14 unchanged sentences
Income from continuing operations
−Removed: Income (loss) from discontinued operations, net of tax
+Added: Loss from discontinued operations, net of tax
Net income attributable to noncontrolling interests
10 unchanged sentences
common stockholders
−Removed: Income (loss) from discontinued operations attributable to Conagra Brands, Inc.
+Added: Loss from discontinued operations attributable to Conagra Brands, Inc.
common stockholders
11 unchanged sentences
Reclassification for derivative adjustments included in net income
−Removed: Unrealized gains on available-for-sale securities
Currency translation adjustments:
5 unchanged sentences
Comprehensive income
−Removed: Comprehensive loss attributable to noncontrolling interests
+Added: Comprehensive income (loss) attributable to noncontrolling interests
Comprehensive income attributable to Conagra Brands, Inc.
29 unchanged sentences
Senior long-term debt, excluding current installments
−Removed: Subordinated debt
Other noncurrent liabilities
6 unchanged sentences
Retained earnings
−Removed: Accumulated other comprehensive loss
+Added: Accumulated other comprehensive income (loss)
Less treasury stock, at cost, 103,934,839 and 97,057,311 common shares
15 unchanged sentences
Stock option and incentive plans
−Removed: Spinoff of Lamb Weston
Adoption of ASU 2016-01
+Added: Adoption of ASU 2014-09
Currency translation adjustments
−Removed: Repurchase of common shares
−Removed: Unrealized gain on available-for-sale securities
+Added: Issuance of treasury shares
+Added: Issuance of common stock
Derivative adjustments
6 unchanged sentences
Stock option and incentive plans
−Removed: Adoption of ASU 2016-01
−Removed: Adoption of ASU 2014-09
Currency translation adjustments
−Removed: Issuance of treasury shares
−Removed: Issuance of common stock
Derivative adjustments
6 unchanged sentences
Stock option and incentive plans
+Added: Adoption of ASU 2016-13
Currency translation adjustments
+Added: Repurchase of common shares
Derivative adjustments
12 unchanged sentences
Cash flows from operating activities:
−Removed: Income (loss) from discontinued operations
+Added: Loss from discontinued operations
Income from continuing operations
3 unchanged sentences
Loss (gain) on divestitures
−Removed: Lease cancellation expense
Loss on extinguishment of debt
2 unchanged sentences
Novation of a legacy guarantee
−Removed: Earnings of affiliates in excess of distributions
+Added: Equity method investment earnings in excess of distributions
Stock-settled share-based payments expense
8 unchanged sentences
Other accrued liabilities
+Added: Deferred employer payroll taxes
Net cash flows from operating activities - continuing operations
10 unchanged sentences
Cash flows from financing activities:
−Removed: Net short-term borrowings (repayments)
+Added: Issuances of commercial paper, maturities greater than 90 days
+Added: Repayments of commercial paper, maturities greater than 90 days
+Added: Net issuances (repayments) of other short-term borrowings
Issuance of long-term debt
20 unchanged sentences
("Conagra Brands", "Company", "we", "us", or "our") ends the last Sunday in May.
−Removed: The fiscal years for the consolidated financial statements presented consist of a 53-week period for fiscal 2020 and 52-week periods for fiscal years 2019 and 2018.
+Added: The fiscal years for the consolidated financial statements presented consist of a 52-week period for fiscal 2021, a 53-week period for fiscal 2020, and a 52-week period for fiscal year 2019.
Basis of Consolidation — The consolidated financial statements include the accounts of Conagra Brands, Inc.
17 unchanged sentences
Year ended May 26, 2019
−Removed: Primarily relates to the acquisition of Pinnacle and translation.
+Added: 1 Primarily relates to translation, the adoption of Accounting Standards Update ("ASU") 2016-13, and the acquisition of Pinnacle Foods Inc.
+Added: ("Pinnacle").
2 Bad debts charged off and adjustments to previous reserves, less recoveries.
13 unchanged sentences
An asset considered "held-for-sale" is reported at the lower of the asset's carrying amount or fair value.
+Added: During fiscal 2021, 2020, and 2019 our capital expenditures totaled $ 506.4 million, $ 369.5 million, and $ 353.1 million, respectively.
+Added: Accrued and unpaid capital expenditures as of May 30, 2021, May 31, 2020, May 26, 2019, and May 27, 2018 totaled $ 123.7 million, $ 112.9 million, $ 64.4 million, and $ 40.6 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.
12 unchanged sentences
In assessing other 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.
−Removed: 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.
+Added: 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
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
+Added: 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 with its carrying value.
2 unchanged sentences
The estimates of fair value of intangible assets not subject to amortization are determined using a "relief from royalty" methodology, which is used in estimating the fair value of our brands/trademarks.
−Removed: Discount rate assumptions are based
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: on an assessment of the risk inherent in the projected future cash flows generated by the respective intangible assets.
+Added: Discount rate assumptions are based on an assessment of the risk inherent in the projected future cash flows generated by the respective intangible assets.
Also subject to judgment are assumptions about royalty rates.
14 unchanged sentences
We recognize changes in the fair value of pension plan assets and net actuarial gains or losses in excess of 10% of the greater of the market-related value of plan assets or the plan's projected benefit obligation (the "corridor") in current period expense annually as of our measurement date, which is our fiscal year-end, or when measurement is required otherwise under U.S.
+Added: generally accepted accounting principles ("GAAP").
Revenue Recognition — Our revenues primarily consist of the sale of food products that are sold to retailers and foodservice customers through direct sales forces, broker, and distributor arrangements.
5 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
−Removed: Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in-store displays and events, feature price discounts, consumer coupons, and loyalty programs.
−Removed: The costs of these activities are recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure.
−Removed: The recognition of these costs therefore requires management judgment regarding the volume of
+Added: We assess the goods
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: promotional offers that will be redeemed by either the retail trade or consumer.
+Added: 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.
+Added: 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.
+Added: Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in-store displays and events, feature price discounts, consumer coupons, and loyalty programs.
+Added: The costs of these activities are recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure.
+Added: The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade or consumer.
These estimates are made using various techniques including historical data on performance of similar promotional programs.
3 unchanged sentences
Research and Development — We incurred expenses of $ 51.3 million, $ 56.4 million, and $ 56.1 million for research and development activities in fiscal 2021, 2020, and 2019, respectively.
−Removed: Comprehensive Income — Comprehensive income includes net income, currency translation adjustments, certain derivative-related activity, changes in the value of available-for-sale investments (prior to the adoption of Accounting Standards Update ("ASU") 2016-01), and changes in prior service cost and net actuarial gains (losses) from pension (for amounts not in excess of the 10% "corridor") and postretirement health care plans.
+Added: Comprehensive Income — Comprehensive income includes net income, currency translation adjustments, certain derivative-related activity, changes in the value of available-for-sale investments (prior to the adoption of ASU 2016-01), and changes in prior service cost and net actuarial gains (losses) from pension (for amounts not in excess of the 10% "corridor") and postretirement health care plans.
On foreign investments we deem to be essentially permanent in nature, we do not provide for taxes on currency translation adjustments arising from converting an investment denominated in a foreign currency to U.S.
When we determine that a foreign investment, as well as undistributed earnings, are no longer permanent in nature, estimated taxes will be provided for the related deferred tax liability (asset), if any, resulting from currency translation adjustments.
−Removed: The following table details the accumulated balances for each component of other comprehensive income, net of tax:
+Added: 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
Derivative adjustments, net of reclassification adjustments
−Removed: Unrealized gains on available-for-sale securities
Pension and postretirement benefit obligations, net of reclassification adjustments
−Removed: Accumulated other comprehensive loss 1
−Removed: 1 Net of unrealized gains on available-for-sale securities reclassified to retained earnings as a result of the adoption of ASU 2016-01 in fiscal 2019 and net of stranded tax effects from change in tax rate as a result of the early adoption of ASU 2018-02 in fiscal 2018 in the amount of $ 0.6 million and $ 17.4 million, respectively.
+Added: Accumulated other comprehensive income (loss) 1
+Added: 1 Net of unrealized gains on available-for-sale securities reclassified to retained earnings as a result of the adoption of ASU 2016-01 in fiscal 2019 in the amount of $ 0.6 million.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: The following table summarizes the reclassifications from accumulated other comprehensive loss into income:
+Added: The following table summarizes the reclassifications from accumulated other comprehensive income (loss) into income:
Affected Line Item in the Consolidated Statement of Earnings 1
2 unchanged sentences
Interest expense, net
+Added: Cash flow hedges
+Added: Selling, general and administrative expenses
+Added: Cash flow hedges
+Added: Equity method investment earnings
Total before tax
1 unchanged sentence
Amortization of pension and postretirement benefit obligations:
−Removed: Net prior service cost (benefit)
+Added: Net prior service cost
Pension and postretirement non-service income
13 unchanged sentences
1 Amounts in parentheses indicate income recognized in the Consolidated Statements of Earnings.
−Removed: Foreign Currency Transaction Gains and Losses — We recognized net foreign currency transaction losses from continuing operations of $ 1.7 million, $ 2.3 million, and $ 1.4 million in fiscal 2020, 2019, and 2018, respectively, in SG&A expenses.
+Added: Foreign Currency Transaction Gains and Losses — We recognized net foreign currency transaction gains of $ 8.2 million in fiscal 2021 and net foreign currency transaction losses of $ 1.7 million and $ 2.3 million in fiscal 2020 and 2019, respectively, in SG&A expenses.
Business Combinations — We use the acquisition method in accounting for acquired businesses.
7 unchanged sentences
Actual results could differ from these estimates.
−Removed: Accounting Changes — In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases , Topic 842 , which requires lessees to reflect most leases on their balance sheet as assets and obligations.
−Removed: We adopted this ASU in the first quarter of fiscal 2020 using the optional transition method provided under ASU 2018-11, Leases, Topic 842:
−Removed: Targeted Improvement, issued in July 2018, allowing for application of the standard at adoption date, with recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.
−Removed: We also elected certain
+Added: Accounting Changes — In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments—Credit Losses ( Topic 326 ):
+Added: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), to update the methodology used to measure current expected credit losses.
+Added: This ASU applies to financial assets measured at amortized cost, including loans, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments and guarantees.
+Added: We adopted this ASU in the first quarter of fiscal 2021 using the modified retrospective transition method through a cumulative-effect adjustment to retained earnings in the period of adoption.
+Added: The adoption of this ASU did not have a material impact to our consolidated financial statements and related disclosures.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: practical expedients permitted under the transition guidance, including not reassessing whether existing contracts contain leases and carrying forward the historical classification of leases.
+Added: In February 2016, the FASB issued ASU 2016-02, Leases, Topic 842, which requires lessees to reflect most leases on their balance sheet as assets and obligations.
+Added: We adopted this ASU in the first quarter of fiscal 2020 using the optional transition method provided under ASU 2018-11, Leases, Topic 842:
+Added: Targeted Improvement, issued in July 2018, allowing for application of the standard at adoption date, with recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.
+Added: We also elected certain practical expedients permitted under the transition guidance, including not reassessing whether existing contracts contain leases and carrying forward the historical classification of leases.
The most significant impact of adoption on our Consolidated Financial Statements was the recognition of right-of-use ("ROU") assets and lease liabilities for operating leases.
4 unchanged sentences
See Note 15 for additional information related to our lease arrangements.
−Removed: In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) :
−Removed: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).
−Removed: The effective date for the standard is for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years.
−Removed: We elected to early adopt this ASU in fiscal 2020.
−Removed: The adoption of this guidance did not have a material impact to our consolidated financial statements and related disclosures.
−Removed: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles of ASC 740 as part of an overall simplification initiative.
−Removed: The effective date for the standard is for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years.
−Removed: We elected to early adopt this ASU in fiscal 2020.
−Removed: The adoption of this guidance did not have a material impact to our consolidated financial statements and related disclosures.
−Removed: Recently Issued Accounting Standards — In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses ( Topic 326 ):
−Removed: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), to update the methodology used to measure current expected credit losses ("CECL").
−Removed: This ASU applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments.
−Removed: This ASU replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates.
−Removed: The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings in the period of adoption.
−Removed: This ASU will be effective beginning in the first quarter of our fiscal year 2021.
−Removed: We do not expect ASU 2016-13 to have a material impact to our consolidated financial statements and related disclosures.
−Removed: On October 26, 2018, we acquired Pinnacle Foods Inc.
−Removed: ("Pinnacle"), a branded packaged foods company specializing in shelf-stable and frozen foods.
+Added: On October 26, 2018, we acquired Pinnacle, a branded packaged foods company specializing in shelf-stable and frozen foods.
