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Item 1. Financial Statements

2025-04-03 compared with 2024-12-19 · 189 added, 134 removed, 553 unchanged (37% of the section changed)

5 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

Cost of goods sold

Selling, general and administrative expenses

Other intangible asset impairment charges

Loss on divestitures

Pension and postretirement non-service income (expense)

17 unchanged sentences

Thirteen Weeks Ended

November 24, 2024

November 26, 2023

February 23, 2025

February 25, 2024

Other comprehensive income:

2 unchanged sentences

Reclassification for derivative adjustments included in net income

Unrealized currency translation losses

Unrealized currency translation gains (losses)

Pension and postretirement benefit obligations:

2 unchanged sentences

Comprehensive income

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to noncontrolling interests

Comprehensive income attributable to Conagra Brands, Inc.

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

Other comprehensive income:

16 unchanged sentences

(in millions except share data)

November 24, 2024

February 23, 2025

Current assets

38 unchanged sentences

(in millions)

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

Cash flows from operating activities:

12 unchanged sentences

Other accrued liabilities

Litigation accruals

Litigation receivables, net of recoveries

Litigation accruals, net of payments

Net cash flows from operating activities

6 unchanged sentences

Proceeds from divestitures, net of cash divested

Proceeds from insurance recoveries

Net cash flows from investing activities

29 unchanged sentences

The unaudited financial information reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented.

During the first quarter of fiscal 2025, we determined that certain assets were held for sale.

We have reclassified these assets within our Condensed Consolidated Balance Sheets for all periods presented (see Note 3).

During the first and third quarters of fiscal 2025, we determined that certain assets and liabilities were held for sale.

We have reclassified these assets and liabilities within our Condensed Consolidated Balance Sheets for all periods presented (see Note 3).

In addition, certain other prior year amounts have been reclassified to conform to current period presentation.

These reclassifications had no effect on net income in our Condensed Consolidated Statements of Earnings.

Certain costs previously classified as selling, general and administrative (“SG&A”) expenses have been reclassified to other intangible asset impairment charges and loss on divestitures in our Condensed Consolidated Statements of Earnings.

All other adjustments are of a normal recurring nature.

28 unchanged sentences

Approximately $ 46.3 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 $ 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.

2 unchanged sentences

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 November 24, 2024, were not material to our Condensed Consolidated Statements of Earnings.

The results of each of these acquisitions, subsequent to the acquisition closings, are primarily included in the Grocery & Snacks segment and through February 23, 2025, 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.

We expect to finalize the purchase price allocation in the fourth quarter of fiscal 2025.

DIVESTITURES AND ASSETS HELD FOR SALE

1 unchanged sentence

Prior to the transaction, our majority ownership of ATFL was consolidated within our International segment.

We recognized a loss of $ 2.3 million on the sale within SG&A expenses in the first quarter of fiscal 2025.

We recognized a loss of $ 2.3 million on the sale within loss on divestitures in the first quarter of fiscal 2025.

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.

In the second quarter of fiscal 2024, we recognized an impairment charge of $ 34.2 million within loss on divestitures 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.

The assets and liabilities classified as held for sale reflected in our Condensed Consolidated Balance Sheet were as follows:

The assets and liabilities related to ATFL classified as held for sale reflected in our Condensed Consolidated Balance Sheet were as follows:

Current assets

6 unchanged sentences

Accordingly, these assets have been reclassified as assets held for sale within our Condensed Consolidated Balance Sheets for all periods presented.

We have initiated plans to sell businesses with operating results primarily included within our Grocery & Snacks, Refrigerated & Frozen, and International segments.

During the third quarter of fiscal 2025, these businesses met the criteria to be classified as held for sale.

The assets and liabilities have been reclassified as assets and liabilities held for sale within our Condensed Consolidated Balance Sheets for all periods presented and are expected to be sold within twelve months of initiating our plans.

As a result , based on our current estimates regarding these planned transactions, we recognized an impairment charge of $ 27.2 million in our Refrigerated & Frozen segment within loss on divestitures in the third quarter of fiscal 2025.

In addition, we actively market certain other assets from time to time.

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 November 24, 2024 and May 26, 2024, respectively.

The assets and liabilities currently classified as held for sale reflected in our Condensed Consolidated Balance Sheets were as follows:

February 23, 2025

Current assets

Noncurrent assets (including goodwill of $ 247.5 million and $ 256.8 million, respectively)

Current liabilities

Noncurrent liabilities

RESTRUCTURING ACTIVITIES

1 unchanged sentence

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.

