What changed in this filing

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Item 1. Financial Statements

2024-12-19 compared with 2024-10-02 · 215 added, 92 removed, 472 unchanged (39% of the section changed)

5 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Costs and expenses:

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Cost of goods sold

19 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

November 24, 2024

November 26, 2023

Other comprehensive income:

2 unchanged sentences

Reclassification for derivative adjustments included in net income

Unrealized currency translation losses

Pension and postretirement benefit obligations:

Unrealized pension and postretirement benefit obligations

Reclassification for pension and postretirement benefit obligations included in net income

Comprehensive income

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to Conagra Brands, Inc.

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

Other comprehensive income:

Derivative adjustments:

Unrealized derivative adjustments

Reclassification for derivative adjustments included in net income

Currency translation adjustments:

5 unchanged sentences

Comprehensive income

Comprehensive income attributable to noncontrolling interests (see Note 3)

Comprehensive income (loss) attributable to noncontrolling interests (see Note 3)

Comprehensive income attributable to Conagra Brands, Inc.

4 unchanged sentences

(in millions except share data)

August 25, 2024

November 24, 2024

Current assets

38 unchanged sentences

(in millions)

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

Cash flows from operating activities:

2 unchanged sentences

Asset impairment charges

Equity method investment earnings in excess of distributions

Stock-settled share-based payments expense (benefit)

Equity method investment earnings less than (in excess of) distributions

Stock-settled share-based payments expense

Contributions to pension plans

13 unchanged sentences

Sale of marketable securities

Purchase of business, net of cash acquired

Purchase of businesses, net of cash acquired

Proceeds from divestitures, net of cash divested

50 unchanged sentences

We are in the process of analyzing the impact of the ASU on our related disclosures.

We will adopt this guidance in the fourth quarter of fiscal 2026, when it becomes effective.

In March 2024, the Securities and Exchange Commission (“SEC”) issued final climate-related disclosure rules that will require disclosure of material climate-related risks and material direct greenhouse gas emissions from operations owned or controlled (Scope 1) and/or material indirect greenhouse gas emissions from purchased energy consumed in owned or controlled operations (Scope 2).

2 unchanged sentences

However, we continue to monitor developments and analyze the potential impact of the new rules on our related disclosures.

In July 2024, we acquired the manufacturing operations of an existing co-manufacturer of our cooking spray products, for a cash purchase price of $ 50.2 million, subject to certain working capital adjustments.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , to provide disaggregated disclosures of specific expense categories underlying certain income statement expense line items on an annual and interim basis.

The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively.

The effective date for the standard is for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

We are in the process of analyzing the impact of the ASU on our related disclosures.

In July 2024, we acquired the manufacturing operations of an existing co-manufacturer of our cooking spray products, for a cash purchase price of $ 51.2 million, including working capital adjustments.

Approximately $ 46.0 million of the purchase price has been classified as goodwill, which is deductible for income tax purposes.

The settlement of certain pre-existing contractual agreements between Conagra and the co-manufacturer as part of the transaction resulted in a net gain of $ 2.9 million within selling, general and administrative (“SG&A”) expenses in the first quarter of fiscal 2025.

In August 2024, we acquired the outstanding equity of Sweetwood Smoke & Co., maker of FATTY ® smoked meat sticks, for a cash purchase price of $ 180.2 million, net of cash acquired and subject to certain working capital adjustments.

The settlement of certain pre-existing contractual agreements between Conagra and the co-manufacturer as part of the transaction resulted in a net gain of $ 3.4 million within selling, general and administrative (“SG&A”) expenses in the first half of fiscal 2025.

In August 2024, we acquired the outstanding equity of Sweetwood Smoke & Co., maker of FATTY ® smoked meat sticks, for a cash purchase price of $ 179.4 million, net of cash acquired and including working capital adjustments.

Approximately $ 129.9 million of the purchase price has been classified as goodwill, which is deductible for income tax purposes.

1 unchanged sentence

For each of these acquisitions, the amounts allocated to goodwill were primarily attributable to anticipated synergies, future growth opportunities, and other intangibles that do not qualify for separate recognition such as an assembled workforce.