Pursuant to the Agreement and Plan of Merger, dated as of June 26, 2018 (the "Merger Agreement"), among the Company, Pinnacle, and Patriot Merger Sub Inc., a wholly-owned subsidiary of the Company that ceased to exist at the effective time of the merger, each outstanding share of Pinnacle common stock was converted into the right to receive $ 43.11 per share in cash and 0.6494 shares of common stock, par value $ 5.00 per share, of the Company ("Company Shares") (together, the "Merger Consideration"), with cash payable in lieu of fractional shares of Company Shares.
5 unchanged sentences
We used such proceeds for the payment of the cash portion of the Merger Consideration, the repayment of Pinnacle debt acquired, the refinancing of certain Conagra Brands debt, and the payment of related fees and expenses.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: The following table summarizes our final allocation of the total purchase consideration to the fair values of the assets acquired and liabilities assumed at the acquisition date.
−Removed: Cash and cash equivalents
−Removed: Prepaid expenses and other current assets
−Removed: Property, plant and equipment
−Removed: Brands, trademarks and other intangibles
−Removed: Current liabilities
−Removed: Senior long-term debt, excluding current installments
−Removed: Noncurrent deferred tax liabilities
−Removed: Other noncurrent liabilities
−Removed: Total assets acquired and liabilities assumed
−Removed: During fiscal 2020, we made adjustments to our initial allocations, which resulted in an increase to goodwill of $ 10.1 million primarily as the result of changes in the values of certain inventory, deferred income taxes, and other noncurrent liabilities as we refined our fair value estimates.
−Removed: These changes did not have a significant impact on our net income.
−Removed: Goodwill represents the excess of the consideration transferred over the fair values of the assets acquired and liabilities assumed and is primarily attributable to synergies and intangible assets such as assembled workforce which are not separately recognizable.
+Added: As a result of the Pinnacle acquisition, we recognized a total of $ 7.03 billion of goodwill and $ 3.52 billion of brands, trademarks and other intangibles.
Of the total goodwill, $ 236.7 million is deductible for tax purposes.
Amortizable brands, trademarks and other intangibles totaled $ 668.7 million and have a weighted average estimated useful life of 25 years.
−Removed: The following unaudited pro forma financial information presents the combined results of operations as if the acquisition of Pinnacle had occurred on May 29, 2017, the beginning of fiscal year 2018.
+Added: Goodwill represents the excess of the consideration transferred over the fair values of the assets acquired and liabilities assumed and is primarily attributable to synergies and intangible assets such as assembled workforce which are not separately recognizable.
+Added: The following unaudited pro forma financial information presents the combined results of operations as if the acquisition of Pinnacle had occurred at the beginning of the year acquired, fiscal 2019.
These unaudited pro forma results may not necessarily reflect the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.
3 unchanged sentences
The pro forma results also include the following material nonrecurring adjustments, along with the related income tax effect of the adjustments:
−Removed: Acquisition related costs incurred by the Company of $ 62.7 million during fiscal 2019 were excluded and assumed to have been incurred at the beginning of fiscal 2018.
−Removed: Acquisition related costs incurred by Pinnacle of $ 66.8 million during fiscal 2019 were excluded from the pro forma results.
−Removed: Non-recurring expense of $ 53.0 million for fiscal 2019 related to the fair value adjustment to acquisition-date inventory estimated to have been sold was removed and $ 54.1 million of expense was included in the results for fiscal 2018.
−Removed: Non-recurring expense of $ 45.7 million for fiscal 2019 related to securing bridge financing for the acquisition were excluded and assumed to have been incurred at the beginning of fiscal 2018.
−Removed: In February 2018, we acquired the Sandwich Bros.
−Removed: of Wisconsin ® business, maker of frozen breakfast and entree flatbread pocket sandwiches, for a cash purchase price of $ 87.3 million, net of cash acquired, including working capital adjustments.
−Removed: Approximately $ 57.8 million has been classified as goodwill and $ 9.7 million and $ 7.1 million have been classified as non-amortizing and amortizing intangible assets, respectively.
−Removed: The amount allocated to goodwill is deductible for tax purposes.
−Removed: The business is included in the Refrigerated & Frozen segment.
+Added: Acquisition related costs incurred by the Company and Pinnacle of $ 62.7 million and $ 66.8 million, respectively, during fiscal 2019 were excluded from the pro forma results.
+Added: Non-recurring expense of $ 53.0 million for fiscal 2019 related to the fair value adjustment to acquisition-date inventory estimated to have been sold was excluded from the pro forma results.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: In October 2017, we acquired Angie's Artisan Treats, LLC, maker of Angie's ® BOOMCHICKAPOP ® ready-to-eat popcorn, for a cash purchase price of $ 249.8 million, net of cash acquired, including working capital adjustments.
−Removed: Approximately $ 156.7 million has been classified as goodwill, of which $ 95.4 million is deductible for income tax purposes.
−Removed: Approximately $ 73.8 million and $ 10.3 million of the purchase price have been allocated to non-amortizing and amortizing intangible assets, respectively.
−Removed: The business is primarily included in the Grocery & Snacks segment, and to a lesser extent within the International segment.
−Removed: For each of these acquisitions, the amounts allocated to goodwill were primarily attributable to anticipated synergies, product portfolios, and other intangibles that do not qualify for separate recognition.
+Added: Non-recurring expense of $ 45.7 million for fiscal 2019 related to securing bridge financing for the acquisition were excluded from the pro forma results.
RESTRUCTURING ACTIVITIES
Pinnacle Integration Restructuring Plan
−Removed: In December 2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the recently acquired operations of Pinnacle (the "Pinnacle Integration Restructuring Plan") for the purpose of achieving significant cost synergies between the companies.
−Removed: We expect to incur material charges for exit and disposal activities under U.S.
−Removed: Although we remain unable to make good faith estimates relating to the entire Pinnacle Integration Restructuring Plan, we are reporting on actions initiated through the end of fiscal 2020, 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.
−Removed: We have approved the incurrence of up to $ 360.0 million ($ 255.0 million of cash charges and $ 105.0 million of non-cash charges) in relation to operational expenditures under the Pinnacle Integration Restructuring Plan.
−Removed: We have incurred or expect to incur approximately $ 360.2 million of charges ($ 277.2 million of cash charges and $ 83.0 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan.
−Removed: We recognized charges of $ 73.8 million and $ 168.2 million in connection with the Pinnacle Integration Restructuring Plan in fiscal 2020 and 2019, respectively.
−Removed: We expect to incur costs related to the Pinnacle Integration Restructuring Plan through fiscal 2022.
+Added: 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, 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.
+Added: We expect to incur approximately $ 358.0 million ($ 283.5 million of cash charges and $ 74.5 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan.
+Added: The Board and/or our senior management have authorized incurrence of these charges.
+Added: We recognized charges of $ 31.7 million, $ 73.8 million, and $ 168.2 million in connection with the Pinnacle Integration Restructuring Plan in fiscal 2021, 2020, and 2019, respectively.
+Added: We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a multi-year period.
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 end of fiscal 2021):
13 unchanged sentences
Consolidated total
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: D uring fiscal 20 20 , we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:
+Added: During fiscal 2021, we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:
Grocery & Snacks
Refrigerated & Frozen
−Removed: International
Accelerated depreciation
3 unchanged sentences
Asset impairment (net of gains on disposal)
−Removed: Accelerated depreciation
Contract/lease termination
4 unchanged sentences
Included in the above results are $ 28.5 million of charges that have resulted or will result in cash outflows and $ 3.2 million in non-cash charges.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
We recognized the following cumulative (plan inception to May 30, 2021) pre-tax expenses for the Pinnacle Integration Restructuring Plan in our Consolidated Statements of Earnings:
18 unchanged sentences
Consulting/professional fees
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
Conagra Restructuring Plan
−Removed: In fiscal 2019, management initiated a restructuring plan (the "Conagra Restructuring Plan") for costs in connection with actions taken to improve SG&A effectiveness and efficiencies and to optimize our supply chain network.
+Added: In fiscal 2019, senior 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 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.
−Removed: As of May 31, 2020, we have approved the incurrence of $ 131.1 million ($ 38.2 million of cash charges and $ 92.9 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan.
+Added: As of May 30, 2021, we had approved the incurrence of $ 172.2 million ($ 45.4 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 $ 157.3 million of charges ($ 36.9 million of cash charges and $ 120.4 million of non-cash charges) for actions identified to date under the Conagra Restructuring Plan.
−Removed: We recognized charges of $ 64.4 million and $ 2.2 million in connection with the Conagra Restructuring Plan in fiscal 2020 and 2019, respectively.
+Added: We recognized charges of $ 46.2 million, $ 64.4 million, and $ 2.2 million in connection with the Conagra Restructuring Plan in fiscal 2021, 2020, and 2019, respectively.
We expect to incur costs related to the Conagra Restructuring Plan over a multi-year period.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
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 2021):
22 unchanged sentences
Asset impairment (net of gains on disposal)
−Removed: Contract/lease termination
Other selling, general and administrative expenses
Total selling, general and administrative expenses
−Removed: Pension and postretirement non-service income
−Removed: Consolidated total
Included in the above results are $ 11.3 million of charges that have resulted or will result in cash outflows and $ 34.9 million in non-cash charges.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
We recognized the following cumulative (plan inception to May 30, 2021) pre-tax expenses for the Conagra Restructuring Plan in our Consolidated Statements of Earnings:
12 unchanged sentences
Consolidated total
−Removed: Included in the above results are $ 12.8 million of charges that have resulted or will result in cash outflows and $ 53.8 million in non-cash charges.
−Removed: Liabilities recorded for the Conagra Restructuring Plan and changes therein for fiscal 2020 were as follows:
−Removed: Severance and related costs
−Removed: Contract/lease termination
−Removed: Supply Chain and Administrative Efficiency Plan
−Removed: As of May 31, 2020, we had substantially completed our restructuring activities related to our Supply Chain and Administrative Efficiency Plan (the "SCAE Plan").
−Removed: We recognized charges of $ 1.3 million, $ 9.6 million, and $ 38.0 million in connection with the SCAE Plan related to our continuing operations in fiscal 2020, 2019, and 2018, respectively.
−Removed: We have recognized $ 471.2 million in pre-tax expenses ($ 103.3 million in cost of goods sold, $ 365.6 million in SG&A expenses, and $ 2.3 million in pension and postretirement non-service income) from the inception of the SCAE Plan through May 31, 2020, related to our continuing operations.
−Removed: Included in these results were $ 322.0 million of cash charges and $ 149.2 million of non-cash charges.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
+Added: Included in the above results are $ 24.1 million of charges that have resulted or will result in cash outflows and $ 88.7 million in non-cash charges.
+Added: Liabilities recorded for the Conagra Restructuring Plan and changes therein for fiscal 2021 were as follows:
+Added: Severance and related costs
LONG-TERM DEBT
6 unchanged sentences
7.0 % senior debt due October 2028
+Added: 1.375 % senior debt due November 2027
6.7 % senior debt due August 2027
2 unchanged sentences
4.3 % senior debt due May 2024
−Removed: LIBOR plus 1.50 % term loan due October 2023
3.2 % senior debt due January 2023
3.25 % senior debt due September 2022
−Removed: LIBOR plus 1.375 % term loan due October 2021
3.8 % senior debt due October 2021
1 unchanged sentence
LIBOR plus 0.50 % senior debt due October 2020
−Removed: LIBOR plus 0.50 % senior debt due October 2020
4.95 % senior debt due August 2020
8 unchanged sentences
Total long-term debt
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
The aggregate minimum principal maturities of the long-term debt for each of the five fiscal years following May 30, 2021, are as follows:
Pinnacle Acquisition Financing
−Removed: In the first quarter of fiscal 2019, in connection with the announcement of the acquisition of Pinnacle Foods Inc.
−Removed: (the "Pinnacle acquisition"), we secured $ 9.0 billion in fully committed bridge financing.
+Added: In the first quarter of fiscal 2019, in connection with the announcement of the acquisition of Pinnacle, we secured $ 9.0 billion in fully committed bridge financing.
Prior to the acquisition, we capitalized financing costs related to the bridge financing of $ 45.7 million to be amortized over the commitment period.
1 unchanged sentence
The bridge facility was terminated in connection with the acquisition, and we recognized $ 33.8 million of expense within SG&A expenses in fiscal 2019 for the remaining unamortized financing costs.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
During the second quarter of fiscal 2019, to finance a portion of our acquisition of Pinnacle, we issued senior unsecured notes in an aggregate principal amount of $ 7.025 billion.
−Removed: We issued the new senior unsecured notes in seven tranches:
−Removed: floating rate senior notes due October 22, 2020 in an aggregate principal amount of $ 525.0 million with interest equal to three-month LIBOR plus 0.75 %, 3.8 % senior notes due October 22, 2021 in an aggregate principal amount of $ 1.20 billion;
−Removed: 4.3 % senior notes due May 1, 2024 in an aggregate principal amount of $ 1.0 billion;
−Removed: 4.6 % senior notes due November 1, 2025 in an aggregate principal amount of $ 1.0 billion;
−Removed: 4.85 % senior notes due November 1, 2028 in an aggregate principal amount of $ 1.30 billion;
−Removed: 5.3 % senior notes due November 1, 2038 in an aggregate principal amount of $ 1.0 billion;
−Removed: and 5.4 % senior notes due November 1, 2048 in an aggregate principal amount of $ 1.0 billion.
