|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
47-0248710
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
222 Merchandise Mart Plaza, Suite 1300
Chicago, Illinois
|
|
60654
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Item 1
|
||
|
||
|
||
|
||
|
||
|
||
Item 2
|
||
Item 3
|
||
Item 4
|
||
Item 1
|
||
Item 1A
|
||
Item 2
|
||
Item 6
|
||
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||
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||
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||
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||
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||
|
||
Exhibit 101
|
|
|
Thirteen weeks ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Net sales
|
$
|
1,804.2
|
|
|
$
|
1,895.6
|
|
Costs and expenses:
|
|
|
|
||||
Cost of goods sold
|
1,285.2
|
|
|
1,351.0
|
|
||
Selling, general and administrative expenses
|
239.0
|
|
|
231.7
|
|
||
Interest expense, net
|
36.4
|
|
|
58.2
|
|
||
Income from continuing operations before income taxes and equity method investment earnings
|
243.6
|
|
|
254.7
|
|
||
Income tax expense
|
120.0
|
|
|
169.2
|
|
||
Equity method investment earnings
|
30.0
|
|
|
13.1
|
|
||
Income from continuing operations
|
153.6
|
|
|
98.6
|
|
||
Income (loss) from discontinued operations, net of tax
|
(0.3
|
)
|
|
91.4
|
|
||
Net income
|
$
|
153.3
|
|
|
$
|
190.0
|
|
Less: Net income attributable to noncontrolling interests
|
0.8
|
|
|
3.8
|
|
||
Net income attributable to Conagra Brands, Inc.
|
$
|
152.5
|
|
|
$
|
186.2
|
|
Earnings per share — basic
|
|
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.37
|
|
|
$
|
0.22
|
|
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
0.20
|
|
||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.37
|
|
|
$
|
0.42
|
|
Earnings per share — diluted
|
|
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.36
|
|
|
$
|
0.22
|
|
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders
|
—
|
|
|
0.20
|
|
||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
0.36
|
|
|
$
|
0.42
|
|
Cash dividends declared per common share
|
$
|
0.2125
|
|
|
$
|
0.25
|
|
|
Thirteen weeks ended
|
||||||||||||||||||
|
August 27, 2017
|
|
August 28, 2016
|
||||||||||||||||
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax (Expense) Benefit
|
After-Tax Amount
|
||||||||||||
Net income
|
$
|
273.4
|
|
$
|
(120.1
|
)
|
$
|
153.3
|
|
|
$
|
408.0
|
|
$
|
(218.0
|
)
|
$
|
190.0
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||||||
Unrealized derivative adjustments
|
—
|
|
—
|
|
—
|
|
|
(8.0
|
)
|
3.1
|
|
(4.9
|
)
|
||||||
Unrealized gains on available-for-sale securities
|
0.3
|
|
(0.1
|
)
|
0.2
|
|
|
0.2
|
|
(0.1
|
)
|
0.1
|
|
||||||
Unrealized currency translation gains (losses)
|
32.6
|
|
(0.1
|
)
|
32.5
|
|
|
(11.9
|
)
|
0.2
|
|
(11.7
|
)
|
||||||
Pension and post-employment benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized pension and post-employment benefit obligations
|
0.1
|
|
—
|
|
0.1
|
|
|
(2.1
|
)
|
0.1
|
|
(2.0
|
)
|
||||||
Reclassification for pension and post-employment benefit obligations included in net income
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
|
(0.9
|
)
|
0.3
|
|
(0.6
|
)
|
||||||
Comprehensive income
|
306.3
|
|
(120.3
|
)
|
186.0
|
|
|
385.3
|
|
(214.4
|
)
|
170.9
|
|
||||||
Comprehensive income attributable to noncontrolling interests
|
2.0
|
|
(0.2
|
)
|
1.8
|
|
|
3.8
|
|
(0.1
|
)
|
3.7
|
|
||||||
Comprehensive income attributable to Conagra Brands, Inc.
