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Item 8. Financial Statements and Supplementary Data

2025-07-10 compared with 2024-07-11 · 361 added, 256 removed, 1108 unchanged (36% of the section changed)

5 unchanged sentences

For the Fiscal Years Ended May

Costs and expenses:

Cost of goods sold

Selling, general and administrative expenses

Goodwill impairment charges

Other intangible asset impairment charges

Loss on divestitures

Operating profit

Pension and postretirement non-service income

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Reclassification for derivative adjustments included in net income

Currency translation adjustments:

Unrealized currency translation gains (losses)

Reclassification for currency translation losses in connection with the sale of Agro Tech Foods Limited (see Note 7)

Pension and postretirement benefit obligations:

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Comprehensive income

Comprehensive loss attributable to noncontrolling interests

Comprehensive income (loss) attributable to noncontrolling interests (see Note 7)

Comprehensive income attributable to Conagra Brands, Inc.

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Senior long-term debt, excluding current installments

Deferred income taxes

Other noncurrent liabilities

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Retained earnings

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Less treasury stock, at cost, 106,846,304 and 106,050,133 common shares

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Derivative adjustments

Activities of noncontrolling interests

Pension and postretirement healthcare benefits

5 unchanged sentences

Currency translation adjustments

Repurchase of common shares

Derivative adjustments

Activities of noncontrolling interests

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Currency translation adjustments

Repurchase of common shares

Derivative adjustments

Activities of noncontrolling interests

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Other accrued liabilities

Litigation accruals

Litigation receivables, net of recoveries

Litigation accruals, net of payments

Deferred employer payroll taxes

3 unchanged sentences

Sale of property, plant and equipment

Proceeds from divestitures, net of cash divested

Purchase of marketable securities

Sales of marketable securities

Purchase of businesses, net of cash acquired

Proceeds from divestitures, net of cash divested

Proceeds from insurance recoveries

7 unchanged sentences

Debt issuance costs

Payment of intangible asset financing arrangement

Repurchase of Conagra Brands, Inc.

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We review our investments in unconsolidated affiliates for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable.

Evidence of a loss in value that is other than temporary includes, but is not limited to, the absence of an ability to recover the carrying amount of the investment, the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment, or, where applicable, estimated sales proceeds which are insufficient to recover the carrying amount of the investment.

Evidence of a loss in value that is other than temporary includes the absence of an ability to recover the carrying amount of the investment, the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment, or, where applicable, estimated sales proceeds which are insufficient to recover the carrying amount of the investment.

Management’s assessment as to whether any decline in value is other than temporary is based on our ability and intent to hold the investment and whether evidence indicating the carrying value of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary.

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2 Bad debts charged off and adjustments to previous reserves, less recoveries.

3 Prior year amounts have been adjusted to remove the activity of a business held for sale.

Inventories — We use the lower of cost (determined using the first-in, first-out method) or net realizable value for valuing inventories.

Inventories — We use the lower of cost (determined using an average costing method) or net realizable value for valuing inventories.

Notes to Consolidated Financial Statements

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Accrued and unpaid capital expenditures as of May 25, 2025, May 26, 2024, May 28, 2023, and May 29, 2022 totaled $ 134.0 million, $ 119.3 million, $ 128.3 million, and $ 108.8 million, respectively.

Total depreciation expense for fiscal 2025, 2024, and 2023 was $ 336.5 million, $ 347.3 million, and $ 313.1 million, respectively.

Goodwill and Other Identifiable Intangible Assets — Goodwill and other identifiable intangible assets with indefinite lives (e.g., brands or trademarks) are not amortized and are tested annually for impairment of value and whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired.

A significant amount of judgment is involved in determining if an indicator of impairment has occurred.

Such indicators may include deterioration in general economic conditions, adverse changes in the markets in which an entity operates, increases in input costs that have negative effects on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others.

The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill and other intangible assets.

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In assessing indefinite-lived intangible assets not subject to amortization for impairment, we have the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of such an intangible asset is less than its carrying amount.

If we determine that it is not more likely than not that the fair value of such an intangible asset is less than its carrying amount, then we are not required to perform any additional tests for assessing intangible assets for impairment.

However, if we conclude otherwise or elect not to perform the qualitative assessment, then we are required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset

If we determine that it is not more likely than not that

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

with its carrying value.

the fair value of such an intangible asset is less than its carrying amount, then we are not required to perform any additional tests for assessing intangible assets for impairment.

If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

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Shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs.

We assess the goods and services promised in our customers’ purchase orders and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct.

We assess the goods and services

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

promised in our customers’ purchase orders and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct.

We offer various forms of trade promotions and the methodologies for determining these provisions are dependent on local customer pricing and promotional practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance.

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A deferred tax liability is recorded on currency translation adjustments related to undistributed foreign earnings that are not deemed to be permanently reinvested.

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

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

Currency translation losses, net of reclassification adjustments

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Pension and postretirement benefit obligations, net of reclassification adjustments

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

The following table summarizes the reclassifications from accumulated other comprehensive income (loss) into income:

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Income tax expense

Amortization of pension and postretirement benefit obligations:

Net prior service cost (benefit)

Pension and postretirement benefit obligations:

Net prior service benefit

Pension and postretirement non-service income

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Income tax expense

Currency translation losses

Selling, general and administrative expenses 2

Total before tax

Income tax expense

1 Amounts in parentheses indicate income recognized in the Consolidated Statements of Earnings.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

Foreign Currency Transaction Gains and Losses — We recognized net foreign currency transaction gains of $ 1.3 million in fiscal 2024, and net foreign currency transaction losses of $ 2.8 million and $ 2.5 million in fiscal 2023 and 2022, respectively, in SG&A expenses.

2 Amount represents the reclassification for currency translation losses in connection with the sale of ATFL (see Note 7).

Foreign Currency Transaction Gains and Losses — We recognized net foreign currency transaction losses of $ 2.6 million and $ 2.8 million in fiscal 2025 and 2023, respectively, and net foreign currency transaction gains of $ 1.3 million in fiscal 2024 in SG&A expenses.

Business Combinations — We use the acquisition method in accounting for acquired businesses.

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Actual results could differ from these estimates.

New Accounting Standards — In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The disclosure requirements must be applied retrospectively to all prior periods presented in the financial statements.

We adopted this ASU in the fourth quarter of fiscal 2025 and added certain disclosures to Note 20, Business Segments and Related Information .

The disclosures were applied retrospectively and impacted all prior periods presented.

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

Approximately $ 46.3 million of the purchase price

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

has been classified as goodwill, which is deductible for income tax purposes.

The settlement of certain pre-existing contractual agreements between Conagra and the contract manufacturer as part of the transaction resulted in a net gain of $ 3.4 million within SG&A expenses in 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 $ 130.0 million of the purchase price has been classified as goodwill, which is deductible for income tax purposes.

Approximately $ 55.8 million and $ 5.5 million of the purchase price has been allocated to non-amortizing and amortizing intangible assets, respectively.

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 acquisition closings, are primarily included in the Grocery & Snacks segment and through May 25, 2025, were not material to our 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.

The purchase price allocations were finalized as of the fourth quarter of fiscal 2025.

RESTRUCTURING ACTIVITIES

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In fiscal 2019, senior management initiated a restructuring plan for costs incurred in connection with actions taken to improve SG&A expense effectiveness and efficiencies and to optimize our supply chain network (the “Conagra Restructuring Plan”).

Although we remain unable to make good faith estimates relating to the entire Conagra Restructuring Plan, we are reporting on actions initiated through the end of fiscal 2024, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows.

We are reporting on actions initiated through the end of fiscal 2025, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows.

As of May 25, 2025, we have approved and expect to incur $ 354.5 million of charges ($ 100.9 million of cash charges and $ 253.6 million of non-cash charges) for actions identified to date under the Conagra Restructuring Plan.

We recognized charges of $ 101.7 million, $ 66.6 million, and $ 10.7 million in connection with the Conagra Restructuring Plan in fiscal 2025, 2024, and 2023, respectively.

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

We anticipate that we will recognize costs related to the Conagra Restructuring Plan through the end of fiscal 2026.

We anticipate that we will recognize the following pre-tax expenses in association with the Conagra Restructuring Plan (amounts include charges recognized from plan inception through the end of fiscal 2025):

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Contract/lease termination

Consulting/professional fees

Other selling, general and administrative expenses

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Contract/lease termination

Consulting/professional fees

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

Pinnacle Integration Restructuring Plan

As of the end of the first quarter of fiscal 2023, we had completed our restructuring and integration plan related to our acquisition of Pinnacle Foods, Inc.

