N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $5.00 par value		CAG		New York Stock Exchange

~~______________________________________________________~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No ¨

☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T ~~(232.405~~(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x☒ No ¨

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer x☒ Accelerated filer ¨ ☐Non-accelerated filer ¨ ~~(Do not check if a smaller reporting company)~~

☐Smaller reporting company ¨ ☐Emerging growth company ¨

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x

☒

Number of shares outstanding of ~~issuer’s~~issuer's common stock as of ~~November 26, 2017,~~August 29, 2021 was ~~400,660,848.~~

479,689,781.

Table of Contents



Part I. FINANCIAL INFORMATION			1
~~Item 1~~			~~Financial Statements~~	1
Item 1		Financial Statements		1

		Unaudited Condensed Consolidated Statements of Earnings for the Thirteen ~~and Twenty-six~~ Weeks ended ~~November 26, 2017~~August 29, 2021 and ~~November 27, 2016~~August 30, 2020		1

		Unaudited Condensed Consolidated Statements of Comprehensive Income for the Thirteen ~~and Twenty-six~~ Weeks ended ~~November 26, 2017~~August 29, 2021 and ~~November 27, 2016~~August 30, 2020		2

		Unaudited Condensed Consolidated Balance Sheets as of ~~November 26, 2017~~August 29, 2021 and May ~~28, 2017~~30, 2021		3

		Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Twenty-six~~Thirteen Weeks ended ~~November 26, 2017~~August 29, 2021 and ~~November 27, 2016~~August 30, 2020		4

		Notes to Unaudited Condensed Consolidated Financial Statements		5

Item 2		Management's Discussion and Analysis of Financial Condition and Results of Operations	27	22

Item 3		Quantitative and Qualitative Disclosures About Market Risk	40	30

Item 4		Controls and Procedures	41	31

Part II. OTHER INFORMATION			42	32
~~Item 1~~			~~Legal Proceedings~~	42
Item 1A1	~~Risk Factors~~	42Legal Proceedings		32

Item 1A		Risk Factors		32

Item 2		Unregistered Sales of Equity Securities and Use of Proceeds	43	32
~~Item 6~~	~~Exhibits~~	44
~~Signatures~~ Item 6		45Exhibits		33
~~Exhibit 10.2.4~~
~~Exhibit 10.4.8~~Signatures				34
~~Exhibit 10.31.1~~
Exhibit 1231.1
Exhibit ~~31.1~~31.2
Exhibit ~~31.2~~32
~~Exhibit 32.1~~
Exhibit 101 Exhibit 104

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions except per share amounts)

(unaudited)

	Thirteen weeks ended
	August 29, 2021			August 30, 2020
Net sales	$	2,653.3		$	2,678.9
Costs and expenses:
Cost of goods sold		1,979.9			1,868.7
Selling, general and administrative expenses		310.1			300.3
Pension and postretirement non-service income		(16.1	)		(13.8	)
Interest expense, net		94.2			113.7
Income before income taxes and equity method investment earnings		285.2			410.0
Income tax expense		69.7			86.7
Equity method investment earnings		20.2			6.5
Net income	$	235.7		$	329.8
Less: Net income attributable to noncontrolling interests		0.3			0.8
Net income attributable to Conagra Brands, Inc.	$	235.4		$	329.0
Earnings per share — basic
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.49		$	0.67
Earnings per share — diluted
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.49		$	0.67

~~(unaudited)~~

Thirteen weeks ended Twenty-six weeks ended
November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Net sales $ 2,173.4
$ 2,088.4
$ 3,977.6
$ 3,984.0
Costs and expenses:
Cost of goods sold 1,515.1
1,440.9
2,800.3
2,791.9
Selling, general and administrative expenses 307.3
417.9
546.3
649.6
Interest expense, net 38.0
54.1
74.4
112.3
Income from continuing operations before income taxes and equity method investment earnings 313.0
175.5
556.6
430.2
Income tax expense 109.5
78.4
229.5
247.6
Equity method investment earnings 20.6
17.2
50.6
30.3
Income from continuing operations 224.1
114.3
377.7
212.9
Income from discontinued operations, net of tax 0.4
11.6
0.1
103.0
Net income $ 224.5
$ 125.9
$ 377.8
$ 315.9
Less: Net income attributable to noncontrolling interests 1.0
3.8
1.8
7.6
Net income attributable to Conagra Brands, Inc. $ 223.5
$ 122.1
$ 376.0
$ 308.3
Earnings per share — basic
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders $ 0.55
$ 0.26
$ 0.91
$ 0.48
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders —
0.02
—
0.22
Net income attributable to Conagra Brands, Inc. common stockholders $ 0.55
$ 0.28
$ 0.91
$ 0.70
Earnings per share — diluted
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders $ 0.54
$ 0.26
$ 0.91
$ 0.48
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders —
0.02
—
0.22
Net income attributable to Conagra Brands, Inc. common stockholders $ 0.54
$ 0.28
$ 0.91
$ 0.70
Cash dividends declared per common share $ 0.2125
$ 0.25
$ 0.425
$ 0.50

See Notes to the Condensed Consolidated Financial Statements.

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(in millions)

(unaudited)

	Thirteen weeks ended
	August 29, 2021									August 30, 2020
	Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount			Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount
Net income	$	305.4		$	(69.7	)	$	235.7		$	416.5		$	(86.7	)	$	329.8
Other comprehensive income:
Derivative adjustments:
Unrealized derivative adjustments		(2.5	)		0.6			(1.9	)		(0.6	)		0.1			(0.5	)
Reclassification for derivative adjustments included in net income		(0.3	)		0.1			(0.2	)		(0.9	)		0.2			(0.7	)
Unrealized currency translation gains (losses)		(15.7	)		0			(15.7	)		18.0			(0.5	)		17.5
Pension and post-employment benefit obligations:
Unrealized pension and post-employment benefit obligations		2.1			(0.2	)		1.9			0.4			(0.1	)		0.3
Reclassification for pension and post-employment benefit obligations included in net income		(0.8	)		0.2			(0.6	)		(0.8	)		0.2			(0.6	)
Comprehensive income		288.2			(69.0	)		219.2			432.6			(86.8	)		345.8
Comprehensive income (loss) attributable to noncontrolling interests		(0.9	)		(0.1	)		(1.0	)		3.3			(0.3	)		3.0
Comprehensive income attributable to Conagra Brands, Inc.	$	289.1		$	(68.9	)	$	220.2		$	429.3		$	(86.5	)	$	342.8

~~(unaudited)~~

Thirteen weeks ended
November 26, 2017 November 27, 2016
Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount
Net income $ 334.0
$ (109.5 ) $ 224.5
$ 243.2
$ (117.3 ) $ 125.9
Other comprehensive income:

Derivative adjustments:
Unrealized derivative adjustments 1.0
(0.4 ) 0.6
2.2
(0.9 ) 1.3
Reclassification for derivative adjustments included in net income 0.1
—
0.1
—
—
—
Unrealized gains on available-for-sale securities 0.4
(0.2 ) 0.2
0.2
—
0.2
Unrealized currency translation losses (12.7 ) 0.1
(12.6 ) (14.1 ) —
(14.1 )
Pension and post-employment benefit obligations:

Unrealized pension and post-employment benefit obligations 43.4
(16.6 ) 26.8
66.8
(25.6 ) 41.2
Reclassification for pension and post-employment benefit obligations included in net income (0.2 ) 0.1
(0.1 ) (0.9 ) 0.4
(0.5 )
Comprehensive income 366.0
(126.5 ) 239.5
297.4
(143.4 ) 154.0
Comprehensive income attributable to noncontrolling interests 0.4
(0.4 ) —
2.2
(0.1 ) 2.1
Comprehensive income attributable to Conagra Brands, Inc. $ 365.6
$ (126.1 ) $ 239.5
$ 295.2
$ (143.3 ) $ 151.9

Twenty-six weeks ended
November 26, 2017 November 27, 2016
Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount
Net income $ 607.4
$ (229.6 ) $ 377.8
$ 651.2
$ (335.3 ) $ 315.9
Other comprehensive income:
Derivative adjustments:
Unrealized derivative adjustments 1.0
(0.4 ) 0.6
(5.8 ) 2.2
(3.6 )
Reclassification for derivative adjustments included in net income 0.1
—
0.1
—
—
—
Unrealized gains on available-for-sale securities 0.7
(0.3 ) 0.4
0.4
(0.1 ) 0.3
Unrealized currency translation gains (losses) 19.9
—
19.9
(26.0 ) 0.2
(25.8 )
Pension and post-employment benefit obligations:
Unrealized pension and post-employment benefit obligations 43.5
(16.6 ) 26.9
64.7
(25.5 ) 39.2
Reclassification for pension and post-employment benefit obligations included in net income (0.3 ) 0.1
(0.2 ) (1.8 ) 0.7
(1.1 )
Comprehensive income 672.3
(246.8 ) 425.5
682.7
(357.8 ) 324.9
Comprehensive income attributable to noncontrolling interests 2.4
(0.6 ) 1.8
6.0
(0.2 ) 5.8
Comprehensive income attributable to Conagra Brands, Inc. $ 669.9
$ (246.2 ) $ 423.7
$ 676.7
$ (357.6 ) $ 319.1

See Notes to the Condensed Consolidated Financial Statements.

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions except share data)

(unaudited)

	August 29, 2021			May 30, 2021
ASSETS
Current assets
Cash and cash equivalents	$	67.0		$	79.2
Receivables, less allowance for doubtful accounts of $3.2		834.4			793.9
Inventories		1,954.6			1,734.0
Prepaid expenses and other current assets		116.2			95.0
Total current assets		2,972.2			2,702.1
Property, plant and equipment		5,707.9			5,624.7
Less accumulated depreciation		(3,061.7	)		(3,016.2	)
Property, plant and equipment, net		2,646.2			2,608.5
Goodwill		11,369.2			11,373.5
Brands, trademarks and other intangibles, net		4,140.7			4,157.6
Other assets		1,407.0			1,349.3
Noncurrent assets held for sale		4.6			4.6
	$	22,539.9		$	22,195.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable	$	458.6		$	707.4
Current installments of long-term debt		21.9			23.1
Accounts payable		1,674.4			1,655.9
Accrued payroll		105.6			175.2
Other accrued liabilities		829.8			744.6
Total current liabilities		3,090.3			3,306.2
Senior long-term debt, excluding current installments		8,779.6			8,275.2
Other noncurrent liabilities		2,034.1			1,982.8
Total liabilities		13,904.0			13,564.2
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 584,219,229		2,921.2			2,921.2
Additional paid-in capital		2,305.0			2,342.1
Retained earnings		6,348.3			6,262.6
Accumulated other comprehensive income (loss)		(9.4	)		5.8
Less treasury stock, at cost, 104,529,448 and 103,934,839 common shares		(3,008.1	)		(2,979.9	)
Total Conagra Brands, Inc. common stockholders' equity		8,557.0			8,551.8
Noncontrolling interests		78.9			79.6
Total stockholders' equity		8,635.9			8,631.4
	$	22,539.9		$	22,195.6

~~(unaudited)~~

November 26,
2017 May 28,
2017
ASSETS
Current assets
Cash and cash equivalents $ 84.0
$ 251.4
Receivables, less allowance for doubtful accounts of $3.4 and $3.1 683.8
563.4
Inventories 1,059.2
934.2
Prepaid expenses and other current assets 183.5
228.7
Current assets held for sale 45.8
35.5
Total current assets 2,056.3
2,013.2
Property, plant and equipment 4,236.8
4,261.9
Less accumulated depreciation (2,594.8 ) (2,606.9 )
Property, plant and equipment, net 1,642.0
1,655.0
Goodwill 4,457.0
4,301.1
Brands, trademarks and other intangibles, net 1,298.2
1,229.3
Other assets 846.1
790.6
Noncurrent assets held for sale 100.5
107.1
$ 10,400.1
$ 10,096.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 67.1
$ 28.2
Current installments of long-term debt 198.8
199.0
Accounts payable 886.7
773.1
Accrued payroll 131.9
167.6
Other accrued liabilities 565.8

552.6
Total current liabilities 1,850.3
1,720.5
Senior long-term debt, excluding current installments 3,065.9
2,573.3
Subordinated debt 195.9
195.9
Other noncurrent liabilities 1,501.5

1,528.8
Total liabilities 6,613.6
6,018.5
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 567,907,172 2,839.7
2,839.7
Additional paid-in capital 1,166.8
1,171.9
Retained earnings 4,464.3
4,247.0
Accumulated other comprehensive loss (165.2 ) (212.9 )
Less treasury stock, at cost, 167,246,324 and 151,387,209 common shares (4,607.9 ) (4,054.9 )
Total Conagra Brands, Inc. common stockholders' equity 3,697.7
3,990.8
Noncontrolling interests 88.8
87.0
Total stockholders' equity 3,786.5
4,077.8
$ 10,400.1
$ 10,096.3

See Notes to the Condensed Consolidated Financial Statements.

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)

	Thirteen weeks ended
	August 29, 2021			August 30, 2020
Cash flows from operating activities:
Net income	$	235.7		$	329.8
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		96.5			95.2
Asset impairment charges		0.7			3.4
Equity method investment earnings less than (in excess of) distributions		(7.4	)		4.0
Stock-settled share-based payments expense		2.6			16.5
Contributions to pension plans		(2.9	)		(5.9	)
Pension benefit		(12.4	)		(9.6	)
Other items		1.4			24.3
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
Receivables		(40.5	)		52.4
Inventories		(220.7	)		(202.8	)
Deferred income taxes and income taxes payable, net		57.6			15.6
Prepaid expenses and other current assets		(19.8	)		(16.7	)
Accounts payable		64.8			20.8
Accrued payroll		(69.5	)		(79.1	)
Other accrued liabilities		53.7			36.6
Net cash flows from operating activities		139.8			284.5
Cash flows from investing activities:
Additions to property, plant and equipment		(154.9	)		(145.5	)
Sale of property, plant and equipment		1.9			0.6
Purchase of marketable securities		(1.9	)		(1.5	)
Sale of marketable securities		0			3.4
Other items		0			0.1
Net cash flows from investing activities		(154.9	)		(142.9	)
Cash flows from financing activities:
Issuances of commercial paper, maturities greater than 90 days		249.8			0
Net repayments of other short-term borrowings		(498.6	)		(0.5	)
Issuance of long-term debt		499.1			0
Repayment of long-term debt		(23.7	)		(133.4	)
Debt issuance costs		(1.9	)		0
Repurchase of Conagra Brands, Inc. common shares		(50.0	)		0
Payment of intangible asset financing arrangement		(12.6	)		(12.9	)
Cash dividends paid		(132.1	)		(103.5	)
Exercise of stock options and issuance of other stock awards, including tax withholdings		(17.6	)		(9.3	)
Other items		(6.9	)		0
Net cash flows from financing activities		5.5			(259.6	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(2.6	)		2.9
Net change in cash and cash equivalents and restricted cash		(12.2	)		(115.1	)
Cash and cash equivalents and restricted cash at beginning of period		80.2			554.3
Cash and cash equivalents and restricted cash at end of period	$	68.0		$	439.2

~~(unaudited)~~

Twenty-six weeks ended
November 26,
2017 November 27,
2016
Cash flows from operating activities:
Net income $ 377.8
$ 315.9
Income from discontinued operations 0.1
103.0
Income from continuing operations 377.7
212.9
Adjustments to reconcile income from continuing operations to net cash flows from operating activities:
Depreciation and amortization 129.0
133.5
Asset impairment charges 8.8
211.9
Gain on divestitures —
(197.5 )
Loss on extinguishment of debt —
60.6
Earnings of affiliates in excess of distributions (50.6 ) (23.4 )
Stock-settled share-based payments expense 17.7
18.3
Contributions to pension plans (6.1 ) (5.9 )
Pension benefit (21.5 ) (20.6 )
Other items 3.8
23.9
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
Receivables (109.8 ) (49.2 )
Inventories (130.5 ) (32.2 )
Deferred income taxes and income taxes payable, net 95.3
183.5
Prepaid expenses and other current assets 0.1
0.2
Accounts payable 132.3
71.7
Accrued payroll (39.7 ) (95.5 )
Other accrued liabilities (1.8 ) (31.6 )
Net cash flows from operating activities — continuing operations 404.7
460.6
Net cash flows from operating activities — discontinued operations 16.0
81.6
Net cash flows from operating activities 420.7
542.2
Cash flows from investing activities:
Additions to property, plant and equipment (123.4 ) (118.3 )
Sale of property, plant and equipment 6.9
11.3
Proceeds from divestitures —
489.1
Purchase of businesses (249.6 ) (108.2 )
Net cash flows from investing activities — continuing operations (366.1 ) 273.9
Net cash flows from investing activities — discontinued operations —
(123.7 )
Net cash flows from investing activities (366.1 ) 150.2
Cash flows from financing activities:
Net short-term borrowings 38.9
(7.2 )
Issuance of long-term debt, net of debt issuance costs

497.4
—
Repayment of long-term debt (4.8 ) (555.8 )
Payment of intangible asset financing arrangement (14.4 ) (14.9 )
Repurchase of Conagra Brands, Inc. common shares (580.0 ) (170.1 )
Cash dividends paid (171.6 ) (219.4 )
Exercise of stock options and issuance of other stock awards, including tax withholdings 4.0
47.4
Net cash flows from financing activities — continuing operations (230.5 ) (920.0 )
Net cash flows from financing activities — discontinued operations —
839.1
Net cash flows from financing activities (230.5 ) (80.9 )
Effect of exchange rate changes on cash and cash equivalents 8.5
(3.5 )
Net change in cash and cash equivalents (167.4 ) 608.0
Add: Cash balance included in assets held for sale and discontinued operations at beginning of period —
36.4
Less: Cash balance included in assets held for sale and discontinued operations at end of period —
—
Cash and cash equivalents at beginning of period 251.4
798.1
Cash and cash equivalents at end of period $ 84.0
$ 1,442.5

See Notes to the Condensed Consolidated Financial Statements.

Conagra Brands, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

~~For the Twenty-six weeks ended November 26, 2017 and November 27, 2016~~

(columnar dollars in millions except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited financial information reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented. The adjustments are of a normal recurring nature, except as otherwise noted. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes included in the Conagra Brands, Inc. ~~(formerly ConAgra Foods, Inc.~~(the "Company", ~~the "Company"~~"Conagra Brands", "we", "us", or "our") Annual Report on Form 10-K for the fiscal year ended May ~~28, 2017~~.

30, 2021.

The results of operations for any quarter or a partial fiscal year period are not necessarily indicative of the results to be expected for other periods or the full fiscal year.

Basis of Consolidation — The Condensed Consolidated Financial Statements include the accounts of Conagra Brands ~~Inc.~~ and all majority-owned subsidiaries. In addition, the accounts of all variable interest entities for which we have been determined to be the primary beneficiary are included in our Condensed Consolidated Financial Statements from the date such determination is made. All significant intercompany investments, accounts, and transactions have been eliminated.

~~On November 9, 2016, the Company completed the spinoff of Lamb Weston Holdings, Inc. ("Lamb Weston") through a distribution of 100%~~

Revenue Recognition — Our revenues primarily consist of the ~~Company's interest in Lamb Weston~~sale of food products that are sold to ~~holders~~retailers and foodservice customers through direct sales forces, broker, and distributor arrangements. These revenue contracts generally have single performance obligations. Revenue, which includes shipping and handling charges billed to the customer, is reported net of ~~shares~~consideration payable to our customers, including applicable discounts, returns, allowances, trade promotion, consumer coupon redemption, unsaleable product, and other costs. Amounts billed and due from our customers are classified as receivables and require payment on a short-term basis and, therefore, we do not have any significant financing components.

We recognize revenue when (or as) performance obligations are satisfied by transferring control of the ~~Company's common stock as of November 1, 2016 (the "Spinoff"). In accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), the results of operations~~goods to customers. Control is transferred upon delivery of the ~~Lamb Weston operations~~goods to the customer. Shipping and/or handling costs that occur before the customer obtains control of the goods are ~~presented~~deemed to be fulfillment activities and are accounted for as ~~discontinued operations~~fulfillment costs. We assess the goods and services promised in our customers' purchase orders and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct.

We 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. Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as ~~such, have been excluded from continuing operations~~in-store displays and ~~segment results for all periods presented (see Note 3 for additional discussion).~~

events, feature price discounts, consumer coupons, and loyalty programs. The costs of these activities are recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. 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. Differences between estimated expense and actual redemptions are recognized as a change in management estimate in a subsequent period.

Comprehensive Income — Comprehensive income includes net income, currency translation adjustments, certain derivative-related activity, ~~changes in the value of available-for-sale investments,~~ and changes in prior service cost and net actuarial gains (losses) from pension (for amounts not in excess of the 10% ~~corridor)~~"corridor") and ~~post-retirement~~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. dollars. 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.

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

November 26, 2017 May 28, 2017
Currency translation losses, net of reclassification adjustments $ (78.7 ) $ (98.6 )
Derivative adjustments, net of reclassification adjustments (0.4 ) (1.1 )
Unrealized gains (losses) on available-for-sale securities 0.1
(0.3 )
Pension and post-employment benefit obligations, net of reclassification adjustments (86.2 ) (112.9 )
Accumulated other comprehensive loss $ (165.2 ) $ (212.9 )

	August 29, 2021			May 30, 2021
Currency translation losses, net of reclassification adjustments	$	(91.5	)	$	(77.1	)
Derivative adjustments, net of reclassification adjustments		22.2			24.3
Pension and postretirement benefit obligations, net of reclassification adjustments		59.9			58.6
Accumulated other comprehensive income (loss)	$	(9.4	)	$	5.8

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

	Thirteen weeks ended						Affected Line Item in the Condensed Consolidated Statement of Earnings¹
	August 29, 2021			August 30, 2020
Net derivative adjustments:
Cash flow hedges	$	(0.8	)	$	(0.9	)	Interest expense, net
Cash flow hedges		0.5			0		Equity method investment earnings
		(0.3	)		(0.9	)	Total before tax
		0.1			0.2		Income tax expense
	$	(0.2	)	$	(0.7	)	Net of tax
Pension and postretirement liabilities:
Net prior service cost	$	0		$	0.1		Pension and postretirement non-service income
Net actuarial gain		(0.8	)		(0.9	)	Pension and postretirement non-service income
		(0.8	)		(0.8	)	Total before tax
		0.2			0.2		Income tax expense
	$	(0.6	)	$	(0.6	)	Net of tax

Thirteen weeks ended
Affected Line Item in the Condensed Consolidated Statement of Earnings¹
November 26, 2017 November 27, 2016
Net derivative adjustment, net of tax:
Cash flow hedges $ 0.1
$ —
Interest expense, net
0.1
—
Total before tax
—
—
Income tax expense
$ 0.1
$ —
Net of tax
Pension and postretirement liabilities:

Net prior service benefit $ (0.2 ) $ (0.9 ) Selling, general and administrative expenses
(0.2 ) (0.9 ) Total before tax
0.1
0.4
Income tax expense
$ (0.1 ) $ (0.5 ) Net of tax

Twenty-six weeks ended
Affected Line Item in the Condensed Consolidated Statement of Earnings¹
November 26, 2017 November 27, 2016
Net derivative adjustment, net of tax:
Cash flow hedges $ 0.1
$ —
Interest expense, net
0.1
—
Total before tax
—
—
Income tax expense
$ 0.1
$ —
Net of tax
Pension and postretirement liabilities:
Net prior service benefit $ (0.3 ) $ (1.8 ) Selling, general and administrative expenses
(0.3 ) (1.8 ) Total before tax
0.1
0.7
Income tax expense
$ (0.2 ) $ (1.1 ) Net of tax

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

Cash and cash equivalents — Cash and all highly liquid investments with an original maturity of three months or less at the date of acquisition, including short-term time deposits and government agency and corporate obligations, are classified as cash and cash equivalents.

Reclassifications and other changes — Certain prior year amounts have been reclassified to conform with current year presentation.

Use of Estimates — Preparation of financial statements in conformity with U.S. ~~GAAP~~generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions. These estimates and assumptions affect reported amounts of assets, liabilities, revenues, and expenses as reflected in the Condensed Consolidated Financial Statements. Actual results could differ from these estimates.

~~Accounting Changes~~ ~~— In July 2015,~~

2. DIVESTITURES AND ASSETS HELD FOR SALE

Divestitures

During the ~~Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-11,~~ ~~Inventory, which requires an entity to measure inventory within~~fourth quarter of fiscal 2021, we completed the scope at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We adopted this ASU prospectively in fiscal 2018. The adoption of this guidance did not have a material impact to our financial statements.

~~Recently Issued Accounting Standards~~ ~~— In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP. On July 9, 2015, the FASB deferred the effective date of the new revenue recognition standard by one year. Based on the FASB's ASU, we will apply the new revenue standard in our fiscal year 2019. Early adoption in our fiscal year 2018 is permitted. We are in the process of documenting the impact of the guidance on our current accounting policies and practices in order to identify material differences, if any, that would result from applying the new requirements to our revenue contracts. We continue to make progress on our revenue recognition review and are also in the

process of evaluating the impact, if any, on changes to our business processes, systems, and controls to support recognition and disclosure requirements under the new guidance. We continue to evaluate the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The standard permits the use of either the retrospective or cumulative effect transition method.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities~~, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The effective date for this standard is for fiscal years beginning after December 31, 2017. Early adoption is not permitted except for certain provisions. We do not expect ASU 2016-01 to have a material impact to our consolidated financial statements.

~~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. The effective date for the standard is for fiscal years beginning after December 15, 2018. Early adoption is permitted. We are evaluating the effect that this standard will have on our consolidated financial statements and related disclosures. The standard is to be applied under the modified retrospective method, with elective reliefs, which requires application of the new guidance for all periods presented.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments~~, which clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The effective date for the standard is for fiscal years beginning after December 15, 2017. Early adoption is permitted. We do not expect ASU 2016-15 to have a material impact to our consolidated financial statements.

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash~~, which provides amendments to current guidance to address the classifications and presentation of changes in restricted cash in the statement of cash flows. The effective date for the standard is for fiscal years beginning after December 15, 2017. Early adoption is permitted. We do not expect ASU 2016-18 to have a material impact to our consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Business Combinations: Clarifying the Definition of a Business~~, which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The effective date for the standard is for fiscal years beginning after December 15, 2017. Early adoption is permitted. We do not expect ASU 2017-01 to have a material impact to our consolidated financial statements.

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~, which requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. Companies will present all other components of net benefit cost outside operating income, if this subtotal is presented. The effective date for the standard is for fiscal years beginning after December 15, 2017. Early adoption is permitted. We do not expect ASU 2017-07 to have a material impact to our consolidated financial statements.

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities~~, which improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance in current U.S. GAAP. The amendments in this update better align an entity's risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results. The effective date for the standard is for fiscal years beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impactsale of our ~~pending adoption of this standard on our consolidated financial statements.~~

~~2. ACQUISITIONS~~

~~In October 2017, we acquired Angie's Artisan Treats, LLC, maker of~~ ~~Angie's~~Egg Beaters^®~~BOOMCHICKAPOP~~^® ~~ready-to-eat popcorn,~~ business for ~~a cash purchase price~~ net proceeds of ~~$249.6~~$50.6 million ~~net of cash acquired and~~, subject to final working capital adjustments. Approximately $156.5 million has been classified as goodwill, of which $95.4 million is deductible for income tax purposes. Approximately $73.8 million and $10.3 million of the purchase price has been allocated to non-amortizing and amortizing intangible assets, respectively. The business ~~is included in~~results were previously reported primarily within our Refrigerated & Frozen segment, and to a lesser extent within our International and Foodservice segments.

