CHICAGO, Dec. 19, 2019 /PRNewswire/ -- Today Conagra
Brands, Inc. (NYSE: CAG) reported results for the second quarter of
fiscal year 2020, which ended on November
24, 2019. All comparisons are against the prior-year fiscal
period, unless otherwise noted. Certain terms used in this release,
including "Organic net sales," "EBITDA," "Free cash flow," and
certain "adjusted" results, are defined under the section entitled
"Definitions." See page 6 for more information.
Highlights
- Second quarter net sales increased 18.3%; organic net sales
increased 1.6%, with positive organic net sales growth in each
reporting segment.
- Diluted earnings per share from continuing operations (EPS) was
$0.53 in the quarter; adjusted EPS
was $0.63, with high single-digit
growth in adjusted net income.
- The Company's integration of Pinnacle remained on-track in the
quarter, with approximately $42
million of incremental cost synergies realized in the
quarter, bringing total cumulative cost synergy realization to
$112 million from the closing of the
acquisition through the end of the second quarter.
- The Company is updating its total targeted annual cost
synergies for the Pinnacle acquisition from $285 million by the end of fiscal 2022 to
$305 million by the end of fiscal
2022. The Company expects the additional $20
million of cost synergies to be fully realized in fiscal
2020 and plans to reinvest the additional savings this fiscal year
into longer-term sales-driving investments.
- During the quarter, the Company continued to reshape its
portfolio by divesting its Direct Store Delivery (DSD) snacks
business. Subsequent to quarter end, the Company sold a peanut
butter manufacturing facility and began the process of exiting the
manufacture and sale of private label peanut butter. The Company is
updating its fiscal 2020 guidance primarily to reflect the impacts
of these portfolio initiatives.
CEO Perspective
Sean
Connolly, president and chief executive officer of Conagra
Brands, commented, "Our second quarter results reflect solid
execution in applying the Conagra Way playbook across our
portfolio. We maintained our strong momentum in frozen and
snacks. We also made good progress on our large grocery
brands, Hunt's and Chef Boyardee, both of which made sequential
improvements. We also continued to make very good progress on
the Pinnacle integration, and we remain squarely on-track with our
plans to improve key Pinnacle brands."
He continued, "Our expectation for fiscal 2020 remains that
first-half investments will result in strong second-half
performance. The second-half is when we expect to see the greatest
impact from new frozen and snacks innovation, continued smart
promotional support in key grocery brands, the ongoing
implementation of our Pinnacle action plan, and synergy
capture."
Total Company Second Quarter Results
In the quarter,
net sales increased 18.3% to $2.8
billion. Reported net sales growth primarily
reflects:
- a 19.6% increase from the acquisition of Pinnacle;
- a 2.9% net decrease from the divestitures of the Wesson oil
business, the Gelit business, and the DSD snacks business (the
"Sold Businesses"); and
- a 1.6% increase in organic net sales.
The 1.6% increase in organic net sales in the quarter was driven
by 1.0% volume growth and 0.6% price/mix
favorability. Favorable net pricing and mix were partially
offset by the Company's continued actions to support its brands
with brand-building investments with retailers.
Gross profit increased 17.8% to $798
million in the quarter, and adjusted gross profit increased
14.1% to $804 million. The
increases were primarily driven by the net impact of the addition
of Pinnacle's gross profit and cost synergies, as well as the
benefits of price/mix and supply chain productivity. These
benefits were partially offset by a reduction in profit associated
with the Sold Businesses, input cost inflation, and increased
brand-building investments with retailers.
Selling, general, and administrative expenses (SG&A), which
include advertising and promotional (A&P) expense, decreased
24.1% to $370 million in the
quarter. Largely in-line with expectations, adjusted SG&A,
which excludes A&P expense, increased 19.6% to $260 million, primarily as a result of additional
Pinnacle-related expenses.
A&P expense for the quarter decreased 12.5% to $61 million. An increase in working media
investment this quarter was more than offset by reductions in
non-working spending, as well as A&P synergies associated with
the Pinnacle transaction.
Net interest expense was $121
million in the quarter. Compared to the prior-year period,
net interest expense increased $41
million on a reported basis and $47
million on an adjusted basis. The increase was driven
by higher levels of debt outstanding as a result of the net debt
issued in connection with the Pinnacle acquisition.
Conagra Brands' 488 million average diluted shares outstanding
as of quarter end is an increase of 67 million shares versus the
prior-year period. The increase was primarily driven by the shares
issued in connection with the Pinnacle acquisition.
In the quarter, net income attributable to Conagra Brands
increased 98.0% to $261 million, or
$0.53 per diluted share. Adjusted net
income attributable to Conagra Brands increased 8.3% to
$306 million, or $0.63 per diluted share in the quarter. The
increase in adjusted net income attributable to Conagra Brands was
driven primarily by the addition of Pinnacle's operating profit,
the benefits of cost synergies, and the increase in organic net
sales. These benefits were partially offset by higher interest
expense and the removal of profit from the Sold
Businesses. The decrease in adjusted EPS in the quarter was
primarily driven by the increase in average diluted shares
outstanding, partially offset by the increase in adjusted net
income.
Adjusted EBITDA, which includes equity method investment
earnings and pension and postretirement non-service income,
increased 17.2% to $610 million in
the quarter.
Grocery & Snacks Segment Second Quarter
Results
Net sales for the Grocery & Snacks segment
increased 14.2% to $1.1 billion in
the quarter, with the acquisition of Pinnacle adding 16.9% of the
net sales growth and the divestiture of the Wesson oil and DSD
snacks businesses subtracting 3.6%. Organic net sales
increased 0.9%. On an organic net sales basis, volume
increased 2.1% during the quarter, and price/mix decreased
1.2%. Th segment continued to benefit from the snacks
business, with successful innovation and momentum in brands such as
Slim Jim, Snack Pack, Swiss Miss, Angie's BOOMCHICKAPOP, and Act
II. The Hunt's tomatoes and Chef Boyardee businesses showed
sequential in-market improvement, after each brand responded to
competitive dynamics. The action plans for Wishbone and
Duncan Hines remain on-track.
Operating profit for the segment increased 20.1% to $264 million in the quarter. Adjusted
operating profit increased 16.7% to $273
million, primarily driven by the addition of Pinnacle's
profit and the benefits of cost synergies, realized productivity,
and organic net sales growth. These benefits were partially
offset by the impacts of higher input costs and the loss of profit
from the divestiture of the Wesson oil and DSD snacks
businesses.
Refrigerated & Frozen Segment Second Quarter
Results
Net sales for the Refrigerated & Frozen
segment increased 28.8% to $1.2
billion in the quarter, with the acquisition of Pinnacle
adding 28.1% of the net sales growth and the divestiture of the
Gelit business subtracting 1.7%. Organic net sales increased
2.4%. On an organic net sales basis, volume increased 0.5% and
price/mix increased 1.9%. The segment benefited from organic
net sales growth across multiple brands, including Birds Eye,
Healthy Choice, Marie Callender's,
and P.F. Chang's Home Menu. The segment\'s recently-launched
innovations, including those within the Healthy Choice Power Bowls
line and Marie Callender's brand, as
well as second-half launches, are expected to benefit the segment's
second-half organic net sales growth rate as they build in-market
distribution and velocity.
Operating profit for the segment increased 19.5% to $187 million in the quarter, and adjusted
operating profit increased 29.6% to $216
million. The increases were primarily driven by the
addition of Pinnacle's profit and the benefit of cost synergies and
realized productivity improvements, which more than offset higher
input costs.
International Segment Second Quarter Results
Net sales
for the International segment increased 7.3% to $234 million in the quarter reflecting:
- an 8.6% increase from the acquisition of Pinnacle,
- a 2.6% decrease from the divestiture of the Wesson oil
business,
- a 0.5% decrease from the unfavorable impact of foreign
exchange, and
- a 1.8% increase in organic net sales.
On an organic net sales basis, volume increased 1.8% and
price/mix was flat. During the quarter, the segment continued
to benefit from growth in the snacks and frozen businesses.
Operating profit for the segment increased 17.1% to $26 million in the quarter. Adjusted
operating profit decreased 8.3% to $27
million as the divestiture of the Wesson oil business,
higher input costs, and the unfavorable impact of foreign exchange
more than offset the benefits of organic net sales growth, realized
productivity, and the addition of Pinnacle's profit.
Foodservice Segment Second Quarter Results
Net sales
for the Foodservice segment increased 6.8% to $276 million in the quarter, with the acquisition
of Pinnacle adding 10.4% and the divestiture of the Wesson oil
business subtracting 4.4% of net sales growth. Organic net sales
increased 0.8%. On an organic net sales basis, price/mix increased
3.6% and volume declined 2.8% in the quarter, driven by continued
execution of the segment's value-over-volume strategy as well as
inflation-related pricing.
Operating profit increased 11.4% to $38
million in the quarter, primarily driven by the addition of
Pinnacle's profit and the benefit of cost synergies, the impacts of
organic net sales growth, and supply chain realized productivity
improvements. The segment's operating profit results were
negatively impacted in the second quarter by higher input costs and
the impact of the Wesson oil divestiture.
Other Second Quarter Items
Corporate expenses
decreased 64.0% to $88 million in the
quarter. Adjusted corporate expenses increased 52.6% to
$71 million in the quarter, primarily
driven by the inclusion of Pinnacle-related expenses.
Pension and post-retirement non-service income was $11 million in the quarter, an increase of
approximately $2 million compared to
the prior-year period.
Equity method investment earnings decreased 26.9% to
$28 million in the quarter, primarily
due to a gain on the sale of an asset in the prior year
period. Adjusted equity method investment earnings increased
24.7% to $28 million in the
quarter. Favorable market conditions led to improved
performance by the Ardent Mills joint venture.
In the quarter, the effective tax rate was 24.3%, and the
adjusted effective tax rate was 23.4%.
In the quarter, the Company paid a dividend of $0.2125 per share.
The Company remains on-schedule with its de-leveraging targets
and remains committed to a solid investment grade credit
rating. Since completing the Pinnacle acquisition through the
end of the second quarter, Conagra Brands has reduced total gross
debt by $1.1 billion.
Portfolio Update
As previously disclosed, on
October 21, 2019, the Company
completed the divestiture of its DSD snacks business.
On November 25, 2019, after the
end of the second quarter, the Company completed the sale of its
peanut butter manufacturing facility in Streator, Illinois. The sale was part of
a broader initiative to optimize the Company's peanut butter
business, which also included the decision to exit the manufacture
and sale of private label peanut butter. The Company estimates
the annualized impact of the exit from private label peanut butter
to be a reduction in net sales of approximately $50 million and no material impact to adjusted
operating profit.
Subsequent to the end of the quarter, the Company entered into a
definitive agreement to divest its Lender's bagel business, which
is part of the Refrigerated & Frozen segment. The
transaction is expected to close during the third quarter of fiscal
year 2020. Following the closing of the transaction, the
expected annualized impact of the divestiture is a reduction of
approximately $50 million of net
sales and $0.01 of adjusted EPS.
Fiscal 2020 Outlook
The Company is updating its fiscal
2020 guidance primarily to reflect the divestiture of the DSD
snacks business and the exit of its private label peanut butter
business, the process of which began subsequent to the quarter
close. The updated guidance includes the expected results from
the Lender's business for the full fiscal year.
Note that organic net sales growth continues to exclude the
impact of fiscal 2020's 53rd week. All other
metrics continue to include the impact of the 53rd
week.
Metric
|
Prior Fiscal 2020
Guidance
|
Updated Fiscal
2020 Guidance
|
Organic Net Sales
Growth
|
+1.0% to
+1.5%
|
+1.0% to
+1.5%
|
Reported Net Sales
Growth
|
+13.5% to
+14.0%
|
+12.4% to
+12.9%
|
Adj. Op.
Margin
|
16.2% to 16.8
%
|
16.2% to
16.8%
|
Adj. Net Interest
Expense
|
~$505
million
|
Slightly below $505
million
|
Adj. Effective Tax
Rate
|
24% to 25%
|
~24%
|
Avg. Diluted
Shares
|
~488
million
|
~488
million
|
Adj. Diluted EPS from
cont. ops.
|
$2.08 to
$2.18
|
$2.07 to
$2.17
|
Free Cash
Flow
|
~$1
billion
|
Slightly below $1
billion
|
The inability to predict the amount and timing of the impacts of
foreign exchange, acquisitions, divestitures, and other items
impacting comparability makes a detailed reconciliation of these
forward-looking non-GAAP financial measures
impracticable. Please see the end of this release for more
information.
Items Affecting Comparability of EPS
Included in the
$0.53 diluted EPS from continuing
operations for the second quarter of fiscal 2020 (EPS amounts
rounded and after tax). Please see the reconciliation
schedules at the end of this release for additional details.
- Approximately $0.06 per diluted
share of net expense related to restructuring
- Approximately $0.05 per diluted
share of net expense related to an impairment of the Lender's
business, which is now classified as an asset held for sale
- Approximately $0.02 per diluted
share of net benefit related to a contract settlement gain
- Approximately $0.01 per diluted
share of net expense related to environmental matters
- Approximately $0.01 per diluted
share of net tax benefit related to unusual tax items
- Approximately $0.01 per diluted
share of negative impact due to rounding
Included in the $0.32 diluted EPS
from continuing operations for the second quarter of fiscal 2019
(EPS amounts rounded and after tax). Please see the reconciliation
schedules at the end of this release for additional details.
- Approximately $0.21 per diluted
share of net expense related to restructuring plans
- Approximately $0.18 per diluted
share of net expense related to acquisitions and divestitures
- Approximately $0.01 per diluted
share of net expense related to the integration of Pinnacle
- Approximately $0.04 per diluted
share of net expense related to Pinnacle inventory fair value
mark-up adjustment
- Approximately $0.03 per diluted
share of net benefit related to the gain on the sale of an asset
within the Ardent Mills joint venture
- Approximately $0.06 per diluted
share of net tax benefit related to the tax adjustment of valuation
allowance associated with the divestiture of the Wesson oil
brand
- Approximately $0.01 per diluted
share of net tax expense related to unusual tax items
- Approximately $0.01 per diluted
share of beneficial impact due to rounding
Definitions
Organic net sales excludes from reported
net sales the impacts of foreign exchange, divested businesses and
acquisitions, including the Pinnacle acquisition (until the
anniversary date of the acquisitions), as well as the impact of any
53rd week. All references to changes in volume and
price/mix throughout this release are on an organic net sales
basis.
References to adjusted items throughout this release refer to
measures computed in accordance with GAAP less the impact of items
impacting comparability. Items impacting comparability are income
or expenses (and related tax impacts) that management believes have
had, or are likely to have, a significant impact on the earnings of
the applicable business segment or on the total corporation for the
period in which the item is recognized, and are not indicative of
the Company's core operating results. These items thus affect
the comparability of underlying results from period to period.
References to earnings before interest, taxes, depreciation, and
amortization (EBITDA) refer to net income attributable to Conagra
Brands before the impacts of discontinued operations, income tax
expense (benefit), interest expense, depreciation, and
amortization. References to adjusted EBITDA refer to EBITDA before
the impacts of items impacting comparability.
Free cash flow is defined as net cash flow from operating
activities from continuing operations less additions to property,
plant, and equipment.
Discussion of Results
Conagra Brands will host a
webcast and conference call at 9:30 a.m.
Eastern time today to discuss the results. The live
audio webcast and presentation slides will be available on
www.conagrabrands.com/investor-relations under Events &
Presentations. The conference call may be accessed by dialing
1-877-883-0383 for participants in the continental U.S. and
1-412-902-6506 for all other participants and using passcode
6135532. Please dial in 10 to 15 minutes prior to the call start
time. Following the Company's remarks, the conference call will
include a question-and-answer session with the investment
community.
A replay of the webcast will be available on
www.conagrabrands.com/investor-relations under Events &
Presentations until December 19,
2020.
About Conagra Brands
Conagra Brands, Inc. (NYSE: CAG),
headquartered in Chicago, is one
of North America's leading branded
food companies. Guided by an entrepreneurial spirit, Conagra Brands
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. Conagra's 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. For more information, visit
www.conagrabrands.com.
Note on Forward-looking Statements
This document
contains forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements are based
on management's current expectations and are subject to uncertainty
and changes in circumstances. Readers of this document should
understand that these statements are not guarantees of performance
or results. Many factors could affect our actual financial results
and cause them to vary materially from the expectations contained
in the forward-looking statements, including those set forth in
this document. These risks, uncertainties, and factors include,
among other things: the risk that the cost savings and any other
synergies from the acquisition of Pinnacle (the "acquisition") may
not be fully realized or may take longer to realize than expected;
the risk that the acquisition may not be accretive within the
expected timeframe or to the extent anticipated; the risks that the
acquisition and related integration will create disruption to the
Company and its management and impede the achievement of business
plans; the risk that the acquisition will negatively impact the
ability to retain and hire key personnel and maintain relationships
with customers, suppliers, and other third parties; risks related
to our ability to successfully address Pinnacle's business
challenges; risks related to our ability to achieve the intended
benefits of other recent and pending 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, including those in place for
specific brands at Pinnacle before the acquisition; 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, related to the acquisition and otherwise, and to
benefit from trade optimization programs, related to the
acquisition and otherwise; 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 its
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
availability and prices of raw materials, including any negative
effects caused by inflation or weather conditions; risks and
uncertainties associated with intangible assets, including any
future goodwill or intangible assets impairment charges, related to
the acquisition or otherwise; the costs, disruption, and diversion
of management's attention due to the integration of the
acquisition; and other risks described in our reports filed from
time to time with the Securities and Exchange Commission. We
caution readers not to place undue reliance on any forward-looking
statements included in this document, which speak only as of the
date of this document. We undertake no responsibility to update
these statements, except as required by law.
Note on Non-GAAP Financial Measures
This document
includes certain non-GAAP financial measures, including adjusted
EPS, organic net sales, adjusted gross profit, adjusted operating
profit, adjusted SG&A, adjusted corporate expenses, adjusted
gross margin, adjusted operating margin, adjusted effective tax
rate, adjusted net income, adjusted net interest expense, free cash
flow, net debt, adjusted equity method investment earnings, and
adjusted EBITDA. Management considers GAAP financial measures as
well as such non-GAAP financial information in its evaluation of
the Company's financial statements and believes these non-GAAP
measures provide useful supplemental information to assess the
Company's operating performance and financial position. These
measures should be viewed in addition to, and not in lieu of, the
Company's diluted earnings per share, operating performance and
financial measures as calculated in accordance with GAAP.
Certain of these non-GAAP measures, such as organic net sales,
adjusted operating margin, adjusted effective tax rate, adjusted
net interest expense, adjusted EPS, net debt, and free cash flow,
are forward-looking. Historically, the Company has excluded the
impact of certain items impacting comparability, such as, but not
limited to, restructuring expenses, the impact of the
extinguishment of debt, the impact of foreign exchange, the impact
of acquisitions and divestitures, hedging gains and losses,
impairment charges, the impact of legacy legal contingencies, and
the impact of unusual tax items, from the non-GAAP financial
measures it presents. Reconciliations of these forward-looking
non-GAAP financial measures to the most directly comparable GAAP
financial measures are not provided because the Company is unable
to provide such reconciliations without unreasonable effort, due to
the uncertainty and inherent difficulty of predicting the
occurrence and the financial impact of such items impacting
comparability and the periods in which such items may be
recognized. For the same reasons, the Company is unable to
address the probable significance of the unavailable information,
which could be material to future results.
Hedge gains and losses are generally aggregated, and net amounts
are reclassified from unallocated corporate expense to the
operating segments when the underlying commodity or foreign
currency being hedged is expensed in segment cost of goods sold.
The Company identifies these amounts as items that impact
comparability within the discussion of unallocated Corporate
results.
Conagra Brands,
Inc.
|
Consolidated
Statements of Earnings
|
(in
millions)
|
(unaudited)
|
|
|
SECOND
QUARTER
|
|
|
Thirteen weeks
ended
|
|
|
Thirteen weeks
ended
|
|
|
|
|
|
November 24,
2019
|
|
|
November 25,
2018
|
|
|
Percent Change
|
|
Net sales
|
$
|
2,820.8
|
|
|
$
|
2,383.7
|
|
|
18.3
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
2,022.9
|
|
|
|
1,706.5
|
|
|
18.5
|
%
|
Selling, general and
administrative expenses
|
|
369.8
|
|
|
|
487.3
|
|
|
(24.1)
|
%
|
Pension and
postretirement non-service income
|
|
(11.3)
|
|
|
|
(9.7)
|
|
|
16.2
|
%
|
Interest expense,
net
|
|
121.4
|
|
|
|
80.6
|
|
|
50.5
|
%
|
Income from
continuing operations before income taxes and equity method
investment earnings
|
|
318.0
|
|
|
|
119.0
|
|
|
167.2
|
%
|
Income tax
expense
|
|
84.1
|
|
|
|
22.4
|
|
|
275.5
|
%
|
Equity method
investment earnings
|
|
27.6
|
|
|
|
37.7
|
|
|
(26.9)
|
%
|
Income from
continuing operations
|
|
261.5
|
|
|
|
134.3
|
|
|
94.8
|
%
|
Loss from
discontinued operations, net of tax
|
|
—
|
|
|
|
(1.9)
|
|
|
100.0
|
%
|
Net income
|
$
|
261.5
|
|
|
$
|
132.4
|
|
|
97.6
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
1.0
|
|
|
|
0.8
|
|
|
20.9
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
260.5
|
|
|
$
|
131.6
|
|
|
98.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.53
|
|
|
$
|
0.32
|
|
|
65.6
|
%
|
Loss from
discontinued operations
|
|
—
|
|
|
|
(0.01)
|
|
|
100.0
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
0.53
|
|
|
$
|
0.31
|
|
|
71.0
|
%
|
Weighted average
shares outstanding
|
|
487.3
|
|
|
|
419.9
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.53
|
|
|
$
|
0.32
|
|
|
65.6
|
%
|
Loss from
discontinued operations
|
|
—
|
|
|
|
(0.01)
|
|
|
100.0
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
0.53
|
|
|
$
|
0.31
|
|
|
71.0
|
%
|
Weighted average
share and share equivalents outstanding
|
|
488.3
|
|
|
|
421.8
|
|
|
15.8
|
%
|
Conagra Brands,
Inc.
|
Consolidated
Statements of Earnings
|
(in
millions)
|
(unaudited)
|
|
|
SECOND QUARTER YEAR
TO DATE
|
|
|
Twenty-six weeks
ended
|
|
|
Twenty-six weeks
ended
|
|
|
|
|
|
November 24,
2019
|
|
|
November 25,
2018
|
|
|
Percent Change
|
|
Net sales
|
$
|
5,211.5
|
|
|
$
|
4,218.1
|
|
|
23.6
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
3,749.1
|
|
|
|
3,025.4
|
|
|
23.9
|
%
|
Selling, general and
administrative expenses
|
|
770.6
|
|
|
|
744.6
|
|
|
3.5
|
%
|
Pension and
postretirement non-service income
|
|
(20.8)
|
|
|
|
(19.9)
|
|
|
4.3
|
%
|
Interest expense,
net
|
|
244.1
|
|
|
|
129.6
|
|
|
88.3
|
%
|
Income from
continuing operations before income taxes and equity method
investment earnings
|
|
468.5
|
|
|
|
338.4
|
|
|
38.4
|
%
|
Income tax
expense
|
|
72.6
|
|
|
|
79.8
|
|
|
(9.0)
|
%
|
Equity method
investment earnings
|
|
39.9
|
|
|
|
53.9
|
|
|
(26.1)
|
%
|
Income from
continuing operations
|
|
435.8
|
|
|
|
312.5
|
|
|
39.5
|
%
|
Loss from
discontinued operations, net of tax
|
|
—
|
|
|
|
(1.9)
|
|
|
100.0
|
%
|
Net income
|
$
|
435.8
|
|
|
$
|
310.6
|
|
|
40.3
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
1.5
|
|
|
|
0.8
|
|
|
76.7
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
434.3
|
|
|
$
|
309.8
|
|
|
40.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.89
|
|
|
$
|
0.76
|
|
|
17.1
|
%
|
Income from
discontinued operations
|
|
—
|
|
|
|
—
|
|
|
0.0
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
0.89
|
|
|
$
|
0.76
|
|
|
17.1
|
%
|
Weighted average
shares outstanding
|
|
487.0
|
|
|
|
407.7
|
|
|
19.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.89
|
|
|
$
|
0.76
|
|
|
17.1
|
%
|
Income from
discontinued operations
|
|
—
|
|
|
|
—
|
|
|
0.0
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
0.89
|
|
|
$
|
0.76
|
|
|
17.1
|
%
|
Weighted average
share and share equivalents outstanding
|
|
488.1
|
|
|
|
409.9
|
|
|
19.1
|
%
|
Conagra Brands,
Inc.
|
Consolidated Balance
Sheets
|
(in
millions)
|
(unaudited)
|
|
|
November 24,
2019
|
|
|
May 26,
2019
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
192.0
|
|
|
$
|
236.6
|
|
Receivables, less
allowance for doubtful accounts of $2.2
|
|
947.6
|
|
|
|
818.2
|
|
Inventories
|
|
1,770.4
|
|
|
|
1,548.9
|
|
Prepaid expenses and
other current assets
|
|
100.5
|
|
|
|
93.4
|
|
Current assets held
for sale
|
|
19.1
|
|
|
|
36.7
|
|
Total current
assets
|
|
3,029.6
|
|
|
|
2,733.8
|
|
Property, plant and
equipment, net
|
|
2,322.2
|
|
|
|
2,327.4
|
|
Goodwill
|
|
11,442.9
|
|
|
|
11,435.4
|
|
Brands, trademarks
and other intangibles, net
|
|
4,494.1
|
|
|
|
4,539.3
|
|
Other
assets
|
|
1,157.9
|
|
|
|
915.5
|
|
Noncurrent assets
held for sale
|
|
45.9
|
|
|
|
262.4
|
|
|
$
|
22,492.6
|
|
|
$
|
22,213.8
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Notes
payable
|
$
|
0.5
|
|
|
$
|
1.0
|
|
Current installments
of long-term debt
|
|
1,173.8
|
|
|
|
20.6
|
|
Accounts
payable
|
|
1,441.6
|
|
|
|
1,252.1
|
|
Accrued
payroll
|
|
131.8
|
|
|
|
173.2
|
|
Other accrued
liabilities
|
|
724.1
|
|
|
|
690.6
|
|
Current liabilities
held for sale
|
|
0.5
|
|
|
|
5.1
|
|
Total current
liabilities
|
|
3,472.3
|
|
|
|
2,142.6
|
|
Senior long-term
debt, excluding current installments
|
|
9,100.0
|
|
|
|
10,459.8
|
|
Subordinated
debt
|
|
195.9
|
|
|
|
195.9
|
|
Other noncurrent
liabilities
|
|
2,033.6
|
|
|
|
1,951.8
|
|
Noncurrent
liabilities held for sale
|
|
0.2
|
|
|
|
—
|
|
Total stockholders'
equity
|
|
7,690.6
|
|
|
|
7,463.7
|
|
|
$
|
22,492.6
|
|
|
$
|
22,213.8
|
|
Conagra Brands, Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(in
millions)
|
(unaudited)
|
|
|
Twenty-six weeks
ended
|
|
|
November
24,
2019
|
|
|
November
25,
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
435.8
|
|
|
$
|
310.6
|
|
Loss from
discontinued operations
|
|
—
|
|
|
|
(1.9)
|
|
Income from
continuing operations
|
|
435.8
|
|
|
|
312.5
|
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
193.4
|
|
|
|
140.3
|
|
Asset impairment
charges
|
|
105.9
|
|
|
|
2.3
|
|
Loss (gain) on
divestiture
|
|
1.5
|
|
|
|
(13.2)
|
|
Earnings of affiliates
in excess of distributions
|
|
(14.1)
|
|
|
|
(26.1)
|
|
Stock-settled
share-based payments expense
|
|
21.0
|
|
|
|
18.7
|
|
Contributions to
pension plans
|
|
(7.4)
|
|
|
|
(7.9)
|
|
Pension
benefit
|
|
(13.2)
|
|
|
|
(13.8)
|
|
Proceeds from
settlement of interest rate swaps
|
|
—
|
|
|
|
47.5
|
|
Other items
|
|
10.9
|
|
|
|
22.5
|
|
Change in operating
assets and liabilities excluding effects of business acquisitions
and dispositions:
|
|
|
|
|
|
|
|
Receivables
|
|
(128.3)
|
|
|
|
(186.5)
|
|
Inventories
|
|
(230.0)
|
|
|
|
(75.2)
|
|
Deferred income taxes
and income taxes payable, net
|
|
(23.0)
|
|
|
|
17.9
|
|
Prepaid expenses and
other current assets
|
|
(7.0)
|
|
|
|
(21.2)
|
|
Accounts
payable
|
|
207.3
|
|
|
|
39.0
|
|
Accrued
payroll
|
|
(41.9)
|
|
|
|
(1.2)
|
|
Other accrued
liabilities
|
|
(83.4)
|
|
|
|
(4.9)
|
|
Net cash flows from
operating activities — continuing operations
|
|
427.5
|
|
|
|
250.7
|
|
Net cash flows from
operating activities — discontinued operations
|
|
—
|
|
|
|
11.2
|
|
Net cash flows from
operating activities
|
|
427.5
|
|
|
|
261.9
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
(183.7)
|
|
|
|
(133.3)
|
|
Sale of property,
plant and equipment
|
|
5.8
|
|
|
|
17.7
|
|
Purchase of marketable
securities
|
|
(27.8)
|
|
|
|
—
|
|
Sale of marketable
securities
|
|
29.9
|
|
|
|
—
|
|
Purchase of
businesses, net of cash acquired
|
|
—
|
|
|
|
(5,119.2)
|
|
Proceeds from
divestiture, net of cash divested
|
|
139.0
|
|
|
|
32.2
|
|
Other items
|
|
(3.4)
|
|
|
|
0.1
|
|
Net cash flows from
investing activities
|
|
(40.2)
|
|
|
|
(5,202.5)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net short-term
borrowings
|
|
(0.5)
|
|
|
|
(277.4)
|
|
Issuance of long-term
debt
|
|
—
|
|
|
|
8,310.5
|
|
Repayment of long-term
debt
|
|
(210.9)
|
|
|
|
(3,061.3)
|
|
Debt issuance costs
and bridge financing fees
|
|
—
|
|
|
|
(87.0)
|
|
Payment of intangible
asset financing arrangement
|
|
(13.6)
|
|
|
|
(14.0)
|
|
Issuance of Conagra
Brands, Inc. common shares, net
|
|
—
|
|
|
|
555.9
|
|
Cash dividends
paid
|
|
(206.7)
|
|
|
|
(166.3)
|
|
Exercise of stock
options and issuance of other stock awards, including tax
withholdings
|
|
(0.7)
|
|
|
|
(3.7)
|
|
Other items
|
|
0.9
|
|
|
|
—
|
|
Net cash flows from
financing activities
|
|
(431.5)
|
|
|
|
5,256.7
|
|
Effect of exchange
rate changes on cash and cash equivalents and restricted
cash
|
|
(0.4)
|
|
|
|
(1.8)
|
|
Net change in cash
and cash equivalents and restricted cash
|
|
(44.6)
|
|
|
|
314.3
|
|
Cash and cash
equivalents and restricted cash at beginning of period
|
|
237.6
|
|
|
|
129.0
|
|
Cash and cash
equivalents and restricted cash at end of period
|
$
|
193.0
|
|
|
$
|
443.3
|
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q2
FY20
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
$
|
1,142.5
|
|
|
$
|
1,168.3
|
|
|
$
|
234.3
|
|
|
$
|
275.7
|
|
|
$
|
2,820.8
|
|
Impact of foreign
exchange
|
|
—
|
|
|
|
—
|
|
|
|
1.2
|
|
|
|
—
|
|
|
|
1.2
|
|
Net sales from
acquired businesses
|
|
(169.2)
|
|
|
|
(255.6)
|
|
|
|
(19.2)
|
|
|
|
(27.0)
|
|
|
|
(471.0)
|
|
Net sales from
divested businesses
|
|
(16.9)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(16.9)
|
|
Organic Net
Sales
|
$
|
956.4
|
|
|
$
|
912.7
|
|
|
$
|
216.3
|
|
|
$
|
248.7
|
|
|
$
|
2,334.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
14.2
|
%
|
|
|
28.8
|
%
|
|
|
7.3
|
%
|
|
|
6.8
|
%
|
|
|
18.3
|
%
|
Impact of
foreign exchange (pp)
|
|
—
|
|
|
|
—
|
|
|
|
0.5
|
|
|
|
—
|
|
|
|
—
|
|
Net sales from
acquired businesses (pp)
|
|
(16.9)
|
|
|
|
(28.1)
|
|
|
|
(8.6)
|
|
|
|
(10.4)
|
|
|
|
(19.6)
|
|
Net sales from
divested businesses (pp)
|
|
3.6
|
|
|
|
1.7
|
|
|
|
2.6
|
|
|
|
4.4
|
|
|
|
2.9
|
|
Organic Net
Sales
|
|
0.9
|
%
|
|
|
2.4
|
%
|
|
|
1.8
|
%
|
|
|
0.8
|
%
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
2.1
|
%
|
|
|
0.5
|
%
|
|
|
1.8
|
%
|
|
|
(2.8)
|
%
|
|
|
1.0
|
%
|
Price/Mix
|
|
(1.2)
|
%
|
|
|
1.9
|
%
|
|
|
(0.0)
|
%
|
|
|
3.6
|
%
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
FY19
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
$
|
1,000.5
|
|
|
$
|
906.7
|
|
|
$
|
218.3
|
|
|
$
|
258.2
|
|
|
$
|
2,383.7
|
|
Net sales from
divested businesses
|
|
(52.7)
|
|
|
|
(15.5)
|
|
|
|
(5.7)
|
|
|
|
(11.4)
|
|
|
|
(85.3)
|
|
Organic Net
Sales
|
$
|
947.8
|
|
|
$
|
891.2
|
|
|
$
|
212.6
|
|
|
$
|
246.8
|
|
|
$
|
2,298.4
|
|
|
|
Q2 FY20
YTD
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
$
|
2,120.1
|
|
|
$
|
2,127.4
|
|
|
$
|
438.7
|
|
|
$
|
525.3
|
|
|
$
|
5,211.5
|
|
Impact of foreign
exchange
|
|
—
|
|
|
|
—
|
|
|
|
2.6
|
|
|
|
—
|
|
|
|
2.6
|
|
Net sales from
acquired businesses
|
|
(406.3)
|
|
|
|
(583.4)
|
|
|
|
(46.0)
|
|
|
|
(62.4)
|
|
|
|
(1,098.1)
|
|
Net sales from
divested businesses
|
|
(46.1)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(46.1)
|
|
Organic Net
Sales
|
$
|
1,667.7
|
|
|
$
|
1,544.0
|
|
|
$
|
395.3
|
|
|
$
|
462.9
|
|
|
$
|
4,069.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
19.7
|
%
|
|
|
38.0
|
%
|
|
|
6.5
|
%
|
|
|
6.6
|
%
|
|
|
23.6
|
%
|
Impact of foreign
exchange (pp)
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
—
|
|
|
|
0.1
|
|
Net sales from
acquired businesses (pp)
|
|
(23.0)
|
|
|
|
(37.9)
|
|
|
|
(11.2)
|
|
|
|
(12.7)
|
|
|
|
(26.1)
|
|
Net sales from
divested businesses (pp)
|
|
2.2
|
|
|
|
1.9
|
|
|
|
3.6
|
|
|
|
4.7
|
|
|
|
2.5
|
|
Net sales from sold
Trenton plant (pp)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
—
|
|
Organic Net
Sales
|
|
(1.1)
|
%
|
|
|
2.0
|
%
|
|
|
(0.5)
|
%
|
|
|
(1.0)
|
%
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
(0.2)
|
%
|
|
|
0.4
|
%
|
|
|
(1.3)
|
%
|
|
|
(4.5)
|
%
|
|
|
(0.5)
|
%
|
Price/Mix
|
|
(0.9)
|
%
|
|
|
1.6
|
%
|
|
|
0.8
|
%
|
|
|
3.5
|
%
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY19
YTD
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
$
|
1,771.2
|
|
|
$
|
1,541.9
|
|
|
$
|
412.1
|
|
|
$
|
492.9
|
|
|
$
|
4,218.1
|
|
Net sales from
divested businesses
|
|
(84.6)
|
|
|
|
(28.7)
|
|
|
|
(14.9)
|
|
|
|
(23.0)
|
|
|
|
(151.2)
|
|
Net sales from sold
Trenton plant
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.0)
|
|
|
|
(2.0)
|
|
Organic Net
Sales
|
$
|
1,686.6
|
|
|
$
|
1,513.2
|
|
|
$
|
397.2
|
|
|
$
|
467.9
|
|
|
$
|
4,064.9
|
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q2
FY20
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
$
|
263.7
|
|
|
$
|
187.4
|
|
|
$
|
26.4
|
|
|
$
|
38.3
|
|
|
$
|
(87.7)
|
|
|
$
|
428.1
|
|
Restructuring
plans
|
|
19.2
|
|
|
|
1.2
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
14.6
|
|
|
|
35.2
|
|
Acquisitions and
divestitures
|
|
2.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.2)
|
|
|
|
1.1
|
|
Impairment of a
business held for sale
|
|
—
|
|
|
|
27.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27.6
|
|
Gain on divestiture
of businesses
|
|
(0.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.2)
|
|
Contract settlement
gain
|
|
(12.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(12.0)
|
|
Legal
matters
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
Environmental
matters
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.6
|
|
|
|
6.6
|
|
Corporate hedging
derivative losses (gains)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.8)
|
|
|
|
(1.8)
|
|
Adjusted Operating
Profit
|
$
|
273.0
|
|
|
$
|
216.2
|
|
|
$
|
26.6
|
|
|
$
|
38.3
|
|
|
$
|
(71.0)
|
|
|
$
|
483.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
23.1
|
%
|
|
|
16.0
|
%
|
|
|
11.3
|
%
|
|
|
13.9
|
%
|
|
|
|
|
|
|
15.2
|
%
|
Adjusted Operating
Profit Margin
|
|
23.9
|
%
|
|
|
18.5
|
%
|
|
|
11.3
|
%
|
|
|
13.9
|
%
|
|
|
|
|
|
|
17.1
|
%
|
Year-over-year %
change - Operating Profit
|
|
20.1
|
%
|
|
|
19.5
|
%
|
|
|
17.1
|
%
|
|
|
11.4
|
%
|
|
|
(64.0)
|
%
|
|
|
125.5
|
%
|
Year-over year %
change - Adjusted Operating Profit
|
|
16.7
|
%
|
|
|
29.6
|
%
|
|
|
(8.3)
|
%
|
|
|
11.4
|
%
|
|
|
52.6
|
%
|
|
|
15.7
|
%
|
Year-over-year bps
change - Adjusted Operating Profit
|
|
52
|
bps
|
|
|
11
|
bps
|
|
|
(193)
|
bps
|
|
|
57
|
bps
|
|
|
|
|
|
|
(39)
|
bps
|
Q2
FY19
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
$
|
219.6
|
|
|
$
|
156.8
|
|
|
$
|
22.5
|
|
|
$
|
34.4
|
|
|
$
|
(243.4)
|
|
|
$
|
189.9
|
|
Restructuring
plans
|
|
2.1
|
|
|
|
0.1
|
|
|
|
3.8
|
|
|
|
—
|
|
|
|
104.9
|
|
|
|
110.9
|
|
Adjustment to gain on
sale of Del Monte business
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
Acquisitions and
divestitures
|
|
0.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
90.2
|
|
|
|
90.5
|
|
Integration
costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.6
|
|
|
|
4.6
|
|
Inventory fair value
mark-up rollout
|
|
11.9
|
|
|
|
9.9
|
|
|
|
2.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24.4
|
|
Corporate hedging
derivative losses (gains)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.8)
|
|
|
|
(2.8)
|
|
Adjusted Operating
Profit
|
$
|
233.9
|
|
|
$
|
166.8
|
|
|
$
|
29.0
|
|
|
$
|
34.4
|
|
|
$
|
(46.5)
|
|
|
$
|
417.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
21.9
|
%
|
|
|
17.3
|
%
|
|
|
10.3
|
%
|
|
|
13.3
|
%
|
|
|
|
|
|
|
8.0
|
%
|
Adjusted Operating
Profit Margin
|
|
23.4
|
%
|
|
|
18.4
|
%
|
|
|
13.3
|
%
|
|
|
13.3
|
%
|
|
|
|
|
|
|
17.5
|
%
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q2 FY20
YTD
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
$
|
415.4
|
|
|
$
|
343.0
|
|
|
$
|
51.2
|
|
|
$
|
69.4
|
|
|
$
|
(187.2)
|
|
|
$
|
691.8
|
|
Restructuring
plans
|
|
38.3
|
|
|
|
1.8
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
43.2
|
|
|
|
84.7
|
|
Acquisitions and
divestitures
|
|
3.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.0
|
|
Impairment of
businesses held for sale
|
|
31.4
|
|
|
|
27.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
59.0
|
|
Intangible impairment
charges
|
|
3.5
|
|
|
|
15.8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19.3
|
|
Loss on divestiture
of businesses
|
|
1.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.5
|
|
Contract settlement
gain
|
|
(12.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(12.0)
|
|
Legal
matters
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
Environmental
matters
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.6
|
|
|
|
6.6
|
|
Corporate hedging
derivative losses (gains)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5.4
|
|
|
|
5.4
|
|
Adjusted Operating
Profit
|
$
|
481.1
|
|
|
$
|
388.2
|
|
|
$
|
52.6
|
|
|
$
|
69.4
|
|
|
$
|
(133.5)
|
|
|
$
|
857.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
19.6
|
%
|
|
|
16.1
|
%
|
|
|
11.7
|
%
|
|
|
13.2
|
%
|
|
|
|
|
|
|
13.3
|
%
|
Adjusted Operating
Profit Margin
|
|
22.7
|
%
|
|
|
18.3
|
%
|
|
|
12.0
|
%
|
|
|
13.2
|
%
|
|
|
|
|
|
|
16.5
|
%
|
Year-over-year %
change - Operating Profit
|
|
4.3
|
%
|
|
|
35.9
|
%
|
|
|
(14.4)
|
%
|
|
|
12.0
|
%
|
|
|
(42.3)
|
%
|
|
|
54.4
|
%
|
Year-over year %
change - Adjusted Operating Profit
|
|
16.4
|
%
|
|
|
48.0
|
%
|
|
|
(6.2)
|
%
|
|
|
12.0
|
%
|
|
|
23.4
|
%
|
|
|
25.2
|
%
|
Year-over-year bps
change - Adjusted Operating Profit
|
|
(64)
|
bps
|
|
|
124
|
bps
|
|
|
(162)
|
bps
|
|
|
64
|
bps
|
|
|
|
|
|
|
21
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 FY19
YTD
|
Grocery
&
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
$
|
398.2
|
|
|
$
|
252.3
|
|
|
$
|
59.8
|
|
|
$
|
62.0
|
|
|
$
|
(324.2)
|
|
|
$
|
448.1
|
|
Restructuring
plans
|
|
2.2
|
|
|
|
0.1
|
|
|
|
4.0
|
|
|
|
—
|
|
|
|
105.8
|
|
|
|
112.1
|
|
Gain on sale of Del
Monte business
|
|
—
|
|
|
|
—
|
|
|
|
(13.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13.2)
|
|
Acquisitions and
divestitures
|
|
0.9
|
|
|
|
—
|
|
|
|
2.9
|
|
|
|
—
|
|
|
|
97.7
|
|
|
|
101.5
|
|
Integration
costs
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8.9
|
|
|
|
8.9
|
|
Inventory fair value
mark-up rollout
|
|
11.9
|
|
|
|
9.9
|
|
|
|
2.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24.4
|
|
Corporate hedging
derivative losses (gains)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.6
|
|
|
|
3.6
|
|
Adjusted Operating
Profit
|
$
|
413.2
|
|
|
$
|
262.3
|
|
|
$
|
56.1
|
|
|
$
|
62.0
|
|
|
$
|
(108.2)
|
|
|
$
|
685.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
22.5
|
%
|
|
|
16.4
|
%
|
|
|
14.5
|
%
|
|
|
12.6
|
%
|
|
|
|
|
|
|
10.6
|
%
|
Adjusted Operating
Profit Margin
|
|
23.3
|
%
|
|
|
17.0
|
%
|
|
|
13.6
|
%
|
|
|
12.6
|
%
|
|
|
|
|
|
|
16.2
|
%
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q2
FY20
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit
1
|
|
|
Income
from
continuing
operations before
income taxes and
equity method
investment
earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net
income
attributable
to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc
common
stockholders
|
|
Reported
|
$
|
797.9
|
|
|
$
|
369.8
|
|
|
$
|
428.1
|
|
|
$
|
318.0
|
|
|
$
|
84.1
|
|
|
|
24.3
|
%
|
|
$
|
260.5
|
|
|
$
|
0.53
|
|
% of Net
Sales
|
|
28.3
|
%
|
|
|
13.1
|
%
|
|
|
15.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
7.6
|
|
|
|
27.6
|
|
|
|
35.2
|
|
|
|
35.2
|
|
|
|
7.7
|
|
|
|
|
|
|
|
27.5
|
|
|
|
0.06
|
|
Acquisitions and
divestitures
|
|
—
|
|
|
|
1.1
|
|
|
|
1.1
|
|
|
|
1.1
|
|
|
|
0.3
|
|
|
|
|
|
|
|
0.8
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
(1.8)
|
|
|
|
—
|
|
|
|
(1.8)
|
|
|
|
(1.8)
|
|
|
|
(0.5)
|
|
|
|
|
|
|
|
(1.3)
|
|
|
|
—
|
|
Advertising and
promotion expenses 2
|
|
—
|
|
|
|
60.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Adjustment to gain on
Ardent JV asset sale
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
|
|
|
|
0.4
|
|
|
|
—
|
|
Impairment of a
business held for sale
|
|
—
|
|
|
|
27.6
|
|
|
|
27.6
|
|
|
|
27.6
|
|
|
|
2.2
|
|
|
|
|
|
|
|
25.4
|
|
|
|
0.05
|
|
Contract settlement
gain
|
|
—
|
|
|
|
(12.0)
|
|
|
|
(12.0)
|
|
|
|
(12.0)
|
|
|
|
(3.0)
|
|
|
|
|
|
|
|
(9.0)
|
|
|
|
(0.02)
|
|
Legal
matters
|
|
—
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
(1.1)
|
|
|
|
—
|
|
Environmental
matters
|
|
—
|
|
|
|
6.6
|
|
|
|
6.6
|
|
|
|
6.6
|
|
|
|
1.6
|
|
|
|
|
|
|
|
5.0
|
|
|
|
0.01
|
|
Loss on divestiture
of businesses
|
|
—
|
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
(0.7)
|
|
|
|
|
|
|
|
0.5
|
|
|
|
—
|
|
Unusual tax
items
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.6
|
|
|
|
|
|
|
|
(2.6)
|
|
|
|
(0.01)
|
|
Rounding
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
0.01
|
|
Adjusted
|
$
|
803.7
|
|
|
$
|
259.9
|
|
|
$
|
483.1
|
|
|
$
|
373.0
|
|
|
$
|
94.1
|
|
|
|
23.4
|
%
|
|
$
|
306.1
|
|
|
$
|
0.63
|
|
% of Net
Sales
|
|
28.5
|
%
|
|
|
9.2
|
%
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - reported
|
|
(12)
|
bps
|
|
|
(733)
|
bps
|
|
|
721
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - adjusted
|
|
(105)
|
bps
|
|
|
10
|
bps
|
|
|
(39)
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
17.8
|
%
|
|
|
(24.1)
|
%
|
|
|
125.5
|
%
|
|
|
167.4
|
%
|
|
|
275.5
|
%
|
|
|
|
|
|
|
98.0
|
%
|
|
|
65.6
|
%
|
Year-over-year
change - adjusted
|
|
14.1
|
%
|
|
|
19.6
|
%
|
|
|
15.7
|
%
|
|
|
5.7
|
%
|
|
|
2.1
|
%
|
|
|
|
|
|
|
8.3
|
%
|
|
|
(6.0)
|
%
|
|
|
Q2
FY19
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit
1
|
|
|
Income
from
continuing
operations before
income taxes and
equity method
investment
earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net
income
attributable
to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc
common
stockholders
|
|
Reported
|
$
|
677.2
|
|
|
$
|
487.3
|
|
|
$
|
189.9
|
|
|
$
|
119.0
|
|
|
$
|
22.4
|
|
|
|
14.3
|
%
|
|
$
|
131.6
|
|
|
$
|
0.32
|
|
% of Net
Sales
|
|
28.4
|
%
|
|
|
20.4
|
%
|
|
|
8.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
5.6
|
|
|
|
105.3
|
|
|
|
110.9
|
|
|
|
110.9
|
|
|
|
24.3
|
|
|
|
|
|
|
|
86.6
|
|
|
|
0.21
|
|
Acquisitions and
divestitures
|
|
—
|
|
|
|
90.5
|
|
|
|
90.5
|
|
|
|
96.8
|
|
|
|
20.1
|
|
|
|
|
|
|
|
76.7
|
|
|
|
0.18
|
|
Integration
costs
|
|
—
|
|
|
|
4.6
|
|
|
|
4.6
|
|
|
|
4.6
|
|
|
|
1.2
|
|
|
|
|
|
|
|
3.4
|
|
|
|
0.01
|
|
Corporate hedging
derivative losses (gains)
|
|
(2.8)
|
|
|
|
—
|
|
|
|
(2.8)
|
|
|
|
(2.8)
|
|
|
|
(0.7)
|
|
|
|
|
|
|
|
(2.1)
|
|
|
|
—
|
|
Advertising and
promotion expenses 2
|
|
—
|
|
|
|
69.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Inventory fair value
mark-up rollout
|
|
24.4
|
|
|
|
—
|
|
|
|
24.4
|
|
|
|
24.4
|
|
|
|
6.2
|
|
|
|
|
|
|
|
18.2
|
|
|
|
0.04
|
|
Adjustment to gain on
sale of Del Monte business
|
|
—
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
|
|
|
|
0.1
|
|
|
|
—
|
|
Gain on Ardent JV
asset sale
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.5)
|
|
|
|
|
|
|
|
(11.6)
|
|
|
|
(0.03)
|
|
Wesson valuation
allowance adjustment
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24.3
|
|
|
|
|
|
|
|
(24.3)
|
|
|
|
(0.06)
|
|
Unusual tax
items
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.2)
|
|
|
|
|
|
|
|
2.2
|
|
|
|
0.01
|
|
Loss from
discontinued operations, net of noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
1.9
|
|
|
|
—
|
|
Rounding
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
(0.01)
|
|
Adjusted
|
$
|
704.4
|
|
|
$
|
217.4
|
|
|
$
|
417.6
|
|
|
$
|
353.0
|
|
|
$
|
92.1
|
|
|
|
24.5
|
%
|
|
$
|
282.7
|
|
|
$
|
0.67
|
|
% of Net
Sales
|
|
29.5
|
%
|
|
|
9.1
|
%
|
|
|
17.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Operating profit is derived from taking Income from continuing
operations before income taxes and equity method investment
earnings, adding back Interest expense, net and removing Pension
and postretirement non-service income.
|
2
Advertising and promotion expense (A&P) has been removed from
adjusted selling, general and administrative expense because this
metric is used in reporting to management, and management believes
this adjusted measure provides useful supplemental information to
assess the Company's operating performance. Please note that
A&P is not removed from adjusted profit measures.
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q2 FY20
YTD
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit
1
|
|
|
Income
from
continuing
operations before
income taxes and
equity method
investment
earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net
income
attributable
to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc
common
stockholders
|
|
Reported
|
$
|
1,462.4
|
|
|
$
|
770.6
|
|
|
$
|
691.8
|
|
|
$
|
468.5
|
|
|
$
|
72.6
|
|
|
|
14.3
|
%
|
|
$
|
434.3
|
|
|
$
|
0.89
|
|
% of Net
Sales
|
|
28.1
|
%
|
|
|
14.9
|
%
|
|
|
13.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
12.1
|
|
|
|
72.6
|
|
|
|
84.7
|
|
|
|
85.3
|
|
|
|
19.2
|
|
|
|
|
|
|
|
66.1
|
|
|
|
0.14
|
|
Acquisitions and
divestitures
|
|
—
|
|
|
|
3.0
|
|
|
|
3.0
|
|
|
|
3.0
|
|
|
|
0.8
|
|
|
|
|
|
|
|
2.2
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
5.4
|
|
|
|
—
|
|
|
|
5.4
|
|
|
|
5.4
|
|
|
|
1.3
|
|
|
|
|
|
|
|
4.1
|
|
|
|
0.01
|
|
Advertising and
promotion expenses 2
|
|
—
|
|
|
|
106.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Gain on Ardent JV
asset sale
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.1)
|
|
|
|
|
|
|
|
(3.7)
|
|
|
|
(0.01)
|
|
Impairment of
businesses held for sale
|
|
—
|
|
|
|
59.0
|
|
|
|
59.0
|
|
|
|
59.0
|
|
|
|
4.0
|
|
|
|
|
|
|
|
55.0
|
|
|
|
0.11
|
|
Contract settlement
gain
|
|
—
|
|
|
|
(12.0)
|
|
|
|
(12.0)
|
|
|
|
(12.0)
|
|
|
|
(3.0)
|
|
|
|
|
|
|
|
(9.0)
|
|
|
|
(0.02)
|
|
Intangible impairment
charges
|
|
—
|
|
|
|
19.3
|
|
|
|
19.3
|
|
|
|
19.3
|
|
|
|
4.5
|
|
|
|
|
|
|
|
14.8
|
|
|
|
0.03
|
|
Legal
matters
|
|
—
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
(1.1)
|
|
|
|
—
|
|
Environmental
matters
|
|
—
|
|
|
|
6.6
|
|
|
|
6.6
|
|
|
|
6.6
|
|
|
|
1.6
|
|
|
|
|
|
|
|
5.0
|
|
|
|
0.01
|
|
Loss on divestiture
of businesses
|
|
—
|
|
|
|
1.5
|
|
|
|
1.5
|
|
|
|
1.5
|
|
|
|
(0.3)
|
|
|
|
|
|
|
|
1.8
|
|
|
|
—
|
|
Unusual tax
items
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
53.6
|
|
|
|
|
|
|
|
(53.6)
|
|
|
|
(0.11)
|
|
Rounding
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
0.01
|
|
Adjusted
|
$
|
1,479.9
|
|
|
$
|
516.1
|
|
|
$
|
857.8
|
|
|
$
|
635.1
|
|
|
$
|
152.8
|
|
|
|
22.8
|
%
|
|
$
|
515.9
|
|
|
$
|
1.06
|
|
% of Net
Sales
|
|
28.4
|
%
|
|
|
9.9
|
%
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - reported
|
|
(21)
|
bps
|
|
|
(287)
|
bps
|
|
|
265
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - adjusted
|
|
(73)
|
bps
|
|
|
(32)
|
bps
|
|
|
21
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
22.6
|
%
|
|
|
3.5
|
%
|
|
|
54.4
|
%
|
|
|
38.5
|
%
|
|
|
(9.0)
|
%
|
|
|
|
|
|
|
40.2
|
%
|
|
|
17.1
|
%
|
Year-over-year
change - adjusted
|
|
20.5
|
%
|
|
|
19.7
|
%
|
|
|
25.2
|
%
|
|
|
8.2
|
%
|
|
|
(2.0)
|
%
|
|
|
|
|
|
|
10.0
|
%
|
|
|
(7.0)
|
%
|
|
|
Q2 FY19
YTD
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit
1
|
|
|
Income
from
continuing
operations before
income taxes and
equity method
investment
earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net
income
attributable
to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc
common
stockholders
|
|
Reported
|
$
|
1,192.7
|
|
|
$
|
744.6
|
|
|
$
|
448.1
|
|
|
$
|
338.4
|
|
|
$
|
79.8
|
|
|
|
20.3
|
%
|
|
$
|
309.8
|
|
|
$
|
0.76
|
|
% of Net
Sales
|
|
28.3
|
%
|
|
|
17.7
|
%
|
|
|
10.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
7.9
|
|
|
|
104.2
|
|
|
|
112.1
|
|
|
|
111.5
|
|
|
|
24.5
|
|
|
|
|
|
|
|
87.0
|
|
|
|
0.21
|
|
Acquisitions and
divestitures
|
|
—
|
|
|
|
101.5
|
|
|
|
101.5
|
|
|
|
113.4
|
|
|
|
22.4
|
|
|
|
|
|
|
|
91.0
|
|
|
|
0.22
|
|
Integration
costs
|
|
—
|
|
|
|
8.9
|
|
|
|
8.9
|
|
|
|
8.9
|
|
|
|
2.3
|
|
|
|
|
|
|
|
6.6
|
|
|
|
0.02
|
|
Corporate hedging
derivative losses (gains)
|
|
3.6
|
|
|
|
—
|
|
|
|
3.6
|
|
|
|
3.6
|
|
|
|
0.9
|
|
|
|
|
|
|
|
2.7
|
|
|
|
0.01
|
|
Advertising and
promotion expenses 2
|
|
—
|
|
|
|
112.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Inventory fair value
mark-up rollout
|
|
24.4
|
|
|
|
—
|
|
|
|
24.4
|
|
|
|
24.4
|
|
|
|
6.2
|
|
|
|
|
|
|
|
18.2
|
|
|
|
0.04
|
|
Gain on sale of Del
Monte business
|
|
—
|
|
|
|
(13.2)
|
|
|
|
(13.2)
|
|
|
|
(13.2)
|
|
|
|
(3.6)
|
|
|
|
|
|
|
|
(9.6)
|
|
|
|
(0.02)
|
|
Gain on Ardent JV
asset sale
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.5)
|
|
|
|
|
|
|
|
(11.6)
|
|
|
|
(0.03)
|
|
Wesson valuation
allowance adjustment
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24.3
|
|
|
|
|
|
|
|
(24.3)
|
|
|
|
(0.06)
|
|
Unusual tax
items
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.6
|
|
|
|
|
|
|
|
(2.6)
|
|
|
|
(0.01)
|
|
Loss from
discontinued operations, net of noncontrolling interests
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
1.9
|
|
|
|
—
|
|
Adjusted
|
$
|
1,228.6
|
|
|
$
|
431.1
|
|
|
$
|
685.4
|
|
|
$
|
587.0
|
|
|
$
|
155.9
|
|
|
|
24.9
|
%
|
|
$
|
469.1
|
|
|
$
|
1.14
|
|
% of Net
Sales
|
|
29.1
|
%
|
|
|
10.2
|
%
|
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Operating profit is derived from taking Income from continuing
operations before income taxes and equity method investment
earnings, adding back Interest expense, net and removing Pension
and postretirement non-service income.
|
2
Advertising and promotion expense (A&P) has been removed from
adjusted selling, general and administrative expense because this
metric is used in reporting to management, and management believes
this adjusted measure provides useful supplemental information to
assess the Company's operating performance. Please note that
A&P is not removed from adjusted profit measures.
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
Q2
FY20
|
|
|
Q2
FY19
|
|
|
%
Change
|
|
Interest expense,
net
|
$
|
121.4
|
|
|
$
|
80.6
|
|
|
|
50.5
|
%
|
Acquisitions and
divestitures
|
|
—
|
|
|
|
(6.3)
|
|
|
|
|
|
Adjusted interest
expense, net
|
$
|
121.4
|
|
|
$
|
74.3
|
|
|
|
63.3
|
%
|
|
|
Q2 FY20
YTD
|
|
|
Q2 FY19
YTD
|
|
|
%
Change
|
|
Interest expense,
net
|
$
|
244.1
|
|
|
$
|
129.6
|
|
|
|
88.3
|
%
|
Acquisitions and
divestitures
|
|
—
|
|
|
|
(11.9)
|
|
|
|
|
|
Adjusted interest
expense, net
|
$
|
244.1
|
|
|
$
|
117.7
|
|
|
|
107.4
|
%
|
|
|
|
Q2
FY20
|
|
|
Q2
FY19
|
|
|
%
Change
|
|
Equity method
investment earnings
|
$
|
27.6
|
|
|
$
|
37.7
|
|
|
|
(26.9)
|
%
|
Gain on Ardent JV
asset sale
|
|
0.6
|
|
|
|
(15.1)
|
|
|
|
|
|
Adjusted equity
method investment earnings
|
$
|
28.2
|
|
|
$
|
22.6
|
|
|
|
24.7
|
%
|
|
|
Q2 FY20
YTD
|
|
|
Q2 FY19
YTD
|
|
|
%
Change
|
|
Equity method
investment earnings
|
$
|
39.9
|
|
|
$
|
53.9
|
|
|
|
(26.1)
|
%
|
Gain on Ardent JV
asset sale
|
|
(4.8)
|
|
|
|
(15.1)
|
|
|
|
|
|
Adjusted equity
method investment earnings
|
$
|
35.1
|
|
|
$
|
38.8
|
|
|
|
(9.8)
|
%
|
|
|
|
Q2
FY20
|
|
|
Q2
FY19
|
|
|
%
Change
|
|
Pension and
postretirement non-service income
|
$
|
(11.3)
|
|
|
$
|
(9.7)
|
|
|
|
16.2
|
%
|
Restructuring
plans
|
|
—
|
|
|
|
—
|
|
|
|
|
|
Adjusted pension
and postretirement non-service income
|
$
|
(11.3)
|
|
|
$
|
(9.7)
|
|
|
|
16.2
|
%
|
|
|
Q2 FY20
YTD
|
|
|
Q2 FY19
YTD
|
|
|
%
Change
|
|
Pension and
postretirement non-service income
|
$
|
(20.8)
|
|
|
$
|
(19.9)
|
|
|
|
4.3
|
%
|
Restructuring
plans
|
|
(0.6)
|
|
|
|
0.6
|
|
|
|
|
|
Adjusted pension
and postretirement non-service income
|
$
|
(21.4)
|
|
|
$
|
(19.3)
|
|
|
|
10.7
|
%
|
|
November 24,
2019
|
|
|
November 25,
2018
|
Net cash flows from
operating activities - continuing operations
|
$
|
427.5
|
|
|
$
|
250.7
|
Additions to
property, plant and equipment
|
|
(183.7)
|
|
|
|
(133.3)
|
Free cash
flow
|
$
|
243.8
|
|
|
$
|
117.4
|
|
Q2
FY19
|
|
|
Q3
FY19
|
|
|
Q4
FY19
|
|
|
Q1
FY20
|
|
Q2
FY20
|
|
Notes
payable
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
56.0
|
|
$
|
0.5
|
|
Current installments
of long-term debt
|
|
17.2
|
|
|
|
19.9
|
|
|
|
20.6
|
|
|
|
150.1
|
|
|
1,173.8
|
|
Senior long-term
debt, excluding current installments
|
|
11,349.5
|
|
|
|
10,911.8
|
|
|
|
10,459.8
|
|
|
|
10,127.5
|
|
|
9,100.0
|
|
Subordinated
debt
|
|
195.9
|
|
|
|
195.9
|
|
|
|
195.9
|
|
|
|
195.9
|
|
|
195.9
|
|
Total
Debt
|
$
|
11,563.5
|
|
|
$
|
11,127.6
|
|
|
$
|
10,677.3
|
|
|
$
|
10,529.5
|
|
$
|
10,470.2
|
|
Less: Cash
|
|
442.3
|
|
|
|
282.2
|
|
|
|
236.6
|
|
|
|
64.7
|
|
|
192.0
|
|
Net
Debt
|
$
|
11,121.2
|
|
|
$
|
10,845.4
|
|
|
$
|
10,440.7
|
|
|
$
|
10,464.8
|
|
$
|
10,278.2
|
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
Q2
FY20
|
|
|
Q2
FY19
|
|
|
%
Change
|
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
260.5
|
|
|
$
|
131.6
|
|
|
98.0
|
%
|
Less:
|
Loss from
discontinued operations, net of tax
|
|
—
|
|
|
|
(1.9)
|
|
|
|
|
Add Back:
|
Income tax
expense
|
|
84.1
|
|
|
|
22.4
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
0.1
|
|
|
|
(0.5)
|
|
|
|
|
|
Interest expense,
net
|
|
121.4
|
|
|
|
80.6
|
|
|
|
|
|
Depreciation
|
|
81.7
|
|
|
|
65.8
|
|
|
|
|
|
Amortization
|
|
15.0
|
|
|
|
10.8
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
$
|
562.8
|
|
|
$
|
312.6
|
|
|
80.0
|
%
|
Restructuring plans
1
|
|
27.2
|
|
|
|
106.5
|
|
|
|
|
Acquisitions and
divestitures 2
|
|
1.1
|
|
|
|
90.5
|
|
|
|
|
Integration
costs
|
|
—
|
|
|
|
4.6
|
|
|
|
|
Corporate hedging
losses (gains)
|
|
(1.8)
|
|
|
|
(2.8)
|
|
|
|
|
Impairment of a
business held for sale
|
|
27.6
|
|
|
|
—
|
|
|
|
|
Inventory fair value
mark-up rollout
|
|
—
|
|
|
|
24.4
|
|
|
|
|
Loss (gain) on sale
of businesses
|
|
(0.2)
|
|
|
|
0.1
|
|
|
|
|
Legal
matters
|
|
(1.5)
|
|
|
|
—
|
|
|
|
|
Environmental
matters
|
|
6.6
|
|
|
|
—
|
|
|
|
|
Contract settlement
gain
|
|
(12.0)
|
|
|
|
—
|
|
|
|
|
Gain on Ardent JV
asset sale
|
|
0.6
|
|
|
|
(15.1)
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
$
|
610.4
|
|
|
$
|
520.8
|
|
|
17.2
|
%
|
|
1 Excludes
comparability items related to depreciation.
|
2 Excludes
comparability items related to interest expense.
|
|
|
|
Q2 FY20
YTD
|
|
|
Q2 FY19
YTD
|
|
|
%
Change
|
|
Net income
attributable to Conagra Brands, Inc.
|
$
|
434.3
|
|
|
$
|
309.8
|
|
|
40.2
|
%
|
Less:
|
Loss from
discontinued operations, net of tax
|
|
—
|
|
|
|
(1.9)
|
|
|
|
|
Add Back:
|
Income tax
expense
|
|
72.6
|
|
|
|
79.8
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
(0.1)
|
|
|
|
(0.7)
|
|
|
|
|
|
Interest expense,
net
|
|
244.1
|
|
|
|
129.6
|
|
|
|
|
|
Depreciation
|
|
163.4
|
|
|
|
121.2
|
|
|
|
|
|
Amortization
|
|
30.0
|
|
|
|
19.1
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
$
|
944.3
|
|
|
$
|
660.7
|
|
|
42.9
|
%
|
Restructuring plans
1
|
|
71.0
|
|
|
|
105.6
|
|
|
|
|
Acquisitions and
divestitures 2
|
|
3.0
|
|
|
|
101.5
|
|
|
|
|
Integration
costs
|
|
—
|
|
|
|
8.9
|
|
|
|
|
Corporate hedging
losses (gains)
|
|
5.4
|
|
|
|
3.6
|
|
|
|
|
Impairment of
businesses held for sale
|
|
59.0
|
|
|
|
—
|
|
|
|
|
Inventory fair value
mark-up rollout
|
|
—
|
|
|
|
24.4
|
|
|
|
|
Loss (gain) on sale
of businesses
|
|
1.5
|
|
|
|
(13.2)
|
|
|
|
|
Legal
matters
|
|
(1.5)
|
|
|
|
—
|
|
|
|
|
Environmental
matters
|
|
6.6
|
|
|
|
—
|
|
|
|
|
Contract settlement
gain
|
|
(12.0)
|
|
|
|
—
|
|
|
|
|
Intangible impairment
charges
|
|
19.3
|
|
|
|
—
|
|
|
|
|
Gain on Ardent JV
asset sale
|
|
(4.8)
|
|
|
|
(15.1)
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
$
|
1,091.8
|
|
|
$
|
876.4
|
|
|
24.6
|
%
|
|
1 Excludes
comparability items related to depreciation.
|
2 Excludes
comparability items related to interest expense.
|
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SOURCE Conagra Foods