The results of each of these acquisitions, subsequent to the acquisitions closings, are primarily included in the Grocery & Snacks segment and through August 25, 2024, were not material to our Condensed Consolidated Statements of Earnings.

The results of each of these acquisitions, subsequent to the acquisitions closings, are primarily included in the Grocery & Snacks segment and through November 24, 2024, were not material to our Condensed Consolidated Statements of Earnings.

Under the acquisition method of accounting, the assets acquired and liabilities assumed in these acquisitions were recorded at their respective estimated fair values at the date of acquisition.

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In connection with this divestiture, we also released $ 41.8 million and $ 38.0 million of currency translation losses from accumulated other comprehensive loss and noncontrolling interests, respectively.

In the second quarter of fiscal 2024, we recognized an impairment charge of $ 34.2 million within SG&A expenses related to this business.

The assets and liabilities related to ATFL have been reclassified as assets and liabilities held for sale within our Condensed Consolidated Balance Sheet for the period presented prior to the divestiture.

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These assets have also been reclassified as assets held for sale within our Condensed Consolidated Balance Sheets for periods prior to the disposal of the individual asset groups.

The related assets classified as held for sale reflected in our Condensed Consolidated Balance Sheets were $ 21.2 million and $ 21.4 million as of August 25, 2024 and May 26, 2024, respectively.

The related assets classified as held for sale reflected in our Condensed Consolidated Balance Sheets were $ 21.2 million and $ 21.4 million as of November 24, 2024 and May 26, 2024, respectively.

RESTRUCTURING ACTIVITIES

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Conagra Restructuring Plan

From fiscal 2019 through August 25, 2024, we have approved $ 256.2 million ($ 81.7 million of cash charges and $ 174.5 million of non-cash charges) and recognized cumulative charges of $ 223.8 million as part of a restructuring plan to improve SG&A expense effectiveness and efficiencies and to optimize our supply chain network (the “Conagra Restructuring Plan”).

In the first quarter of fiscal 2025 and 2024, we recognized charges of $ 4.3 million and $ 23.8 million, respectively, in connection with the Conagra Restructuring Plan.

From fiscal 2019 through November 24, 2024, we have approved $ 333.2 million ($ 92.7 million of cash charges and $ 240.5 million of non-cash charges) and recognized cumulative charges of $ 303.3 million as part of a restructuring plan to improve SG&A expense effectiveness and efficiencies and to optimize our supply chain network (the “Conagra Restructuring Plan”).

In the second quarter and first half of fiscal 2025, we recognized charges of $ 79.5 million and $ 83.8 million, respectively, in connection with the Conagra Restructuring Plan.

In the second quarter and first half of fiscal 2024, we recognized charges of $ 3.6 million and $ 27.4 million, respectively, in connection with the Conagra Restructuring Plan.

We incur costs related to the Conagra Restructuring Plan over a multi-year period.

During the first quarter of fiscal 2025, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

During the first half of fiscal 2025, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

International

3 unchanged sentences

Severance and related costs

Asset impairment (net of gains on disposal)

Contract/lease termination

Included in the above results are $ 15.0 million of charges that have resulted or will result in cash outflows and $ 68.8 million in non-cash charges.

Liabilities recorded for the Conagra Restructuring Plan and changes therein for the first quarter of fiscal 2025 were as follows:

Liabilities recorded for the Conagra Restructuring Plan and changes therein for the first half of fiscal 2025 were as follows:

Costs Paid or

Otherwise Settled

August 25, 2024

November 24, 2024

Severance and related costs

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The repayment was primarily funded using the net proceeds from the issuance of $ 500.0 million aggregate principal amount of 5.30 % senior notes due October 1, 2026.

During the fourth quarter of fiscal 2024, we entered into an unsecured Term Loan Agreement with a financial institution and borrowed the full principal amount, $ 300.0 million, available thereunder (the “2024 Term Loan”).

The 2024 Term Loan matures on April 29, 2025.

During the second quarter of fiscal 2023, we borrowed the full $ 500.0 million aggregate principal amount available under our unsecured term loan (the “Term Loan”) from a syndicate of financial institutions.