During the ~~Grocery & Snacks segment.~~

~~In April 2017,~~ third quarter of fiscal 2021, we ~~acquired protein-based snacking businesses Thanasi Foods LLC, maker~~completed the sale of ~~Duke's~~our Peter Pan^® ~~meat snacks, and BIGS LLC, maker~~ peanut butter business for net proceeds of ~~BIGS~~^® ~~seeds, for $217.6~~$101.5 million ~~in cash, net of cash acquired,~~ , including working capital ~~adjustments. Approximately $133.3 million has been classified as goodwill, of which $70.9 million is deductible~~adjustments but subject to final adjustments for ~~income~~certain tax purposes. Approximately $65.1 million and $16.1 million of the purchase price has been allocated to non-amortizing and amortizing intangible assets, respectively. These businesses are included in the Grocery & Snacks segment.

~~In September 2016, we acquired the operating assets of Frontera Foods, Inc. and Red Fork LLC, including the~~ ~~Frontera~~^®, ~~Red Fork~~^®~~, and~~ ~~Salpica~~^® ~~brands. These businesses make authentic, gourmet Mexican food products and contemporary American cooking sauces.~~

We acquired the businesses for a cash purchase price of $108.2 million, net of cash acquired, including working capital adjustments. Approximately $39.5 million has been classified as goodwill and $47.1 million and $19.6 million has been classified as non-amortizing and amortizing intangible assets, respectively.benefits. The ~~amount allocated to goodwill is deductible for tax purposes. These businesses are reflected principally~~business results were previously reported primarily within ~~the~~ our Grocery & Snacks segment, and to a lesser extent within ~~the Refrigerated & Frozen~~our International and ~~International segments.~~

These acquisitions collectively contributed $37.4 million and $68.4 million to net sales during the second quarter and first half of fiscal 2018, respectively, and $6.4 million for each of the second quarter and first half of fiscal 2017.

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.

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

~~Subsequent to the end of~~Foodservice segments.

During the second quarter of fiscal ~~2018,~~ 2021, we ~~entered into a definitive agreement to acquire~~completed the ~~Sandwich Bros.~~sale of ~~Wisconsin~~our H.K. Anderson^® business ~~maker~~ for net proceeds of ~~frozen breakfast and entree flatbread pocket sandwiches, for a cash purchase price of $87~~$8.7 million ~~net of cash acquired and subject to~~, including working capital adjustments. The business will be primarily included in the Refrigerated & Frozen segment. The transaction is expected to close in early calendar year 2018, subject to customary closing conditions, including the receipt of any applicable regulatory approvals.

~~3. DISCONTINUED OPERATIONS AND OTHER DIVESTITURES~~

~~Lamb Weston Spinoff~~

On November 9, 2016, we completed the Spinoff of our Lamb Weston business. 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. The business results were previously reported ~~in the Commercial segment. We reflected the results of this business as discontinued operations for all periods presented.~~

~~The summary comparative financial results of the Lamb Weston business through the date of the Spinoff, included~~primarily within ~~discontinued operations, were as follows:~~

Thirteen weeks ended Twenty-six weeks ended
November 26, 2017 November 27, 2016 November 26, 2017 November 27, 2016
Net sales $ —
$ 636.0
$ —
$ 1,407.9
Income (loss) from discontinued operations before income taxes and equity method investment earnings $ —
$ 46.3
$ (0.3 ) $ 175.1
Income (loss) before income taxes and equity method investment earnings —
46.3
(0.3 ) 175.1
Income tax expense (benefit) —
39.1
(0.1 ) 88.6
Equity method investment earnings —
5.3
—
15.9
Income (loss) from discontinued operations, net of tax —
12.5
(0.2 ) 102.4
Less: Net income attributable to noncontrolling interests —
3.2
—
6.8
Net income (loss) from discontinued operations attributable to Conagra Brands, Inc. $ —
$ 9.3
$ (0.2 ) $ 95.6

For the second quarter and first half of fiscal 2017, we incurred $62.2 million and $72.0 million, respectively, of expenses in connection with the Spinoff primarily related to professional fees and contract services associated with preparation of regulatory filings and separation activities. These expenses are reflected in income from discontinued operations.

In connection with the Spinoff, total assets of $2.28 billion and total liabilities of $2.98 billion (including debt of $2.46 billion) were transferred to Lamb Weston. As part of the consideration for the Spinoff, the Company received a cash payment from Lamb Weston in the amount of $823.5 million. See Note 5 for discussion of the debt-for-debt exchange related to the Spinoff.

We entered into a transition services agreement in connection with the Lamb Weston Spinoff and recognized $0.8 million and $2.1 million of income for the performance of services during the second quarter and first half of fiscal 2018, respectively, classified within selling, general and administrative ("SG&A") expenses.

~~Private Brands Operations~~

~~On February 1, 2016, pursuant to the Stock Purchase Agreement, dated as of November 1, 2015, we completed the disposition of~~ our ~~Private Brands operations to TreeHouse Foods, Inc. for $2.6 billion in cash on a debt-free basis. Results of operations for the Private Brands business were immaterial for all periods presented.~~

We entered into a transition services agreement with TreeHouse Foods, Inc. and recognized $0.5 million and $5.4 million of income for the performance of services during the second quarter of fiscal 2018 and 2017, respectively, classified within selling, general and administrative expenses. We recognized $2.2 million and $11.5 million of transition services agreement income in the first half of fiscal 2018 and 2017, respectively.

~~Other Divestitures~~

~~During the fourth quarter of fiscal 2017, we signed an agreement to sell our~~ ~~Wesson~~^® ~~oil business, which is part of our~~ Grocery & Snacks segment, and to ~~The J.M. Smucker Company ("Smucker")~~a lesser extent within our Foodservice segment. ~~The transaction is subject~~

Other Assets Held for Sale

From time to time, we actively market certain ~~customary closing conditions, including the termination or expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"). On~~other assets. Balances totaling $4.6 million at both August ~~28, 2017, Smucker~~29, 2021 and the Company each received a request for additional information under the HSR Act (a "second request") from the U.S. Federal Trade Commission ("FTC") in connection with the FTC's review of the transaction. The agreement for the sale of the ~~Wesson~~^® oil business provides that, unless otherwise agreed upon by the Company and Smucker, if the closing of the transaction has not occurred on or prior to March 31, 2018 because HSR approval has not been received as of such date, then either party may terminate the agreement. The parties are cooperating fully with the FTC as it conducts its review of the transaction. The purchase price under the agreement is $285 million. The assets of this businessMay 30, 2021 have been reclassified as noncurrent assets held for sale within our Condensed Consolidated Balance ~~Sheets for all periods presented.~~

~~The assets classified as held for sale reflected in~~Sheets.

3. RESTRUCTURING ACTIVITIES

Pinnacle Integration Restructuring Plan

In December2018, our ~~Condensed Consolidated Balance Sheets~~Board of Directors (the "Board") approved a restructuring and integration plan related to the ~~Wesson~~^® ~~oil business were~~ongoing integration of the operations of Pinnacle Foods, Inc. ("Pinnacle"), which we acquired in October 2018 (the "Pinnacle Integration Restructuring Plan"), for the purpose of achieving significant cost synergies between the companies, as ~~follows:~~a result of which we expect to

incur material charges for exit and disposal activities under U.S. GAAP. We expect to incur approximately $357.0 million of charges ($283.2 million of cash charges and $73.8 million of non-cash charges) for actions identified to date under the Pinnacle Integration Restructuring Plan. The Board and/or our senior management have authorized incurrence of these charges. In the first quarter of fiscal 2022 and 2021, we recognized charges of $7.3 million and $8.6 million, respectively, in connection with the Pinnacle Integration Restructuring Plan. 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 first quarter of fiscal 2022):

	Grocery & Snacks		Refrigerated & Frozen		International		Corporate		Total
Accelerated depreciation	$	7.6	$	4.6	$	—	$	—	$	12.2
Other cost of goods sold		3.8		7.1		0.7		—		11.6
Total cost of goods sold		11.4		11.7		0.7		—		23.8
Severance and related costs		—		3.5		1.5		112.2		117.2
Asset impairment (net of gains on disposal)		30.3		4.0		—		2.6		36.9
Accelerated depreciation		—		—		—		7.4		7.4
Contract/lease termination		7.7		8.2		0.8		16.1		32.8
Consulting/professional fees		1.0		—		0.8		105.7		107.5
Other selling, general and administrative expenses		5.9		4.5		0.3		20.7		31.4
Total selling, general and administrative expenses		44.9		20.2		3.4		264.7		333.2
Consolidated total	$	56.3	$	31.9	$	4.1	$	264.7	$	357.0

November 26, 2017 May 28, 2017
Current assets $ 45.8
$ 35.5
Noncurrent assets (including goodwill of $74.5 million) 95.5
95.5

During the first quarter of fiscal ~~2017,~~2022, we ~~completed~~recognized the ~~sales~~following pre-tax expenses for the Pinnacle Integration Restructuring Plan:

	Grocery & Snacks		Refrigerated & Frozen		Corporate			Total
Other cost of goods sold	$	—	$	0.1	$	—		$	0.1
Total cost of goods sold		—		0.1		—			0.1
Severance and related costs		—		—		(0.2	)		(0.2	)
Contract/lease termination		—		—		0.2			0.2
Consulting/professional fees		0.1		—		5.7			5.8
Other selling, general and administrative expenses		0.1		0.8		0.5			1.4
Total selling, general and administrative expenses		0.2		0.8		6.2			7.2
Consolidated total	$	0.2	$	0.9	$	6.2		$	7.3

All of these charges have resulted or will result in cash outflows.

We recognized the following cumulative (plan inception to August 29, 2021) pre-tax expenses for the Pinnacle Integration Restructuring Plan in our ~~Spicetec Flavors & Seasonings business ("Spicetec")~~Condensed Consolidated Statement of Earnings:

	Grocery & Snacks		Refrigerated & Frozen		International		Corporate		Total
Accelerated depreciation	$	0.6	$	4.6	$	—	$	—	$	5.2
Other cost of goods sold		2.3		3.0		0.7		—		6.0
Total cost of goods sold		2.9		7.6		0.7		—		11.2
Severance and related costs		—		3.4		1.5		112.2		117.1
Asset impairment (net of gains on disposal)		0.3		4.0		—		2.6		6.9
Accelerated depreciation		—		—		—		7.4		7.4
Contract/lease termination		1.8		—		0.8		16.1		18.7
Consulting/professional fees		0.8		—		0.8		95.2		96.8
Other selling, general and administrative expenses		2.9		1.9		0.3		17.8		22.9
Total selling, general and administrative expenses		5.8		9.3		3.4		251.3		269.8
Consolidated total	$	8.7	$	16.9	$	4.1	$	251.3	$	281.0

Included in the above results are $248.2 million of charges that have resulted or will result in cash outflows and ~~our JM Swank business, each of which was part of our Commercial segment. Through~~$32.8 million in non-cash charges.

Liabilities recorded for the ~~second~~Pinnacle Integration Restructuring Plan and changes therein for the first quarter of fiscal 2017, we received $329.8 million and $159.3 million, respectively, in cash, net of cash included in the dispositions. We recognized pre-tax gains from the sales of $144.8 million and $52.9 million, respectively, in the first half of2022 were as follows:

	Balance at May 30, 2021		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at August 29, 2021
Severance and related costs	$	5.1	$	—	$	(0.9	)	$	(0.2	)	$	4.0
Contract/lease termination		—		0.2		(0.2	)		—			—
Consulting/professional fees		3.9		5.8		(5.3	)		—			4.4
Other costs		—		1.5		(1.5	)		—			—
Total	$	9.0	$	7.5	$	(7.9	)	$	(0.2	)	$	8.4

Conagra Restructuring Plan

In fiscal ~~2017. We entered into transition services agreements~~2019, senior management initiated a restructuring plan (the "Conagra Restructuring Plan") for costs incurred in connection with ~~the sales of these businesses and recognized $0.2 million of income during the first half of fiscal 2018 and $1.0 million during the second quarter and first half of fiscal 2017, classified within~~actions taken to improve selling, general and administrative ~~expenses.~~

In addition, we are actively marketing certain other long-lived assets. These assets have been reclassified as assets held for sale within our Condensed Consolidated Balance Sheets for all periods presented. The balance of these noncurrent assets classified as held for sale was $5.0 million and $11.6 million within our Corporate segment at November 26, 2017 and May 28, 2017, respectively.

~~4. RESTRUCTURING ACTIVITIES~~

~~Supply Chain and Administrative Efficiency Plan~~

~~In May 2013, we announced the Supply Chain and Administrative Efficiency Plan (the "SCAE Plan"~~("SG&A")~~, our plan to integrate and restructure the operations of our Private Brands business, improve SG&A~~ expense effectiveness and efficiencies and optimize our supply chain network, manufacturing assets, dry distribution centers, and mixing centers. In the second quarter of fiscal 2016, we announced plans to realize efficiency benefits by reducing SG&A expenses and enhancing trade spend processes and tools, which plans were included as part of the SCAE Plan. Although we divested the Private Brands business, we have continued to implement the SCAE Plan, including by working to optimize our supply chain ~~network, pursue cost reductions through our SG&A functions, enhance trade spend processes and tools, and improve productivity.~~

network. Although we remain unable to make good faith estimates relating to the entire ~~SCAE~~Conagra Restructuring Plan, we are reporting on actions initiated through the end of the ~~second~~first quarter of fiscal ~~2018,~~2022, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. As of ~~November 26, 2017, our Board of Directors has~~August 29, 2021, we have approved the incurrence of ~~up to $900.9~~$172.6million ($45.8 million of ~~expenses in connection~~cash charges and $126.8 million of non-cash charges) for several projects associated with the ~~SCAE Plan, including expenses allocated for the Private Brands and Lamb Weston operations.~~Conagra Restructuring Plan. We have incurred or expect to incur ~~approximately $464.8~~$144.7 million of charges ($~~320.7~~36.0 million of cash charges and ~~$144.1~~$108.7 million of non-cash charges) for actions identified to date under the ~~SCAE Plan related to our continuing operations.~~Conagra Restructuring Plan. In the ~~second~~first quarter ~~and first half~~ of fiscal ~~2018,~~2022 and 2021, we recognized charges of ~~$7.1~~$8.5 million and ~~$18.5~~$17.3 million, respectively, in ~~association~~connection with the SCAE Plan related to our continuing operations. In the second quarter and first half of fiscal 2017, we recognized $19.8 million and $33.9 million, respectively, in association with the SCAE Plan related to our continuing operations.Conagra Restructuring Plan. We expect to incur costs related to the ~~SCAE~~Conagra Restructuring Plan over a multi-year period.

We anticipate that we will recognize the following pre-tax expenses in association with the ~~SCAE~~Conagra Restructuring Plan ~~related to our continuing operations~~ (amounts include charges recognized from plan inception through the first ~~half of fiscal 2018):~~

Grocery & Snacks Refrigerated & Frozen International Foodservice Corporate Total
Pension costs $ 32.9
$ 1.5
$ —
$ —
$ —
$ 34.4
Accelerated depreciation 32.2
18.6
—
—
1.2
52.0
Other cost of goods sold 10.0
2.1
—
—
—
12.1
    Total cost of goods sold 75.1
22.2
—
—
1.2
98.5
Severance and related costs, net 26.0
10.3
3.4
7.9
103.4
151.0
Fixed asset impairment (net of gains on disposal) 5.9
6.9
—
—
11.2
24.0
Accelerated depreciation —
—
—
—
4.7
4.7
Contract/lease cancellation expenses 0.9
0.6
0.6
—
86.2
88.3
Consulting/professional fees 1.1
0.4
0.1
—
54.1
55.7
Other selling, general and administrative expenses 16.1
3.2
—
—
23.3
42.6
    Total selling, general and administrative expenses 50.0
21.4
4.1
7.9
282.9
366.3
        Consolidated total $ 125.1
$ 43.6
$ 4.1
$ 7.9
$ 284.1
$ 464.8

~~During the second~~ quarter of fiscal ~~2018,~~2022):

		Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Accelerated depreciation		$	34.7	$	39.1	$	—	$	—	$	—	$	73.8
Other cost of goods sold			8.9		1.3		—		—		—		10.2
Total cost of goods sold			43.6		40.4		—		—		—		84.0
Severance and related costs	��		12.6		1.1		1.1		0.3		2.6		17.7
Asset impairment (net of gains on disposal)			26.9		0.3		0.1		—		—		27.3
Contract/lease termination			0.1		—		—		—		0.2		0.3
Consulting/professional fees			—		—		—		—		0.9		0.9
Other selling, general and administrative expenses			11.1		2.6		—		—		0.2		13.9
Total selling, general and administrative expenses			50.7		4.0		1.2		0.3		3.9		60.1
Total		$	94.3	$	44.4	$	1.2	$	0.3	$	3.9	$	144.1
Pension and postretirement non-service income													0.6
Consolidated total												$	144.7

During the first quarter of fiscal 2022, we recognized the following pre-tax expenses for the ~~SCAE Plan related to our continuing operations:~~Conagra Restructuring Plan:

	Grocery & Snacks			Refrigerated & Frozen			Foodservice		Corporate		Total
Accelerated depreciation	$	1.0		$	5.3		$	—	$	—	$	6.3
Total cost of goods sold		1.0			5.3			—		—		6.3
Severance and related costs		1.7			(1.2	)		0.3		0.2		1.0
Asset impairment (net of gains on disposal)		(0.2	)		—			—		—		(0.2	)
Other selling, general and administrative expenses		1.4			—			—		—		1.4
Total selling, general and administrative expenses		2.9			(1.2	)		0.3		0.2		2.2
Total	$	3.9		$	4.1		$	0.3	$	0.2	$	8.5

Grocery & Snacks International Corporate Total
Pension costs $ 2.1
$ —
$ —
$ 2.1
Other cost of goods sold 1.3
—
—
1.3
    Total cost of goods sold 3.4
—
—
3.4
Severance and related costs, net (0.2 ) 0.9
0.6
1.3
Fixed asset impairment (net of gains on disposal) (1.5 ) —
—
(1.5 )
Accelerated depreciation —
—
0.7
0.7
Contract/lease cancellation expenses 0.1
—
(0.1 ) —
Consulting/professional fees 0.1
—
0.4
0.5
Other selling, general and administrative expenses 2.1
—
0.6
2.7
    Total selling, general and administrative expenses 0.6
0.9
2.2
3.7
        Consolidated total $ 4.0
$ 0.9
$ 2.2
$ 7.1

Included in the above ~~table~~results are ~~$7.7~~$2.4 million in charges that have resulted or will result in cash outflows and $6.1 million in non-cash charges.

We recognized the following cumulative (plan inception to August 29, 2021) pre-tax expenses for the Conagra Restructuring Plan in our Condensed Consolidated Statement of Earnings:

	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Accelerated depreciation	$	33.0	$	32.0	$	—	$	—	$	—	$	65.0
Other cost of goods sold		4.8		0.2		—		—		—		5.0
Total cost of goods sold		37.8		32.2		—		—		—		70.0
Severance and related costs		12.1		0.6		1.1		0.3		2.3		16.4
Asset impairment (net of gains on disposal)		26.9		0.3		0.1		—		—		27.3
Contract/lease termination		—		—		—		—		0.1		0.1
Other selling, general and administrative expenses		6.4		0.3		—		—		0.2		6.9
Total selling, general and administrative expenses		45.4		1.2		1.2		0.3		2.6		50.7
Total	$	83.2	$	33.4	$	1.2	$	0.3	$	2.6	$	120.7
Pension and postretirement non-service income												0.6
Consolidated total											$	121.3

Included in the above results are $26.5 million of charges that have resulted or will result in cash outflows and ~~net non-cash gains of $0.6 million.~~

~~During the first half of fiscal 2018, we recognized the following pre-tax expenses for the SCAE Plan related to our continuing operations:~~

Grocery & Snacks International Corporate Total
Pension costs $ 2.1
$ —
$ —
$ 2.1
Accelerated depreciation 1.2
—
—
1.2
Other cost of goods sold 2.4
—
—
2.4
    Total cost of goods sold 5.7
—
—
5.7
Severance and related costs, net 1.8
0.9
0.6
3.3
Fixed asset impairment (net of gains on disposal) (1.4 ) —
4.4
3.0
Accelerated depreciation —
—
1.3
1.3
Contract/lease cancellation expenses 0.1
—
(0.1 ) —
Consulting/professional fees 0.1
—
0.6
0.7
Other selling, general and administrative expenses 3.9
—
0.6
4.5
    Total selling, general and administrative expenses 4.5
0.9
7.4
12.8
        Consolidated total $ 10.2
$ 0.9
$ 7.4
$ 18.5

~~Included in the above table are $12.5 million of charges that have resulted or will result in cash outflows and $6.0~~$94.8 million in non-cash charges.

We recognized the following cumulative (plan inception to November 26, 2017) pre-tax expenses related to the SCAE Plan related to our continuing operations in our Condensed Consolidated Statements of Earnings:

Grocery & Snacks Refrigerated & Frozen International Foodservice Corporate Total
Pension costs $ 35.0
$ 1.5
$ —
$ —
$ —
$ 36.5
Accelerated depreciation 32.2
18.6
—
—
1.2
52.0
Other cost of goods sold 7.4
2.1
—
—
—
9.5
    Total cost of goods sold 74.6
22.2
—
—
1.2
98.0
Severance and related costs, net 25.7
10.3
3.4
7.9
102.1
149.4
Fixed asset impairment (net of gains on disposal) 5.9
6.9
—
—
11.2
24.0
Accelerated depreciation —
—
—
—
3.9
3.9
Contract/lease cancellation expenses 0.9
0.6
0.6
—
71.2
73.3
Consulting/professional fees 1.0
0.4
0.1
—
51.8
53.3
Other selling, general and administrative expenses 15.1
3.2
—
—
20.6
38.9
    Total selling, general and administrative expenses 48.6
21.4
4.1
7.9
260.8
342.8
        Consolidated total $ 123.2
$ 43.6
$ 4.1
$ 7.9
$ 262.0
$ 440.8

Included in the above results are $298.0 million of charges that have resulted or will result in cash outflows and $142.8 million in non-cash charges. Not included in the above results are $130.2 million of pre-tax expenses ($84.5 million of cash charges and $45.7 million of non-cash charges) related to the Private Brands operations, which we sold in the third quarter of fiscal 2016, and $2.1 million of pre-tax expenses (all resulting in cash charges) related to Lamb Weston.

Liabilities recorded for the ~~SCAE~~Conagra Restructuring Plan ~~related to our continuing operations~~ and changes therein for the first ~~half~~quarter of fiscal ~~2018~~2022 were as follows:

	Balance at May 30, 2021		��	Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at August 29, 2021
Severance and related costs	$	9.7		$	2.3	$	(0.7	)	$	(1.3	)	$	10.0
Other costs		—			1.4		(1.4	)		—			—
Total	$	9.7		$	3.7	$	(2.1	)	$	(1.3	)	$	10.0

Balance at May 28, 2017
Costs Incurred
and Charged
to Expense

Costs Paid
or Otherwise Settled
Changes in Estimates Balance at November 26, 2017
Pension costs $ 31.8
$ —
$ —
$ 2.1
$ 33.9
Severance and related costs 13.8
4.0
(7.9 ) (0.7 ) 9.2
Consulting/professional fees 0.6
0.7
(1.1 ) —
0.2
Contract/lease cancellation 11.6
0.3
(3.6 ) (0.3 ) 8.0
Other costs 1.9
6.5
(6.9 ) —
1.5
Total $ 59.7
$ 11.5
$ (19.5 ) $ 1.1
$ 52.8

4. LONG-TERM DEBT AND REVOLVING CREDIT FACILITY

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

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 their maturity date of March 1, 2021.

During the third quarter of fiscal 2021, we redeemed $400.0 million aggregate principal amount of our 3.20% senior notes prior to their maturity date of January 25, 2023.

During the second quarter of fiscal 2021, we issued $1.0 billion aggregate principal amount of 1.375% senior notes due November 1, 2027 (the "2027 Senior Notes"). We also redeemed the entire outstanding $1.20 billion aggregate principal amount of our 3.80% senior notes prior to their maturity date of October 22, 2021. This redemption was primarily funded using the net proceeds from the issuance of the 2027 Senior Notes.

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

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

and is unsecured. The term of the Revolving Credit Facility may be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. As of ~~November 26, 2017,~~August 29, 2021, there were 0 outstanding borrowings under the Revolving Credit Facility.

In the first quarter of fiscal 2022, we entered into an amendment to the Revolving Credit Facility (the "Amended Revolving Credit Facility"). The Amended Revolving Credit Facility generally requires our ratio of earnings before interest, taxes, depreciation and amortization ("EBITDA") to interest expense not to be less than 3.0 to 1.0 and our ratio of funded debt to EBITDA not to exceed 4.5 to 1.0, with each ratio to be calculated on a rolling four-quarter basis. As of August 29, 2021, we were in compliance with all financial covenants under the Amended Revolving Credit Facility.

During the second quarter of fiscal 2018, we issued $500.0 million aggregate principal amount of floating rate notes due October 9, 2020. The notes bear interest at a rate equal to three-month LIBOR plus 0.50% per annum.

During the third quarter of fiscal 2017, we repaid the remaining principal balance of $224.8 million of our 5.819% senior notes due 2017 and $248.2 million principal amount of our 7.0% senior notes due 2019, in each case prior to maturity, resulting in a net loss on early retirement of debt of $32.7 million.

In connection with the Spinoff (see Note 3), Lamb Weston issued to us $1.54 billion aggregate principal amount of senior notes (the "Lamb Weston notes"). On November 9, 2016, we exchanged the Lamb Weston notes for $250.2 million aggregate principal amount of our 5.819% senior notes due 2017, $880.4 million aggregate principal amount of our 1.9% senior notes due 2018, $154.9 million aggregate principal amount of our 2.1% senior notes due 2018, $86.9 million aggregate principal amount of our 7.0% senior notes due 2019, and $71.1 million aggregate principal amount of our 4.95% senior notes due 2020 (collectively, the "Conagra notes"), which had been purchased in the open market by certain investment banks prior to the Spinoff. Following the exchange, we canceled the Conagra notes. These actions resulted in a net loss of $60.6 million as a cost of early retirement of debt.

Net interest expense ~~from continuing operations~~ consists of:

	Thirteen weeks ended
	August 29, 2021			August 30, 2020
Long-term debt	$	96.9		$	117.0
Short-term debt		0.6			—
Interest income		(0.3	)		(0.8	)
Interest capitalized		(3.0	)		(2.5	)
	$	94.2		$	113.7

Thirteen weeks ended Twenty-six weeks ended
November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Long-term debt $ 39.4
$ 56.6
$ 77.5
$ 117.5
Short-term debt 0.7
0.2
1.1
0.4
Interest income (1.1 ) (0.8 ) (2.0 ) (1.5 )
Interest capitalized (1.0 ) (1.9 ) (2.2 ) (4.1 )
$ 38.0
$ 54.1
$ 74.4
$ 112.3

~~6. VARIABLE INTEREST ENTITIES~~

~~Variable Interest Entities Not Consolidated~~

We have variable interests in certain entities that we have determined to be variable interest entities, but for which we are not the primary beneficiary. We do not consolidate the financial statements of these entities.