(“Pinnacle”) in 2018 for the purpose of achieving significant cost synergies (the “Pinnacle Integration Restructuring Plan”).

We recognized charges of $ 2.4 million and $ 19.6 million in connection with the Pinnacle Integration Restructuring Plan in fiscal 2023 and 2022, respectively.

LONG-TERM DEBT

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SOFR plus 1.35 % term loan due August 2025

4.3 % senior debt due May 2024

0.5 % senior debt due August 2023

0.79 % to 13.22 % lease financing obligations due on various dates through 2043

Other indebtedness

Total face value of debt

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In the fourth quarter of fiscal 2024, we repaid the entire outstanding $ 1.00 billion aggregate principal amount of our 4.30 % senior notes on their maturity date of May 1, 2024.

The repayment was funded using the net proceeds from the 2024 Term Loan in the principal amount of $ 300.0 million (see Note 4), along with the issuance of commercial paper and cash on hand.

The repayment was funded using the net proceeds from the 2024 Term Loan in the principal amount of $ 300.0 million (see Note 5), along with the issuance of commercial paper and operating cash flows.

In the first quarter of fiscal 2024, we repaid the entire outstanding $ 500.0 million aggregate principal amount of our 0.50 % senior notes on their maturity date of August 11, 2023.

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.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

In the third quarter of fiscal 2023, we repaid the remaining outstanding $ 437.0 million aggregate principal amount of our 3.20 % senior notes on their maturity date of January 25, 2023.

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The repayment was primarily funded using the net proceeds of the 2023 Term Loan discussed below.

In the first quarter of fiscal 2022, we issued $ 500.0 million aggregate principal amount of 0.500 % senior notes due August 11, 2023.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

2023 Term Loan

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

Borrowings under the Term Loan bear interest at the sum of Term SOFR (as defined in the 2023 Term Loan Agreement), plus a 0.10 % per annum rate spread adjustment, plus a percentage spread (ranging from 0.90 % per annum to 1.375 % per annum) based on the Company’s senior unsecured long-term indebtedness ratings.

The Company may voluntarily prepay term loans under the 2023 Term Loan, in whole or in part, without premium or penalty, subject to certain conditions.

During the second quarter of fiscal 2024, we prepaid $ 250.0 million of the aggregate principal amount outstanding under the 2023 Term Loan utilizing operating cash flow and the issuance of commercial paper.

The remaining balance matures on August 26, 2025.

We prepaid the $ 500.0 million aggregate principal amount unsecured term loan entered into during the second quarter of fiscal 2023 with a syndicate of financial institutions through a prepayment of $ 250.0 million of the aggregate principal amount outstanding during the second quarter of fiscal 2024, utilizing operating cash flow and the issuance of commercial paper and, during the second quarter of fiscal 2025, a prepayment of the remaining $ 250.0 million aggregate principal amount outstanding, utilizing primarily operating cash flow.

Interest Expense

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2025 Term Loan

In the fourth quarter of fiscal 2024, we entered into an unsecured Term Loan Agreement with a financial institution (the “2024 Term Loan Agreement”).

The 2024 Term Loan Agreement provides for term loans to the Company in an aggregate principal amount of up to $ 300.0 million.

We borrowed the full amount of the $ 300.0 million provided for under the 2024 Term Loan Agreement (the “2024 Term Loan”).

The 2024 Term Loan matures on April 29, 2025.

The 2024 Term Loan bears interest at the sum of Term SOFR (as defined in the 2024 Term Loan Agreement), plus a percentage spread of 1.15 % per annum, plus a 0.10 % per annum rate spread adjustment or (b) 0.15 % per annum plus the alternate base rate, described in the 2024 Term Loan Agreement as the greatest of (i) Bank of America’s prime rate, (ii) the federal funds rate plus 0.50 %, and (iii) one-month Term SOFR plus 1.00 %.

In the fourth quarter of fiscal 2025, we entered into an unsecured Term Loan Agreement with a financial institution (the “2025 Term Loan Agreement”), borrowing an aggregate principal amount of $ 200.0 million (the “2025 Term Loan”) which is classified as notes payable within our Consolidated Balance Sheets.

The 2025 Term Loan matures on October 29, 2025 and bears interest at, at the Company’s election, either (a) the sum of Term SOFR, plus 0.875 % per annum or (b) 0.00 % per annum plus the Base Rate, described in the 2025 Term Loan Agreement as the highest of (i) the prime rate in the U.S.

published in The Wall Street Journal, (ii) the Federal Funds Rate plus 0.50 % , and (iii) one-month Term SOFR plus 1.00 % .

The Company may voluntarily prepay loans under the 2025 Term Loan Agreement, in whole or in part, without premium or penalty, subject to certain conditions.

On June 4, 2025, subsequent to our fiscal year end, we prepaid $ 100.0 million of the aggregate principal amount outstanding under the 2025 Term Loan utilizing a portion of the proceeds received in connection with the sale of our Chef Boyardee ® business (see Note 7).

2024 Term Loan

In the fourth quarter of fiscal 2024, we entered into an unsecured Term Loan Agreement with a financial institution (the “2024 Term Loan Agreement”), borrowing an aggregate principal amount of $ 300.0 million (the “2024 Term Loan”) which is classified as notes payable within our Consolidated Balance Sheets.

In the fourth quarter of fiscal 2025, we entered into a letter agreement (the “Amendment”) extending the maturity date of the 2024 Term Loan from April 29, 2025 to October 29, 2025.

The 2024 Term Loan, as amended, bears interest at, at the Company’s election, either (a) the sum of Term SOFR, plus 0.875 % per annum, or (b) 0.00 % per annum plus the Base Rate, described in the 2024 Term Loan Agreement as the greatest of (i) Bank of America, N.A.’s “prime rate”, (ii) the Federal Funds Rate plus 0.50 %, and (iii) one-month Term SOFR plus 1.00 %.

The Company may voluntarily prepay loans under the 2024 Term Loan Agreement, in whole or in part, without premium or penalty, subject to certain conditions.

On June 4, 2025, subsequent

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

to our fiscal year end, we prepaid $ 150.0 million of the aggregate principal amount outstanding under the Amended 2024 Term Loan utilizing a portion of the proceeds received in connection with the sale of our Chef Boyardee ® business (see Note 7).

Revolving Credit Facility

In the first quarter of fiscal 2023, we entered into a Second Amended and Restated Revolving Credit Agreement (the “Revolving Credit Agreement”) with a syndicate of financial institutions providing for a revolving credit facility in 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 the consent of the lenders).

The revolving credit facility provided for under the Revolving Credit Agreement replaced the Company’s revolving credit facility under the prior revolving credit agreement, which was terminated.

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

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

The Revolving Credit Agreement provided for a maturity date of August 26, 2027 and was unsecured.

As of May 25, 2025, there were no outstanding borrowings under the Revolving Credit Agreement.

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As of May 25, 2025, we were in compliance with all financial covenants under the Revolving Credit Agreement.

On June 27, 2025, subsequent to our fiscal year end, we terminated and replaced our existing revolving credit facility by entering into a Third Amended and Restated Revolving Credit Agreement (the “Amended Revolving Credit Agreement”) with a syndicate of financial institutions providing for a revolving credit facility in 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 the consent of the lenders).

The Amended Revolving Credit Agreement matures on June 27, 2030 and generally requires our ratio of EBITDA to interest expense not to be less than 3.0 to 1.0 and our ratio of funded debt to EBITDA not to exceed 4.5 to 1.0, with each ratio to be calculated on a rolling four-quarter basis.

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

Commercial Paper

We finance our short-term liquidity needs with existing cash balances, cash flows from operations, and commercial paper borrowings.

As of May 26, 2024, we had $ 586.0 million outstanding under our commercial paper program at an average weighted interest rate of 5.80 %.

As of May 25, 2025, we had $ 259.0 million outstanding under our commercial paper program, which is classified as notes payable within our Consolidated Balance Sheets, at an average weighted interest rate of 4.91 %.

As of May 26, 2024, we had $ 586.0 million outstanding under our commercial paper program at an average weighted interest rate of 5.80 %.