During the second quarter of fiscal 2024, we prepaid $ 250.0 million of the aggregate principal amount outstanding under the Term Loan.

The remaining balance matures on August 26, 2025.

During the second quarter of fiscal 2025, we prepaid the remaining $ 250.0 million of the aggregate principal amount outstanding under the Term Loan.

The 2024 Term Loan matures on April 29, 2025.

Revolving Credit Facility

At August 25, 2024, we had a revolving credit facility (the “Revolving Credit Facility”) with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $ 2.0 billion (subject to increase to a maximum aggregate principal amount of $ 2.5 billion with consent of the lenders).

At November 24, 2024, we had a revolving credit facility (the “Revolving Credit Facility”) with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $ 2.0 billion (subject to increase to a maximum aggregate principal amount of $ 2.5 billion with consent of the lenders).

The Revolving Credit Facility matures on August 26, 2027 and is unsecured.

The Company may request the term of the Revolving Credit Facility be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis.

As of August 25, 2024, there were no outstanding borrowings under the Revolving Credit Facility.

As of November 24, 2024, there were no outstanding borrowings under the Revolving Credit Facility.

Debt Covenants

The Revolving Credit Facility generally requires our ratio of earnings before interest, taxes, depreciation and amortization (“EBITDA”) to interest expense to be not less than 3.0 to 1.0 and our ratio of funded net debt to EBITDA not to exceed 4.5 to 1.0, with each ratio to be calculated on a rolling four-quarter basis.

As of August 25, 2024, we were in compliance with all financial covenants under the Revolving Credit Facility.

As of November 24, 2024, we were in compliance with all financial covenants under the Revolving Credit Facility.

Commercial Paper

As of August 25, 2024 and May 26, 2024, we had $ 926.0 million and $ 586.0 million, respectively, outstanding under our commercial paper program.

As of November 24, 2024 and May 26, 2024, we had $ 849.0 million and $ 586.0 million, respectively, outstanding under our commercial paper program.

Interest Expense

1 unchanged sentence

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Long-term debt

11 unchanged sentences

Supplier participation in these agreements is voluntary.

As of August 25, 2024 and May 26, 2024, $ 308.9 million and $ 334.1 million, respectively, of our total accounts and other payables were payable to suppliers who utilized these third-party services.

As of November 24, 2024 and May 26, 2024, $ 290.7 million and $ 334.1 million, respectively, of our total accounts and other payables were payable to suppliers who utilized these third-party services.

The associated payments are included in net cash flows from operating activities within our Condensed Consolidated Statements of Cash Flows.

1 unchanged sentence

The proceeds and payments associated with short-term borrowings are reflected as financing activities within our Condensed Consolidated Statements of Cash Flows.

As of August 25, 2024 and May 26, 2024, we had approximately $ 42.9 million and $ 43.2 million, respectively, of short-term borrowings related to these arrangements.

As of November 24, 2024 and May 26, 2024, we had approximately $ 47.5 million and $ 43.2 million, respectively, of short-term borrowings related to these arrangements.

GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the first quarter of fiscal 2025 was as follows:

The change in the carrying amount of goodwill for the first half of fiscal 2025 was as follows:

Grocery & Snacks

Refrigerated & Frozen

International

1 unchanged sentence

Currency translation

Balance as of August 25, 2024

Balance as of November 24, 2024

Other identifiable intangible assets were as follows:

August 25, 2024

November 24, 2024

Non-amortizing intangible assets

2 unchanged sentences

Customer relationships and intellectual property

During the second quarter of fiscal 2025, we reorganized our reporting units in the Refrigerated & Frozen and Grocery & Snacks segments.

This required us to reassign assets and liabilities between the reporting units, assess whether there were indicators of impairment for the impacted reporting units, and evaluate other assets in the reporting units for impairment, including indefinite-lived intangibles (brand names and trademarks).

The fair value of our reporting units is typically estimated using a discounted cash flow method.

The fair value of our indefinite-lived intangibles is determined using the "relief from royalty" methodology.

Both the “relief from royalty” methodology and the discounted cash flow method require us to estimate the future cash flows as well as to select a risk-adjusted discount rate to measure the present value of the anticipated cash flows.

