, 2017
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/s/ SEAN M. CONNOLLY
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Sean M. Connolly
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q for the quarter ended
November 27, 2016
of Conagra Brands, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: January 4, 2017
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/s/ DAVID S. MARBERGER
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David S. Marberger
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Executive Vice President and Chief Financial Officer
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January 4, 2017
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/s/ SEAN M. CONNOLLY
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Sean M. Connolly
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Chief Executive Officer
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January 4, 2017
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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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