|
$
|
304.3
|
|
$
|
(120.1
|
)
|
$
|
184.2
|
|
|
$
|
381.5
|
|
$
|
(214.3
|
)
|
$
|
167.2
|
|
|
August 27,
2017 |
|
May 28,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
251.4
|
|
|
$
|
251.4
|
|
Receivables, less allowance for doubtful accounts of $3.2 and $3.1
|
577.1
|
|
|
563.4
|
|
||
Inventories
|
1,068.8
|
|
|
934.2
|
|
||
Prepaid expenses and other current assets
|
188.5
|
|
|
228.7
|
|
||
Current assets held for sale
|
39.2
|
|
|
35.5
|
|
||
Total current assets
|
2,125.0
|
|
|
2,013.2
|
|
||
Property, plant and equipment
|
4,198.2
|
|
|
4,261.9
|
|
||
Less accumulated depreciation
|
(2,550.9
|
)
|
|
(2,606.9
|
)
|
||
Property, plant and equipment, net
|
1,647.3
|
|
|
1,655.0
|
|
||
Goodwill
|
4,301.7
|
|
|
4,301.1
|
|
||
Brands, trademarks and other intangibles, net
|
1,223.6
|
|
|
1,229.3
|
|
||
Other assets
|
827.5
|
|
|
790.6
|
|
||
Noncurrent assets held for sale
|
100.5
|
|
|
107.1
|
|
||
|
$
|
10,225.6
|
|
|
$
|
10,096.3
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes payable
|
$
|
323.5
|
|
|
$
|
28.2
|
|
Current installments of long-term debt
|
198.7
|
|
|
199.0
|
|
||
Accounts payable
|
845.7
|
|
|
773.1
|
|
||
Accrued payroll
|
95.5
|
|
|
167.6
|
|
||
Other accrued liabilities
|
590.2
|
|
|
552.6
|
|
||
Total current liabilities
|
2,053.6
|
|
|
1,720.5
|
|
||
Senior long-term debt, excluding current installments
|
2,571.1
|
|
|
2,573.3
|
|
||
Subordinated debt
|
195.9
|
|
|
195.9
|
|
||
Other noncurrent liabilities
|
1,522.4
|
|
|
1,528.8
|
|
||
Total liabilities
|
6,343.0
|
|
|
6,018.5
|
|
||
Common stockholders' equity
|
|
|
|
||||
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 567,907,172
|
2,839.7
|
|
|
2,839.7
|
|
||
Additional paid-in capital
|
1,159.9
|
|
|
1,171.9
|
|
||
Retained earnings
|
4,312.6
|
|
|
4,247.0
|
|
||
Accumulated other comprehensive loss
|
(181.2
|
)
|
|
(212.9
|
)
|
||
Less treasury stock, at cost, 159,409,040 and 151,387,209 common shares
|
(4,337.2
|
)
|
|
(4,054.9
|
)
|
||
Total Conagra Brands, Inc. common stockholders' equity
|
3,793.8
|
|
|
3,990.8
|
|
||
Noncontrolling interests
|
88.8
|
|
|
87.0
|
|
||
Total stockholders' equity
|
3,882.6
|
|
|
4,077.8
|
|
||
|
$
|
10,225.6
|
|
|
$
|
10,096.3
|
|
|
Thirteen Weeks Ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
153.3
|
|
|
$
|
190.0
|
|
Income (loss) from discontinued operations
|
(0.3
|
)
|
|
91.4
|
|
||
Income from continuing operations
|
153.6
|
|
|
98.6
|
|
||
Adjustments to reconcile income from continuing operations to net cash flows from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
64.7
|
|
|
67.2
|
|
||
Asset impairment charges
|
6.0
|
|
|
164.1
|
|
||
Gain on divestitures
|
—
|
|
|
(198.2
|
)
|
||
Earnings of affiliates in excess of distributions
|
(30.0
|
)
|
|
(6.9
|
)
|
||
Stock-settled share-based payments expense
|
8.2
|
|
|
7.5
|
|
||
Contributions to pension plans
|
(3.8
|
)
|
|
(3.0
|
)
|
||
Pension benefit
|
(12.6
|
)
|
|
(10.4
|
)
|
||
Other items
|
5.5
|
|
|
11.7
|
|
||
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
|
|
|
|
||||
Receivables
|
(13.7
|
)
|
|
14.8
|
|
||
Inventories
|
(138.4
|
)
|
|
(83.3
|
)
|
||
Deferred income taxes and income taxes payable, net
|
132.1
|
|
|
215.3
|
|
||
Prepaid expenses and other current assets
|
(6.5
|
)
|
|
(4.8
|
)
|
||
Accounts payable
|
67.8
|
|
|
56.5
|
|
||
Accrued payroll
|
(72.1
|
)
|
|
(121.2
|
)
|
||
Other accrued liabilities
|
(19.3
|
)
|
|
0.4
|
|
||
Net cash flows from operating activities — continuing operations
|
141.5
|
|
|
208.3
|
|
||
Net cash flows from operating activities — discontinued operations
|
(5.5
|
)
|
|
117.6
|
|
||
Net cash flows from operating activities
|
136.0
|
|
|
325.9
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(42.6
|
)
|
|
(58.1
|
)
|
||
Sale of property, plant and equipment
|
4.0
|
|
|
2.0
|
|
||
Proceeds from divestitures
|
—
|
|
|
486.3
|
|
||
Net cash flows from investing activities — continuing operations
|
(38.6
|
)
|
|
430.2
|
|
||
Net cash flows from investing activities — discontinued operations
|
—
|
|
|
(58.3
|
)
|
||
Net cash flows from investing activities
|
(38.6
|
)
|
|
371.9
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Net short-term borrowings
|
295.3
|
|
|
(3.3
|
)
|
||
Repayment of long-term debt
|
(2.3
|
)
|
|
(553.9
|
)
|
||
Payment of intangible asset financing arrangement
|
(14.4
|
)
|
|
(14.9
|
)
|
||
Repurchase of Conagra Brands, Inc. common shares
|
(300.0
|
)
|
|
(85.6
|
)
|
||
Cash dividends paid
|
(83.3
|
)
|
|
(109.5
|
)
|
||
Exercise of stock options and issuance of other stock awards, including tax withholdings
|
(2.4
|
)
|
|
32.6
|
|
||
Net cash flows from financing activities — continuing operations
|
(107.1
|
)
|
|
(734.6
|
)
|
||
Net cash flows from financing activities — discontinued operations
|
—
|
|
|
(3.1
|
)
|
||
Net cash flows from financing activities
|
(107.1
|
)
|
|
(737.7
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
9.7
|
|
|
—
|
|
||
Net change in cash and cash equivalents
|
—
|
|
|
(39.9
|
)
|
||
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
|
—
|
|
|
72.4
|
|
||
Cash and cash equivalents at beginning of period
|
251.4
|
|
|
798.1
|
|
||
Cash and cash equivalents at end of period
|
$
|
251.4
|
|
|
$
|
722.2
|
|
|
August 27, 2017
|
|
May 28, 2017
|
||||