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As of May 25, 2025 and May 26, 2024, we had approximately $ 45.9 million and $ 43.2 million, respectively, of short-term borrowings related to these arrangements.

ASSETS HELD FOR SALE

During the second quarter of fiscal 2024, we initiated a plan to sell our ownership stake in Agro Tech Foods Limited, which is a majority-owned subsidiary that is consolidated within our International segment.

On February 29, 2024, we entered into a definitive agreement to sell this business.

The closing of the transaction is subject to certain closing conditions, including the receipt of any applicable regulatory approvals in addition to a mandatory tender offer to minority shareholders, and is expected to be completed by the end of calendar year 2024.

We expect to realize proceeds of approximately $ 78 million from the sale, which will be paid in the local currency (Indian Rupee).

The assets and liabilities have been reclassified as assets and liabilities held for sale within our Consolidated

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

Balance Sheets for all periods presented.

In connection with this activity, we recognized impairment charges of $ 36.4 million within SG&A expenses in fiscal 2024.

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

The roll-forward of our outstanding obligations confirmed as valid under our supplier finance program for fiscal 2025 are as follows:

Obligations outstanding at the beginning of the year

New invoices confirmed during the year

Confirmed invoices paid during the year

Obligations outstanding at the end of the year

DIVESTITURES AND ASSETS HELD FOR SALE

Chef Boyardee ® Business

During the fourth quarter of fiscal 2025, we entered into a definitive agreement to sell our Chef Boyardee ® business, which is reflected in our Grocery & Snacks, International, and Foodservice segments .

On June 3, 2025, subsequent to the end of fiscal 2025, we completed the sale of this business for net proceeds of $ 601.2 million, subject to final working capital adjustments.

In connection with the sale, the Company entered into a transition services agreement (“TSA”) with Hometown Food Company, under which the Company will provide certain services to help facilitate an orderly transition of the businesses following the sale.

In return for these services, Hometown Food Company is required to pay certain agreed upon fees that are designed to reimburse the Company for certain costs incurred by the Company in providing such services.

The TSA provides for a term of services starting at the sale completion date and continuing for a period of up to 12 months .

The assets and liabilities related to our Chef Boyardee ® business have been reclassified as assets and liabilities held for sale within our Consolidated Balance Sheets for all periods presented.

The assets and liabilities related to our Chef Boyardee ® business classified as held for sale reflected in our Consolidated Balance Sheets were as follows:

Current assets

Noncurrent assets (including goodwill of $ 230.4 million)

Current liabilities

Noncurrent liabilities

Frozen Fish Business

On June 5, 2025, subsequent to the end of fiscal 2025, we entered into a definitive agreement to sell our frozen fish business, which includes our Van De Kamp’s ® and Mrs.

Paul’s ® brands.

This business is reflected primarily in our Refrigerated & Frozen segment.

We completed the sale of this business on June 30, 2025 for net proceeds of $ 42.4 million, subject to final working capital adjustments.

In connection with the sale of this business, we recognized an impairment charge of $ 27.2 million in our Refrigerated & Frozen segment within loss on divestitures during fiscal 2025.

The Company entered into a transition services agreement with High Liner Foods for a term of services starting at the sale completion date and continuing for a period of up to 9 months .

The assets related to our frozen fish business have been reclassified as assets held for sale within our Consolidated Balance Sheets for all periods presented.

The assets related to our frozen fish business classified as held for sale reflected in our Consolidated Balance Sheets were as follows:

Current assets

Noncurrent assets (including goodwill of $ 17.1 million and $ 26.4 million, respectively)

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

Agro Tech Foods Limited Divestiture

During the first quarter of fiscal 2025, we completed the sale of our 51.8 % ownership stake in Agro Tech Foods Limited (“ATFL”) for net proceeds of $ 76.8 million.

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 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.

During fiscal 2024, we recognized impairment charges of $ 36.4 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 Consolidated Balance Sheet for the period presented prior to the divestiture.

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

Current assets

Noncurrent assets (including goodwill of $ 46.4 million)

Current liabilities

Noncurrent liabilities

Other Assets Held for Sale

As a result of management’s decision to exit a certain manufacturing facility and related warehouse in our Refrigerated & Frozen segment in fiscal 2024, we began to actively market these assets during fiscal 2025.

We currently anticipate entering into a definitive agreement to sell these assets in the next twelve months.

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

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 Consolidated Balance Sheets for periods prior to the disposal of the individual asset groups.

The other assets currently classified as noncurrent assets held for sale in our Consolidated Balance Sheets were $ 25.6 million and $ 25.8 million as of May 25, 2025 and May 26, 2024, respectively.

INVESTMENTS IN JOINT VENTURES

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Total dividends received from equity method investments in fiscal 2023 were $ 138.4 million.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

Summarized combined financial information for our equity method investments on a 100% basis is as follows:

Total net sales

Gross margin:

Total gross margin

Gross profit:

Total gross profit

Earnings after income taxes:

Total earnings after income taxes

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

Ardent Mills:

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Customer relationships and intellectual property

The fair value of our reporting units is typically estimated using a discounted cash flow method, and in certain circumstances, we also use a guideline public company method.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

2025 Goodwill and Indefinite-Lived Intangible Asset Impairment Testing

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.

The guideline public company method is based on our actual and estimated EBITDA and considers public companies that are comparable to our reporting units.

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

Under our discounted cash flow method, 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 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 selected EBITDA multiples, future cash flows, discount rates, or terminal growth rates could produce substantially different estimates of the fair value.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

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, 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.

In the fourth quarter of fiscal 2025, we performed our annual goodwill impairment assessment on all of our reporting units and found no indicators of impairment.

We completed a qualitative assessment which primarily considered our previous cushion from our last quantitative test in addition to market comparable transactions.

We will continue to evaluate the impact of any significant changes in consumer purchasing behaviors, government restrictions, input cost inflation, or other macroeconomic conditions that could change certain assumptions and result in future impairments.

For our non-amortizing intangible assets, which are comprised of brands and trademarks, we use a “relief from royalty” methodology in estimating fair value.

In the fourth quarter of fiscal 2025, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges within other intangible asset impairment charges of $ 53.2 million in our Grocery & Snacks and Refrigerated & Frozen segments.

Our largest impairments were related to our spreads businesses ( Earth Balance ® and Smart Balance ® ).

Both of these brands were negatively impacted by volume declines in the current fiscal year, which also resulted in revised sales growth expectations.

Including the impairments of certain brands recognized in the second quarter of fiscal 2025, discussed above, our total brand impairment charges recognized in fiscal 2025 were $ 72.1 million.

2024 Goodwill and Indefinite-Lived Intangible Asset Impairment Testing

In the fourth quarter of fiscal 2024 , we performed our annual goodwill impairment assessment on all of our reporting units.

We completed a qualitative assessment on all of our reporting units with the exception of our Sides, Components, Enhancers reporting unit.

Our qualitative assessment found no indicators of impairment and considered, among other things, our previous cushion from our last quantitative test, moderating inflation, and improved operating margins due in part to our productivity initiatives.

We completed a quantitative impairment test for our Sides, Components, Enhancers reporting unit with the assistance of a third-party valuation specialist using both a discounted cash flow method and guideline public company method in the current year as a result of lower market multiples in our industry as of our testing date.

We completed a quantitative impairment test for our Sides, Components, Enhancers reporting unit with the assistance of a third-party valuation specialist using both a discounted cash flow method and guideline public company method as a result of lower market multiples in our industry as of our testing date.

In estimating the fair value of this reporting unit, we selected a market multiple of 9.0- 9.5x using actual and estimated EBITDA for our guideline public company method.

We used a discount rate of 8.50% and a terminal growth rate that approximated 1% for our discounted cash flow approach.

As a result of our impairment test, we recognized goodwill impairment charges within SG&A expenses of $ 526.5 million.

The impairments were largely due to the 75-basis point increase in the discount rate as a result of current economic conditions (higher interest rates and a slightly higher company specific risk premium), a decline in market capitalization, lower market multiples in our industry as of our testing date, as well as a downward revision to our sales forecasts for this specific reporting unit.

After these impairments, the goodwill carrying amount of our Sides, Components, Enhancers reporting unit is approximately $ 1.4 billion.

Accumulated impairment losses to goodwill associated with this reporting unit were $ 668.2 million as of May 26, 2024 and $ 141.7 million as of May 28, 2023.

As a result of our impairment tests, we recognized goodwill impairment charges of $ 526.5 million within goodwill impairment charges.