We lease certain office buildings from entities that we have determined to be variable interest entities. The lease agreements with these entities include fixed-price purchase options for the assets being leased. The lease agreements also contain contingent put options (the "lease put options") that allow 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. As a result of substantial impairment

charges related to our divested Private Brands operations, these lease put options are exercisable now and remain exercisable until generally 30 days after the end of the respective lease agreements. We are amortizing the difference between the put price and the estimated fair value (without a lease agreement in place) of each respective property over the remaining respective lease term within selling, general and administrative expenses. As of November 26, 2017 and May 28, 2017, the estimated amount by which the put prices exceeded the fair values of the related properties was $50.7 million, of which we had accrued $10.2 million and $8.4 million, respectively. In December 2017, subsequent to the second quarter of fiscal 2018, we purchased a building that had been subject to a put option. We will recognize a net loss of approximately $13 million for the early termination of the associated lease in our third quarter of fiscal 2018. Also in December 2017, we made an offer to purchase another property subject to a put option. We have not entered into a binding legal contract in connection with this offer. However, if our offer is accepted, we may recognize an estimated loss of $30 million to $40 million, upon closing of the transaction, for the early exit of an unfavorable lease contract. If this transaction is completed, we would have one remaining leased building subject to a put option for which the put option price exceeds the estimated fair value by $8.2 million, of which we had accrued $1.0 million, as of November 26, 2017. These leases, with the exception of one, are accounted for as operating leases. A capital lease asset and related lease obligation of $25.3 million and $28.9 million, respectively, were included in the Condensed Consolidated Balance Sheets as of November 26, 2017. We have determined that we do not have the power to direct the activities that most significantly impact the economic performance of these entities. In making this determination, we have considered, among other items, the terms of the lease agreements, the expected remaining useful lives of the assets leased, and the capital structure of the lessor entities.

5. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the first ~~half~~quarter of fiscal ~~2018~~2022 was as follows:

	Grocery & Snacks		Refrigerated & Frozen		International			Foodservice		Total
Balance as of May 30, 2021	$	4,698.2	$	5,625.1	$	302.5		$	747.7	$	11,373.5
Currency translation		0		0		(4.3	)		0		(4.3	)
Balance as of August 29, 2021	$	4,698.2	$	5,625.1	$	298.2		$	747.7	$	11,369.2

Grocery & Snacks Refrigerated & Frozen International Foodservice Total
Balance as of May 28, 2017 $ 2,439.1
$ 1,037.3
$ 253.6
$ 571.1
$ 4,301.1
Acquisitions 156.5
—
—
—
156.5
Purchase accounting adjustments (1.5 ) —
—
—
(1.5 )
Currency translation —
0.9
—
—
0.9
Balance as of November 26, 2017 $ 2,594.1
$ 1,038.2
$ 253.6
$ 571.1
$ 4,457.0

Other identifiable intangible assets were as follows:

	August 29, 2021				May 30, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Non-amortizing intangible assets	$	3,300.0	$	—	$	3,301.2	$	—
Amortizing intangible assets		1,234.1		393.4		1,235.3		378.9
	$	4,534.1	$	393.4	$	4,536.5	$	378.9

November 26, 2017 May 28, 2017

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization
Non-amortizing intangible assets $ 908.8
$ —
$ 834.1
$ —
Amortizing intangible assets 587.3
197.9
575.4
180.2
$ 1,496.1
$ 197.9
$ 1,409.5
$ 180.2

In the first quarter of fiscal 2017, in anticipation of the Spinoff, we changed our reporting segments. In accordance with applicable accounting guidance, we were required to determine new reporting units at a lower level (at the operating segment or one level lower, as applicable). When such a determination was made, we were required to perform a goodwill impairment analysis for each of the new reporting units.

We performed an assessment of impairment of goodwill for the new Canadian reporting unit within the new International reporting segment. Estimating the fair value of individual reporting units requires us to make assumptions and estimates regarding our future plans and future industry and economic conditions. We estimated the future cash flows of the Canadian reporting unit and calculated the net present value of those estimated cash flows using a risk adjusted discount rate, in order to estimate the fair value of each reporting unit from the perspective of a market participant. We used discount rates and terminal growth rates of 7.5% and 2%, respectively, to calculate the present value of estimated future cash flows. We then compared the estimated fair value of the reporting unit to the historical carrying value (including allocated assets and liabilities of certain shared and Corporate functions), and determined that the fair value of the reporting unit was less than the carrying value in the first quarter of fiscal 2017. With the assistance of a third-party valuation specialist, we estimated the fair value of the assets and liabilities of this reporting unit in order to determine the implied fair value of goodwill. We recognized an impairment charge for the difference between the implied fair value of goodwill and the carrying value of goodwill. Accordingly, during the first quarter of fiscal 2017, we recorded charges totaling $139.2 million for the impairment of goodwill.

As part of the assessment of the fair value of each asset and liability within the Canadian reporting unit, with the assistance of the third-party valuation specialist, we estimated the fair value of our Canadian ~~Del Monte~~^® ~~brand to be less than its carrying value. In~~

~~accordance with applicable accounting guidance, we recognized an impairment charge of $24.4 million to write-down the intangible asset to its estimated fair value.~~

We also performed an assessment of impairment of goodwill for the new Mexican reporting unit within the International reporting segment using similar methods to those described above. We used discount rates and terminal growth rates of 8.5% and 3%, respectively, to calculate the present value of estimated future cash flows. We determined that the estimated fair value of this reporting unit exceeded the carrying value of its net assets by approximately 5%. Accordingly, we did not recognize an impairment of the goodwill in the Mexican reporting unit.

During the second quarter of fiscal 2017, as a result of further deterioration in forecasted sales and profits primarily due to foreign exchange rates, we performed an additional assessment of impairment of goodwill for the new Mexican reporting unit. We used discount rates and terminal growth rates of 8.5% and 3%, respectively, to calculate the present value of estimated future cash flows. We then compared the estimated fair value of the reporting unit to the historical carrying value (including allocated assets and liabilities of certain shared and Corporate functions), and determined that the fair value of the reporting unit was less than the carrying value in the second quarter of fiscal 2017. With the assistance of a third-party valuation specialist, we estimated the fair value of the assets and liabilities of this reporting unit in order to determine the implied fair value of goodwill. We recognized an impairment charge for the difference between the implied fair value of goodwill and the carrying value of goodwill. Accordingly, during the second quarter of fiscal 2017, we recorded charges totaling $43.9 million for the impairment of goodwill.

Non-amortizing intangible assets are ~~comprised~~composed of brands and trademarks.

Amortizing intangible assets, carrying a remaining weighted average life of approximately 1419 years, are principally composed of customer relationships ~~licensing arrangements,~~ and acquired intellectual property. Amortization expense was ~~$8.7 million and $17.3~~$14.9 million for the ~~second~~first quarter of both fiscal 2022 and ~~first half of fiscal 2018, respectively, and $8.1 million and $16.5 million for the second quarter and first half of fiscal 2017, respectively.~~2021. Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of ~~November 26, 2017~~,August 29, 2021, amortization expense is estimated to average ~~$34.0~~$52.8 million for each of the next five years.

6. DERIVATIVE FINANCIAL INSTRUMENTS

Our operations are exposed to market risks from adverse changes in commodity prices affecting the cost of raw materials and energy, foreign currency exchange rates, and interest rates. In the normal course of business, these risks are managed through a variety of strategies, including the use of derivatives.

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. Generally, we economically hedge a portion of our anticipated consumption of commodity inputs for periods of up to 36 months. We may enter into longer-term economic hedges on particular commodities, if deemed appropriate. As of ~~November 26, 2017~~,August 29, 2021, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through ~~December 2018.~~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. This includes, but is not limited to, hedging against foreign currency risk in purchasing inventory and capital equipment, sales of finished goods, and future settlement of foreign-denominated assets and liabilities. As of ~~November 26, 2017~~,August 29, 2021, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through ~~August 2018.~~

May 2022.

From time to time, we may use derivative instruments, including interest rate swaps, to reduce risk related to changes in interest rates. This includes, but is not limited to, hedging against increasing interest rates prior to the issuance of long-term debt and hedging the fair value of our senior long-term debt.

Derivatives Designated as Cash Flow Hedges

During the first quarter of fiscal 2019, we entered into deal-contingent forward starting interest rate swap contracts to hedge a portion of the interest rate risk related to our issuance of long-term debt to help finance the acquisition of Pinnacle. We settled these contracts during the second quarter of fiscal 2019 and deferred a $47.5 million gain in accumulated other comprehensive income that is being amortized as a reduction of interest expense over the lives of the related debt instruments. The unamortized amount at August 29, 2021, was $37.4 million.

Economic Hedges of Forecasted Cash Flows

Many of our derivatives do not qualify for, and we do not currently designate certain commodity or foreign currency derivatives to achieve, hedge accounting treatment. We reflect realized and unrealized gains and losses from derivatives used to economically hedge anticipated commodity consumption and to mitigate foreign currency cash flow risk in earnings immediately within general corporate expense (within cost of goods sold). The gains and losses are reclassified to segment operating results in the period in which the underlying item being economically hedged is recognized in cost of goods sold. In the event that management determines a particular derivative entered into as an economic hedge of a forecasted commodity purchase has ceased to function as an economic hedge, we cease recognizing further gains and losses on such derivatives in corporate expense and begin recognizing such gains and losses within segment operating results immediately.

Economic Hedges of Fair Values — Foreign Currency Exchange Rate Risk

We may use options and cross currency swaps to economically hedge the fair value of certain monetary assets and liabilities (including intercompany balances) denominated in a currency other than the functional currency. These derivatives are marked-to-market with gains and losses immediately recognized in ~~selling, general and administrative~~SG&A expenses. These substantially offset the foreign currency transaction gains or losses recognized as values of the monetary assets or liabilities being economically hedged change.

All derivative instruments are recognized on our balance sheets at fair value (refer to Note 1614 for additional information related to fair value measurements). The fair value of derivative assets is recognized within prepaid expenses and other current assets, while the fair value of derivative liabilities is recognized within other accrued liabilities. In accordance with U.S. GAAP, we offset certain derivative asset and liability balances, as well as certain amounts representing rights to reclaim cash collateral and obligations to return cash collateral, where master netting agreements provide for legal right of setoff. At ~~November 26, 2017~~August 29, 2021 and May ~~28, 2017, $0.9 million~~30, 2021, amounts representing ~~a right~~an obligation to ~~reclaim~~return cash collateral ~~was~~of $1.6 million and $2.0 million, respectively, were included in prepaid expenses and other current assets in our Condensed Consolidated Balance Sheets.

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

August 29,

2021

May 30,

2021

Prepaid expenses and other current assets

12.3

15.5

Other accrued liabilities

0.7

6.9

November 26,
2017 May 28,
2017
Prepaid expenses and other current assets $ 4.2
$ 2.3
Other accrued liabilities 2.0
1.3

The following table presents our derivative assets and liabilities, at ~~November 26, 2017,~~August 29, 2021, on a gross basis, prior to the setoff of ~~$0.1~~$4.0 million to total derivative assets and ~~$1.0~~$2.4 million to total derivative liabilities where legal right of setoff existed:

	Derivative Assets			Derivative Liabilities
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Prepaid expenses and other current assets	$	14.9	Other accrued liabilities	$	2.4
Foreign exchange contracts	Prepaid expenses and other current assets		1.4	Other accrued liabilities		0.7
Total derivatives not designated as hedging instruments		$	16.3		$	3.1

Derivative Assets Derivative Liabilities

Balance Sheet
Location
Fair Value
Balance Sheet
Location
Fair Value
Commodity contracts Prepaid expenses and other current assets $ 3.5
Other accrued liabilities $ 1.0
Foreign exchange contracts Prepaid expenses and other current assets 0.8
Other accrued liabilities 1.9
Other Prepaid expenses and other current assets —
Other accrued liabilities 0.1
Total derivatives not designated as hedging instruments $ 4.3
$ 3.0

The following table presents our derivative assets and liabilities at May ~~28, 2017~~,30, 2021, on a gross basis, prior to the setoff of ~~$0.5~~$7.4 million to total derivative assets and ~~$1.4~~$5.4 million to total derivative liabilities where legal right of setoff existed:

	Derivative Assets			Derivative Liabilities
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Prepaid expenses and other current assets	$	22.9	Other accrued liabilities	$	5.4
Foreign exchange contracts	Prepaid expenses and other current assets		—	Other accrued liabilities		6.9
Total derivatives not designated as hedging instruments		$	22.9		$	12.3

Derivative Assets Derivative Liabilities

Balance Sheet
Location
Fair Value
Balance Sheet
Location
Fair Value
Commodity contracts Prepaid expenses and other current assets $ 2.6
Other accrued liabilities $ 1.4
Foreign exchange contracts Prepaid expenses and other current assets 0.2
Other accrued liabilities 1.1
Other Prepaid expenses and other current assets —
Other accrued liabilities 0.2
Total derivatives not designated as hedging instruments $ 2.8
$ 2.7

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

	Location in Condensed Consolidated	Gains (Losses) Recognized on Derivatives in Condensed Consolidated Statements of Earnings for the Thirteen Weeks Ended
Derivatives Not Designated as Hedging Instruments	Statements of Earnings of Gains (Losses) Recognized on Derivatives	August 29, 2021		August 30, 2020
Commodity contracts	Cost of goods sold	$	4.2	$	1.2
Foreign exchange contracts	Cost of goods sold		6.0		(5.2	)
Total gains (losses) from derivative instruments not designated as hedging instruments		$	10.2	$	(4.0	)

Derivatives Not Designated as Hedging Instruments Location in Condensed Consolidated Statement of Earnings of Gains Recognized on Derivatives Gains Recognized on Derivatives in Condensed Consolidated Statement of Earnings for the Thirteen Weeks Ended
November 26, 2017 November 27, 2016
Commodity contracts Cost of goods sold $ 0.8
$ 1.6
Foreign exchange contracts Cost of goods sold 2.2
1.4
Foreign exchange contracts Selling, general and administrative expense —
2.5
Total gains from derivative instruments not designated as hedging instruments $ 3.0
$ 5.5

Derivatives Not Designated as Hedging Instruments Location in Condensed Consolidated Statement of Earnings of Gains (Losses) Recognized on Derivatives Gains (Losses) Recognized on Derivatives in Condensed Consolidated Statement of Earnings for
the Twenty-six Weeks Ended
November 26, 2017 November 27, 2016
Commodity contracts Cost of goods sold $ 1.4
$ 1.2
Foreign exchange contracts Cost of goods sold (5.8 ) 1.5
Foreign exchange contracts Selling, general and administrative expense 0.3
1.3
Total gains (losses) from derivative instruments not designated as hedging instruments $ (4.1 ) $ 4.0

As of ~~November 26, 2017,~~August 29, 2021, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of ~~$81.6~~$117.8 million and ~~$34.2~~$127.2 million for purchase and sales contracts, respectively. As of May ~~28, 2017,~~30, 2021, our open commodity contracts had a notional value of ~~$76.8~~$148.8 million and ~~$73.4~~$159.4 million for purchase and sales contracts, respectively. The notional amount of our foreign currency forward contracts as of ~~November 26, 2017~~August 29, 2021 and May ~~28, 2017~~30, 2021 was ~~$72.8~~$102.1 million and ~~$81.9~~$111.4 million, respectively.

We enter into certain commodity, interest rate, and foreign exchange derivatives with a diversified group of counterparties. We continually monitor our positions and the credit ratings of the counterparties involved and limit the amount of credit exposure to any one party. These transactions may expose us to potential losses due to the risk of nonperformance by these counterparties. We have not incurred a material loss due to nonperformance in any period presented and do not expect to incur any such material loss. We also enter into futures and options transactions through various regulated exchanges.

At ~~November 26, 2017~~,August 29, 2021, the maximum amount of loss due to the credit risk of the counterparties, had the counterparties failed to perform according to the terms of the ~~contracts,~~contract, was ~~$0.9~~$2.8 million.

7. SHARE-BASED PAYMENTS

For the ~~second~~first quarter ~~and first half~~ of fiscal ~~2018,~~2022 and 2021, we recognized total stock-based compensation expense (including ~~stock options,~~ restricted stock units, cash-settled restricted stock units, performance shares, and ~~performance shares)~~performance-based restricted stock units) of ~~$12.3~~$2.6 million and ~~$18.7~~$17.4 million, respectively. ~~For~~In the ~~second~~first quarter ~~and first half~~ of fiscal 2017, we recognized total stock-based compensation expense of $17.9 million and $32.7 million, respectively. These amounts are inclusive of discontinued operations. Included in the total stock-based compensation expense for the second quarter and first half of fiscal 2018 was expense of $0.1 million and $0.4 million, respectively, related to stock options granted by a subsidiary in the subsidiary's shares to the subsidiary's employees. The expense for these stock options for the second quarter and first half of fiscal 2017 was $0.3 million and $0.2 million, respectively. For the first half of fiscal 2018,2022, we granted ~~0.8~~1.0 million restricted stock units at a weighted average grant date price of ~~$34.09~~$34.34 and 0.5 million performance shares at a weighted average grant date price of ~~$33.82.~~$34.13.

Performance shares are granted to selected executives and other key employees with vesting contingent upon meeting various Company-wide performance goals. The performance ~~goal for one-third of the target number of performance shares~~goals for the three-year performance ~~period~~periods ending in fiscal ~~2018~~2022 (the ~~"2018~~"2022 performance period") isand fiscal 2024 (the "2024 performance period") are based on our fiscal 2016 earnings before interest, taxes, depreciation, and amortization ("EBITDA") return on capital. Another one-third of the target number of performance shares granted for the 2018 performance period is based on our fiscal 2017 EBITDA return on capital. The fiscal 2017 EBITDA return on capital target,

when set, excluded the results of Lamb Weston. The performance goal for the last one-third of the target number of performance shares granted for the 2018 performance period is based on our fiscal 2018 diluted earnings per share ("EPS") compound annual growth rate ("CAGR")~~. In addition, for certain participants, all performance shares for the 2018 performance period are~~, subject to ~~an overarching EPS goal that must be met in each fiscal year of~~certain adjustments, measured over the ~~2018~~defined performance ~~period before any pay out can be made to such participants on the performance shares.~~

periods. The performance goal for one-third of the target number of performance shares for the three-year performance period ending in fiscal ~~2019~~2023 (the ~~"2019~~"2023 performance period") is based on our fiscal ~~2017 EBITDA return on capital. The fiscal 2017 EBITDA return on capital target, when set, excluded the results of Lamb Weston.~~2021 diluted EPS CAGR, subject to certain adjustments. The performance goal for the final two-thirds of the target number of performance shares granted for the ~~2019~~2023 performance period is based on our diluted EPS CAGR, subject to certain adjustments, measured over the two-year period ending in fiscal ~~2019. In addition, for certain participants, all~~2023. For each of the 2022 performance period, 2023 performance period, and 2024 performance period, the awards actually earned will range from 0 to two hundred percent of the targeted number of performance shares for ~~the 2019~~such performance ~~period~~period. Dividend equivalents are ~~subject to an overarching EPS goal that must be met in each fiscal year of the 2019 performance period before any pay out can be made to such participants~~paid on the ~~performance shares.~~

The performance goal for the three-year performance period ending in fiscal 2020 is based on our diluted EPS CAGR, measured over the defined performance period. In addition, for certain participants, allportion of performance shares ~~for the 2020 performance period are subject to an overarching EPS goal that must be met~~actually earned at our regular dividend rate in ~~each fiscal year~~additional shares of ~~the 2020 performance period before any pay out can be made to such participants on the performance shares.~~

common stock.

Awards, if earned, will be paid in shares of our common stock. Subject to limited exceptions set forth in ~~the~~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.

~~10.~~ Forfeitures are accounted for as they occur.

8. EARNINGS PER SHARE

Basic earnings per share is calculated on the basis of weighted average outstanding shares of common stock. 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.

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

	Thirteen weeks ended
	August 29, 2021		August 30, 2020
Net income attributable to Conagra Brands, Inc. common stockholders:	$	235.4	$	329.0
Weighted average shares outstanding:
Basic weighted average shares outstanding		480.4		488.2
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities		1.9		1.7
Diluted weighted average shares outstanding		482.3		489.9

Thirteen weeks ended Twenty-six weeks ended
November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Net income available to Conagra Brands, Inc. common stockholders:
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders $ 223.1
$ 113.7
$ 375.9
$ 212.1
Income from discontinued operations, net of tax, attributable to Conagra Brands, Inc. common stockholders 0.4
8.4
0.1
96.2
Net income attributable to Conagra Brands, Inc. common stockholders $ 223.5
$ 122.1
$ 376.0
$ 308.3
Less: Increase in redemption value of noncontrolling interests in excess of earnings allocated —
0.3
—
0.8
Net income available to Conagra Brands, Inc. common stockholders $ 223.5
$ 121.8
$ 376.0
$ 307.5
Weighted average shares outstanding:
Basic weighted average shares outstanding 406.5
437.7
411.1
438.4
Add: Dilutive effect of stock options, restricted stock unit awards, and other dilutive securities 3.9
3.6
4.0
3.7
Diluted weighted average shares outstanding 410.4
441.3
415.1
442.1

For ~~both~~ the ~~second~~first quarter ~~and first half~~ of fiscal ~~2018,~~2022 and 2021, there were ~~1.4~~0.5 million and 1.0 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive. ~~For the second quarter and first half of fiscal 2017, there were 1.5 million and 1.1 million stock options outstanding, respectively, that were excluded from the calculation.~~

~~11.~~

9. INVENTORIES

The major classes of inventories were as follows:

	August 29, 2021		May 30, 2021
Raw materials and packaging	$	307.8	$	290.7
Work in process		169.0		125.1
Finished goods		1,395.1		1,238.1
Supplies and other		82.7		80.1
Total	$	1,954.6	$	1,734.0

November 26,
2017 May 28,
2017
Raw materials and packaging $ 204.2
$ 182.1
Work in process 124.9
91.9
Finished goods 682.2
612.9
Supplies and other 47.9
47.3
Total $ 1,059.2
$ 934.2

~~12.~~

10. INCOME TAXES

~~Income tax expense from continuing operations for~~

In the ~~second~~first quarter of fiscal ~~2018~~2022 and ~~2017 was $109.5~~2021, we recognized income tax expense of $69.7 million and ~~$78.4 million, respectively. Income tax expense from continuing operations for the first half of fiscal 2018 and 2017 was $229.5 million and $247.6~~$86.7 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, ~~from continuing operations,~~ inclusive of equity method investment earnings) ~~from continuing operations~~ was ~~32.8%~~22.8% and ~~40.7%~~20.8% for the ~~second~~first quarter of fiscal ~~2018~~2022 and ~~2017,~~2021, respectively. ~~The effective tax rate from continuing operations was 37.8% and 53.8% for the first half of fiscal 2018 and 2017, respectively.~~

The effective tax rate in the ~~second~~first quarter of fiscal ~~2018 reflects~~2022 reflected a benefit of $3.6 million from the ~~following:~~

~~an income~~settlement of tax ~~benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond~~issues that ~~which is attributable to the original fair value of the awards upon the date of grant,~~

~~additional income tax expense related to state taxes, and~~

~~an income tax benefit related to a change in estimate of the income tax effect of undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made.~~

were previously reserved.

The effective tax rate for the first half of fiscal 2018 reflects the above-cited items, as well as additional expense related to the repatriation of cash from foreign subsidiaries and the tax expense related to undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made.

~~The effective tax rate in the second~~ quarter of fiscal ~~2017 reflects~~2021 reflected a benefit of $7.6 million resulting from the ~~following:~~

~~an income tax benefit allowed upon~~regulations issued by the ~~vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value~~U.S. Treasury and Internal Revenue Service on certain provisions of the ~~awards upon the date of grant,~~

~~additional tax expense associated with a change in estimate regarding the tax basis of the Spicetec business that was sold in the first quarter of fiscal~~ 2017 ~~and~~

~~additional tax expense associated with non-deductible goodwill in our Mexican business, for which an impairment charge was recognized.~~

~~The effective tax rate for the first half of fiscal 2017 reflects the above-cited items, as well as the following:~~

~~additional tax expense associated with non-deductible goodwill sold in connection with the dispositions of the Spicetec~~Tax Cuts and ~~JM Swank businesses,~~

~~additional tax expense associated with non-deductible goodwill in our Canadian business, for which an impairment charge was recognized,~~

an income tax benefit for excess tax benefits allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant, and

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

Jobs Act.

The amount of gross unrecognized tax benefits for uncertain tax positions was ~~$34.0~~$26.0 million as of ~~November 26, 2017~~August 29, 2021 and ~~$39.3~~$33.0 million as of May ~~28, 2017. There were no balances included as of either November 26, 2017 or May 28, 2017,~~30, 2021. Included in both amounts was $0.8 million for tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The gross unrecognized tax benefits excluded related liabilities for gross interest and penalties of ~~$7.1~~$7.8 million and ~~$6.0~~$8.8 million as of ~~November 26, 2017~~August 29, 2021 and May ~~28, 2017,~~30, 2021, respectively.

The net amount of unrecognized tax benefits at ~~November 26, 2017~~August 29, 2021 and May ~~28, 2017~~30, 2021 that, if recognized, would impact the Company's effective tax rate was ~~$25.7~~$21.3 million and ~~$31.6~~$28.2 million, respectively. Included in those amounts is $6.6 million and $15.6 million, respectively, that would be reported in discontinued operations. Recognition of these tax benefits would have a favorable impact on the Company's effective tax rate.

We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to ~~$9.4~~$7.9 million over the next twelve months due to various ~~federal,~~ state ~~and foreign~~ audit settlements and the expiration of statutes of limitations.

In fiscal 2021, we completed a restructuring of ~~November 26, 2017 and May 28, 2017, we had~~our ownership interest in the Ardent Mills joint venture, a ~~deferred tax asset~~milling business, that utilized a portion of ~~$1.09 billion and $1.08 billion, respectively, that was generated from the~~our capital loss ~~realized on~~carryforward prior to its expiration. Also in fiscal 2021, we completed several other transactions related to retained assets in conjunction with the ~~sale~~divestitures of the ~~Private Brands operations with corresponding valuation allowances of $995.1 million~~Peter Pan^® peanut butter and ~~$990.9 million, respectively, to reflect the uncertainty regarding the ultimate realization~~Egg Beaters^® businesses that we believe will utilize a portion of the remaining capital loss carryforward. These transactions are subject to certain elections and are currently under review by the Internal Revenue Service. We believe they may result in increases to the tax ~~asset. During the first half of fiscal 2018, the balance of the deferred~~basis in those assets and if successful would result in tax ~~asset was adjusted for the impact of state law changes, realization of certain tax attributes, and the settlement of certain tax indemnity claims under the contract terms of the Private Brands sale.~~

~~Historically, we~~benefits being realized in future periods.

We have not provided ~~U.S.~~any deferred taxes on ~~the cumulative~~ undistributed earnings of our foreign subsidiaries. During the first quarter of fiscal 2018, we decided to repatriate certain cash balances then held in Italy, Canada, Mexico, the Netherlands, and Luxembourg due to the timing of cash flows in connection with certain business acquisition and divestiture activity, as well as forecasted levels of short-term borrowings. We repatriated $151.3 million during the second quarter of fiscal 2018. The cash repatriation resulted in the repatriation of $115.0 million in previously undistributedDeferred taxes will be provided for earnings of ~~our foreign subsidiaries. As a result of the repatriation,~~non-U.S. affiliates and associated companies when we ~~have recognized $11.8 million of income tax expense in the first half of fiscal 2018.~~

~~In conjunction with this repatriation, we have determined~~determine that ~~additional previously undistributed~~such earnings ~~of certain foreign subsidiaries~~are no longer ~~meet the requirements for indefinite reinvestment under applicable accounting guidance and, therefore, recognized an additional $6.8 million of income tax expense in the first half of fiscal 2018.~~

An additional $2.5 million and $6.8 million of income tax expense was recognized in the second quarter and first half of fiscal 2018, respectively, primarily related to a valuation allowance on foreign tax credits generated in the current year and prior periods.

~~We continue to believe the remaining undistributed earnings of our foreign subsidiaries, after taking into account the above transactions, are~~ indefinitely reinvested and ~~therefore have not provided any additional U.S. deferred taxes.~~

~~On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. We are~~will result in the process of evaluating the impact of the recently enacted law to our Condensed Consolidated Financial Statements. The impact is expected to be material to the Condensed Consolidated Financial Statements.