Currency translation losses, net of reclassification adjustments
|
$
|
(67.1
|
)
|
|
$
|
(98.6
|
)
|
Derivative adjustments, net of reclassification adjustments
|
(1.1
|
)
|
|
(1.1
|
)
|
||
Unrealized losses on available-for-sale securities
|
(0.1
|
)
|
|
(0.3
|
)
|
||
Pension and post-employment benefit obligations, net of reclassification adjustments
|
(112.9
|
)
|
|
(112.9
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(181.2
|
)
|
|
$
|
(212.9
|
)
|
|
|
Thirteen weeks ended
|
|
Affected Line Item in the Condensed Consolidated Statement of Earnings
1
|
||||||
|
|
August 27, 2017
|
|
August 28, 2016
|
|
|
||||
Pension and postretirement liabilities:
|
|
|
|
|
|
|
||||
Net prior service benefit
|
|
$
|
(0.1
|
)
|
|
$
|
(0.9
|
)
|
|
Selling, general and administrative expenses
|
|
|
(0.1
|
)
|
|
(0.9
|
)
|
|
Total before tax
|
||
|
|
—
|
|
|
0.3
|
|
|
Income tax expense
|
||
|
|
$
|
(0.1
|
)
|
|
$
|
(0.6
|
)
|
|
Net of tax
|
|
Thirteen Weeks Ended
|
||||||
|
August 27, 2017
|
|
August 28, 2016
|
||||
Net sales
|
$
|
—
|
|
|
$
|
771.9
|
|
Income (loss) from discontinued operations before income taxes and equity method investment earnings
|
$
|
(0.3
|
)
|
|
$
|
128.8
|
|
Income (loss) before income taxes and equity method investment earnings
|
(0.3
|
)
|
|
128.8
|
|
||
Income tax expense (benefit)
|
(0.1
|
)
|
|
49.5
|
|
||
Equity method investment earnings
|
—
|
|
|
10.6
|
|
||
Income (loss) from discontinued operations, net of tax
|
(0.2
|
)
|
|
89.9
|
|
||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
3.6
|
|
||
Net income (loss) from discontinued operations attributable to Conagra Brands, Inc.
|
$
|
(0.2
|
)
|
|
$
|
86.3
|
|
|
August 27, 2017
|
|
May 28, 2017
|
||||
Current assets
|
$
|
39.2
|
|
|
$
|
35.5
|
|
Noncurrent assets (including goodwill of $74.5 million)
|
95.5
|
|
|
95.5
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Pension costs
|
$
|
32.9
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34.4
|
|
Accelerated depreciation
|
33.7
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
53.5
|
|
||||||
Other cost of goods sold
|
9.2
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.3
|
|
||||||
Total cost of goods sold
|
75.8
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
99.2
|
|
||||||
Severance and related costs, net
|
26.9
|
|
|
10.3
|
|
|
2.5
|
|
|
7.9
|
|
|
102.1
|
|
|
149.7
|
|
||||||
Fixed asset impairment (net of gains on disposal)
|
7.4
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|
25.5
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
|
4.4
|
|
||||||
Contract/lease cancellation expenses
|
0.8
|
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|
72.6
|
|
|
74.6
|
|
||||||
Consulting/professional fees
|
0.9
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
52.7
|
|
|
54.1
|
|
||||||
Other selling, general and administrative expenses
|
15.0
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
24.4
|
|
|
42.6
|
|
||||||
Total selling, general and administrative expenses
|
51.0
|
|
|
21.4
|
|
|
3.2
|
|
|
7.9
|
|
|
267.4
|
|
|
350.9
|
|
||||||
Consolidated total
|
$
|
126.8
|
|
|
$
|
43.6
|
|
|
$
|
3.2
|
|
|
$
|
7.9
|
|
|
$
|
268.6
|
|
|
$
|
450.1
|
|
|
Grocery & Snacks
|
|
Corporate
|
|
Total
|
||||||
Accelerated depreciation
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
Other cost of goods sold
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|||
Total cost of goods sold
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|||
Severance and related costs, net
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|||
Fixed asset impairment (net of gains on disposal)
|
0.1
|
|
|
4.4
|
|
|
4.5
|
|
|||
Accelerated depreciation
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|||
Consulting/professional fees
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
Other selling, general and administrative expenses
|
1.8
|
|
|
—
|
|
|
1.8
|
|
|||
Total selling, general and administrative expenses
|
3.9
|
|
|
5.2
|
|
|
9.1
|
|
|||
Consolidated total
|
$
|
6.2
|
|
|
$
|
5.2
|
|
|
$
|
11.4
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Corporate
|
|
Total
|
||||||||||||
Pension costs
|
$
|
32.9
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34.4
|
|
Accelerated depreciation
|
32.2
|
|
|
18.6
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
52.0
|
|
||||||
Other cost of goods sold
|
6.1
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.2
|
|
||||||
Total cost of goods sold
|
71.2
|
|
|
22.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
94.6
|
|
||||||
Severance and related costs, net
|
25.9
|
|
|
10.3
|
|
|
2.5
|
|
|
7.9
|
|
|
101.5
|
|
|
148.1
|
|
||||||
Fixed asset impairment (net of gains on disposal)
|
7.4
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|
25.5
|
|
||||||
Accelerated depreciation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|
3.2
|
|
||||||
Contract/lease cancellation expenses
|
0.8
|
|
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|
71.3
|
|
|
73.3
|
|
||||||
Consulting/professional fees
|
0.9
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
51.4
|
|
|
52.8
|
|
||||||
Other selling, general and administrative expenses
|
13.0
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
|
20.0
|
|
|
36.2
|
|
||||||
Total selling, general and administrative expenses
|
48.0
|
|
|
21.4
|