The impairment was largely due to the 75-basis point increase in the discount rate as a result of economic conditions (higher interest rates and a slightly higher company specific risk premium), a decline in market capitalization, lower market multiples in our industry as of our testing date, as well as a downward revision to our sales forecasts for this specific reporting unit.

After the impairment, the goodwill carrying amount of our Sides, Components, Enhancers reporting unit was approximately $ 1.4 billion and accumulated impairment losses to goodwill associated with this reporting unit were $ 668.2 million as of May 26, 2024 and $ 141.7 million as of May 28, 2023.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

As a result of our fiscal 2024 annual impairment test for indefinite lived intangibles, we recognized impairment charges within other intangible asset impairment charges of $ 430.2 million within our Grocery & Snacks and Refrigerated & Frozen segments.

All brands were negatively impacted by an increase in our discount rate in response to the economic environment (higher interest rates including an increase in certain brand specific risk premiums) since our last annual impairment test.

Our two largest impairments were related to Birds Eye ® and Earth Balance ® in the amount of $ 255.4 million and $ 72.1 million, respectively.

Both of these brands were negatively impacted by volume declines in fiscal 2024 driven by lower consumption trends, which also resulted in revised sales growth expectations.

Birds Eye ® was also negatively impacted by lower than expected profit margins which resulted in a slight reduction to our assumed royalty rate.

2023 Goodwill and Indefinite-Lived Intangible Asset Impairment Testing

During the first quarter of fiscal 2023, management reorganized its reporting structure for certain brands within two reporting units in our Refrigerated & Frozen segment.

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The fair value of our indefinite-lived intangibles was determined using the “relief from royalty” methodology.

As a result of our impairment tests, we recognized goodwill impairment charges within SG&A expenses of $ 141.7 million within our Sides, Components, Enhancers reporting unit in the first quarter of fiscal 2023.

In addition, we recognized an impairment charge within SG&A expenses of $ 244.0 million related to our Birds Eye ® brand name in the first quarter of fiscal 2023.

Amortizing intangible assets, carrying a remaining weighted-average life of approximately 17 years , are principally composed of customer relationships and acquired intellectual property.

For fiscal 2024, 2023, and 2022, we recognized amortization expense of $ 53.6 million, $ 56.8 million, and $ 59.3 million, respectively.

Based on amortizing assets recognized in our Consolidated Balance Sheet as of May 26, 2024, amortization expense for the next five years is estimated to be as follows:

For our non-amortizing intangible assets, which are comprised of brands and trademarks, we use a “relief from royalty” methodology in estimating fair value.

In the fourth quarter of fiscal 2024, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges in SG&A expenses of $ 430.2 million within our Grocery & Snacks and Refrigerated & Frozen segments.

All brands were negatively impacted by an increase in our discount rate in response to the current economic environment (higher interest rates including an increase in certain brand specific risk premiums) since our last annual impairment test.

Our two largest impairments were related to Birds Eye ® and Earth Balance ® in the amount of $ 255.4 million and $ 72.1 million, respectively.

Both of these brands were negatively impacted by volume declines in the current fiscal year given recent consumption trends, which also resulted in revised sales growth expectations.

Birds Eye ® was also negatively impacted by lower than expected profit margins which resulted in a slight reduction to our assumed royalty rate.

During fiscal 2023, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges in SG&A expenses of $ 345.2 million, primarily within our Grocery & Snacks and Refrigerated & Frozen segments.

As a result of our impairment tests, we recognized goodwill impairment charges of $ 141.7 million within our Sides, Components, Enhancers reporting unit in the first quarter of fiscal 2023 within goodwill impairment charges.

In addition, we recognized an impairment charge within other intangible asset impairment charges of $ 244.0 million related to our Birds Eye ® brand name in the first quarter of fiscal 2023.

As a result of our fiscal 2023 annual impairment test for indefinite lived intangibles, we recognized impairment charges within other intangible asset impairment charges of $ 345.2 million, primarily within our Grocery & Snacks and Refrigerated & Frozen segments.

The most notable brands with impairments included Gardein ® , Birds Eye ® , Hungry Man ® , Vlasic ® , Van De Kamps ® , Earth Balance ® , and Comstock ® .

These brands were negatively impacted by an increase in our discount rate in response to the current economic environment

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

(including an increase in interest rates) since our last annual impairment test.

These brands were negatively impacted by an increase in our discount rate in response to the economic environment (including an increase in interest rates) since our last annual impairment test.

Our two largest impairments were related to Gardein ® and Birds Eye ® in the amount of $ 91.5 million and $ 78.3 million, respectively.

Both of these brands were negatively impacted by lower than expected profit margins which resulted in a reduction to our assumed royalty rates in addition to revised sales growth expectations to be consistent with recent industry trends.

Including the Birds Eye ® brand impairment recognized in the first quarter of fiscal 2023, discussed above, our total brand impairment charges recognized in fiscal 2023 were $ 589.2 million.

During fiscal 2022, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges in SG&A expenses of $ 209.0 million, primarily within our Grocery & Snacks and Refrigerated & Frozen segments.

Duncan Hines ® and Gardein ® were the most notable brands with impairments largely due to lower than expected profit margins which resulted in a reduction to our assumed royalty rates along with increases in our discount rate.

Definite-Lived Intangible Assets

Amortizing intangible assets, carrying a remaining weighted-average life of approximately 16 years , are principally composed of customer relationships and acquired intellectual property.

For fiscal 2025, 2024, and 2023, we recognized amortization expense of $ 53.7 million, $ 53.6 million, and $ 56.8 million, respectively.

Based on amortizing assets recognized in our Consolidated Balance Sheet as of May 25, 2025, amortization expense for the next five years is estimated to be as follows:

EARNINGS PER SHARE

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Diluted earnings per share is computed on the basis of basic weighted average outstanding shares of common stock adjusted for the dilutive effect of stock options, restricted stock unit awards, and other dilutive securities.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

The following table reconciles the income and average share amounts used to compute both basic and diluted earnings per share:

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For fiscal 2025, 2024, and 2023, there were 1.4 million, 1.2 million, and 0.5 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.

The major classes of inventories were as follows:

The major classes of inventories, excluding amounts classified as held for sale (see Note 7), were as follows:

Raw materials and packaging

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Supplies and other

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

OTHER NONCURRENT LIABILITIES

Other noncurrent liabilities consisted of:

Postretirement health care and pension obligations (see Note 18)

Noncurrent income tax liabilities (see Note 14)

Noncurrent lease liabilities (see Note 15)

Self-insurance liabilities

Asset retirement obligations

Environmental liabilities (see Note 16)

Legal settlement costs (see Note 16)

CAPITAL STOCK

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In addition to the shares under the 2023 Stock Plan, certain shares of Conagra Brands common stock subject to outstanding awards under predecessor stock plans that expire, lapse, are cancelled, terminated, forfeited, otherwise become unexercisable, or are settled for cash are available for issuance.

At May 26, 2024, approximately 14.9 million shares were reserved for granting new share-based awards.

At May 25, 2025, approximately 13.8 million shares remained reserved for granting new share-based awards.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

Share Unit Awards

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The tax benefit related to the stock-settled share unit award compensation expense for fiscal 2025, 2024, and 2023 was $ 9.5 million, $ 7.7 million, and $ 6.2 million, respectively.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

The following table summarizes the nonvested share units as of May 25, 2025 and changes during the fiscal year then ended:

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

The performance goal for the three -year performance period ending in fiscal 2024 (the “2024 performance period”) was based on our diluted earnings per share (“EPS”) compound annual growth rate, subject to certain adjustments, measured over the defined performance period.

The performance goals for the three -year performance periods ending in fiscal 2025 (the “2025 performance period”) and fiscal 2026 (the “2026 performance period”) are based on our net sales and diluted EPS growth, subject to certain adjustments, measured over the defined performance period, with each year of the performance period weighted one-third.

The performance goals for the three -year performance periods ending in fiscal 2025 (the “2025 performance period”) and 2026 (the “2026 performance period”) are based on our net sales and diluted earnings per share (“EPS”) growth, subject to certain adjustments, measured over the defined performance period, with each year of the performance period weighted one-third.

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 and are subject to adjustment based on our total shareholder return during the performance period relative to a defined peer group.

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.

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Subject to limited exceptions set forth in our performance share plan, any shares earned will be distributed after the end of the performance period, and generally only if the participant continues to be employed with the Company through the date of distribution.