−Removed: During the second quarter of fiscal 2019, to finance a portion of our acquisition of Pinnacle, we also borrowed $ 1.30 billion under a term loan agreement (the "Term Loan Agreement") with a syndicate of financial institutions providing for term loans to the Company in an aggregate principal amount of up to $ 1.30 billion.
+Added: During the second quarter of fiscal 2019, to finance a portion of our acquisition of Pinnacle, we also entered into a term loan agreement (the "Term Loan Agreement") with a syndicate of financial institutions providing for term loans to the Company in an aggregate principal amount of up to $ 1.30 billion.
Our borrowings under the Term Loan Agreement consisted of a $ 650.0 million tranche of three-year term loans maturing on October 26, 2021 and a $ 650.0 million tranche of five-year term loans maturing on October 26, 2023.
+Added: During fiscal 2019, we repaid $ 900.0 million under the Term Loan Agreement and we repaid the remaining $ 400.0 million outstanding under the Term Loan Agreement during fiscal 2020.
+Added: The Term Loan Agreement was terminated following these repayments.
In connection with our acquisition of Pinnacle, we prepaid in full $ 2.40 billion of obligations and liabilities of Pinnacle under or in respect of Pinnacle's credit agreement and other debt agreements.
We also redeemed $ 350.0 million in aggregate principal amount of Pinnacle's outstanding 5.875 % senior notes due January 15, 2024 and recognized a charge of $ 3.9 million in fiscal 2019 as a cost of early retirement of debt.
−Removed: During fiscal 2019, we repaid $ 900.0 million of our borrowings under the Term Loan Agreement, which repayment consisted of $ 450.0 million of the three-year tranche loans and $ 450.0 million of the five-year tranche loans.
−Removed: During fiscal 2020, we repaid the remaining $ 400.0 million outstanding principal balances of our borrowings under the Term Loan Agreement, of which repayment consisted of $ 200.0 million of the three-year tranche loans and $ 200.0 million of the five-year tranche loans.
−Removed: The Term Loan Agreement was terminated after these repayments.
−Removed: 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 first quarter of fiscal 2019, we entered into deal-contingent forward starting interest rate swap contracts (see Note 17) to hedge a portion of the interest rate risk related to our anticipated issuance of long-term debt to help finance the Pinnacle acquisition.
1 unchanged sentence
This gain was deferred in accumulated other comprehensive income and is being amortized as a reduction of interest expense over the lives of the related debt instruments.
−Removed: Our net interest expense was reduced by $ 3.5 million and $ 2.0 million in fiscal 2020 and fiscal 2019, respectively, due to the impact of these interest rate swap contracts.
−Removed: Other Long-Term Debt
−Removed: During the fourth quarter of fiscal 2020, we entered into an unsecured term loan agreement (the "Credit Agreement") with a financial institution.
−Removed: 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).
−Removed: The Credit Agreement matures on May 21, 2023 .
−Removed: As of May 31, 2020, there were no outstanding borrowings under the Credit Agreement .
−Removed: 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 .
−Removed: The Company may voluntarily prepay term loans under the Credit Agreement, in whole or in part, without penalty, subject to certain conditions.
−Removed: In fiscal 2018, we entered into a term loan agreement (the "Prior Term Loan Agreement") with a financial institution.
−Removed: The Prior Term Loan Agreement provided for term loans to the Company in an aggregate principal amount not to exceed $ 300.0 million, maturing on February 26, 2019.
−Removed: During the fourth quarter of fiscal 2018, we borrowed the full amount of the $ 300.0 million provided for under the Prior Term Loan Agreement.
−Removed: During the second quarter of fiscal 2019, we repaid in full the
+Added: Our net interest expense was reduced by $ 3.3 million, $ 3.5 million and $ 2.0 million in fiscal 2021, fiscal 2020, and fiscal 2019, respectively, due to the impact of these interest rate swap contracts.
+Added: During the fourth quarter of fiscal 2021, we repaid the remaining outstanding $ 195.9 million aggregate principal amount of our 9.75 % subordinated notes on the maturity date of March 1, 2021.
+Added: During the third quarter of fiscal 2021, we redeemed $ 400.0 million aggregate principal amount of our 3.20 % senior notes due January 25, 2023, prior to maturity, resulting in a loss of $ 24.4 million within SG&A expenses as a cost of early extinguishment of debt.
+Added: 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").
+Added: We also redeemed the entire outstanding $ 1.20 billion aggregate principal amount of our 3.80 % senior notes prior to their maturity date of October 22, 2021, resulting in a net loss of $ 44.3 million within SG&A expenses as a cost of early extinguishment of debt.
+Added: This redemption was primarily funded using the net proceeds from the issuance of the 2027 Senior Notes.
Notes to Consolidated Financial Statements – (Continued)
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(columnar dollars in millions except per share amounts)
−Removed: principal balance of all term loans outstanding under the Prior Term Loan Agreement.
−Removed: This did not result in a significant gain or loss.
−Removed: In fiscal 2018, we repaid the remaining principal balance of $ 70.0 million of our 2.1 % senior notes on the maturity date of March 15, 2018, the remaining principal balance of $ 119.6 million of our 1.9 % senior notes on the maturity date of January 25, 2018, and the remaining capital lease liability balance of $ 28.5 million in connection with the early exit of an unfavorable lease contract.
−Removed: In fiscal 2018, we issued $ 500.0 million aggregate principal amount of floating rate notes due October 9, 2020.
−Removed: The notes bear interest at a rate equal to three-month LIBOR plus 0.50 % per annum.
−Removed: Our most restrictive debt agreement (the Revolving Credit Facility (as defined in Note 5)) 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 5.25 through the first quarter of fiscal 2021 to 3.75 from the second quarter of fiscal 2023 and thereafter, with each ratio to be calculated on a rolling four-quarter basis.
−Removed: As of May 31, 2020, we were in compliance with all financial covenants under the Revolving Credit Facility.
+Added: 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.
+Added: 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.
+Added: In fiscal 2020, we 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.
+Added: In the fourth quarter of fiscal 2020, we entered into an unsecured term loan agreement (the "Credit Agreement") with a financial institution.
+Added: The Credit Agreement provided for delayed draw term loans to the Company in an aggregate principal amount not to exceed $ 600.0 million (subject to increase to a maximum aggregate principal amount of $ 750.0 million) through October 9, 2020.
+Added: We did not borrow under the Credit Agreement, and it was terminated in the second quarter of fiscal 2021 .
Net interest expense consists of:
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As of May 30, 2021, we were in compliance with all financial covenants under the Revolving Credit Facility.
−Removed: We finance our short-term liquidity needs with bank borrowings, commercial paper borrowings, and bankers' acceptances.
−Removed: There were no outstanding borrowings under our commercial paper program as of May 31, 2020 and May 26, 2019.
+Added: On July 13, 2021, subsequent to our fiscal year end, we entered into an amendment to the Revolving Credit Facility.
+Added: The amendment modifies the ratio of funded debt to EBITDA financial covenant to require a ratio of not greater than 4.50 on a rolling four-quarter basis.
+Added: We finance our short-term liquidity needs with existing cash balances, cash flows from operations, and commercial paper borrowings.
+Added: As of May 30, 2021, we had $ 705.7 million outstanding under our commercial paper program at an average weighted interest rate of 0.36 %.
+Added: There were no outstanding borrowings under our commercial paper program as of May 31, 2020.
Notes to Consolidated Financial Statements – (Continued)
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DIVESTITURES AND ASSETS HELD FOR SALE
−Removed: Lender's ® Bagel Business
−Removed: During the third quarter of fiscal 2020, we completed the sale of our Lender's ® bagel business for net proceeds of $ 33.2 million, subject to final working capital adjustments.
−Removed: The business results were previously reported primarily in our Refrigerated & Frozen segment, and to a lesser extent within our Foodservice segment.
−Removed: 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.
−Removed: The assets and liabilities classified as held for sale reflected in our Consolidated Balance Sheets related to the Lender's ® bagel business were as follows:
+Added: During the fourth quarter of fiscal 2021, we completed the sale of our Egg Beaters ® business for net proceeds of $ 50.6 million , subject to final working capital adjustments.
+Added: The business results were previously reported primarily within our Refrigerated & Frozen segment, and to a lesser extent within our International and Foodservice segments .
+Added: We recognized a gain on the sale of $ 10.4 million, included within SG&A expenses .
+Added: In connection with the sale of our Egg Beaters ® business, we also recognized a loss of $ 7.1 million within SG&A expenses related to the early exit of an unfavorable contract.
+Added: The assets and liabilities classified as held for sale reflected in our Consolidated Balance Sheets related to the Egg Beaters ® business were as follows:
Current assets
1 unchanged sentence
Current liabilities
−Removed: DSD Snacks Business
−Removed: 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 final working capital adjustments.
−Removed: The business results were previously reported in our Grocery & Snacks segment.
−Removed: 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.
−Removed: The assets and liabilities classified as held for sale reflected in our Consolidated Balance Sheets related to the DSD snacks business were as follows:
+Added: During the third quarter of fiscal 2021, we completed the sale of our Peter Pan ® peanut butter business for net proceeds of $ 101.5 million , including working capital adjustments but subject to final adjustments for certain tax benefits.
+Added: The business results were previously reported primarily within our Grocery & Snacks segment, and to a lesser extent within our International and Foodservice segments .
+Added: We recognized a gain on the sale of $ 49.8 million, included within SG&A expenses .
+Added: The assets and liabilities classified as held for sale reflected in our Consolidated Balance Sheets related to the Peter Pan ® peanut butter business were as follows:
Current assets
1 unchanged sentence
Current liabilities
−Removed: Lamb Weston Spinoff
−Removed: On November 9, 2016, we completed the spinoff of our Lamb Weston business.
−Removed: As of such date, we did not beneficially own any equity interest in Lamb Weston and no longer consolidated Lamb Weston into our financial results.
−Removed: Included within discontinued operations during fiscal 2019 and 2018 was an after-tax loss of $ 2.8 million and after-tax income of $ 14.3 million, respectively, due primarily to income tax adjustments.
−Removed: We entered into a transition services agreement in connection with the Lamb Weston Spinoff and recognized $ 2.2 million of income for the performance of services during fiscal 2018, classified within SG&A expenses.
−Removed: Private Brands Operations
−Removed: On February 1, 2016, we completed the disposition of our Private Brands operations to TreeHouse Foods, Inc.
−Removed: ("TreeHouse").
−Removed: Included within discontinued operations during fiscal 2019 and 2018 was after-tax income of $ 0.9 million and an after-tax loss of $ 0.1 million, respectively, related to the Private Brands operations.
−Removed: We entered into a transition services agreement with TreeHouse and recognized $ 2.2 million of income for the performance of services during fiscal 2018, classified within SG&A expenses.
+Added: During the second quarter of fiscal 2021, we completed the sale of our H.K.
+Added: Anderson ® business for net proceeds of $ 8.7 million , including working capital adjustments.
+Added: The business results were previously reported in our Grocery & Snacks segment, and to a lesser extent within our Foodservice segment .
+Added: We recognized a gain on the sale of $ 5.3 million, included within SG&A expenses .
+Added: The assets classified as held for sale reflected in our Consolidated Balance Sheets related to the H.K.
+Added: Anderson ® business were as follows:
+Added: Current assets
+Added: Noncurrent assets (including goodwill of $ 2.4 million)
+Added: 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.
+Added: The business results were previously reported primarily in our Refrigerated & Frozen segment, and to a lesser extent within our Foodservice segment.
+Added: 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.
+Added: 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 final working capital adjustments.
+Added: The business results were previously reported in our Grocery & Snacks segment.
+Added: 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.
Notes to Consolidated Financial Statements – (Continued)
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(columnar dollars in millions except per share amounts)
−Removed: Other Divestitures
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.
−Removed: We received net proceeds of $ 24.8 million, subject to final working capital adjustments.
+Added: We received net proceeds of $ 24.8 million, including working capital adjustments .
In connection with this divestiture, we recognized impairment charges of $ 23.0 million within SG&A expenses in the first half of fiscal 2020.
These charges have been included in restructuring activities .
−Removed: The assets held for sale reflected in our Consolidated Balance Sheets related to the exit of our private label peanut butter business were as follows:
−Removed: Current assets
−Removed: Noncurrent assets (including goodwill of $ 10.3 million at May 26, 2019)
During the fourth quarter of fiscal 2019, we completed the sale of our Italian-based frozen pasta business, Gelit, for proceeds net of cash divested of $ 80.1 million, including final working capital adjustments.