|
|
3.2
|
|
|
7.9
|
|
|
258.6
|
|
|
339.1
|
|
||||||
Consolidated total
|
$
|
119.2
|
|
|
$
|
43.6
|
|
|
$
|
3.2
|
|
|
$
|
7.9
|
|
|
$
|
259.8
|
|
|
$
|
433.7
|
|
|
Balance at May 28, 2017
|
|
Costs Incurred
and Charged
to Expense
|
|
Costs Paid
or Otherwise Settled
|
|
Changes in Estimates
|
|
Balance at August 27, 2017
|
||||||||||
Pension costs
|
$
|
31.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31.8
|
|
Severance and related costs
|
13.8
|
|
|
2.3
|
|
|
(4.4
|
)
|
|
(0.3
|
)
|
|
11.4
|
|
|||||
Consulting/professional fees
|
0.6
|
|
|
0.2
|
|
|
(0.6
|
)
|
|
—
|
|
|
0.2
|
|
|||||
Contract/lease cancellation
|
11.6
|
|
|
—
|
|
|
(1.7
|
)
|
|
—
|
|
|
9.9
|
|
|||||
Other costs
|
1.9
|
|
|
2.7
|
|
|
(3.2
|
)
|
|
—
|
|
|
1.4
|
|
|||||
Total
|
$
|
59.7
|
|
|
$
|
5.2
|
|
|
$
|
(9.9
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
54.7
|
|
|
Thirteen weeks ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Long-term debt
|
$
|
38.1
|
|
|
$
|
60.9
|
|
Short-term debt
|
0.4
|
|
|
0.2
|
|
||
Interest income
|
(0.9
|
)
|
|
(0.7
|
)
|
||
Interest capitalized
|
(1.2
|
)
|
|
(2.2
|
)
|
||
|
$
|
36.4
|
|
|
$
|
58.2
|
|
|
Grocery & Snacks
|
|
Refrigerated & Frozen
|
|
International
|
|
Foodservice
|
|
Total
|
||||||||||
Balance as of May 28, 2017
|
$
|
2,439.1
|
|
|
$
|
1,037.3
|
|
|
$
|
253.6
|
|
|
$
|
571.1
|
|
|
$
|
4,301.1
|
|
Purchase accounting adjustments
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
|||||
Currency translation
|
—
|
|
|
0.9
|
|
|
1.1
|
|
|
—
|
|
|
2.0
|
|
|||||
Balance as of August 27, 2017
|
$
|
2,437.7
|
|
|
$
|
1,038.2
|
|
|
$
|
254.7
|
|
|
$
|
571.1
|
|
|
$
|
4,301.7
|
|
|
August 27, 2017
|
|
May 28, 2017
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Non-amortizing intangible assets
|
$
|
835.6
|
|
|
$
|
—
|
|
|
$
|
834.1
|
|
|
$
|
—
|
|
Amortizing intangible assets
|
577.3
|
|
|
189.3
|
|
|
575.4
|
|
|
180.2
|
|
||||
|
$
|
1,412.9
|
|
|
$
|
189.3
|
|
|
$
|
1,409.5
|
|
|
$
|
180.2
|
|
|
August 27,
2017 |
|
May 28,
2017 |
||||
Prepaid expenses and other current assets
|
$
|
4.1
|
|
|
$
|
2.3
|
|
Other accrued liabilities
|
6.3
|
|
|
1.3
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
5.1
|
|
|
Other accrued liabilities
|
|
$
|
1.4
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
0.3
|
|
|
Other accrued liabilities
|
|
6.1
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other accrued liabilities
|
|
0.1
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
5.4
|
|
|
|
|
$
|
7.6
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet
Location
|
|
Fair Value
|
|
Balance Sheet
Location
|
|
Fair Value
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
$
|
2.6
|
|
|
Other accrued liabilities
|
|
$
|
1.4
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
0.2
|
|
|
Other accrued liabilities
|
|
1.1
|
|
||
Other
|
Prepaid expenses and other current assets
|
|
—
|
|
|
Other accrued liabilities
|
|
0.2
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
$
|
2.8
|
|
|
|
|
$
|
2.7
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Location in Condensed Consolidated Statement of Earnings of
Gain (Loss) Recognized on Derivatives
|
|
Amount of Gain (Loss)
Recognized on Derivatives
in Condensed Consolidated
Statement of Earnings for
the Thirteen Weeks Ended
|
||||||
August 27, 2017
|
|
August 28, 2016
|
||||||||
Commodity contracts
|
|
Cost of goods sold
|
|
$
|
0.6
|
|
|
$
|
(0.4
|
)
|
Foreign exchange contracts
|
|
Cost of goods sold
|
|
(8.0
|
)
|
|
0.1
|
|
||
Foreign exchange contracts
|
|
Selling, general and administrative expense
|
|
0.3
|
|
|
(1.2
|
)
|
||
Total loss from derivative instruments not designated as hedging instruments
|
|
|
|
$
|
(7.1
|
)
|
|
$
|
(1.5
|
)
|
|
Thirteen weeks ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Net income available to Conagra Brands, Inc. common stockholders:
|
|
|
|
||||
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders
|
$
|
152.8
|
|
|
$
|
98.4
|
|
Income (loss) from discontinued operations, net of tax, attributable to Conagra Brands, Inc. common stockholders
|
(0.3
|
)
|
|
87.8
|
|
||
Net income attributable to Conagra Brands, Inc. common stockholders
|
$
|
152.5
|
|
|
$
|
186.2
|
|
Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated
|
—
|
|
|
0.5
|
|
||
Net income available to Conagra Brands, Inc. common stockholders
|
$
|
152.5
|
|
|
$
|
185.7
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic weighted average shares outstanding
|
415.1
|
|
|
439.0
|
|
||
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities
|
4.1
|
|
|
3.7
|
|
||
Diluted weighted average shares outstanding
|
419.2
|
|
|
442.7
|
|
|
August 27,
2017 |
|
May 28,
2017 |
||||
Raw materials and packaging
|
$
|
203.8
|
|
|
$
|
182.1
|
|
Work in process
|
96.1
|
|
|
91.9
|
|
||
Finished goods
|
721.2
|
|
|
612.9
|
|
||
Supplies and other
|
47.7
|
|
|
47.3
|
|
||
Total
|
$
|
1,068.8
|
|
|
$
|
934.2
|
|
•
|
an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant,
|
•
|
additional tax expense in the
first quarter
of fiscal 2017 associated with non-deductible goodwill sold in connection with the dispositions of the Spicetec and JM Swank businesses, and
|
•
|
additional tax expense in the
first quarter
of fiscal 2017 associated with non-deductible goodwill, for which an impairment charge was recognized.