For awards where performance against the performance target has not been certified, the value of the performance shares is adjusted based upon the market price of our common stock and current forecasted performance against the performance targets at the end of each reporting period and amortized as compensation expense over the vesting period.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

performance against the performance targets at the end of each reporting period and amortized as compensation expense over the vesting period.

Forfeitures are accounted for as they occur.

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Nonvested performance shares at May 25, 2025

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

We recognized a benefit of $ 7.7 million, expense of $ 45.0 million, and a benefit of $ 1.4 million for our performance share awards in fiscal 2024, 2023, and 2022, respectively.

We recognized a benefit of $ 5.8 million and $ 7.7 million in fiscal 2025 and 2024, respectively, and expense of $ 45.0 million in fiscal 2023 for our performance share awards.

The tax expense related to the compensation benefit for fiscal 2025 and 2024 was $ 0.1 million and $ 0.4 million, respectively.

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No stock options have been granted since fiscal 2017.

Cash received from stock option exercises for fiscal 2024, 2023, and 2022 was $ 3.2 million, $ 10.7 million, and $ 7.8 million, respectively.

The actual tax benefit realized for the tax deductions from option exercises totaled $ 0.3 million, $ 0.7 million, and $ 0.5 million for fiscal 2024, 2023, and 2022, respectively.

Cash received from stock option exercises for fiscal 2024 and 2023 was $ 3.2 million and $ 10.7 million, respectively.

The actual tax benefit realized for the tax deductions from option exercises totaled $ 0.3 million and $ 0.7 million for fiscal 2024 and 2023, respectively.

Cash received from stock option exercises for fiscal 2025 and the related tax benefit realized were immaterial.

PRE-TAX INCOME AND INCOME TAXES

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United States

The provision for income taxes included the following:

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

The provision for income taxes included the following:

Income taxes computed by applying the U.S.

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Goodwill and intangible impairments

Tax elections under review by the IRS on capital loss utilization

Federal audit settlements

Change of valuation allowance due to certain tax elections

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Income taxes paid, net of refunds, were $ 227.8 million, $ 343.3 million, and $ 407.1 million in fiscal 2025, 2024, and 2023, respectively.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

The tax effect of temporary differences and carryforwards that give rise to significant portions of deferred tax assets and liabilities consisted of the following:

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Internal Revenue Service (“IRS”) has completed its audit of the Company for tax years through fiscal 2021.

All resulting significant items for fiscal 2020

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

and prior years have been settled with the IRS.

Tax elections made in conjunction with filing our fiscal 2021 federal tax return are still under review with the IRS.

All resulting significant items for fiscal 2021 and prior years have been settled with the IRS.

Statutes of limitation for pre-acquisition tax years of Pinnacle generally remain open for calendar year 2005 and subsequent years principally related to net operating losses.

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We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $ 3.8 million over the next twelve months due to various federal, state, and foreign audit settlements and the expiration of statutes of limitations.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

The change in the unrecognized tax benefits for the fiscal years ended May 25, 2025 and May 26, 2024 was as follows:

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Ending balance

We have approximately $ 22.8 million of foreign net operating loss carryforwards ($ 22.6 million will expire between fiscal 2029 and 2044 and $ 0.2 million have no expiration dates) and $ 51.3 million of federal net operating loss carryforwards which expire in fiscal 2027.

Included in net deferred tax liabilities are $ 21.5 million of tax effected state net operating loss carryforwards which expire in various years ranging from fiscal 2025 to 2044 and $ 2.2 million of tax effected state capital loss balances that expire in fiscal year 2027 through 2037.

We have approximately $ 25.6 million in foreign net operating loss carryforwards which expire between fiscal 2030 and 2045 and $ 34.2 million of federal net operating loss carryforwards which expire in fiscal 2027.

Included in net deferred tax liabilities are $ 17.7 million of tax effected state net operating loss carryforwards which expire in various years ranging from fiscal 2026 to 2045 and $ 2.2 million of tax effected state capital loss balances that expire between fiscal 2027 and 2037.

Foreign tax credits of $ 23.4 million will expire between fiscal 2026 and 2035.

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In fiscal 2022, we reflected additional tax expense of $ 25.0 million related to tax elections made in conjunction with filing our fiscal 2021 federal tax return.

These elections are still under review with the IRS.

These elections may result in increases to the tax basis in those assets and if successful would result in tax benefits being realized in future periods.

During fiscal 2025, interactions with the U.S.

Internal Revenue Service (IRS) regarding these tax elections make the realization of certain deferred tax assets likely.

The realization of these deferred tax assets allows for both current and future tax deductions through 2036, and resulted in an income tax benefit of approximately $ 225.8 million.

We have recognized a valuation allowance for the portion of the net operating loss carryforwards, capital loss carryforwards, tax credit carryforwards, and other deferred tax assets we believe are not more likely than not to be realized.

The net change in the valuation allowance for fiscal 2024 was a decrease of $ 0.4 million, principally related to a decrease in valuation allowances related to state attributes.

The net change in the valuation allowance for fiscal 2025 was a decrease of $ 247.8 million, principally related to a federal audit settlement and future generation of income from the disposition of held for sale assets allowing certain tax attributes to be utilized.

The net change in the valuation allowance for fiscal 2024 was an increase of $ 0.4 million.

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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.

The undistributed historic earnings in our foreign subsidiaries through May 30, 2021 are considered to be indefinitely reinvested or can be remitted in a tax-neutral transaction.

Accordingly, we have not recorded a deferred tax liability related to these undistributed historic earnings.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law.

We have determined that we are not subject to the corporate alternative minimum tax at this time.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law.

The Act includes changes to U.S.

tax law that will be applicable to Conagra beginning in fiscal 2026.

These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures.

We are in the process of evaluating the impact of the Act to our Consolidated Financial Statements.

We have operating and finance leases of certain warehouses, plants, land, office space, production and distribution equipment, automobiles, and office equipment.

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Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

As most of our leases do not provide an implicit interest rate, we calculate the lease liability at lease commencement as the present value of unpaid lease payments using our estimated incremental borrowing rate.

The incremental borrowing rate represents the

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

The incremental borrowing rate represents the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease.

rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease.

We have elected not to separate lease and non-lease components of an agreement for all underlying asset classes prospectively from the ASU 2016-02, Leases, Topic 842 adoption date.

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Total lease cost

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

The weighted-average remaining lease terms and weighted-average discount rate for our leases as of May 25, 2025 and May 26, 2024 were as follows:

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Weighted-average discount rate

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

Cash flows arising from lease transactions were as follows:

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Total lease liabilities

We have entered into contracts that are or contain a lease that have not yet commenced with aggregate payments totaling $ 87.1 million as of May 26, 2024.

This amount primarily relates to a warehouse facility with a future minimum lease commitment of $ 81.8 million over a term of 10 years.

We expect to take control of this leased asset in fiscal 2025.

CONTINGENCIES

Litigation Matters

We are a party to certain litigation matters relating to our acquisition of Beatrice Company (“Beatrice”) in fiscal 1991, including litigation proceedings related to businesses divested by Beatrice prior to our acquisition.

These proceedings have included suits against a number of lead-based paint and pigment manufacturers, including ConAgra Grocery Products Company, LLC, a wholly owned subsidiary of the Company (“ConAgra Grocery Products”), as alleged successor to W.

Fuller & Co., a lead-based paint and pigment manufacturer owned and operated by a predecessor to Beatrice from 1962 until 1967.

These lawsuits have generally sought damages for personal injury, property damage, economic loss, and governmental expenditures allegedly caused by the use of lead-based paint, and/or injunctive relief for inspection and abatement.

ConAgra Grocery Products has denied liability, both on the merits of the claims and on the basis that we do not believe it to be the successor to any liability attributable to W.

Pursuant to the settlement of a consolidated lead-based paint and pigment related action in California in 2019, ConAgra Grocery Products is responsible for payments totaling $ 101.7 million, payable in seven annual installments from fiscal 2020 through fiscal 2026, of which $ 73.0 million had been paid as of May 26, 2024.

As part of the settlement, ConAgra Grocery Products has also provided a guarantee of up to $ 15.0 million in the event co-defendant, NL Industries, Inc., defaults on its payment obligations.