6 unchanged sentences
We recognized a gain on the sale of $ 13.2 million, included within SG&A expenses.
+Added: Lamb Weston Spinoff
+Added: On November 9, 2016, we completed the spinoff of Lamb Weston Holdings, Inc.
+Added: ("Lamb Weston").
+Added: As of such date, we did not beneficially own any equity interest in Lamb Weston and no longer consolidated Lamb Weston into our financial results.
+Added: Included within discontinued operations during fiscal 2019 was an after-tax loss of $ 2.8 million due primarily to an income tax adjustment.
+Added: Private Brands Operations
+Added: On February 1, 2016, we completed the disposition of our Private Brands operations to TreeHouse Foods, Inc.
+Added: Included within discontinued operations during fiscal 2019 was after-tax income of $ 0.9 million related to the Private Brands operations.
Other Assets Held for Sale
3 unchanged sentences
The total carrying value of our equity method investments at the end of fiscal 2021 and 2020 was $ 841.8 million and $ 798.7 million, respectively.
−Removed: These amounts are included in other assets and reflect our 44 % ownership interest in Ardent Mills and 50 % ownership interests in other joint ventures.
+Added: These amounts are included in other assets and reflect our 44 % ownership interest in Ardent Mills and a 50 % ownership interest in one other joint venture.
Due to differences in fiscal reporting periods, we recognized the equity method investment earnings on a lag of approximately one month.
24 unchanged sentences
GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS
−Removed: The change in the carrying amount of goodwill for fiscal 2020 and 2019 was as follows:
+Added: The change in the carrying amount of goodwill for fiscal 2021 and 2020, excluding amounts classified as held for sale (see Note 6), was as follows:
Grocery & Snacks
5 unchanged sentences
Balance as of May 31, 2020
−Removed: Purchase accounting adjustments
Currency translation
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(columnar dollars in millions except per share amounts)
−Removed: Other identifiable intangible assets were as follows:
+Added: Other identifiable intangible assets, excluding amounts classified as held for sale, were as follows:
Gross Carrying Amount
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Amortizing intangible assets
−Removed: During the first quarter fiscal 2020, we reorganized our reporting segments to incorporate the Pinnacle business into our legacy reporting segments to reflect how the business is now being managed.
−Removed: Accordingly, we reassigned goodwill from the legacy Pinnacle segment to the applicable reporting units of the legacy Conagra segments, consistent with the Company's new management structure.
−Removed: The allocation of goodwill to Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice was $ 2.19 billion, $ 4.58 billion, $ 58.5 million, and $ 181.6 million, respectively, inclusive of goodwill related to businesses divested in fiscal 2020.
−Removed: We tested goodwill for impairment both prior to and subsequent to the reallocation of Pinnacle goodwill and there were no impairments of goodwill.
−Removed: Such impairment tests are performed by estimating the fair value of each reporting unit and comparing that to the carrying amount of the net assets of the applicable reporting unit.
−Removed: If the estimated fair value of a reporting unit is less than its carrying value, such deficit is recognized as an impairment of goodwill.
+Added: In the first quarter of fiscal 2021, management changed its reporting of certain brands within two reporting units in our Refrigerated & Frozen segment.
+Added: The total goodwill in our Refrigerated & Frozen segment remains unchanged, but we reassigned goodwill between the two reporting units.
+Added: We evaluated goodwill for impairment both prior to and subsequent to the change, and there were no impairments.
+Added: For the Sides, Components, Enhancers reporting unit that was impacted by the management change, based upon a quantitative impairment test, the excess fair value over the carrying value was approximately 20 %, which remained relatively consistent with our prior year quantitative impairment test.
Fair value is typically estimated using a discounted cash flow analysis which requires 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.
1 unchanged sentence
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).
−Removed: With the assistance of a third-party valuation specialist, we used a discount rate for our domestic reporting units of 7 % and rates ranging from 8 % to 11 % for our International reporting units.
−Removed: We used terminal growth rates between 1 % and 2 % for all reporting units (excluding one international reporting unit with a 3 % terminal growth rate).
+Added: We used a discount rate for our Sides, Components, Enhancers reporting unit of 6.25 % and a terminal growth rate slightly in excess of 1 %.
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.
−Removed: Several of our reporting units have an estimated fair value substantially in excess of the carrying value.
−Removed: Three of our reporting units with aggregate goodwill of $ 3.49 billion have an estimated fair value that exceeds the respective carrying value as of our most recent quantitative testing date in the first quarter of fiscal 2020 as follows:
−Removed: Carrying Value of Goodwill
−Removed: Excess Fair Value as of Fiscal 2020 Test Date
−Removed: Sides, Components, Enhancers (part of Refrigerated & Frozen segment)
−Removed: Canada (part of International segment)
In the fourth quarter of fiscal 2021, 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 considered, among other things, an increase in our market capitalization from our previous testing date, the current interest rate environment, and recent events which have had a positive impact on our financial results for most of our reporting units.
−Removed: While retail sales have increased due to higher than anticipated consumer demand for our products, our Foodservice segment has experienced a negative impact from shelter in place mandates limiting access to away-from-home establishments.
−Removed: Due to the temporary nature of the shelter in place orders, we determined that there was no impairment triggering event as it was not more likely than not that the fair value of this reporting unit is less than its carrying amount.
−Removed: Given the evolving nature and uncertainty of the COVID-19 pandemic, we will continue to evaluate the impact on our reporting units as changes to these assumptions could result in future impairments.
+Added: However, we will continue to evaluate the impact of any significant changes in consumer purchasing behaviors, government restrictions, input cost inflation, or other macroeconomic conditions which could change certain assumptions that result in future impairments.
+Added: While retail sales have increased due to higher than anticipated consumer demand for our products throughout the COVID-19 pandemic, our Foodservice segment has experienced a negative impact with decreased away-from-home eating occasions.
+Added: We continue to believe this is a temporary decline as seen with improving trends in our Foodservice segment in the fourth quarter of fiscal 2021.
+Added: As such, we have determined that there was no impairment triggering event as it was not more likely than not that the fair value of this reporting unit is less than its carrying amount.
Amortizing intangible assets, carrying a remaining weighted-average life of approximately 19 years, are principally composed of customer relationships and acquired intellectual property.
1 unchanged sentence
Based on amortizing assets recognized in our Consolidated Balance Sheet as of May 30, 2021, amortization expense for the next five years is estimated to be as follows:
+Added: For our non-amortizing intangible assets, which are comprised of brands and trademarks, we use a "relief from royalty" methodology in estimating fair value.
+Added: During fiscal 2021, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges in SG&A expenses of $ 90.9 million, primarily within our Grocery & Snacks and Refrigerated
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: For our non-amortizing intangible assets, which are comprised of brands and trademarks, we use a "relief from royalty" methodology in estimating fair value.
+Added: & Frozen segments.
+Added: Udi’s ® was the most notable brand with impairment in fiscal 2021 largely due to lower than expected sales and profit margins which resulted in a reduction to our assumed royalty rate.
During the first quarter of fiscal 2020, we recorded impairment charges totaling $ 19.3 million within our Refrigerated & Frozen segment and Grocery & Snacks segment for certain brands for which management changed its business strategy and that continued to have lower than expected sales and profit margins.
1 unchanged sentence
During fiscal 2020, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges in SG&A expenses of $ 146.2 million, primarily within our Grocery & Snacks and Refrigerated & Frozen segments, largely associated with brands that were recorded at fair value in recent acquisitions.
−Removed: The more notable brands with impairments include Frontera ® , Gardein ® , Glutino ® , Hungry Man ® , and Udi’s ® .
+Added: The more notable brands with impairments included Frontera ® , Gardein ® , Glutino ® , Hungry Man ® , and Udi’s ® .
While most of our recently acquired brands continue to remain on track with previous assumptions, these brands have had lower than expected sales or profit margins which have led to some revisions in our original assumptions (most notably declines in our assumed royalty rates).
−Removed: During fiscal 2020, in conjunction with the divestiture of our Direct Store Delivery ("DSD") snacks business, our Lender’s ® bagel business, and the exit of our private label peanut butter business, we reclassified $ 64.2 million and $ 122.1 million of goodwill and other identifiable intangible assets, respectively, to noncurrent assets held for sale for periods prior to the divestiture.
−Removed: During fiscal 2019, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges of $ 76.5 million for our Chef Boyardee ® and Red Fork ® brands in our Grocery & Snacks segment.
+Added: During fiscal 2019, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges in SG&A expenses of $ 76.5 million for our Chef Boyardee ® and Red Fork ® brands in our Grocery & Snacks segment.
We also recognized impairment charges of $ 13.1 million for our Aylmer ® and Sundrop ® brands in our International segment.
−Removed: During fiscal 2018, as a result of our annual impairment test for indefinite lived intangibles, we recognized impairment charges of $ 4.0 million for our HK Anderson ® , Red Fork ® , and Salpica ® brands in our Grocery & Snacks segment.
−Removed: We also recognized an impairment charge of $ 0.8 million for our Aylmer ® brand in our International segment.
EARNINGS PER SHARE
1 unchanged sentence
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.
−Removed: During the second quarter of fiscal 2019, we issued 77.5 million shares of our common stock out of treasury to the former shareholders of Pinnacle pursuant to the terms of the Merger Agreement.
+Added: During the second quarter of fiscal 2019, we issued 77.5 million shares of our common stock out of treasury to the former stockholders of Pinnacle pursuant to the terms of the Merger Agreement.
In addition, we issued 16.3 million shares of our common stock, par value $ 5.00 per share, in an underwritten public offering in connection with the financing of the Pinnacle acquisition, with net proceeds of $ 555.7 million (see Note 2).
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (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:
3 unchanged sentences
common stockholders
−Removed: Income (loss) from discontinued operations, net of tax, attributable to Conagra Brands, Inc.
+Added: Loss from discontinued operations, net of tax, attributable to Conagra Brands, Inc.
common stockholders
6 unchanged sentences
For fiscal 2021, 2020, and 2019, there were 0.4 million, 1.9 million, and 2.0 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
The major classes of inventories were as follows:
7 unchanged sentences
Noncurrent income tax liabilities
−Removed: Noncurrent lease liabilities
+Added: Noncurrent lease liabilities (see Note 15)
Self-insurance liabilities
+Added: Asset retirement obligations
Environmental liabilities (see Note 16)
6 unchanged sentences
250,000 shares of Class C Preferred Stock, par value $ 100.00 per share;
−Removed: 1,100,000 shares of Class D Preferred
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: Stock, no par value per share;
+Added: 1,100,000 shares of Class D Preferred Stock, no par value per share;
and 16,550,000 shares of Class E Preferred Stock, no par value per share.
1 unchanged sentence
We have repurchased our shares of common stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our Board.
−Removed: In May 2018, our Board approved an increase to our share repurchase authorization of $ 1.0 billion.
−Removed: We repurchased 27.4 million shares of our common stock for approximately $ 967.3 million in fiscal 2018 under this program.
+Added: During fiscal 2021, we repurchased 8.8 million shares of our common stock for $ 298.1 million.
SHARE-BASED PAYMENTS
6 unchanged sentences
At May 30, 2021, approximately 39.5 million shares were reserved for granting new share-based awards.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
Share Unit Awards
6 unchanged sentences
We recognize compensation expense for share unit awards on a straight-line basis over the requisite service period, accounting for forfeitures as they occur.
−Removed: All cash-settled restricted stock units are marked-to-market and presented within other current and noncurrent liabilities in our Consolidated Balance Sheets.
+Added: All cash-settled restricted stock units were marked-to-market and presented within other current and noncurrent liabilities in our Consolidated Balance Sheets prior to final payout in fiscal 2021.
The compensation expense for our stock-settled share unit awards totaled $ 28.1 million, $ 24.5 million, and $ 23.9 million for fiscal 2021, 2020, and 2019, respectively.
6 unchanged sentences
Included in the fiscal 2020 and 2019 expense for cash-settled share unit awards above is expense of $ 0.2 million and income of $ 6.7 million, respectively, related to the mark-to-market of this liability.
−Removed: As of May 31, 2020, our liability for the replacement awards was $ 3.4 million, which includes post-combination service expense, the mark-to-market of the liability, and the impact of payouts since completing the Pinnacle acquisition.
−Removed: Post-combination expense of approximately $ 0.8 million, based on the market price of shares of Conagra Brands common stock as of May 31, 2020, is expected to be recognized related to the replacement awards over the remaining post-combination service period of approximately one year .
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
+Added: As of May 30, 2021, there were no remaining cash-settled share unit awards.
The following table summarizes the nonvested share units as of May 30, 2021 and changes during the fiscal year then ended:
9 unchanged sentences
The total intrinsic value of cash-settled share units vested was $ 4.3 million, $ 24.3 million, and $ 50.5 million during fiscal 2021, 2020, and 2019, respectively.