|
|
Pension Benefits
|
||||||
|
Thirteen Weeks Ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Service cost
|
$
|
12.7
|
|
|
$
|
16.7
|
|
Interest cost
|
28.2
|
|
|
30.0
|
|
||
Expected return on plan assets
|
(54.2
|
)
|
|
(53.8
|
)
|
||
Amortization of prior service cost
|
0.7
|
|
|
0.6
|
|
||
Benefit cost (benefit) — Company plans
|
(12.6
|
)
|
|
(6.5
|
)
|
||
Pension benefit cost — multi-employer plans
|
1.5
|
|
|
2.3
|
|
||
Total benefit cost (benefit)
|
$
|
(11.1
|
)
|
|
$
|
(4.2
|
)
|
|
Postretirement Benefits
|
||||||
|
Thirteen Weeks Ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
0.9
|
|
|
1.1
|
|
||
Amortization of prior service benefit
|
(0.8
|
)
|
|
(1.7
|
)
|
||
Recognized net actuarial loss
|
—
|
|
|
0.1
|
|
||
Total cost (benefit)
|
$
|
0.1
|
|
|
$
|
(0.5
|
)
|
|
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 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
|
|
|
|
|
(12.0
|
)
|
|
0.4
|
|
|
|
|
17.7
|
|
|
|
|
6.1
|
|
|||||||||||
Spinoff of Lamb Weston
|
|
|
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
1.0
|
|
|||||||||||||
Currency translation adjustment, net
|
|
|
|
|
|
|
|
|
31.5
|
|
|
|
|
1.0
|
|
|
32.5
|
|
||||||||||||
Repurchase of common shares
|
|
|
|
|
|
|
|
|
|
|
(300.0
|
)
|
|
|
|
(300.0
|
)
|
|||||||||||||
Unrealized gain on securities
|
|
|
|
|
|
|
|
|
0.2
|
|
|
|
|
|
|
0.2
|
|
|||||||||||||
Activities of noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
0.8
|
|
|
0.8
|
|
|||||||||||||
Dividends declared on common stock; $0.2125 per share
|
|
|
|
|
|
|
(88.3
|
)
|
|
|
|
|
|
|
|
(88.3
|
)
|
|||||||||||||
Net income attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
152.5
|
|
|
|
|
|
|
|
|
152.5
|
|
|||||||||||||
Balance at August 27, 2017
|
567.9
|
|
|
$
|
2,839.7
|
|
|
$
|
1,159.9
|
|
|
$
|
4,312.6
|
|
|
$
|
(181.2
|
)
|
|
$
|
(4,337.2
|
)
|
|
$
|
88.8
|
|
|
$
|
3,882.6
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
3.8
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
4.1
|
|
Available-for-sale securities
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
||||
Total assets
|
$
|
7.6
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
6.3
|
|
|
$
|
—
|
|
|
$
|
6.3
|
|
Deferred compensation liabilities
|
50.5
|
|
|
—
|
|
|
—
|
|
|
50.5
|
|
||||
Total liabilities
|
$
|
50.5
|
|
|
$
|
6.3
|
|
|
$
|
—
|
|
|
$
|
56.8
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Net Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
2.0
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
Available-for-sale securities
|
3.5
|
|
|
—
|
|
|
—
|
|
|
3.5
|
|
||||
Total assets
|
$
|
5.5
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
Deferred compensation liabilities
|
47.2
|
|
|
—
|
|
|
—
|
|
|
47.2
|
|
||||
Total liabilities
|
$
|
47.2
|
|
|
$
|
1.3
|
|
|
$
|
—
|
|
|
$
|
48.5
|
|
|
Thirteen Weeks Ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Net sales
|
|
|
|
||||
Grocery & Snacks
|
$
|
745.8
|
|
|
$
|
757.2
|
|
Refrigerated & Frozen
|
615.7
|
|
|
604.6
|
|
||
International
|
190.9
|
|
|
194.7
|
|
||
Foodservice
|
251.8
|
|
|
268.0
|
|
||
Commercial
|
—
|
|
|
71.1
|
|
||
Total net sales
|
$
|
1,804.2
|
|
|
$
|
1,895.6
|
|
Operating profit
|
|
|
|
||||
Grocery & Snacks
|
$
|
176.2
|
|
|
$
|
180.5
|
|
Refrigerated & Frozen
|
101.9
|
|
|
92.2
|
|
||
International
|
18.9
|
|
|
(149.2
|
)
|
||
Foodservice
|
23.2
|
|
|
21.7
|
|
||
Commercial
|
—
|
|
|
203.3
|
|
||
Total operating profit
|
$
|
320.2
|
|
|
$
|
348.5
|
|
Equity method investment earnings
|
30.0
|
|
|
13.1
|
|
||
General corporate expense
|
40.2
|
|
|
35.6
|
|
||
Interest expense, net
|
36.4
|
|
|
58.2
|
|
||
Income tax expense
|
120.0
|
|
|
169.2
|
|
||
Income from continuing operations
|
$
|
153.6
|
|
|
$
|
98.6
|
|
Less: Net income attributable to noncontrolling interests of continuing operations
|
0.8
|
|
|
0.2
|
|
||
Income from continuing operations attributable to Conagra Brands, Inc.
