Table of Contents

PART I. FINANCIAL INFORMATION		1	1

Item 1	Financial Statements	~~Financial Statements~~1		1

		Unaudited Condensed Consolidated Statements of Earnings for the Thirteen and ~~Thirty-Nine~~Twenty-Six Weeks Ended ~~February~~November 27, 2022 and ~~February~~November 28, 2021		1

		Unaudited Condensed Consolidated Statements of Comprehensive Income for the Thirteen and ~~Thirty-Nine~~Twenty-Six Weeks Ended ~~February~~November 27, 2022 and ~~February~~November 28, 2021		2

		Unaudited Condensed Consolidated Balance Sheets as of ~~February~~November 27, 2022 and May ~~30, 2021~~29, 2022		3

		Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Thirty-Nine~~Twenty-Six Weeks Ended ~~February~~November 27, 2022 and ~~February~~November 28, 2021		4

		Notes to Unaudited Condensed Consolidated Financial Statements		5

Item 2		Management's Discussion and Analysis of Financial Condition and Results of Operations		2725

Item 3		Quantitative and Qualitative Disclosures About Market Risk		38

Item 4		Controls and Procedures		39

PART II. OTHER INFORMATION		39	40

Item 1	Legal Proceedings	~~Legal Proceedings~~39		40

Item 1A	Risk Factors	~~Risk Factors~~39		40

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 6	Exhibits	~~Exhibits~~40		41

Signatures				4241

Exhibit 31.1
Exhibit 31.2
Exhibit 32
Exhibit 101
Exhibit ~~101~~ ~~Exhibit~~ 104

PART I — FINANCIAL INFORMATION

ITEM1. FINANCIAL STATEMENTS

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions except per share amounts)

(unaudited)

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended						*Thirteen Weeks Ended*						*Twenty-Six Weeks Ended*
	February 27, 2022			February 28, 2021			February 27, 2022			February 28, 2021			*November 27, 2022*			*November 28, 2021*			*November 27, 2022*			*November 28, 2021*
Net sales	$	2,913.7		$	2,771.1		$	8,625.9		$	8,445.2		$	3,312.9		$	3,058.9		$	6,217.2		$	5,712.2
Costs and expenses:
Cost of goods sold		2,216.5			2,012.7			6,500.5			5,987.7			2,390.6			2,304.1			4,574.6			4,284.0
Selling, general and administrative expenses		338.0			309.7			993.5			967.7			372.7			345.4			1,114.3			655.5
Pension and postretirement non-service income		(16.1	)		(13.7	)		(48.3	)		(41.2	)		(6.1	)		(16.1	)		(12.2	)		(32.2	)
Interest expense, net		94.6			100.6			283.7			322.0			100.3			94.9			197.4			189.1
Income before income taxes and equity method investment earnings		280.7			361.8			896.5			1,209.0			455.4			330.6			343.1			615.8
Income tax expense		109.9			101.6			263.8			269.0			122.5			84.2			136.9			153.9
Equity method investment earnings		48.1			21.5			97.8			51.0			49.3			29.5			98.5			49.7
Net income	$	218.9		$	281.7		$	730.5		$	991.0		$	382.2		$	275.9		$	304.7		$	511.6
Less: Net income attributable to noncontrolling interests		0.5			0.3			1.2			1.7			0.3			0.4			0.3			0.7
Net income attributable to Conagra Brands, Inc.	$	218.4		$	281.4		$	729.3		$	989.3		$	381.9		$	275.5		$	304.4		$	510.9
Earnings per share — basic
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.45		$	0.58		$	1.52		$	2.03		$	0.80		$	0.57		$	0.63		$	1.06
Earnings per share — diluted
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.45		$	0.58		$	1.51		$	2.02		$	0.79		$	0.57		$	0.63		$	1.06

The accompanying Condensed Consolidated Financial Statements of Conagra Brands, Inc. (the "Company", "Conagra Brands", "we", "us", or "our") have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. 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~~During the second quarter of fiscal 2023, it was determined that certain assets and liabilities previously presented as assets and liabilities held for sale within our Condensed Consolidated Balance Sheets no longer met the held for sale criteria. Assets of $58.9 million and liabilities of $4.1 million as of May 29, 2022 have been reclassified to assets and liabilities held and used. All other adjustments are of a normal recurring ~~nature, except as otherwise noted.~~nature. 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. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes included in ~~the Conagra Brands, Inc. (the "Company", "Conagra Brands", "we", "us", or "our")~~our Annual Report on Form ~~10-K~~10-K for the fiscal year ended May ~~30, 2021.~~

~~The results~~29, 2022. There were no significant changes to our accounting policies from those disclosed in Note 1,"Summary of ~~operations for any quarter or a partial fiscal year period are not necessarily indicative of~~Significant Accounting Policies", to 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 and all majority-owned subsidiaries. All significant intercompany investments, accounts, and transactions have been eliminated.~~

~~Revenue Recognition~~ ~~— Our revenues primarily consist of the sale of food products~~in that are sold to 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 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 goods to customers. Control is transferred upon delivery of the goods to the customer. Shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs. We assess the goods and services promised in our customers' purchase orders and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct.

We 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 in-store displays and 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, and changes in prior service cost and net actuarial gains (losses) from pension (for amounts not in excess of the 10% "corridor") and postretirement health care plans. On foreign investments we deem to be essentially permanent in nature, we do not provide for taxes on currency translation adjustments arising from converting an investment denominated in a foreign currency to U.S. dollars. A deferred tax liability is recorded on currency translation adjustments related to undistributed foreign earnings that are not deemed to be permanently reinvested.

~~The following table details the accumulated balances for each component of other comprehensive income (loss), net of tax:~~Form 10-K.

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

¹~~Amounts 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.

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

~~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. 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.

~~During the fourth quarter of fiscal 2021,~~ ~~we completed the sale of our~~ ~~Egg Beaters~~^® ~~business~~ ~~for net proceeds~~ ~~of $50.7 million. The business results were previously reported primarily within our Refrigerated & Frozen~~ ~~segment, and to a lesser extent within our International and Foodservice segments~~.

~~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. The business results were previously reported primarily within our~~ ~~Grocery & Snacks segment, and to a lesser extent within our International and Foodservice segments. We recognized a gain on the sale of $49.7 million in the third quarter of fiscal 2021, included within selling, general and administrative ("SG&A") expenses.~~

~~During the second quarter of fiscal 2021,~~ ~~we completed the sale of our~~ ~~H.K. Anderson~~^® ~~business~~ ~~for net proceeds~~ ~~of $8.7 million~~ ~~and~~ ~~recognized a gain on the sale of $5.3 million, included within SG&A expenses. The business results were previously reported primarily within our~~ ~~Grocery & Snacks segment, and to a lesser extent within our Foodservice segment~~.

During the second quarter of fiscal 2022, we initiated a plan to sell businesses with operating results included within our Grocery & Snacks, Refrigerated & Frozen, and Foodservice segments. The assets and liabilities have been reclassified as assets and liabilities held for sale within our Condensed Consolidated Balance Sheets for all periods presented and are expected to be sold within twelve months of initiating our plan. In connection with this activity, we recognized an impairment charge of $39.2 million within SG&A expenses in the second quarter of fiscal 2022. During the third quarter of fiscal 2022, we recognized a further impairment charge of $30.9 million within SG&A expenses.

In addition, we actively market certain other assets from time to time. These assets have been reclassified as assets held for sale within our Condensed Consolidated Balance Sheets for periods prior to the disposal of the individual asset groups.

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

~~In December~~2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the operations of Pinnacle Foods, Inc. ("Pinnacle") (such plan 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. GAAP. We expect to incur approximately $341.0 million of charges ($277.7 million of cash charges and $63.3 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 third quarter and first three quarters of fiscal 2022, we recognized charges of $0.2 million and $13.3 million, respectively, in connection with the Pinnacle Integration Restructuring Plan. In the third quarter and first three quarters of fiscal 2021, we recognized charges of $5.4 million and $24.2 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 third quarter of fiscal 2022):

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

~~Included in the above results are $5.3 million of charges that have resulted or will result in cash outflows and a non-cash net benefit of $5.1 million.~~

~~During the first three quarters of fiscal 2022, we recognized the following pre-tax expenses for the Pinnacle Integration Restructuring Plan:~~

~~Included in the above results are $17.2 million of charges that have resulted or will result in cash outflows and a net non-cash benefit of $3.9 million.~~

~~We recognized the following cumulative (plan inception to February 27, 2022) pre-tax expenses for the Pinnacle Integration Restructuring Plan in our Condensed Consolidated Statement of Earnings:~~

~~Included in the above results are $258.1 million of charges that have resulted or will result in cash outflows and $28.9 million in non-cash charges.~~

~~Liabilities recorded for the Pinnacle Integration Restructuring Plan and changes therein for the first three quarters of fiscal 2022 were as follows:~~

In fiscal 2019, senior management initiated a restructuring plan for costs incurred in connection with actions taken to improve selling, general and administrative ("SG&A&A") expense effectiveness and efficiencies and to optimize our supply chain network (the "Conagra Restructuring Plan"). Although we remain unable to make good faith estimates relating to the entire Conagra Restructuring Plan, we are reporting on actions initiated through the end of the ~~third~~second quarter of fiscal ~~2022,~~2023, 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 ~~February~~November 27, 2022, we ~~have~~had approved the incurrence of ~~$175.6~~$184.0million ($~~48.8~~57.2 million of cash charges and $126.8 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan. As of ~~February~~November 27, 2022, we ~~have~~had incurred or ~~expect~~expected to incur ~~$148.4~~$152.6 million of charges ($~~44.6~~50.7 million of cash charges and ~~$103.8~~$101.9 million of non-cash charges) for actions identified toas of such date under the Conagra Restructuring Plan. In the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022,~~2023, we recognized charges of ~~$10.5~~$1.8 million and ~~$25.6~~$5.9 million, respectively, in connection with the Conagra Restructuring Plan. In the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2021,~~2022, we recognized charges of ~~$10.0~~$6.6 million and ~~$37.8~~$15.1 million, respectively, in connection with the Conagra Restructuring Plan. We expect to incur costs related to the Conagra Restructuring Plan over a multi-year period.

We anticipate that we will recognize the following pre-tax expenses in association with the Conagra Restructuring Plan (amounts include charges recognized from plan inception through the ~~third~~second quarter of fiscal ~~2022)~~2023):

During the ~~third~~second quarter of fiscal ~~2022,~~2023, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

Included in the above results are ~~$6.8~~$1.8 million of charges that have resulted or will result in cash outflows.

During the first half of fiscal 2023, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

Included in the above results are $6.0 million in charges that have resulted or will result in cash outflows and ~~$3.7 million in~~a non-cash ~~charges.~~net benefit of $0.1 million.

~~During the first three quarters of fiscal 2022, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:~~

~~Included in the above results are $11.4 million in charges that have resulted or will result in cash outflows and $14.2 million in non-cash charges.~~

We recognized the following cumulative (plan inception to ~~February~~November 27, ~~2022)~~2022) pre-tax expenses for the Conagra Restructuring Plan in our Condensed Consolidated Statement of Earnings:

Included in the above results are ~~$35.5~~$46.1 million of charges that have resulted or will result in cash outflows and ~~$102.9~~$102.0 million in non-cash charges.

Liabilities recorded for the Conagra Restructuring Plan and changes therein for the first ~~three quarters~~ half of fiscal ~~2022~~2023 were as follows:

As of the end of the first quarter of fiscal 2023, we had substantially completed our restructuring and integration plan related to our acquisition of Pinnacle Foods, Inc. ("Pinnacle") in 2018 for the purpose of achieving significant cost synergies (the "Pinnacle Integration Restructuring Plan"). In the first half of fiscal 2023, we recognized charges of $0.8 million in connection with the Pinnacle Integration Restructuring Plan. In the second quarter and first half of fiscal 2022, we recognized charges of $5.8 million and $13.1 million, respectively, in connection with the Pinnacle Integration Restructuring Plan.

We had recognized $294.1 million in pre-tax expenses ($12.8 million in cost of goods sold and $281.3 million in SG&A expenses) from the inception of this plan through November 27, 2022, related to our continuing operations. Included in these results were $266.1 million of cash charges and $28.0 million of non-cash charges. Our total pre-tax expenses for the Pinnacle Integration Restructuring Plan related to our continuing operations are expected to be $344.8 million ($283.6 million of cash charges and $61.2 million of non-cash charges). The remaining charges relate primarily to certain leased facilities that are not expected to be used in their current capacity through the contractual lease term.

During the first quarter of fiscal 2023, we entered into an unsecured Term Loan Agreement (the "Term Loan Agreement") with a syndicate of financial institutions. The Term Loan Agreement provided for delayed draw term loans to the Company in an aggregate principal amount of up to $500.0 million. The Term Loan Agreement matures on August 26, 2025. During the second quarter of fiscal 2023, we borrowed the full $500.0 million aggregate principal amount available under the Term Loan Agreement. The proceeds were used to repay the full outstanding $250.0 million aggregate principal amount of our 3.25% senior notes on their maturity date of September 15, 2022,as well as to repay outstanding borrowings under our commercial paper program. Borrowings under the Term Loan Agreement bear interest at the sum of Term SOFR (as defined in the Term Loan Agreement), plus a 0.10% per annum rate spread adjustment, plus a percentage spread (ranging from 0.90% per annum to 1.375% per annum) based on the Company's senior unsecured long-term indebtedness ratings. The Company may voluntarily prepay term loans under the Term Loan Agreement, in whole or in part, without premium or penalty, subject to certain conditions. As of November 27, 2022, there were $500.0 million of borrowings outstanding under the Term Loan Agreement.

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

In the ~~fourth~~first quarter of fiscal ~~2021,~~2023, 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 due January 25, 2023, prior to maturity, resulting in~~entered into a ~~loss of $24.4 million within SG&A expenses as a cost of early extinguishment of debt.~~

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, resulting in a net loss of $44.3 million within SG&A expenses as a cost of early extinguishment of debt. This redemption was primarily funded using the net proceeds from the issuance of the 2027 Senior Notes.

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

~~At February 27, 2022, we had a revolving credit facility~~Second Amended and Restated Revolving Credit Agreement (the "Revolving Credit ~~Facility"~~Agreement") with a syndicate of financial institutions providing for a revolving credit facility in a maximum aggregate principal amount outstanding at any one time of ~~$1.6~~$2.0 billion (subject to increase to a maximum aggregate principal amount of ~~$2.1~~$2.5 billion with ~~the~~ consent of the lenders). The revolving credit facility provided for under the Revolving Credit ~~Facility~~Agreement replaced the Company's revolving credit facility under the prior revolving credit agreement, which was terminated. The revolving credit facility provided for under the Revolving Credit Agreement matures on ~~July 11, 2024~~ August 26, 2027 and is unsecured. The Company may request the term of the Revolving Credit ~~Facility may~~Agreement be extended for additional ~~one-year~~one-year or ~~two-year~~two-year periods from the then-applicable maturity date on an annual basis. As of ~~February~~November 27, 2022, there were 0no outstanding borrowings under the Revolving Credit ~~Facility.~~Agreement.

The Revolving Credit ~~Facility (the "Amended Revolving Credit Facility"). The Amended Revolving Credit Facility~~Agreement 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 net debt to EBITDA not to exceed 4.75 to 1.0 through the third quarter of fiscal 2023 and 4.5 to 1.0 for each quarter thereafter, with each ratio to be calculated on a rolling ~~four-quarter~~four-quarter basis. As of ~~February~~November 27, 2022, we were in compliance with all financial covenants under the ~~Amended~~ Revolving Credit ~~Facility.~~Agreement.

As of November 27, 2022 and May 29, 2022, we had $254.0 million and $180.0 million, respectively, outstanding under our commercial paper program.

We enter into various supplier financing arrangements to facilitate supply from our vendors. Balance sheet classification is based on the nature of the arrangement and amounts are classified as either Accounts payable or Notes payable within our Condensed Consolidated Balance Sheets. We have concluded that certain obligations to our suppliers, including amounts due and scheduled payment terms, are impacted by third-party service programs and therefore we have classified certain amounts outstanding under these programs as Notes payable. We had approximately $109.2 million of short-term borrowings as of November 27, 2022 related to these arrangements.

The change in the carrying amount of goodwill for the first ~~three quarters~~ half of fiscal ~~2022, excluding amounts classified as held for sale (see Note 2),~~2023 was as follows:

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

During the first quarter of fiscal 2023, management reorganized its reporting structure for certain brands within two reporting units in our Refrigerated & Frozen segment. The change in management reporting required us to reassign assets and liabilities, including goodwill, between the reporting units, complete a goodwill impairment test both prior to and subsequent to the change, and evaluate other assets in the reporting units for impairment, including indefinite-lived intangibles (brand names and trademarks). The fair value of our indefinite-lived intangibles was determined using the "relief from royalty" methodology.

Fair value of our reporting units is estimated using a discounted cash flow analysis. Both the "relief from royalty" methodology used to value our indefinite-lived intangible assets and the discounted cash flow analysis require us to estimate the future cash flows as well as to select a risk-adjusted discount rate to measure the present value of the anticipated cash flows. When determining future cash flow estimates, we consider historical results adjusted to reflect current and anticipated operating conditions. We estimate cash flows for a reporting unit over a discrete period (typically five years) and a terminal period (considering expected long-term growth rates and trends). We used a discount rate of 7.75% and a terminal growth rate that approximated 1% in estimating the fair value of our Sides, Components, Enhancers reporting unit. Estimating the fair value of individual reporting units and our indefinite-lived intangible assets requires us to make assumptions and estimates in areas such as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or estimates for future cash flows, discount rates, or terminal growth rates could produce substantially different estimates of the fair value.

As a result of our impairment tests, we recognized goodwill impairment charges within SG&A expenses of $141.7 million within our Sides, Components, Enhancers reporting unit in the first quarter of fiscal 2023. In addition, we recognized an impairment charge within SG&A expenses of $244.0 million related to our Birds Eye^® brand name in the first quarter of fiscal 2023. The impairments were largely due to the 125 basis point increase in the discount rate as a result of current economic conditions, including a significant increase in interest rates since our last quantitative impairment tests, as well as a downward revision to our sales forecasts.

Amortizing intangible assets carry a remaining weighted average life of approximately 1918 years. Amortization expense was $14.7 million and $29.5 million for the second quarter and first half of fiscal 2023, respectively, and $14.8 million and ~~$44.5~~$29.7 million for the ~~third~~second quarter and first ~~three quarters~~ half of fiscal 2022 ~~respectively, and $14.9 million and $44.8 million for the third quarter and first three quarters of fiscal 2021,~~, respectively. Based on amortizing assets recognized in our Condensed Consolidated Balance Sheet as of ~~February~~November 27, 2022, amortization expense is estimated to average ~~$51.0~~$48.4 million for each of the next five years.

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 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, diesel fuel 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 ~~February~~November 27, 2022, we had economically hedged certain portions of our anticipated consumption of commodity inputs using derivative instruments with expiration dates through ~~November 2022.~~April 2024.

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 ~~February~~November 27, 2022, we had economically hedged certain portions of our foreign currency risk in anticipated transactions using derivative instruments with expiration dates through ~~November 2022.~~August 2023.

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.

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 ~~February~~November 27, 2022, was ~~$35.8~~$33.2 million.

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 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 1413 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 ~~February~~November 27, 2022 and May ~~30, 2021,~~29, 2022, amounts representing an obligation to return cash collateral of ~~$1.7~~$1.1 million and ~~$2.0~~$4.0 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:

The following table presents our derivative assets and liabilities, at ~~February~~November 27, 2022, on a gross basis, prior to the setoff of ~~$11.7~~$0.7 million to total derivative assets and ~~$10.0~~$0.4 million to total derivative liabilities where legal right of setoff existed:

The following table presents our derivative assets and liabilities at May ~~30, 2021,~~29, 2022, on a gross basis, prior to the setoff of ~~$7.4~~$20.1 million to total derivative assets and ~~$5.4~~$16.1 million to total derivative liabilities where legal right of setoff existed:

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

As of ~~February~~November 27, 2022, our open commodity contracts had a notional value (defined as notional quantity times market value per notional quantity unit) of ~~$123.3 million and $154.5~~$140.4 million for purchase ~~and sales contracts, respectively.~~contracts. As of May ~~30, 2021,~~29, 2022, our open commodity contracts had a notional value of ~~$148.8~~$115.3 million and ~~$159.4~~$96.7 million for purchase and sales contracts, respectively. The notional amount of our foreign currency forward contracts as of ~~February~~November 27, 2022 and May ~~30, 2021~~29, 2022 was ~~$88.2~~$90.5 million and ~~$111.4~~$106.6 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 ~~February~~November 27, 2022, the maximum amount of loss due to the credit risk of the counterparties, had the counterparties failed to perform according to the terms of the contract, was ~~$0.7~~$5.4 million.

For the ~~third~~second quarter and first ~~three quarters~~ half of ~~fiscal 2022,~~2023, we recognized total stock-based compensation expense (including restricted stock units, performance shares, and performance-based restricted stock units) of ~~$12.5~~$36.0 million and ~~$26.8~~$59.0 million, respectively. For the ~~third~~second quarter and first ~~three quarters~~ half of ~~fiscal 2021,~~2022, we recognized total stock-based compensation expense of ~~$10.4~~$11.7 million and ~~$42.4~~$14.3 million, respectively. In the first ~~three quarters~~ half of fiscal ~~2022,~~2023, we granted ~~1.0~~1.5 million restricted stock units at a weighted average grant date price of ~~$34.27~~$33.14 and ~~0.5~~0.7 million performance shares at a weighted average grant date price of ~~$34.13.~~$33.13.

Performance shares are granted to selected executives and other key employees with vesting contingent upon meeting various Company-wide performance goals. The performance ~~goals~~goal for one-third of the target number of performance shares for the ~~three-year~~three-year performance ~~periods~~period ending in fiscal ~~2022~~2023 (the ~~"2022~~"2023 performance period") ~~and fiscal 2024 (the "2024 performance period") are~~is based on our fiscal 2021 diluted earnings per share ("EPS") compound annual growth rate ("CAGR"), subject to certain adjustments, measured over the defined performance periods. The performance goal for one-third of the target number of performance shares for the three-year performance period ending in fiscal 2023 (the "2023 performance period") is based on our fiscal 2021 diluted EPS CAGR, subject to certain adjustments. The performance goal for the final ~~two-thirds~~two-thirds of the target number of performance shares granted for the 2023 performance period is based on our diluted EPS CAGR, subject to certain adjustments, measured over the ~~two-year~~two-year period ending in fiscal 2023. The performance goal for the three-year performance period ending in fiscal 2024 (the "2024 performance period") is based on our diluted EPS CAGR, subject to certain adjustments, measured over the defined performance period. The performance goals for the three-year performance period ending in fiscal 2025 (the "2025 performance period") are based on our net sales and diluted EPS growth, subject to certain adjustments, measured over the defined performance period, with each year of the performance period weighted one-third. For each of the ~~2022~~2023 performance period, ~~2023~~2024 performance period, and ~~2024~~2025 performance period, the awards actually earned will range from 0zero to two hundred percent of the targeted number of performance shares for such performance period. Dividend equivalents are paid on the portion of performance shares actually earned at our regular dividend rate in additional shares of common stock.

Awards, if earned, will be paid in shares of our common stock. Subject to limited exceptions set forth in our performance share plan, any shares earned will be distributed after the end of the performance period, and generally only if the participant continues to be employed with the Company through the date of distribution. For awards where performance against the performance target has not been certified, the value of the performance shares is adjusted based upon the market price of our common stock and current forecasted performance against the performance targets at the end of each reporting period and amortized as compensation expense over the vesting period. Forfeitures are accounted for as they occur.

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:

For the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022,~~2023, there were ~~1.0~~0.8 million and ~~0.8~~0.9 million stock options outstanding, respectively, that were excluded from the computation of diluted weighted average shares because the effect was antidilutive. For the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2021,~~2022, there were ~~0.5~~1.0 million and 0.7 million stock options outstanding, respectively, that were excluded from the calculation.

In the ~~third~~second quarter of fiscal ~~2022~~2023 and ~~2021,~~2022, we recognized income tax expense of ~~$109.9~~$122.5 million and ~~$101.6~~$84.2 million, respectively. In the first ~~three quarters~~ half of fiscal ~~2022~~2023 and ~~2021,~~2022, we recognized income tax expense of ~~$263.8 million~~$136.9 and ~~$269.0 million,~~$153.9, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was ~~33.4%~~24.3% and ~~26.5%~~23.4% for the ~~third~~second quarter of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. The effective tax rate for the first ~~three quarters~~ half of fiscal ~~2022~~2023 and ~~2021~~2022 was ~~26.5%~~31.0% and ~~21.3%~~23.1%, respectively.

The effective tax rate in the ~~third~~second quarter of fiscal ~~2022~~2023 reflected additional tax expense ~~of $25.0 million~~from disallowed deductions related to tax elections made in connection with filing our fiscal 2021 federal tax return. These elections are still under review with the Internal Revenue Service. These elections may result in increases to the tax basis in those assets and if successful would result in tax benefits being realized in future periods. The effective tax rate also reflected additional tax expense associated with non-deductible goodwill related to assets held for sale for which an impairment charge was recognized.

~~The effective tax rate in the first three quarters of fiscal 2022 reflected the above-cited items, as well as a tax benefit~~incentive compensation plans resulting from ~~state law changes,~~an increased level of estimated achievement on performance targets and stock price, a tax benefit from statute lapses on state tax issues that were previously reserved, and a benefit from the ~~settlement~~adjustment of ~~tax issues~~certain foreign taxes that were previously ~~reserved.~~accrued.

The effective tax rate in the first half of fiscal 2023 reflected the above-cited items, as well as the impact of an impairment of goodwill that was largely non-deductible for tax purposes. During the first half of fiscal 2023, goodwill impairment charges totaling $141.7 million were recognized with an associated tax benefit of $2.7 million.

The effective tax rate for the ~~third~~second quarter of fiscal ~~2021~~2022 reflected additional tax expense associated with non-deductible goodwill related to ~~the divestiture of the~~ ~~Peter Pan~~^® ~~peanut butter business.~~

~~The effective~~assets previously held for sale for which an impairment charge was recognized, a tax ~~rate for the first three quarters of fiscal 2021 reflected the above-cited item, as well as release of valuation allowance associated with the capital gains~~benefit resulting from ~~the divestiture of the~~ ~~Peter Pan~~^® ~~peanut butter business,~~state law changes, and a benefit from statute lapses on state tax issues that were previously ~~reserved, and~~reserved.

The effective tax rate in the first half of fiscal 2022 reflected the above-cited items as well as a benefit ~~resulting~~of $3.6 million from the ~~regulations issued by the U.S. Treasury and Internal Revenue Service on certain provisions~~settlement of ~~the 2017 Tax Cuts and Jobs Act.~~tax issues that were previously reserved.

The amount of gross unrecognized tax benefits for uncertain tax positions was ~~$54.8~~$29.7 million as of ~~February~~November 27, 2022 and ~~$33.0~~$62.9 million as of May ~~30, 2021. Included in~~29, 2022. In the second quarter of fiscal 2023, we have adjusted our reserve with respect to certain elections made based on our current expected filing position. The impact of these ~~amounts were $0.2 million and $0.8 million, respectively, for~~elections did not impact our effective tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The amount as of February 27, 2022 includes the issue noted above that is still under review with the IRS.rate. The gross unrecognized tax benefits excluded related liabilities for gross interest and penalties of ~~$7.6~~$6.8 million and ~~$8.8~~$6.7 million as of ~~February~~November 27, 2022 and May ~~30, 2021,~~29, 2022, respectively.

The net amount of unrecognized tax benefits at ~~February~~November 27, 2022 and May ~~30, 2021~~29, 2022 that, if recognized, would favorably impact the Company's effective tax rate was ~~$49.9~~$26.0 million and ~~$28.2~~$58.0 million, respectively.

We estimate that it is reasonably possible that the amount of gross unrecognized tax benefits will decrease by up to ~~$4.4~~$4.8 million over the next twelve months due to various state audit settlements and the expiration of statutes of limitations.

In the ~~third quarter of fiscal 2022, it was determined~~prior year, we made the assessment that the current earnings of certain foreign subsidiaries were not indefinitely reinvested or that we could not remit to the U.S. parent in a tax-neutral transaction. Accordingly, we have recorded a deferred tax liability of ~~$1.2~~$6.4 million on approximately ~~$23.6~~$128.6 million of earnings at ~~February~~November 27, ~~2022.~~2022. The deferred tax liability relates to local withholding taxes that will be owed when this cash is distributed. The undistributed historic earnings in our foreign subsidiaries through May 30, 2021 are considered to be indefinitely reinvested or can be remitted in a tax-neutral transaction. Accordingly, we have not recorded a deferred tax liability related to these undistributed historic earnings.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law. We are in the process of evaluating the impact of the recently enacted law, including whether we are subject to the corporate alternative minimum tax. However, we do not expect the impact to be material to our Condensed Consolidated Financial Statements.

We are a party to certain litigation matters relating to our acquisition of Beatrice Company ("Beatrice") in fiscal 1991, including litigation proceedings related to businesses divested by Beatrice prior to our ~~acquisition of the company.~~acquisition. These proceedings have included suits against a number of ~~lead~~lead-based paint and pigment manufacturers, including ConAgra Grocery Products Company, LLC, a wholly owned subsidiary of the Company ("ConAgra Grocery Products"), as alleged successor to W. P. Fuller & Co., a ~~lead~~lead-based paint and pigment manufacturer owned and operated by a predecessor to Beatrice from 1962 until 1967. 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 were rendered~~In the first quarter of fiscal 2023,one of these lawsuits in ~~Rhode Island, New Jersey, Wisconsin, and Ohio.~~Illinois was resolved through a final judgment in favor of 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 suit in 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 an alleged public 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 2 other defendants ordering the creation of a California abatement fund in the amount of $1.15 billion. Liability was joint and several. The Company appealed the Judgment, and on November 14, 2017 the California Court of Appeal for the Sixth Appellate District reversed in part, holding that the defendants were not liable to pay for abatement of homes built after 1950, but affirmed the Judgment as to homes built before 1951. The Court of Appeal remanded the case to the trial court with directions to recalculate the amount of the abatement fund estimated to be necessary to cover the cost of remediating pre-1951 homes, and to hold an evidentiary hearing regarding appointment of a suitable receiver. ConAgra Grocery Products and the other defendants petitioned the California Supreme Court for review of the decision, which we believe to be an unprecedented expansion of current California law. On February 14, 2018, the California Supreme Court denied the petition and declined to review the merits of the case, and the case was remanded to the trial court for further proceedings. ConAgra Grocery Products and the 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 review the case. On September 4, 2018, the trial court recalculated its estimate of the amount needed to remediate pre-1951 homes in the plaintiff jurisdictions to be $409.0 million. As of July 10, 2019, the parties reached an agreement in principle to resolve this matter, which agreement was approved by the trial court on July 24, 2019, and the action against ConAgra Grocery Products was dismissed with prejudice.Products. Pursuant to the settlement of a consolidated lead-based paint and pigment related action in California in 2019,ConAgra Grocery Products ~~will pay a total of~~is responsible for payments totaling $101.7 million, payable in 7seven annual installments ~~to be paid annually~~ from fiscal 2020 through fiscal ~~2026.~~ 2026, of which $61.0 million had been paid as of November 27, 2022. As part of the settlement, ConAgra Grocery Products has also provided a guarantee of up to $15.0 million in the event co-defendant, NL Industries, Inc., defaults on its payment obligations.

We ~~have~~had accrued $11.4 million and ~~$40.6~~$29.1 million, within other accrued liabilities and other noncurrent liabilities, respectively, for this matter as of ~~February~~November 27, 2022. ~~The extent of insurance coverage is uncertain and the Company's carriers are on notice; however, any possible insurance recovery has not been considered for purposes of determining our liability.~~

We 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.~~Inc., a class action lawsuit, 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 declined to review the decision and the case was remanded to the trial court for further proceedings. On ~~April 4, 2019,~~ November 15, 2022, the trial court granted preliminary approval of a $3.0 million settlement ~~in this matter. In~~pursuant to which the ~~second quarter of fiscal 2020,~~Company paid the total amount into a ~~single objecting class member appealed~~settlement fund on December 9, 2022.

We are party to matters challenging 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~~Company's wage and ~~remanded to the trial court for further proceedings. On December 22, 2021, the trial court denied plaintiffs’ motion for final approval of the settlement.~~hour practices. While we cannot predict with certainty the results of ~~this~~these or any other legal ~~proceeding challenging our product claims,~~proceedings, we do not expect these matters to have a material adverse effect on our financial condition, results of operations, or business.

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

this matter. Final approval of the settlement was granted on February 7, 2022 and the case was dismissed with prejudice. The Company fulfilled its settlement obligations by contributing a total of $9.4 million to the settlement fund as of February 18, 2022.

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.

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 – to October 31in 2020 and 2021 and from April 1 to October 31 in 2022 to monitor hydrogen sulfide emissions at the wastewater treatment facility. As a result of the monitoring data findings, the MPCA has alleged violations of Minnesota Ambient Air Quality Standards based on our hydrogen sulfide emissions during calendar years 2020,2021, and ~~2021.~~2022. The ~~MPCA~~'sMPCA's current proposed penalty is $1.8 million for 2020 and $4.3 million for ~~2021,~~2021; however, we are still in settlement negotiations with the MPCA to reduce the amount allegedly owed. ~~To that end, Conagra is~~Additionally, we are taking ~~additional~~ actions to improve wastewater treatment at the Waseca facility, which actions may be ~~used~~considered to offset portions of the penalties ultimately agreed upon by the parties.

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~~in fiscal 1991, including litigation and administrative proceedings involving Beatrice's possible status as a potentially responsible party at approximately 4035 Superfund, proposed Superfund, or state-equivalent sites (the "Beatrice sites"). ~~These~~The Beatrice sites ~~involve~~consist of 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 ~~$51.9~~$39.2 million ($~~2.4~~2.0 million within other accrued liabilities and ~~$49.5~~$37.2 million within other noncurrent liabilities) as of ~~February~~November 27, 2022, 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.

In certain limited situations, we will guarantee an obligation of an unconsolidated entity. WeAs of November 27, 2022, we continued to guarantee an obligation of the Lamb Weston business pursuant to a guarantee arrangement that existed prior to the spinoff of the Lamb Weston business (the "Spinoff")~~. The guarantee~~, remained in place following completion of the Spinoff, and it will remain in place until such guarantee obligation is substituted for guarantees issued by Lamb Weston. Pursuant to the separation and distribution agreement, dated as of November 8, 2016 ~~(the~~(the "Separation Agreement"), between us and Lamb Weston, this guarantee arrangement is deemed a liability of Lamb Weston that was transferred to Lamb Weston as part of the Spinoff. Accordingly, under the Separation Agreement, in the event that we are required to make any payments as a result of this guarantee arrangement, Lamb Weston is obligated to indemnify us for any such liability, reduced by any insurance proceeds received by ~~us, in accordance with the terms of the indemnification provisions under the Separation Agreement.~~us. Lamb Weston is a party to an agricultural sublease agreement with a third party for certain farmland through 2025 (subject, at Lamb Weston's option, to extension for 1one additional ~~five-year~~five-year period). Under the terms of the sublease agreement, Lamb Weston is required to make certain rental payments to the sublessor. We have guaranteed to 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 guarantee, would be largely mitigated.

We also guarantee a lease resulting from an exited facility. As of ~~February~~November 27, 2022, the remaining term of this arrangement did not exceed ~~five~~four years and the maximum amount of guaranteed future payments ~~we have guaranteed~~ was ~~$11.9~~$10.0 million.

After taking into account liabilities recognized for all of the foregoing matters, management believes the ultimate resolution of such matters should not have a material adverse effect on our financial condition, results of operations, or liquidity; however, it is reasonably possible that a change of the estimates of any of the foregoing matters may occur in the future ~~which~~that could have a material adverse effect on our financial condition, results of operations, or liquidity.

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

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 to qualifying U.S. employees.

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 cost in fiscal ~~2022~~2023 were ~~3.50%~~4.74% and ~~2.29%~~4.09%, respectively.

During the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022,~~2023, we contributed ~~$3.7~~$2.9 million and ~~$8.6~~$5.9 million, respectively, to our pension plans and contributed $1.7 million and ~~$5.5~~$3.6 million, respectively, to our postretirement plans. Based upon the current funded status of the plans and the current interest rate environment, we anticipate making further contributions of approximately ~~$3.7~~$6.5 million to our pension plans during the remainder of fiscal ~~2022.~~2023. We anticipate making further contributions of approximately ~~$3.5~~$4.5 million to our postretirement plans during the remainder of fiscal ~~2022.~~2023. These estimates are based on ERISA guidelines, current tax laws, plan asset performance, and liability assumptions, which are subject to change.

~~The following table presents a reconciliation of our stockholders' equity accounts for the thirty-nine weeks ended February 27, 2022:~~

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

Stock option and incentive plans

12.1

(0.6
)

0.3

0.1

11.9

Currency translation adjustments

(16.2
)

(1.5
)

(17.7
)
Derivative adjustments

1.4

1.4

Activities of noncontrolling interests

0.4

0.4

Pension and postretirement healthcare benefits

(0.6
)

(0.6
)
Dividends declared on common stock; $0.3125 per share

(149.9
)

(149.9
)
Net income attributable to Conagra Brands, Inc.

275.5

275.5

Balance at November 28, 2021

584.2

$
2,921.2

$
2,317.1

$
6,473.3

$
(24.8
)

$
(3,007.8
)

$
77.9

$
8,756.9

Stock option and incentive plans

11.1

(0.5
)

5.1

0.4

16.1

Currency translation adjustments

10.8

(0.1
)

10.7

Derivative adjustments

1.3

1.3

Activities of noncontrolling interests

0.5

0.5

Pension and postretirement healthcare benefits

(0.6
)

(0.6
)
Dividends declared on common stock; $0.3125 per share

(150.0
)

(150.0
)
Net income attributable to Conagra Brands, Inc.

218.4

218.4

Balance at February 27, 2022

584.2

$
2,921.2

$
2,328.2

$
6,541.2

$
(13.3
)

$
(3,002.7
)

$
78.7

$
8,853.3

The following table presents a reconciliation of our stockholders' equity accounts for the ~~thirty-nine~~twenty-six weeks ended ~~February~~November 27, 2022:

The following table presents a reconciliation of our stockholders' equity accounts for the twenty-six weeks ended November 28, ~~2021:~~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 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

Stock option and incentive plans

14.2

(0.4
)

1.6

15.4

Currency translation adjustments

11.4

(0.7
)

10.7

Derivative adjustments

(0.1
)

(0.1
)
Activities of noncontrolling interests

0.6

0.6

Pension and postretirement healthcare benefits

(0.6
)

(0.6
)
Dividends declared on common stock; $0.275 per share

(134.4
)

(134.4
)
Net income attributable to Conagra Brands, Inc.

378.9

378.9

Balance at November 29, 2020

584.2

$
2,921.2

$
2,312.0

$
5,938.7

$
(85.1
)

$
(2,694.8
)

$
77.5

$
8,469.5

Stock option and incentive plans

7.1

(0.5
)

3.4

0.2

10.2

Currency translation adjustments

0.1

0.1

Repurchase of common shares

(298.1
)

(298.1
)
Derivative adjustments

(0.1
)

(0.1
)
Activities of noncontrolling interests

0.3

0.3

Pension and postretirement healthcare benefits

(0.6
)

(0.6
)
Dividends declared on common stock; $0.275 per share

(132.9
)

(132.9
)
Net income attributable to Conagra Brands, Inc.

281.4

281.4

Balance at February 28, 2021

584.2

$
2,921.2

$
2,319.1

$
6,086.7

$
(85.7
)

$
(2,989.5
)

$
78.0

$
8,329.8

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

The following tables summarize the reclassifications from accumulated other comprehensive income (loss) into income:

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

Financial Accounting Standards Board guidance establishes a ~~three-level~~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 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.

Our Level 3 available-for-sale debt securities consist of a convertible note receivable acquired in the second quarter of fiscal 2022. The convertible note receivable is not traded in active markets and the fair value was determined using a discounted cash flow valuation model.

The following table presents our financial instruments measured at fair value on a recurring basis for which, based upon the level within the fair value hierarchy in which the fair value measurements fall, as of February 27, 2022:

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 27, 2022:

Certain assets and liabilities, including long-lived assets, goodwill, asset retirement obligations, and equity investments are measured at fair value on a nonrecurring basis using Level 3 inputs.

In the first ~~three quarters~~ quarter of fiscal ~~2022,~~2023, we recognized a charge for the impairment of an indefinite-lived brand of $244.0 million in our Refrigerated & Frozen segment. The fair value of this brand was estimated using the "relief from royalty" method (see Note 4).

During the first quarter of fiscal 2023, goodwill impairment charges totaling $141.7 million were recognized within our Refrigerated & Frozen segment. The impairments were measured using a discounted cash flow valuation model specific to the Sides, Components and Enhancers reporting unit (see Note 4).

In the first quarter of fiscal 2023, we recognized impairment charges totaling ~~$26.3~~$0.5 million in our Grocery & Snacks segment, ~~$28.9~~$5.7 million in our Refrigerated & Frozen segment, and ~~$14.9~~$20.5 million in our Foodservice segment. In the second quarter of fiscal 2022, we recognized impairment charges totaling $22.4 million in our Grocery & Snacks segment, $12.0 million in our Refrigerated & Frozen segment, and $4.8 million in our Foodservice segment. The impairments were measured based upon the estimated sales price of ~~the~~a disposal group ~~(see Note 2).~~

Inthat no longer meets the ~~third~~held for sale criteria as of the second quarter of fiscal 2021, we updated our cost estimates associated with certain asset retirement obligations at several manufacturing facilities largely due to recent experience of physically closing a wastewater lagoon. This change in estimate resulted in a non-cash increase to our long-lived assets in the amount of $27.4 million and will result in additional depreciation in future periods generally ranging from 15-25 years. The fair value of our asset retirement obligations was measured using cost estimates to settle our future obligations (including an estimate of inflation) and discounted to present value using a credit-adjusted risk-free rate.2023 (see Note 1).

In the first quarter of fiscal 2021, we recognized charges totaling $3.0 million in our Grocery & Snacks segment for the impairment of certain long-lived assets. The impairment was measured based upon the estimated sales price of the assets and has been included in restructuring activities.

The carrying amount of long-term debt (including current installments) was ~~$8.80~~$9.04 billion and ~~$8.30~~$8.80 billion as of ~~February~~November 27, 2022 and May ~~30, 2021,~~29, 2022, respectively. Based on current market rates, the fair value of this debt (level 2 liabilities) at ~~February~~November 27, 2022 and May ~~30, 2021,~~29, 2022, was estimated at ~~$9.54~~$8.79 billion and ~~$9.76~~$8.85 billion, respectively.

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

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

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

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) 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:

As of ~~February~~November 27, 2022, the cumulative amount of net derivative gains from economic hedges that had been recognized in general corporate expenses and not yet allocated to reporting segments was ~~$16.8~~$14.0 million. This amount reflected net gains of ~~$17.7~~$13.6 million incurred during the ~~thirty-nine~~twenty-six weeks ended ~~February~~November 27, 2022 and net ~~losses~~gains of ~~$0.9~~$0.4 million incurred prior to fiscal ~~2022.~~2023. Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results gains of ~~$7.2~~$11.0 million in fiscal ~~2022~~2023 and gains of ~~$9.6~~$3.0 million in fiscal ~~2023~~2024 and thereafter.

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 ~~$77.3~~$77.8 million and ~~$241.1~~$156.0 million for the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022,~~2023, respectively. Total depreciation expense was ~~$81.7~~$82.2 million and ~~$244.8~~$163.8 million for the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2021,~~2022, respectively.

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 ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022~~2023 and ~~2021.~~2022. Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately ~~$248.9~~$274.0 million and ~~$755.3~~$515.8 million in the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022,~~2023, respectively. Our foreign net sales during the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2021~~2022 were approximately ~~$246.8~~$263.1 million and ~~$724.1~~$506.4 million, respectively. Our long-lived assets located outside of the United States are not significant.

Our largest customer, Walmart, Inc. and its affiliates, accounted for approximately ~~27%~~28% of consolidated net sales in both the ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022,~~2023, and 27% and 26% in the ~~third~~second quarter and first ~~three quarters~~ half of ~~2021,~~2022, respectively, primarily in the Grocery & Snacks and Refrigerated & Frozen segments.

Walmart, Inc. and its affiliates accounted for approximately ~~30%~~20% and ~~31%~~30% of consolidated net receivables as of ~~February~~November 27, 2022 and May ~~30, 2021,~~29, 2022, respectively. The Kroger Co. and its affiliates accounted for approximately ~~10%~~13% and ~~11%~~9% of consolidated net receivables as of ~~February~~November 27, 2022 and May ~~30, 2021,~~29, 2022, respectively.

ITEM2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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. These risks, uncertainties, and factors include, among other things: the risk that the cost savings and any other synergies from the acquisition of Pinnacle Foods, Inc. (the "Pinnacle acquisition") may not be fully realized or may take longer to realize than expected; the 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 business plans; risks related to our ability to achieve the intended benefits of other recent acquisitions and divestitures; risks associated with general economic and industry conditions; risks associated with our ability to successfully execute our long-term value creation strategies; risks related to our ability to deleverage on currently anticipated timelines, and to continue to access capital on acceptable terms or at all; risks related to our ability to execute operating and restructuring plans and achieve targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; risks related to the effectiveness of our hedging activities and 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, as well as any securities litigation, including securities class action lawsuits; risk associated with actions of governments and regulatory bodies that affect our 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 health pandemics or outbreaks of disease, or actual or threatened hostilities or war, or other geopolitical uncertainty; disruptions or inefficiencies in our supply chain and/or operations, including from the COVID-19 pandemic; risks related to disruptions in the global economy caused by the ongoing conflict between Russia and Ukraine; 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 amount and timing of future dividends, which remain subject to Board approval and depend on market and other conditions; risks related to the Company's ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters, including as a result of evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets; and other risks described in our reports filed from time to time with the Securities and Exchange Commission (the "SEC"). We caution readers not to place undue reliance on 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, 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 ~~30, 2021~~29, 2022 and subsequent filings with the SEC. Results for the ~~third~~second quarter of fiscal ~~2022~~2023 are not necessarily indicative of results that may be attained in the future.

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^®, Banquet^®, Healthy Choice^®, Slim Jim^®, Reddi-wip^®, and Vlasic^® as well as emerging brands, including Angie's^® BOOMCHICKAPOP^®, Duke's^®, Earth Balance^®, Gardein^®, and Frontera^®, offer choices for every occasion.