−Removed: At May 31, 2020, we had $ 27.9 million and $ 0.8 million of total unrecognized compensation expense that will be recognized over a weighted average period of 1.8 years and 0.9 years, related to stock-settled share unit awards and cash-settled share unit awards, respectively.
+Added: At May 30, 2021, we had $ 28.2 million of total unrecognized compensation expense that will be recognized over a weighted average period of 1.7 years related to stock-settled share unit awards.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
Performance Share Awards
In accordance with stockholder-approved equity incentive plans, we grant performance shares to selected executives and other key employees with vesting contingent upon meeting various Company-wide performance goals.
−Removed: The performance goals for the three-year performance periods ending in fiscal 2020 (the "2020 performance period"), fiscal 2021 ("2021 performance period"), and fiscal 2022 ("2022 performance period") are based on our diluted earnings per share ("EPS") compound annual growth rate, subject to certain adjustments, measured over the defined performance periods.
−Removed: In addition, for certain participants, all performance shares for the 2020 performance period are subject to an overarching EPS goal that must be met in each fiscal year of the 2020 performance period before any payout on the performance shares can be made to such participants.
+Added: The performance goals for the three-year performance periods ending in fiscal 2021 (the "2021 performance period") and fiscal 2022 ("2022 performance period") are based on our diluted earnings per share ("EPS") compound annual growth rate ("CAGR"), subject to certain adjustments, measured over the defined performance periods.
+Added: The performance goal for one-third of the target number of performance shares for the three-year performance period ending in fiscal 2023 (the "2023 performance period") is based on our fiscal 2021 diluted EPS CAGR, subject to certain adjustments.
+Added: The performance goal for the final two-thirds of the target number of performance shares granted for the 2023 performance period is based on our diluted EPS CAGR, subject to certain adjustments, measured over the two-year period ending in fiscal 2023.
For each of the 2021 performance period, 2022 performance period, and 2023 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.
1 unchanged sentence
Awards, if earned, will be paid in shares of our common stock.
−Removed: 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 only if the participant continues to be employed with the Company through the date of distribution.
+Added: 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.
Forfeitures are accounted for as they occur.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
A summary of the activity for performance share awards as of May 30, 2021 and changes during the fiscal year then ended is presented below:
13 unchanged sentences
The PBRSU awards are awards of share units with vesting contingent on our achievement of certain absolute total shareholder return performance ("TSR") goals over a performance period beginning on the grant date and ending May 27, 2022 (the "PBRSU performance period").
−Removed: If PBRSUs are earned based on absolute TSR and absolute TSR meets or exceeds a predetermined rate, they become eligible for an upward adjustment of 25 % based on our relative TSR for the PBRSU performance period versus the median TSR of the S&P 500 Index ("RTSR").
+Added: If PBRSUs are earned based on absolute TSR and absolute TSR meets or exceeds a
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
+Added: predetermined rate, they become eligible for an upward adjustment of 25 % based on our relative TSR for the PBRSU performance period versus the median TSR of the S&P 500 Index ("RTSR").
Each PBRSU award payout can range from 0 % to 500 % of the initial target grant and will not exceed 8.6 times the grant value of each grantee's PBRSU award (including earned dividend equivalents).
3 unchanged sentences
We recognize compensation expense using the straight-line method over the requisite service period, accounting for forfeitures as they occur.
−Removed: The compensation expense for our PBRSU awards totaled $ 2.7 million and $ 0.3 million for fiscal 2020 and fiscal 2019, respectively.
−Removed: The tax benefit related to the compensation expense for fiscal 2020 and fiscal 2019 was $ 0.2 million and $ 0.1 million, respectively.
−Removed: Based on estimates at May 31, 2020, we had $ 4.7 million of total unrecognized compensation expense related to the PBRSU awards that will be recognized over a period of 2 years.
+Added: The compensation expense for our PBRSU awards totaled $ 2.4 million, $ 2.7 million, and $ 0.3 million for fiscal 2021, 2020, and 2019 respectively.
+Added: The tax benefit related to the compensation expense for fiscal 2021, 2020, and 2019 was $ 0.2 million, $ 0.2 million, and $ 0.1 million, respectively.
+Added: Based on estimates at May 30, 2021, we had $ 2.3 million of total unrecognized compensation expense related to the PBRSU awards that will be recognized over a period of one year .
Stock Option Awards
2 unchanged sentences
No stock options were granted in fiscal 2021, 2020, or 2019.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
A summary of the option activity as of May 30, 2021 and changes during the fiscal year then ended is presented below:
6 unchanged sentences
The closing market price of our common stock on the last trading day of fiscal 2021 was $ 38.10 per share.
−Removed: Compensation expense for stock option awards totaled $ 0.2 million, $ 2.2 million, and $ 4.2 million for fiscal 2020, 2019, and 2018, respectively.
−Removed: Included in the compensation expense for stock option awards for fiscal 2019 and 2018 was $ 0.2 million and $ 0.4 million, respectively, related to stock options granted by a subsidiary in the subsidiary's shares to the subsidiary's employees.
−Removed: The tax benefit related to the stock option expense for fiscal 2020, 2019, and 2018 was $ 0.1 million, $ 0.5 million, and $ 1.4 million, respectively.
+Added: Compensation expense for stock option awards totaled $ 0.2 million and $ 2.2 million for fiscal 2020 and 2019, respectively.
+Added: Included in the compensation expense for stock option awards for fiscal 2019 was $ 0.2 million related to stock options granted by a subsidiary in the subsidiary's shares to the subsidiary's employees.
+Added: The tax benefit related to the stock option expense for fiscal 2020 and 2019 was $ 0.1 million and $ 0.5 million, respectively.
At May 30, 2021, we had no unrecognized compensation expense related to stock options.
1 unchanged sentence
The actual tax benefit realized for the tax deductions from option exercises totaled $ 1.7 million, $ 1.4 million, and $ 2.3 million for fiscal 2021, 2020, and 2019, respectively.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
Stock Appreciation Rights Awards
5 unchanged sentences
The related tax expense for fiscal 2020 and fiscal 2019 was $ 0.1 million and $ 3.4 million, respectively
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: A summary of the stock appreciation rights activity as of May 31, 2020 and changes during the fiscal year then ended is presented below:
−Removed: Stock Appreciation Rights
−Removed: (in Millions)
−Removed: Outstanding at May 26, 2019
−Removed: Outstanding at May 31, 2020
PRE-TAX INCOME AND INCOME TAXES
11 unchanged sentences
Federal tax impact
−Removed: Remeasurement of deferred taxes due to U.S.
−Removed: tax legislation
−Removed: Transition tax on foreign earnings
−Removed: Tax credits and domestic manufacturing deduction
−Removed: Federal rate differential on legal reserve
Goodwill and intangible impairments
22 unchanged sentences
As of May 31, 2020, our gross liability for unrecognized tax benefits was $ 35.8 million, excluding a related liability of $ 7.4 million for gross interest and penalties.
−Removed: Interest and penalties recognized in the Consolidated
+Added: Interest and penalties recognized in the Consolidated Statements of Earnings was an expense of $ 1.4 million in fiscal 2021, a benefit of $ 4.3 million in fiscal 2020, and an expense of $ 1.2 million in fiscal 2019.
+Added: The net amount of unrecognized tax benefits at May 30, 2021 and May 31, 2020 that, if recognized, would favorably impact our effective tax rate was $ 28.2 million and $ 30.3 million, respectively.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: Statements of Earnings was a benefit of $ 4.3 million and expense of $ 1.2 million and $ 1.6 million in fiscal 2020 , 2019 , and 2018 , respectively .
−Removed: The net amount of unrecognized tax benefits at May 31, 2020 and May 26, 2019 that, if recognized, would favorably impact our effective tax rate was $ 30.3 million and $ 37.3 million, respectively.
We accrue interest and penalties associated with uncertain tax positions as part of income tax expense.
5 unchanged sentences
We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to $ 13.2 million over the next twelve months due to various federal, state, and foreign audit settlements and the expiration of statutes of limitations.
−Removed: Of this amount, approximately $ 6.6 million would reverse through results of discontinued operations.
The change in the unrecognized tax benefits for the year ended May 30, 2021 was:
3 unchanged sentences
Increases from positions established during the current period
−Removed: Decreases relating to settlements with taxing authorities
−Removed: Reductions resulting from lapse of applicable statute of
+Added: Reductions resulting from lapse of applicable statute of limitation
Other adjustments to liability
1 unchanged sentence
We have approximately $ 13.3 million of foreign net operating loss carryforwards ($ 9.8 million will expire between fiscal 2022 and 2042 and $ 3.5 million have no expiration dates) and $ 106.8 million of federal net operating loss carryforwards which expire between fiscal 2022 and 2027.
−Removed: Federal capital loss carryforwards related to the Private Brands divestiture of approximately $ 2.6 billion will expire in fiscal 2021.
−Removed: Included in net deferred tax liabilities are $ 42.1 million of tax effected state net operating loss carryforwards which expire in various years ranging from fiscal 2021 to 2039 and $ 165.0 million of tax effected state capital loss carryforwards related to the divestiture of Private Brands, the vast majority of which expire in fiscal 2021.
+Added: Included in net deferred tax liabilities are $ 30.7 million of tax effected state net operating loss carryforwards which expire in various years ranging from fiscal 2022 to 2040 and $ 3.8 million of tax effected state capital loss balances that expire in fiscal year 2031.
Foreign tax credits of $ 14.3 million will expire between fiscal 2025 and 2031.
State tax credits of approximately $ 5.2 million will expire in various years ranging from fiscal 2023 to 2028.
+Added: Federal capital loss carryforwards related to the Private Brands divestiture of approximately $ 1.9 billion expired at the end of fiscal 2021.
+Added: Accordingly, we have removed the deferred tax asset and the related valuation allowance from our balance sheet.
+Added: Tax effected state capital loss carryforwards related to the Private Brands divestiture of approximately $ 91.9 million also expired at the end of fiscal 2021 and were removed from the balance sheet, including the related valuation allowance.
+Added: In fiscal 2021, we completed a restructuring of our ownership interest in Ardent Mills that utilized a portion of our capital loss carryforward prior to its expiration.
+Added: Also in fiscal 2021, we completed several other transactions related to retained assets in conjunction with the divestiture of the Peter Pan ® peanut butter and Egg Beaters ® businesses that we believe will utilize a portion of the remaining capital loss carryforward.
+Added: These transactions are subject to certain elections and are currently under review by the Internal Revenue Service.
+Added: We believe they may result in increases to the tax basis in those assets and if successful would result in tax benefits being realized in future periods.
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 2021 was a decrease of $ 653.9 million.
−Removed: For fiscal 2019 and 2018, changes in the valuation allowance were a decrease of $ 1.5 million and a decrease of $ 273.8 million, respectively.
−Removed: The current year change principally relates to decreases in the valuation allowances for state net operating losses, charitable contributions and credits.
−Removed: We believe that our foreign subsidiaries have invested or will invest any undistributed earnings indefinitely, or the earnings will be remitted in a tax-neutral transaction, and, therefore, do not provide deferred taxes on the cumulative undistributed earnings of our foreign subsidiaries.
+Added: For fiscal 2020 and 2019, changes in the valuation allowance were a decrease of $ 9.8 million and $ 1.5 million, respectively.
+Added: The current year change principally relates to decreases in the valuation allowances on the capital loss carryforward generated from the sale of our Private Brands operations.
+Added: Valuation allowances were released on capital losses that were utilized against capital gains generated on the divestures of the Peter Pan ® peanut butter and Egg Beaters ® businesses and the restructuring of our ownership interest in Ardent Mills.
+Added: Valuation allowances were also removed on the Federal and state capital losses that expired at the end of fiscal 2021.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
+Added: We believe that our foreign subsidiaries have invested or will invest any undistributed earnings indefinitely, or the earnings will be remitted in a tax-neutral transaction, and, therefore, do not provide deferred taxes on the cumulative undistributed earnings of our foreign subsidiaries.
We have operating and finance leases of certain warehouses, plants, land, office space, production and distribution equipment, automobiles, and office equipment.
3 unchanged sentences
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.
−Removed: We have elected not to separate lease and non-lease components of an agreement for all underlying asset classes prospectively from the ASC 842 adoption date.
+Added: 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.
Any lease arrangements with an initial term of twelve months or less are not recorded on our Consolidated Balance Sheet.
4 unchanged sentences
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
−Removed: Leases reported in our Consolidated Balance Sheet as of May 31, 2020 were as follows:
+Added: Leases reported in our Consolidated Balance Sheet were as follows:
Operating Leases
17 unchanged sentences
Senior long-term debt, excluding current installments
−Removed: The components of total lease cost for fiscal 2020 were as follows:
+Added: The components of total lease cost were as follows:
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
Operating lease cost
6 unchanged sentences
These charges are included in the Pinnacle Integration Restructuring Plan.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: The weighted-average remaining lease terms and weighted-average discount rate for our leases as of May 31, 2020 were as follows:
+Added: Rent expense under all operating leases was $ 83.5 million in fiscal 2019.
+Added: The weighted-average remaining lease terms and weighted-average discount rate for our leases as of May 30, 2021 and May 31, 2020 were as follows:
Operating Leases
2 unchanged sentences
Weighted-average discount rate
−Removed: Cash flows arising from lease transactions for fiscal 2020 were as follows:
+Added: Cash flows arising from lease transactions were as follows:
Cash paid for amounts included in the measurement of lease liabilities:
5 unchanged sentences
Finance leases
+Added: Non-cash issuances of capital lease obligations totaling $ 23.5 million are excluded from cash flows from investing and financing activities on the Consolidated Statements of Cash Flows for fiscal 2019.
Maturities of lease liabilities by fiscal year as of May 30, 2021 were as follows:
4 unchanged sentences
Total lease liabilities
−Removed: We have entered into lease agreements for certain facilities and equipment with payments totaling $ 2.0 million that have not yet commenced as of May 31, 2020.
−Removed: A summary of non-cancelable operating lease commitments as of May 26, 2019 is as follows:
−Removed: Rent expense under all operating leases was $ 83.5 million and $ 62.5 million fiscal 2019 and 2018, respectively.
−Removed: These amounts are inclusive of certain charges recognized at the cease-use date for remaining lease payments associated with exited properties.
−Removed: Non-cash issuances of capital and financing lease obligations totaling $ 23.5 million and $ 1.3 million are excluded from cash flows from investing and financing activities on the Consolidated Statements of Cash Flows for fiscal 2019 and 2018, respectively.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
+Added: We have entered into contracts that are or contain a lease that have not yet commenced with aggregate payments totaling $ 272.2 million as of May 30, 2021.
+Added: This amount primarily relates to a warehouse facility with a future minimum lease commitment of $ 257.7 million.
+Added: We expect to take control of this leased asset in fiscal 2023.
CONTINGENCIES
25 unchanged sentences
however, any possible insurance recovery has not been considered for purposes of determining our liability.
−Removed: 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.
7 unchanged sentences
On April 4, 2019, the trial court granted preliminary approval of a settlement in this matter.
−Removed: In the second quarter of fiscal 2020, a single objecting class member appealed the court's decision approving the settlement to the United States Court of Appeals for the Ninth Circuit.
−Removed: The settlement will not be final until the appeal has been resolved.
+Added: In the second
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
+Added: quarter of fiscal 2020, a single objecting class member appealed the court's decision approving the settlement to the United States Court of Appeals for the Ninth Circuit.
+Added: On June 1, 2021, the appellate court rejected the settlement and remanded to the trial court for further proceedings.
+Added: While we cannot predict with certainty the results of this or any other legal proceeding challenging our product claims, we do not expect these matters to have a material adverse effect on our financial condition, results of operations, or business.
We are party to matters challenging the Company's wage and hour practices.
2 unchanged sentences
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.
+Added: On June 21, 2021, the trial court granted preliminary approval of a settlement in this matter.
+Added: If final approval is obtained, the settlement will require a payment by the Company of $ 9.0 million, which we have accrued within other accrued liabilities.
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.
9 unchanged sentences
District Court for the Northern District of Illinois.
−Removed: 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.
+Added: That consolidated lawsuit was dismissed with prejudice on December 23, 2020 for failure to state a claim.
+Added: On January 22, 2021, the plaintiff filed a notice of appeal of the trial court’s decision to the U.S.
+Added: Court of Appeals for the Seventh Circuit.
+Added: In addition, on May 9, 2019, a stockholder filed a derivative action on behalf of the Company against the Company's directors captioned Klein v.
Arora, et al.
1 unchanged sentence
On July 9, 2019, September 20, 2019, and March 10, 2020, the Company received three separate demands from stockholders under Delaware law to inspect the Company's books and records related to the Board of Directors' review of the Pinnacle business, acquisition, and the Company's public statements related to them.
−Removed: On July 22, 2019 and August 6, 2019, respectively, two additional shareholder derivative lawsuits captioned Opperman v.
+Added: On July 22, 2019 and August 6, 2019, respectively, two additional stockholder derivative lawsuits captioned Opperman v.
Connolly, et al.
4 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.
−Removed: We have put the Company's insurance carriers on notice of each of these securities and shareholder matters.
+Added: All remaining stockholder lawsuits and demands are currently stayed by agreement pending the final outcome of the West Palm Beach Firefighters' Pension Fund matter.
+Added: We have put the Company's insurance carriers on notice of each of these securities and stockholder matters.
While we cannot predict with certainty the results of these or any other legal proceedings, we do not expect these matters to have a material adverse effect on our financial condition, results of operations, or business.
Environmental Matters
+Added: Securities and Exchange Commission (the "SEC") regulations require us to disclose certain information about environmental proceedings if a governmental authority is a party to such proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed a stated threshold.
+Added: 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.
We are a party to certain environmental proceedings relating to our acquisition of Beatrice in fiscal 1991.
Such proceedings include proceedings related to businesses divested by Beatrice prior to our acquisition of Beatrice.
−Removed: The current environmental proceedings associated with Beatrice include litigation and administrative proceedings involving Beatrice's possible status as a potentially responsible party at approximately 40 Superfund, proposed Superfund, or state-equivalent sites (the "Beatrice sites").
−Removed: These sites involve locations previously owned or operated by predecessors of Beatrice that used or produced petroleum, pesticides, fertilizers, dyes, inks, solvents, polycholorinated biphenyls, acids, lead, sulfur, tannery wastes, and/or other contaminants.
−Removed: 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.
−Removed: The accrual for Beatrice-related environmental matters totaled $ 57.7 million as of May 31, 2020, a majority of which relates to the Superfund and state-equivalent sites referenced above.
−Removed: 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.
−Removed: Environmental Protection Agency ("EPA") issued a Record of Decision ("ROD") for the Southwest Properties portion of the site on September 29, 2017 and has entered into negotiations with potentially responsible parties to determine final responsibility for implementing the ROD.
−Removed: Additionally, in conjunction with the conclusion of the fifth Five-Year Review period for Operating Unit 1 of the Wells G&H site, which spanned from October 1, 2014 to September 30, 2019, we are negotiating with the EPA to allow us to begin testing different environmental remediation methods to improve the efficiency and effectiveness of our current cleanup efforts affecting both Operating Units 1 and 2.
−Removed: As a result, in
+Added: The current environmental
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: the second quarter of fiscal 2020, we increased our environmental reserves by $ 6.6 million associated with these expected cleanup efforts.
+Added: proceedings associated with Beatrice include litigation and administrative proceedings involving Beatrice's possible status as a potentially responsible party at approximately 40 Superfund, proposed Superfund, or state-equivalent sites (the "Beatrice sites").
+Added: These sites involve locations previously owned or operated by predecessors of Beatrice that used or produced petroleum, pesticides, fertilizers, dyes, inks, solvents, polycholorinated biphenyls, acids, lead, sulfur, tannery wastes, and/or other contaminants.
+Added: 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.
+Added: The accrual for Beatrice-related environmental matters totaled $ 55.6 million ($ 2.4 million within other accrued liabilities and $ 53.2 million within other noncurrent liabilities) as of May 30, 2021 , a majority of which relates to the Superfund and state-equivalent sites referenced above.
+Added: 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.
+Added: Environmental Protection Agency ("EPA") issued a Record of Decision ("ROD") for the Southwest Properties portion of the site on September 29, 2017 and entered into negotiations with potentially responsible parties to determine final responsibility for implementing the ROD.
+Added: On September 14, 2020, the district court entered a consent decree among EPA and the settling defendants, including the Company.
Guarantees and Other Contingencies
3 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.
−Removed: 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).
+Added: 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.
2 unchanged sentences
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.
−Removed: We lease or leased certain office buildings from entities that we have determined to be variable interest entities.
−Removed: The lease agreements with these entities include fixed-price purchase options for the assets being leased.
−Removed: The lease agreements also contain contingent put options (the "lease put options") that allow or allowed the lessors to require us to purchase the buildings at the greater of original construction cost, or fair market value, without a lease agreement in place (the "put price") in certain limited circumstances.
−Removed: As a result of substantial impairment charges related to our divested Private Brands operations, these lease put options became exercisable.
−Removed: We are amortizing the difference between the put price and the estimated fair value (without a lease agreement in place) of the property over the remaining lease term within SG&A expenses.
−Removed: During fiscal 2018, we purchased two buildings that were subject to lease put options and recognized net losses totaling $ 48.2 million for the early exit of unfavorable lease contracts.
−Removed: As of May 31, 2020, there was one remaining leased building subject to a lease put option.
−Removed: The lease is accounted for as an operating lease and $ 8.2 million, representing the value for which the put option price exceeded the estimated fair value of the property, was included in our measurement of the lease liability upon adoption of ASU 2016-02, Leases, Topic 842 , in the first quarter of fiscal 2020.
−Removed: In certain limited situations, we will guarantee an obligation of an unconsolidated entity.
−Removed: We guarantee certain leases resulting from the divestiture of the JM Swank business completed in the first quarter of fiscal 2017.
−Removed: As of May 31, 2020, the remaining terms of these arrangements did not exceed three years and the maximum amount of future payments we have guaranteed was $ 0.6 million.
−Removed: In addition, we guarantee a lease resulting from an exited facility.
−Removed: As of May 31, 2020, the remaining term of this arrangement did not exceed seven years and the maximum amount of future payments we have guaranteed was $ 16.5 million.
+Added: We also guarantee a lease resulting from an exited facility.
+Added: As of May 30, 2021, the remaining term of this arrangement did not exceed six years and the maximum amount of future payments we have guaranteed was $ 13.9 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;
1 unchanged sentence
Costs of legal services associated with the foregoing matters are recognized in earnings as services are provided.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
DERIVATIVE FINANCIAL INSTRUMENTS
1 unchanged sentence
In the normal course of business, these risks are managed through a variety of strategies, including the use of derivatives.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
Commodity and commodity index futures and option contracts are used from time to time to economically hedge commodity input prices on items such as natural gas, vegetable oils, proteins, packaging materials, dairy, grains, and electricity.
1 unchanged sentence
We may enter into longer-term economic hedges on particular commodities, if deemed appropriate.
−Removed: As of May 31, 2020, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through April 2021.
+Added: As of May 30, 2021, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through October 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.
7 unchanged sentences
This gain will be amortized as a reduction of net interest expense over the lives of the related debt instruments.
+Added: In the second quarter of fiscal 2021, $ 0.5 million was written off in connection with the early extinguishment of debt (see Note 4).
The unamortized amount at May 30, 2021 was $ 38.2 million.
11 unchanged sentences
In accordance with U.S.
−Removed: GAAP, we offset certain derivative asset and liability balances, as well as certain amounts representing rights to reclaim cash
+Added: 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.
+Added: At May 30, 2021 and May 31, 2020, $ 2.0 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 Consolidated Balance Sheets.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: collateral and obligations to return cash collateral, where master netting agreements provide for legal right of setoff.
−Removed: At May 31 , 20 20 and May 2 6 , 201 9 , $ 1.1 million , representing a right to reclaim cash collateral, and $ 0.1 million, representing an obligation to return cash collateral , 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:
25 unchanged sentences
Other accrued liabilities
−Removed: Prepaid expenses and other current assets
−Removed: Other accrued liabilities
Total derivatives not designated as
13 unchanged sentences
Cost of goods sold
−Removed: Total losses from derivative instruments not
+Added: Total gains from derivative instruments not
designated as hedging instruments
29 unchanged sentences
Cost of goods sold
−Removed: Foreign exchange contracts
−Removed: Selling, general and administrative expense
Total losses from derivative instruments not
10 unchanged sentences
PENSION AND POSTRETIREMENT BENEFITS
−Removed: We have defined benefit retirement plans ("plans") for eligible salaried and hourly employees.
+Added: We have defined benefit retirement plans ("pension plans") for eligible salaried and hourly employees.
Benefits are based on years of credited service and average compensation or stated amounts for each year of service.
−Removed: We also sponsor postretirement plans which provide certain medical and dental benefits ("other postretirement benefits") to qualifying U.S.
+Added: We also sponsor postretirement plans which provide certain medical and dental benefits to qualifying U.S.
Effective August 1, 2013, our defined benefit pension plan for eligible salaried employees was closed to new hire salaried employees.
New hire salaried employees will generally be eligible to participate in our defined contribution plan.
−Removed: In connection with the acquisition of Pinnacle, we now include the components of pension and postretirement expense associated with the Pinnacle pension plans and a post-employment benefit plan in our Consolidated Statements of Earnings from the date of the completion of the acquisition.
−Removed: These plans are frozen for future benefits.
−Removed: The tabular disclosures presented below are inclusive of the Pinnacle plans.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: During the third quarter of fiscal 2020, we amended a certain hourly pension plan that will freeze future compensation and service periods.
+Added: During the third quarter of fiscal 2020, we amended a certain hourly pension plan that froze future compensation and service periods.
As a result, we remeasured the Company's hourly pension plan liability as of January 31, 2020 and recorded a pension curtailment loss of $ 0.2 million previously within other comprehensive income (loss).
1 unchanged sentence
The remeasurement increased the underfunded status of the pension plan by $ 4.3 million with a corresponding loss within other comprehensive income (loss).
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
During the second quarter of fiscal 2020, the Company provided a voluntary lump-sum settlement offer to certain terminated vested participants in the salaried pension plan in order to reduce a portion of the pension obligation.
6 unchanged sentences
The curtailment loss and related remeasurement increased the underfunded status of the pension plan by $ 12.3 million with a corresponding loss within other comprehensive income (loss).
−Removed: During the second quarter of fiscal 2018, we approved the amendment of our salaried and non-qualified pension plans effective as of December 31, 2017.
−Removed: The amendment froze the compensation and service periods used to calculate pension benefits for active employees who participate in the plans.
−Removed: Beginning January 1, 2018, impacted employees do not accrue additional benefit for future service and eligible compensation received under these plans.
−Removed: As a result of this amendment, we remeasured our pension plan liability as of September 30, 2017.
−Removed: In connection with the remeasurement, we updated the effective discount rate assumption from 3.90 % to 3.78 %.
−Removed: The curtailment and related remeasurement resulted in a net decrease to the underfunded status of the pension plans by $ 43.5 million with a corresponding benefit within other comprehensive income (loss) for the second quarter of fiscal 2018.
−Removed: In addition, we recorded charges of $ 3.4 million and $ 0.7 million reflecting the write-off of actuarial losses in excess of 10% of our pension liability and a curtailment charge, respectively.
−Removed: We recognize the funded status of our plans and other benefits in the Consolidated Balance Sheets.
−Removed: For our 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.
−Removed: For our other benefits, 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.
+Added: We recognize the funded status of our pension and postretirement plans in the Consolidated Balance Sheets.
+Added: 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.
+Added: 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.
−Removed: Amounts are included in the components of pension benefit and other postretirement benefit costs, below, as recognized net actuarial loss.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
+Added: Amounts are included in the components of pension and postretirement plan costs, below, as recognized net actuarial loss.
The changes in benefit obligations and plan assets at May 30, 2021 and May 31, 2020 are presented in the following table.
−Removed: Pension Benefits
−Removed: Other Benefits
+Added: Pension Plans
+Added: Postretirement Plans
Change in Benefit Obligation
1 unchanged sentence
Interest cost
−Removed: Plan participants' contributions
Actuarial loss (gain)
1 unchanged sentence
Benefits paid
−Removed: Business acquisitions and divestitures
Benefit obligation at end of year
3 unchanged sentences
Employer contributions
−Removed: Plan participants' contributions
Plan settlements
Benefits paid
−Removed: Business acquisitions and divestitures
Fair value of plan assets at end of year
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
The funded status and amounts recognized in our Consolidated Balance Sheets at May 30, 2021 and May 31, 2020 were:
−Removed: Pension Benefits
−Removed: Other Benefits
+Added: Pension Plans
+Added: Postretirement Plans
Funded Status
3 unchanged sentences
Net Amount Recognized
−Removed: Amounts Recognized in Accumulated Other
−Removed: Comprehensive (Income) Loss (Pre-tax)
+Added: Amounts Recognized in Accumulated Other Comprehensive (Income) Loss (Pre-tax)
Actuarial net loss (gain)
3 unchanged sentences
Long-term rate of compensation increase
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
The accumulated benefit obligation for all defined benefit pension plans was $ 3.74 billion and $ 3.87 billion at May 30, 2021 and May 31, 2020, respectively.
3 unchanged sentences
Fair value of plan assets
−Removed: Components of pension benefit and other postretirement benefit costs included:
−Removed: Pension Benefits
−Removed: Other Benefits
+Added: Components of pension and postretirement plan costs included:
+Added: Pension Plans
+Added: Postretirement Plans
Interest cost
2 unchanged sentences
Recognized net actuarial loss (gain)
−Removed: Settlement loss (gain)
+Added: Settlement gain
Curtailment loss (gain)
−Removed: Benefit cost — Company plans
−Removed: Pension benefit cost — multi-employer plans
−Removed: Total benefit (income) cost
+Added: Pension and postretirement cost (benefit) — Company plans
+Added: Pension cost (benefit) — multi-employer plans
+Added: Total pension and postretirement cost (benefit)
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
In fiscal 2021, 2020, and 2019, the Company recorded charges of $ 0.8 million, $ 44.8 million, and $ 5.1 million, respectively, reflecting the year-end write-off of actuarial losses in excess of 10 % of our pension liability.
−Removed: In fiscal 2020, the higher actuarial losses outside of the 10% corridor is principally related to a reduction in the discount rate used to recognize at present value our pension obligations and a decline in market value of certain plan assets associated with our non-qualified and hourly plans.
−Removed: The Company recorded an expense of $ 0.3 million and $ 0.6 million (primarily within restructuring activities) during fiscal 2019 and 2018, respectively, related to our expected incurrence of certain multi-employer plan withdrawal costs.
+Added: In fiscal 2020, the higher actuarial losses outside of the 10% corridor were principally related to a reduction in the discount rate used to recognize at present value our pension obligations and a decline in market value of certain plan assets associated with our non-qualified and hourly plans.
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were:
−Removed: Pension Benefits
−Removed: Other Benefits
+Added: Pension Plans
+Added: Postretirement Plans
Net actuarial gain (loss)
Amortization of prior service cost (benefit)
−Removed: Settlement and curtailment gain
+Added: Settlement and curtailment loss (gain)
Recognized net actuarial loss (gain)
Net amount recognized
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
Weighted-Average Actuarial Assumptions Used to Determine Net Expense
−Removed: Pension Benefits
−Removed: Other Benefits
+Added: Pension Plans
+Added: Postretirement Plans
Discount rate
4 unchanged sentences
The spot-rate approach applies separate discount rates for each projected benefit payment in the calculation of pension service and interest cost.
−Removed: We amortize prior service cost for our pension plans and postretirement plans, as well as amortizable gains and losses for our postretirement plans, in equal annual amounts over the average expected future period of vested service.
+Added: We amortize prior service cost for our pension and postretirement plans, as well as amortizable gains and losses for our postretirement plans, in equal annual amounts over the average expected future period of vested service.
For plans with no active participants, average life expectancy is used instead of average expected useful service.
41 unchanged sentences
For certain of these investments, with a fair value of approximately $ 52.2 million as of May 30, 2021, the asset managers have the ability to impose customary redemption gates which may further restrict or limit the redemption of invested funds therein.
−Removed: As of May 31, 2020, funds with a fair value of $ 0.1 million have imposed such gates.
+Added: As of May 30, 2021, no such gates were imposed.
As of May 30, 2021, we have unfunded commitments for additional investments of $ 32.6 million in private equity funds and $ 10.9 million in natural resources funds.
1 unchanged sentence
To develop the expected long-term rate of return on plan assets assumption for the pension plans, we consider the current asset allocation strategy, the historical investment performance, and the expectations for future returns of each asset class.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
Our pension plan weighted-average asset allocations by asset category were as follows:
3 unchanged sentences
Private equity
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
−Removed: Due to the salaried pension plan freeze, the Company's pension asset strategy is now designed to align our pension plan assets with our projected benefit obligation to reduce volatility by targeting an investment strategy of approximately 90 % in fixed-income securities and approximately 10 % in return seeking assets, primarily equity securities, real estate, and private assets.
+Added: Due to the salaried pension plan freeze that occurred in fiscal 2018, the Company's pension asset strategy is now designed to align our pension plan assets with our projected benefit obligation to reduce volatility by targeting an investment strategy of approximately 90 % in fixed-income securities and approximately 10 % in return seeking assets, primarily equity securities, real estate, and private assets.
Assumed health care cost trend rates have a significant effect on the benefit obligation of the postretirement plans.
7 unchanged sentences
The following table presents estimated future gross benefit payments for our plans:
+Added: Postretirement
Succeeding 5 years
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
Multiemployer Pension Plans
11 unchanged sentences
A plan in the "red" zone has been determined to be in "critical status", based on criteria established under the Internal Revenue Code ("Code"), and is generally less than 65 % funded.
−Removed: A plan in the "yellow" zone has been determined to be in "endangered status", based on criteria established under the Code, and is generally less than 80 %
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
+Added: A plan in the "yellow" zone has been determined to be in "endangered status", based on criteria established under the Code, and is generally less than 80 % funded.
A plan in the "green" zone has been determined to be neither in "critical status" nor in "endangered status", and is generally at least 80 % funded.
3 unchanged sentences
The last column lists the expiration dates of the collective bargaining agreements pursuant to which the Company contributes to the plans.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
For plans that are not individually significant to Conagra Brands the total amount of contributions is presented in the aggregate.
15 unchanged sentences
During fiscal 2019, we ceased to participate in the Bakery and Confectionary Union and Industry International Fund in conjunction with our sale of the Trenton, Missouri plant.
−Removed: In addition to the contributions listed in the table above, we recorded an additional expense of $ 0.3 million and $ 0.6 million in fiscal 2019 and 2018, respectively, related to our expected incurrence of certain withdrawal costs.
+Added: In addition to the contributions listed in the table above, we recorded an additional expense of $ 0.3 million in fiscal 2019 related to our expected incurrence of certain withdrawal costs.
Certain of our employees are covered under defined contribution plans.
4 unchanged sentences
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities,
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
Level 2 — Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets, and
Level 3 — Unobservable inputs reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability.
−Removed: The fair values of our Level 2 derivative instruments were determined using valuation models that use market observable inputs including interest rate curves and both forward and spot prices for currencies and commodities.
+Added: The fair values of our Level 2 derivative instruments were determined using valuation models that use market observable inputs including both forward and spot prices for currencies and commodities.
Derivative assets and liabilities included in Level 2 primarily represent commodity and foreign currency option and forward contracts and cross-currency swaps.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
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 May 30, 2021:
13 unchanged sentences
Certain assets and liabilities, including long-lived assets, goodwill, asset retirement obligations, and equity investments are measured at fair value on a nonrecurring basis using Level 3 inputs.
+Added: During fiscal 2021, we updated our cost estimates associated with certain asset retirement obligations at several manufacturing facilities largely due to recent experience of physically closing a wastewater lagoon.
+Added: This change in estimate resulted in a non-cash increase to our long-lived assets in the amount of $ 27.4 million and will result in additional depreciation in future periods generally ranging from 15 - 25 years .
+Added: The fair value of our asset retirement obligations was measured using cost estimates to settle our future obligations (including an estimate of inflation) and discounted to present value using a credit-adjusted risk-free rate.
We recognized charges for the impairment of certain indefinite-lived brands.
1 unchanged sentence
Impairments in our Grocery & Snacks segment totaled $ 13.0 million, $ 46.4 million, and $ 76.5 million for fiscal 2021, 2020, and 2019, respectively.
−Removed: Impairments in our Refrigerated & Frozen segment totaled $ 110.8 million for fiscal 2020.
+Added: Impairments in our Refrigerated & Frozen segment totaled $ 76.9 million and $ 110.8 million for fiscal 2021 and 2020, respectively.
Impairments in our International segment totaled $ 1.0 million, $ 8.3 million, and $ 13.1 million for fiscal 2021, 2020, and 2019, respectively.
−Removed: During fiscal 2020, we recognized impairment charges totaling $ 54.4 million in the Grocery & Snacks segment and $ 27.6 million in the Refrigerated & Frozen segment.
+Added: During fiscal 2020, we recognized impairment charges totaling $ 54.4 million in our Grocery & Snacks segment and $ 27.6 million in our Refrigerated & Frozen segment.
The impairments were measured based upon the estimated sales price of the disposal group (see Note 6).
+Added: We recognized charges for the impairment of certain long-lived assets measured based upon the estimated sales price of the assets.
+Added: Impairments totaled $ 3.0 million in our Grocery & Snacks segment in fiscal 2021, $ 3.8 million in our Refrigerated & Frozen segment in fiscal 2020, and $ 2.7 million within general corporate expenses in fiscal 2019.
Notes to Consolidated Financial Statements – (Continued)
1 unchanged sentence
(columnar dollars in millions except per share amounts)
−Removed: We recognized charges totaling $ 3.8 million in the Refrigerated & Frozen segment in fiscal 2020, and charges totaling $ 2.7 million and $ 4.7 million within general corporate expenses in fiscal 2019 and 2018, respectively, for the impairment of certain long-lived assets.
−Removed: The impairments were measured based upon the estimated sales price of the assets.