|
$
|
152.8
|
|
|
$
|
98.4
|
|
|
Thirteen Weeks Ended
|
||||||
|
August 27,
2017 |
|
August 28,
2016 |
||||
Net derivative losses incurred
|
$
|
(7.4
|
)
|
|
$
|
(0.3
|
)
|
Less: Net derivative losses allocated to reporting segments
|
(1.4
|
)
|
|
(1.0
|
)
|
||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
(6.0
|
)
|
|
$
|
0.7
|
|
Net derivative losses allocated to Grocery & Snacks
|
$
|
(0.6
|
)
|
|
$
|
(0.4
|
)
|
Net derivative losses allocated to Refrigerated & Frozen
|
—
|
|
|
(0.2
|
)
|
||
Net derivative losses allocated to International
|
(0.7
|
)
|
|
—
|
|
||
Net derivative losses allocated to Foodservice
|
(0.1
|
)
|
|
(0.3
|
)
|
||
Net derivative losses allocated to Commercial
|
—
|
|
|
(0.1
|
)
|
||
Net derivative losses included in segment operating profit
|
$
|
(1.4
|
)
|
|
$
|
(1.0
|
)
|
•
|
charges totaling $11.4 million ($7.3 million after-tax) in connection with the "SCAE Plan" (as defined below) and
|
•
|
an income tax charge of $27.8 million associated with the planned repatriation of cash from foreign subsidiaries and the tax expense related to the earnings of foreign subsidiaries previously deemed to be permanently invested.
|
•
|
gains totaling $198.2 million ($75.3 million after-tax) from the sales of the Spicetec and JM Swank businesses,
|
•
|
charges totaling $163.6 million ($149.5 million after-tax) related to the impairment of goodwill and other intangible assets in our International segment,
|
•
|
charges totaling $14.1 million ($9.1 million after-tax) in connection with the SCAE Plan, and
|
•
|
an income tax benefit of $7.5 million associated with a tax planning strategy that allowed us to utilize certain state tax attributes.
|
|
Thirteen Weeks Ended
|
||||||
($ in millions)
|
August 27,
2017 |
|
August 28,
2016 |
||||
Net derivative losses incurred
|
$
|
(7.4
|
)
|
|
$
|
(0.3
|
)
|
Less: Net derivative losses allocated to reporting segments
|
(1.4
|
)
|
|
(1.0
|
)
|
||
Net derivative gains (losses) recognized in general corporate expenses
|
$
|
(6.0
|
)
|
|
$
|
0.7
|
|
Net derivative losses allocated to Grocery & Snacks
|
$
|
(0.6
|
)
|
|
$
|
(0.4
|
)
|
Net derivative losses allocated to Refrigerated & Frozen
|
—
|
|
|
(0.2
|
)
|
||
Net derivative losses allocated to International
|
(0.7
|
)
|
|
—
|
|
||
Net derivative losses allocated to Foodservice
|
(0.1
|
)
|
|
(0.3
|
)
|
||
Net derivative losses allocated to Commercial
|
—
|
|
|
(0.1
|
)
|
||
Net derivative losses included in segment operating profit
|
$
|
(1.4
|
)
|
|
$
|
(1.0
|
)
|
|
Net Sales
|
|||||||||
($ in millions)
|
Thirteen weeks ended
|
|||||||||
Reporting Segment
|
August 27,
2017 |
|
August 28,
2016 |
|
% Inc
(Dec)
|
|||||
Grocery & Snacks
|
$
|
745.8
|
|
|
$
|
757.2
|
|
|
(2
|
)%
|
Refrigerated & Frozen
|
615.7
|
|
|
604.6
|
|
|
2
|
%
|
||
International
|
190.9
|
|
|
194.7
|
|
|
(2
|
)%
|
||
Foodservice
|
251.8
|
|
|
268.0
|
|
|
(6
|
)%
|
||
Commercial
|
—
|
|
|
71.1
|
|
|
(100
|
)%
|
||
Total
|
$
|
1,804.2
|
|
|
$
|
1,895.6
|
|
|
(5
|
)%
|
•
|
charges totaling $163.6 million related to the impairment of goodwill and other intangible assets within our International segment, and
|
|
Operating Profit
|
|||||||||
($ in millions)
|
Thirteen weeks ended
|
|||||||||
Reporting Segment
|
August 27,
2017 |
|
August 28,
2016 |
|
% Inc
(Dec)
|
|||||
Grocery & Snacks
|
$
|
176.2
|
|
|
$
|
180.5
|
|
|
(2
|
)%
|
Refrigerated & Frozen
|
101.9
|
|
|
92.2
|
|
|
11
|
%
|
||
International
|
18.9
|
|
|
(149.2
|
)
|
|
N/A
|
|
||
Foodservice
|
23.2
|
|
|
21.7
|
|
|
7
|
%
|
||
Commercial
|
—
|
|
|
203.3
|
|
|
(100
|
)%
|
•
|
an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant,
|
•
|
additional tax expense in the
first quarter
of fiscal 2017 associated with non-deductible goodwill sold in connection with the dispositions of the Spicetec and JM Swank businesses, and
|
•
|
additional tax expense in the
first quarter
of fiscal 2017 associated with non-deductible goodwill, for which an impairment charge was recognized.