~~13.~~a tax liability upon distribution.

11. CONTINGENCIES

Litigation Matters

We are a party to ~~various environmental proceedings and~~certain litigation ~~primarily related~~matters relating to our acquisition ~~in fiscal 1991~~ of Beatrice Company ("Beatrice"). As a result of the acquisition of Beatrice and the significant pre-acquisition contingencies of the Beatrice businesses and its former subsidiaries, our condensed consolidated post-acquisition financial statements reflect liabilities associated with the estimated resolution of these contingencies. Such liabilities include various in fiscal 1991, including litigation ~~and environmental~~ proceedings related to businesses divested by Beatrice prior to our acquisition of ~~Beatrice. The litigation~~the company. These proceedings ~~include~~have included suits against a number of lead paint and pigment manufacturers, including ConAgra Grocery Products Company, LLC, a wholly owned subsidiary of the Company ("ConAgra Grocery Products")~~, and the Company~~ as alleged ~~successors~~successor to W. P. Fuller & Co., a lead paint and pigment manufacturer owned and operated by a predecessor to Beatrice from 1962 until 1967. ~~Although decisions~~These lawsuits generally seek damages for personal injury, property damage, economic loss, and governmental expenditures allegedly caused by the use of lead-based paint, and/or injunctive relief for inspection and abatement. When such lawsuits have been brought, ConAgra Grocery Products has denied liability, both on the merits of the claims and on the basis that we do not believe it to be the successor to any liability attributable to W. P. Fuller & Co. Decisions favorable to us ~~have been~~were rendered in Rhode Island, New Jersey, Wisconsin, and ~~Ohio, we~~Ohio. ConAgra Grocery Products was held liable for the abatement of a public nuisance in California, and the case was dismissed pursuant to settlement in July 2019 as discussed in the following paragraph. We remain a defendant in 1 active ~~suits~~suit in ~~Illinois and California.~~Illinois. The Illinois suit seeks class-wide relief for reimbursement of costs associated with the testing of lead levels in blood. We do not believe it is probable that we have incurred any liability with respect to the Illinois case, nor is it possible to estimate any potential exposure.

In California, a number of cities and counties joined in a consolidated action seeking abatement of ~~the~~an alleged public ~~nuisance.~~nuisance in the form of lead-based paint potentially present on the interior of residences, regardless of its condition. On September 23, 2013, a trial of the California case concluded in the Superior Court of California for the County of Santa Clara, and on January 27, 2014, the court entered a judgment (the "Judgment") against ConAgra Grocery Products and ~~two~~2 other defendants ordering the creation of a California abatement fund in the amount of $1.15 billion. Liability iswas joint and several. The Company appealed the Judgment, and on November 14, 2017 the California Court of Appeal for the Sixth Appellate District reversed in part, holding that the defendants were not liable to pay for abatement of homes built after 1950, but affirmed the Judgment as to homes built before ~~1951 and~~1951. The Court of Appeal remanded the case to the trial court with directions to recalculate the ~~sum~~amount of the abatement fund estimated to be ~~paid into~~necessary to cover the ~~abatement fund. The Company has~~cost of remediating pre-1951 homes, and to hold an evidentiary hearing regarding appointment of a suitable receiver. ConAgra Grocery Products and the other defendants petitioned the California Supreme Court for ~~further~~ review of the decision, which ~~the Company believes~~we believe to be an unprecedented expansion of current California law. ~~In light~~On February 14, 2018, the California Supreme Court denied the petition and declined to review the merits of the ~~unsettled nature of California public nuisance law~~case, and the ~~ongoing appeal, a loss is considered neither probable nor estimable,~~case was remanded to the trial court for further proceedings. ConAgra Grocery Products and the ~~Company has accordingly not accrued any loss related~~other defendants sought further review of certain issues from the Supreme Court of the United States, but on

October 15, 2018, the Supreme Court declined to ~~this~~review the case. ~~In addition, it is not possible~~On September 4, 2018, the trial court recalculated its estimate of the amount needed to ~~estimate exposure~~remediate pre-1951 homes in the ~~remaining case~~plaintiff jurisdictions to be $409.0 million. As of July 10, 2019, the parties reached an agreement in ~~Illinois,~~principle to resolve this matter, which ~~is based~~agreement was approved by the trial court on ~~different legal theories. If ultimately necessary,~~July 24, 2019, and the ~~Company~~action against ConAgra Grocery Products was dismissed with prejudice. Pursuant to the settlement, ConAgra Grocery Products will ~~look~~pay a total of $101.7 million in 7 installments to be paid annually from fiscal 2020 through fiscal 2026. As part of the settlement, ConAgra Grocery Products has provided a guarantee of up to $15.0 million in the event co-defendant, NL Industries, Inc., defaults on its ~~insurance policies~~payment obligations.

We have accrued $11.9 million and $51.9 million, within other accrued liabilities and other noncurrent liabilities, respectively, for ~~coverage; its carriers are on notice. However, the~~this matter as of August 29, 2021. The extent of insurance coverage is uncertain and the ~~Company cannot assure that the final resolution~~Company's carriers are on notice; however, any possible insurance recovery has not been considered for purposes of ~~these matters will not have a material adverse effect on its financial condition, results of operations, or liquidity.~~

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"). These sites involve locations previously owned or operated by predecessors of Beatrice that used or produced petroleum, pesticides, fertilizers, dyes, inks, solvents, PCBs, acids, lead, sulfur, tannery wastes, and/or other contaminants. In the past five years, Beatrice has paid or is in the process of paying its liability share at 31 of these sites. Reserves for these Beatrice environmental proceedings have been established based ondetermining our best estimate of the undiscounted remediation liabilities, which estimates include evaluation of investigatory studies, extent of required clean-up, the known volumetric contribution of Beatrice and other potentially responsible parties, and its experience in remediating sites. The accrual for Beatrice-related environmental matters totaled $52.8 million as of November 26, 2017, a majority of which relates to the Superfund and state-equivalent sites referenced above. During the third quarter of fiscal 2017, a final Remedial Investigation/Feasibility Study was submitted for the Southwest Properties portion of the Wells G&H Superfund site, which is one of the Beatrice sites. The U.S. Environmental Protection Agency (the "EPA") issued a Record of Decision (the "ROD") for the Southwest Properties portion of the site on September 29, 2017, and will subsequently enter into negotiations with potentially responsible parties to determine final responsibility for implementing the ROD.

~~In June 2009, an accidental explosion occurred at our manufacturing facility in Garner, North Carolina. This facility was the primary production facility for our~~ ~~Slim Jim~~^® branded meat snacks. In June 2009, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives announced its determination that the explosion was the result of an accidental natural gas release and not a deliberate act. During the fourth quarter of fiscal 2011, we settled our property and business interruption claims related to the Garner accident with our insurance providers. During the fourth quarter of fiscal 2011, Jacobs Engineering Group Inc. ("Jacobs"), our engineer and project manager at the site, filed a declaratory judgment action against us seeking indemnity for personal injury claims brought against it as a result of the accident. During the first quarter of fiscal 2012, our motion for summary judgment was granted and the suit was dismissed without prejudice on the basis that the suit was filed prematurely. In the third quarter of fiscal 2014, Jacobs refiled its action seeking indemnity. On March 25, 2016, a Douglas County jury in Nebraska rendered a verdict in favor of Jacobs and against us in the amount of $108.9 million plus post-judgment interest. We filed our Notice of Appeal in September 2016, and the case is awaiting decision by the Nebraska Supreme Court. The appeal will be decided directly by the Nebraska Supreme Court. Although our insurance carriers have provided customary notices of reservation of their rights under the policies of insurance, we expect any ultimate exposure in this case to be limited to the applicable insurance deductible.

liability.

We are party to a number of putative class action lawsuits challenging various product claims made in the Company's product labeling. These matters include Briseno v. ConAgra Foods, Inc., in which it is alleged that the labeling for Wesson^® oils as 100% natural is false and misleading because the oils contain genetically modified plants and organisms. In February 2015, the U.S. District Court for the Central District of California granted class certification to permit plaintiffs to pursue state law claims. The Company appealed to the United States Court of Appeals for the Ninth Circuit, which affirmed class certification in January 2017. The Supreme Court of the United States ~~Supreme Court~~ declined to review the decision and the case ~~has been~~was remanded to the trial court for further proceedings. On April 4, 2019, the trial court granted preliminary approval of a settlement in this matter. 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. On June 1, 2021, the appellate court rejected the settlement and remanded to the trial court for further proceedings. While we cannot predict with certainty the results of this or any other legal proceeding challenging our product claims, we do not expect ~~this matter~~these matters to have a material adverse effect on our financial condition, results of operations, or business.

We are party to ~~a number of~~ matters challenging the Company's wage and hour practices. These matters include a number of ~~putative~~ class actions consolidated under the caption Negrete v. ConAgra Foods, Inc., et ~~al,~~al., pending in the U.S. District Court for the Central District of California, in which the plaintiffs allege a pattern of violations of California and/or federal law at several current and former Company manufacturing facilities across the State of California. On June 21, 2021, the trial court granted preliminary approval of a settlement in this matter. 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.

We are party to a number of matters asserting product liability claims against the Company related to certain Pam^® and other cooking spray products. These lawsuits generally seek damages for personal injuries allegedly caused by defects in the design, manufacture, or safety warnings of the cooking spray products. We have put the Company's insurance carriers on notice. 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.

The Company, its directors, and several of its executive officers are defendants in several class actions alleging violations of federal securities laws. The lawsuits assert that the Company's officers made material misstatements and omissions that caused the market to have an unrealistically positive assessment of the Company's financial prospects in light of the acquisition of Pinnacle, thus causing the Company's securities to be overvalued prior to the release of the Company's consolidated financial results on December 20, 2018 for the second quarter of fiscal year 2019. The first of these lawsuits, captioned West Palm Beach Firefighters' Pension Fund v. Conagra Brands, Inc., et al., with which subsequent lawsuits alleging similar facts have been consolidated, was filed on February 22, 2019 in the U.S. District Court for the Northern District of Illinois. That consolidated lawsuit was dismissed with prejudice on December 23, 2020 for failure to state a claim. On January 22, 2021, the plaintiff filed a notice of appeal of the trial court's decision to the U.S. Court of Appeals for the Seventh Circuit. 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. in the U.S. District Court for the Northern District of Illinois asserting harm to the Company due to alleged breaches of fiduciary duty and mismanagement in connection with the Pinnacle acquisition. 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. On July 22, 2019 and August 6, 2019, respectively, two additional stockholder derivative lawsuits captioned Opperman v. Connolly, et al. and Dahl v. Connolly, et al. were filed in the U.S. District Court for the Northern District of Illinois asserting similar facts and claims as the Klein v. Arora, et al. matter. On October 21, 2019, the Company received an additional demand from a stockholder under Delaware law to appoint a special committee to investigate the conduct of certain officers and directors in connection with the Pinnacle acquisition and the Company's public statements. All remaining stockholder lawsuits and demands are currently stayed by agreement pending the final outcome of the West Palm Beach Firefighters' Pension Fund matter. We have put the Company's insurance carriers on notice of each of these securities

and 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

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

In October 2019, the Minnesota Pollution Control Agency ("MPCA") initiated an odor complaint investigation at our Waseca, Minnesota vegetable processing facility. As a result of the investigation, the MPCA required implementation of a continuous monitoring system running from May 1 – October 31 to monitor hydrogen sulfide emissions at the wastewater treatment facility. As a result of the monitoring data findings, the MPCA has alleged violations of Minnesota Ambient Air Quality Standards based on our hydrogen sulfide emissions during calendar years 2020 and 2021. The MPCA proposed a penalty of $2.2 million for 2020, and we are awaiting a proposed additional penalty for 2021 until after the monitoring season is complete. We are currently in settlement negotiations with the MPCA related to these allegations.

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. 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"). These sites involve locations previously owned or operated by predecessors of Beatrice that used or produced petroleum, pesticides, fertilizers, dyes, inks, solvents, polychlorinated biphenyls, acids, lead, sulfur, tannery wastes, and/or other contaminants. Reserves for these Beatrice environmental proceedings have been established based on our best estimate of the undiscounted remediation liabilities, which estimates include evaluation of investigatory studies, extent of required clean-up, the known volumetric contribution of Beatrice and other potentially responsible parties, and its experience in remediating sites. The accrual for Beatrice-related environmental matters totaled $55.0 million ($2.4 million within other accrued liabilities and $52.6 million within other noncurrent liabilities) as of August 29, 2021, a majority of which relates to the Superfund and state-equivalent sites referenced above. During the third quarter of fiscal 2017, a final Remedial Investigation/Feasibility Study was submitted for the Southwest Properties portion ("Operating Unit 4") of the Wells G&H Superfund site, which is one of the Beatrice sites. The U.S. 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. On September 14, 2020, the district court entered a consent decree among EPA and the settling defendants, including the Company.

Guarantees and Other Contingencies

In certain limited situations, we will guarantee ~~obligations~~an obligation of an unconsolidated entity. We guarantee an obligation of the Lamb Weston business pursuant to a guarantee ~~arrangements~~arrangement that existed prior to the ~~Spinoff and~~spinoff of the Lamb Weston business (the "Spinoff"). The guarantee remained in place following completion of the Spinoff and it will remain in place until such guarantee ~~obligations are~~obligation is substituted for guarantees issued by Lamb Weston. ~~Such guarantee arrangements are described below.~~ Pursuant to the ~~Separation~~separation and ~~Distribution Agreement,~~distribution agreement, dated as of November 8, 2016 (the "Separation Agreement"), between us and Lamb Weston, ~~these~~this guarantee ~~arrangements are~~arrangement is deemed ~~liabilities~~a liability of Lamb Weston that ~~were~~was transferred to Lamb Weston as part of the Spinoff. Accordingly, in the event that we are required to make any payments as a result of ~~these~~this guarantee ~~arrangements,~~arrangement, Lamb Weston is obligated to indemnify us for any such liability, reduced by any insurance proceeds received by us, in accordance with the terms of the indemnification provisions under the Separation Agreement.

Lamb Weston is a party to a warehouse services agreement with a third-party warehouse provider through July 2035. Under this agreement, Lamb Weston is required to make payments for warehouse services based on the quantity of goods stored and other service factors. We have guaranteed the warehouse provider that we will make the payments required under the agreement in the event that Lamb Weston fails to perform. Minimum payments of $1.5 million per month are required under this agreement. It is not possible to determine the maximum amount of the payment obligations under this agreement. Upon completion of the Spinoff, we recognized a liability for the estimated fair value of this guarantee. As of November 26, 2017, the amount of this guarantee, recorded in other noncurrent liabilities, was $28.9 million.

Lamb Weston is a party to an agricultural sublease agreement with a third party for certain farmland through ~~2020~~2025 (subject, at Lamb Weston's option, to extension for ~~two~~1 additional five-year ~~periods)~~ period). Under the terms of the sublease agreement, Lamb Weston is required to make certain rental payments to the sublessor. We have guaranteed the sublessor Lamb Weston's performance and the payment of all amounts (including indemnification obligations) owed by Lamb Weston under the sublease agreement, up to a maximum of $75.0 million. We believe the farmland associated with this sublease agreement is readily marketable for lease to other area farming operators. As such, we believe that any financial exposure to the ~~company,~~Company, in the event that we were required to perform under the ~~guaranty,~~guarantee, would be largely mitigated.

We also guarantee a lease ~~certain office buildings~~resulting from ~~entities that~~an exited facility. As of August 29, 2021, the remaining term of this arrangement did not exceed six years and the maximum amount of future payments we have determined to be variable interest entities. The lease agreements contain put options exercisable now and remain exercisable until generally 30 days after the end of the respective lease agreements, that allow the lessors to require us to purchase the buildings at the greater of original construction cost, or fair market value, without a lease in place. We have financial exposure with respect to these entities in the event we are required to purchase the leased buildings for a price in excess of the then current fair value under the applicable lease purchase options. We are amortizing the difference between the put price and the estimated fair value (without a lease agreement in place) of each respective property over the remaining respective lease term within selling, general and administrative expenses. As of November 26, 2017 and May 28, 2017, the estimated amount by which the put prices exceeded the fair values of the related propertiesguaranteed was $50.7 million, of which we had accrued $10.2 million and $8.4 million, respectively. In December 2017, subsequent to the second quarter of fiscal 2018, we purchased a building that had been subject to a put option. We will recognize a net loss of approximately $13 million for the early termination of the associated lease in our third quarter of fiscal 2018. Also in December 2017, we made an offer to purchase another property subject to a put option. We have not entered into a binding legal contract in connection with this offer. However, if our offer is accepted, we may recognize an estimated loss of $30 million to $40 million, upon closing of the transaction, for the early exit of an unfavorable lease contract. If this transaction is completed, we would have one remaining leased building subject to a put option for which the put option price exceeds the estimated fair value by $8.2 million, of which we had accrued $1.0 million, as of November 26, 2017.

$13.2 million.

General

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. It~~liquidity; however, it is reasonably possible that a change of the estimates of any of the foregoing matters may occur in the future ~~and, as noted, while unlikely, the lead paint matter~~which could ~~result in~~have a material ~~final judgment.~~ adverse effect on our financial condition, results of operations, or liquidity.

Costs of legal services associated with the foregoing matters are recognized in earnings as services are provided.

~~14.~~

12. PENSION AND POSTRETIREMENT BENEFITS

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. We also sponsor postretirement plans which provide certain medical and dental benefits ~~("other postretirement benefits")~~ to qualifying U.S. employees.

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. The amendment will freeze the compensation and service periods used to calculate pension benefits for active employees who participate in the plans. Beginning January 1, 2018, impacted employees will not accrue additional benefit for future service and eligible compensation received under these plans.

As a result of the amendment, we were required to remeasure our pension plan liability as of September 30, 2017. In connection with the remeasurement, we updated the effective discount rate assumption from 3.90% to 3.78%. 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. 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.

Components of pension ~~benefit~~ and ~~other~~ postretirement ~~benefit~~plan costs ~~are (includes amounts related to discontinued operations):~~(benefits) are:

	Pension Plans
	Thirteen weeks ended
	August 29, 2021			August 30, 2020
Service cost	$	2.7		$	3.1
Interest cost		20.8			21.7
Expected return on plan assets		(36.4	)		(35.0	)
Amortization of prior service cost		0.5			0.6
Pension cost (benefit) — Company plans		(12.4	)		(9.6	)
Pension cost (benefit) — multi-employer plans		1.9			1.8
Total pension cost (benefit)	$	(10.5	)	$	(7.8	)

	Postretirement Plans
	Thirteen weeks ended
	August 29, 2021			August 30, 2020
Service cost	$	0		$	0.1
Interest cost		0.3			0.3
Amortization of prior service cost (benefit)		(0.5	)		(0.5	)
Recognized net actuarial gain		(0.8	)		(0.9	)
Total postretirement cost (benefit)	$	(1.0	)	$	(1.0	)

Pension Benefits
Thirteen weeks ended Twenty-six weeks ended
November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Service cost $ 13.2
$ 15.9
$ 25.9
$ 32.6
Interest cost 27.7
29.9
55.9
59.9
Expected return on plan assets (54.6 ) (53.9 ) (108.8 ) (107.7 )
Amortization of prior service cost 0.7
0.7
1.4
1.3
Recognized net actuarial loss 3.4
—
3.4
—
Special termination benefits —
1.5
—
1.5
Curtailment loss 0.7
—
0.7
—
Benefit cost (benefit) — Company plans (8.9 ) (5.9 ) (21.5 ) (12.4 )
Pension benefit cost — multi-employer plans 4.2
2.8
5.7
5.1
Total benefit cost (benefit) $ (4.7 ) $ (3.1 ) $ (15.8 ) $ (7.3 )

Postretirement Benefits
Thirteen weeks ended Twenty-six weeks ended
November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Service cost $ —
$ 0.1
$ —
$ 0.1
Interest cost 0.9
1.0
1.8
2.1
Amortization of prior service benefit (0.8 ) (1.6 ) (1.6 ) (3.3 )
Recognized net actuarial loss —
0.1
—
0.2
Total cost (benefit) $ 0.1
$ (0.4 ) $ 0.2
$ (0.9 )

The Company uses a split discount rate (spot-rate approach) for the U.S. plans and certain foreign plans. The spot-rate approach applies separate discount rates for each projected benefit payment in the calculation of pension service and interest cost.

The weighted-average discount rates for service and interest costs under the spot-rate approach used for pension ~~benefit~~ cost ~~from May 29, 2017 through September 30, 2017,~~in fiscal 2022 were ~~4.19%~~3.50% and ~~3.26%~~2.29%, respectively. ~~The weighted-average discount rates for service and interest costs subsequent to September 30, 2017 are 4.04% and 3.24%, respectively.~~

During the ~~second~~first quarter ~~and first half~~ of fiscal ~~2018,~~2022, we contributed ~~$2.3~~$2.9 million ~~and $6.1 million, respectively,~~ to our pension plans and ~~contributed $3.0~~$2.1 million ~~and $6.9 million, respectively,~~ to our ~~other~~ postretirement plans. Based upon the current funded status of the plans and the current interest rate environment, we anticipate making further contributions of approximately ~~$6.8~~$9.4 million to our pension plans ~~for~~during the remainder of fiscal ~~2018.~~2022. We anticipate making further contributions of approximately ~~$11.8~~$6.9 million to our ~~other~~ postretirement plans during the remainder of fiscal ~~2018.~~2022. These estimates are based on ERISA guidelines, current tax laws, plan asset performance, and liability assumptions, which are subject to change.

During the second quarter of fiscal 2018, we recorded an expense of $2.1 million related to our expected incurrence of certain multi-employer pension plan withdrawal costs. This expense has been included in restructuring activities.

~~15.~~

13. STOCKHOLDERS' EQUITY

The following table presents a reconciliation of our stockholders' equity accounts for the ~~twenty-six~~thirteen weeks ended~~November 26, 2017~~: August 29, 2021:

	Conagra Brands, Inc. Stockholders' Equity
	Common Shares		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Noncontrolling Interests			Total Equity
Balance at May 30, 2021		584.2	$	2,921.2	$	2,342.1		$	6,262.6		$	5.8		$	(2,979.9	)	$	79.6		$	8,631.4
Stock option and incentive plans						(37.1	)		0.2						21.8			0.3			(14.8	)
Currency translation adjustments												(14.4	)					(1.3	)		(15.7	)
Repurchase of common shares															(50.0	)					(50.0	)
Derivative adjustments												(2.1	)								(2.1	)
Activities of noncontrolling interests																		0.3			0.3
Pension and postretirement healthcare benefits												1.3									1.3
Dividends declared on common stock; $0.3125 per share									(149.9	)											(149.9	)
Net income attributable to Conagra Brands, Inc.									235.4												235.4
Balance at August 29, 2021		584.2	$	2,921.2	$	2,305.0		$	6,348.3		$	(9.4	)	$	(3,008.1	)	$	78.9		$	8,635.9

Conagra Brands, Inc. Stockholders' Equity

Common
Shares

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Noncontrolling
Interests

Total
Equity
Balance at May 28, 2017 567.9
$ 2,839.7
$ 1,171.9
$ 4,247.0
$ (212.9 ) $ (4,054.9 ) $ 87.0
$ 4,077.8
Stock option and incentive plans (5.1 ) 0.2
27.0
22.1
Spinoff of Lamb Weston 15.5
15.5
Currency translation adjustment, net 19.9

19.9
Repurchase of common shares (580.0 ) (580.0 )
Unrealized gain on securities 0.4
0.4
Derivative adjustment, net 0.7
0.7
Activities of noncontrolling interests 1.8
1.8
Pension and postretirement healthcare benefits 26.7
26.7
Dividends declared on common stock; $0.425 per share (174.4 ) (174.4 )
Net income attributable to Conagra Brands, Inc. 376.0
376.0
Balance at November 26, 2017 567.9
$ 2,839.7
$ 1,166.8
$ 4,464.3
$ (165.2 ) $ (4,607.9 ) $ 88.8
$ 3,786.5

~~On November 9, 2016, we completed~~

The following table presents a reconciliation of our stockholders' equity accounts for the Spinoff of the Lamb Weston business. During the first half of fiscal 2018, the income tax basis of certain Lamb Weston assets and liabilities were finalized. The adjustment to Retained Earnings was recorded to reflect the adjustment to deferred income taxes.thirteen weeks ended August 30, 2020:

	Conagra Brands, Inc. Stockholders' Equity
	Common Shares		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Noncontrolling Interests		Total Equity
Balance at May 31, 2020		584.2	$	2,921.2	$	2,323.2		$	5,471.2		$	(109.6	)	$	(2,729.9	)	$	74.6	$	7,950.7
Stock option and incentive plans						(25.4	)		(0.7	)					33.5					7.4
Adoption of ASU 2016-13									(1.1	)										(1.1	)
Currency translation adjustments												15.3						2.2		17.5
Derivative adjustments												(1.2	)							(1.2	)
Activities of noncontrolling interests																		0.8		0.8
Pension and postretirement healthcare benefits												(0.3	)							(0.3	)
Dividends declared on common stock; $0.2125 per share									(103.8	)										(103.8	)
Net income attributable to Conagra Brands, Inc.									329.0											329.0
Balance at August 30, 2020		584.2	$	2,921.2	$	2,297.8		$	5,694.6		$	(95.8	)	$	(2,696.4	)	$	77.6	$	8,199.0

~~16.~~

14. FAIR VALUE MEASUREMENTS

~~FASB~~

Financial Accounting Standards Board guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs used to measure fair value are as follows:

Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities,

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.

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

The following table presents our financial assets and liabilities measured at fair value on a recurring basis, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of ~~November 26, 2017~~:August 29, 2021:

	Level 1		Level 2		Level 3		Net Value
Assets:
Derivative assets	$	9.5	$	2.8	$	0	$	12.3
Marketable securities		7.9		0		0		7.9
Deferred compensation assets		8.9		0		0		8.9
Total assets	$	26.3	$	2.8	$	0	$	29.1
Liabilities:
Derivative liabilities	$	0	$	0.7	$	0	$	0.7
Deferred compensation liabilities		86.1		0		0		86.1
Total liabilities	$	86.1	$	0.7	$	0	$	86.8

Level 1 Level 2 Level 3 Net Value
Assets:
Derivative assets $ 3.3
$ 0.9
$ —
$ 4.2
Available-for-sale securities 4.3
—
—
4.3
Total assets $ 7.6
$ 0.9
$ —
$ 8.5
Liabilities:
Derivative liabilities $ —
$ 2.0
$ —
$ 2.0
Deferred compensation liabilities 53.7
—
—
53.7
Total liabilities $ 53.7
$ 2.0
$ —
$ 55.7

	Level 1		Level 2		Level 3		Net Value
Assets:
Derivative assets	$	13.0	$	2.5	$	0	$	15.5
Marketable securities		6.6		0		0		6.6
Deferred compensation assets		8.8		0		0		8.8
Total assets	$	28.4	$	2.5	$	0	$	30.9
Liabilities:
Derivative liabilities	$	0	$	6.9	$	0	$	6.9
Deferred compensation liabilities		81.0		0		0		81.0
Total liabilities	$	81.0	$	6.9	$	0	$	87.9

Level 1 Level 2 Level 3 Net Value
Assets:
Derivative assets $ 2.0
$ 0.3
$ —
$ 2.3
Available-for-sale securities 3.5
—
—
3.5
Total assets $ 5.5
$ 0.3
$ —
$ 5.8
Liabilities:
Derivative liabilities $ —
$ 1.3
$ —
$ 1.3
Deferred compensation liabilities 47.2
—
—
47.2
Total liabilities $ 47.2
$ 1.3
$ —
$ 48.5

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

basis using Level 3 inputs.