When determining future cash flow estimates, we consider historical results adjusted to reflect current and anticipated operating conditions.

We estimate cash flows for a reporting unit over a discrete period (typically five years) and a terminal period (considering expected long-term growth rates and trends).

We used a discount rate of 7.50 % and a terminal growth rate that ranged between 1 % to 1.5 % in estimating the fair value of our reporting units.

Estimating the fair value of individual reporting units and our indefinite-lived intangible assets requires us to make assumptions and estimates in areas such as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures.

The use of different assumptions or estimates for future cash flows, discount rates, or terminal growth rates could produce substantially different estimates of the fair value.

As a result of our impairment tests, we recognized impairment charges in SG&A expenses of $ 18.9 million within our Grocery & Snacks and Refrigerated & Frozen segments for certain brands that continued to have lower than expected sales and profit margins.

There were no impairments to goodwill.

Amortizing intangible assets carry a remaining weighted average life of approximately 17 years .

Amortization expense was $ 13.4 million and $ 13.5 million for the first quarter of fiscal 2025 and 2024, respectively.

Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of August 25, 2024, amortization expense is estimated to average $ 44.0 million for each of the next five years.

Amortization expense was $ 13.5 million and $ 26.9 million for the second quarter and first half of fiscal 2025, respectively, and $ 13.3 million and $ 26.8 million for the second quarter and first half of fiscal 2024, respectively.

Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of November 24, 2024, amortization expense is estimated to average $ 43.3 million for each of the next five years.

DERIVATIVE FINANCIAL INSTRUMENTS

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We settled these contracts during the second quarter of fiscal 2019 and deferred a $ 47.5 million gain in accumulated other comprehensive income that is being amortized as a reduction of interest expense over the lives of the related debt instruments.

The unamortized amount at August 25, 2024 was $ 27.4 million.

The unamortized amount at November 24, 2024 was $ 26.7 million.

Economic Hedges of Forecasted Cash Flows

5 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Gross derivative gains (losses) incurred

Net derivative losses allocated to reporting segments

Net derivative gains (losses) allocated to reporting segments

Net derivative gains (losses) recognized in general corporate expenses

Net derivative losses allocated to Grocery & Snacks

Net derivative losses allocated to Refrigerated & Frozen

Net derivative losses allocated to International

Net derivative losses allocated to Foodservice

Net derivative losses included in segment operating profit

The fair values of our derivative positions were not material as of August 25, 2024 and were Level 1 or Level 2 assets or liabilities in the fair value hierarchy (see Note 16 for further information).

Net derivative gains (losses) allocated to Grocery & Snacks

Net derivative gains (losses) allocated to Refrigerated & Frozen

Net derivative gains (losses) allocated to International

Net derivative gains (losses) allocated to Foodservice

Net derivative gains (losses) included in segment operating profit

The fair values of our derivative positions were not material as of November 24, 2024 and were Level 1 or Level 2 assets or liabilities in the fair value hierarchy (see Note 16 for further information).

We have not significantly changed our valuation techniques from prior periods.

The location and amount of gains (losses) from derivatives not designated as hedging instruments in our Condensed Consolidated Statements of Earnings were as follows:

Location in Condensed Consolidated

Statements of Earnings of Gains (Losses)

Gains (Losses) Recognized on

Derivatives in Condensed Consolidated

Location in Condensed Consolidated

Statements of Earnings for the

Statements of Earnings of Gains (Losses)

Thirteen Weeks Ended

1 unchanged sentence

Recognized on Derivatives

August 25, 2024

August 27, 2023

November 24, 2024

November 26, 2023

Commodity contracts

3 unchanged sentences

Total gains (losses) from derivative instruments not designated as hedging instruments

As of August 25, 2024, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of $ 106.7 million for purchase contracts and $ 1.4 million for sales contracts.