|
|
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
|
$
|
2,821.3
|
|
|
$
|
189.7
|
|
|
$
|
126.7
|
|
|
$
|
195.9
|
|
|
$
|
2,309.0
|
|
Capital lease obligations
|
128.9
|
|
|
9.1
|
|
|
16.8
|
|
|
17.4
|
|
|
85.6
|
|
|||||
Operating lease obligations
|
225.1
|
|
|
41.4
|
|
|
51.5
|
|
|
35.0
|
|
|
97.2
|
|
|||||
Purchase obligations
1
and other contracts
|
1,210.2
|
|
|
1,023.1
|
|
|
113.3
|
|
|
70.0
|
|
|
3.8
|
|
|||||
Notes payable
|
323.5
|
|
|
323.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
4,709.0
|
|
|
$
|
1,586.8
|
|
|
$
|
308.3
|
|
|
$
|
318.3
|
|
|
$
|
2,495.6
|
|
|
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
|
$
|
1.8
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
0.5
|
|
|
$
|
0.3
|
|
Other commitments
|
3.6
|
|
|
2.3
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
5.4
|
|
|
$
|
2.8
|
|
|
$
|
1.8
|
|
|
$
|
0.5
|
|
|
$
|
0.3
|
|
|
Fair Value Impact
|
||||||
In Millions
|
Average
During Thirteen Weeks
Ended August 27, 2017
|
|
Average
During Thirteen Weeks
Ended August 28, 2016
|
||||
Energy commodities
|
$
|
0.4
|
|
|
$
|
0.4
|
|
Agriculture commodities
|
0.5
|
|
|
0.8
|
|
||
Foreign exchange
|
0.7
|
|
|
0.3
|
|
Period
|
Total Number
of Shares (or
units)
Purchased
|
|
Average
Price Paid
per Share
(or unit)
|
|
Total Number of
Shares
Purchased as Part of
Publicly Announced
Plans or Programs
(1)
|
|
Approximate Dollar
Value of Maximum
Number of Shares that
may yet be Purchased
under the Program (1)
|
||||||
May 29 through June 25, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,381,967,000
|
|
June 26 through July 23, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,381,967,000
|
|
July 24 through August 27, 2017
|
8,744,441
|
|
|
$
|
34.31
|
|
|
8,744,441
|
|
|
$
|
1,081,967,000
|
|
Total Fiscal 2018 First Quarter Activity
|
8,744,441
|
|
|
$
|
34.31
|
|
|
8,744,441
|
|
|
$
|
1,081,967,000
|
|
(1)
|
Pursuant to publicly announced share repurchase programs from December 2003, we have repurchased approximately 201.9 million shares at a cost of $5.5 billion through
August 27, 2017
. On October 11, 2016, we announced that our Board of
|
|
CONAGRA BRANDS, INC.
|
|
|
|
|
|
By:
|
/s/ DAVID S. MARBERGER
|
|
|
David S. Marberger
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
By:
|
/s/ ROBERT G. WISE
|
|
|
Robert G. Wise
|
|
|
Senior Vice President and Corporate Controller
|
1.3
|
Compensation Deferral Agreement
. The term “Compensation Deferral Agreement” means the written compensation deferral agreement entered into by a Participant with the Company pursuant to the Plan.
|
1.4
|
Compensation Deferral Contribution
. “Compensation Deferral Contribution” means a contribution made to the Plan by a Participant pursuant to Section 3.1.
|
1.5
|
Disability
. A Participant has a “Disability” or shall be considered “Disabled” if the Participant is, by reason of 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 12 months, receiving income replacement benefits for a period of not less than three months under the Company’s long-term disability plan.
|
1.6
|
Distribution Sub-Account
. The term “Distribution Sub-Account” shall refer to each sub-account elected by the Participant pursuant to Section 5.1 for the purpose of applying a specific election concerning time and form of payment to only such sub-account.
|
1.7
|
Employer Matching Contribution
. The term “Employer Matching Contribution” means a contribution made to the Plan by the Employer pursuant to Section 3.2.
|
1.8
|
Employer Non-elective Contribution
. The term “Employer Non-elective Contribution” means a contribution made to the Plan by the Employer pursuant to Section 3.3.
|
1.9
|
Related Company
. The term “Related Company” means: (i) any corporation that is a member of a controlled group of corporations (as defined in Code Section 414(b)) that includes the Company); and (ii) any trade or business (whether or not incorporated) that is under common control (as defined in Code Section 414(c)) with the Company. For purposes of applying Code Sections 414(b) and (c), 25% is substituted for the 80% ownership level.
|
1.10
|
Separation from Service
. The term “Separation from Service” means the date that the Participant separates from service within the meaning of Code Section 409A. Generally, a Participant separates from service if the Participant dies, retires, or otherwise has a termination of employment with the Company, determined in accordance with the following:
|
1.
|
Award Grant.
Conagra hereby grants Restricted Stock Units ("RSUs", and each such unit an “RSU”) to the Participant under the ConAgra Foods, Inc. 2014 Stock Plan (the “Plan”), as follows, effective as of the Date of Grant set forth below:
|
2.
|
Definitions.
Capitalized
terms used herein without definition have the meanings set forth in the Plan.