In the first quarter of fiscal ~~2018, a charge of $4.7~~2021, we recognized charges totaling $3.0 million ~~was recognized~~ in ~~the Corporate~~our Grocery & Snacks segment for the impairment of certain long-lived assets. The impairment was measured based upon the estimated sales price of the ~~assets.~~

~~In the second quarter~~assets and ~~first half of fiscal 2017, we recognized goodwill impairment charges~~has been included in the International segment of $43.9 million and $183.1 million, respectively. See Note 7 for discussion of the methodology employed to measure this impairment. We also recognized an impairment of an indefinite-lived brand totaling $24.4 million in the International segment in the first quarter of fiscal 2017. The fair value of the brand was estimated using the "Relief From Royalty" method.

restructuring activities.

The carrying amount of long-term debt (including current installments) was ~~$3.46~~$8.80 billion and $8.30 billion as of ~~November 26, 2017~~August 29, 2021 and ~~$2.97 billion as of~~ May ~~28, 2017~~.30, 2021, respectively. Based on current market rates, the fair value of this debt (level 2 liabilities) at ~~November 26, 2017~~August 29, 2021 and May ~~28, 2017~~,30, 2021, was estimated at ~~$3.80~~$10.32 billion and ~~$3.32~~$9.76 billion, respectively.

~~17.~~

15. BUSINESS SEGMENTS AND RELATED INFORMATION

We reflect our results of operations in ~~five~~4 reporting segments: Grocery & Snacks, Refrigerated & Frozen, International, ~~Foodservice,~~ and ~~Commercial.~~

Foodservice.

The Grocery & Snacks reporting segment principally includes branded, shelf-stable food products sold in various retail channels in the United States.

The Refrigerated & Frozen reporting segment principally includes branded, ~~temperature controlled~~temperature-controlled food products sold in various retail channels in the United States.

The International reporting segment principally includes branded food products, in various temperature states, sold in various retail and foodservice channels outside of the United States.

The Foodservice reporting segment includes branded and customized food products, including meals, entrees, sauces and a variety of custom-manufactured culinary products packaged for sale to restaurants and other foodservice establishments primarily in the United States.

The Commercial reporting segment included commercially branded and private label food and ingredients, which were sold primarily to commercial, restaurant, foodservice, food manufacturing, and industrial customers. The segment's primary food items included a variety of vegetable, spice, and frozen bakery goods, which were sold under brands such as ~~Spicetec Flavors & Seasonings~~^®~~. The Spicetec and JM Swank businesses were sold in the first quarter of fiscal 2017.~~

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

~~Intersegment sales have been recorded at amounts approximating market.~~

Operating profit for each of the segments is based on net sales less all identifiable operating expenses. General corporate expense, ~~net~~pension and postretirement non-service income, interest expense, ~~and~~net, income taxes, and equity method investment earnings have been excluded from segment operations.

	Thirteen weeks ended
	August 29, 2021			August 30, 2020
Net sales
Grocery & Snacks	$	1,075.1		$	1,131.0
Refrigerated & Frozen		1,101.8			1,130.6
International		236.6			219.0
Foodservice		239.8			198.3
Total net sales	$	2,653.3		$	2,678.9
Operating profit
Grocery & Snacks	$	215.9		$	283.1
Refrigerated & Frozen		157.6			240.1
International		34.1			38.5
Foodservice		20.3			25.4
Total operating profit	$	427.9		$	587.1
Equity method investment earnings		20.2			6.5
General corporate expense		64.6			77.2
Pension and postretirement non-service income		(16.1	)		(13.8	)
Interest expense, net		94.2			113.7
Income tax expense		69.7			86.7
Net income	$	235.7		$	329.8
Less: Net income attributable to noncontrolling interests		0.3			0.8
Net income attributable to Conagra Brands, Inc.	$	235.4		$	329.0

The following table presents further disaggregation of our net sales:

	Thirteen weeks ended
	August 29, 2021		August 30, 2020
Frozen	$	920.4	$	918.4
Staples
Other shelf-stable		641.6		713.9
Refrigerated		181.4		212.2
Snacks		433.5		417.1
Foodservice		239.8		198.3
International		236.6		219.0
Total net sales	$	2,653.3	$	2,678.9

Thirteen weeks ended Twenty-six weeks ended
November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Net sales
Grocery & Snacks $ 900.4
$ 853.2
$ 1,646.2
$ 1,610.4
Refrigerated & Frozen 758.1
740.7
1,373.8
1,345.3
International 220.3
211.4
411.2
406.1
Foodservice 294.6
283.1
546.4
551.1
Commercial —
—
—
71.1
Total net sales $ 2,173.4
$ 2,088.4
$ 3,977.6
$ 3,984.0
Operating profit
Grocery & Snacks $ 199.8
$ 220.2
$ 376.0
$ 400.7
Refrigerated & Frozen 128.5
118.0
230.4
210.2
International 20.2
(26.7 ) 39.1
(175.9 )
Foodservice 47.4
31.9
70.6
53.6
Commercial —
(0.5 ) —
202.8
Total operating profit $ 395.9
$ 342.9
$ 716.1
$ 691.4
Equity method investment earnings 20.6
17.2
50.6
30.3
General corporate expense 44.9
113.3
85.1
148.9
Interest expense, net 38.0
54.1
74.4
112.3
Income tax expense 109.5
78.4
229.5
247.6
Income from continuing operations $ 224.1
$ 114.3
$ 377.7
$ 212.9
Less: Net income attributable to noncontrolling interests of continuing operations 1.0
0.6
1.8
0.8
Income from continuing operations attributable to Conagra Brands, Inc. $ 223.1
$ 113.7
$ 375.9
$ 212.1

To be consistent with the manner in which 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. domestic retail refrigerated products and other shelf-stable grocery products. 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) ~~for~~from Economic Hedges of Forecasted Cash Flows in Segment Results

Derivatives used to manage commodity price risk and foreign currency risk are not designated for hedge accounting treatment. We believe these derivatives provide economic hedges of certain forecasted transactions. As such, these derivatives are recognized at fair market value with realized and unrealized gains and losses recognized in general corporate expenses. The gains and losses are subsequently recognized in the operating results of the reporting segments in the period in which the underlying transaction being economically hedged is included in earnings. In the event that management determines a particular derivative entered into as an economic hedge of a forecasted commodity purchase has ceased to function as an economic hedge, we cease recognizing further gains and losses on such derivatives in corporate expense and begin recognizing such gains and losses within segment operating results, immediately.

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:

	Thirteen weeks ended
	August 29, 2021			August 30, 2020
Gross derivative gains (losses) incurred	$	10.2		$	(4.0	)
Less: Net derivative gains (losses) allocated to reporting segments		5.0			(1.5	)
Net derivative gains (losses) recognized in general corporate expenses	$	5.2		$	(2.5	)
Net derivative gains (losses) allocated to Grocery & Snacks	$	3.2		$	(1.8	)
Net derivative gains (losses) allocated to Refrigerated & Frozen		4.7			(1.1	)
Net derivative gains (losses) allocated to International		(3.2	)		1.6
Net derivative gains (losses) allocated to Foodservice		0.3			(0.2	)
Net derivative gains (losses) included in segment operating profit	$	5.0		$	(1.5	)

Thirteen weeks ended Twenty-six weeks ended
November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Net derivative gains (losses) incurred $ 3.0
$ 3.0
$ (4.4 ) $ 2.7
Less: Net derivative gains (losses) allocated to reporting segments (4.1 ) 3.8
(5.5 ) 2.8
Net derivative gains (losses) recognized in general corporate expenses $ 7.1
$ (0.8 ) $ 1.1
$ (0.1 )
Net derivative gains (losses) allocated to Grocery & Snacks $ (0.4 ) $ 2.4
$ (1.0 ) $ 2.0
Net derivative gains allocated to Refrigerated & Frozen 0.1
0.7
0.1
0.5
Net derivative gains (losses) allocated to International (3.7 ) 0.2
(4.4 ) 0.2
Net derivative gains (losses) allocated to Foodservice (0.1 ) 0.5
(0.2 ) 0.2
Net derivative losses allocated to Commercial —
—
—
(0.1 )
Net derivative gains (losses) included in segment operating profit $ (4.1 ) $ 3.8
$ (5.5 ) $ 2.8

As of ~~November 26, 2017,~~August 29, 2021, the cumulative amount of net derivative ~~losses~~gains from economic hedges that had been recognized in general corporate expenses and not yet allocated to reporting segments was ~~$1.9~~$16.7 million. This amount reflected net ~~losses~~gains of ~~$0.6~~$10.2 million incurred during the ~~twenty-six~~thirteen weeks ended ~~November 26, 2017, as well as~~August 29, 2021 and net ~~losses~~gains of ~~$1.3~~$6.5 million incurred prior to fiscal ~~2018.~~2022. Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results ~~losses~~gains of ~~$1.8~~$15.1 million in fiscal ~~2018~~2022 and ~~losses~~gains of ~~$0.1~~$1.6 million in fiscal ~~2019~~2023 and thereafter.

Assets by Segment

The majority of our manufacturing assets are shared across multiple reporting segments. Output from these facilities used by each reporting segment can change over time. Also, working capital balances are not tracked by reporting segment. Therefore, it is impracticable to allocate those assets to the reporting segments, as well as disclose total assets by segment. Total depreciation expense was ~~$55.6~~$81.6 million and ~~$111.7~~$80.3 million for the ~~second~~first quarter ~~and first half~~ of fiscal ~~2018, respectively,~~2022 and ~~$58.2~~2021, respectively.

Other Information

Our operations are principally in the United States. With respect to operations outside of the United States, no single foreign country or geographic region was significant with respect to consolidated operations for the first quarter of fiscal 2022 and 2021. Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately $243.3 million and ~~$117.0~~$224.7 million ~~for~~in the ~~second~~first quarter ~~and first half~~ of fiscal ~~2017,~~2022 and 2021, respectively.

~~Other Information~~

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

Our largest customer, ~~Wal-Mart Stores,~~Walmart, Inc. and its affiliates, accounted for approximately ~~24%~~26% and 25% of consolidated net sales in ~~each of~~ the ~~second~~first quarter ~~and first half~~ of fiscal ~~2018~~2022 and ~~2017, primarily in the Grocery & Snacks and Refrigerated & Frozen segments.~~

~~Wal-Mart Stores, Inc. and its affiliates accounted for approximately 28% and 26% of consolidated net receivables as of November 26, 2017 and May 28, 2017,~~2021, respectively, primarily in the Grocery & Snacks and Refrigerated & Frozen segments.

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

Walmart, Inc. and its affiliates accounted for approximately 32% and 31% of consolidated net receivables as of August 29, 2021 and May 30, 2021, respectively. The ~~third party service also allows suppliers to finance advances on our scheduled payments at the sole discretion~~Kroger Co. and its affiliates accounted for approximately 10% and 11% of ~~the supplier~~consolidated net receivables as of August 29, 2021 and the third party. We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third party, or any financial institutions concerning this service. All of our accounts payable remain as obligations to our suppliers as stated in our supplier agreements. As of November 26, 2017, $68.7 million of our total accounts payable is payable to suppliers who utilize this third-party service.

May 30, 2021, respectively.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

The information contained in this report includes forward-looking statements within the meaning of the federal securities laws. Examples of forward-looking statements include statements regarding our expected future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical facts. You can identify forward-looking statements by their use of forward-looking words, such as "may", "will", "anticipate", "expect", "believe", "estimate", "intend", "plan", "should", "seek", or comparable terms.

Readers of this report should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. ~~Such~~These risks, uncertainties, and factors include, among other things: ~~changes in federal~~the risk that the cost savings and ~~state tax laws, including~~any other synergies from the ~~recently enacted U.S. tax reform legislation;the ability and timing to obtain required regulatory approvals and satisfy other closing conditions for the pending~~ ~~Wesson~~^® ~~oil divestiture and the pending~~ acquisition of Pinnacle Foods, Inc. (the "Pinnacle acquisition") may not be fully realized or may take longer to realize than expected; the ~~Sandwich Bros.~~risk that the Pinnacle acquisition may not be accretive within the expected timeframe or to the extent anticipated; the risks that the Pinnacle acquisition and related integration will create disruption to the Company and its management and impede the achievement of ~~Wisconsin~~^® ~~business;~~business plans; risks related to our ability to achieve the intended benefits of other recent acquisitions and ~~divestitures, including the recent Spinoff (as defined below) of our Lamb Weston business, the recent acquisition of Angie’s Artisan Treats, LLC, the proposed divestiture of the~~ ~~Wesson~~^® ~~oil business, and the proposed acquisition of the~~ ~~Sandwich Bros. of Wisconsin~~^® ~~business;~~divestitures; risks associated with general economic and industry conditions; risks associated with our ability to successfully execute our long-term value creation ~~strategy;~~strategies; risks related to our ability to deleverage on currently anticipated timelines, and to continue to access ~~capital;~~capital on acceptable terms or at all; risks related to our ability to execute ~~our~~ operating and restructuring plans and achieve ~~our~~ targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; risks related to the effectiveness of our hedging activities and ~~our~~ ability to respond to volatility in commodities; risks related to the Company's competitive environment and related market conditions; risks related to our ability to respond to changing consumer preferences and the success of our innovation and marketing investments; risks related to the ultimate impact of any product recalls and litigation, including litigation related to the lead paint and pigment ~~matters;~~matters, as well as any securities litigation, including securities class action lawsuits; risk associated with actions of governments and regulatory ~~factors affecting~~bodies that affect our ~~businesses;~~businesses, including the ultimate impact of new or revised regulations or interpretations; risks related to the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers, and employees; risks related to our forecasts of consumer eat-at-home habits as the impacts of the COVID-19 pandemic abate; risks related to the availability and prices of supply chain resources, including raw materials, packaging, and transportation, including any negative effects caused by changes in inflation rates, weather conditions, or ~~weather conditions;~~health pandemics; disruptions or inefficiencies in our supply chain and/or operations, including from the COVID-19 pandemic; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; risks related to a material failure in or breach of our or our vendors' information technology systems; the ~~costs, disruption,~~amount and ~~diversion~~timing of ~~management's attention associated with campaigns commenced by activist investors;~~future dividends, which remain subject to Board approval and depend on market and other conditions; and other risks described in our ~~Annual Report on Form 10-K and other~~ reports ~~we file~~filed from time to time with the Securities and Exchange Commission (the "SEC"). We caution readers not to place undue reliance on ~~these~~any forward-looking statements included in this report, which speak only as of the date of this report. We undertake no responsibility to update these ~~statements.~~

statements, except as required by law.

The discussion that follows should be read together with the unaudited Condensed Consolidated Financial Statements and related notes contained in this report and with the financial statements, related notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended May ~~28, 2017~~30, 2021 and subsequent filings with the SEC. Results for the ~~second~~first quarter of fiscal ~~2018~~2022 are not necessarily indicative of results that may be attained in the future.

~~Fiscal 2018 Second Quarter Executive Overview~~

EXECUTIVE OVERVIEW

Conagra Brands, Inc. (the "Company", "Conagra Brands", "we", "us", or "our"), headquartered in Chicago, is one of North America's leading branded food companies. Guided by an entrepreneurial spirit, the Company combines a rich heritage of making great food with a sharpened focus on innovation. The Company's portfolio is evolving to satisfy people's changing food preferences. Its iconic brands such as Birds Eye^®, Marie Callender's^®, ~~Reddi-wip~~Banquet^®, ~~Hunt's~~Healthy Choice^®, ~~Healthy Choice~~Slim Jim^®, ~~Slim Jim~~Reddi-wip^®, and ~~Orville Redenbacher's~~Vlasic^®, as well as emerging brands, including ~~Alexia~~Angie's^®, ~~Angie's~~ BOOMCHICKAPOP^®~~BOOMCHICKAPOP~~, Duke's^®, ~~Blake's~~Earth Balance^®, ~~Duke's~~Gardein^®,and Frontera^®, offer choices for every occasion.

On November 9, 2016, we completed the spinoff of Lamb Weston Holdings, Inc. ("Lamb Weston") through a distribution of 100% of our interest in Lamb Weston to holders, as of November 1, 2016, of outstanding shares of our common stock (the "Spinoff"). The transaction effecting this change was structured as a tax-free spinoff.

~~The results of operations for the Lamb Weston business have been reclassified to results of discontinued operations for all periods prior to the Spinoff.~~

Fiscal 2022 First Quarter Results

In the first quarter of fiscal ~~2017, we completed~~2022, results reflected a decrease in net sales, with organic (excludes the ~~sales~~impacts of foreign exchange and divested businesses) decreases in our ~~Spicetec Flavors~~Grocery & ~~Seasonings business ("Spicetec")~~Snacks and ~~our JM Swank business for combined proceeds of $489.1 million. The results of operations of Spicetec and JM Swank are included in the Commercial segment.~~

Refrigerated & Frozen segments offset by organic

increases in our International and Foodservice segments, in each case compared to the ~~second~~first quarter of fiscal ~~2018, earnings reflected~~2021. Overall gross profit decreased due to decreased net sales, input cost inflation, higher transportation costs, and lost profits from divested businesses, which were partially offset by supply chain realized productivity, cost synergies associated with the ~~impact of increased sales volumes, primarily the result of hurricane-related sales,~~Pinnacle acquisition, and ~~a gross margin increase in the Foodservice~~lower COVID-19 pandemic-related expenses. Overall segment ~~as well as higher~~ operating profit decreased in all of our operating segments. Corporate expenses were lower primarily ~~in the Refrigerated & Frozen~~due to items impacting comparability, as discussed below. There were increased selling, general and ~~Foodservice segments. The improved operating performance also reflected an increase in~~administrative ("SG&A") expenses primarily due to higher advertising and promotion expenses offset by lower stock-based compensation expense. We recognized higher equity method investment earnings, lower interest expense, and lower ~~interest~~income tax expense, in each case compared to the ~~second~~first quarter of fiscal ~~2017. Overall operating performance~~2021. Excluding items impacting comparability, our effective tax rate was ~~impacted by higher-than-anticipated inflation, hurricane-related costs, and increased investments~~slightly higher compared to ~~drive distribution and consumer trial.~~

the first quarter of fiscal 2021.

Diluted earnings per share in the ~~second~~first quarter of fiscal ~~2018~~2022 were ~~$0.54.~~$0.49. Diluted earnings per share in the ~~second~~first quarter of fiscal ~~2017~~2021 were ~~$0.28,~~$0.67. Diluted earnings per share were affected by lower net income in the first quarter of fiscal 2022 compared to the first quarter of fiscal 2021.

In the first quarter of fiscal 2022, we experienced higher than expected input cost inflation, including ~~earnings~~higher transportation and supply chain costs, that negatively impacted gross margins. We expect input cost inflation to remain elevated throughout the rest of ~~$0.26 per diluted share from continuing operations~~fiscal 2022. Supply chain realized productivity and ~~$0.02 per diluted share from discontinued operations. Several significant items affect~~pricing actions are expected to mitigate some of the ~~comparability~~inflationary pressures, but we do not expect such benefits to occur in time to fully offset the higher costs in fiscal 2022. As our estimates of ~~year-over-year results of continuing operations (see~~ ~~"Items Impacting Comparability"~~ ~~below).~~

inflation for fiscal 2022 continue to change, it is impractical to quantify the impact at this time.

Items Impacting Comparability

Segment presentation of gains and losses from derivatives used for economic hedging of anticipated commodity input costs and economic hedging of foreign currency exchange rate risks of anticipated transactions is discussed in the ~~segment review~~"Segment Review" below.

~~Items of note impacting comparability for the second quarter of fiscal 2018 included the following:~~

~~charges totaling $7.1 million ($4.6 million after-tax) in connection with our SCAE Plan (as defined below),~~

~~charges totaling $7.8 million ($5.0 million after-tax) associated with costs incurred for acquisitions and planned divestitures,~~

~~charges totaling $4.1 million ($2.5 million after-tax) related to a remeasurement of our salaried and non-qualified pension plan liability, and~~

an income tax benefit of $5.3 million related to an adjustment to the estimated tax expense resulting from the repatriation of cash during the second quarter from foreign subsidiaries and the tax expense related to the earnings of foreign subsidiaries previously deemed to be permanently invested.

~~Items of note impacting comparability for the second quarter of fiscal 2017 included the following:~~

~~charges totaling $60.6 million ($39.2 million after-tax) related to the early retirement of debt,~~

~~charges totaling $43.9 million ($40.7 million after-tax) related to the impairment of goodwill in our International segment,~~

~~charges totaling $19.8 million ($12.9 million after-tax) in connection with our SCAE Plan, and~~

~~an income tax expense of $7.4 million associated with a change in a valuation allowance on a deferred tax asset due to a change in the estimated capital gain on the Spicetec divestiture.~~

Items of note impacting comparability for the first ~~half~~quarter of fiscal ~~2018~~2022 included the following:

•

charges totaling $15.8 million ($11.9 million after-tax) in connection with our restructuring plans and

~~charges totaling $18.5 million ($12.0 million after-tax) in connection with our SCAE Plan,~~

•

an income tax benefit of $3.6 million related to the settlement of a tax matter that was previously reserved.

~~charges totaling $8.6 million ($5.5 million after-tax) associated with costs incurred for acquisitions and planned divestitures,~~

~~charges totaling $4.1 million ($2.5 million after-tax) related to the pension remeasurement, and~~

an income tax charge of $22.5 million associated with the repatriation of cash during the second quarter from foreign subsidiaries and the tax expense related to the earnings of foreign subsidiaries previously deemed to be permanently invested.

Items of note impacting comparability for the first ~~half of fiscal 2017 included the following:~~

~~charges totaling $207.5 million ($190.2 million after-tax) related to the impairment of goodwill and other intangible assets in our International segment,~~

~~gains totaling $197.7 million ($67.6 million after-tax) from the divestiture of the Spicetec and JM Swank businesses,~~

~~charges totaling $60.6 million ($39.2 million after-tax) related to the early retirement of debt,~~

~~charges totaling $33.9 million ($22.0 million after-tax) in connection with our SCAE Plan, and~~

~~an income tax benefit of $7.5 million associated with a tax planning strategy that allowed us to utilize certain state tax attributes.~~

~~Acquisitions~~

~~Subsequent to the end of the second~~ quarter of fiscal ~~2018,~~2021 included the following:

•

charges totaling $25.9 million ($19.5 million after-tax) in connection with our restructuring plans and

•

an income tax benefit of $7.6 million related to certain final tax regulations on prior year federal tax matters.

Divestitures

During the fourth quarter of fiscal 2021, we ~~entered into a definitive agreement~~completed the sale of our Egg Beaters^® business for net proceeds of $50.6 million, subject to ~~acquire the~~ ~~Sandwich Bros. of Wisconsin~~^®~~business, maker of frozen breakfast and entree flatbread pocket sandwiches, for a cash purchase price of $87 million, net of cash acquired and subject to~~final working capital adjustments. The results of operations of the divested Egg Beaters^®business ~~will be~~were primarily included in ~~the~~our Refrigerated & Frozen ~~segment. The transaction is expected~~segment, and to ~~close in early calendar year 2018,~~a lesser extent within our International and Foodservice segments, for the periods preceding the completion of the transaction.

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 ~~customary closing conditions, including~~final adjustments for certain tax benefits. The results of operations of the ~~receipt of any applicable regulatory approvals.~~

~~In October 2017, we acquired Angie's Artisan Treats, LLC, maker of~~ ~~Angie's~~divested Peter Pan^®~~BOOMCHICKAPOP~~^® ~~ready-to-eat popcorn, for a cash purchase price of $249.6 million, net of cash acquired and subject to working capital adjustments. The~~ peanut butter business isare primarily included in ~~the Grocery & Snacks segment.~~

~~In April 2017, we acquired protein-based snacking businesses Thanasi Foods LLC, maker of~~ ~~Duke's~~^® ~~meat snacks, and BIGS LLC, maker of~~ ~~BIGS~~^® ~~seeds, for $217.6 million in cash, net of cash acquired. These businesses are included in the Grocery & Snacks segment.~~

~~In September 2016, we acquired the operating assets of Frontera Foods, Inc. and Red Fork LLC, including the~~ ~~Frontera~~^®, ~~Red Fork~~^®~~, and~~ ~~Salpica~~^® brands. These businesses make authentic, gourmet Mexican food products and contemporary American cooking sauces. We acquired the businesses for $108.2 million in cash, net of cash acquired. These businesses are included principally in theour Grocery & Snacks segment, and to a lesser extent within our International and Foodservice segments, for the ~~Refrigerated & Frozen and International segments.~~

~~Divestitures~~

~~During~~periods preceding the ~~fourth quarter of fiscal 2017, we signed an agreement to sell our~~ ~~Wesson~~^® oil business, which is part of our Grocery & Snacks segment, to The J.M. Smucker Company ("Smucker"). The transaction is subject to certain customary closing conditions, including the termination or expirationcompletion of the ~~waiting period~~transaction.

Restructuring Plans

In December2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the operations of Pinnacle Foods, Inc., 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. generally accepted accounting principles. We expect to incur approximately $357.0 million of charges ($283.2 million of cash charges and $73.8 million of non-cash charges) for actions identified to date under the ~~Hart-Scott-Rodino Antitrust Improvements Act~~Pinnacle Integration Restructuring Plan. The Board and/or our senior management have authorized incurrence of 1976 (the "HSR Act"). On August 28, 2017, Smucker and the Company each received a request for additional information under the HSR Act (a "second request") from the U.S. Federal Trade Commission ("FTC") in connection with the FTC's review of the transaction. The agreement for the sale of the ~~Wesson~~^® oil business provides that, unless otherwise agreed upon by the Company and Smucker, if the closing of the transaction has not occurred on or prior to March 31, 2018 because HSR approval has not been received as of such date, then either party may terminate the agreement. The parties are cooperating fully with the FTC as it conducts its review of the transaction.

~~On November 9, 2016, we completed the Spinoff of Lamb Weston. The results of operations of the Lamb Weston business have been reclassified to discontinued operations for all periods presented.~~

these charges. In the first quarter of fiscal ~~2017,~~2022 and 2021, we ~~completed~~recognized charges of $7.3 million and $8.6 million, respectively, in connection with the ~~sales of our Spicetec and Flavors & Seasonings business ("Spicetec"~~Pinnacle Integration Restructuring Plan. We expect to incur costs related to the Pinnacle Integration Restructuring Plan over a multi-year period.

In fiscal 2019, senior management initiated a restructuring plan (the "Conagra Restructuring Plan") ~~and JM Swank business~~ for ~~combined proceeds of $489.1 million. The results of operations of Spicetec and JM Swank are included~~costs incurred in ~~the Commercial segment.~~

~~Restructuring Plans~~

~~In May 2013, we announced the Supply Chain and Administrative Efficiency Plan (the "SCAE Plan"), our plan~~connection with actions taken to ~~integrate and restructure the operations of our Private Brands business,~~ improve ~~selling, general and administrative ("~~SG~~&A")~~&A expense effectiveness and efficiencies and optimize our supply chain network, manufacturing assets, dry distribution centers, and mixing centers. In fiscal 2016, we announced plans to realize efficiency benefits by reducing SG&A expenses and enhancing trade spend processes and tools, which plans were included as part of the SCAE Plan. Although we divested the Private Brands business, we have continued to implement the SCAE Plan, including by working to optimize our supply chain ~~network, pursue cost reductions through our SG&A functions, enhance trade spend processes and tools, and improve productivity.~~

network. Although we remain unable to make good faith estimates relating to the entire ~~SCAE~~Conagra Restructuring Plan, we are reporting on actions initiated through the end of the ~~second~~first quarter of fiscal ~~2018,~~2022, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. As of ~~November 26, 2017, the Board of Directors of the Company has~~August 29, 2021, we have approved the incurrence of ~~up to $900.9~~$172.6 million ($45.8 million of ~~expenses in connection~~cash charges and $126.8 million of non-cash charges) for several projects associated with the ~~SCAE Plan, including expenses allocated for the Private Brands and Lamb Weston operations.~~Conagra Restructuring Plan. We have incurred or expect to incur ~~approximately $464.8~~$144.7 million of charges ($~~320.7~~36.0 million of cash charges and ~~$144.1~~$108.7 million of non-cash charges) for actions identified to date under the ~~SCAE Plan related to our continuing operations.~~Conagra Restructuring Plan. In the ~~second~~first quarter ~~and first half~~ of fiscal ~~2018,~~2022 and 2021, we recognized charges of ~~$7.1~~$8.5 million and ~~$18.5~~$17.3 million, respectively, in ~~association~~connection with the SCAE Plan related to our continuing operations. In the second quarter and first half of fiscal 2017, we recognized charges of $19.8 million and 33.9 million, respectively, in association with the SCAE Plan related to our continuing operations.Conagra Restructuring Plan. We expect to incur costs related to the ~~SCAE~~Conagra Restructuring Plan over a multi-year period.