In the ~~third~~second quarter of fiscal ~~2022,~~2023, results reflected an increase in net sales, with organic (excludes the ~~impacts~~impact of foreign ~~exchange and divested businesses)~~exchange) increases in all of our segments, in each case compared to the ~~third~~second quarter of fiscal ~~2021.~~2022. Overall gross profit ~~decreased~~increased primarily as a result of higher net sales, productivity, and lower transportation costs, which were offset by input cost inflation, ~~higher transportation costs,~~unfavorable operating leverage, and elevated supply chain operating costs due, in part, to disruptions in the availability of labor and certain materials, and lost profits from divested businesses, which were partially offset by higher organic net sales, supply chain realized productivity, cost synergies associated with the Pinnacle acquisition, and lower COVID-19 pandemic-related expenses.costs. Overall segment operating profit ~~decreased~~increased in our Refrigerated & Frozen, Grocery & Snacks, ~~Refrigerated & Frozen,~~ and Foodservice segments, which was partially offset by a slight ~~increase~~decrease in our International segment. Corporate expenses were ~~lower~~higher primarily due to ~~items impacting comparability, as discussed below.~~higher share-based payment expense. Selling, general and administrative ("SG&A") expenses were also impacted by higher ~~due to~~advertising and promotion expenses offset by other items impacting comparability ~~partially offset by lower advertising and promotion expenses.~~as discussed below. We recognized higher equity method investment earnings, ~~lower~~higher interest expense, and higher income tax expense, in each case compared to the ~~third~~second quarter of fiscal ~~2021.~~2022. Excluding items impacting comparability, our effective tax rate was slightly higher compared to the ~~third~~second quarter of fiscal ~~2021.~~2022.

Diluted earnings per share in the ~~third~~second quarter of fiscal 2023 and 2022 ~~were $0.45.~~was $0.79 and $0.57, respectively. Diluted earnings per share ~~in the third quarter of fiscal 2021 were $0.58. Diluted earnings per share were~~was affected by ~~lower~~higher net income in the ~~third~~second quarter of fiscal ~~2022~~2023 compared to the ~~third~~second quarter of fiscal ~~2021.~~2022.

During fiscal 2022 and continuing into fiscal 2023, our industry has been impacted by supply chain disruptions, labor issues, input cost inflation, and other global macroeconomic challenges. In the ~~third~~second quarter of fiscal ~~2022,~~2023, while we continued to experience ~~higher than expected~~significant input cost inflation, ~~including higher transportation and~~our supply chain ~~costs, that negatively impacted~~productivity and pricing actions assisted in a 316-basis point improvement to gross ~~margins.~~margin. We expect input cost inflation ~~and transportation costs~~ to remain elevated throughout the rest of fiscal ~~2022. Supply~~2023, but anticipate continued supply chain ~~realized~~ productivity and pricing actions ~~are expected~~ to mitigate some of the inflationary pressures. As our estimates of inflation for fiscal ~~2022~~2023 continue to change, it is impractical to quantify the ultimate impact at this time. As we approach our annual goodwill and brand impairment assessment in the fourth quarter of fiscal 2023, continued increases to interest rates coupled with the uncertainty in the inflationary environment creates a heightened risk for future impairments later in the fiscal year.

We continue to monitor the impact of the COVID-19 pandemic on financial markets, supply chains, commodity costs, the labor environment and aspects of our business. During the second quarter of fiscal 2023, we continued to experience elevated demand for our products in the retail segments versus pre-pandemic levels, but volumes were lower compared to the second quarter of fiscal 2022 primarily due to the elasticity impact from our inflation-driven pricing actions. We experienced higher demand for our foodservice products across all of our major markets during the second quarter of fiscal 2023 compared to the second quarter of fiscal 2022 as consumer traffic in away-from-home food outlets continues to be strong, approaching pre-pandemic levels. We expect these trends to continue throughout the remainder of fiscal 2023.

We also continue to expect recovery from the higher costs we experienced in fiscal 2021 and which continued to rise in fiscal 2022 during the COVID-19 pandemic and we expect a decrease in supply chain operating costs during the second half of fiscal 2023 as we continue to recover our service levels. We will continue to evaluate the evolving macroeconomic environment to take action to mitigate the impact on our business, consolidated results of operations, and financial condition.

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" below.

Items of note impacting comparability for the ~~third~~second quarter of fiscal 2023 included the following:

Items of note impacting comparability for the second quarter of fiscal 2022 included the following:

●

•

a gain of $3.3 million ($2.8 million after-tax) related to proceeds received from the sale of a legacy investment.

Table of Contents

~~Items of note impacting comparability for the first three quarters of fiscal 2021 included the following:~~

•

~~charges totaling $68.7 million ($51.5 million after-tax) related to early extinguishment of debt,~~

•

~~net charges totaling $62.0 million ($46.5 million after-tax) in connection with our restructuring plans,~~

•

~~a gain of $55.0 million ($31.4 million after-tax) associated with the divestiture of certain businesses,~~

•

consulting expenses of $6.5 million ($4.9 million after-tax) primarily associated with securing tax benefits for a new production facility (the associated tax benefits will be recognized in future periods),

•

~~an income tax benefit of $24.8 million related to a release of valuation allowance associated with the divestiture of the~~ ~~Peter Pan~~^® ~~peanut butter business, 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 completed the sale of our~~ ~~Egg Beaters~~^® ~~business for net proceeds of $50.7 million. The results of operations of the divested~~ ~~Egg Beaters~~^® business were primarily included in our Refrigerated & Frozen segment, and to 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. The results of operations of the divested~~ ~~Peter Pan~~^® peanut butter business are primarily included in our Grocery & Snacks segment, and to a lesser extent within our International and Foodservice segments, for the periods preceding the completion of the transaction.

Restructuring Plans

~~In December~~2018, our Board of Directors (the "Board") approved a restructuring and integration plan related to the ongoing integration of the operations of Pinnacle Foods, Inc. ("Pinnacle") (such plan 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 $341.0 million of charges ($277.7 million of cash charges and $63.3 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 third quarter and first three quarters of fiscal 2022, we recognized charges of $0.2 million and $13.3 million, respectively, in connection with the Pinnacle Integration Restructuring Plan. In the third quarter and first three quarters of fiscal 2021, we recognized charges of $5.4 million and $24.2 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.

In fiscal 2019, senior management initiated a restructuring plan for costs incurred in connection with actions taken to improve SG&A expense effectiveness and efficiencies and to optimize our supply chain network (the "Conagra Restructuring Plan"). Although we remain unable to make good faith estimates relating to the entire Conagra Restructuring Plan, we are reporting on actions initiated through the end of the ~~third~~second quarter of fiscal ~~2022,~~2023, 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 ~~February~~November 27, 2022, we ~~have~~had approved the incurrence of ~~$175.6~~$184.0 million ($~~48.8~~57.2 million of cash charges and $126.8 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan. As of ~~February~~November 27, 2022, we ~~have~~had incurred or ~~expect~~expected to incur ~~$148.4~~$152.6 million of charges ($~~44.6~~50.7 million of cash charges and ~~$103.8~~$101.9 million of non-cash charges) for actions identified to date under the Conagra Restructuring Plan. In the ~~third~~second quarter ~~and first three quarters~~ of fiscal 2023 and 2022, we recognized charges of ~~$10.5~~$1.8 million and ~~$25.6~~$6.6 million, respectively, in connection with the Conagra Restructuring Plan. In the ~~third quarter and~~ first ~~three quarters~~half of fiscal ~~2021,~~2023 and 2022, we recognized charges of ~~$10.0~~$5.9 million and ~~$37.8~~$15.1 million, respectively, in connection with ~~the Conagra Restructuring Plan.~~this plan. We expect to incur costs related to the Conagra Restructuring Plan over a multi-year period.

~~COVID–19 Pandemic~~

~~We continue to monitor the impact~~As of the ~~COVID-19 pandemic on all aspects~~end of the first quarter of fiscal 2023, we had substantially completed our ~~business. During~~Pinnacle Integration Restructuring Plan related to our acquisition of Pinnacle in 2018 for the ~~third~~purpose of achieving significant cost synergies (the "Pinnacle Integration Restructuring Plan"). In the second quarter of fiscal 2022, we ~~continued to experience elevated demand for our products in the retail segments versus pre-pandemic levels, but volumes were lower compared to the third quarter~~recognized charges of fiscal 2021 primarily due to the elasticity impact from inflation-driven pricing actions. We experienced higher demand for our foodservice products across all of our major markets during the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021 as consumer traffic in away-from-home food outlets continue to recover from the impacts of the pandemic. We incurred $10.8$5.8 million ~~of supply chain costs associated with the COVID-19 pandemic during the third quarter of fiscal 2022, which was a decrease in comparison to the third quarter of fiscal 2021.~~

As we continue into the fourth quarter of 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; vaccine effectiveness; and the macroeconomic environment. In the fourth quarter of fiscal 2022, we continue to expect to see inflationary headwinds but anticipate that gross margins will begin to benefit from sales price increases. 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. However, we do not expect full realization of such benefits to occur in time to fully offset the higher costs overall in fiscal 2022. We will continue to evaluate the extent to which the COVID-19 pandemic will impact our business, consolidated results of operations, and financial condition.

~~We have experienced some challenges~~ in connection with the ~~COVID-19 pandemic, including~~Pinnacle Integration Restructuring Plan. In the first half of fiscal 2023 and 2022, we recognized charges of $0.8 million and $13.1 million, respectively, in connection with ~~respect~~this plan. Our total pre-tax expenses for this plan related to ~~the supply~~our continuing operations are expected to be $344.8 million ($283.6 million of ~~our ingredients, packaging, or other sourced materials. Despite these challenges, all~~cash charges and $61.2 million of ~~our production facilities remain open. We cannot predict the ultimate COVID-19 impact on our suppliers, distributors, and manufacturers.~~non-cash charges).

SEGMENT REVIEW

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

Grocery & Snacks

The Grocery & Snacks reporting segment principally includes branded, 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 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.

Presentation of Derivative Gains (Losses) 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. See Note 15 14 "Business Segments and Related Information", to the Condensed Consolidated Financial Statements contained in this report for further discussion.

Table of Contents

Net Sales

Net Sales

($ in millions)

Thirteen Weeks Ended

Thirty-Nine Weeks Ended

Reporting Segment

February 27,
2022

February 28,
2021

% Inc
(Dec)

February 27,
2022

February 28,
2021

% Inc
(Dec)

Grocery & Snacks

$
1,199.0

$
1,129.5

6
%

$
3,538.6

$
3,543.6

—
%
Refrigerated & Frozen

1,238.6

1,203.1

3
%

3,626.3

3,581.7

1
%
International

241.2

240.9

—
%

740.0

709.7

4
%
Foodservice

234.9

197.6

19
%

721.0

610.2

18
%
Total

$
2,913.7

$
2,771.1

5
%

$
8,625.9

$
8,445.2

2
%

	Net Sales
($ in millions)	Thirteen Weeks Ended							Twenty-Six Weeks Ended
Reporting Segment	November 27, 2022		November 28, 2021		% Inc (Dec)			November 27, 2022		November 28, 2021		% Inc (Dec)
Grocery & Snacks	$	1,349.9	$	1,264.5		7	%	$	2,538.2	$	2,339.6		8	%
Refrigerated & Frozen		1,421.5		1,285.9		11	%		2,629.1		2,387.7		10	%
International		258.7		262.2		(1	)%		492.2		498.8		(1	)%
Foodservice		282.8		246.3		15	%		557.7		486.1		15	%
Total	$	3,312.9	$	3,058.9		8	%	$	6,217.2	$	5,712.2		9	%

Net sales for the ~~third~~second quarter and first half of fiscal ~~2022~~2023 in our Grocery & Snacks segment included ~~a decrease~~an increase in ~~volumes~~price/mix of 2%19% and 18%, ~~excluding~~respectively, when compared to the ~~impact~~prior-year period due to favorability in inflation-driven pricing and favorable brand mix. Volumes decreased by 12% and 9% for the second quarter and first half of ~~divestitures,~~fiscal 2023, respectively, when compared to the prior-year period. The decrease in volumes was primarily due to the elasticity impact from inflation-driven pricing actions. ~~Price/mix increased 9%~~

Net sales for the ~~third~~second quarter and first half of fiscal ~~2022, excluding the impact~~2023 in our Refrigerated & Frozen segment reflected an increase in price/mix of ~~divestitures,~~16% and 14%, respectively, when compared to the prior-year period due to favorability in inflation-driven ~~pricing~~pricing. Volumes decreased by 5% and ~~favorable brand mix. The third quarter of fiscal 2021 included $8.8 million of net sales related to our~~ ~~Peter Pan~~^® ~~peanut butter business, which was sold in the third quarter of fiscal 2021.~~

Net sales for the first three quarters of fiscal 2022 in our Grocery & Snacks segment included a decrease in volumes of 3%, excluding the impact of divestitures, compared to the prior-year period. The decrease in volumes was 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 coupled with the elasticity impact from inflation-driven pricing actions. Price/mix increased 4% for the second quarter and first ~~three quarters~~half of fiscal ~~2022, excluding the impact of divestitures,~~2023, respectively, when compared to the prior-year period due to favorability in inflation-driven pricing, partially offset by a benefit in the prior-year period of $7.4 million related to a change in estimate associated with our fiscal 2020 fourth quarter trade accrual. The first three quarters of fiscal 2021 included $34.7 million of net sales related to our ~~Peter Pan~~^® ~~peanut butter business, which was sold in the third quarter of fiscal 2021. The first three quarters of fiscal 2021 also included $3.6 million of net sales related to our~~ ~~H.K. Anderson~~^® ~~business, which was sold in the second quarter of fiscal 2021.~~

~~Net sales for the third quarter of fiscal 2022 in our Refrigerated & Frozen segment reflected a decrease in volumes of 4%, excluding the impact of divestitures,~~ compared to the prior-year period primarily due to the elasticity impact from inflation-driven pricing actions coupled with supply constraints. Price/mix increased by 8% for the third quarter of fiscal 2022, excluding the impact of divestitures, when compared to the prior-year period due to favorability in inflation-driven pricing and favorable brand mix. The third quarter of fiscal 2021 included $11.0 million of net sales related to our ~~Egg Beaters~~^® ~~business, which was sold in the fourth quarter of fiscal 2021.~~actions.

Net sales for the first three quarters of fiscal 2022 in our Refrigerated & Frozen segment reflected a decrease in volumes of 4%, excluding the impact of divestitures, compared to the prior-year period primarily due to lapping the prior year's surge in at-home food consumption from the COVID-19 pandemic and replenishment of inventory levels in connection with the COVID-19 pandemic coupled with the elasticity impact from inflation-driven pricing actions and supply constraints. Price/mix increased by 6% for the first three quarters of fiscal 2022, excluding the impact of divestitures, when compared to the prior-year period due to favorability in inflation-driven pricing and favorable brand mix, partially offset by a benefit in the prior-year period of $7.4 million related to a change in estimate associated with our fiscal 2020 fourth quarter trade accrual. The first three quarters of fiscal 2021 included $30.3 million of net sales related to our ~~Egg Beaters~~^® ~~business, which was sold in the fourth~~second quarter of fiscal ~~2021.~~

~~Net sales for the third quarter of fiscal 2022~~2023 in our International segment reflected a 7%13% increase in price/mix, an 11% decrease in volumes, and a 1%3% decrease due to unfavorable foreign exchange rates, ~~and~~in each case compared to the prior-year period. Net sales for the first half of fiscal 2023 in our International segment reflected an 8%11% increase in price/mix, ~~excluding the impact of divestitures,~~a 9% decrease in volumes, and a 3% decrease due to unfavorable foreign exchange rates, in each case compared to the prior-year period. The decrease in volumes was driven by the elasticity impact from inflation-driven pricing actions. The increase in price/mix was primarily due to favorability in inflation-driven ~~pricing and favorable product mix.~~pricing.

Net sales for the second quarter and first ~~three quarters~~half of fiscal ~~2022~~2023 in our ~~International~~Foodservice segment reflected ~~a 6% decrease in volumes, a 3% increase due to favorable foreign exchange rates, and~~ an 8% increase in price/mix ~~excluding~~of 18% and 19%, respectively, compared to the ~~impact~~prior-year period, reflecting inflation-driven pricing. Volumes decreased by 3% and 4% in the second quarter and first half of ~~divestitures, in each case~~fiscal 2023, respectively, when compared to the prior-year period. The decrease in volumes was driven by ~~lapping the prior year's surge in at-home food demand from the COVID-19 pandemic coupled with~~ the elasticity impact from inflation-driven pricing actions. ~~The increase in price/mix was primarily due to favorability in inflation-driven pricing and favorable product mix, partially offset by a benefit in the prior-year period~~

Table of ~~$2.8 million related to a change in estimate associated with our fiscal 2020 fourth quarter trade accrual. The first three quarters of fiscal 2021 included $1.4 million of net sales related to our~~ ~~Peter Pan~~^® ~~peanut butter business.~~

Contents

Net sales for the third quarter of fiscal 2022 in our Foodservice segment reflected an 11% increase in volumes, excluding the impact of divestitures, compared to the prior-year period. The increase in volume reflected the continued recovery of away-from-home food outlets from the impacts of the COVID-19 pandemic, partially offset by the elasticity impact from inflation-driven pricing actions. Price/mix, excluding the impact of divestitures, increased by 8% in the third quarter of fiscal 2022 compared to the prior-year period, reflecting inflation-driven pricing and favorable product mix.

Net sales for the first three quarters of fiscal 2022 in our Foodservice segment reflected a 13% increase in volumes, excluding the impact of divestitures, compared to the prior-year period. The increase in volume reflected the continued recovery of away-from-home food outlets from the impacts of the COVID-19 pandemic, partially offset by the elasticity impact from inflation-driven pricing actions. Price/mix, excluding the impact of divestitures, increased by 5% in the first three quarters of fiscal 2022 compared to the prior-year period, reflecting inflation-driven pricing and favorable product mix.

SG&A Expenses (includes general corporate expenses)

SG&A expenses totaled ~~$338.0~~$372.7 million for the ~~third~~second quarter of fiscal ~~2022,~~2023, an increase of ~~$28.3~~$27.3 million, as compared to the ~~third~~second quarter of fiscal ~~2021.~~2022. SG&A expenses for the ~~third~~second quarter of fiscal ~~2022~~2023 reflected the following:

Items impacting comparability of earnings

●

•

~~expenses of $30.9 million related to the impairment of businesses held for sale and~~

•

net charges of ~~$5.1~~$1.7 million in connection with our restructuring plans.

Other changes in expenses compared to the ~~third~~second quarter of fiscal ~~2021~~2022

●

•an increase in share-based payment expense of $24.4 million primarily due to an increase to the estimated level of achievement of certain performance targets and an increase in our share price,

●

~~a decrease~~an increase in advertising and promotion expense of ~~$8.4~~$7.4 million driven by ~~lower broadcast media investments,~~an increased investment in modern marketing, including social and digital platforms,

●

•an increase in consulting and professional fees of $5.5 million,

●

an increase in salary, wage, and fringe benefit expense of ~~$7.1~~$4.3 million,

●

•an increase in charitable donations of $3.8 million,

●

~~a decrease of $7.1 million in commission expense due to our transition away from certain third-party brokers,~~

•

~~a decrease~~an increase in short-term incentive expense of ~~$3.9~~$2.9 million, ~~due to the expectation of exceeding certain performance targets in the prior year,~~ and

●

•

~~a decrease in share-based payment and deferred compensation expense of $3.7 million primarily due to market declines offset by~~ an increase in ~~our share price.~~travel and entertainment expense of $2.5 million.

SG&A expenses for the ~~third~~second quarter of fiscal ~~2021~~2022 included the following items impacting the comparability of earnings:

•●

~~a gain of $49.7 million related to the divestiture of a business,~~

•

~~expenses of $24.4 million associated with the early extinguishment of debt,~~

•

~~net charges of $6.2 million in connection with our restructuring plans,~~

•

~~consulting expenses of $5.3 million primarily associated with securing tax benefits for a new production facility (the associated tax benefits will be recognized in future periods), and~~

•

expense of ~~$4.3 million related to a previous legal matter.~~

SG&A expenses totaled $993.5 million for the first three quarters of fiscal 2022, an increase of $25.8 million, as compared to the first three quarters of fiscal 2021. SG&A expenses for the first three quarters of fiscal 2022 reflected the following:

~~Items impacting comparability of earnings~~

•

~~expense of $70.1~~$39.2 million related to the impairment of businesses previously held for sale,

•●

~~net charges of $17.0 million in connection with our restructuring plans,~~

•

a net benefit of $14.6 related to a legal settlement,

●

•

a benefit of $3.3 million related to the sale of a legacy investment,

●

•expenses of $2.5 million in connection with our restructuring plans, and

●

~~expenses of $2.2 million associated with costs incurred for planned divestitures, and~~

•

expenses of $1.7 million associated with consulting fees for certain tax matters.

SG&A expenses totaled $1.11 billion for the first half of fiscal 2023, an increase of $458.8 million, as compared to the first half of fiscal 2022. SG&A expenses for the first half of fiscal 2023 reflected the following:

Items impacting comparability of earnings

●

charges totaling $385.7 million related to the goodwill and Birds Eye^® brand impairments in connection with certain reporting unit changes within our Refrigerated & Frozen segment,

●

charges totaling $26.7 million related to the impairment of businesses previously held for sale, and

●

net charges of $6.4 million in connection with our restructuring plans.

Table of Contents

Other changes in expenses compared to the first ~~three quarters~~ half of fiscal ~~2021~~2022

●

•

~~a decrease~~an increase in share-based payment ~~and deferred compensation~~ expense of ~~$27.7~~$45.8 million primarily due to ~~market declines, a reduction of~~an increase to the estimated level of achievement of certain performance targets, more significant award vesting in the current period, and ~~a decrease~~volatility between periods in our share price,

●

•an increase consulting and professional fees of $7.6 million, in part due to information technology implementation services,

●

an increase in advertising and promotion expenses of $7.1 million driven by an increased investment in modern marketing, including social and digital platforms,

●

an increase in salary, wage, and fringe benefit expense of ~~$20.1~~$7.0 million,

●

•

an increase in ~~advertising and promotion expense~~charitable donations of ~~$15.7~~$5.0 million, ~~driven primarily by higher eCommerce investments,~~

●

•

~~a decrease in short-term incentive expense of $13.0 million, due to the expectation of exceeding certain performance targets in the prior year,~~

•

~~an increase of $7.4 million in foreign currency transaction losses, primarily due to remeasuring certain intercompany notes payable,~~

•

~~an increase of $7.3 million in self-insurance expense due to favorable claim development in the prior year,~~

•

~~a decrease of $6.9 million in commission expense due to our transition away from certain third-party brokers,~~

•

~~an increase in information technology-related expenses of $5.9 million,~~

•

~~a decrease of $5.5 million in consulting and professional fees, and~~

•

an increase in travel and entertainment expense of ~~$3.8~~$4.6 million,

●

a decrease in deferred compensation expense of $3.9 million primarily due to market gains in the prior-year period,

●

an increase in short-term incentive expense of $3.9 million, and

●

a decrease in depreciation expense of $3.0 million.

SG&A expenses for the first ~~three quarters~~half of fiscal ~~2021~~2022 included the following items impacting the comparability of earnings:

•●

~~expenses~~expense of ~~$68.7 million associated with the early extinguishment of debt,~~

•

~~a gain of $55.0~~$39.2 million related to the ~~divestiture~~impairment of ~~certain~~ businesses previously held for sale,

●

a net benefit of $14.6 related to a legal settlement,

●

•

~~net charges~~expenses of ~~$32.9~~$11.9 million in connection with our restructuring plans,

●

•a benefit of $3.3 million related to the sale of a legacy investment, and

●

~~consulting~~ expenses of ~~$6.5 million primarily associated with securing tax benefits for a new production facility (the associated tax benefits will be recognized in future periods),~~

•

~~expenses of $4.7~~$1.7 million associated with ~~costs incurred~~consulting fees for ~~planned divestitures, and~~certain tax matters.

•

~~a net expense of $2.3 million related to a previous legal matter.~~

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							Twenty-Six Weeks Ended
Reporting Segment	November 27, 2022		November 28, 2021		% Inc (Dec)			November 27, 2022		November 28, 2021		% Inc (Dec)
Grocery & Snacks	$	340.4	$	249.2		37	%	$	590.8	$	465.1		27	%
Refrigerated & Frozen		250.3		168.3		49	%		34.0		325.9		(90	)%
International		36.9		37.1		(1	)%		63.8		71.2		(10	)%
Foodservice		28.5		13.8		106	%		29.7		34.1		(13	)%

Operating Profit

($ in millions)

Thirteen Weeks Ended

Thirty-Nine Weeks Ended

Reporting Segment

February 27,
2022

February 28,
2021

% Inc
(Dec)

February 27,
2022

February 28,
2021

% Inc
(Dec)

Grocery & Snacks

$
231.5

$
290.0

(20
)%

$
696.6

$
889.2

(22
)%
Refrigerated & Frozen

158.0

214.6

(26
)%

483.9

719.0

(33
)%
International

29.9

27.8

7
%

101.1

105.8

(4
)%
Foodservice

4.7

13.0

(64
)%

38.8

61.0

(36
)%

Table of Contents

Operating profit in our Grocery & Snacks segment for the ~~third~~second quarter of fiscal ~~2022~~2023 reflected ~~a decrease~~an increase in gross profits of ~~$6.4~~$78.8 million compared to the ~~third~~second quarter of fiscal ~~2021.~~2022. The ~~lower~~higher gross profit was driven by the net sales growth discussed above, partially offset by the impacts of input cost inflation, unfavorable fixed cost leverage, and elevated supply chain operating ~~costs due,~~costs. The increase in ~~part, to disruptions in the availability of labor and certain materials, and a reduction in profit associated with the divestiture of our~~ ~~Peter Pan~~^® ~~peanut butter business,~~gross profits was partially offset by ~~the net sales growth~~higher SG&A expenses, excluding items impacting comparability, as discussed above, 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 supply chain employees, and costs necessary to meet elevated levels of demand.above. Operating profit in the second quarter of ~~the Grocery & Snacks segment was impacted by expense~~fiscal 2022 included $2.0 million of ~~$2.6 million and $4.2 million~~net charges related to our restructuring plans ~~in the third quarter of fiscal 2022~~ and ~~2021, respectively. The third quarter of fiscal 2022 included~~ expense of ~~$3.9~~$22.4 million related to the impairment of businesses previously held for sale. ~~The third quarter of fiscal 2021 included a gain on the divestiture of our~~ ~~Peter Pan~~^® ~~peanut butter business of $49.7 million.~~

Operating profit in our Grocery & Snacks segment for the first ~~three quarters~~half of fiscal ~~2022~~2023 reflected ~~a decrease~~an increase in gross profits of ~~$124.6~~$113.6 million compared to the first ~~three quarters~~half of fiscal ~~2021.~~2022. The ~~lower~~higher gross profit was driven by the net sales growth discussed above, partially offset by the impacts of input cost

inflation, ~~higher inventory write-offs,~~ unfavorable fixed cost leverage, and elevated supply chain operating ~~costs due,~~costs. The increase in ~~part, to disruptions in the availability of labor and certain materials, and a reduction in profit associated with the divestitures of our~~ ~~H.K. Anderson~~^® ~~and~~ ~~Peter Pan~~^® ~~peanut butter businesses,~~gross profits was 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.~~higher SG&A expenses, excluding items impacting comparability, as discussed above. Operating profit of the Grocery & Snacks segment was impacted by net expense of ~~$8.7~~$0.2 million and ~~$25.9~~$6.1 million related to our restructuring plans in the first ~~three quarters~~half of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. The first ~~three quarters~~half of fiscal 2023 included expenses of $3.2 million related to a municipal water break that impacted one of our production facilities. The first half of fiscal 2022 included expense of ~~$26.3~~$22.4 million related to the impairment of businesses previously held for sale. ~~The first three quarters of fiscal 2021 included gains of $55.0 million related to the divestiture of businesses.~~

Operating profit in our Refrigerated & Frozen segment for the ~~third~~second quarter of fiscal ~~2022~~2023 reflected ~~a decrease~~an increase in gross profits of ~~$56.0~~$78.6 million compared to the ~~third~~second quarter of fiscal ~~2021.~~2022. The ~~decrease~~increase was driven by the net sales growth discussed above, partially offset by the impacts of input cost inflation, unfavorable fixed cost leverage, and elevated supply chain operating ~~costs due,~~costs. The increase in ~~part, to disruptions in the availability of labor and certain materials, and a reduction in profit associated with the divestiture of our~~ ~~Egg Beaters~~^® ~~business,~~gross profits was partially offset by ~~the net sales growth~~higher SG&A expenses, excluding items impacting comparability, as discussed above, ~~benefits~~including increased advertising and promotion expenses. Operating profit of ~~supply chain realized productivity, cost synergies~~our Refrigerated & Frozen segment included charges of $7.9 million in the second quarter of fiscal 2023 associated with a fire occurring at one of our manufacturing facilities. Operating profit in the ~~Pinnacle acquisition, and a decrease in COVID-19 pandemic-related costs.~~second quarter of fiscal 2022 included charges of $12.0 million related to the impairment of businesses previously held for sale. Operating profit of the Refrigerated & Frozen segment was impacted by net expense of ~~$1.2~~$0.8 million and ~~$7.0~~$6.8 million related to our restructuring plans in the ~~third~~second quarter of fiscal 2023 and 2022, ~~and 2021,~~ respectively. The third quarter of fiscal 2022 also included expense of $16.9 million related to the impairment of businesses held for sale. Advertising and promotion expenses for the third quarter of fiscal 2022 decreased by $8.9 million compared to the third quarter of fiscal 2021.

Operating profit in our Refrigerated & Frozen segment for the first ~~three quarters~~half of fiscal ~~2022~~2023 reflected ~~a decrease~~an increase in gross profits of ~~$207.0~~$100.4 million compared to the first ~~three quarters~~half of fiscal ~~2021.~~2022. The ~~decrease~~increase was driven by the net sales growth discussed above, partially offset by the impacts of input cost inflation, unfavorable fixed cost leverage, and elevated supply chain operating ~~costs due,~~costs. The increase in ~~part, to disruptions in the availability of labor and certain materials, higher inventory write-offs, and a reduction in profit associated with the divestiture of our~~ ~~Egg Beaters~~^® ~~business,~~gross profits was partially offset by higher SG&A expenses, excluding items impacting comparability, as discussed above, including increased advertising and promotion expenses. Operating profit in the ~~benefits~~first half of ~~supply chain realized productivity, cost synergies~~fiscal 2023 included charges of $385.7 million related to the goodwill and Birds Eye^® brand impairments in connection with certain reporting unit changes within our Refrigerated & Frozen segment and charges of $7.9 million associated with a fire occurring at one of our manufacturing facilities. Operating profit in the ~~Pinnacle acquisition,~~first half of fiscal 2023 and ~~a decrease in COVID-19 pandemic-related costs.~~2022 included charges of $5.7 million and $12.0 million, respectively, related to the impairment of businesses previously held for sale. Operating profit of the Refrigerated & Frozen segment was impacted by net expense of ~~$13.0~~$1.4 million and ~~$19.9~~$11.8 million related to our restructuring plans in the first ~~three quarters~~half of fiscal 2023 and 2022, ~~and 2021,~~ respectively. The first three quarters of fiscal 2022 included expense of $28.9 million related to the impairment of businesses held for sale. Advertising and promotion expenses for the first three quarters of fiscal 2022 increased by $9.5 million compared to the first three quarters of fiscal 2021.

Operating profit in our International segment for the ~~third~~second quarter of fiscal ~~2022~~2023 reflected ~~an increase~~flat gross profits when compared to the prior-year period. Operating profit in our International segment for the first half of fiscal 2023 reflected a decrease in gross profits of ~~$3.2~~$6.5 million when compared to the prior-year period due to the ~~benefits of supply chain realized productivity, partially offset by the~~ impacts of input cost ~~inflation.~~inflation and unfavorable fixed cost leverage.

~~Operating profit in our International segment for the first three quarters~~

Table of fiscal 2022 reflected an increase in gross profits of $8.8 million when compared to the prior-year period due to the net sales growth discussed above and the benefits of supply chain realized productivity, 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 $13.5 million driven by higher advertising and promotion expenses and salary, wage, and fringe benefits.Contents

Operating profit in our Foodservice segment for the ~~third~~second quarter of fiscal ~~2022~~2023 reflected an increase in gross profits of ~~$2.5~~$10.8 million compared to the ~~third~~second quarter of fiscal ~~2021.~~2022. The increase in gross profit was driven by the net sales growth discussed above, ~~and the benefits of supply chain realized productivity,~~ partially offset by the impacts of input cost inflation and ~~elevated supply chain operating costs due, in part, to disruptions~~unfavorable fixed cost leverage. Operating profit in the ~~availability of labor and certain materials. The third~~second quarter of fiscal 2022 included expense of ~~$10.1~~$4.8 million related to the impairment of businesses previously held for sale.

Operating profit in our Foodservice segment for the first ~~three quarters~~half of fiscal ~~2022~~2023 reflected ~~a decrease~~an increase in gross profits of ~~$7.4~~$12.2 million compared to the first ~~three quarters~~half of fiscal ~~2021.~~2022. The ~~lower~~increase in gross profit was driven by ~~input cost inflation, elevated supply chain operating costs due, in part, to disruptions in the availability of labor and certain materials, and higher inventory write-offs, which more than offset~~ the net sales growth discussed above, partially offset by the impacts of input cost inflation, unfavorable fixed cost leverage, and ~~the benefits of~~elevated supply chain ~~realized productivity. The~~operating costs. Operating profit in the first ~~three quarters~~half of fiscal 2023 and 2022 included expense of ~~$14.9~~$20.5 million and $4.8 million, respectively, related to the impairment of businesses previously held for sale.

Pension and Postretirement Non-service Income

In the ~~third quarter~~second quarter of fiscal ~~2022,~~2023, pension and postretirement non-service income was ~~$16.1~~$6.1 million, ~~an increase~~a decrease of ~~$2.4~~$10.0 million compared to the ~~third~~second quarter of fiscal ~~2021.~~2022. In the first ~~three quarters of~~half fiscal ~~2022,~~2023, pension and postretirement non-service income was ~~$48.3~~$12.2 million, ~~an increase~~a decrease of ~~$7.1 million~~$20.0 compared to the first ~~three quarters~~half of fiscal ~~2021.~~ 2022. The ~~third~~second quarter and first ~~three quarters~~ half of fiscal ~~2022~~2023 reflected ~~lower~~higher interest ~~costs and an increase in expected returns on plan assets.~~costs.

Interest Expense, Net

Net interest expense was ~~$94.6~~$100.3 million and ~~$100.6~~$94.9 million for the ~~third~~second quarter of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. Net interest expense was ~~$283.7~~$197.4 million and ~~$322.0~~$189.1 million for the first ~~three quarters~~half of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~decrease~~increase was driven by a ~~lower~~higher weighted average interest rate on outstanding debt. See Note 4, 3, "~~Long-Term~~ Debt and Revolving Credit Facility", to the Condensed Consolidated Financial Statements contained in this report for further discussion.

Income Taxes

In the ~~third~~second quarter ~~and first three quarters~~ of fiscal 2023 and 2022, we recognized income tax expense of ~~$109.9~~$122.5 million and ~~$263.8~~$84.2 million, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was approximately ~~33.4%~~24.3% and ~~26.5%~~23.4% for the ~~third~~second quarter ~~and first three quarters~~ of fiscal 2023 and 2022, respectively. In the ~~third quarter and~~ first ~~three quarters~~half of fiscal ~~2021,~~2023 and 2022, we recognized income tax expense of ~~$101.6~~$136.9 million and ~~$269.0~~$153.9 million, respectively. The effective tax rate was approximately ~~26.5%~~31.0% and ~~21.3%~~23.1% for the ~~third quarter and~~ first ~~three quarters~~half of fiscal ~~2021,~~2023 and 2022, respectively. The effective tax rate for the first half of fiscal 2023 was principally impacted by the non-deductible goodwill impairments noted above. See Note ~~10,~~ 9, "Income Taxes", to the Condensed Consolidated Financial 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 were subject to elections made in connection with filing our fiscal 2021 federal tax return. These elections are still under review by the Internal Revenue Service. These elections may result in increases to the tax basis in those assets and if successful would result in tax benefits being realized in future periods.

Equity Method Investment Earnings

Equity method investment earnings were ~~$48.1~~$49.3 million and ~~$21.5~~$29.5 million for the ~~third~~second quarter of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. Equity method investment earnings were ~~$97.8~~$98.5 million and ~~$51.0~~$49.7 million for the first ~~three quarters~~half of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. Ardent Mills earnings for the ~~third~~second quarter and first ~~three quarters~~half of fiscal ~~2022~~2023 reflected favorable market conditions, including the joint ~~venture’s~~venture's effective management through the recent volatility in the wheat markets.

Earnings Per Share

Diluted earnings per share in the ~~third~~second quarter of fiscal 2023 and 2022 was $0.79 and ~~2021 were $0.45 and $0.58,~~$0.57, respectively. Diluted earnings per share in the first ~~three quarters~~half of fiscal 2023 and 2022 was $0.63 and ~~2021 were $1.51 and $2.02,~~$1.06, respectively. The increase in diluted earnings per share for the second quarter of fiscal 2023 reflected higher net income. The decrease in diluted earnings per share for the first half of fiscal 2023 reflected lower net ~~income.~~income and was largely impacted by the goodwill and brand impairment charges in the first quarter of fiscal 2023.

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity and Capital

The primary objective of our financing strategy is to maintain a prudent capital structure that provides us flexibility to pursue our growth objectives. 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). We are committed to maintaining solid investment grade credit 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, other contractual obligations, and payment of anticipated quarterly dividends for at least the next twelve ~~months.~~months and the foreseeable future thereafter.

Borrowing Facilities and Long-Term Debt

At ~~February~~November 27, 2022, we had a revolving credit facility (the "Revolving Credit Facility") with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of ~~$1.6~~$2.0 billion (subject to increase to a maximum aggregate principal amount of ~~$2.1~~$2.5 billion with the consent of the lenders). The Revolving Credit Facility matures on ~~July 11, 2024~~August 26, 2027 and is unsecured. The Company may request 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 ~~February~~November 27, 2022, there were no outstanding borrowings under the Revolving Credit Facility.

As of ~~February~~November 27, 2022, we had ~~$361.0~~$254.0 million outstanding under our commercial paper program. The highest level of borrowings during the first ~~three quarters~~half of fiscal ~~2022~~2023 was ~~$989.0~~$452.0 million. We had ~~$705.7~~$180.0 million outstanding under our commercial paper program as of May ~~30, 2021.~~29, 2022.

During the first quarter of fiscal ~~2022,~~2023, we ~~issued~~entered into an unsecured Term Loan Agreement (the "Term Loan Agreement") with a syndicate of financial institutions. The Term Loan Agreement provided for delayed draw term loans to the Company in an aggregate principal amount of up to $500.0 million. The Term Loan Agreement matures on August 26, 2025. During the second quarter of fiscal 2023, we borrowed the full $500.0 million aggregate principal amount ~~of 0.500% senior notes due August 11, 2023.~~available under the Term Loan Agreement. The proceeds were ~~primarily~~ used to ~~refinance~~repay the full outstanding $250.0 million aggregate principal amount of our 3.25% senior notes on their maturity date of September 15, 2022 as well as to repay outstanding borrowings under our commercial paper ~~borrowings.~~program.

For additional information about our long-term debt balances, refer to Note 4, 3, " ~~Long-Term~~ Debt and Revolving Credit Facility", to the Condensed Consolidated Financial Statements contained in this report and Note 4, 3, "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~~.29, 2022. The weighted average coupon interest rate of long-term debt obligations outstanding as of ~~February~~November 27, 2022, was approximately 4.4%.

We expect to maintain or have access to sufficient liquidity to retire or refinance long-term debt at maturity or otherwise, 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 all.

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As of the end of the ~~third~~second quarter of fiscal ~~2022,~~2023, 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, 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, or impossible.

Our most restrictive debt agreement (the Revolving Credit Facility) generally requires our ratio of ~~EBITDA~~earnings before interest, taxes, depreciation and amortization ("EBITDA") to interest expense not be ~~not~~ less than 3.0 to 1.0 and our ratio of funded net debt to EBITDA not to exceed 4.75 to 1.0 through the third quarter of fiscal 2023 and 4.5 to 1.0 ~~with~~for each quarter thereafter. Each ratio is to be calculated on a rolling four-quarter basis. As of ~~February~~November 27, 2022, 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. 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 ~~quarter~~half of fiscal ~~2022,~~2023, we repurchased ~~1.5~~4.2 million shares of our common stock under this authorization for an aggregate of ~~$50.0~~$150.0 million. ~~We did not repurchase any shares of common stock during the second or third quarters of fiscal 2022.~~ The Company's total remaining share repurchase authorization as of ~~February~~November 27, 2022 was ~~$1.07 billion.~~$916.6 million.

On ~~March 2,~~December 1, 2022, the ~~company~~Company paid a quarterly cash dividend on shares of its common stock of ~~$0.3125~~$0.33 per share to stockholders of record as of close of business on November 3, 2022. On December 21, 2022, our Board announced a quarterly dividend payment of $0.33 per share to be paid on March 2, 2023, to stockholders of record as of close of business on January ~~31, 2022.~~30, 2023.

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~~lease payments, income taxes, pension and postretirement benefits, and unconditional purchase obligations.

As of ~~February~~November 27, 2022, our finance and operating lease liabilities reported in our Condensed Consolidated Balance Sheet totaled ~~$133.5~~$118.8 million and ~~$249.5~~$248.7 million, respectively. We have entered into contracts that are or contain a lease that have not yet commenced with aggregate payments totaling ~~$269.9~~$269.6 million, as of ~~February~~November 27, 2022. For additional information, refer to Note ~~15,~~ 14, "Leases", to the Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended May ~~30, 2021~~.29, 2022.

The liability for gross unrecognized tax benefits related to uncertain tax positions was ~~$54.8~~$29.7 million as of ~~February~~November 27, 2022. For additional information, refer to Note ~~10,~~ 9, "Income Taxes", to the Condensed Consolidated Financial Statements contained in this report and Note ~~14,~~ 13, "Pre-Tax Income and Income Taxes", to the Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended May ~~30, 2021~~.29, 2022.

As of May ~~30, 2021,~~29, 2022, we had an aggregate funded pension asset of ~~$109.6~~$162.1 million and an aggregate unfunded postretirement benefit obligation totaling ~~$78.2~~$61.4 million. We expect to make payments totaling approximately ~~$12.3~~$12.4 million and ~~$9.0~~$8.1 million in fiscal ~~2022~~2023 to fund our pension and postretirement plans, respectively. See Note 12 11 "Pension and Postretirement Benefits", to the Condensed Consolidated Financial Statements contained in this report and Note ~~18,~~ 17, "Pension and Postretirement Benefits", to the Consolidated Financial Statements and "Critical Accounting Estimates – ~~Employment-Related~~ Employee-Related Benefits" contained in the Company's Annual Report on Form 10-K for the fiscal year ended May ~~30, 2021~~,29, 2022, for further discussion of our pension obligation and factors that could affect estimates of these obligations.

As of ~~February~~November 27, 2022, our 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) totaled approximately ~~$2.24~~$2.84 billion. Approximately ~~$1.55~~$1.93 billionof this balance is due in less than one year. Included in this amount are open purchase orders and other supply agreements totaling approximately ~~$1.37~~$1.73 billion, which are generally settleable in the ordinary course of business. Some are not legally binding and/or may be cancellable. Warehousing service agreements totaling approximately ~~$380~~$626 millionmake up a majority of our remaining unconditional purchase obligations with various terms of up to 2010 years.

We expect to have sufficient cash flows from the above cited sources to meet the material cash requirements of these contractual obligations as they become settleable in the ordinary course of business.

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Capital Expenditures

We continue to make investments in our business and operating facilities. Our estimate of capital expenditures for fiscal ~~2022~~2023 is approximately ~~$485~~$425 million.

Supplier Arrangements

~~We offer certain~~Certain suppliers have access to a third-party ~~service~~services that ~~allows~~allow them to view our scheduled payments online. ~~The~~These third-party ~~service~~services also ~~allows~~allow suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party. ~~We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third party, or any financial institutions concerning this service. All balances~~Balances remain as obligations to our suppliers as stated in our supplier agreements and are either reflected in accounts payable or in notes payable within our Condensed Consolidated Balance ~~Sheets.~~Sheets depending on the nature of the arrangement. The associated payments are included in net cash flows from operating activities for those balances reflected in accounts payable, whereas the proceeds and payments associated with short-term borrowings are reflected as financing activities within our Condensed Consolidated Statements of Cash Flows. As of ~~February~~November 27, 2022 and May ~~30, 2021, $291.9~~29, 2022, $386.8 million and ~~$279.3~~$378.3 million, respectively, of our total accounts payable was payable to suppliers who utilize ~~this~~these third-party ~~service.~~ services. As of November 27, 2022, we also had approximately $109.2 million of short-term borrowings related to these arrangements.

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 these extended payment terms to increase at a slower rate in the future.~~ A number of 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 ~~three quarters~~half of fiscal ~~2022,~~2023, we used ~~$0.5~~$43.6 million of cash, which was the net result of ~~$752.6~~$297.8 million generated from operating activities, ~~$342.9~~$181.9 million used in investing activities, ~~$407.0~~$157.4 million used in financing activities, and a decrease of ~~$3.2~~$2.1 million due to the effects of changes in foreign currency exchange rates.

Cash generated from operating activities totaled ~~$752.6~~$297.8 million and ~~$1.07 billion~~$262.1 million in the first ~~three quarters~~half of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. The ~~decrease~~increase in operating cash flows for the first ~~three quarters~~half of fiscal ~~2022~~2023 compared to the first ~~three quarters~~half of fiscal ~~2021~~2022 was primarily driven by ~~lower~~higher gross profits and the accelerated receipt of our outstanding receivables. In the first half of fiscal 2023, we utilized certain customer payment term offerings to accelerate receipt on our outstanding receivables in exchange for a slightly higher prompt pay discount, which ~~reflect the impact of realized~~increased our cash flow from operations by approximately $152 million. This was partially offset by higher inventory balances, largely due to input cost inflation and ~~higher transportation costs. Working capital changes have been impacted by sales price increases in response to input cost inflation which have increased our receivables, offset by less~~some inventory ~~rebuilding in comparison to the prior year as we lap the initial surge in demand~~rebuild from ~~the pandemic. In addition, there were decreased tax, interest,~~previous supply chain constraints, and ~~pension contribution~~timing of payments ~~for the first three quarters~~ 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 three quarters of fiscal 2021 benefited from the deferral of $33.9 million of employer payroll taxesaccounts payable.

under the Coronavirus Aid, Relief, and Economic Security Act. Payments totaling $25.5 million of such amounts were made in the third quarter of fiscal 2022 and remaining payments will occur in the third quarter of fiscal 2023.

Cash used in investing activities totaled ~~$342.9~~$181.9 million and ~~$281.9~~$244.2 million in the first ~~three quarters~~half of fiscal ~~2022~~2023 and ~~2021,~~2022, respectively. Net cash outflows from investing activities in the first ~~three quarters~~half of fiscal ~~2022~~2023 and ~~2021~~2022 consisted primarily of capital expenditures totaling ~~$364.2~~$188.4 million and ~~$396.7~~$257.5 million, respectively. ~~Investing cash flows for the first three quarters of fiscal 2021 also included proceeds from divestitures totaling $112.2 million, mainly from the sale of our~~ ~~PeterPan~~^® ~~peanut butter and~~ ~~H.K. Anderson~~^® ~~businesses.~~

Cash used in financing activities totaled ~~$407.0~~$157.4 million and ~~$1.26 billion~~$23.7 million in the first ~~three quarters~~half of fiscal 2023 and 2022, ~~and 2021.~~respectively. Financing activities in the first ~~three quarters~~half of fiscal 2023 principally reflected repayments of long-term debt of $265.8 million, the issuance of long-term debt totaling $500.0 million, net short-term borrowing issuances of $75.4 million, cash dividends paid of $308.6 million, and common stock repurchases of $150.0 million. Financing activities in the first half of fiscal 2022 principally ~~reflect~~reflected 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 ~~$344.6~~$121.6 million, cash dividends paid of ~~$431.9~~$282.0 million, and common stock repurchases of $50.0 million. Financing activities in the first three quarters of fiscal 2021 principally reflect repayments of long-term debt of $2.31 billion, the issuance of long-term debt totaling $988.2 million, net short-term borrowings of $727.6 million, cash dividends paid of $341.7 million, and common stock repurchases of $298.1 million.

Cash Held by International Subsidiaries

The Company had cash and cash equivalents of ~~$79.7~~$39.7 million at ~~February~~November 27, 2022 and ~~$79.2~~$83.3 million at May ~~30, 2021,~~29, 2022, of which ~~$71.2~~$32.8 million at ~~February~~November 27, 2022, and ~~$72.4~~$74.7 million at May ~~30, 2021~~29, 2022 was held in foreign countries. A deferred tax liability is provided for certain undistributed foreign earnings in fiscal ~~2022~~2023 that are not considered to be indefinitely reinvested or cannot be remitted in a tax-neutral transaction. Other undistributed foreign earnings are invested indefinitely and therefore we have not provided deferred taxes on those earnings.

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CRITICAL ACCOUNTING ESTIMATES

Consistent with previous years, we will perform our annual impairment test on our indefinite-lived intangible assets and goodwill in the fourth quarter of fiscal 2022. We recognized impairment charges on several brands, primarily from the Pinnacle acquisition, in the fourth quarter of both fiscal 2021 and 2020. As a result of the impairment charges, these assets were written down to their respective fair values resulting in zero excess fair value over carrying amount. While most of these brands have had elevated sales demand as a result of the COVID-19 pandemic, some brands have also experienced deterioration in margins due to several factors, including recent input cost inflation. If expectations of future long-term growth rates and margins are not met or if management's future strategy changes on certain brands, there is a heightened risk of future impairment. Excluding impairments associated with businesses held for sale, no events occurred during the third quarter of fiscal 2022 that indicated it was more likely than not that our indefinite-lived intangible assets were impaired.

For further discussion of our critical accounting estimates, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section in Part II, Item 7, of our Annual Report on Form 10-K for the fiscal year ended May ~~30, 2021.~~29, 2022.

ITEM3. 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 ~~thirty-nine~~twenty-six weeks ended ~~February~~November 27, 2022. For additional information, refer to the "Quantitative and Qualitative Disclosures About Market Risk" section in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended May ~~30, 2021.~~29, 2022.

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 ~~$8.80~~$9.04 billion as of ~~February~~November 27, 2022. Based on current market rates, the fair value of this debt at ~~February~~November 27, 2022 was estimated at ~~$9.54~~$8.79 billion. As of ~~February~~November 27, 2022, a 1% increase in the interest rates would decrease the fair value of our fixed rate debt by approximately ~~$580.9~~$428.2 million, while a 1% decrease in interest rates would increase the fair value of our fixed rate debt by approximately ~~$660.3~~$482.3 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.

Effect of Hypothetical 10% Fluctuation

We changed the disclosure alternative for reporting our commodity and foreign exchange derivatives (inclusive of commodity and foreign exchange swaps, futures, forwards, and options) in the second quarter of fiscal 2022 from a value-at-risk ("VaR") model to a hypothetical sensitivity analysis. The change in the methodology was made to simplify and enhance the information presented about the sensitivities of our derivative positions.

The potential gain or loss on the fair value of our outstanding commodity and foreign exchange contracts, assuming a hypothetical 10% fluctuation in commodity prices and foreign currency exchange rates, would have been (in millions):

Fair Value Impact

In Millions

February 27, 2022

February 28, 2021

Energy commodities

$
1.3

$
3.1

Agriculture commodities

3.9

1.5

Foreign exchange

8.8

10.7

	Fair Value Impact
In Millions	November 27, 2022		November 28, 2021
Energy commodities	$	5.9	$	1.3
Agriculture commodities		7.7		4.2
Foreign exchange		8.8		8.6

It should be noted that any change in the fair value of our derivative contracts, real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged items. In relation to foreign currency contracts, this hypothetical calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar.

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ITEM4. 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 ~~February~~November 27, 2022. 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 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

~~PART II — OTHER INFORMATION~~

ITEM1. LEGAL PROCEEDINGS

For additional information on legal proceedings, please refer to Note ~~16,~~ 15, "~~Contingencies,"~~Contingencies", to the financial statements contained in our Annual Report on Form 10-K for the fiscal year ended May ~~30, 2021~~29, 2022 and Note ~~11,~~ 10, "~~Contingencies,"~~Contingencies", to the Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q.

ITEM1A. RISK FACTORS

~~The disclosure below supplements~~

A discussion of our risk factors ~~previously disclosed~~can be found in Item 1A, "Risk Factors", in our Annual Report on Form 10-K for the fiscal year ended May ~~30, 2021. These risks~~29, 2022 and ~~uncertainties, along~~in our other filings with ~~those~~the SEC. During the second quarter of fiscal 2023, there were no material changes to our previously disclosed ~~could materially adversely affect our business or financial results.~~risk factors.

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

~~Our business, financial condition~~The following table presents the total number of shares of common stock purchased during the second quarter of fiscal 2023, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, and ~~results~~the approximate dollar value of ~~operations could~~the maximum number of shares that may yet be ~~adversely affected by disruptions in~~purchased under the ~~global economy caused by the ongoing conflict between Russia and Ukraine.~~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
August 29, 2022 through September 25, 2022		—	$	—		—	$	1,016,577,000
September 26, 2022 through October 23, 2022		—	$	—		—	$	1,016,577,000
October 24, 2022 through November 27, 2022		2,758,054	$	36.26		2,758,054	$	916,578,000
Total Fiscal 2023 Second Quarter Activity		2,758,054	$	36.26		2,758,054	$	916,578,000

¹The ~~global economy~~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 ~~negatively impacted by~~subsequently increased from time to time. On June 27, 2018, we announced that the ~~military conflict between Russia and Ukraine. Furthermore, governments in~~Board increased the U.S., United Kingdom, and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. Although we have no operations in Russia or Ukraine, we have experienced shortages in materials and increased costs for transportation, energy, and raw material due in part to the negative impactamount of the ~~Russia-Ukraine military conflict on the global economy. Further escalation~~share repurchase authorization by $1.0 billion. As of geopolitical tensions related to the military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain. In addition, the effects of the ongoing conflict could heighten manyNovember 27, 2022, approximately $916.6 million of our ~~known risks described~~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 ~~Part I, Item 1A,~~ ~~"Risk Factors"~~ ~~in our Annual Report on Form 10-K for the year ended May 30, 2021, filed with the SEC on July 23, 2021.~~

open market purchases or privately negotiated transactions.

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ITEM6. 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

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~~September 26, 2022

3.2		Amended and Restated Bylaws of Conagra Brands, Inc., incorporated herein by reference to Exhibit ~~3.1~~3.2 to the ~~Company’s~~Company's Current Report on Form 8-K filed with the SEC on ~~July 28, 2020~~September 26, 2022

31.1		Section 302 Certificate of Chief Executive Officer

31.2		Section 302 Certificate of Chief Financial Officer

32		Section 906 Certificates

101		The following materials from Conagra Brands' Quarterly Report on Form 10-Q for the quarter ended ~~February~~November 27, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of ~~Earnings, (ii)~~Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) 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.

104
~~104~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)		~~Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)~~

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SIGNATURES

~~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
		ExecutiveVicePresidentandChiefFinancialOfficer

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

Dated this ~~7th~~5th day of ~~April, 2022.~~January, 2023.

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)	~~(Zip Code)~~

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

	Thirteen Weeks Ended																		*Thirteen Weeks Ended*
	February 27, 2022									February 28, 2021									*November 27, 2022*									*November 28, 2021*
	Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount			Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount			*Pre-Tax Amount*			*Tax (Expense) Benefit*			*After- Tax Amount*			*Pre-Tax Amount*			*Tax (Expense) Benefit*			*After- Tax Amount*
Net income	$	328.8		$	(109.9	)	$	218.9		$	383.3		$	(101.6	)	$	281.7		$	504.7		$	(122.5	)	$	382.2		$	360.1		$	(84.2	)	$	275.9
Other comprehensive income:
Derivative adjustments:
Unrealized derivative adjustments		2.1			(0.6	)		1.5			0.6			(0.1	)		0.5			9.7			(2.4	)		7.3			2.2			(0.5	)		1.7
Reclassification for derivative adjustments included in net income		(0.4	)		0.2			(0.2	)		(0.8	)		0.2			(0.6	)		(1.0	)		0.3			(0.7	)		(0.3	)		—			(0.3	)
Unrealized currency translation gains		10.7			0			10.7			0.7			(0.6	)		0.1
Unrealized currency translation losses																				(8.2	)		—			(8.2	)		(17.7	)		—			(17.7	)
Pension and post-employment benefit obligations:
Unrealized pension and post-employment benefit obligations																				(0.6	)		0.1			(0.5	)		—			—			—
Reclassification for pension and post-employment benefit obligations included in net income		(0.9	)		0.3			(0.6	)		(0.8	)		0.2			(0.6	)		(1.2	)		0.3			(0.9	)		(0.9	)		0.3			(0.6	)
Comprehensive income		340.3			(110.0	)		230.3			383.0			(101.9	)		281.1			503.4			(124.2	)		379.2			343.4			(84.4	)		259.0
Comprehensive income attributable to noncontrolling interests		0.6			(0.2	)		0.4			0.5			(0.2	)		0.3
Comprehensive loss attributable to noncontrolling interests																				(1.4	)		(0.1	)		(1.5	)		(1.0	)		(0.1	)		(1.1	)
Comprehensive income attributable to Conagra Brands, Inc.	$	339.7		$	(109.8	)	$	229.9		$	382.5		$	(101.7	)	$	280.8		$	504.8		$	(124.1	)	$	380.7		$	344.4		$	(84.3	)	$	260.1

	Thirty-Nine Weeks Ended																		*Twenty-Six Weeks Ended*
	February 27, 2022									February 28, 2021									*November 27, 2022*									*November 28, 2021*
	Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount			Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount			*Pre-Tax Amount*			*Tax (Expense) Benefit*			*After- Tax Amount*			*Pre-Tax Amount*			*Tax (Expense) Benefit*			*After- Tax Amount*
Net income	$	994.3		$	(263.8	)	$	730.5		$	1,260.0		$	(269.0	)	$	991.0		$	441.6		$	(136.9	)	$	304.7		$	665.5		$	(153.9	)	$	511.6
Other comprehensive income:
Derivative adjustments:
Unrealized derivative adjustments		1.8			(0.5	)		1.3			1.1			(0.3	)		0.8			7.4			(1.8	)		5.6			(0.3	)		0.1			(0.2	)
Reclassification for derivative adjustments included in net income		(1.0	)		0.3			(0.7	)		(2.9	)		0.7			(2.2	)		(1.6	)		0.5			(1.1	)		(0.6	)		0.1			(0.5	)
Unrealized currency translation gains (losses)		(22.7	)		0			(22.7	)		29.5			(1.2	)		28.3
Unrealized currency translation losses																				(21.8	)		—			(21.8	)		(33.4	)		—			(33.4	)
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			1.6			—			1.6			2.1			(0.2	)		1.9
Reclassification for pension and post-employment benefit obligations included in net income		(2.6	)		0.8			(1.8	)		(2.4	)		0.6			(1.8	)		(2.3	)		0.7			(1.6	)		(1.7	)		0.5			(1.2	)
Comprehensive income		971.9			(263.4	)		708.5			1,285.7			(269.3	)		1,016.4			424.9			(137.5	)		287.4			631.6			(153.4	)		478.2
Comprehensive income (loss) attributable to noncontrolling interests		(1.3	)		(0.4	)		(1.7	)		3.8			(0.6	)		3.2
Comprehensive loss attributable to noncontrolling interests																				(3.5	)		(0.1	)		(3.6	)		(1.9	)		(0.2	)		(2.1	)
Comprehensive income attributable to Conagra Brands, Inc.	$	973.2		$	(263.0	)	$	710.2		$	1,281.9		$	(268.7	)	$	1,013.2		$	428.4		$	(137.4	)	$	291.0		$	633.5		$	(153.2	)	$	480.3

	February 27, 2022			May 30, 2021			*November 27, 2022*			*May 29, 2022*
ASSETS
Current assets
Cash and cash equivalents	$	79.7		$	79.2		$	39.7		$	83.3
Receivables, less allowance for doubtful accounts of $3.4 and $3.2		914.5			793.9
Receivables, less allowance for doubtful accounts of $3.7 and $3.9								910.5			867.4
Inventories		1,766.5			1,709.7			2,347.7			1,966.7
Prepaid expenses and other current assets		129.5			95.0			118.5			116.3
Current assets held for sale		24.4			24.3
Total current assets		2,914.6			2,702.1			3,416.4			3,033.7
Property, plant and equipment		5,731.5			5,564.8			5,993.1			5,896.3
Less accumulated depreciation		(3,076.0	)		(2,992.8	)		(3,304.9	)		(3,159.1	)
Property, plant and equipment, net		2,655.5			2,572.0			2,688.2			2,737.2
Goodwill		11,332.4			11,338.9			11,180.1			11,329.2
Brands, trademarks and other intangibles, net		4,077.6			4,124.6			3,579.0			3,857.8
Other assets		1,487.2			1,344.7			1,550.3			1,477.2
Noncurrent assets held for sale		32.0			113.3
	$	22,499.3		$	22,195.6		$	22,414.0		$	22,435.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable	$	362.8		$	707.4		$	365.5		$	184.3
Current installments of long-term debt		706.3			23.1			954.3			707.3
Accounts payable		1,593.9			1,655.9			1,596.3			1,864.6
Accrued payroll		142.8			175.2			119.4			151.7
Other accrued liabilities		717.1			743.0			687.2			610.9
Current liabilities held for sale		1.7			1.6
Total current liabilities		3,524.6			3,306.2			3,722.7			3,518.8
Senior long-term debt, excluding current installments		8,089.1			8,275.2			8,081.8			8,088.2
Other noncurrent liabilities		2,029.9			1,979.6			1,871.8			1,965.9
Noncurrent liabilities held for sale		2.4			3.2
Total liabilities		13,646.0			13,564.2			13,676.3			13,572.9
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
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		2,328.2			2,342.1			2,360.9			2,324.6
Retained earnings		6,541.2			6,262.6			6,536.5			6,550.7
Accumulated other comprehensive income (loss)		(13.3	)		5.8
Less treasury stock, at cost, 104,343,974 and 103,934,839 common shares		(3,002.7	)		(2,979.9	)
Accumulated other comprehensive loss								(24.6	)		(11.2	)
Less treasury stock, at cost, 107,596,728 and 104,157,169 common shares								(3,127.7	)		(2,997.6	)
Total Conagra Brands, Inc. common stockholders' equity		8,774.6			8,551.8			8,666.3			8,787.7
Noncontrolling interests		78.7			79.6			71.4			74.5
Total stockholders' equity		8,853.3			8,631.4			8,737.7			8,862.2
	$	22,499.3		$	22,195.6
��							$	22,414.0		$	22,435.1

	February 27, 2022			May 30, 2021
Currency translation losses, net of reclassification adjustments	$	(96.9	)	$	(77.1	)
Derivative adjustments, net of reclassification adjustments		24.9			24.3
Pension and postretirement benefit obligations, net of reclassification adjustments		58.7			58.6
Accumulated other comprehensive income (loss)	$	(13.3	)	$	5.8

	Thirteen Weeks Ended						Affected Line Item in the Condensed Consolidated Statement of Earnings¹
	February 27, 2022			February 28, 2021
Net derivative adjustments:
Cash flow hedges	$	(0.8	)	$	(0.8	)	Interest expense, net
Cash flow hedges		0.4			0		Equity method investment earnings
		(0.4	)		(0.8	)	Total before tax
		0.2			0.2		Income tax expense
	$	(0.2	)	$	(0.6	)	Net of tax
Pension and postretirement liabilities:
Net actuarial gain	$	(0.9	)	$	(0.8	)	Pension and postretirement non-service income
		(0.9	)		(0.8	)	Total before tax
		0.3			0.2		Income tax expense
	$	(0.6	)	$	(0.6	)	Net of tax


	February 27, 2022		May 30, 2021
Current assets	$	24.4	$	24.3
Noncurrent assets (including goodwill of $34.6 million at May 30, 2021)		32.0		113.3
Current liabilities		1.7		1.6
Noncurrent liabilities		2.4		3.2

	Refrigerated & Frozen			Corporate			Total
Other cost of goods sold	$	0.4		$	—		$	0.4
Total cost of goods sold		0.4			—			0.4
Severance and related costs		0.5			—			0.5
Asset gains on disposal (net of impairment)		(5.5	)		—			(5.5	)
Contract/lease termination		—			(0.7	)		(0.7	)
Consulting/professional fees		—			4.9			4.9
Other selling, general and administrative expenses		0.3			0.3			0.6
Total selling, general and administrative expenses		(4.7	)		4.5			(0.2	)
Consolidated total	$	(4.3	)	$	4.5		$	0.2

	Balance at May 30, 2021		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at February 27, 2022
Severance and related costs	$	5.1	$	0.3	$	(5.1	)	$	0.4		$	0.7
Contract/lease termination		—		—		0.5			(0.5	)		—
Consulting/professional fees		3.9		13.5		(15.8	)		—			1.6
Other costs		—		3.5		(3.5	)		—			—
Total	$	9.0	$	17.3	$	(23.9	)	$	(0.1	)	$	2.3

	*Grocery & Snacks*		*Refrigerated & Frozen*		*International*		*Foodservice*		*Corporate*		*Total*
Accelerated depreciation	$	33.2	$	39.6	$	—	$	—	$	—	$	72.8
Other cost of goods sold		8.7		2.5		—		—		—		11.2
Total cost of goods sold		41.9		42.1		—		—		—		84.0
Severance and related costs		11.6		1.2		1.3		0.3		5.1		19.5
Asset impairment (net of gains on disposal)		21.9		0.8		0.1		—		—		22.8
Contract/lease termination		0.5		0.1		—		—		0.1		0.7
Consulting/professional fees		0.5		2.4		—		—		5.7		8.6
Other SG&A		12.8		3.1		—		—		0.5		16.4
Total SG&A		47.3		7.6		1.4		0.3		11.4		68.0
Total	$	89.2	$	49.7	$	1.4	$	0.3	$	11.4	$	152.0
Pension and postretirement non-service income												0.6
Consolidated total											$	152.6

	Grocery & Snacks		Refrigerated & Frozen		International			Foodservice		Total
Balance as of May 30, 2021	$	4,692.4	$	5,611.2	$	302.5		$	732.8	$	11,338.9
Currency translation		0		0		(6.5	)		0		(6.5	)
Balance as of February 27, 2022	$	4,692.4	$	5,611.2	$	296.0		$	732.8	$	11,332.4

	*November 27, 2022*				*May 29, 2022*
	*Gross Carrying Amount*		*Accumulated Amortization*		*Gross Carrying Amount*		*Accumulated Amortization*
Non-amortizing intangible assets
Brands and trademarks	$	2,816.2	$	—	$	3,061.6	$	—
Amortizing intangible assets
Customer relationships and intellectual property		1,232.6		469.8		1,233.9		437.7
	$	4,048.8	$	469.8	$	4,295.5	$	437.7

	February 27, 2022				May 30, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Non-amortizing intangible assets
Brands and trademarks	$	3,271.3	$	—	$	3,273.1	$	—
Amortizing intangible assets
Customer relationships and intellectual property		1,227.5		421.2		1,228.8		377.3
	$	4,498.8	$	421.2	$	4,501.9	$	377.3

	November 27, 2022		May 29, 2022
Prepaid expenses and other current assets	$	11.6	$	7.0
Other accrued liabilities		1.5		2.2

		Derivative Assets			Derivative Liabilities			Derivative Assets			Derivative Liabilities
		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts		Prepaid expenses and other current assets	$	25.0	Other accrued liabilities	$	10.0	Prepaid expenses and other current assets	$	8.4	Other accrued liabilities	$	0.3
Foreign exchange contracts		Prepaid expenses and other current assets		0.7	Other accrued liabilities		1.2	Prepaid expenses and other current assets		2.5	Other accrued liabilities		1.6
Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments		$	25.7		$	11.2	Total derivatives not designated as hedging instruments	$	10.9		$	1.9

	*Derivative Assets*			*Derivative Liabilities*
	*Balance Sheet Location*	*Fair Value*		*Balance Sheet Location*	*Fair Value*
Commodity contracts	Prepaid expenses and other current assets	$	26.8	Other accrued liabilities	$	16.1
Foreign exchange contracts	Prepaid expenses and other current assets		0.3	Other accrued liabilities		2.2
Total derivatives not designated as hedging instruments		$	27.1		$	18.3

		Location in Condensed Consolidated	Gains (Losses) Recognized on Derivatives in Condensed Consolidated Statements of Earnings for the Thirteen Weeks Ended						*Location in Condensed Consolidated*	*Gains 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	February 27, 2022			February 28, 2021			*Statements of Earnings of Gains Recognized on Derivatives*	*November 27, 2022*		*November 28, 2021*
Commodity contracts		Cost of goods sold	$	13.0		$	8.2		Cost of goods sold	$	3.7	$	4.6
Foreign exchange contracts		Cost of goods sold		(3.0	)		(2.9	)	Cost of goods sold		1.6		2.4
Total gains from derivative instruments not designated as hedging instruments	Total gains from derivative instruments not designated as hedging instruments		$	10.0		$	5.3		Total gains from derivative instruments not designated as hedging instruments	$	5.3	$	7.0

	February 27, 2022		May 30, 2021
Raw materials and packaging	$	351.6	$	284.1
Work in process		176.6		125.1
Finished goods		1,157.4		1,221.8
Supplies and other		80.9		78.7
Total	$	1,766.5	$	1,709.7

	Pension Plans
	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	February 27, 2022			February 28, 2021			February 27, 2022			February 28, 2021
Service cost	$	2.0		$	2.7		$	6.7		$	9.0
Interest cost		20.9			21.7			62.5			65.1
Expected return on plan assets		(36.4	)		(35.0	)		(109.1	)		(105.0	)
Amortization of prior service cost		0.5			0.5			1.4			1.7
Pension cost (benefit) — Company plans		(13.0	)		(10.1	)		(38.5	)		(29.2	)
Pension cost (benefit) — multi-employer plans		2.0			1.7			6.3			5.7
Total pension cost (benefit)	$	(11.0	)	$	(8.4	)	$	(32.2	)	$	(23.5	)

	*Pension Plans*
	*Thirteen Weeks Ended*						*Twenty-Six Weeks Ended*
	*November 27, 2022*			*November 28, 2021*			*November 27, 2022*			*November 28, 2021*
Service cost	$	1.7		$	2.0		$	3.3		$	4.7
Interest cost		31.0			20.8			62.0			41.6
Expected return on plan assets		(36.4	)		(36.3	)		(72.9	)		(72.7	)
Amortization of prior service cost		0.3			0.4			0.7			0.9
Pension cost (benefit) — Company plans		(3.4	)		(13.1	)		(6.9	)		(25.5	)
Pension cost (benefit) — multi-employer plans		2.8			2.4			5.0			4.3
Total pension cost (benefit)	$	(0.6	)	$	(10.7	)	$	(1.9	)	$	(21.2	)

	Postretirement Plans												*Postretirement Plans*
	Thirteen Weeks Ended						Thirty-Nine Weeks Ended						*Thirteen Weeks Ended*						*Twenty-Six Weeks Ended*
	February 27, 2022			February 28, 2021			February 27, 2022			February 28, 2021			*November 27, 2022*			*November 28, 2021*			*November 27, 2022*			*November 28, 2021*
Service cost	$	0.1		$	0		$	0.2		$	0.1		$	0.1		$	0.1		$	0.1		$	0.1
Interest cost		0.3			0.4			1.0			1.1			0.6			0.4			1.1			0.7
Amortization of prior service cost (benefit)		(0.5	)		(0.5	)		(1.4	)		(1.5	)		(0.5	)		(0.4	)		(0.9	)		(0.9	)
Recognized net actuarial gain		(0.9	)		(0.8	)		(2.7	)		(2.6	)		(1.1	)		(1.0	)		(2.2	)		(1.8	)
Total postretirement cost (benefit)	$	(1.0	)	$	(0.9	)	$	(2.9	)	$	(2.9	)	$	(0.9	)	$	(0.9	)	$	(1.9	)	$	(1.9	)

	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 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
Stock option and incentive plans						12.1			(0.6	)					0.3		0.1				11.9
Currency translation adjustments												(16.2	)					(1.5	)		(17.7	)
Derivative adjustments												1.4									1.4
Activities of noncontrolling interests																		0.4			0.4
Pension and postretirement healthcare benefits												(0.6	)								(0.6	)
Dividends declared on common stock; $0.3125 per share									(149.9	)											(149.9	)
Net income attributable to Conagra Brands, Inc.									275.5												275.5
Balance at November 28, 2021		584.2	$	2,921.2	$	2,317.1		$	6,473.3		$	(24.8	)	$	(3,007.8	)	$	77.9		$	8,756.9
Stock option and incentive plans						11.1			(0.5	)					5.1		0.4				16.1
Currency translation adjustments												10.8						(0.1	)		10.7
Derivative adjustments												1.3									1.3
Activities of noncontrolling interests																		0.5			0.5
Pension and postretirement healthcare benefits												(0.6	)								(0.6	)
Dividends declared on common stock; $0.3125 per share									(150.0	)											(150.0	)
Net income attributable to Conagra Brands, Inc.									218.4												218.4
Balance at February 27, 2022		584.2	$	2,921.2	$	2,328.2		$	6,541.2		$	(13.3	)	$	(3,002.7	)	$	78.7		$	8,853.3

	*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 29, 2022		584.2	$	2,921.2	$	2,324.6		$	6,550.7		$	(11.2	)	$	(2,997.6	)	$	74.5		$	8,862.2
Stock option and incentive plans						(1.6	)		0.2						16.3						14.9
Currency translation adjustments												(11.5	)					(2.1	)		(13.6	)
Repurchase of common shares															(50.0	)					(50.0	)
Derivative adjustments												(2.1	)								(2.1	)
Pension and postretirement healthcare benefits												1.4									1.4
Dividends declared on common stock; $0.33 per share									(158.6	)											(158.6	)
Net loss attributable to Conagra Brands, Inc.									(77.5	)											(77.5	)
Balance at August 28, 2022		584.2	$	2,921.2	$	2,323.0		$	6,314.8		$	(23.4	)	$	(3,031.3	)	$	72.4		$	8,576.7
Stock option and incentive plans						37.9			(2.4	)					3.6			0.5			39.6
Currency translation adjustments												(6.5	)					(1.7	)		(8.2	)
Repurchase of common shares															(100.0	)					(100.0	)
Derivative adjustments												6.6									6.6
Activities of noncontrolling interests																		0.3			0.3
Pension and postretirement healthcare benefits												(1.3	)					(0.1	)		(1.4	)
Dividends declared on common stock; $0.33 per share									(157.8	)											(157.8	)
Net income attributable to Conagra Brands, Inc.									381.9												381.9
Balance at November 27, 2022		584.2	$	2,921.2	$	2,360.9		$	6,536.5		$	(24.6	)	$	(3,127.7	)	$	71.4		$	8,737.7

	*Thirteen Weeks Ended*						Affected Line Item in the Condensed Consolidated Statement of Earnings¹
	*November 27, 2022*			*November 28, 2021*
Net derivative adjustments:
Cash flow hedges	$	(0.8	)	$	(0.7	)	Interest expense, net
Cash flow hedges		(0.2	)		0.4		Equity method investment earnings
		(1.0	)		(0.3	)	Total before tax
		0.3			—		Income tax expense
	$	(0.7	)	$	(0.3	)	Net of tax
Pension and postretirement liabilities:
Net prior service cost	$	(0.1	)	$	0.1		Pension and postretirement non-service income
Net actuarial gain		(1.1	)		(1.0	)	Pension and postretirement non-service income
		(1.2	)		(0.9	)	Total before tax
		0.3			0.3		Income tax expense
	$	(0.9	)	$	(0.6	)	Net of tax

	Level 1		Level 2		Level 3		Net Value
Assets:
Derivative assets	$	13.3	$	0.7	$	0	$	14.0
Marketable securities		7.3		0		0		7.3
Deferred compensation assets		8.1		0		0		8.1
Available-for-sale debt securities		0		0		7.5		7.5
Total assets	$	28.7	$	0.7	$	7.5	$	36.9
Liabilities:
Derivative liabilities	$	0	$	1.2	$	0	$	1.2
Deferred compensation liabilities		75.8		0		0		75.8
Total liabilities	$	75.8	$	1.2	$	0	$	77.0

	*Level 1*		*Level 2*		*Level 3*		*Net Value*
Assets:
Derivative assets	$	6.2	$	5.4	$	—	$	11.6
Deferred compensation assets		7.1		—		—		7.1
Available-for-sale debt securities		—		—		7.9		7.9
Total assets	$	13.3	$	5.4	$	7.9	$	26.6
Liabilities:
Derivative liabilities	$	—	$	1.5	$	—	$	1.5
Deferred compensation liabilities		72.5		—		—		72.5
Total liabilities	$	72.5	$	1.5	$	—	$	74.0

	Fair Value Impact
In Millions	February 27, 2022		February 28, 2021
Energy commodities	$	1.3	$	3.1
Agriculture commodities		3.9		1.5
Foreign exchange		8.8		10.7