The following terms shall have the respective meanings set forth below:
|
(i)
|
Leaves of Absence
. The employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or, if longer, so long as the Participant retains a right to reemployment with the Company under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Company. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six‑month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 12‑month period of absence shall be substituted for such six-month period.
|
(ii)
|
Dual Status
. Generally, if a Participant performs services both as an employee and an independent contractor, such Participant must separate from service both as an employee and as an independent contractor, pursuant to standards set forth in Treasury Regulations, to be treated as having a separation from service. However, if a Participant provides services to the Company as an employee and as a member of the Board, and if any plan in which such person participates as a Board member is not aggregated with this Agreement pursuant to Treasury Regulation Section 1.409A-1(c)(2)(ii), then the services provided as a director are not taken into account in determining whether the Participant has a separation from service as an employee for purposes of this Agreement.
|
(iii)
|
Termination of Employment
. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Company and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an employee or as an independent contractor except as provided in (ii) above) would permanently decrease to no more than 20% of the average level of bona fide services performed (whether as an employee or an independent contractor,
|
(g)
|
“
Settlement Amount
” means [
as applicable
:
one share of Stock/an amount in cash equal to the closing price on the New York Stock Exchange of one share of Stock on the Vesting Date].
|
3.
|
Vesting of RSUs
.
|
(a)
|
Normal Vesting
. Subject to the Plan and this Agreement, if the Participant has been in Continuous Employment through the respective Vesting Date[s] as set forth in Section 1, then the RSUs subject to such Vesting Date[s] shall become nonforfeitable (“Vest” or similar terms).
|
(i)
|
by reason of death, then all unvested RSUs evidenced by this Agreement shall, to the extent such RSUs have not previously been forfeited, become 100% Vested.
|
(ii)
|
by reason of Normal Retirement, then all unvested RSUs evidenced by this Agreement shall, to the extent such RSUs have not previously been forfeited, become 100% Vested.
|
(iii)
|
by reason of Early Retirement, involuntary termination due to Disability, position elimination, reduction in force (each as defined in the Company's sole discretion), or Divestiture, then the Participant shall Vest in a pro rata portion of the RSUs determined by multiplying the number of RSUs evidenced by this Agreement, to the extent not previously Vested or forfeited, by a fraction, the numerator of which is the total number of calendar days during which the Participant was employed by the Company during the period beginning on the Date of Grant and ending on the Participant’s Separation from Service and the denominator of which is the total number of calendar days beginning on the Date of Grant and ending on the final Vesting Date, rounded to the nearest whole number of RSUs.
|
(iv)
|
for Cause prior to the final Vesting Date, then all RSUs, whether Vested or unvested prior to the final Vesting Date, shall be immediately forfeited without further consideration to the Participant.
|
(i)
|
If a Change of Control occurs prior to the final Vesting Date, and the Participant has been in Continuous Employment between the Date of Grant and the date of such Change of Control, then all unvested RSUs evidenced by this Agreement shall become 100% Vested, except (A) to the extent such RSUs have previously been forfeited, or (B) to the extent that a Replacement Award is provided to the Participant to replace, continue or adjust the outstanding RSUs (the “Replaced Award”). If the Participant’s employment with the Company (or any of its successors after the Change of Control) (as applicable, the “Successor Company”) is terminated by the Participant for Good Reason or by the Successor Company other than for Cause, in each case within a period of two years after the Change of Control but prior to the final Vesting Date, to the extent that the Replacement Award has not previously been Vested or forfeited, the Replacement Award shall become 100% Vested (and become entitled to settlement as specified in Section 4(b)(ii)).
|
(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
|
(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
|
4.
|
Settlement of RSUs
.
|
(a)
|
Normal
. Subject to Section 4(b), the Company shall pay to the Participant the Settlement Amount on or within 30 days after the Vesting Date for each Vested RSU to the extent the RSU has not previously been Vested, forfeited or settled.
|
(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)
|
Separation from Service
. Within 30 days of the Participant's Separation from Service, 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), 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.
|
|
Thirteen Weeks Ended
|
||
August 27, 2017
|
|||
Earnings:
|
|
||
Income from continuing operations before income taxes and equity method investment earnings
|
$
|
243.6
|
|
Add (deduct):
|
|
||
Fixed charges
|
43.8
|
|
|
Distributed income of equity method investees
|
—
|
|
|
Capitalized interest
|
(1.2
|
)
|
|
Earnings available for fixed charges (a)
|
$
|
286.2
|
|
|
|
||
Fixed charges:
|
|
||
Interest expense
|
$
|
37.4
|
|
Capitalized interest
|
1.2
|
|
|
One third of rental expense
(1)
|
5.2
|
|
|
Total fixed charges (b)
|
$
|
43.8
|
|
|
|
||
Ratio of earnings to fixed charges (a/b)
|
6.5
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended
August 27, 2017
of Conagra Brands, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: October 3, 2017
|
|
|
|
/s/ SEAN M. CONNOLLY
|
|
Sean M. Connolly
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended
August 27, 2017
of Conagra Brands, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: October 3, 2017
|
|
|
|
/s/ DAVID S. MARBERGER
|
|
David S. Marberger
|
|
Executive Vice President and Chief Financial Officer
|
|
October 3, 2017
|
|
|
|
/s/ SEAN M. CONNOLLY
|
|
Sean M. Connolly
|
|
Chief Executive Officer
|
|
October 3, 2017
|
|
|
|
/s/ DAVID S. MARBERGER
|
|
David S. Marberger
|
|
Executive Vice President and Chief Financial Officer
|
|