Location in Condensed Consolidated

Statements of Earnings of Gains (Losses)

Gains (Losses) Recognized on

Derivatives in Condensed Consolidated

Statements of Earnings for the

Twenty-Six Weeks Ended

Derivatives Not Designated as Hedging Instruments

Recognized on Derivatives

November 24, 2024

November 26, 2023

Commodity contracts

Cost of goods sold

Foreign exchange contracts

Cost of goods sold

Total gains from derivative instruments not designated as hedging instruments

As of November 24, 2024, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of $ 98.9 million for purchase contracts.

As of May 26, 2024, our open commodity contracts had a notional value of $ 88.2 million for purchase contracts and $ 11.0 million for sales contracts.

The notional amount of our foreign currency forward contracts as of August 25, 2024 and May 26, 2024 was $ 104.6 million and $ 101.5 million, respectively.

The notional amount of our foreign currency forward contracts as of November 24, 2024 and May 26, 2024 was $ 88.8 million and $ 101.5 million, respectively.

SHARE-BASED PAYMENTS

For the first quarter of fiscal 2025 and 2024, we recognized total stock-based compensation expense (including restricted stock units and performance shares) of $ 20.6 million and income of $ 2.7 million, respectively.

In the first quarter of fiscal 2025, we granted 2.2 million restricted stock units at a weighted average grant date price of $ 29.85 per share unit and 0.7 million performance shares at a weighted average grant date price of $ 29.86 per share.

For the second quarter and first half of fiscal 2025, we recognized total stock-based compensation expense (including restricted stock units and performance shares) of $ 9.2 million and $ 29.8 million, respectively.

For the second quarter and first half of fiscal 2024, we recognized total stock-based compensation expense of $ 6.2 million and $ 3.5 million, respectively.

In the first half of fiscal 2025, we granted 2.2 million restricted stock units at a weighted average grant date price of $ 29.85 per share unit and 0.7 million performance shares at a weighted average grant date price of $ 29.86 per share.

Performance shares are granted to selected executives and other key employees with vesting contingent upon meeting various Company-wide performance goals.

1 unchanged sentence

The performance goals for the three -year performance period ending in fiscal 2027 (the “2027 performance period”) is based on our net sales and diluted EPS on a three-year cumulative basis, subject to certain adjustments, measured over the defined performance period.

For each of the 2025 performance period, 2026 performance period, and 2027 performance period, the awards actually earned will range from zero to two hundred percent of the targeted number of performance shares for such performance period.

For each of the 2025 performance period, 2026 performance period, and 2027 performance period, the awards

actually earned will range from zero to two hundred percent of the targeted number of performance shares for such performance period.

Dividend equivalents are paid on the portion of performance shares actually earned at our regular dividend rate in additional shares of common stock.

8 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Net income attributable to Conagra Brands, Inc.

4 unchanged sentences

Diluted weighted average shares outstanding

For the first quarter of fiscal 2025 and 2024, there were 1.3 million and 0.6 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.

For the second quarter and first half of fiscal 2025, there were 1.1 million and 1.2 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.

For the second quarter and first half of fiscal 2024, there were 1.4 million and 1.0 million stock options outstanding, respectively, that were excluded from the computation.

The major classes of inventories were as follows:

August 25, 2024

November 24, 2024

Raw materials and packaging

2 unchanged sentences

Supplies and other

In the first quarter of fiscal 2025 and 2024, we recognized an income tax benefit of $ 138.9 million and income tax expense of $ 98.3 million, respectively.

The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was ( 42.4 )% and 23.5 % for the first quarter of fiscal 2025 and 2024, respectively.

The effective tax rate in the first quarter of fiscal 2025 reflected a $ 210.4 million deferred tax benefit related to the release of valuation allowances booked against certain deferred tax assets.

In the second quarter of fiscal 2025 and 2024, we recognized income tax expense of $ 61.5 million and $ 102.9 million, respectively.

The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was 17.8 % and 26.5 % for the second quarter of fiscal 2025 and 2024, respectively.

In the first half of fiscal 2025 and 2024, we recognized an income tax benefit of $ 77.4 million and income tax expense of $ 201.2 million, respectively.

The effective tax rate was ( 11.5 )% and 24.9 % for the first half of fiscal 2025 and 2024, respectively.

The effective tax rate in the second quarter of fiscal 2025 reflected a $ 10.4 million benefit related to the release of valuation allowances booked against certain deferred tax assets, and a $ 9.1 million benefit from the settlement of tax issues that were previously reserved.