COVID–19 Pandemic

We continue to monitor the impact of the COVID-19 pandemic on all aspects of our business. During the first quarter of fiscal 2022, we continued to experience elevated demand for our products in the retail segments, but net sales were lower compared to the first quarter of fiscal 2021 as we began to lap the initial surge in demand at the beginning of the pandemic. We experienced higher demand for our foodservice products across all of our major markets during the first quarter of fiscal 2022 compared to the first quarter of fiscal 2021 as consumer traffic in away-from-home food outlets increased from the initial months of the pandemic. During the first quarter of fiscal 2022, we incurred $25.4 million of supply chain costs associated with the COVID-19 pandemic, which was a decrease in comparison to the first quarter of fiscal 2021.

As we progress through fiscal 2022, we generally expect retail demand levels to remain elevated versus pre-pandemic levels and we continue to expect foodservice demand levels to return to more historical norms. However, uncertainty still remains with the pandemic and such trends ultimately depend on the length and severity of the pandemic, inclusive of the introduction of new strains and variants of the virus; infection rates in the markets where we do business; the federal, state, and local government actions taken in response; continued vaccine availability and effectiveness; and the macroeconomic environment. In fiscal 2022, we continue to expect to see inflationary headwinds but anticipate that they will be partially mitigated by supply chain realized productivity and price increases that have either taken effect or are expected to take effect in the remaining part of the fiscal year. We also continue to expect a decrease in costs related to the COVID-19 pandemic and a decrease in supply chain costs as we continue to recover our supply and service levels. We will continue to evaluate the extent to which the COVID-19 pandemic will impact our business, consolidated results of operations, and financial condition.

Beginning in February 2020 and over the course of the COVID-19 pandemic, we created COVID-19 pandemic, Return to Office, and Vaccine Preparedness teams, in order to review and assess the evolving COVID-19 pandemic, and to recommend risk mitigation actions for the health and safety of our employees. In order to enhance the safety of our employees during the COVID-19 pandemic, these teams have recommended and implemented various measures, including the installation of physical barriers between employees in production facilities, cleaning and sanitation protocols for both production and office spaces, execution of a phased return to office approach to enable in-person work for corporate personnel, implementation of work-from-home initiatives for certain office personnel, and increased access to vaccines for employees at our production facilities and corporate locations. The implementation of such safety measures has not resulted in any meaningful change to our financial control environment.

We have experienced some challenges in connection with the COVID-19 pandemic, including with respect to the supply of our ingredients, packaging, or other sourced materials. Despite these challenges, all of our production facilities remain open. We cannot predict the ultimate COVID-19 impact on our suppliers, distributors, and manufacturers.

SEGMENT REVIEW

We reflect our results of operations in ~~five~~four reporting segments: Grocery & Snacks, Refrigerated & Frozen, ~~Foodservice,~~ International, and ~~Commercial.~~

Foodservice.

Grocery & Snacks

The Grocery & Snacks reporting segment principally includes branded, ~~shelf stable~~shelf-stable food products sold in various retail channels in the United States.

Refrigerated & Frozen

The Refrigerated & Frozen reporting segment principally includes branded, ~~temperature controlled~~temperature-controlled food products sold in various retail channels in the United States.

International

The International reporting segment principally includes branded food products, in various temperature states, sold in various retail and foodservice channels outside of the United States.

Foodservice

The Foodservice reporting segment includes branded and customized food products, including meals, entrees, sauces, and a variety of custom-manufactured culinary products that are packaged for sale to restaurants and other foodservice establishments primarily in the United States.

~~Commercial~~

Presentation of Derivative Gains (Losses) from Economic Hedges of Forecasted Cash Flows in Segment Results

~~The following table presents~~ See Note 15 "Business Segments and Related Information", to the ~~net derivative gains (losses) from economic hedges of forecasted commodity consumption and the foreign currency risk of certain forecasted transactions, under~~Condensed Consolidated Financial Statements contained in this ~~methodology:~~

Thirteen weeks ended Twenty-six weeks ended
($ in millions) November 26,
2017 November 27,
2016 November 26,
2017 November 27,
2016
Net derivative gains (losses) incurred $ 3.0
$ 3.0
$ (4.4 ) $ 2.7
Less: Net derivative gains (losses) allocated to reporting segments (4.1 ) 3.8
(5.5 ) 2.8
Net derivative gains (losses) recognized in general corporate expenses $ 7.1
$ (0.8 ) $ 1.1
$ (0.1 )
Net derivative gains (losses) allocated to Grocery & Snacks $ (0.4 ) $ 2.4
$ (1.0 ) $ 2.0
Net derivative gains allocated to Refrigerated & Frozen 0.1
0.7
0.1
0.5
Net derivative gains (losses) allocated to International (3.7 ) 0.2
(4.4 ) 0.2
Net derivative gains (losses) allocated to Foodservice (0.1 ) 0.5
(0.2 ) 0.2
Net derivative losses allocated to Commercial —
—
—
(0.1 )
Net derivative gains (losses) included in segment operating profit $ (4.1 ) $ 3.8
$ (5.5 ) $ 2.8

As of November 26, 2017, 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 $1.9 million. This amount reflected net losses of $0.6 million incurred during the twenty-six weeks ended November 26, 2017, as well as net losses of $1.3 million incurred prior to fiscal 2018. Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results losses of $1.8 million in fiscal 2018 and losses of $0.1 million in fiscal 2019 and thereafter.

report for further discussion.

Net Sales

	Net Sales
($ in millions)	Thirteen weeks ended
Reporting Segment	August 29, 2021		August 30, 2020		% Inc (Dec)
Grocery & Snacks	$	1,075.1	$	1,131.0		(5	)%
Refrigerated & Frozen		1,101.8		1,130.6		(3	)%
International		236.6		219.0		8	%
Foodservice		239.8		198.3		21	%
Total	$	2,653.3	$	2,678.9		(1	)%

Net Sales
($ in millions) Thirteen weeks ended Twenty-six weeks ended
Reporting Segment November 26,
2017 November 27,
2016
% Inc
(Dec)
November 26,
2017 November 27,
2016
% Inc
(Dec)
Grocery & Snacks $ 900.4
$ 853.2
6 % $ 1,646.2
$ 1,610.4
2 %
Refrigerated & Frozen 758.1
740.7
2 % 1,373.8
1,345.3
2 %
International 220.3
211.4
4 % 411.2
406.1
1 %
Foodservice 294.6
283.1
4 % 546.4
551.1
(1 )%
Commercial —
—
— % —
71.1
(100 )%
Total $ 2,173.4
$ 2,088.4
4 % $ 3,977.6
$ 3,984.0
— %

~~Net sales for the second quarter of fiscal 2018 were $2.17 billion, an increase of $85.0 million, or 4%, from the second quarter of fiscal 2017.~~

Net sales for the first ~~half~~quarter of fiscal ~~2018 were $3.98 billion, a decrease of $6.4 million, or flat, from the first half of fiscal 2017.~~

2022 in our Grocery & Snacks ~~net sales for the second quarter~~segment included a decrease in volumes of ~~fiscal 2018 were $900.4 million, an increase of $47.2 million, or 6%~~3%, compared to the second quarter of fiscal 2017. Grocery & Snacks net sales for the first half of fiscal 2018 were $1.65 billion, an increase of $35.8 million, or 2%, compared to the first half of fiscal 2017. Results for the second quarter of fiscal 2018 reflected a 3% increase in volumes, excluding the impact of ~~acquisitions.~~divestitures, compared to the prior-year period. The ~~increase~~decrease in ~~sales~~ volumes was ~~driven~~primarily due to lapping the prior year's surge in at-home food consumption from the COVID-19 pandemic and replenishment of customer inventory levels in connection with the COVID-19 pandemic. Price/mix was flat for the first quarter of fiscal 2022, excluding the impact of divestitures, when compared to the prior-year period due to favorability in net pricing offset by unfavorable brand mix and a benefit in the ~~recent hurricanes through inventory builds~~prior year of $7.4 million related to a change in ~~both customer warehouses and consumer pantries~~estimate associated with our fiscal 2020 fourth quarter trade accrual. The first quarter of fiscal 2021 included $16.8 million of net sales related to our Peter Pan^® peanut butter business, which was sold in the third quarter of fiscal 2021. The first quarter of fiscal 2021 also included $1.9 million of net sales related to our H.K. Anderson^® business, which was sold in the second quarter of fiscal ~~2018, which are expected to negatively impact~~2021.

Net sales for the ~~third~~first quarter of fiscal ~~2018. Price/mix decreased by 1%~~2022 in the second quarter of fiscal 2018, compared to the second quarter of fiscal 2017, as a result of investing in higher quality merchandising events intended to drive increased brand saliency with consumers. Results for the first half of fiscal 2018our Refrigerated & Frozen segment reflected a 1% decrease in volumes of 4%, excluding the impact of acquisitions, reflecting the prior quarter reduction in promotional intensity and planned discontinuation of certain lower-performing products. The acquisitions of Thanasi Foods LLC, BIGS LLC, and Angie's Artisan Treats, LLC contributed $26.4 million and $47.4 million to Grocery & Snacks net sales for the second quarter and first half of fiscal 2018, respectively. The acquisition of Frontera Foods, Inc. and Red Fork LLC contributed $2.1 million and $8.6 million for the second quarter and first half of fiscal 2018, respectively, through the one-year anniversary of the acquisition, which occurred in September 2016.

Refrigerated & Frozen net sales for the second quarter of fiscal 2018 were $758.1 million, an increase of $17.4 million, or 2%, compared to the second quarter of fiscal 2017. Refrigerated & Frozen net sales for the first half of fiscal 2018 were $1.37 billion, an increase of $28.5 million, or 2%, compared to the first half of fiscal 2017. Results for the second quarter and first half of fiscal 2018 reflected a 4% and 3% increase in volumes, respectively, excluding the impact of acquisitions. The increase in sales volumes was a result of core business improvements and innovation launches. Price/mix decreased by 2% and 1% in the second quarter and first half of fiscal 2018, respectively, in each casedivestitures, compared to the prior-year period ~~primarily~~ due to ~~investments to drive distribution~~lapping the prior year's surge in at-home food consumption from the COVID-19 pandemic and ~~trial. The acquisition~~replenishment of ~~Frontera Foods, Inc. and Red Fork LLC, and subsequent innovation~~inventory levels in ~~those brands, contributed $1.0 million and $4.4 million to Refrigerated & Frozen net sales~~connection with the COVID-19 pandemic. Price/mix increased by 2% for the ~~second quarter and~~ first ~~half of fiscal 2018, respectively, through the one-year anniversary of the acquisition, which occurred in September 2016.~~

~~International net sales for the second~~ quarter of fiscal ~~2018 were $220.3 million, an increase~~2022, excluding the impact of ~~$8.9 million, or 4%,~~divestitures, when compared to the ~~second~~prior-year period due to favorable brand mix and slight favorability in net pricing partially offset by a benefit in the prior year of $7.4 million related to a change in estimate associated with our fiscal 2020 fourth quarter trade accrual. The first quarter of fiscal ~~2017. International~~2021 included $9.2 million of net sales related to our Egg Beaters^® business, which was sold in the fourth quarter of fiscal 2021.

Net sales for the first ~~half of fiscal 2018 were $411.2 million, an increase of $5.1 million, or 1%, compared to the first half of fiscal 2017. Results for the second~~ quarter of fiscal ~~2018 reflected a 2% decrease~~2022 in ~~volume, a 2% increase in price/mix, and a 4% increase from foreign exchange rates, in each case compared to the prior-year period. Results for the first half of fiscal 2018~~our International segment reflected a 5% decrease in volume, a 3%6% increase due to favorable foreign exchange rates, and a 7% increase in price/mix, ~~and a 3% increase from foreign exchange rates,~~excluding the impact of divestitures, in each case compared to the prior-year period. The ~~volume~~ decrease in volumes was driven by the ~~second quarter and first half of fiscal 2018 reflected strategic decisions to eliminate lower margin products and a reduction~~prior year's surge in ~~promotional intensity.~~demand from the COVID-19 pandemic. The increase in price/mix ~~for the second quarter and first half of fiscal 2018~~ was ~~driven by improvements in~~primarily due to inflation-justified pricing and favorable product mix offset by a benefit in the prior year of $2.8 million related to a change in estimate associated with our fiscal 2020 fourth quarter trade ~~productivity.~~accrual.

~~Foodservice net sales for the second quarter of fiscal 2018 were $294.6 million, an increase of $11.5 million, or 4%, compared to the second quarter of fiscal 2017. Foodservice net~~

Net sales for the first ~~half of fiscal 2018 were $546.4 million, a decrease of $4.7 million, or 1%, compared to the first half of fiscal 2017. Results for the second~~ quarter of fiscal ~~2018~~2022 in our Foodservice segment reflected a ~~7% decrease~~20% increase in volume, ~~and a~~

~~11% increase in price/mix, in each case compared to~~excluding the ~~prior-year period. Results for the first half~~impact of ~~fiscal 2018 reflected a 12% decrease in volumes and a 11% increase in price/mix,~~divestitures, compared to the prior-year period. The ~~decrease~~increase in ~~volumes primarily~~volume reflected the continued recovery of away-from-home food outlets from the impacts of the COVID-19 pandemic. Price/mix, excluding the impact of ~~exiting a non-core business, offset~~divestitures, increased by a benefit in the current quarter related to the recent hurricanes. The increase in price/mix reflected favorable product and customer mix, the impact of inflation-driven increases in pricing, and the execution of the segment's value over volume strategy.

~~Our Spicetec and JM Swank businesses were sold~~2% in the first quarter of fiscal ~~2017. These businesses comprise~~2022 compared to the ~~entire Commercial segment following the presentation of Lamb Weston as discontinued operations. Accordingly, there were no net sales in the Commercial segment after~~prior-year period, reflecting inflation-justified pricing.

SG&A Expenses (includes general corporate expenses)

SG&A expenses totaled $310.1 million for the first quarter of fiscal ~~2017. These businesses had net sales~~2022, an increase of ~~$71.1 million for the first half of fiscal 2017, prior to the completion of the divestitures.~~

~~SG&A Expenses (Includes general corporate expenses)~~

~~SG&A expenses totaled $307.3 million for the second quarter of fiscal 2018, a decrease of $110.6~~$9.8 million, as compared to the ~~second~~first quarter of fiscal ~~2017.~~2021. SG&A expenses for the ~~second~~first quarter of fiscal ~~2018~~2022 reflected the following:

Items impacting comparability of earnings

•

expenses of $9.4 million in connection with our restructuring plans and

~~a charge of $7.8 million associated with costs incurred for acquisitions and planned divestitures,~~

•

expenses of $1.0 million associated with costs incurred for planned divestitures.

~~a charge of $4.1 million related to a remeasurement of our salaried and non-qualified pension plan liability, and~~

~~expenses of $3.7 million in connection with our SCAE Plan.~~

Other changes in expenses compared to the ~~second~~first quarter of fiscal ~~2017~~2021

•

an increase in advertising and promotion expense of $16.3 million driven primarily by higher eCommerce investments,

~~a decrease in advertising and promotion spending of $11.4 million~~

•

a decrease in share-based payment and deferred compensation expense of $17.3 million, due to a decrease in our share price, market declines, and a reduction of estimated level of achievement of certain performance targets,

~~an increase in self-insured worker's compensation and product liability expense of $9.0 million.~~

•

an increase of $5.2 million in foreign currency transaction losses, primarily due to remeasuring certain intercompany notes payable,

•

an increase in information technology-related expenses of $3.8 million,

•

an increase in salary, wage, and fringe benefit expense of $3.2 million, and

•

an increase in professional fees of $2.9 million.

SG&A expenses for the ~~second~~first quarter of fiscal ~~2017~~2021 included the following items impacting the comparability of earnings:

•

expenses of $15.5 million in connection with our restructuring plans,

~~charges totaling $60.6 million related to the early retirement of debt,~~

•

expenses of $2.7 million associated with costs incurred for planned divestitures,

~~charges totaling $43.9 million related to the impairment of goodwill within our International segment,~~

•

a benefit of $2.0 million related to a previous legal matter, and

~~expenses of $18.0 million in connection with our SCAE plan.~~

•

expenses of $1.5 million associated with consulting fees for certain tax matters.

SG&A expenses totaled $546.3 million for the first half of fiscal 2018, a decrease of $103.3 million, as compared to the first half of fiscal 2017. SG&A expenses for the first half of fiscal 2018 reflected the following:

~~Items impacting comparability of earnings~~

~~expenses of $12.8 million in connection with our SCAE Plan,~~

~~a charge of $8.6 million associated with costs incurred for acquisitions and planned divestitures, and~~

~~a charge of $4.1 million related to the remeasurement of our salaried and non-qualified pension plan liability.~~

~~Other changes in expenses compared to the first half of fiscal 2017~~

~~a decrease in advertising and promotion spending of $21.2 million,~~

~~a decrease in share-based payment expense of $9.4 million, and~~

~~an increase in self-insured worker's compensation and product liability expense of $8.0 million.~~

~~SG&A expenses for the first half of fiscal 2017 included the following items impacting the comparability of earnings:~~

~~charges totaling $207.5 million related to the impairment of goodwill and other intangible assets within our International segment,~~

~~gains totaling $197.7 million from the divestiture of the Spicetec and JM Swank businesses,~~

~~charges totaling $60.6 million related to the early retirement of debt, and~~

~~expenses of $26.9 million in connection with our SCAE plan.~~

Segment Operating Profit (Earnings before general corporate expenses, pension and postretirement non-service income, interest expense, net, income taxes, and equity method investment earnings)

	Operating Profit
($ in millions)	Thirteen weeks ended
Reporting Segment	August 29, 2021		August 30, 2020		% Inc (Dec)
Grocery & Snacks	$	215.9	$	283.1		(24	)%
Refrigerated & Frozen		157.6		240.1		(34	)%
International		34.1		38.5		(11	)%
Foodservice		20.3		25.4		(20	)%

Operating Profit
($ in millions) Thirteen weeks ended Twenty-six weeks ended
Reporting Segment November 26,
2017 November 27,
2016
% Inc
(Dec)
November 26,
2017 November 27,
2016
% Inc
(Dec)
Grocery & Snacks $ 199.8
$ 220.2
(9 )% $ 376.0
$ 400.7
(6 )%
Refrigerated & Frozen 128.5
118.0
9 % 230.4
210.2
10 %
International 20.2
(26.7 ) N/A
39.1
(175.9 ) N/A
Foodservice 47.4
31.9
48 % 70.6
53.6
32 %
Commercial —
(0.5 ) (100 )% —
202.8
(100 )%

Operating profit in our Grocery & Snacks ~~operating profit~~segment for the ~~second~~first quarter of fiscal ~~2018 was $199.8 million,~~2022 reflected a decrease in gross profits of ~~$20.4~~$67.4 million ~~or 9%,~~ compared to the ~~second~~first quarter of fiscal ~~2017. Gross profits were $12.0 million lower in the second quarter of fiscal 2018 than in the second quarter of fiscal 2017.~~2021. The lower gross profit was driven by the ~~previously mentioned merchandising investments as well as~~net sales decline discussed above, the impacts of ~~higher~~ input ~~costs~~cost inflation, fixed cost leverage, and ~~transportation and warehousing costs~~a reduction in profit associated with the ~~recent hurricanes. The acquisitions~~divestitures of ~~Thanasi Foods LLC, BIGS LLC,~~our H.K. Anderson^® and ~~Angie's Artisan Treats, LLC contributed $9.3 million~~Peter Pan^® peanut butter businesses, partially offset by the benefits of supply chain realized productivity, cost synergies associated with the Pinnacle acquisition, and a decrease in COVID-19 pandemic-related costs. Pandemic-related costs included investments in employee safety protocols, bonuses paid to ~~Grocery & Snacks gross profit for the second quarter~~supply chain employees, and costs necessary to meet elevated levels of fiscal 2018. The acquisition of Frontera Foods, Inc. and Red Fork LLC contributed $0.6 million in gross profit for the second quarter of fiscal 2018, through the one-year anniversary of the acquisition that occurred in September 2016. Advertising and promotion expenses for the second quarter of fiscal 2018 decreased by $3.9 million compared to the second quarter of fiscal 2017.demand. Operating profit of the Grocery & Snacks segment was impacted by ~~charges~~expense of ~~$4.0~~$4.1 million and ~~$1.4~~$13.9 million ~~in connection with~~related to our restructuring plans in the ~~second~~first quarter of fiscal ~~2018~~2022 and ~~2017,~~2021, respectively. ~~In addition, the second quarter of fiscal 2018 included $7.8 million in charges related to acquisitions and planned divestitures.~~

Grocery & Snacks operating profit for the first half of fiscal 2018 was $376.0 million, a decrease of $24.7 million, or 6%, compared to the first half of fiscal 2017. Gross profits were $17.3 million lower in the first half of fiscal 2018 than in the first half of fiscal 2017. The lower gross profit was driven by merchandising investments as well as the impacts of higher input costs and transportation and warehousing costs associated with the recent hurricanes, offset by improved plant productivity. The acquisitions of Thanasi Foods LLC, BIGS LLC, and Angie's Artisan Treats, LLC contributed $15.8 million to Grocery & Snacks gross profit for the first half of fiscal 2018. The acquisition of Frontera Foods, Inc. and Red Fork LLC contributed $2.1 million in gross profit for the first half of fiscal 2018, through the one-year anniversary of the acquisition that occurred in September 2016. Advertising and promotion expenses for the first ~~half~~quarter of fiscal ~~2018 decreased~~2022 increased by ~~$6.5~~$4.2 million compared to the first ~~half~~quarter of fiscal ~~2017.~~ 2021.

Operating profit ~~of the Grocery & Snacks segment was impacted by charges of $10.2 million and $6.3 million~~ in ~~connection with~~ our restructuring plans in the first half of fiscal 2018 and 2017, respectively. In addition, the first half of fiscal 2018 included $8.6 million in charges related to acquisitions and planned divestitures.

Refrigerated & Frozen ~~operating profit~~segment for the ~~second~~first quarter of fiscal ~~2018 was $128.5 million, an increase~~2022 reflected a decrease in gross profits of $10.5 million, or 9%, compared to the second quarter of fiscal 2017. Gross profits were $3.7 million lower in the second quarter of fiscal 2018 than in the second quarter of fiscal 2017, driven by inflation and investments to drive distribution, enhanced shelf presence, and trial, partially offset by increased sales volumes and supply chain realized productivity. Advertising and promotion expenses for the second quarter of fiscal 2018 decreased by $7.6$74.9 million compared to the ~~second~~first quarter of fiscal ~~2017.~~2021. The decrease was driven by the net sales decline discussed above, the impacts of input cost inflation, fixed cost leverage, higher inventory write-offs, and a reduction in profit associated with the divestiture of our Egg Beaters^® business, partially offset by the benefits of supply chain realized productivity, cost synergies associated with the Pinnacle acquisition, and a decrease in COVID-19 pandemic-related costs. Operating profit of the Refrigerated & Frozen segment was impacted by ~~charges~~expense of ~~$2.2~~$5.0 million ~~in connection with~~and $5.7 million related to our restructuring plans in the ~~second~~first quarter of fiscal ~~2017.~~

Refrigerated & Frozen operating profit for the first half of fiscal 2018 was $230.4 million, an increase of $20.2 million, or 10%, compared to the first half of fiscal 2017. Gross profits were $5.2 million lower in the first half of fiscal 2018 than in the first half of fiscal 2017, driven by inflation, absorption,2022 and ~~investments to drive distribution, enhanced shelf presence, and trial, partially offset by increased sales volumes and supply chain realized productivity.~~2021, respectively. Advertising and promotion expenses for the first ~~half~~quarter of fiscal ~~2018 decreased~~2022 increased by ~~$12.7~~$11.2 million compared to the first half of fiscal 2017. Operating profit of the Refrigerated & Frozen segment was impacted by charges of $7.2 million in connection with our restructuring plans, as well as $7.7 million related to a product recall in the first half of fiscal 2017.

~~International operating profit for the second~~ quarter of fiscal 2018 was $20.2 million, compared to an operating loss of $26.7 million in the second quarter of fiscal 2017. The operating loss in the second quarter of fiscal 2017 included charges totaling $43.9 million for the impairment of goodwill2021.

Operating profit in our Mexican operations. Gross profits were $3.2 million higher in the second quarter of fiscal 2018 than in the second quarter of fiscal 2017, as a result of the value over volume strategy through reductions in promotional intensity, improvements in pricing, and trade productivity, and planned discontinuations of certain lower-performing products.

International ~~operating profit~~segment for the first half of fiscal 2018 was $39.1 million, compared to an operating loss of $175.9 million in the first half of fiscal 2017. The operating loss in the first half of fiscal 2017 included charges totaling $207.5 million for the impairment

of goodwill and an intangible brand asset in our Canadian and Mexican operations. Gross profits were $3.9 million higher in the first half of fiscal 2018 than in the first half of fiscal 2017, as a result of the value over volume strategy and planned discontinuations of certain lower-performing products.

Foodservice operating profit for the second quarter of fiscal 2018 was $47.4 million, an increase of $15.5 million, or 48%, compared to the second quarter of fiscal 2017. Gross profits were $15.2 million higher in the second quarter of fiscal 2018 than in the second quarter of fiscal 2017. The higher gross profit primarily reflected the increase in net sales as a result of the recent hurricanes, favorable product and customer mix, as well as the impact of inflation-driven increases in pricing.

Foodservice operating profit for the first half of fiscal 2018 was $70.6 million, an increase of $17.0 million, or 32%, compared to the first half of fiscal 2017. Gross profits were $13.2 million higher in the first half of fiscal 2018 than in the first half of fiscal 2017. The higher gross profit primarily reflected the increase in net sales as a result of the recent hurricanes, favorable product and customer mix, as well as the impact of inflation-driven increases in pricing, offset by the impact of exiting a non-core business. Operating profit of the Foodservice segment was impacted by charges of $1.8 million in the first half of fiscal 2017 in connection with our restructuring plans.

Commercial operating loss for the second quarter of fiscal 2017 was $0.5 million. Commercial operating profit for the first half of fiscal 2017 was $202.8 million. The company sold the Spicetec and JM Swank businesses in the first quarter of fiscal ~~2017, recognizing pre-tax gains totaling $197.7 million. These businesses comprise~~2022 reflected an increase in gross profits of $2.3 million when compared to the ~~entire Commercial~~prior-year period due to the net sales growth discussed above, the benefits of supply chain realized productivity, and favorable foreign exchange rates, partially offset by the impacts of input cost inflation. The increase in gross profit was more than offset by an increase in SG&A expenses of $6.7 million driven by higher foreign currency transaction losses, salary, wage, and fringe benefits, and commission expenses.

Operating profit in our Foodservice segment ~~following the presentation of Lamb Weston as discontinued operations. There are no further operations in the Commercial segment.~~

~~Interest Expense, Net~~

~~Net interest expense was $38.0 million and $54.1 million~~ for the second quarter of fiscal 2018 and 2017, respectively. Net interest expense was $74.4 million and $112.3 million for the first half of fiscal 2018 and 2017, respectively. The decrease reflects the repayment of $550.0 million aggregate principal amount of outstanding notes in the first quarter of fiscal ~~2017 and $473.0~~2022 reflected a decrease in gross profits of $4.5 million ~~aggregate principal amount of outstanding notes in~~compared to the ~~third~~first quarter of fiscal ~~2017, as well as~~2021. The lower gross profit was driven by input cost inflation and higher inventory write-offs, which more than offset the ~~exchange~~net sales growth discussed above and the benefits of ~~$1.44 billion of debt in connection with~~supply chain realized productivity.

Pension and Postretirement Non-service Income

In the ~~Spinoff of Lamb Weston during the second quarter of 2017. This was partially offset by the issuance of $500.0 million aggregate principal amount of floating rate notes due 2020 during the second~~first quarter of fiscal ~~2018.~~

~~Income Taxes~~

In2022, pension and postretirement non-service income was $16.1 million, an increase of $2.3 million compared to the ~~second~~first quarter of fiscal ~~2018~~2021. The first quarter of fiscal 2022 reflected lower interest costs and ~~2017,~~an increase in expected returns on plan assets.

Interest Expense, Net

Net interest expense was $94.2 million and $113.7 million for the first quarter of fiscal 2022 and 2021, respectively. The decrease was driven by an overall reduction of our debt balances. See Note 4 "Long-Term Debt and Revolving Credit Facility", to the Condensed Consolidated Financial Statements contained in this report for further discussion.

Income Taxes

In the first quarter of fiscal 2022 and 2021, we recognized income tax expense ~~from continuing operations was $109.5~~of $69.7 million and ~~$78.4 million, respectively. Income tax expense from continuing operations for the first half of fiscal 2018 and 2017 was $229.5 million and $247.6~~$86.7 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, ~~from continuing operations,~~ inclusive of equity method investment earnings) was approximately ~~33%~~22.8% and ~~41%~~20.8% for ~~the second quarter of fiscal 2018 and 2017, respectively. The effective tax rate in the first half of fiscal 2018 and 2017 was 38% and 54%, respectively.~~

~~The effective tax rate in the second quarter of fiscal 2018 reflects the following:~~

an income tax benefit allowed upon the vesting/exercise of employee stock compensation awards by our employees, beyond that which is attributable to the original fair value of the awards upon the date of grant,

~~additional income tax expense related to state taxes, and~~

~~an income tax benefit related to a change in estimate of the income tax effect of undistributed foreign earnings for which the indefinite reinvestment assertion is no longer made.~~

~~The effective tax rate in the second quarter of fiscal 2017 reflects the following:~~

~~additional tax expense associated with a change in estimate regarding the tax basis of the Spicetec business that was sold in~~ the first quarter of fiscal ~~2017,~~2022 and

~~additional tax expense associated with non-deductible goodwill in our Mexican business, for which an impairment charge was recognized.~~

~~The effective tax rate for the first half of fiscal 2017 reflects the above-cited items, as well as the following:~~

~~additional tax expense associated with non-deductible goodwill sold in connection with the dispositions of the Spicetec and JM Swank businesses,~~

~~additional tax expense associated with non-deductible goodwill in our Canadian business, for which an impairment charge was recognized,~~

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

On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. We are in the process of evaluating the impact of the recently enacted law to our Condensed Consolidated Financial Statements. The impact is expected to be material 2021, respectively. See Note 10 "Income Taxes", to the Condensed Consolidated Financial ~~Statements.~~

Statements contained in this report for a discussion on the change in effective tax rates.

In fiscal 2021, we completed a restructuring of our ownership interest in the Ardent Mills joint venture, a milling business ("Ardent Mills"), that utilized a portion of our capital loss carryforward prior to its expiration. Also in fiscal 2021, we completed several other transactions related to retained assets in conjunction with the divestitures of the Peter Pan^® peanut butter and Egg Beaters^® businesses that we believe will utilize a portion of the remaining capital loss carryforward. These transactions are subject to certain elections and are currently under review by the Internal Revenue Service. 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.

Equity Method Investment Earnings

Equity method investment earnings were ~~$20.6~~$20.2 million and ~~$17.2 million for the second quarter of fiscal 2018 and 2017, respectively. Equity method investment earnings were $50.6 million and $30.3~~$6.5 million for the first ~~half~~quarter of fiscal ~~2018~~2022 and ~~2017,~~2021, respectively. Ardent Mills earnings ~~were higher than they were in the prior-year periods due to more favorable market conditions and continued improvement in operating effectiveness.~~

~~Results of Discontinued Operations~~

~~Our discontinued operations generated an after-tax gain of $0.4 million and $11.6 million~~ for the ~~second~~first quarter of fiscal 2018 and 2017, respectively. Our discontinued operations generated an after-tax gain of $0.1 million and $103.0 million for the first half of fiscal 2018 and 2017, respectively. The prior-year period results2022 reflected ~~the operations of Lamb Weston. We incurred significant costs associated with effecting the Spinoff of Lamb Weston. These costs are included in results of discontinued operations.~~

favorable market conditions.

Earnings Per Share

Diluted earnings per share in the second quarter of fiscal 2018 were $0.54. Diluted earnings per share in the second quarter of fiscal 2017 were $0.28, including earnings of $0.26 per diluted share from continuing operations and $0.02 per diluted share from discontinued operations.

Diluted earnings per share in the first ~~half~~quarter of fiscal ~~2018~~2022 and 2021 were ~~$0.91. Diluted~~$0.49 and $0.67, respectively. The decrease in diluted earnings per share ~~in the first half of fiscal 2017 were $0.70, including earnings of $0.48 per diluted share from continuing operations and $0.22 per diluted share from discontinued operations.~~

reflected lower net income.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity and Capital

~~Our~~

The primary objective of our financing ~~objective~~strategy is to maintain a prudent capital structure that provides us flexibility to pursue our growth objectives. ~~If necessary, we~~We use a combination of equity and short- and long-term debt. We use short-term debt principally to finance

ongoing operations, including our seasonal requirements for working capital (accounts receivable, prepaid expenses and other current assets, and inventories, less accounts payable, accrued payroll, and other accrued liabilities)~~, and a combination of equity and long-term debt to finance both our base working capital needs and our non-current assets.~~. We are committed to maintaining ansolid investment grade credit ~~rating.~~

ratings.

Management believes that existing cash balances, cash flows from operations, existing credit facilities, our commercial paper program and access to capital markets will provide sufficient liquidity to meet our debt obligations, including any repayment of debt or refinancing of debt, working capital needs, planned capital expenditures, and payment of anticipated quarterly dividends for at least the next twelve months.

Borrowing Facilities and Long-Term Debt

At ~~November 26, 2017,~~August 29, 2021, we had a revolving credit facility (the ~~"Facility"~~"Revolving Credit Facility") with a syndicate of financial institutions ~~that provides~~providing for a maximum aggregate principal amount outstanding at any one time of ~~$1.25~~$1.6 billion (subject to increase to a maximum aggregate principal amount of ~~$1.75~~$2.1 billion with the consent of the lenders). The Revolving Credit Facility matures on July 11, 2024 and is unsecured. The term of the Revolving Credit Facility may be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. In the first quarter of fiscal 2022, we entered into an amendment to the Revolving Credit Facility, which modified the ratio of funded debt to earnings before interest, taxes, depreciation, and amortization ("EBITDA") financial covenant to require a ratio of not greater than 4.5 to 1.0 on a rolling four-quarter basis. We have historically used a credit facility principally as a back-up for our

commercial paper program. As of ~~November 26, 2017,~~August 29, 2021, there were no outstanding borrowings under the Revolving Credit Facility. The Facility contains customary affirmative and negative covenants for unsecured investment grade credit facilities of this type. It generally requires our ratio of EBITDA (earnings before interest, taxes, depreciation and amortization) to interest expense to be not less than 3.0 to 1.0 and our ratio of funded debt to EBITDA to be not greater than 3.75 to 1.0 (provided that such ratio may be increased at the option of the Company in connection with a material transaction), with each ratio to be calculated on a rolling four-quarter basis.

As of ~~November 26, 2017, we were in compliance with all financial covenants in the Facility.~~

~~As of November 26, 2017,~~August 29, 2021, we had ~~$67.0~~$457.0 million outstanding under our commercial paper program. The highest level of borrowings during the first ~~half~~quarter of fiscal ~~2018~~2022 was ~~$419.9~~$989.0 million. A~~s of May 28, 2017, we~~We had ~~$26.2~~$705.7 million outstanding under our commercial paper ~~program.~~

program as of May 30, 2021.

During the ~~second~~first quarter of fiscal ~~2018,~~2022, we issued $500.0 million aggregate principal amount of ~~floating rate~~0.500% senior notes due ~~October 9, 2020.~~August 11, 2023. The ~~notes bear~~proceeds were primarily used to refinance commercial paper borrowings.

For additional information about our long-term debt balances, refer to Note 4, " Long-Term Debt and Revolving Credit Facility", to the Condensed Consolidated Financial Statements contained in this report and Note 4, "Long-Term Debt", to the Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended May 30, 2021. The weighted average coupon interest rate of long-term debt obligations outstanding as of August 29, 2021, was approximately 4.4%.

We expect to maintain or have access to sufficient liquidity to retire or refinance long-term debt upon maturity, from operating cash flows, our commercial paper program, access to the capital markets, and our Revolving Credit Facility. We continuously evaluate opportunities to refinance our debt; however, any refinancing is subject to market conditions and other factors, including financing options that may be available to us from time to time, and there can be no assurance that we will be able to successfully refinance any debt on commercially acceptable terms at ~~a rate equal to three-month LIBOR plus 0.50% per annum.~~

all.

As of the end of the ~~second~~first quarter of fiscal ~~2018,~~2022, our senior long-term debt ratings were all investment grade. A significant downgrade in our credit ratings would not affect our ability to borrow amounts under the ~~revolving credit facility,~~Revolving Credit Facility, although borrowing costs would increase. A downgrade of our short-term credit ratings would impact our ability to borrow under our commercial paper program by negatively impacting borrowing costs and causing shorter durations, as well as making access to commercial paper more ~~difficult.~~

difficult, or impossible.

Our most restrictive debt agreement (the Revolving Credit Facility) generally requires our ratio of EBITDA to interest expense be not less than 3.0 to 1.0 and our ratio of funded debt to EBITDA not to exceed 4.5 to 1.0, with each ratio to be calculated on a rolling four-quarter basis. As of August 29, 2021, we were in compliance with these financial covenants.

Equity and Dividends

We repurchase shares of our common stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our ~~Board of Directors.~~Board. Under the share repurchase authorization, we may repurchase our shares periodically over several years, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions. The share repurchase authorization has no expiration date. During the first ~~half~~quarter of fiscal ~~2018,~~2022, we repurchased ~~16.9~~1.5 million shares of our common stock under this authorization for an aggregate of ~~$580.0~~$50.0 million. The Company's total remaining share repurchase authorization as of ~~November 26, 2017~~August 29, 2021, was ~~$802.0 million.~~$1.07 billion.

On ~~December 12, 2017,~~September 2, 2021, the ~~Board of Directors announced~~Company paid a quarterly cash dividend ~~payment~~on shares of ~~$0.2125~~its common stock of $0.3125 per share ~~which will be paid on March 1, 2018~~ to stockholders of record as of the close of business on ~~January 30, 2018.~~

~~During~~August 3, 2021.

Contractual Obligations

As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments. These obligations impact our liquidity and capital resource needs. In addition to principal and interest payments on our outstanding long-term debt and notes payable balances, discussed above, our contractual obligations primarily consist of leases payments, income taxes, pension and postretirement benefits, and unconditional purchase obligations.

As of August 29, 2021, our finance and operating lease liabilities reported in our Condensed Consolidated Balance Sheet totaled $143.7 million and $260.8 million, respectively. For additional information, refer to Note 15, "Leases", to the ~~fourth quarter of fiscal 2017, we signed an agreement to sell our~~ ~~Wesson~~^® ~~oil business to Smucker. The transaction is subject to certain customary closing conditions, including~~Consolidated Financial Statements contained in the termination or expiration of the waiting period under the HSR Act. On August 28, 2017, Smucker and the Company each received a second request from the FTC in connection with the FTC's review of the transaction. The agreementCompany's Annual Report on Form 10-K for the ~~sale of the~~ ~~Wesson~~^® ~~oil business provides that, unless otherwise agreed upon by the Company and Smucker, if the closing of the transaction has not occurred on or prior~~fiscal year ended May 30, 2021.

The liability for gross unrecognized tax benefits related to ~~March 31, 2018 because HSR approval has not been received~~uncertain tax positions was $26.0 million as of such date, then either party may terminate the agreement. The parties are cooperating fully with the FTC as it conducts its review of the transaction. The purchase price under the agreement is $285 million.

~~In December 2017, we entered into a definitive agreement to acquire the~~ ~~Sandwich Bros. of Wisconsin~~^® business, maker of frozen breakfast and entree flatbread pocket sandwiches, for a cash purchase price of $87 million, net of cash acquired and subject to working capital adjustments. The transaction is expected to close in early calendar year 2018, subject to customary closing conditions, including the receipt of any applicable regulatory approvals.

~~We have access to the $1.25 billion revolving credit facility, our commercial paper program, and the capital markets. We believe we also have access to~~August 29, 2021. For additional ~~bank loan facilities, if needed.~~

We expect to utilize cash flows from operations and commercial paper issuances to finance the repayment of senior note principal maturities totaling $189.7 million due in the second half of fiscal 2018.

Management believes that the Company's sources of liquidity will be adequate to meet required debt repayments, planned capital expenditures, acquisitions, working capital needs, and payment of anticipated quarterly dividends for the foreseeable future.

We expect to maintain or have access to sufficient liquidity to either retire or refinance senior debt upon maturity, as market conditions warrant, from operating cash flows, our commercial paper program, proceeds from any divestitures and other disposition transactions, access to capital markets, and our revolving credit facility.

~~Cash Flows~~

During the first half of fiscal 2018, we used $167.4 million of cash, which was the net result of $420.7 million generated from operating activities, $366.1 million used in investing activities, $230.5 million used in financing activities, and an increase of $8.5 million due to the effects of changes in foreign currency exchange rates.

Cash generated from operating activities of continuing operations totaled $404.7 million in the first half of fiscal 2018, as compared to $460.6 million generated in the first half of fiscal 2017. The decrease was the result of higher income tax payments attributable to continuing operations and changes in working capital primarily driven by increases in accounts receivable and inventory. This was partially offset by decreases in interest payments, due to significant debt repayments during fiscal 2017, and lower payments related to incentive compensation and our restructuring plans.

The operating activities of discontinued operations generated $16.0 million and $81.6 million in the first half of fiscal 2018 and 2017, respectively. This reflects the activities of the Lamb Weston business that was spun off on November 9, 2016 and other divested businesses.

Cash used in investing activities of continuing operations totaled $366.1 million in the first half of fiscal 2018, compared to cash provided of $273.9 million in the first half of fiscal 2017. Investing activities of continuing operations in the first half of fiscal 2018 consisted primarily of capital expenditures totaling $123.4 million and the purchase of Angie's Artisan Treats, LLC for $249.6 million, net of cash acquired. Investing activities of continuing operations in the first half of fiscal 2017 included proceeds from the sales of the Spicetec and JM Swank businesses totaling $489.1 million, partially offset by capital expenditures of $118.3 million and the purchase of the operating assets of Frontera Foods, Inc. and Red Fork LLC totaling $108.2 million, net of cash acquired.

~~Cash used in investing activities of discontinued operations in the first half of fiscal 2017 resulted mainly from capital expenditures.~~

Cash used in financing activities of continuing operations totaled $230.5 million in the first half of fiscal 2018 and $920.0 million in the first half of fiscal 2017. Financing activities of continuing operations in the first half of fiscal 2018 consisted principally of common stock repurchases totaling $580.0 million, net proceeds from the issuance of long-term debt totaling $497.4 million, cash dividends paid of $171.6 million, and net short-term borrowings of $38.9 million, mainly under our commercial paper program. Cash used in financing activities of continuing operations in the first half of fiscal 2017 reflected long-term debt repayments of $555.8 million, cash dividends paid of $219.4 million, and common stock repurchases totaling $170.1 million, partially offset by net proceeds from employee stock option exercises and the issuance of other stock awards of $47.4 million.

Cash provided by financing activities of discontinued operations in the first half of fiscal 2017 principally comprises borrowings by Lamb Weston, which were transferred in connection with the Spinoff.

The Company had cash and cash equivalents of $84.0 million at November 26, 2017 and $251.4 million at May 28, 2017, of which $76.8 million at November 26, 2017 and $244.9 million at May 28, 2017 was held in foreign countries. During the second quarter of fiscal 2018, the Company repatriated $151.3 million of cash balances previously deemed to be permanently reinvested outside the U.S. Referinformation, refer to Note 1210, " Income Taxes", to the Condensed Consolidated Financial Statements contained in this report ~~for more information related~~and Note 14, "Pre-Tax Income and Income Taxes", to ~~this repatriation of cash and related adjustments to deferred tax liability. The Tax Cuts and Jobs Act, signed into law on December 22, 2017, will require~~ the ~~Company to pay tax on the unremitted earnings of its foreign subsidiaries. The Company is~~Consolidated Financial Statements contained in the ~~process~~Company's Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

As of ~~determining~~May 30, 2021, we had an aggregate funded pension asset of $109.6 million and an aggregate unfunded postretirement benefit obligation totaling $78.2 million. We expect to make payments totaling approximately $12.3 million and $9.0 million in fiscal 2022 to fund our pension and postretirement plans, respectively. See Note 12 "Pension and Postretirement Benefits", to the ~~amount of that tax and expects to record an initial estimate of the impact on our~~ Condensed Consolidated Financial Statements contained in this report and Note 18, "Pension and Postretirement Benefits", to the Consolidated Financial Statements and "Critical Accounting Estimates – Employment-Related Benefits" contained in the ~~third quarter~~Company's Annual Report on Form 10-K for the fiscal year ended May 30, 2021, for further discussion of ~~fiscal 2018.~~

~~Our estimate of capital expenditures for fiscal 2018 is approximately $300 million. For the first half of fiscal 2018, we have funded $123.4 million of capital expenditures.~~

~~Management believes~~our pension obligation and factors that existing cash balances, cash flows from operations, existing credit facilities, and access to capital markets will provide sufficient liquidity to meet our repayment of debt, including any repayment of debt or refinancing of debt, working capital needs, planned capital expenditures, planned share repurchases, and payment of anticipated quarterly dividends for at least the next twelve months.

~~OFF-BALANCE SHEET ARRANGEMENTS~~

We use off-balance sheet arrangements (e.g., leases accounted for as operating leases) where sound business principles warrant their use. We also periodically enter into guarantees and other similar arrangements as part of transactions in the ordinary course of business. These are described further in ~~"Obligations and Commitments"~~ ~~below.~~

~~Variable Interest Entities Not Consolidated~~

As of November 26, 2017 and May 28, 2017, the estimated amount by which the put prices exceeded the fair values of the related properties was $50.7 million, of which we had accrued $10.2 million and $8.4 million, respectively. In December 2017, subsequent to the second quarter of fiscal 2018, we purchased a building that had been subject to a put option. We will recognize a net loss of approximately $13 million for the early termination of the associated lease inAugust 29, 2021, our third quarter of fiscal 2018. Also in December 2017, we made an offer to purchase another property subject to a put option. We have not entered into a binding legal contract in connection with this offer. However, if our offer is accepted, we may recognize an estimated loss of $30 million to $40 million, upon closing of the transaction, for the early exit of an unfavorable lease contract. If this transaction is completed, we would have one remaining leased building subject to a put option for which the put option price exceeds the estimated fair value by $8.2 million, of which we had accrued $1.0 million, as of November 26, 2017. These leases, with the exception of one, are accounted for as operating leases. A capital lease asset and related lease obligation of $25.3 million and $28.9 million, respectively, were included in the Condensed Consolidated Balance Sheets as of November 26, 2017. We have determined that we do not have the power to direct the activities that most significantly impact the economic performance of these entities. In making this determination, we have considered, among other items, the terms of the lease agreements, the expected remaining useful lives of the assets leased, and the capital structure of the lessor entities.

~~OBLIGATIONS AND COMMITMENTS~~

~~As part of our ongoing operations, we enter into arrangements that obligate us to make future payments under contracts such as lease agreements, debt agreements, and~~ unconditional purchase obligations (i.e., obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as "take-or-pay" contracts)~~. The unconditional purchase obligation arrangements are entered into~~ totaled approximately $2.29 billion. Approximately $1.56 billionof this balance is due in ~~our normal course of business in order to ensure adequate levels of sourced product are available. Of these items, debt, notes payable, and capital lease obligations, which totaled $3.5 billion as of~~ ~~November 26, 2017, were recognized as liabilities in the Condensed Consolidated Balance Sheets contained~~less than one year. Included in this ~~report. Operating lease obligations and unconditional purchase obligations, which totaled $1.2 billion as of~~ ~~November 26, 2017, were not recognized as liabilities in the Condensed Consolidated Balance Sheets contained in this report, in accordance with generally accepted accounting principles.~~

~~A summary of our contractual obligations as of~~ ~~November 26, 2017~~ ~~was as follows:~~

Payments Due by Period
(in millions)
Contractual Obligations Total
Less than
1 Year
1-3 Years 3-5 Years
After 5
Years
Long-term debt $ 3,321.3
$ 189.7
$ 626.7
$ 445.9
$ 2,059.0
Capital lease obligations 127.0
9.1
16.8
17.6
83.5
Operating lease obligations 216.5
39.9
50.0
34.0
92.6
Purchase obligations¹and other contracts
1,038.2
856.9
114.3
65.3
1.7
Notes payable 67.1
67.1
—
—
—
Total $ 4,770.1
$ 1,162.7
$ 807.8
$ 562.8
$ 2,236.8

¹ ~~Amount includes~~amount are open purchase orders and other supply agreements ~~some~~totaling approximately $1.39 billion, which are generally settleable in the ordinary course of ~~which~~business. Some are not legally binding and/or may be cancellable. ~~Such~~Warehousing service agreements ~~are generally settleable~~totaling approximately $400 millionand obligations for leases that have not yet commenced totaling $282.2 million as of August 29, 2021, make up a majority of our remaining unconditional purchase obligations, with various terms of up to 20 years.

Capital Expenditures

We continue to make investments in ~~the ordinary course~~our business and operating facilities. Our estimate of ~~business in less than one year.~~

capital expenditures for fiscal 2022 is approximately $500 million.

Supplier Arrangements

We ~~are~~offer certain suppliers access to a third-party service that allows them to view our scheduled payments online. The third-party service also ~~contractually obligated~~allows suppliers to ~~pay interest~~finance advances on our ~~long-term debt and capital lease obligations. The weighted average coupon interest rate~~scheduled payments at the sole discretion of the ~~long-term debt obligations outstanding as of~~ ~~November 26, 2017, was approximately 4.8%.~~

~~The operating lease obligations noted in the table above have not been reduced by non-cancellable sublease rentals of $0.9 million.~~

As of May 28, 2017, we had aggregate unfunded pension obligations totaling $565.1 million. This amount is not included in the table above, and we do not expect to be required to make payments to fund these amounts in the foreseeable future. Based on current statutory requirements, we are not obligated to fund any amount to our qualified pension plans during the next twelve months. We estimate that we will make payments of approximately $15.2 million over the next twelve months to fund our pension plans. See Note 14, Pension and Postretirement Benefits, to the Condensed Consolidated Financial Statements contained in this reportsupplier and the ~~Company's Annual Report on Form 10-K for~~third party. We have no economic interest in these financing arrangements and no direct relationship with the ~~year ended May 28, 2017, Critical Accounting Estimates - Employment Related Benefits, for further discussion of our pension obligations and factors that could affect estimates of this liability.~~

As part of our ongoing operations, we also enter into arrangements that obligate us to make future cash payments only upon the occurrence of a future event (e.g., guarantees of debt or lease payments of a third party shouldsuppliers, the third party, ~~be unable~~or any financial institutions concerning this service. All balances remain as obligations to ~~perform). In accordance with generally accepted accounting principles, the following commercial commitments~~our suppliers as stated in our supplier agreements and are ~~not recognized as liabilities~~reflected in ~~the~~accounts payable within our Condensed Consolidated Balance ~~Sheets contained~~Sheets. The associated payments are included in ~~this report. A summary~~net cash flows from operating activities within our Condensed Consolidated Statements of Cash Flows. As of August 29, 2021 and May 31, 2020, $277.3 million and $279.3 million, respectively, of our ~~commitments, including commitments~~total accounts payable was payable to suppliers who utilize this third-party service.

The program commenced at about the same time that we began an initiative to negotiate extended payment terms with our suppliers. Although difficult to predict, we generally expect the incremental cash flow benefits associated with ~~equity method investments, as~~these extended payment terms to increase at a slower rate in the future. A number of ~~November 26, 2017~~factors may impact our future payment terms, including our relative creditworthiness, overall market liquidity, and changes in interest rates and other general economic conditions.

Cash Flows

During the first quarter of fiscal 2022, we used $12.2 million of cash, which was ~~as follows:~~

Amount of Commitment Expiration Per Period
(in millions)
Other Commercial Commitments Total
Less than
1 Year
1-3 Years 3-5 Years
After 5
Years
Standby repurchase obligations $ 0.9
$ 0.6
$ 0.3
$ —
$ —
Other commitments 6.9
3.5
3.4
—
—
Total $ 7.8
$ 4.1
$ 3.7
$ —
$ —

~~In certain limited situations, we will guarantee an obligation~~the net result of ~~an unconsolidated entity. We guarantee certain leases resulting~~$139.8 million generated from operating activities, $154.9 million used in investing activities, $5.5 million generated from financing activities, and a decrease of $2.6 million due to the ~~divestiture~~effects of ~~the JM Swank business completed~~changes in foreign currency exchange rates.

Cash generated from operating activities totaled $139.8 million and $284.5 million in the first quarter of fiscal ~~2017. As~~2022 and 2021, respectively. The decrease in operating cash flows for the first quarter of ~~November 26, 2017,~~fiscal 2022 compared to the ~~remaining terms~~first quarter of ~~these arrangements~~fiscal 2021 reflected the impact of realized input cost inflation. Comparative changes in working capital balances were also negatively impacted by the timing of accounts receivable receipts. This was partially offset by decreased tax and interest payments for the first quarter of fiscal 2022 compared to fiscal 2021. Tax payments for the first quarter of fiscal 2021 included approximately $47.0 million of fourth quarter fiscal 2020 tax payments, which were deferred due to the extension of the deadline for certain federal cash tax payments. Operating cash flows in the first quarter of fiscal 2021 benefited from the deferral of approximately $15 million of employer payroll taxes under the Coronavirus Aid, Relief, and Economic Security Act. Payments totaling 50% of such amounts will occur in the third quarter of both fiscal 2022 and 2023.

Cash used in investing activities totaled $154.9 million and $142.9 million in the first quarter of fiscal 2022 and 2021, respectively. Net cash outflows from investing activities in the first quarter of fiscal 2022 and 2021 consisted primarily of capital expenditures totaling $154.9 million and $145.5 million, respectively.

Cash generated from financing activities totaled $5.5 million in the first quarter of fiscal 2022, compared to cash used of $259.6 million in the first quarter of fiscal 2021. Financing activities in the first quarter of fiscal 2022 principally reflect net proceeds of $499.1 million from the issuance of $500.0 million aggregate principal amount of long-term debt, net short-term borrowing repayments of $248.8 million, cash dividends paid of $132.1 million, and common stock repurchases of $50.0 million. Financing activities in the first quarter of fiscal 2021 consisted primarily of the repayment of long-term debt totaling $133.4 million and cash dividends paid of $103.5 million.

Cash Held by International Subsidiaries

The Company had cash and cash equivalents of $67.0 million at August 29, 2021 and $79.2 million at May 30, 2021, of which $57.5 million at August 29, 2021, and $72.4 million at May 30, 2021, was held in foreign countries. We believe that our foreign subsidiaries have invested or will invest any undistributed earnings indefinitely, or that any undistributed earnings will be remitted in a tax-neutral transaction, and, therefore, do not ~~exceed six years and the maximum amount of future payments we have guaranteed was $3.4 million.~~

In certain limited situations, we also guarantee obligations of the Lamb Weston business pursuant to guarantee arrangements that existed prior to the Spinoff and remained in place following completion of the Spinoff until such guarantee obligations are substituted for guarantees issued by Lamb Weston. Such guarantee arrangements are described below. Pursuant to the Separation and Distribution Agreement, dated as of November 8, 2016 (the "Separation Agreement"), between us and Lamb Weston, these guarantee arrangements are deemed liabilities of Lamb Weston that were transferred to Lamb Weston as part of the Spinoff. Accordingly, in the event that we are required to make any payments as a result of these guarantee arrangements, Lamb Weston is obligated to indemnify us for any such liability, reduced by any insurance proceeds received by us, in accordance with the terms of the indemnification provisions under the Separation Agreement.

Lamb Weston is a party to a warehouse services agreement with a third-party warehouse provider through July 2035. Under this agreement, Lamb Weston is required to make payments for warehouse services basedprovide deferred taxes on the quantity of goods stored and other service factors. We have guaranteed the warehouse provider that we will make the payments required under the agreement in the event that Lamb Weston fails to perform. Minimum payments of $1.5 million per month are required under this agreement. It is not possible to determine the maximum amount of the payment obligations under this agreement. Upon completion of the Spinoff, we recognized a liability for the estimated fair value of this guarantee. As of November 26, 2017, the amount of this guarantee, recorded in other noncurrent liabilities, was $28.9 million.

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). Under the terms of the sublease agreement, Lamb Weston is required to make certain rental payments to the sublessor. We have guaranteed the sublessor Lamb Weston’s performance and the payment of all amounts (including indemnification obligations) owed by Lamb Weston under the sublease agreement, up to a maximum of $75.0 million. We believe the farmland associated with this sublease agreement is readily marketable for lease to other area farming operators. As such, we believe that any financial exposure to the company, in the event that we were required to perform under the guaranty, would be largely mitigated.

~~The obligations and commitments tables above do not include any reserves for uncertainties in income taxes, as we are unable to reasonably estimate the ultimate amount or timing of settlement~~cumulative undistributed earnings of our reserves for income taxes. The liability for gross unrecognized tax benefits at November 26, 2017 was $34.0 million. The net amount of unrecognized tax benefits at November 26, 2017, that, if recognized, would impact our effective tax rate was $25.7 million. Recognition of these tax benefits would have a favorable impact on our effective tax rate.

foreign subsidiaries.

CRITICAL ACCOUNTING ESTIMATES

For further discussion of our critical accounting estimates, ~~can be found in~~please refer to the ~~"Management's~~"Management's Discussion and Analysis of Financial Condition and Results of Operations" section in Part I,II, Item 7, of our Annual Report on Form 10-K for the fiscal year ended May ~~28, 2017~~.

30, 2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The principal market risks affecting us are exposures to price fluctuations of commodity and energy inputs, interest rates, and foreign currencies.

Other than the changes noted below, there have been no material changes in our market risk during the ~~twenty-six~~thirteen weeks ended~~November 26, 2017~~. August 29, 2021. For additional information, refer to the ~~"Quantitative~~"Quantitative and Qualitative Disclosures ~~about~~About Market Risk" section in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended May ~~28, 2017.~~

30, 2021.

Commodity Market Risk

We purchase commodity inputs such as wheat, corn, oats, soybean meal, soybean oil, meat, dairy products, nuts, sugar, natural gas, electricity, and packaging materials to be used in our operations. These commodities are subject to price fluctuations that may create price risk. We enter into commodity hedges to manage this price risk using physical forward contracts or derivative instruments. We have policies governing the hedging instruments our businesses may use. These policies include limiting the dollar risk exposure for each of our businesses. We also monitor the amount of associated counter-party credit risk for all non-exchange-traded transactions.

Interest Rate Risk

We may use interest rate swaps to manage the effect of interest rate changes on the fair value of our existing debt as well as the forecasted interest payments for the anticipated issuance of debt.

The carrying amount of long-term debt (including current installments) was ~~$3.46~~$8.80 billion as of ~~November 26, 2017~~.August 29, 2021. Based on current market rates, the fair value of this debt at ~~November 26, 2017~~August 29, 2021 was estimated at ~~$3.80~~$10.32 billion. As of ~~November 26, 2017~~,August 29, 2021, a 1% increase in the interest rates would decrease the fair value of our fixed rate debt by approximately ~~$188.4~~$691.8 million, while a 1% decrease in interest rates would increase the fair value of our fixed rate debt by approximately ~~$208.9~~$791.0 million.

Foreign Currency Risk

In order to reduce exposures for our processing activities related to changes in foreign currency exchange rates, we may enter into forward exchange or option contracts for transactions denominated in a currency other than the functional currency for certain of our operations. This activity primarily relates to economically hedging against foreign currency risk in purchasing inventory and capital equipment, sales of finished goods, and future settlement of foreign denominated assets and liabilities.

Value-at-Risk (VaR)

We employ various tools to monitor our derivative risk, including value-at-risk ("VaR") models. We perform simulations using historical data to estimate potential losses in the fair value of current derivative positions. We use price and volatility information for the prior 90 days in the calculation of VaR that is used to monitor our daily risk. The purpose of this measurement is to provide a single view of the potential risk of loss associated with derivative positions at a given point in time based on recent changes in market prices. Our model uses a 95% confidence level. Accordingly, in any given ~~one day~~one-day time period, losses greater than the amounts included in the table below are expected to occur only 5% of the time. We include commodity swaps, futures, and options and foreign exchange forwards, swaps, and options in this calculation. The following table provides an overview of our average daily VaR for our energy, agriculture, and foreign exchange positions ~~(including discontinued operations)~~ during the ~~twenty-six~~thirteen weeks ended ~~November 26, 2017~~August 29, 2021 and ~~November 27, 2016.~~August 30, 2020.

	Fair Value Impact
In Millions	Average During Thirteen Weeks Ended August 29, 2021		Average During Thirteen Weeks Ended August 30, 2020
Energy commodities	$	0.6	$	0.5
Agriculture commodities		1.9		0.2
Foreign exchange		0.9		1.2

Fair Value Impact
In Millions
Average
During Twenty-six Weeks
Ended November 26, 2017

Average
During Twenty-six Weeks
Ended November 27, 2016
Energy commodities $ 0.4
$ 0.4
Agriculture commodities 0.4
0.7
Foreign exchange 0.6
0.3

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company's management carried out an evaluation, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, as of ~~November 26, 2017~~.August 29, 2021. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures ~~are~~were effective.

Internal Control Over Financial Reporting

The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, evaluated any change in the Company's internal control over financial reporting that occurred during the quarter covered by this report and determined that there was no change in our internal control over financial reporting during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are a party to various environmental proceedings and litigation, primarily related to our acquisition in fiscal 1991 of Beatrice Company ("Beatrice"). As a result of the acquisition of Beatrice and the significant pre-acquisition contingencies of the Beatrice businesses and its former subsidiaries, our condensed consolidated post-acquisition financial statements reflect liabilities associated with the estimated resolution of these contingencies. Such liabilities include various litigation and environmental proceedings related to businesses divested by Beatrice prior to our acquisition of Beatrice. The litigation proceedings include suits against a number of lead paint and pigment manufacturers, including ConAgra Grocery Products Company, LLC, a wholly owned subsidiary of the Company ("ConAgra Grocery Products"), and the Company as alleged successors to W. P. Fuller Co., a lead paint and pigment manufacturer owned and operated by a predecessor to Beatrice from 1962 until 1967. Although decisions favorable to us have been rendered in Rhode Island, New Jersey, Wisconsin, and Ohio, we remain a defendant in active suits in Illinois and California. The Illinois suit seeks class-wide relief for reimbursement of costs associated with the testing of lead levels in blood. In California, a number of cities and counties joined in a consolidated action seeking abatement of the alleged public nuisance. On September 23, 2013, a trial of the California case concluded in the Superior Court of California for the County of Santa Clara, and on January 27, 2014, the court entered a judgment (the "Judgment") against ConAgra Grocery Products and two other defendants ordering the creation of a California abatement fund in the amount of $1.15 billion. Liability is joint and several. The Company appealed the Judgment, and on November 14, 2017 the California Court of Appeal for the Sixth Appellate District reversed in part, holding that the defendants were not liable to pay for abatement of homes built after 1950, but affirmed the Judgment as to homes built before 1951 and remanded to the trial court with directions to recalculate the sum to be paid into the abatement fund. The Company has petitioned the California Supreme Court for further review of the decision, which the Company believes to be an unprecedented expansion of current California law. In light of the unsettled nature of California public nuisance law and the ongoing appeal, a loss is considered neither probable nor estimable, and the Company has accordingly not accrued any loss related to this case. In addition, it is not possible to estimate exposure in the remaining case in Illinois, which is based on different legal theories. If ultimately necessary, the Company will look to its insurance policies for coverage; its carriers are on notice. However, the extent of insurance coverage is uncertain, and the Company cannot assure that the final resolution of these matters will not have a material adverse effect on its financial condition, results of operations, or liquidity.

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"). These sites involve locations previously owned or operated by predecessors of Beatrice that used or produced petroleum, pesticides, fertilizers, dyes, inks, solvents, PCBs, acids, lead, sulfur, tannery wastes, and/or other contaminants. In the past five years, Beatrice has paid or is in the process of paying its liability share at 31 of these sites. Reserves for these Beatrice environmental proceedings have been established based on our best estimate of the undiscounted remediation liabilities, which estimates include evaluation of investigatory studies, extent of required clean-up, the known volumetric contribution of Beatrice and other potentially responsible parties, and its experience in remediating sites. The accrual for Beatrice-related environmental matters totaled $52.8 million as of November 26, 2017, a majority of which relates to the Superfund and state-equivalent sites referenced above. During the third quarter of fiscal 2017, a final Remedial Investigation/Feasibility Study was submitted for the Southwest Properties portion of the Wells G&H Superfund site, which is one of the Beatrice sites. The U.S. Environmental Protection Agency (the "EPA") issued a Record of Decision (the “ROD”) for the Southwest Properties portion of the site on September 29, 2017, and will subsequently enter into negotiations with potentially responsible parties to determine final responsibility for implementing the ROD.

For additional information on legal proceedings, please refer to ~~Part I, Item 3 "Legal Proceedings" and~~ Note ~~17 "Contingencies"~~16 "Contingencies," to the financial statements ~~in each case~~ contained in our Annual Report on Form 10-K for the year ended May ~~28, 2017, and Part II, Item 1 "Legal Proceedings"~~30, 2021 and Note ~~13 "Contingencies"~~11 "Contingencies," to the Condensed Consolidated Financial Statements ~~in each case~~ contained in ~~our subsequent~~this Quarterly ~~Reports~~Report on Form 10-Q.

ITEM 1A. RISK FACTORS

A discussion of our risk factors can be found in Item 1A "Risk ~~Factors,~~Factors" in our Annual Report on Form 10-K for the fiscal year ended May ~~28, 2017, our Quarterly Report on Form 10-Q for the period ended August 27, 2017,~~30, 2021 and in our other filings with the SEC. During the ~~second~~first quarter of fiscal ~~2018,~~2022, there were no material changes to our previously disclosed risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table presents the total number of shares of common stock purchased during the ~~second~~first quarter of fiscal ~~2018,~~2022, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, and the approximate dollar value of the maximum number of shares that may yet be purchased under the share repurchase program:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program ¹		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program ¹
May 31, 2021 through June 27, 2021		—	$	—		—	$	1,116,576,000
June 28, 2021 through July 25, 2021		1,184,311	$	34.13		1,184,311	$	1,076,151,000
July 26, 2021 through August 29, 2021		278,630	$	34.36		278,630	$	1,066,577,000
Total Fiscal 2022 First Quarter Activity		1,462,941	$	34.18		1,462,941	$	1,066,577,000

Period
Total Number
of Shares (or
units)
Purchased

Average
Price Paid
per Share
(or unit)

Total Number of
Shares
Purchased as Part of
Publicly Announced
Plans or Programs
(1)

Approximate Dollar
Value of Maximum
Number of Shares that
may yet be Purchased
under the Program (1)
August 28 through September 24, 2017 —
$ —
—
$ 1,081,967,000
September 25 through October 22, 2017 2,278,142
$ 34.16
2,278,142
$ 1,004,155,000
October 23 through November 26, 2017 5,904,526
$ 34.24
5,904,526
$ 801,968,000
Total Fiscal 2018 Second Quarter Activity 8,182,668
$ 34.22
8,182,668
$ 801,968,000

~~________________~~

~~(1)~~

Pursuant to publicly announced share repurchase programs from December 2003, we have repurchased approximately 210.1 million shares at a cost of $5.75 billion through November 26, 2017. On October 11, 2016, we announced that our Board of Directors approved an increase of $1.25 billion to the share repurchase program. On June 29, 2017, we announced that in the fourth quarter of fiscal 2017, our Board of Directors approved a further increase of $1.0 billion to the share repurchase program. The share repurchase program is effective and has no expiration date.

¹The Board approved a share repurchase program authorizing the Company to purchase shares of its common stock in December 2003, which share repurchase authorization has been subsequently increased from time to time. On June 27, 2018, we announced that the Board increased the amount of the share repurchase authorization by $1.0 billion. As of August 29, 2021, approximately $1.07 billion of our common stock remained available for purchase under this authorization, which has no expiration. Under the share repurchase authorization, we may repurchase our shares periodically over several years, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions.

ITEM 6. EXHIBITS

All documents referenced below were filed pursuant to the Securities Exchange Act of 1934, as amended, by Conagra Brands, Inc. (file number 001-07275), unless otherwise noted.

EXHIBIT		DESCRIPTION

~~EXHIBIT~~ 3.1		~~DESCRIPTION~~

~~3.1~~		Amended and Restated Certificate of Incorporation of Conagra Brands, Inc., incorporated herein by reference to Exhibit 3.1 to the ~~Company's~~Company’s Current Report on Form 8-K filed with the SEC on November 10, 2016

3.2		Amended and Restated ~~By-Laws~~Bylaws of Conagra Brands, Inc., incorporated herein by reference to Exhibit 3.1 ofto the Company’s Current Report on Form 8-K filed with the SEC on ~~May 23, 2017~~July 28, 2020

~~4.2~~ 4.1		Indenture, dated ~~October~~August 12, ~~2017,~~2021, by and between ~~the Company~~Conagra Brands, Inc., and ~~Wells Fargo~~U.S. Bank National Association, as Trustee, incorporated herein by reference to Exhibit 4.1 ofto the Company’s Current Report on Form 8-K filed with the SEC on ~~October~~August 12, ~~2017~~2021

~~4.3~~ 4.2		First Supplemental Indenture, dated ~~October~~August 12, ~~2017,~~2021, by and between the Company and ~~Wells Fargo~~U.S. Bank National Association as Trustee (including Form of Note), incorporated herein by reference to Exhibit 4.2 ofto the Company’s Current Report on Form 8-K filed with the SEC on ~~October~~August 12, ~~2017~~2021

*10.2.4 10.1		Amendment ~~Four~~No. 1, dated as of July 13, 2021, to Amended and Restated Revolving Credit Agreement by and among Conagra Brands, Inc. ~~Nonqualified Pension Plan (January 1, 2009 Restatement)~~, ~~dated December 19, 2017~~

*10.4.7		~~Conagra Brands, Inc. Voluntary Deferred Compensation Plan (Restated Effective January 1, 2017)~~the banks, financial institutions and other institutional lenders party thereto, as lenders, and Bank of America, N.A., ~~dated October 2, 2017,~~as administrative agent, incorporated herein by reference to Exhibit ~~10.4.7 of~~10.19 to the Company’s ~~Quarterly~~Annual Report on Form ~~10-Q~~10-K for the ~~quarter~~fiscal year ended ~~August 27, 2017~~May 30, 2021

*10.4.8 31.1		~~First Amendment to Conagra Brands, Inc. Voluntary Deferred Compensation Plan (Restated Effective January 1, 2017), dated December 21, 2017~~

*10.7.7		First Amendment to ConAgra Foods, Inc. 2014 Stock Plan, dated December 15, 2017, incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on December 15, 2017

~~10.31.1~~		~~Extension of Transition Services Agreement, dated as of October 9, 2017, by and between the Company and Lamb Weston Holdings, Inc.~~

12		~~Statement regarding computation of ratio of earnings to fixed charges~~

~~31.1~~		Section 302 Certificate of Chief Executive Officer

31.2		Section 302 Certificate of Chief Financial Officer

~~32.1~~ 32		Section 906 Certificates

101		The following materials from Conagra Brands' Quarterly Report on Form 10-Q for the quarter ended ~~November 26, 2017,~~August 29, 2021, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) Notes to Condensed Consolidated Financial Statements, and (vi) document and entity information.

* Management contract or compensatory plan. 104

Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with respect to long-term debt of Conagra Brands, Inc. are not filed with this Quarterly Report on Form 10-Q. The Company will furnish a copy of any such long-term debt agreement to the SEC upon request. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	CONAGRA BRANDS, INC.

	By:	/s/ DAVID S. MARBERGER
		David S. Marberger
		Executive Vice President and Chief Financial Officer

	By:	/s/ ROBERT G. WISE
		Robert G. Wise
		Senior Vice President and Corporate Controller

Dated this ~~4th~~7th day of ~~January, 2018.~~

October, 2021.

Delaware		47-0248710

~~Delaware~~		~~47-0248710~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

222 W. Merchandise Mart Plaza, Suite 1300 Chicago, Illinois		60654
(Address of principal executive offices)		(Zip Code)


☒
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Thirteen weeks ended				Twenty-six weeks ended
	November 26, 2017		November 27, 2016		November 26, 2017		November 27, 2016
Net sales	$	2,173.4	$	2,088.4	$	3,977.6	$	3,984.0
Costs and expenses:
Cost of goods sold	1,515.1		1,440.9		2,800.3		2,791.9
Selling, general and administrative expenses	307.3		417.9		546.3		649.6
Interest expense, net	38.0		54.1		74.4		112.3
Income from continuing operations before income taxes and equity method investment earnings	313.0		175.5		556.6		430.2
Income tax expense	109.5		78.4		229.5		247.6
Equity method investment earnings	20.6		17.2		50.6		30.3
Income from continuing operations	224.1		114.3		377.7		212.9
Income from discontinued operations, net of tax	0.4		11.6		0.1		103.0
Net income	$	224.5	$	125.9	$	377.8	$	315.9
Less: Net income attributable to noncontrolling interests	1.0		3.8		1.8		7.6
Net income attributable to Conagra Brands, Inc.	$	223.5	$	122.1	$	376.0	$	308.3
Earnings per share — basic
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders	$	0.55	$	0.26	$	0.91	$	0.48
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders	—		0.02		—		0.22
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.55	$	0.28	$	0.91	$	0.70
Earnings per share — diluted
Income from continuing operations attributable to Conagra Brands, Inc. common stockholders	$	0.54	$	0.26	$	0.91	$	0.48
Income from discontinued operations attributable to Conagra Brands, Inc. common stockholders	—		0.02		—		0.22
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.54	$	0.28	$	0.91	$	0.70
Cash dividends declared per common share	$	0.2125	$	0.25	$	0.425	$	0.50



	Thirteen weeks ended
	November 26, 2017									November 27, 2016
	Pre-Tax Amount			Tax (Expense) Benefit			After-Tax Amount			Pre-Tax Amount			Tax (Expense) Benefit			After-Tax Amount
Net income	$	334.0		$	(109.5	)	$	224.5		$	243.2		$	(117.3	)	$	125.9
Other comprehensive income:
Derivative adjustments:
Unrealized derivative adjustments	1.0			(0.4		)	0.6			2.2			(0.9		)	1.3
Reclassification for derivative adjustments included in net income	0.1			—			0.1			—			—			—
Unrealized gains on available-for-sale securities	0.4			(0.2		)	0.2			0.2			—			0.2
Unrealized currency translation losses	(12.7		)	0.1			(12.6		)	(14.1		)	—			(14.1		)
Pension and post-employment benefit obligations:
Unrealized pension and post-employment benefit obligations	43.4			(16.6		)	26.8			66.8			(25.6		)	41.2
Reclassification for pension and post-employment benefit obligations included in net income	(0.2		)	0.1			(0.1		)	(0.9		)	0.4			(0.5		)
Comprehensive income	366.0			(126.5		)	239.5			297.4			(143.4		)	154.0
Comprehensive income attributable to noncontrolling interests	0.4			(0.4		)	—			2.2			(0.1		)	2.1
Comprehensive income attributable to Conagra Brands, Inc.	$	365.6		$	(126.1	)	$	239.5		$	295.2		$	(143.3	)	$	151.9



	November 26, 2017			May 28, 2017
ASSETS
Current assets
Cash and cash equivalents	$	84.0		$	251.4
Receivables, less allowance for doubtful accounts of $3.4 and $3.1	683.8			563.4
Inventories	1,059.2			934.2
Prepaid expenses and other current assets	183.5			228.7
Current assets held for sale	45.8			35.5
Total current assets	2,056.3			2,013.2
Property, plant and equipment	4,236.8			4,261.9
Less accumulated depreciation	(2,594.8		)	(2,606.9		)
Property, plant and equipment, net	1,642.0			1,655.0
Goodwill	4,457.0			4,301.1
Brands, trademarks and other intangibles, net	1,298.2			1,229.3
Other assets	846.1			790.6
Noncurrent assets held for sale	100.5			107.1
	$	10,400.1		$	10,096.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable	$	67.1		$	28.2
Current installments of long-term debt	198.8			199.0
Accounts payable	886.7			773.1
Accrued payroll	131.9			167.6
Other accrued liabilities	565.8			552.6
Total current liabilities	1,850.3			1,720.5
Senior long-term debt, excluding current installments	3,065.9			2,573.3
Subordinated debt	195.9			195.9
Other noncurrent liabilities	1,501.5			1,528.8
Total liabilities	6,613.6			6,018.5
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 567,907,172	2,839.7			2,839.7
Additional paid-in capital	1,166.8			1,171.9
Retained earnings	4,464.3			4,247.0
Accumulated other comprehensive loss	(165.2		)	(212.9		)
Less treasury stock, at cost, 167,246,324 and 151,387,209 common shares	(4,607.9		)	(4,054.9		)
Total Conagra Brands, Inc. common stockholders' equity	3,697.7			3,990.8
Noncontrolling interests	88.8			87.0
Total stockholders' equity	3,786.5			4,077.8
	$	10,400.1		$	10,096.3



	November 26, 2017			May 28, 2017
Currency translation losses, net of reclassification adjustments	$	(78.7	)	$	(98.6	)
Derivative adjustments, net of reclassification adjustments	(0.4		)	(1.1		)
Unrealized gains (losses) on available-for-sale securities	0.1			(0.3		)
Pension and post-employment benefit obligations, net of reclassification adjustments	(86.2		)	(112.9		)
Accumulated other comprehensive loss	$	(165.2	)	$	(212.9	)



	Balance at May 28, 2017		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at November 26, 2017
Pension costs	$	31.8	$	—	$	—		$	2.1		$	33.9
Severance and related costs	13.8		4.0		(7.9		)	(0.7		)	9.2
Consulting/professional fees	0.6		0.7		(1.1		)	—			0.2
Contract/lease cancellation	11.6		0.3		(3.6		)	(0.3		)	8.0
Other costs	1.9		6.5		(6.9		)	—			1.5
Total	$	59.7	$	11.5	$	(19.5	)	$	1.1		$	52.8



Derivatives Not Designated as Hedging Instruments	Location in Condensed Consolidated Statement of Earnings of Gains Recognized on Derivatives	Gains Recognized on Derivatives in Condensed Consolidated Statement of Earnings for the Thirteen Weeks Ended
Derivatives Not Designated as Hedging Instruments		November 26, 2017		November 27, 2016
Commodity contracts	Cost of goods sold	$	0.8	$	1.6
Foreign exchange contracts	Cost of goods sold	2.2		1.4
Foreign exchange contracts	Selling, general and administrative expense	—		2.5
Total gains from derivative instruments not designated as hedging instruments		$	3.0	$	5.5



	Pension Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	November 26, 2017			November 27, 2016			November 26, 2017			November 27, 2016
Service cost	$	13.2		$	15.9		$	25.9		$	32.6
Interest cost	27.7			29.9			55.9			59.9
Expected return on plan assets	(54.6		)	(53.9		)	(108.8		)	(107.7		)
Amortization of prior service cost	0.7			0.7			1.4			1.3
Recognized net actuarial loss	3.4			—			3.4			—
Special termination benefits	—			1.5			—			1.5
Curtailment loss	0.7			—			0.7			—
Benefit cost (benefit) — Company plans	(8.9		)	(5.9		)	(21.5		)	(12.4		)
Pension benefit cost — multi-employer plans	4.2			2.8			5.7			5.1
Total benefit cost (benefit)	$	(4.7	)	$	(3.1	)	$	(15.8	)	$	(7.3	)



	Postretirement Benefits
	Thirteen weeks ended						Twenty-six weeks ended
	November 26, 2017			November 27, 2016			November 26, 2017			November 27, 2016
Service cost	$	—		$	0.1		$	—		$	0.1
Interest cost	0.9			1.0			1.8			2.1
Amortization of prior service benefit	(0.8		)	(1.6		)	(1.6		)	(3.3		)
Recognized net actuarial loss	—			0.1			—			0.2
Total cost (benefit)	$	0.1		$	(0.4	)	$	0.2		$	(0.9	)



	Payments Due by Period (in millions)
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		After 5 Years
Long-term debt	$	3,321.3	$	189.7	$	626.7	$	445.9	$	2,059.0
Capital lease obligations	127.0		9.1		16.8		17.6		83.5
Operating lease obligations	216.5		39.9		50.0		34.0		92.6
Purchase obligations¹and other contracts	1,038.2		856.9		114.3		65.3		1.7
Notes payable	67.1		67.1		—		—		—
Total	$	4,770.1	$	1,162.7	$	807.8	$	562.8	$	2,236.8



	Amount of Commitment Expiration Per Period (in millions)
Other Commercial Commitments	Total		Less than 1 Year		1-3 Years		3-5 Years		After 5 Years
Standby repurchase obligations	$	0.9	$	0.6	$	0.3	$	—	$	—
Other commitments	6.9		3.5		3.4		—		—
Total	$	7.8	$	4.1	$	3.7	$	—	$	—



	Fair Value Impact
In Millions	Average During Twenty-six Weeks Ended November 26, 2017		Average During Twenty-six Weeks Ended November 27, 2016
Energy commodities	$	0.4	$	0.4
Agriculture commodities	0.4		0.7
Foreign exchange	0.6		0.3



Period	Total Number of Shares (or units) Purchased	Average Price Paid per Share (or unit)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Maximum Number of Shares that may yet be Purchased under the Program (1)
August 28 through September 24, 2017	—	$	—	—	$	1,081,967,000
September 25 through October 22, 2017	2,278,142	$	34.16	2,278,142	$	1,004,155,000
October 23 through November 26, 2017	5,904,526	$	34.24	5,904,526	$	801,968,000
Total Fiscal 2018 Second Quarter Activity	8,182,668	$	34.22	8,182,668	$	801,968,000