From fiscal 2019 through February 23, 2025, we have approved $ 345.9 million ($ 90.1 million of cash charges and $ 255.8 million of non-cash charges) and recognized cumulative charges of $ 310.2 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 third quarter and first three quarters of fiscal 2025, we recognized charges of $ 6.9 million and $ 90.7 million, respectively, in connection with the Conagra Restructuring Plan.

In the third quarter and first three quarters of fiscal 2024, we recognized charges of $ 1.5 million and $ 28.9 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 half of fiscal 2025, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

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

International

6 unchanged sentences

Included in the above results are $ 18.2 million of charges that have resulted or will result in cash outflows and $ 72.5 million in non-cash charges.

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

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

Costs Paid or

Otherwise Settled

November 24, 2024

February 23, 2025

Severance and related costs

6 unchanged sentences

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.

During the second quarter of fiscal 2024, we

prepaid $ 250.0 million of the aggregate principal amount outstanding under the Term Loan.

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

2 unchanged sentences

Revolving Credit Facility

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).

At February 23, 2025, 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 November 24, 2024, there were no outstanding borrowings under the Revolving Credit Facility.

As of February 23, 2025, 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 November 24, 2024, we were in compliance with all financial covenants under the Revolving Credit Facility.

As of February 23, 2025, we were in compliance with all financial covenants under the Revolving Credit Facility.

Commercial Paper

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.

As of February 23, 2025 and May 26, 2024, we had $ 535.0 million and $ 586.0 million, respectively, outstanding under our commercial paper program.

Interest Expense

1 unchanged sentence

Thirteen Weeks Ended

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

Long-term debt

11 unchanged sentences

Supplier participation in these agreements is voluntary.

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.

As of February 23, 2025 and May 26, 2024, $ 269.0 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.

We have also concluded that certain obligations to our suppliers, including amounts due and scheduled payment terms, are impacted by these third-party service programs and these arrangements are classified as notes payable within our Condensed Consolidated Balance Sheets.

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

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.

The proceeds and payments associated with short-term borrowings are reflected as financing activities within our Condensed

Consolidated Statements of Cash Flows.

As of both February 23, 2025 and May 26, 2024, we had approximately $ 43.2 million 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 half of fiscal 2025 was as follows:

The change in the carrying amount of goodwill for the first three quarters of fiscal 2025, excluding amounts classified as held for sale (see Note 3), was as follows:

Grocery & Snacks

3 unchanged sentences

Currency translation

Balance as of November 24, 2024

Other identifiable intangible assets were as follows:

November 24, 2024

Balance as of February 23, 2025

Other identifiable intangible assets, excluding amounts classified as held for sale, were as follows:

February 23, 2025

Non-amortizing intangible assets

12 unchanged sentences

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.

As a result of our impairment tests, in the second quarter of fiscal 2025 we recognized impairment charges of $ 18.9 million for certain brands with continued lower than expected sales and profit margins.

These charges were recorded within other intangible asset impairment charges in our Grocery & Snacks and Refrigerated & Frozen segments.

There were no impairments to goodwill.

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

Amortization expense was $ 13.5 million and $ 40.4 million for the third quarter and first three quarters of fiscal 2025, respectively, and $ 13.4 million and $ 40.2 million for the third quarter and first three quarters of fiscal 2024, respectively.

Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of February 23, 2025, amortization expense is estimated to average $ 41.9 million for each of the next five years.

DERIVATIVE FINANCIAL INSTRUMENTS

3 unchanged sentences

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 November 24, 2024 was $ 26.7 million.

The unamortized amount at February 23, 2025 was $ 26.0 million.

Economic Hedges of Forecasted Cash Flows

5 unchanged sentences

Thirteen Weeks Ended

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

Gross derivative gains (losses) incurred

1 unchanged sentence

Net derivative gains (losses) recognized in general corporate expenses

Net derivative gains (losses) allocated to Grocery & Snacks

Net derivative gains (losses) allocated to Refrigerated & Frozen

Net derivative losses allocated to Grocery & Snacks

Net derivative losses allocated to Refrigerated & Frozen

Net derivative gains (losses) allocated to International

1 unchanged sentence

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).

The fair values of our derivative positions were not material as of February 23, 2025 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.

8 unchanged sentences

Recognized on Derivatives

November 24, 2024

November 26, 2023

February 23, 2025

February 25, 2024

Commodity contracts

8 unchanged sentences

Statements of Earnings for the

Twenty-Six Weeks Ended

Thirty-Nine Weeks Ended

Derivatives Not Designated as Hedging Instruments

Recognized on Derivatives

November 24, 2024

November 26, 2023

February 23, 2025

February 25, 2024

Commodity contracts

3 unchanged sentences

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 February 23, 2025, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of $ 65.4 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 November 24, 2024 and May 26, 2024 was $ 88.8 million and $ 101.5 million, respectively.

The notional amount of our foreign currency forward contracts as of February 23, 2025 and May 26, 2024 was $ 83.9 million and $ 101.5 million, respectively.

SHARE-BASED PAYMENTS

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.

For the third quarter and first three quarters of fiscal 2025, we recognized total stock-based compensation expense (including restricted stock units and performance shares) of $ 6.3 million and $ 36.1 million, respectively.

For the third quarter and first three quarters of fiscal 2024, we recognized total stock-based compensation expense of $ 15.2 million and $ 18.7 million, respectively.

In the first three quarters of fiscal 2025, we granted 2.2 million restricted stock units at a weighted average grant date price of $ 29.81 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

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

Net income attributable to Conagra Brands, Inc.

4 unchanged sentences

Diluted weighted average shares outstanding

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.

For the third quarter and first three quarters of fiscal 2025, there were 1.6 million and 1.3 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.

For the third quarter and first three quarters of fiscal 2024, there were 1.3 million and 1.1 million stock options outstanding, respectively, that were excluded from the computation.

The major classes of inventories were as follows:

November 24, 2024

February 23, 2025

Raw materials and packaging

2 unchanged sentences

Supplies and other

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.

In the third quarter of fiscal 2025 and 2024, we recognized income tax expense of $ 43.9 million and $ 95.9 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 23.3 % and 23.7 % for the third quarter of fiscal 2025 and 2024, respectively.

In the first three quarters of fiscal 2025 and 2024, we recognized an income tax benefit of $ 33.5 million and income tax expense of $ 297.1 million, respectively.

The effective tax rate was ( 3.9 )% and 24.5 % for the first three quarters of fiscal 2025 and 2024, respectively.

The effective tax rate in the third quarter of fiscal 2025 reflected additional tax expense associated with non-deductible goodwill related to assets held for sale for which an impairment charge was recognized.

During the third quarter of fiscal 2025, goodwill impairment charges totaling $ 8.3 million were recognized with no associated tax benefit.

The effective tax rate in the first three quarters of fiscal 2025 reflected the above-cited items, as well as a $ 9.1 million benefit from the settlement of tax issues that were previously reserved and a $ 220.8 million deferred tax benefit related to the release of valuation allowances booked against certain deferred tax assets.

Recent interactions with the U.S.

1 unchanged sentence

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

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.

The effective tax rate in the first three quarters of fiscal 2024 reflected the impact of an impairment of goodwill that is non-deductible for tax purposes, and 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 three quarters 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 $ 1.7 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.

Accordingly, we have recorded a deferred tax liability of $ 2.2 million on approximately $ 43.1 million of cumulative earnings as of February 23, 2025.

The deferred tax liability relates to local

withholding taxes that will be owed when this cash is distributed.

In the first quarter of fiscal 2025, we paid $ 16.9 million of withholding taxes previously accrued in connection with the restructuring of our ownership interest in Ardent Mills.

4 unchanged sentences

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 $ 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.

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 February 23, 2025), 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 February 23, 2025 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.

These lawsuits generally seek damages for personal injuries allegedly caused by defects in the design, manufacture, or safety warnings of our cooking spray products and we have denied liability, however, we cannot predict with certainty the results of these proceedings.

For example, during fiscal 2024, a jury entered a verdict against the Company for $ 3.1 million in compensatory damages and $ 4.0 million in punitive damages in one of these lawsuits captioned Reese v.

Conagra Brands, Inc., et al.

We have appealed the judgment in the Reese lawsuit.

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 $ 9.0 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.

Additionally, we have put the applicable insurance carriers on notice of these cooking spray matters and had recognized a related insurance receivable of $ 71.7 million ($ 54.6 million within receivables and $ 17.1 million within other assets) as of February 23, 2025 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 two 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 $ 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.

Our accrual for all litigation matters, including those matters described above that are probable and estimable, was $ 203.8 million ($ 159.5 million within other accrued liabilities and $ 44.3 million within other noncurrent liabilities) as of February 23, 2025 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

4 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 $ 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.

The accrual for Beatrice-related environmental matters totaled $ 36.7 million ($ 3.2 million within other accrued liabilities and $ 33.5 million within other noncurrent liabilities ) as of February 23, 2025 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;

however, it is reasonably possible that a change of the estimates of any of the foregoing matters may occur in the future that could have a material adverse effect on our financial condition, results of operations, or liquidity.

however, it is reasonably

possible that a change of the estimates of any of the foregoing matters may occur in the future that could have a material adverse effect on our financial condition, results of operations, or liquidity.

Costs of legal services associated with the foregoing matters are recognized within SG&A expenses as services are provided.

3 unchanged sentences

We also sponsor postretirement plans which provide certain medical and dental benefits to qualifying U.S.

During the second quarter of fiscal 2024, the Company provided a voluntary lump-sum settlement offer to certain vested participants in the salaried and hourly pension plans in order to reduce a portion of the pension obligation.

During the third quarter of fiscal 2024, approximately $ 135 million was distributed from the pension plan assets in connection with this offer.

The lump-sum settlement did exceed our service and interest cost for our hourly pension plans, which required a remeasurement in the third quarter of fiscal 2024.

In connection with the remeasurement, we updated the effective discount rate assumption for the impacted pension plan obligations from 5.52 % to 5.20 %, as of December 31, 2023.

The settlement and related remeasurement resulted in the recognition of an immaterial settlement loss, reflected in pension and postretirement non-service income (expense), as well as a loss in other comprehensive income (loss) totaling $ 6.8 million in the third quarter of fiscal 2024.

Components of pension and postretirement plan costs (benefits) are:

1 unchanged sentence

Thirteen Weeks Ended

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

Interest cost

1 unchanged sentence

Amortization of prior service cost

Settlement loss

Pension cost (benefit) — Company plans

3 unchanged sentences

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Twenty-Six Weeks Ended

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November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

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 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.

During the third quarter and first three quarters of fiscal 2025, we contributed $ 3.2 million and $ 9.1 million, respectively, to our pension plans and contributed $ 1.7 million and $ 5.1 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 $ 2.6 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 twenty-six weeks ended November 24, 2024:

The following table presents a reconciliation of our stockholders’ equity accounts for the thirty-nine weeks ended February 23, 2025:

Conagra Brands, Inc.

21 unchanged sentences

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:

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 February 23, 2025

The following table presents a reconciliation of our stockholders’ equity accounts for the thirty-nine weeks ended February 25, 2024:

Conagra Brands, Inc.

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Balance at November 26, 2023

Stock option and incentive plans

Currency translation adjustments

Derivative adjustments

Activities of noncontrolling interests

Pension and postretirement healthcare benefits

Dividends declared on common stock;

$ 0.35 per share

Net income attributable to Conagra Brands, Inc.

Balance at February 25, 2024

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

November 24, 2024

February 23, 2025

Currency translation losses, net of reclassification adjustments

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Thirteen Weeks Ended

November 24, 2024

November 26, 2023

February 23, 2025

February 25, 2024

Net derivative adjustments:

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Pension and postretirement liabilities:

Pension settlement

Pension and postretirement non-service income

Net prior service cost (benefit)

Pension and postretirement non-service income

Net actuarial gain

3 unchanged sentences

Affected Line Item in the Condensed Consolidated Statement of

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

Net derivative adjustments:

6 unchanged sentences

Pension and postretirement liabilities:

Pension settlement

Pension and postretirement non-service income

Net prior service cost (benefit)

Pension and postretirement non-service income

Net actuarial gain

16 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 November 24, 2024:

Derivative assets

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Impairment of Assets Held for Sale

In the third quarter of fiscal 2025, we recognized an impairment charge totaling $ 27.2 million in our Refrigerated & Frozen segment.

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

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

5 unchanged sentences

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.

The impairments were 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.

Impairments totaled $ 0.6 million in our Grocery & Snacks segment and $ 14.1 million in our International segment.

Impairments totaled $ 0.6 million in our Grocery & Snacks segment

and $ 14.1 million in our International segment.

The majority of these impairment charges were based upon management’s decision to exit certain manufacturing facilities in fiscal 2024, which reduced the future expected cash flows to be generated at these facilities.

Long-Term Debt Fair Value

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.

The carrying amount of long-term debt (including current installments) was $ 7.27 billion and $ 7.51 billion as of February 23, 2025 and May 26, 2024, respectively.

Based on current market rates, the fair value of this debt (level 2 liabilities) at February 23, 2025 and May 26, 2024 was estimated at $ 7.12 billion and $ 7.26 billion, respectively.

BUSINESS SEGMENTS AND RELATED INFORMATION

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Thirteen Weeks Ended

Twenty-Six Weeks Ended

November 24, 2024

November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

Grocery & Snacks

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November 26, 2023

November 24, 2024

November 26, 2023

Thirty-Nine Weeks Ended

February 23, 2025

February 25, 2024

February 23, 2025

February 25, 2024

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 $ 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.

Total depreciation expense was $ 84.8 million and $ 254.5 million for the third quarter and first three quarters of fiscal 2025, respectively.

Total depreciation expense was $ 82.4 million and $ 251.5 million for the third quarter and first three quarters 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