The effective tax rate in the first half of fiscal 2025 reflected the above-cited items, as well as a $ 210.4 million deferred tax benefit related to the release of valuation allowances booked against certain deferred tax assets.

Recent interactions with the U.S.

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The realization of these deferred tax assets allows for both current and future tax deductions through 2036.

The effective tax rate in the first quarter of fiscal 2024 was in line with our expected effective tax rate of approximately 24 %.

The effective tax rate in the second quarter and first half of fiscal 2024 reflected the impact of an impairment of goodwill that is non-deductible for tax purposes, in addition to tax expense associated with no longer asserting permanent reinvestment of a foreign subsidiary when we reclassified certain assets and liabilities to held for sale.

During the first half of fiscal 2024, goodwill impairment charges totaling $ 20.7 million were recognized with no associated tax benefit.

We have previously made the assessment that the current earnings of certain foreign subsidiaries were not indefinitely reinvested or that we could not remit to the U.S.

parent in a tax-neutral transaction.

Accordingly, we have recorded a deferred tax liability of $ 1.6 million on approximately $ 33.7 million of cumulative earnings as of August 25, 2024.

Accordingly, we have recorded a deferred tax liability of $ 1.7 million on approximately $ 33.3 million of cumulative earnings as of November 24, 2024.

The deferred tax liability relates to local withholding taxes that will be owed when this cash is distributed.

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We have denied liability, both on the merits of the claims and on the basis that we do not believe we are the successor to any such liability.

In one such action, we agreed to pay $ 101.7 million, in seven annual installments from fiscal 2020 through fiscal 2026 (of which $ 73.0 million had been paid as of August 25, 2024), as part of a 2019 settlement, which also included a guarantee of up to $ 15.0 million in payments to be made in the event of default by a co-defendant, NL Industries, Inc.

We had accrued $ 28.7 million ($ 12.0 million within other accrued liabilities and $ 16.7 million within other noncurrent liabilities) as of August 25, 2024 and $ 28.9 million ($ 11.8 million within other accrued liabilities and $ 17.1 million within other noncurrent liabilities) as of May 26, 2024.

In one such action, we agreed to pay $ 101.7 million, in seven annual installments from fiscal 2020 through fiscal 2026 (of which $ 85.0 million had been paid as of November 24, 2024), as part of a 2019 settlement, which also included a guarantee of up to $ 15.0 million in payments to be made in the event of default by a co-defendant, NL Industries, Inc.

We had accrued $ 16.9 million within other accrued liabilities as of November 24, 2024 and $ 28.9 million ($ 11.8 million within other accrued liabilities and $ 17.1 million within other noncurrent liabilities) as of May 26, 2024.

We are party to a number of matters asserting product liability claims against the Company related to certain Pam® and other cooking spray products.

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The Company believes adequate provision has been made in its Condensed Consolidated Financial Statements for all probable and reasonably estimable losses for the litigation related to the cooking spray products based on information available to us at the time of our evaluation.

Additionally, we have put the applicable insurance carriers on notice of these cooking spray matters and had recognized a related insurance receivable of $ 9.7 million ($ 4.7 million within receivables and $ 5.0 million within other assets) as of August 25, 2024 and $ 14.7 million ($ 7.1 million within receivables and $ 7.6 million within other assets) as of May 26, 2024 in connection with a settlement agreement with one of these insurance carriers.

We are party to various other lawsuits such as putative class action lawsuits challenging various product claims made in the Company’s product labeling and matters challenging the Company’s wage and hour practices.

Additionally, we have put the applicable insurance carriers on notice of these cooking spray matters and had recognized a related insurance receivable of $ 9.0 million ($ 4.0 million within receivables and $ 5.0 million within other assets) as of November 24, 2024 and $ 14.7 million ($ 7.1 million within receivables and $ 7.6 million within other assets) as of May 26, 2024 in connection with a settlement agreement with one of these insurance carriers.

We are party to various other lawsuits including product liability claims, putative class action lawsuits challenging various product claims made in the Company’s product labeling, and matters challenging the Company’s wage and hour practices.