During fiscal 2020, we recognized charges of $ 2.9 million in general corporate expenses related to the impairments of ROU assets.
3 unchanged sentences
BUSINESS SEGMENTS AND RELATED INFORMATION
−Removed: In the fiscal 2020, we reorganized our reporting segments to incorporate the Pinnacle business into our legacy reporting segments in order to better reflect how the business is now being managed.
−Removed: We now reflect our results of operations in four reporting segments:
+Added: We reflect our results of operations in four reporting segments:
Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice.
4 unchanged sentences
We do not aggregate operating segments when determining our reporting segments.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (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.
−Removed: General corporate expense, net interest expense, and income taxes have been excluded from segment operations.
+Added: 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
13 unchanged sentences
Income from continuing operations
−Removed: Net income attributable to noncontrolling interests of continuing operations
+Added: Net income attributable to noncontrolling interests
Income from continuing operations attributable to Conagra Brands, Inc.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
The following table presents further disaggregation of our net sales:
2 unchanged sentences
Total net sales
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
+Added: To be consistent with how we present certain disaggregated net sales information to investors, we have categorized certain net sales of our segments as "Staples", which includes all of our U.S.
+Added: domestic retail refrigerated products and other shelf-stable grocery products.
+Added: Management continues to regularly review financial results and make decisions about allocating resources based upon the four reporting segments outlined above.
Presentation of Derivative Gains (Losses) from Economic Hedges of Forecasted Cash Flows in Segment Results
5 unchanged sentences
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:
−Removed: Net derivative losses incurred
+Added: Net derivative gains (losses) incurred
Net derivative losses allocated to reporting segments
Net derivative gains (losses) recognized in general corporate expenses
−Removed: Net derivative gains (losses) allocated to Grocery & Snacks
+Added: Net derivative losses allocated to Grocery & Snacks
Net derivative losses allocated to Refrigerated & Frozen
2 unchanged sentences
Net derivative losses included in segment operating profit
−Removed: As of May 31, 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 $ 4.1 million.
−Removed: This amount reflected net losses of $ 4.5 million incurred during the fiscal year ended May 31, 2020, as well as net gains of $ 0.4 million incurred prior to fiscal 2020.
−Removed: 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 $ 2.1 million in fiscal 2021 and $ 2.0 million in fiscal 2022 and thereafter.
+Added: As of May 30, 2021, 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 $ 11.5 million.
+Added: This amount reflected net gains of $ 13.5 million incurred during the fiscal year ended May 30, 2021, as well as net losses of $ 2.0 million incurred prior to fiscal 2021.
+Added: 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 $ 11.2 million in fiscal 2022 and $ 0.3 million in fiscal 2023 and thereafter.
Assets by Segment
2 unchanged sentences
Also, working capital balances are not tracked by reporting segment.
−Removed: Therefore, it is impracticable to allocate those assets to the reporting segments, as well as disclose total assets by segment.
+Added: Notes to Consolidated Financial Statements – (Continued)
+Added: Fiscal Years Ended May 30, 2021, May 31, 2020, and May 26, 2019
+Added: (columnar dollars in millions except per share amounts)
+Added: it is impracticable to allocate those assets to the reporting segments, as well as disclose total assets by segment.
Total depreciation expense for fiscal 2021 , 2020 , and 2019 was $ 328.0 million, $ 329.1 million, and $ 283.9 million, respectively.
5 unchanged sentences
Our largest customer, Walmart, Inc.
−Removed: and its affiliates, accounted for approximately 26 % of consolidated net sales for fiscal 2020 and 24 % of consolidated net sales for each of fiscal 2019 and 2018, significantly impacting the Grocery & Snacks and Refrigerated & Frozen segments.
−Removed: Notes to Consolidated Financial Statements – (Continued)
−Removed: Fiscal Years Ended May 31, 2020, May 26, 2019, and May 27, 2018
−Removed: (columnar dollars in millions except per share amounts)
+Added: and its affiliates, accounted for approximately 26 % of consolidated net sales for each of fiscal 2021 and 2020 and 24 % of consolidated net sales for fiscal 2019, significantly impacting the Grocery & Snacks and Refrigerated & Frozen segments.
Walmart, Inc.
−Removed: and its affiliates accounted for approximately 30 % of consolidated net receivables as of each of May 31, 2020 and May 26, 2019.
−Removed: At May 31, 2020, The Kroger Co.
−Removed: and its affiliates accounted for approximately 10 % of consolidated net receivables.
−Removed: We offer certain suppliers access to a third-party service that allows them to view our scheduled payments online.
−Removed: 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.
−Removed: 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.
−Removed: All of our accounts payable remain as obligations to our suppliers as stated in our supplier agreements.
−Removed: Of our total accounts payable, $ 258.7 million and $ 189.3 million were payable to suppliers who utilize this third-party service as of May 31, 2020 and May 26, 2019, respectively.
−Removed: QUARTERLY FINANCIAL DATA (Unaudited)
−Removed: Income from continuing operations, net of tax
−Removed: Loss from discontinued operations, net of tax
−Removed: Net income attributable to Conagra Brands, Inc.
−Removed: Earnings per share (1) :
−Removed: Basic earnings per share:
−Removed: Net income attributable to Conagra Brands, Inc.
−Removed: common stockholders
−Removed: Diluted earnings per share:
−Removed: Net income attributable to Conagra Brands, Inc.
−Removed: common stockholders
−Removed: Dividends declared per common share
−Removed: Basic and diluted earnings per share are calculated independently for each of the quarters presented.
−Removed: Accordingly, the sum of the quarterly earnings per share amounts may not agree with the total year.
+Added: and its affiliates accounted for approximately 31 % and 30 % of consolidated net receivables as of May 30, 2021 and May 31, 2020, respectively.
+Added: The Kroger Co.
+Added: and its affiliates accounted for approximately 11 % and 10 % of consolidated net receivables as of May 30, 2021 and May 31, 2020, respectively.
Report of Independent Registered Public Accounting Firm
3 unchanged sentences
We have audited the accompanying consolidated balance sheets of Conagra Brands, Inc.
−Removed: and subsidiaries (the Company) as of May 31, 2020 and May 26, 2019, the related consolidated statements of earnings, comprehensive income, common stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended May 31, 2020, and the related notes (collectively, the consolidated financial statements).
+Added: and subsidiaries (the Company) as of May 30, 2021 and May 31, 2020, the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended May 30, 2021, and the related notes (collectively, the consolidated financial statements).
We also have audited the Company’s internal control over financial reporting as of May 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
29 unchanged sentences
Annually, or whenever events or changes in circumstances indicate potential asset impairment has occurred, the Company evaluates the recoverability of the carrying value of goodwill.
−Removed: The Company performed a quantitative impairment test of goodwill during its first fiscal quarter in connection with a reorganization of its segments.
−Removed: In the fourth fiscal quarter, the Company performed a qualitative assessment for its required annual goodwill impairment evaluation.
−Removed: The results of the quantitative impairment test indicated that all but three reporting units had an estimated fair value substantially in excess of the carrying value.
−Removed: The aggregate goodwill in the three reporting units where the fair value was not substantially in excess of the carrying value was $3.49 billion.
−Removed: For the qualitative assessment in the fourth fiscal quarter, the Company determined for all the reporting units, that it was not more likely than not that the estimated fair value was less than the carrying values.
−Removed: We identified the evaluation of the recoverability of the carrying value of goodwill as a critical audit matter.
−Removed: Subjective and challenging auditor judgment was required to evaluate certain assumptions and information used in the Company’s first fiscal quarter quantitative impairment test and its fourth fiscal quarter qualitative impairment assessment for the three reporting units where the fair value was not substantially in excess of the carrying value.
−Removed: Specifically, for the quantitative impairment test, these assumptions included forecasted revenue growth rates including the terminal growth rates, and margin growth rates used in determining the forecasted cash flows and the selection of discount rates.
−Removed: For the qualitative impairment assessment for the three reporting units, the information included evaluating the industry, macroeconomic and market considerations, overall financial performance, and other relevant entity-specific events affecting the reporting units.
−Removed: The primary procedures we performed to address this critical audit matter included the following.
−Removed: We tested certain internal controls over the Company’s evaluation of the assumptions used to determine the fair value of the reporting units, as well as the controls over the Company’s annual qualitative impairment assessment.
+Added: The Company performed a quantitative impairment test of goodwill for its Sides, Components & Enhancers reporting unit in its first fiscal quarter of 2021, as a result of a reporting unit change.
+Added: We identified the evaluation of the recoverability of the carrying value of the Sides, Components & Enhancers reporting unit goodwill subsequent to the reporting unit change as a critical audit matter.
+Added: Subjective and challenging auditor judgment was required to evaluate certain assumptions used to determine the fair value of the reporting unit in the Company’s first fiscal quarter quantitative impairment test.
+Added: These assumptions included forecasted revenue growth rates including the terminal growth rates, margin growth rates used in determining the forecasted cash flows, and selection of the discount rate.
+Added: The following are the primary procedures we performed to address this critical audit matter.
+Added: We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s evaluation of the assumptions used to determine the fair value of the reporting unit.
We evaluated the Company’s ability to forecast cash flows by comparing historical forecasts to actual results and forecasted cash flows with the Company’s most recent plans.
−Removed: We also considered current industry, macroeconomic and market conditions, the Company’s historical results and the results of other guideline companies within the same industry in evaluating the assumptions described above.
−Removed: We evaluated the Company’s qualitative impairment assessment by considering any event specific changes to the reporting units, analyst industry reports, and the Company’s latest available forecasted financial information.
+Added: We also considered current industry, macroeconomic and market conditions, and the Company’s historical results in evaluating the assumptions described above.
We involved our valuation professionals with specialized skills and knowledge who assisted in:
−Removed: evaluating the discount rates used by the Company by comparing the Company’s inputs to the discount rates to publicly available data for comparable entities and assessing the resulting discount rate;
evaluating the terminal growth rates by comparing them with publicly available market data;
−Removed: testing the estimate of the fair value of the reporting units using the Company’s cash flow assumptions and discount rates and comparing the results to the Company’s fair value estimate.
+Added: evaluating the discount rate used by the Company by comparing the Company’s inputs to the discount rate to publicly available data for comparable entities and assessing the resulting discount rate;
+Added: testing the estimate of the fair value of the reporting unit using the Company’s cash flow assumptions and discount rate and comparing the results to the Company’s fair value estimate.
Evaluation of the recoverability of the carrying value of certain indefinite-lived intangible assets
As described in Notes 1 and 8 to the consolidated financial statements, the Company’s indefinite-lived intangible assets (consisting primarily of brand names and trademarks) were $4.16 billion as of May 30, 2021.
−Removed: For the year ended May 31, 2020, the Company recorded impairment charges totaling $165.5 million on indefinite-lived intangible assets.
−Removed: In assessing indefinite-lived intangible assets for impairment , the Company performs either a qualitative or quantitative
−Removed: assessment at least annually or whenever circumstances indicate a potential impairment exists.
+Added: For the fiscal year ended May 30, 2021, the Company recorded impairment charges totaling $90.9 million on indefinite-lived intangible assets.
+Added: 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.
When a quantitative assessment is performed, the Company estimates the fair value of the intangibles by utilizing a discounted cash flow model that incorporates an estimated royalty rate that would be charged to a third party for the use of the brand.
2 unchanged sentences
Subjective and challenging auditor judgment was required to evaluate certain assumptions used in determining the fair value of these assets.
−Removed: Specifically, there was a high degree of judgment required in evaluating assumptions related to the forecasted revenue growth rates including the terminal growth rates and forecasted margins, royalty rates and discount rates.
−Removed: The primary procedures we performed to address this critical audit matter included the following.
−Removed: We tested certain internal controls over the quantitative impairment assessments, including controls over the development of the assumptions described above.
+Added: These assumptions included the forecasted revenue growth rates including the terminal growth rates and forecasted margins, royalty rates, and discount rates.
+Added: The following are the primary procedures we performed to address this critical audit matter.
+Added: 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.
To assess the Company’s ability to forecast, we compared historical forecasts to actual results.
1 unchanged sentence
We also involved valuation professionals with specialized skills and knowledge, who assisted for certain brand names intangibles in:
−Removed: evaluating the discount rates used by the Company by comparing the Company’s inputs to the discount rates to publicly available data for comparable entities and assessing the resulting discount rate;
−Removed: evaluating the terminal growth rates by comparing them with publicly available market data;
+Added: evaluating the terminal growth rates by comparing them to publicly available market data;
evaluating the royalty rates by determining that the selected royalty rates are supported by the associated brand name’s margin;
+Added: evaluating the discount rates used by the Company by comparing the Company’s inputs to the discount rates to publicly available data for comparable entities and assessing the resulting discount rate;
testing the estimated brand names fair values using the Company’s assumptions and comparing the results to the Company’s fair value estimate.
4 unchanged sentences
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.