We had accrued $ 28.9 million ($ 11.8 million

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

within other accrued liabilities and $ 17.1 million within other noncurrent liabilities) as of May 26, 2024 and $ 40.7 million ($ 11.8 million within other accrued liabilities and $ 28.9 million within other noncurrent liabilities) as of May 28, 2023.

We are party to a number of matters 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.

In these lawsuits, we have denied liability, however, we cannot predict with certainty the results of these proceedings.

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

We have denied liability, however, we cannot predict with certainty the results of these actions.

To date, the Company has settled all but a few of these matters.

Pursuant to these settlements, the Company paid $ 25 million in fiscal 2025 and has agreed to pay an additional $ 185 million in fiscal 2026 and the first quarter of fiscal 2027.

The Company has secured insurance recovery from certain applicable insurers, recognizing related insurance receivables of $ 81.8 million ($ 78.4 million within receivables and $ 3.4 million within other assets) as of May 25, 2025 and $ 14.7 million ($ 7.1 million within receivables and $ 7.6 million within other assets) as of May 26, 2024, and continues to pursue additional insurance proceeds.

The Company believes adequate provision has been made in its 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 have recognized a related insurance receivable of $ 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.

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 cooking spray related lawsuits captioned Reese v.

Conagra Brands, Inc., et al.

We have appealed the judgment in the Reese lawsuit.

We are party to a number of putative class action lawsuits challenging various product claims made in the Company’s product labeling, and matter challenging the Company’s wage and hour practices.

In 2019, we resolved a legacy litigation matter related to lead-based paint and/or pigment manufactured by an alleged predecessor to the Company during the first half of the 20 th century for a total settlement of $ 101.7 million.

Pursuant to the settlement, ConAgra Grocery Products, LLC, a wholly owned subsidiary of the Company, has paid annual installments toward the total settlement from fiscal 2020 through fiscal 2026, including $ 12.0 million paid in each of fiscal 2025 and 2024, and a final $ 16.7 million payable in fiscal 2026.

We are party to various other lawsuits including personal injury, 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 the remaining claims 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 $ 204.5 million ($ 160.2 million within other accrued liabilities and $ 44.3 million within other noncurrent liabilities) as of May 25, 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.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

Environmental Matters

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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.

In October 2019, the Minnesota Pollution Control Agency (“MPCA”) initiated an odor complaint investigation at our Waseca, Minnesota vegetable processing facility.

As a result of the investigation, the MPCA required implementation of a continuous monitoring system running from May 1 to October 31 in 2020 and 2021 and from April 1 to October 31 in 2022 to monitor hydrogen sulfide emissions at the wastewater treatment facility.

As a result of the monitoring data findings, the MPCA has alleged violations of Minnesota Ambient Air Quality Standards based on our hydrogen sulfide emissions during calendar years 2020, 2021, and 2022.

In August 2023, the parties entered into a settlement agreement with a penalty amount of $ 1.25 million for all of the alleged violations.

We are a party to certain environmental proceedings relating to businesses divested by Beatrice prior to our acquisition in fiscal 1991, including litigation and administrative proceedings involving Beatrice’s possible status as a potentially responsible party at approximately 35 Superfund, proposed Superfund, or state-equivalent sites (the “Beatrice sites”).

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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

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

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.

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We may enter into longer-term economic hedges on particular commodities, if deemed appropriate.

As of May 26, 2024, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through December 2024.

As of May 25, 2025, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through April 2026.

In order to reduce exposures related to changes in foreign currency exchange rates, we enter into forward exchange, option, or swap contracts from time to time for transactions denominated in a currency other than the applicable functional currency.

This includes, but is not limited to, hedging against foreign currency risk in purchasing inventory and capital equipment, sales of finished goods, and future settlement of foreign-denominated assets and liabilities.

As of May 26, 2024, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through February 2025.

This includes hedging against foreign currency risk in purchasing inventory and capital equipment, sales of finished goods, and future settlement of foreign-denominated assets and liabilities.

As of May 25, 2025, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through April 2026.

From time to time, we may use derivative instruments, including interest rate swaps, to reduce risk related to changes in interest rates.

This includes, but is not limited to, hedging against increasing interest rates prior to the issuance of long-term debt and hedging the fair value of our senior long-term debt.

This includes hedging against increasing interest rates prior to the issuance of long-term debt and hedging the fair value of our senior long-term debt.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

Derivatives Designated as Cash Flow Hedges

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In the event that management determines a particular derivative entered into as an economic hedge of a forecasted commodity purchase has ceased to function as an economic hedge, we cease recognizing further gains and losses on such derivatives in corporate expense and begin recognizing such gains and losses within segment operating results immediately.

Notes to Consolidated Financial Statements

Fiscal Years Ended May 26, 2024, May 28, 2023, and May 29, 2022

(columnar dollars in millions except per share amounts)

The following table presents the net derivative gains (losses) from economic hedges of forecasted commodity consumption and the foreign currency risk of certain forecasted transactions, under this methodology:

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Net derivative gains (losses) included in segment operating profit

As of May 26, 2024, the cumulative amount of net derivative losses from economic hedges that had been recognized in general corporate expenses and not yet allocated to reporting segments was $ 5.1 million.

This amount reflected net losses of $ 4.0 million incurred during the fiscal year ended May 26, 2024, as well as net losses of $ 1.1 million incurred prior to fiscal 2024.

Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results net losses of $ 5.3 million in fiscal 2025 and net gains of $ 0.2 million in fiscal 2026 and thereafter.

As of May 25, 2025, the cumulative amount of net derivative gains from economic hedges that had been recognized in general corporate expenses and not yet allocated to reporting segments was $ 3.1 million.

This amount reflected net gains of $ 2.8 million incurred during the fiscal year ended May 25, 2025, as well as net gains of $ 0.3 million incurred prior to fiscal 2025.

Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results net gains of $ 2.7 million in fiscal 2026 and net gains of $ 0.4 million in fiscal 2027 and thereafter.

Economic Hedges of Fair Values — Foreign Currency Exchange Rate Risk

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GAAP, we offset certain derivative asset and liability balances, as well as certain amounts representing rights to reclaim cash collateral and obligations to return cash collateral, where master netting agreements provide for legal right of setoff.

At May 26, 2024 and May 28, 2023, amounts representing an obligation to return cash collateral and a right to reclaim cash collateral of $ 1.2 million and $ 21.3 million, respectively, were included in prepaid expenses and other current assets in our Consolidated Balance Sheets.

Derivative assets and liabilities and amounts representing a right to reclaim cash collateral or obligation to return cash collateral were reflected in our Consolidated Balance Sheets as follows:

Prepaid expenses and other current assets

Other accrued liabilities

At May 25, 2025 and May 26, 2024, amounts representing a right to reclaim cash collateral and an obligation to return cash collateral of $ 0.2 million and $ 1.2 million, respectively, were included in prepaid expenses and other current assets in our Consolidated Balance Sheets.

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

Derivative assets and liabilities and amounts representing a right to reclaim cash collateral or obligation to return cash collateral were reflected in our Consolidated Balance Sheets as follows:

Prepaid expenses and other current assets

Other accrued liabilities

The following table presents our derivative assets and liabilities at May 25, 2025, on a gross basis, prior to the setoff of $ 0.8 million to total derivative assets and $ 1.1 million to total derivative liabilities where legal right of setoff existed:

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Derivatives Not Designated as Hedging Instruments

Location in Consolidated Statement of Earnings of Gains (Losses) Recognized on Derivatives

Amount of Gains (Losses) Recognized on Derivatives in Consolidated Statement of Earnings

Location in Consolidated Statement of Earnings of Gains Recognized on Derivatives

Amount of Gains Recognized on Derivatives in Consolidated Statement of Earnings

Commodity contracts

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Total gains from derivative instruments not designated as hedging instruments

As of May 26, 2024, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of $ 88.2 million and $ 11.0 million for purchase and sales contracts, respectively.

As of May 28, 2023, our open commodity contracts had a notional value of $ 134.6 million for purchase contracts.

As of May 25, 2025, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of $ 140.2 million for purchase contracts.

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

The notional amount of our foreign currency forward and cross currency swap contracts as of May 25, 2025 and May 26, 2024 was $ 93.5 million and $ 101.5 million, respectively.

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We also enter into futures and options transactions through various regulated exchanges.

At May 26, 2024, the maximum amount of loss due to the credit risk of the counterparties, had the counterparties failed to perform according to the terms of the contracts, was $ 0.7 million.

At May 25, 2025, the maximum amount of loss due to the credit risk of the counterparties, had the counterparties failed to perform according to the terms of the contracts was immaterial.

PENSION AND POSTRETIREMENT BENEFITS

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New hire salaried employees will generally be eligible to participate in our defined contribution plan.

During fiscal 2025, we transferred $ 760.6 million of our U.S.

defined benefit pension plan obligations to an insurance company through the purchase of an irrevocable group annuity contract (the “U.S.

buy-out contract”).

This included approximately 22,000 retired participants in the salaried and hourly pension plans.

The group annuity contract was purchased and funded directly with $ 678.3 million from the assets of our pension plans, resulting in an actuarial gain of $ 82.3 million in other comprehensive income (loss).

As a result of this transaction, we recognized a noncash pre-tax settlement gain of $ 13.0 million in pension and postretirement non-service income in the fourth quarter of fiscal 2025.

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 exceeded our service and interest cost for our hourly pension plans, requiring a remeasurement in the third quarter of fiscal 2024.

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 expense (income), as well as a loss in other comprehensive income (loss) totaling $ 6.8 million in the third quarter of fiscal 2024.

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

We recognize the funded status of our pension and postretirement plans in the Consolidated Balance Sheets.

For our pension plans, we also recognize as a component of accumulated other comprehensive income (loss), the net of tax results of the actuarial gains or losses within the corridor and prior service costs or credits that arise during the period but are not recognized in net periodic benefit cost.

For our postretirement plans, we also recognize as a component of accumulated other comprehensive income (loss), the net of tax results of the gains or losses and prior service costs or credits that arise during the period but are not recognized in net periodic benefit cost.

These amounts will be adjusted out of accumulated other comprehensive income (loss) as they are subsequently recognized as components of net periodic benefit cost.

For our pension plans, we have elected to immediately recognize actuarial gains and losses in our operating results in the year in which they occur, to the extent they exceed the corridor, eliminating amortization.

Amounts are included in the components of pension and postretirement plan costs, below, as recognized net actuarial loss.

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

These amounts will be adjusted out of accumulated other comprehensive income (loss) as they are subsequently recognized as components of net periodic benefit cost.

Amounts are included in the components of pension and postretirement plan costs, below, as recognized net actuarial loss (gain).

The changes in benefit obligations and plan assets at May 25, 2025 and May 26, 2024 are presented in the following table.

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Interest cost

Actuarial gain

Actuarial loss (gain)

Plan settlements

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Fair value of plan assets at end of year

The $ 31.2 million actuarial gain reducing our projected benefit obligation at the end of fiscal 2024 is principally related to the increase in the discount rate from 5.50 % to 5.58 %.

The $ 148.6 million actuarial gain reducing our projected benefit obligation at the end of fiscal 2025 is principally related to the gain from the annuity settlement and an increase in the discount rate from 5.58 % to 5.91 %.

The funded status and amounts recognized in our Consolidated Balance Sheets at May 25, 2025 and May 26, 2024 were as follows:

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Recognized net actuarial loss (gain)

Settlement loss

Settlement loss (gain)

Pension and postretirement cost (benefit) — Company plans

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Total pension and postretirement cost (benefit)

In fiscal 2024, 2023, and 2022, the Company recorded a gain of $ 12.5 million, charges of $ 0.1 million, and a gain of $ 2.9 million, respectively, reflecting the year-end write-off of actuarial gains and losses in excess of 10 % of our pension liability.

In fiscal 2025, 2024, and 2023, the Company recorded gains of $ 3.5 million and $ 12.5 million, and charges of $ 0.1 million, respectively, reflecting the year-end write-off of actuarial gains and losses in excess of 10 % of our pension liability.

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were as follows:

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Amortization of prior service cost (benefit)

Settlement loss

Settlement loss (gain)

Recognized net actuarial gain

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Level 3 assets consist of investments where active market pricing is not readily available and, as such, fair value is estimated using significant unobservable inputs.

Certain assets that are measured at fair value using the NAV (net asset value) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

Certain assets that are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

Such investments are generally considered long-term in nature with varying redemption availability.

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Impairment of Assets Held for Sale

In fiscal 2024, we recognized impairment charges totaling $ 36.4 million in our International segment.

The impairment was measured based upon the estimated sales price of the disposal group (see Note 6).

During fiscal 2023, we recognized impairment charges totaling $ 0.5 million in our Grocery & Snacks segment, $ 5.7 million in our Refrigerated & Frozen segment, and $ 20.5 million in our Foodservice segment.

During fiscal 2025 and 2024, we recognized impairment charges totaling $ 27.2 million in our Refrigerated & Frozen segment and $ 36.4 million in our International segment, respectively.

The impairments were measured based upon the estimated sale prices of the disposal groups (see Note 7).

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Impairments in our Refrigerated & Frozen segment totaled $ 60.2 million, $ 352.6 million, and $ 496.6 million for fiscal 2025, 2024, and 2023, respectively.

Impairments in our International segment totaled $ 13.7 million and $ 14.4 million for fiscal 2023 and 2022, respectively.

Impairments in our International segment totaled $ 13.7 million for fiscal 2023.

Notes to Consolidated Financial Statements

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Other Asset Impairments

In 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 3).

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

In 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 (see Note 3).

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The carrying amount of long-term debt (including current installments) was $ 7.26 billion as of May 25, 2025 and $ 7.51 billion as of May 26, 2024.

Based on current market rates, the fair value of this debt (Level 2 liabilities) at May 26, 2024 and May 28, 2023 was estimated at $ 7.26 billion and $ 8.31 billion, respectively.

Based on current market rates, the fair value of this debt (Level 2 liabilities) on May 25, 2025 and May 26, 2024 was estimated at $ 7.03 billion and $ 7.26 billion, respectively.

BUSINESS SEGMENTS AND RELATED INFORMATION

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We do not aggregate operating segments when determining our reporting segments.

Our chief operating decision maker (“CODM”) is identified as our Chief Executive Officer.

Our CODM uses segment operating profit in the annual plan and forecasting process and considers year-over-year performance when making decisions about allocating resources to our segments.

The CODM also uses segment operating profit as an input to the overall compensation measures under our incentive compensation plans.

We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends.

Segment operating profit is defined as operating profit excluding the effect of items impacting comparability.

Items impacting comparability are gains or losses that our CODM believes have had, or are likely to have, a significant impact on segment operating profit and are not indicative of our core operating results.

Items impacting comparability include, when they occur, the impacts of gain or loss on divestitures, restructuring activities, deal costs, unrealized gains/(losses) on commodity and foreign exchange hedges (the unrealized gains and losses are recorded in general corporate expenses until realized;

once realized, the gains and losses are recorded in the applicable segment’s operating results), impairment losses, certain non-ordinary course legal and regulatory matters, and other

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

Operating profit for each of the segments is based on net sales less all identifiable operating expenses.

General corporate expense, pension and postretirement non-service income, interest expense, net, income taxes, and equity method investment earnings have been excluded from segment operations.

Grocery & Snacks

Refrigerated & Frozen

unusual gains or losses that are not part of our measurement of segment performance.

Corporate unallocated expense;

pension and postretirement non-service income (expense);

interest expense, net;

and equity method investment earnings are centrally managed costs and have been excluded from segment operating profit.

International

Total net sales

Operating profit (loss)

Grocery & Snacks

Refrigerated & Frozen

Segment cost of goods sold 1

Segment SG&A expenses 2

Segment operating profit

General corporate expenses 3

Other intangible asset impairment charges

Loss on divestitures

Other charges, net 4

Operating profit

Pension and postretirement non-service income

Interest expense, net

Equity method investment earnings

Income before income taxes

International

Total operating profit

Segment cost of goods sold 1

Segment SG&A expenses 2

Segment operating profit

General corporate expenses 3

Goodwill impairment charges

Other intangible asset impairment charges

Loss on divestitures

Other charges, net 4

Operating profit

Pension and postretirement non-service income

Interest expense, net

Equity method investment earnings

Income before income taxes

Notes to Consolidated Financial Statements

Fiscal Years Ended May 25, 2025, May 26, 2024, and May 28, 2023

(columnar dollars in millions except per share amounts)

International

Segment cost of goods sold 1

Segment SG&A expenses 2

Segment operating profit

General corporate expenses 3

Goodwill impairment charges

Other intangible asset impairment charges

Loss on divestitures

Other charges, net 4

Operating profit

Pension and postretirement non-service income

Interest expense, net

Income tax expense

Net income attributable to noncontrolling interests

Net income attributable to Conagra Brands, Inc.

Equity method investment earnings

Income before income taxes

1 Segment cost of goods sold does not include items recorded in the Cost of goods sold line on our income statement that are presented in the Other charges, net line of this table.

2 Segment SG&A expenses are regularly provided to the CODM as a percent of net sales.

Segment SG&A expenses do not include items recorded in the Selling, general and administrative expenses line of our income statement that are presented in the Other charges, net line of this table.

3 General corporate expenses relate to certain costs that are shared across multiple segments but are not directly attributable, which include executive compensation, share-based payment expense, and costs associated with certain corporate functions.

4 Other charges include the following:

net charges related to our restructuring plans, net gains and losses associated with fire-related costs and insurance proceeds, costs associated with a third-party vendor cybersecurity incident, and costs associated with a municipal water break.

The following table presents further disaggregation of our net sales:

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Also, working capital balances are not tracked by reporting segment.

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

Total depreciation expense for fiscal 2024, 2023, and 2022 was $ 347.3 million, $ 313.1 million, and $ 316.1 million, respectively.

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

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

CODM does not use assets by segment to evaluate performance or allocate resources.

Depreciation and amortization are allocated to our reporting segments based on the output of each reporting segment per facility during each reporting period.

The following table presents depreciation and amortization by segment:

Grocery & Snacks

Refrigerated & Frozen

International

Total Reporting Segments

Total Company

Other Information

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With respect to operations outside of the United States, no single foreign country or geographic region was significant with respect to consolidated operations for fiscal 2025, 2024, and 2023.

Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately $ 1.11 billion, $ 1.04 billion, and $ 1.00 billion in fiscal 2024, 2023, and 2022, respectively.

Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately $ 987.9 million, $ 1.11 billion, and $ 1.04 billion in fiscal 2025, 2024, and 2023, respectively.

Our long-lived assets located outside of the United States are not significant.

Our largest customer, Walmart, Inc.

and its affiliates, accounted for approximately 28 % of consolidated net sales for fiscal 2024 and 2023, and 27 % for fiscal 2022, significantly impacting the Grocery & Snacks and Refrigerated & Frozen segments.

and its affiliates, accounted for approximately 29 % of consolidated net sales for fiscal 2025 and 28 % for fiscal 2024 and fiscal 2023, significantly impacting the Grocery & Snacks and Refrigerated & Frozen segments.

Walmart, Inc.

and its affiliates accounted for approximately 16 % and 32 % of consolidated net receivables as of May 25, 2025 and May 26, 2024, respectively.

SUBSEQUENT EVENTS

Subsequent to the end of fiscal 2024, we entered into a definitive agreement to acquire the manufacturing operations of an existing co-manufacturer of our cooking spray products.

The initial cash consideration transferred was $ 46 million, which is subject to certain working capital adjustments.

We also paid an additional $ 14 million to satisfy pre-existing liabilities mostly related to certain equipment finance leases.

The business will be primarily included in the Grocery & Snacks segment.

The transaction closed on July 1, 2024.

Notes to Consolidated Financial Statements

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the recoverability of the carrying value of the Birds Eye indefinite-lived intangible asset and goodwill assigned to the Sides, Components, Enhancers reporting unit

As discussed in Notes 1 and 8 to the consolidated financial statements, indefinite-lived intangible assets (consisting primarily of brand names and trademarks) and goodwill as of May 26, 2024, excluding amounts classified as held for sale (see Note 6), were $2.03 billion and $10.58 billion, respectively.

For the fiscal year ended May 26, 2024, the Company recorded impairment charges totaling $430.2 million and $526.5 million on indefinite-lived intangible assets and goodwill, respectively.

In assessing indefinite-lived intangible assets and goodwill for impairment, the Company performs either a qualitative or quantitative assessment at least annually or whenever circumstances indicate a potential impairment exists.

On the annual impairment assessment date, the Company estimated the fair value of its Birds Eye indefinite-lived intangible asset by using a discounted cash flow method that incorporates an estimated royalty rate that would be charged to a third party for the use of the brand.

The Company estimated the fair value of its Sides, Components, Enhancers reporting unit by using a combination of a discounted cash flow method and guideline public company method.

Impairment charges are recorded for any intangible assets or goodwill with carrying values in excess of their respective estimated fair values.

We identified the evaluation of the recoverability of the carrying value of the Birds Eye indefinite-lived intangible asset and the goodwill assigned to the Sides, Components, Enhancers reporting unit as a critical audit matter.

Subjective and challenging auditor judgment was required to evaluate certain assumptions used in determining the fair value of these assets.

These assumptions included the forecasted revenue growth rates including the terminal growth rates and forecasted margins, royalty rate, discount rates, and the earnings before interest, taxes, depreciation, and amortization (EBITDA) market multiple.

Changes to these assumptions could have had a significant effect on the Company’s assessment of the carrying value of the Birds Eye indefinite-lived intangible asset and the goodwill assigned to the Sides, Components, Enhancers reporting unit.

Evaluation of the recoverability of the carrying value of the Birds Eye indefinite-lived intangible asset

As discussed in Notes 1 and 9 to the consolidated financial statements, indefinite-lived intangible assets (consisting primarily of brand names and trademarks), excluding amounts classified as held for sale, were $1.80 billion as of May 25, 2025.

For the fiscal year ended May 25, 2025, the Company recorded impairment charges totaling $72.1 million on indefinite-lived intangible assets.

In assessing indefinite-lived intangible assets for impairment, the Company performs either a qualitative or quantitative assessment at least annually or whenever circumstances indicate a potential impairment exists.

On the annual impairment assessment date, the Company estimates the fair value of its indefinite-lived intangible assets by using a discounted cash flow method that incorporates an estimated royalty rate that would be charged to a third party for the use of the brand.

Impairment charges are recorded for indefinite-lived intangible assets with carrying values in excess of their respective estimated fair values.

We identified the evaluation of the recoverability of the carrying value of the Birds Eye indefinite-lived intangible asset for which a quantitative impairment assessment was performed as a critical audit matter.

Subjective and challenging auditor judgment was required to evaluate certain assumptions used in determining the fair value of this asset.

These assumptions included the terminal growth rate, forecasted margin, royalty rate, and discount rate.

Changes to these assumptions could have had a significant effect on the Company’s assessment of the carrying value of the Birds Eye indefinite-lived intangible asset.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the quantitative impairment assessments, including controls over the development of the assumptions described above.

We evaluated the design and tested the operating effectiveness of certain internal controls over the quantitative impairment assessment, including controls over the development of the assumptions described above.

To assess the Company’s ability to forecast, we compared historical forecasts to actual results.

We evaluated the forecasted revenue growth rates including the terminal growth rates and forecasted margins, which were also used to support the royalty rate used in the indefinite-lived asset impairment testing, by considering current and past performance, as well as external market and industry outlook data.

We evaluated the terminal growth rate and forecasted margin, which were also used to support the royalty rate used in the Birds Eye indefinite-lived asset impairment testing, by considering current and past performance, as well as external market and industry outlook data.

We also involved valuation professionals with specialized skills and knowledge, who assisted in:

● evaluating the terminal growth rates by comparing them to publicly available market data ;

● evaluating the royalty rate by determining that the selected royalty rate is supported by the associated brand name’s margin ;

● assessing the discount rates by comparing the Company’s inputs to the discount rates to publicly available data for comparable entities ;

● evaluating the terminal growth rate by comparing it to publicly available market data ;

● evaluating the royalty rate by determining that the selected royalty rate is supported by the brand name’s margin and comparable third-party license agreements ;

● evaluating the discount rate by comparing it to a discount rate range that was independently developed using publicly available data for comparable entities;

● testing the estimated fair value of the Birds Eye indefinite-lived intangible asset using the Company’s assumptions and comparing the results to the Company’s fair value estimate.

Notes to Consolidated Financial Statements

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(columnar dollars in millions except per share amounts)

● evaluating the EBITDA market multiple by comparing to an EBITDA market multiple range developed using publicly available market data for comparable entities;

● testing the estimated fair values of the Birds Eye indefinite-lived intangible asset and the Sides, Components, Enhancers reporting unit using the Company’s assumptions and comparing the results to the Company’s fair value estimate .

We have served as the Company’s auditor since 2005.

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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-K

Item 8. Financial Statements and Supplementary Data