While we cannot predict with certainty the results of these or any other legal proceedings, we do not expect these matters to have a material adverse effect on our financial condition, results of operations, or business.

Our accrual for all litigation matters, including those matters described above that are probable and estimable, was $ 68.6 million ($ 32.5 million within other accrued liabilities and $ 36.1 million within other noncurrent liabilities) as of August 25, 2024 and $ 76.3 million ($ 30.4 million within other accrued liabilities and $ 45.9 million within other noncurrent liabilities) as of May 26, 2024.

Our accrual for all litigation matters, including those matters described above that are probable and estimable, was $ 52.3 million ($ 33.3 million within other accrued liabilities and $ 19.0 million within other noncurrent liabilities) as of November 24, 2024 and $ 76.3 million ($ 30.4 million within other accrued liabilities and $ 45.9 million within other noncurrent liabilities) as of May 26, 2024.

Environmental Matters

Securities and Exchange Commission (the “SEC”) regulations require us to disclose certain information about environmental proceedings if a governmental authority is a party to such proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed a stated threshold.

SEC regulations require us to disclose certain information about environmental proceedings if a governmental authority is a party to such proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed a stated threshold.

Pursuant to the SEC regulations, the Company uses a threshold of $ 1.0 million for purposes of determining whether disclosure of any such proceedings is required.

2 unchanged sentences

Reserves for these Beatrice environmental proceedings have been established based on our best estimate of the undiscounted remediation liabilities, which estimates include evaluation of investigatory studies, extent of required clean-up, the known volumetric contribution of Beatrice and other potentially responsible parties, and its experience in remediating sites.

The accrual for Beatrice-related environmental matters totaled $ 39.0 million ($ 3.2 million within other accrued liabilities and $ 35.8 million within other noncurrent liabilities ) as of August 25, 2024 and $ 39.3 million ($ 3.3 million within other accrued liabilities and $ 36.0 million within other noncurrent liabilities ) as of May 26, 2024, a majority of which relates to the Superfund and state-equivalent sites referenced above.

The accrual for Beatrice-related environmental matters totaled $ 38.4 million ($ 3.2 million within other accrued liabilities and $ 35.2 million within other noncurrent liabilities ) as of November 24, 2024 and $ 39.3 million ($ 3.3 million within other accrued liabilities and $ 36.0 million within other noncurrent liabilities ) as of May 26, 2024, a majority of which relates to the Superfund and state-equivalent sites referenced above.

After taking into account liabilities recognized for all of the foregoing matters, management believes the ultimate resolution of such matters should not have a material adverse effect on our financial condition, results of operations, or liquidity;

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Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Interest cost

6 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Interest cost

6 unchanged sentences

The weighted-average discount rates for service and interest costs under the spot-rate approach used for pension cost in fiscal 2025 were 5.72 % and 5.51 %, respectively.

During the first quarter of fiscal 2025, we contributed $ 2.9 million to our pension plans and contributed $ 1.9 million to our postretirement plans.

During the second quarter and first half of fiscal 2025, we contributed $ 3.0 million and $ 5.9 million, respectively, to our pension plans and contributed $ 1.5 million and $ 3.4 million, respectively, to our postretirement plans.

Based upon the current funded status of the plans and the current interest rate environment, we anticipate making further contributions of approximately $ 5.8 million to our pension plans during the remainder of fiscal 2025.

2 unchanged sentences

STOCKHOLDERS’ EQUITY

The following table presents a reconciliation of our stockholders’ equity accounts for the thirteen weeks ended August 25, 2024:

The following table presents a reconciliation of our stockholders’ equity accounts for the twenty-six weeks ended November 24, 2024:

Conagra Brands, Inc.

13 unchanged sentences

Balance at August 25, 2024

The following table presents a reconciliation of our stockholders’ equity accounts for the thirteen weeks ended August 27, 2023:

Stock option and incentive plans

Currency translation adjustments

Derivative adjustments

Pension and postretirement healthcare benefits

Dividends declared on common stock;

$ 0.35 per share

Net income attributable to Conagra Brands, Inc.

