What changed in this filing

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Item 1. Financial Statements

2021-01-07 compared with 2020-10-06 · 259 added, 133 removed, 651 unchanged (38% of the section changed)

5 unchanged sentences

Thirteen weeks ended

Twenty-six weeks ended

Costs and expenses:

4 unchanged sentences

Income before income taxes and equity method investment earnings

Income tax expense (benefit)

Income tax expense

Equity method investment earnings

13 unchanged sentences

Thirteen weeks ended

August 30, 2020

August 25, 2019

November 29, 2020

November 24, 2019

Other comprehensive income:

2 unchanged sentences

Reclassification for derivative adjustments included in net income

Unrealized currency translation gains

Pension and post-employment benefit obligations:

Reclassification for pension and post-employment benefit obligations included in net income

Comprehensive income

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income attributable to Conagra Brands, Inc.

Twenty-six weeks ended

November 29, 2020

November 24, 2019

Other comprehensive income:

Derivative adjustments:

Unrealized derivative adjustments

Reclassification for derivative adjustments included in net income

Unrealized currency translation gains (losses)

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Other accrued liabilities

Current liabilities held for sale

Total current liabilities

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(in millions)

Thirteen weeks ended

Twenty-six weeks ended

Cash flows from operating activities:

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Asset impairment charges

Loss on divestiture

Distributions in excess of earnings of affiliates

Loss on extinguishment of debt

Loss (gain) on divestitures

Equity method investment earnings in excess of distributions

Stock-settled share-based payments expense

7 unchanged sentences

Other accrued liabilities

Deferred employer payroll taxes

Net cash flows from operating activities

4 unchanged sentences

Sale of marketable securities

Proceeds from divestitures, net of cash divested

Net cash flows from investing activities

Cash flows from financing activities:

Net short-term borrowings

Issuances of commercial paper, maturities greater than 90 days

Net issuances (repayments) of other short-term borrowings

Issuance of long-term debt

Repayment of long-term debt

Debt issuance costs

Payment of intangible asset financing arrangement

45 unchanged sentences

Statement of Earnings 1

August 30, 2020

August 25, 2019

November 29, 2020

November 24, 2019

Net derivative adjustments:

1 unchanged sentence

Interest expense, net

Cash flow hedges

Selling, general and administrative expenses

Total before tax

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Pension and postretirement non-service income

Total before tax

Income tax expense

Twenty-six weeks ended

Affected Line Item in the Condensed Consolidated

Statement of Earnings 1

November 29, 2020

November 24, 2019

Net derivative adjustment, net of tax:

Cash flow hedges

Interest expense, net

Cash flow hedges

Selling, general and administrative expenses

Total before tax

Income tax expense

Pension and postretirement liabilities:

Net prior service cost

Pension and postretirement non-service income

Net actuarial gain

Pension and postretirement non-service income

Total before tax

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DIVESTITURES AND ASSETS HELD FOR SALE

During the second quarter of fiscal 2021, we completed the sale of our H.K.

Anderson ® business for net proceeds of $ 8.5 million , subject to final working capital adjustments.

The business results were previously reported in our Grocery & Snacks segment, and to a lesser extent within our Foodservice segment .

We recognized a gain on the sale of $ 5.3 million, included within selling, general and administrative ("SG&A") expenses .

The assets classified as held for sale reflected in our Condensed Consolidated Balance Sheets related to the H.K.

Anderson ® business were as follows:

Current assets

Noncurrent assets (including goodwill of $ 2.4 million)

During the third quarter of fiscal 2020, we completed the sale of our Lender's ® bagel business for net proceeds of $ 33.3 million, including working capital adjustments.

The business results were previously reported primarily in our Refrigerated & Frozen segment, and to a lesser extent within our Foodservice segment .

During the second quarter of fiscal 2020, we completed the sale of our Direct Store Delivery ("DSD") Snacks business for net proceeds of $ 137.5 million , including working capital adjustments.

The business results were previously reported in our Grocery & Snacks segment.

In connection with the sale of our DSD Snacks business, we recognized an impairment charge of $ 31.4 million within selling, general and administrative ("SG&A") expenses in the first quarter of fiscal 2020.

In connection with the sale of our Lender's ® bagel business, we recognized an impairment charge of $ 27.6 million within SG&A expenses in the second quarter of fiscal 2020.

During the third quarter of fiscal 2020, we completed the sale of our peanut butter manufacturing facility in Streator, Illinois.

1 unchanged sentence

The business results were previously reported primarily in our Grocery & Snacks segment, and to a lesser extent within our Foodservice segment.

We received net proceeds of $ 24.8 million, subject to final working

capital adjustments .

In connection with this planned divestiture, we recognized an impairment charge of $ 11.9 million within SG&A expenses in the first quarter of fiscal 2020.

Th is charge ha s been included in restructuring activities.

We received net proceeds of $ 24.8 million, subject to final working capital adjustments.

In connection with this divestiture, we recognized impairment charges of $ 11.1 million and $ 23.0 million within SG&A expenses in the second quarter and first half of fiscal 2020, respectively.

These charges have been included in restructuring activities.

During the second quarter of fiscal 2020, we completed the sale of our Direct Store Delivery ("DSD") Snacks business for net proceeds of $ 137.5 million , including working capital adjustments.

The business results were previously reported in our Grocery & Snacks segment.

In connection with the sale of our DSD Snacks business, we recognized an impairment charge of $ 31.4 million within SG&A expenses in the first quarter of fiscal 2020.

Other Assets Held for Sale

During the first quarter of fiscal 2021, we initiated a plan to sell our H.K.

Anderson ® business, which is reflected primarily within our Grocery & Snacks segment, and to a lesser extent within our Foodservice segment.

These assets have been reclassified as assets held for sale within our Condensed Consolidated Balance Sheets for all period presented.

Subsequent to the end of the first quarter of fiscal 2021, on September 28, 2020, we entered into a definitive agreement to sell this business.

The purchase price under the agreement is $ 8.5 million in expected cash proceeds, subject to final working capital adjustments.

The transaction is subject to customary closing conditions and is expected to be completed before the end of the calendar year.

In addition, we are actively marketing certain other assets.

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

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

August 30, 2020

During the second quarter of fiscal 2021, we initiated a plan to sell our Peter Pan ® peanut butter business, which is reflected primarily within our Grocery & Snacks segment, and to a lesser extent within our International and Foodservice segments.

On December 7, 2020, subsequent to the end of the second quarter of fiscal 2021, we entered into a definitive agreement to sell this business.

The transaction is subject to customary closing conditions and is expected to be completed in the third quarter of fiscal 2021.

We expect to realize net proceeds from the sale of $ 102.0 million, subject to final adjustments for working capital and certain tax benefits.

The assets and liabilities classified as held for sale reflected in our Condensed Consolidated Balance Sheets related to the Peter Pan ® peanut butter business were as follows:

November 29, 2020

Current assets

Noncurrent assets (including goodwill of $ 44.9 million)

Current liabilities

RESTRUCTURING ACTIVITIES

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In December 2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the operations of Pinnacle Foods Inc.

("Pinnacle"), which we acquired in October 2018 (the "Pinnacle Integration Restructuring Plan"), for the purpose of achieving significant cost synergies between the companies, as a result of which we expect to incur material charges for exit and disposal activities under U.S.

incur material charges for exit and disposal activities under U.S.

We expect to incur approximately $ 360.0 million of charges ($ 281.2 million of cash charges and $ 78.8 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan.

The Board and/or our senior management have authorized incurrence of these charges.

In the first quarter of fiscal 2021 and 2020, we recognized charges of $ 8.6 million and $ 27.7 million, respectively, in connection with the Pinnacle Integration Restructuring Plan.

In the second quarter and first half of fiscal 2021 , we recognized charges of $ 10.2 million and $ 18.8 million, respectively, in connection with the Pinnacle Integration Restructuring Plan.

In the second quarter and first half of fiscal 2020 , we recognized charges of $ 16.2 million and $ 43.9 million, respectively, in connection with the Pinnacle Integration Restructuring Plan .

We expect to incur costs related to the Pinnacle Integration Restructuring Plan through fiscal 2022 .

We anticipate that we will recognize the following pre-tax expenses in association with the Pinnacle Integration Restructuring Plan (amounts include charges recognized from plan inception through the first quarter of fiscal 2021):

Grocery & Snacks

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Consolidated total

During the first quarter of fiscal 2021 , we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:

During the second quarter of fiscal 2021, we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:

Grocery & Snacks

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Included in the above results are $ 9.3 million of charges that have resulted or will result in cash outflows and $ 0.9 million in non-cash charges.

We recognized the following cumulative (plan inception to August 30, 2020) pre-tax expenses for the Pinnacle Integration Restructuring Plan related to our continuing operations in our Condensed Consolidated Statement of Operations:

During the first half of fiscal 2021, we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:

Grocery & Snacks

Refrigerated & Frozen

Accelerated depreciation

Other cost of goods sold

Total cost of goods sold

Severance and related costs

Asset impairment (net of gains on disposal)

Contract/lease termination

Consulting/professional fees

Other selling, general and administrative expenses

Total selling, general and administrative expenses

Consolidated total

Included in the above results are $ 17.6 million of charges that have resulted or will result in cash outflows and $ 1.2 million in non-cash charges.

We recognized the following cumulative (plan inception to November 29, 2020) pre-tax expenses for the Pinnacle Integration Restructuring Plan in our Condensed Consolidated Statement of Operations:

Grocery & Snacks

Refrigerated & Frozen

International

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Included in the above results are $ 230.0 million of charges that have resulted or will result in cash outflows and $ 30.8 million in non-cash charges.

Liabilities recorded for the Pinnacle Integration Restructuring Plan and changes therein for the first quarter of fiscal 2021 were as follows:

Liabilities recorded for the Pinnacle Integration Restructuring Plan and changes therein for the first half of fiscal 2021 were as follows:

Costs Incurred

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In fiscal 2019, management initiated a restructuring plan (the "Conagra 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.

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 the first quarter of fiscal 2021, including the estimated amounts or range of amounts for each major type of costs

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 the second quarter of fiscal 2021, 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 August 30, 2020 , we have approved the incurrence of $ 170.6 million ($ 43.8 million of cash charges and $ 126.8 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan.

As of November 29, 2020 , we have approved the incurrence of $ 171.0 million ($ 44.2 million of cash charges and $ 126.8 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan.

We have incurred or expect to incur $ 156.2 million of charges ($ 36.8 million of cash charges and $ 119.4 million of non-cash charges) for actions identified to date under the Conagra Restructuring Plan.

In the first quarter of fiscal 2021 and 2020 , we recognized charges of $ 17.3 million and $ 21.1 million, respectively, in connection with the Conagra Restructuring Plan .

In the second quarter and first half of fiscal 2021 , we recognized charges of $ 10.5 million and $ 27.8 million, respectively, in connection with the Conagra Restructuring Plan .

In the second quarter and first half of fiscal 2020 , we recognized charges of $ 19.6 million and $ 40.7 million, respectively, in connection with the Conagra Restructuring Plan.

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

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 first quarter of fiscal 2021):

Grocery & Snacks

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Consolidated total

During the first quarter of fiscal 2021, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

During the second quarter of fiscal 2021, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

Grocery & Snacks

Refrigerated & Frozen

Accelerated depreciation

Total cost of goods sold

Severance and related costs

Asset impairment (net of gains on disposal)

Other selling, general and administrative expenses

Total selling, general and administrative expenses

Included in the above results are $ 1.9 million in charges that have resulted or will result in cash outflows and $ 8.6 million in non-cash charges.

During the first half of fiscal 2021, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

Grocery & Snacks

Refrigerated & Frozen

International

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Included in the above results are $ 6.9 million in charges that have resulted or will result in cash outflows and $ 20.9 million in non-cash charges.

We recognized the following cumulative (plan inception to August 30, 2020) pre-tax expenses for the Conagra Restructuring Plan related to our continuing operations in our Condensed Consolidated Statement of Operations:

We recognized the following cumulative (plan inception to November 29, 2020) pre-tax expenses for the Conagra Restructuring Plan in our Condensed Consolidated Statement of Operations:

Grocery & Snacks

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Included in the above results are $ 19.7 million of charges that have resulted or will result in cash outflows and $ 74.7 million in non-cash charges.

Liabilities recorded for the Conagra Restructuring Plan and changes therein for the first quarter of fiscal 2021 were as follows:

Liabilities recorded for the Conagra Restructuring Plan and changes therein for the first half of fiscal 2021 were as follows:

Costs Incurred

1 unchanged sentence

LONG-TERM DEBT AND REVOLVING CREDIT FACILITY

At August 30, 2020, we had a revolving credit facility (the "Revolving Credit Facility") with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $ 1.6 billion (subject to increase to a maximum aggregate principal amount of $ 2.1 billion with the consent of the lenders).

At November 29, 2020, we had a revolving credit facility (the "Revolving Credit Facility") with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $ 1.6 billion (subject to increase to a maximum aggregate principal amount of $ 2.1 billion with the consent of the lenders).

The Revolving Credit Facility matures on July 11, 2024 and is unsecured.

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

As of August 30, 2020, there were no outstanding borrowings under the Revolving Credit Facility.

As of November 29, 2020, there were no outstanding borrowings under the Revolving Credit Facility.

During the second quarter of fiscal 2021, we issued $ 1.0 billion aggregate principal amount of 1.375 % senior notes due November 1, 2027 (the "2027 Senior Notes").

We also redeemed the entire outstanding $ 1.20 billion aggregate principal amount of our 3.800 % senior notes prior to their maturity date of October 22, 2021, resulting in a net loss of $ 44.3 million as a cost of early extinguishment of debt.

This redemption was primarily funded using the net proceeds from the issuance of the 2027 Senior Notes.

During the second quarter of fiscal 2021, we also repaid the entire outstanding $ 500.0 million aggregate principal amount of our floating rate notes on the maturity date of October 9, 2020.

On December 23, 2020, subsequent to the end of the second quarter of fiscal 2021, we redeemed $ 400.0 million aggregate principal amount of our 3.200 % senior notes due January 25, 2023 (the "2023 Senior Notes") and expect to recognize a net loss in the third quarter of fiscal 2021 of approximately $ 24.4 million as a cost of early extinguishment of debt in connection with such redemption.

The 2023 Senior Notes are presented within current installments of long-term debt in our Condensed Consolidated Balance Sheet as of November 29, 2020.

During the first quarter of fiscal 2021, we repaid the remaining outstanding $ 126.6 million aggregate principal amount of our 4.95 % senior notes on their maturity date of August 15, 2020.

During the fourth quarter of fiscal 2020, we entered into an unsecured term loan agreement (the "Credit Agreement") with a financial institution.

The Credit Agreement provides for delayed draw term loans to the Company in an aggregate principal amount not in excess of $ 600.0 million (subject to increase to a maximum aggregate principal amount of $ 750.0 million).

Borrowings under the Credit Agreement can be drawn, in full or in part, through October 9, 2020.

The Credit Agreement matures on May 21, 2023 .

As of August 30, 2020, there were no outstanding borrowings under the Credit Agreement.

Borrowings under the Credit Agreement will bear interest at, at the Company's election, either (a) LIBOR plus a percentage spread (ranging from 1.125 % to 1.75 %) based on the Company's senior unsecured long-term indebtedness ratings or (b) the alternate base rate, described in the Credit Agreement as the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50 % and (iii) one-month LIBOR plus 1.00 %, plus a percentage spread (ranging from 0 % to 0.625 %) based on the Company's senior unsecured long-term indebtedness ratings.

The Company may voluntarily prepay term loans under the Credit Agreement, in whole or in part, without penalty, subject to certain conditions.

During the first quarter of fiscal 2020, we repaid $ 200.0 million of our borrowings under our term loan agreement (the "Term Loan Agreement"), which repayment consisted of $ 100.0 million of the three-year tranche loans and $ 100.0 million of the five-year tranche loans.

During the third quarter of fiscal 2020, we repaid the remaining borrowings under the Term Loan Agreement of $ 200.0

million, which repayment consisted of $ 100.0 million of the three-year tranche loans and $ 100.0 million of the five-year tranche loans.

The Term Loan Agreement was t erminated after these repayment s .

During fiscal 2020, we also redeemed the entire outstanding $ 525.0 million aggregate principal amount of our floating rate notes due October 22, 2020 in two separate redemptions totaling $ 250.0 million and $ 275.0 million in the third and fourth quarters of fiscal 2020, respectively.

In the fourth quarter of fiscal 2020, we entered into an unsecured term loan agreement (the "Credit Agreement") with a financial institution.

The Credit Agreement provided for delayed draw term loans to the Company in an aggregate principal amount

not in excess of $ 600.0 million (subject to increase to a maximum aggregate principal amount of $ 750.0 million) through October 9, 2020 .

We did not borrow under the Credit Agreement, and it was terminated in the second quarter of fiscal 2021 .

In the first quarter of fiscal 2020, we repaid $ 200.0 million of our borrowings under our term loan agreement (the "Term Loan Agreement"), which repayment consisted of $ 100.0 million of the three-year tranche loans and $ 100.0 million of the five-year tranche loans.

In the third quarter of fiscal 2020, we repaid the remaining borrowings under the Term Loan Agreement of $ 200.0 million, which repayment consisted of $ 100.0 million of the three-year tranche loans and $ 100.0 million of the five-year tranche loans.

The Term Loan Agreement was terminated after these repayments.

In fiscal 2020, we also redeemed the entire outstanding $ 525.0 million aggregate principal amount of our floating rate notes due October 22, 2020 in two separate redemptions totaling $ 250.0 million and $ 275.0 million in the third and fourth quarters of fiscal 2020, respectively.

Our most restrictive debt agreement (the Revolving Credit Facility) generally requires our ratio of earnings before interest, taxes, depreciation and amortization ("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 certain decreasing specified levels, ranging from 4.75 through the first quarter of fiscal 2022 to 3.75 from the second quarter of fiscal 2023 and thereafter, with each ratio to be calculated on a rolling four-quarter basis.

As of August 30, 2020, we were in compliance with all financial covenants under the Revolving Credit Facility.

As of November 29, 2020, we were in compliance with all financial covenants under the Revolving Credit Facility.

Net interest expense consists of:

Thirteen weeks ended

Twenty-six weeks ended

Long-term debt

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GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the first quarter of fiscal 2021, excluding amounts classified as held for sale (see Note 2), was as follows:

The change in the carrying amount of goodwill for the first half of fiscal 2021, excluding amounts classified as held for sale (see Note 2), was as follows:

International

1 unchanged sentence

Currency translation

Balance as of August 30, 2020

Balance as of November 29, 2020

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

August 30, 2020

November 29, 2020

Non-amortizing intangible assets

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

The use of different

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

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 of the reporting units.

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

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Amortizing intangible assets, carrying a remaining weighted average life of approximately 19 years, are principally composed of customer relationships and acquired intellectual property.

Amortization expense was $ 14.9 million and $ 15.0 million for the first quarter of fiscal 2021 and 2020, respectively.

Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of August 30, 2020, amortization expense is estimated to average $ 56.2 million for each of the next five years.

Amortization expense was $ 15.0 million and $ 29.9 million for the second quarter and first half of fiscal 2021, respectively, and $ 15.0 million and $ 30.0 million for the second quarter and first half of fiscal 2020, respectively.

Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of November 29, 2020, amortization expense is estimated to average $ 55.3 million for each of the next five years.

DERIVATIVE FINANCIAL INSTRUMENTS

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

As of August 30, 2020, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through April 2021.

As of November 29, 2020, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through February 2022.

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 August 30, 2020, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through May 2021.

As of November 29, 2020, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through August 2021.

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

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During the first quarter of fiscal 2019, we entered into deal-contingent forward starting interest rate swap contracts to hedge a portion of the interest rate risk related to our issuance of long-term debt to help finance the acquisition of Pinnacle.

We settled these contracts during the second quarter of fiscal 2019 and deferred a $ 47.5 million gain in accumulated other comprehensive income.

This gain will be amortized as a reduction of interest expense over the lives of the related debt instruments.

The unamortized amount at August 30, 2020 was $ 41.1 million.

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

The unamortized amount at November 29, 2020 was $ 39.8 million.

The portion written off in fiscal 2021 in connection with the second quarter early extinguishment of debt totaled $ 0.5 million (see Note 4).

Economic Hedges of Forecasted Cash Flows

Many of our derivatives do not qualify for, and we do not currently designate certain commodity or foreign currency derivatives to achieve, hedge accounting treatment.

We reflect realized and unrealized gains and losses from derivatives used to economically hedge anticipated commodity consumption and to mitigate foreign currency cash flow risk in earnings immediately within general corporate expense (within cost of goods sold).

We reflect realized and unrealized gains and losses from derivatives used to economically

hedge anticipated commodity consumption and to mitigate foreign currency cash flow risk in earnings immediately within general corporate expense (within cost of goods sold).

The gains and losses are reclassified to segment operating results in the period in which the underlying item being economically hedged is recognized in cost of goods sold.

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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 August 30, 2020 and May 31, 2020, $ 0.6 million, representing an obligation to return cash collateral, and $ 1.1 million, representing a right to reclaim cash collateral, respectively, were included in prepaid expenses and other current assets in our Condensed Consolidated Balance Sheets.

At November 29, 2020 and May 31, 2020, $ 0.3 million, representing an obligation to return cash collateral, and $ 1.1 million, representing a right to reclaim cash collateral, respectively, were included in prepaid expenses and other current assets in our Condensed Consolidated Balance Sheets.

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

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Other accrued liabilities

The following table presents our derivative assets and liabilities, at August 30, 2020, on a gross basis, prior to the setoff of $ 0.7 million to total derivative assets and $ 0.1 million to total derivative liabilities where legal right of setoff existed:

The following table presents our derivative assets and liabilities, at November 29, 2020, on a gross basis, prior to the setoff of $ 1.2 million to total derivative assets and $ 0.9 million to total derivative liabilities where legal right of setoff existed:

Derivative Assets

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Cost of goods sold

Total gains from derivative instruments not designated as hedging instruments

Location in Condensed Consolidated

Gains (Losses) Recognized on Derivatives in Condensed Consolidated Statements of Earnings for the

Twenty-six Weeks Ended

Derivatives Not Designated as Hedging Instruments

Statements of Earnings of Gains (Losses)

Recognized on Derivatives

Commodity contracts

Cost of goods sold

Foreign exchange contracts

Cost of goods sold

Total losses from derivative instruments not designated as hedging instruments

As of August 30, 2020, our open commodity purchase contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of $ 72.4 million.

We did no t have any open sales commodity contracts as of August 30, 2020.

As of November 29, 2020, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of $ 56.8 million and $ 24.6 million for purchase and sales contracts, respectively.

As of May 31, 2020, our open commodity contracts had a notional value of $ 102.0 million and $ 3.4 million for purchase and sales contracts, respectively.

The notional amount of our foreign currency forward contracts as of August 30, 2020 and May 31, 2020 was $ 112.9 million and $ 107.6 million, respectively.

The notional amount of our foreign currency forward contracts as of November 29, 2020 and May 31, 2020 was $ 99.6 million and $ 107.6 million, respectively.

We enter into certain commodity, interest rate, and foreign exchange derivatives with a diversified group of counterparties.

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

At August 30, 2020, 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 contract, was $ 1.2 million.

At November 29, 2020, 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 contract, was $ 1.4 million.

SHARE-BASED PAYMENTS

For the first quarter of fiscal 2021 and 2020, we recognized total stock-based compensation expense (including stock options, restricted stock units, cash-settled restricted stock units, performance shares, performance-based restricted stock units, and cash-settled stock appreciation rights) of $ 17.4 million and $ 11.9 million, respectively.

In the first quarter of fiscal 2021, we granted 0.9 million restricted stock units at a weighted average grant date price of $ 36.70 and 0.5 million performance shares at a weighted average grant date price of $ 36.82 .

For the second quarter and first half of fiscal 2021, we recognized total stock-based compensation expense (including restricted stock units, cash-settled restricted stock units, performance shares, and performance-based restricted stock units) of $ 14.6 million and $ 32.0 million, respectively.

For the second quarter and first half of fiscal 2020, we recognized total stock-based compensation expense of $ 12.6 million and $ 24.5 million, respectively.

In the first half of fiscal 2021, we granted 0.9 million restricted stock units at a weighted average grant date price of $ 36.70 and 0.5 million performance shares at a weighted average grant date price of $ 36.82 .

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

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Twenty-six weeks ended

Net income attributable to Conagra Brands, Inc.

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Diluted weighted average shares outstanding

For the first quarter of fiscal 2021 and 2020, there were 1.0 million and 2.1 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.

For the first half of fiscal 2021, there were 0.6 million stock options outstanding that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.

For the second quarter of fiscal 2021, there were no stock options outstanding with an antidilutive effect.

For the second quarter and first half of fiscal 2020, there were 2.0 million and 2.1 million stock options outstanding, respectively, that were excluded from the calculation.

The major classes of inventories were as follows:

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Supplies and other

In the first quarter of fiscal 2021 and 2020 we recognized income tax expense of $ 86.7 million and an income tax benefit of $ 11.5 million, respectively.

The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was 20.8 % and ( 7.0 )% for the first quarter of fiscal 2021 and 2020, respectively.

The effective tax rate in the first quarter of fiscal 2021 reflected a benefit resulting from the regulations issued by the U.S.

In the second quarter of fiscal 2021 and 2020, we recognized income tax expense of $ 80.7 million and $ 84.1 million, respectively.

In the first half of fiscal 2021 and 2020, we recognized income tax expense of $ 167.4 million and $ 72.6 million, respectively.

The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was 17.6 % and 24.3 % for the second quarter of fiscal 2021 and 2020, respectively.

The effective tax rate for the first half of fiscal 2021 and 2020 was 19.1 % and 14.3 %, respectively.

The effective tax rate in the second quarter of fiscal 2021 reflected a release of valuation allowance associated with the expected capital gains from the planned divestiture of the Peter Pan ® peanut butter business and a benefit from statute lapses on tax issues that were previously reserved.

The effective tax rate for the first half of fiscal 2021 reflects the above-cited items, as well as a benefit resulting from the regulations issued by the U.S.

Treasury and Internal Revenue Service on certain provisions of the 2017 Tax Cuts and Jobs Act.

The effective tax rate in the first quarter of fiscal 2020 reflected the following:

additional tax expense associated with non-deductible goodwill in our DSD Snacks and private label peanut butter businesses, for which an impairment charge was recognized,

a tax benefit resulting from state law changes,

a benefit from the settlement of tax issues that were previously reserved,

an additional benefit due to a change in the deferred state tax rates relating to the integration of Pinnacle activity for tax purposes, and

an income tax benefit associated with a tax planning strategy that will allow us to utilize certain state tax attributes.

The amount of gross unrecognized tax benefits for uncertain tax positions was $ 34.4 million as of August 30, 2020 and $ 35.8 million as of May 31, 2020.

The effective tax rate in the second quarter of fiscal 2020 reflected the following:

additional tax expense primarily associated with non-deductible goodwill in our Lender's ® bagel business, for which an impairment charge was recognized,

a benefit from statute lapses on tax issues that were previously reserved for, and

an income tax benefit associated with a deduction of a prior year federal income tax matter.

The effective tax rate for the first half of fiscal 2020 reflected the above-cited items, as well as the impact of benefits from the settlement of tax issues that were previously reserved, a change in deferred state tax rates due to the integration of Pinnacle activity for tax purposes, a tax planning strategy that will allow utilization of certain state attributes, and state tax law changes.

The amount of gross unrecognized tax benefits for uncertain tax positions was $ 33.9 million as of November 29, 2020 and $ 35.8 million as of May 31, 2020.

Included in those amounts was $ 0.8 million and $ 0.7 million, respectively, for tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The gross unrecognized tax benefits excluded related liabilities for gross interest and penalties of $ 8.1 million and $ 7.4 million as of August 30, 2020 and May 31, 2020, respectively.

The net amount of unrecognized tax benefits at August 30, 2020 and May 31, 2020 that, if recognized, would impact the Company's effective tax rate was $ 29.1 million and $ 30.3 million, respectively.

The gross unrecognized tax benefits excluded related liabilities for gross interest and penalties of $ 8.1 million and $ 7.4 million as of November 29, 2020 and May 31, 2020, respectively.

The net amount of unrecognized tax benefits at November 29, 2020 and May 31, 2020 that, if recognized, would impact the Company's effective tax rate was $ 28.8 million and $ 30.3 million, respectively.

Included in those amounts is $ 6.5 million that would be reported in discontinued operations.

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We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $ 12.1 million over the next twelve months due to various federal, state, and foreign audit settlements and the expiration of statutes of limitations.

As of August 30, 2020 and May 31, 2020, we had a deferred tax asset of $ 685.3 million and $ 685.2 million, respectively, that was generated from the capital loss realized on the sale of the Private Brands operations with corresponding valuation allowances of $ 685.3 million and $ 685.2 million, respectively, to reflect the uncertainty regarding the ultimate realization of the tax asset.

As of November 29, 2020 and May 31, 2020, we had a deferred tax asset of $ 685.3 million and $ 685.2 million, respectively, that was generated from the capital loss realized on the sale of the Private Brands operations with corresponding valuation allowances of $ 660.0 million and $ 685.2 million, respectively, to reflect the uncertainty regarding the ultimate realization of the tax asset.

Federal capital loss carryforwards related to the Private Brands divestiture will expire in fiscal 2021.

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Liability was joint and several.

The Company appealed the Judgment, and on November 14, 2017 the California Court of Appeal for the Sixth Appellate District reversed in part, holding that the defendants were not liable to pay for abatement of homes built after 1950, but affirmed the Judgment as to homes built before 1951.

The Company appealed the Judgment, and

on November 14, 2017 the California Court of Appeal for the Sixth Appellate District reversed in part, holding that the defendants were not liable to pay for abatement of homes built after 1950, but affirmed the Judgment as to homes built before 1951.

The Court of Appeal remanded the case to the trial court with directions to recalculate the amount of the abatement fund estimated to be necessary to cover the cost of remediating pre-1951 homes, and to hold an evidentiary hearing regarding appointment of a suitable receiver.

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Pursuant to the settlement, ConAgra Grocery Products will pay a total of $ 101.7 million in seven installments to be paid annually from fiscal 2020 through fiscal 2026.

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

We have accrued $ 11.9 million and $ 63.1 million, within other accrued liabilities and other noncurrent liabilities, respectively, for this matter as of August 30, 2020.

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

As of November 29, 2020, we have remaining amounts accrued of $ 11.0 million and $ 52.2 million, within other accrued liabilities and other noncurrent liabilities, respectively, for this matter.

The extent of insurance coverage is uncertain and the Company's carriers are on notice;

however, any possible insurance recovery has not been considered for purposes of determining our liability.

We cannot assure that the final resolution of the lead paint and pigment matters will not have a material adverse effect on our financial condition, results of operations, or liquidity.

We are party to a number of putative class action lawsuits challenging various product claims made in the Company's product labeling.

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These matters include a number of class actions consolidated under the caption Negrete v.

ConAgra Foods, Inc., et al , pending in the U.S.

ConAgra Foods, Inc., et al.

, pending in the U.S.

District Court for the Central District of California, in which the plaintiffs allege a pattern of violations of California and/or federal law at several current and former Company manufacturing facilities across the State of California.

The Company has notified the Court that is has reached a settlement in principle with the plaintiffs, which requires preliminary and final approval of the Court.

The Company has notified the Court that it has reached a settlement in principle with the plaintiffs, which requires preliminary and final approval of the Court.

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

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District Court for the Northern District of Illinois.

That consolidated lawsuit was dismissed with prejudice on December 23, 2020 for failure to state a claim.

In addition, on May 9, 2019, a shareholder filed a derivative action on behalf of the Company against the Company's directors captioned Klein v.

9 unchanged sentences

On October 21, 2019, the Company received an additional demand from a stockholder under Delaware law to appoint a special committee to investigate the conduct of certain officers and directors in connection with the Pinnacle acquisition and the Company ' s public statements.

All remaining shareholder lawsuits and demands are currently stayed by agreement pending the final outcome of the West Palm Beach Firefighters ' Pension Fund matter.

We have put the Company ' s insurance carriers on notice of each of these securities and shareholder matters.

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Environmental Matters

SEC regulations require us to disclose certain information about environmental proceedings if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold.

Pursuant to the SEC regulations, the Company uses a threshold of $ 1 million for purposes of determining whether disclosure of any such proceedings is required.

We are a party to certain environmental proceedings relating to our acquisition of Beatrice in fiscal 1991.

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

The accrual for Beatrice-related environmental matters totaled $ 57.4 million as of August 30, 2020, a majority of which relates to the Superfund and state-equivalent sites referenced above.

The accrual for Beatrice-related environmental matters totaled $ 56.0 million ($ 2.0 million within other accrued liabilities and $ 54.0 million within other noncurrent liabilities) as of November 29, 2020, a majority of which relates to the Superfund and state-equivalent sites referenced above.

During the third quarter of fiscal 2017, a final Remedial Investigation/Feasibility Study was submitted for the Southwest Properties portion ("Operating Unit 4") of the Wells G&H Superfund site, which is one of the Beatrice sites.

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Guarantees and Other Contingencies

In certain limited situations, we will guarantee an obligation of an unconsolidated entity.

We guarantee an obligation of the Lamb Weston business pursuant to a guarantee arrangement that existed prior to the spinoff of the Lamb Weston business (the "Spinoff").

2 unchanged sentences

Accordingly, in the event that we are required to make any payments as a result of this guarantee arrangement, Lamb Weston is obligated to indemnify us for any such liability, reduced by any insurance proceeds received by us, in accordance with the terms of the indemnification provisions under the Separation Agreement.

Lamb Weston is a party to an agricultural sublease agreement with a third party for certain farmland through 2020 (subject, at Lamb Weston's option, to extension for two additional five-year periods).

Lamb Weston is a party to an agricultural sublease agreement with a third party for certain farmland through 2025 (subject, at Lamb Weston's option, to extension for one additional five-year period).

Under the terms of the sublease agreement, Lamb Weston is required to make certain rental payments to the sublessor.

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As such, we believe that any financial exposure to the Company, in the event that we were required to perform under the guarantee, would be largely mitigated.

In certain limited situations, we will guarantee an obligation of an unconsolidated entity.

We guarantee certain leases resulting from the divestiture of the JM Swank business completed in the first quarter of fiscal 2017.

As of August 30, 2020, the remaining terms of these arrangements did not exceed three years and the maximum amount of future payments we have guaranteed was $ 0.4 million.

We also guarantee certain leases resulting from the divestiture of the JM Swank business completed in the first quarter of fiscal 2017.

As of November 29, 2020, the remaining terms of these arrangements did not exceed three years and the maximum amount of future payments we have guaranteed was $ 0.3 million.

In addition, we guarantee a lease resulting from an exited facility.

As of August 30, 2020, the remaining term of this arrangement did not exceed seven years and the maximum amount of future payments we have guaranteed was $ 15.8 million.

As of November 29, 2020, the remaining term of this arrangement did not exceed six years and the maximum amount of future payments we have guaranteed was $ 15.2 million.

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

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Thirteen weeks ended

Twenty-six weeks ended

Interest cost

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Thirteen weeks ended

Twenty-six weeks ended

Interest cost

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The spot-rate approach applies separate discount rates for each projected benefit payment in the calculation of pension service and interest cost.

The weighted-average discount rates for service and interest costs under the spot-rate approach used for pension benefit cost in fiscal 2021 were 3.35 % and 2.30 %.

During the first quarter of fiscal 2021, we contributed $ 5.9 million to our pension plans and contributed $ 2.3 million to our other postretirement plans.

The weighted-average discount rates for service and interest costs under the spot-rate approach used for pension benefit cost in fiscal 2021 were 3.35 % and 2.30 %, respectively.

During the second quarter and first half of fiscal 2021, we contributed $ 14.8 million and $ 20.7 million, respectively, to our pension plans and contributed $ 1.8 million and $ 4.1 million, respectively, to our other postretirement plans.

Based upon the current funded status of the plans and the current interest rate environment, we anticipate making further contributions of approximately $ 11.5 million to our pension plans for the remainder of fiscal 2021.

2 unchanged sentences

STOCKHOLDERS' EQUITY

The following table presents a reconciliation of our stockholders' equity accounts for the thirteen weeks ended August 30, 2020:

The following table presents a reconciliation of our stockholders' equity accounts for the twenty-six weeks ended November 29, 2020:

Conagra Brands, Inc.

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Balance at August 30, 2020

The following table presents a reconciliation of our stockholders' equity accounts for the thirteen weeks ended August 25, 2019:

Stock option and incentive plans

Currency translation adjustments

Derivative adjustments

Activities of noncontrolling interests

Pension and postretirement healthcare benefits

Dividends declared on common stock;

$ 0.275 per share

Net income attributable to Conagra Brands, Inc.

Balance at November 29, 2020

The following table presents a reconciliation of our stockholders' equity accounts for the twenty-six weeks ended November 24, 2019:

Conagra Brands, Inc.

13 unchanged sentences

Balance at August 25, 2019

Stock option and incentive plans

Currency translation adjustments

Derivative adjustments

Activities of noncontrolling interests

Pension and postretirement healthcare benefits

Dividends declared on common stock;

$ 0.2125 per share

Net income attributable to Conagra Brands, Inc.

Balance at November 24, 2019

FAIR VALUE MEASUREMENTS

6 unchanged sentences

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

The following table presents our financial assets and liabilities measured at fair value on a recurring basis, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of August 30, 2020:

Derivative assets

13 unchanged sentences

In the first quarter of fiscal 2021, we recognized charges totaling $ 3.0 million in our Grocery & Snacks segment for the impairment of certain long-lived assets.

The impairment was measured based upon the estimated sales price of the assets.

The impairment was measured based upon the estimated sales price of the assets and has been included in restructuring activities.

In the first quarter of fiscal 2020, we recognized charges for the impairment of certain indefinite-lived brands.

1 unchanged sentence

Impairments in our Grocery & Snacks and Refrigerated & Frozen segments totaled $ 3.5 million and $ 15.8 million, respectively.

In the first quarter of fiscal 2020, we recognized charges totaling $ 43.3 million in our Grocery & Snacks segment for impairments of certain long-lived assets.

In the second quarter and first half of fiscal 2020, we recognized impairment charges in our Grocery & Snacks segment totaling $ 11.1 million and $ 54.4 million, respectively.

In the second quarter of fiscal 2020, we recognized impairment charges in our Refrigerated & Frozen segment of $ 27.6 million.

The impairments were measured based upon the estimated sales price of the disposal groups (see Note 2).

The carrying amount of long-term debt (including current installments) was $ 9.62 billion and $ 9.75 billion as of August 30, 2020 and May 31, 2020, respectively.

Based on current market rates, the fair value of this debt (level 2 liabilities) at August 30, 2020 and May 31, 2020, was estimated at $ 11.38 billion and $ 11.35 billion, respectively.

In the second quarter of fiscal 2020, we recognized charges of $ 2.9 million in general corporate expenses related to the impairments of lease right-of-use assets.

The impairments were measured based upon a discounted cash flow approach.

The carrying amount of long-term debt (including current installments) was $ 8.90 billion and $ 9.75 billion as of November 29, 2020 and May 31, 2020, respectively.

Based on current market rates, the fair value of this debt (level 2 liabilities) at November 29, 2020 and May 31, 2020, was estimated at $ 10.85 billion and $ 11.35 billion, respectively.

BUSINESS SEGMENTS AND RELATED INFORMATION

9 unchanged sentences

Thirteen weeks ended

August 30, 2020

August 25, 2019

Twenty-six weeks ended

November 29, 2020

November 24, 2019

November 29, 2020

November 24, 2019

Grocery & Snacks

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Interest expense, net

Income tax expense (benefit)

Income tax expense

Net income attributable to noncontrolling interests

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Thirteen weeks ended

August 30, 2020

August 25, 2019

Twenty-six weeks ended

November 29, 2020

November 24, 2019

November 29, 2020

November 24, 2019

Other shelf-stable

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Thirteen weeks ended

August 30, 2020

August 25, 2019

Gross derivative losses incurred

Twenty-six weeks ended

November 29, 2020

November 24, 2019

November 29, 2020

November 24, 2019

Gross derivative gains (losses) incurred

Net derivative losses allocated to reporting segments

Net derivative losses recognized in general corporate expenses

Net derivative gains (losses) recognized in general corporate expenses

Net derivative losses allocated to Grocery & Snacks

Net derivative losses allocated to Refrigerated & Frozen

Net derivative gains allocated to International

Net derivative gains (losses) allocated to International

Net derivative gains (losses) allocated to Foodservice

Net derivative losses included in segment operating profit

As of August 30, 2020, 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 $ 6.6 million.

This amount reflected net losses of $ 3.5 million incurred during the thirteen weeks ended August 30, 2020 and net losses of $ 3.1 million incurred prior to fiscal 2021.

As of November 29, 2020, 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 $ 3.3 million.

This amount reflected net losses of $ 2.3 million incurred during the twenty-six weeks ended November 29, 2020 and net losses of $ 1.0 million incurred prior to fiscal 2021.

Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results losses of $ 1.8 million in fiscal 2021 and losses of $ 1.5 million in fiscal 2022 and thereafter.

4 unchanged sentences

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

Total depreciation expense was $ 80.3 million and $ 81.7 million for the first quarter of fiscal 2021 and 2020, respectively.

Total depreciation expense was $ 82.8 million and $ 163.1 million for the second quarter and first half of fiscal 2021, respectively, and $ 81.7 million and $ 163.4 million for the second quarter and first half of fiscal 2020, respectively.

Other Information

Our operations are principally in the United States.

With respect to operations outside of the United States, no single foreign country or geographic region was significant with respect to consolidated operations for the first quarter of fiscal 2021 and 2020.

Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately $ 224.7 million and $ 211.7 million in the first quarter of fiscal 2021 and 2020, respectively.

With respect to operations outside of the United States, no single foreign country or geographic region was significant with respect to consolidated operations for the second quarter and first half of fiscal 2021 and 2020.

Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately $ 252.6 million and $ 477.3 million in the second quarter and first half of fiscal 2021, respectively.

Our foreign net sales during the second quarter and first half of 2020 were approximately $ 236.2 million and $ 447.9 million, 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 25 % and 26 % of consolidated net sales in the first quarter of fiscal 2021 and 2020, respectively, primarily in the Grocery & Snacks and Refrigerated & Frozen segments.

and its affiliates, accounted for approximately 25 % of consolidated net sales in both the second quarter and first half of fiscal 2021 and 2020, primarily in the Grocery & Snacks and Refrigerated & Frozen segments.

Walmart, Inc.

and its affiliates accounted for approximately 33 % and 30 % of consolidated net receivables as of August 30, 2020 and May 31, 2020, respectively.

and its affiliates accounted for approximately 33 % and 30 % of consolidated net receivables as of November 29, 2020 and May 31, 2020, respectively.

The Kroger Co.

and its affiliates accounted for approximately 11 % and 10 % of consolidated net receivables as of August 30, 2020 and May 31, 2020, respectively.

We offer certain suppliers access to a third-party service that allows them to view our scheduled payments online.

The third-party service also allows suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party.

We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third party, or any financial institutions concerning this service.

All of our accounts payable remain as obligations to our suppliers as stated in our supplier agreements.

As of August 30, 2020 and May 31, 2020, $ 269.2 million and $ 258.7 million, respectively, of our total accounts payable is payable to suppliers who utilize this third-party service.

and its affiliates accounted for approximately 12 % and 10 % of consolidated net receivables as of November 29, 2020 and May 31, 2020, respectively.

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

What changed 10-Q

Item 1. Financial Statements