Balance at November 24, 2024

The following table presents a reconciliation of our stockholders’ equity accounts for the twenty-six weeks ended November 26, 2023:

Conagra Brands, Inc.

12 unchanged sentences

Balance at August 27, 2023

Stock option and incentive plans

Currency translation adjustments

Derivative adjustments

Pension and postretirement healthcare benefits

Dividends declared on common stock;

$ 0.35 per share

Net income attributable to Conagra Brands, Inc.

Balance at November 26, 2023

The following table details the accumulated balances for each component of other comprehensive loss, net of tax:

August 25, 2024

November 24, 2024

Currency translation losses, net of reclassification adjustments

5 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

November 24, 2024

November 26, 2023

Net derivative adjustments:

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Income tax expense

Affected Line Item in the Condensed Consolidated Statement of

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

Net derivative adjustments:

Cash flow hedges

Interest expense, net

Cash flow hedges

Equity method investment earnings

Total before tax

Income tax expense

Pension and postretirement liabilities:

Net actuarial gain

Pension and postretirement non-service income

Total before tax

Income tax expense

Currency translation losses

12 unchanged sentences

Derivative assets and liabilities included in Level 2 primarily represent commodity and foreign currency option and forward contracts.

The following table presents our financial assets and liabilities measured at fair value on a recurring basis, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of August 25, 2024:

Derivative assets

13 unchanged sentences

Certain assets and liabilities, including long-lived assets, goodwill, asset retirement obligations, and equity investments are measured at fair value on a nonrecurring basis using Level 3 inputs.

Impairment of Assets Held for Sale

In the second quarter of fiscal 2024, we recognized an impairment charge totaling $ 34.2 million in our International segment.

The impairment was measured based upon the estimated sales price of the disposal group (see Note 3).

Impairment of Intangible Assets

In the second quarter of fiscal 2025, we recognized charges for the impairment of indefinite-lived brands of $ 18.2 million in our Refrigerated & Frozen segment and $ 0.7 million in our Grocery & Snacks segment.

The fair value of these brands was estimated using the “relief from royalty” method (see Note 7).

Other Asset Impairments

In the second quarter of fiscal 2025, we recognized charges of $ 64.7 million in our Refrigerated & Frozen segment for the impairment of certain long-lived assets based upon a discounted cash flow valuation model and included in restructuring activities (see Note 4).

The impairment was based upon management’s intent to exit a manufacturing facility which became probable in the second quarter of fiscal 2025, which reduced the future expected cash flows to be generated at this facility.

In the first quarter of fiscal 2024, we recognized charges for the impairment of certain long-lived assets based upon a discounted cash flow valuation model and included in restructuring activities.

2 unchanged sentences

Long-Term Debt Fair Value

The carrying amount of long-term debt (including current installments) was $ 7.51 billion and $ 7.51 billion as of August 25, 2024 and May 26, 2024, respectively.

Based on current market rates, the fair value of this debt (level 2 liabilities) at August 25, 2024 and May 26, 2024 was estimated at $ 7.52 billion and $ 7.26 billion, respectively.

The carrying amount of long-term debt (including current installments) was $ 7.27 billion and $ 7.51 billion as of November 24, 2024 and May 26, 2024, respectively.

Based on current market rates, the fair value of this debt (level 2 liabilities) at November 24, 2024 and May 26, 2024 was estimated at $ 7.12 billion and $ 7.26 billion, respectively.

BUSINESS SEGMENTS AND RELATED INFORMATION

13 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Grocery & Snacks

16 unchanged sentences

Thirteen Weeks Ended

August 25, 2024

August 27, 2023

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Other shelf-stable

9 unchanged sentences

Therefore, it is impracticable to allocate those assets to the reporting segments, as well as disclose total assets by segment.

Total depreciation expense was $ 85.7 million and $ 83.1 million for the first quarter of fiscal 2025 and 2024, respectively.

Total depreciation expense was $ 84.0 million and $ 169.7 million for the second quarter and first half of fiscal 2025, respectively.

Total depreciation expense was $ 86.0 million and $ 169.1 million for the second quarter and first half of fiscal 2024, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements