PR Newswire | Jul 13, 2021 07:31AM EDT

07/13 06:30 CDT

Conagra Brands Reports Strong FY21 Fourth Quarter And Full-Year ResultsProvides updated fiscal 2022 guidance; increases annualized dividend 14% CHICAGO, July 13, 2021

CHICAGO, July 13, 2021 /PRNewswire/ -- Today Conagra Brands, Inc. (NYSE: CAG) reported results for the fourth quarter and full fiscal year 2021, which ended on May 30, 2021. All comparisons are against the prior-year fiscal period, unless otherwise noted. Certain terms used in this release, including "Organic net sales," "EBITDA," "Two-year compounded annualized," and certain "adjusted" results, are defined under the section entitled "Definitions." See page 7 for more information.

Highlights

* Fourth quarter: * Net sales decreased 16.7%, and organic net sales decreased 10.1% driven by lapping the prior year's significant surge in at-home food consumption at the onset of the COVID-19 pandemic. On a two-year compounded annualized basis, fiscal 2021 fourth quarter net sales increased 2.4% and organic net sales increased 4.5%. * Operating margin decreased 143 basis points to 10.5%; adjusted operating margin decreased 311 basis points to 14.0%. * Diluted earnings per share from continuing operations (EPS) for the fourth quarter grew 56.1% to $0.64, and adjusted EPS declined 28.0% to $0.54. On a two-year compounded annualized basis, fourth quarter EPS increased 56.9% and adjusted EPS increased 22.5%.

* Full year fiscal 2021: * Net sales increased 1.2% and organic net sales increased 5.1%. Organic net sales benefited from strong growth in each of the Company's three retail reporting segments. On a two-year compounded annualized basis, fiscal 2021 net sales increased 8.3% and organic net sales increased 5.4%. * Operating margin increased 279 basis points to 15.9%; adjusted operating margin increased 101 basis points to 17.5%. * EPS for fiscal 2021 grew 54.7% to $2.66; adjusted EPS grew 15.8% to $2.64. On a two-year basis, adjusted EPS grew 14.6%.

* The Company divested the Egg Beaters business at quarter's end. * The Company achieved its leverage target of 3.5x to 3.6x and ended the year at 3.6x. * The Company is revising its Fiscal 2022 guidance to reflect increased inflation since the fiscal third quarter. This impact will be particularly felt in the first half of fiscal 2022, as remediation measures - including pricing - lag the timing of realized cost inflation. The Company now expects fiscal 2022 results as follows: * Organic net sales growth of approximately flat compared to fiscal 2021 * Adjusted operating margin of approximately 16% * Adjusted EPS of approximately $2.50 * Adjusted EPS in the second half of the fiscal year is expected to be in-line with what was assumed for the second half of fiscal 2022 in the Company's prior fiscal 2022 guidance.

* The Board of Directors has authorized a 14% increase to the Company's annualized dividend rate, beginning with the dividend payable on September 2, 2021, reflecting continued confidence in the strength of the business. * The Company plans to host an investor meeting in spring 2022 to provide information on its long-term outlook.

CEO Perspective

Sean Connolly, president and chief executive officer of Conagra Brands, commented, "I am very proud of how the entire Conagra Brands team responded to fiscal 2021's dynamic environment. Our strong results - both in the absolute and relative to competition - reflect the team's dedication to executing the Conagra Way each day. We successfully responded to the heightened consumer demand while continuing to invest in the long-term health of the business. Our business remains very strong, and we believe we are well-positioned to continue to win with consumers."

He continued, "As the fourth quarter unfolded, input cost inflation accelerated and we now expect fiscal 2022 input cost inflation to be materially higher than we anticipated at the end of fiscal Q3. In response, we have further enhanced the aggressive and comprehensive action plan already being executed, which includes broad-based pricing. While we are pleased with the initial results, there will be a lag between the time we are hit with higher costs and when we realize the benefits of our actions. The impact of this lag is expected to be most acute in the first half of fiscal 2022. We anticipate second-half adjusted EPS to be in line with what we previously assumed within our prior fiscal 2022 guidance. The underlying strength of our business and our continued investments to further support our brands gives me confidence that we have a long runway of growth and shareholder value creation ahead of us. This confidence is underscored by our Board of Directors' decision to increase our annual dividend by 14% after increasing it 29% last fiscal year. We look forward to discussing our longer-term outlook at an investor meeting in the spring of 2022."

Total Company Fourth Quarter Results

In the quarter, net sales decreased 16.7% to $2.7 billion. The decline in reported net sales primarily reflects:

* a 1.5% decrease from the Sold Businesses, which include the H.K. Anderson business, the Peter Pan peanut butter business as well as the Egg Beaters business, which was sold at quarter end; * a 0.5% increase from the impact of foreign exchange; * a 5.6% decrease from the impact of last year's 53rd week; and * a 10.1% decrease in organic net sales.

The 10.1% decrease in organic net sales was driven by a 12.8% decrease in volume and a favorable price/mix impact of 2.7%. The volume decrease was primarily driven by lapping the prior year's surge in at-home food consumption at the onset of the COVID-19 pandemic. Last year's surge negatively impacted fiscal 2021 fourth quarter growth rates in the Company's three retail reporting segments and benefited its Foodservice segment's growth rate. The price/mix favorability was primarily driven by favorable mix, lower promotional activity, and inflation-justified pricing that began to roll-out during the quarter.

Gross profit decreased 21.8% to $722 million in the quarter, and adjusted gross profit decreased 22.4% to $721 million. Gross margin decreased 172 basis points to 26.3% in the quarter, and adjusted gross margin decreased 194 basis points to 26.3%. Gross profit in the quarter benefited from supply chain realized productivity, cost synergies associated with the Pinnacle Foods acquisition, and favorable margin mix; however, these benefits were not enough to offset the impacts of the net sales decline, cost of good sold inflation, which increased rapidly as the quarter progressed, and the lost profit from the Sold Businesses and last year's 53rd week.

Selling, general, and administrative expense (SG&A), which includes A&P, decreased 18.2% to $435 million in the quarter. Adjusted SG&A, which excludes A&P, decreased 14.7% to $263 million, primarily as a result of lower incentive compensation and commissions expense compared to the prior-year period and from the additional expense incurred last year due to the 53rd week.

A&P for the quarter increased 27.1% to $75 million, driven primarily by higher E-commerce investments.

Net interest expense was $98 million in the quarter. Compared to the prior-year period, net interest expense decreased 21.5% or $27 million, as a result of lower levels of debt outstanding.

The average diluted share count decreased 1.3% compared to the prior-year period to 483 million shares, driven by the Company's decision to recommence strategic share repurchase activity earlier in the fiscal year.

In the quarter, net income attributable to Conagra Brands increased 53.6% to $310 million, or $0.64 per diluted share, as tax benefits associated with a restructuring of the Ardent Mills joint venture investment offset declines in gross profit. Adjusted net income attributable to Conagra Brands decreased 29.1% to $261 million, or $0.54 per diluted share in the quarter, driven primarily by the decrease in gross profit.

Adjusted EBITDA, which includes equity method investment earnings and pension and postretirement non-service income, decreased 24.6% to $520 million in the quarter, primarily driven by the decrease in adjusted gross profit.

Total Company Fiscal 2021 Results

For the full fiscal year, net sales increased 1.2% to $11.2 billion. The growth in reported net sales primarily reflects:

* a 2.0% net decrease from the Sold Businesses; which include the Lender's bagel business, the Direct Store Delivery (DSD) Snacks business, the H.K. Anderson business, the Peter Pan peanut butter business, the private label peanut butter business, and the Egg Beaters business, which was sold at quarter end; * a 1.9% decrease from the impact of last year's 53rd week; and * a 5.1% increase in organic net sales.

For the full fiscal year, gross profit increased 3.6% to $3.2 billion and adjusted gross profit increased 3.0% to $3.2 billion. Gross margin increased 66 basis points to 28.4%, and adjusted gross margin increased 50 basis points to 28.6%. The benefits from the organic net sales increase, supply chain realized productivity, favorable margin mix, cost synergies associated with the Pinnacle Foods acquisition, and favorable fixed cost leverage more than offset the impacts from cost of goods sold inflation, increased COVID-19-related expenses, and the lost profit from the Sold Businesses, and last year's 53rd week.

For the full fiscal year, EPS increased 54.7% to $2.66, and adjusted EPS grew 15.8% to $2.64, driven by an increase in adjusted operating profit, an increase in equity method investment earnings, lower interest expense, and a decrease in the number of shares outstanding.

For the full fiscal year, the Company generated $1.5 billion in net cash flows from operating activities and $962 million of free cash flow.

Grocery & Snacks Segment Fourth Quarter Results

Net sales for the Grocery & Snacks segment decreased 26.4% to $1.1 billion in the quarter reflecting:

* a 2.6% decrease from the impact of the Sold Businesses; * a 4.8% decrease from the impact of last year's 53rd week; and * a 19.0% decrease in organic net sales.

On an organic net sales basis, volume decreased 19.8% and price/mix increased 0.8%. The volume decline was due to lapping the prior year's surge in at-home food consumption at the onset of the COVID-19 pandemic. Price/mix favorability was driven by inflation-justified pricing actions partially offset by unfavorable brand mix. In the quarter, the Company gained share in staples categories such as canned tomatoes and canned meat, and snacking categories including microwave popcorn and seeds.

Operating profit for the segment decreased 32.2% to $204 million in the quarter. Adjusted operating profit decreased 38.1% to $218 million, primarily driven by the organic net sales decline, cost of goods sold inflation, lost profits from the segment's Sold Businesses and last year's 53rd week, increased COVID-19 related expenses, and incremental A&P investments. These benefits were partially offset by supply chain realized productivity, cost synergies associated with the Pinnacle Foods acquisition, and lower SG&A.

Refrigerated & Frozen Segment Fourth Quarter Results

Net sales for the Refrigerated & Frozen segment decreased 12.0% to $1.2 billion in the quarter reflecting:

* a 0.2% decrease from the impact of the Sold Businesses; * a 6.3% decrease from the impact of last year's 53rd week; and * a 5.5% decrease in organic net sales.

On an organic net sales basis, volume decreased 8.9% and price/mix increased 3.4%. The volume decline was due to lapping the prior year's surge in at-home food consumption at the onset of the COVID-19 pandemic. The price/mix increase was primarily driven by favorable brand mix, as well as slight favorability in pricing. In the quarter, the Company gained share in categories such as frozen vegetables, whipped topping, frozen handhelds, and frozen appetizers.

Operating profit for the segment decreased 30.3% to $118 million in the quarter. Adjusted operating profit decreased 25.9% to $198 million as the benefits of supply chain realized productivity, lower SG&A, decreased COVID-19 related expenses, and cost synergies associated with the Pinnacle Foods acquisition were more than offset by cost of goods sold inflation, lower organic net sales, lost profit from the segment's Sold Businesses and last year's 53rd week, and increased A&P investment.

International Segment Fourth Quarter Results

Net sales for the International segment decreased 13.8% to $229 million in the quarter reflecting:

* a 0.1% decrease from the impact of the Sold Businesses; * a 6.5% increase from the favorable impact of foreign exchange; * a 5.5% decrease from the impact of last year's 53rd week; and * a 14.7% decrease in organic net sales.

On an organic net sales basis, volume decreased 21.2% and price/mix increased 6.5%. Volume decreased primarily due to lapping the prior year's surge in demand at the onset of the COVID-19 pandemic. The price/mix increase was driven by inflation-justified pricing and favorable mix.

Operating profit for the segment decreased 4.0% to $26 million in the quarter. Adjusted operating profit decreased 24.3% to $27 million due to the decline in organic net sales, lost profit from last year's 53rd week, and increased A&P investment, partially offset by the favorable impact of foreign exchange.

Foodservice Segment Fourth Quarter Results

Net sales for the Foodservice segment increased 20.8% to $233 million in the quarter reflecting:

* a 1.4% decrease from the impact of the Sold Businesses; * a 8.8% decrease from the impact of last year's 53rd week; and * a 31.0% increase in organic net sales.

On an organic net sales basis, volume increased 30.2% as restaurant traffic began to recover from the impacts of the COVID-19 pandemic. Price/mix was favorable 0.8% in the quarter, primarily driven by increased pricing to offset higher input costs.

Operating profit for the segment increased from $1 million to $19 million in the quarter, as the benefits of higher organic net sales, supply chain realized productivity, and fixed cost leverage more than offset the impact of higher input costs and COVID-19-related expenses.

Other Fourth Quarter Items

Corporate expenses decreased 25.1% to $80 million in the quarter and adjusted corporate expense decreased 16.1% to $79 million in the quarter primarily as a result of lower incentive compensation expense.

Pension and post-retirement non-service income was $13 million in the quarter compared to $27 million of expense in the prior-year period. The Company expenses actuarial gains and losses in excess of the 10% corridor annually at the pension measurement date. This practice resulted in a $45 million non-cash year-end pension expense in the prior year, driven by a reduction of the discount rate used to remeasure the pension obligations to present value and a reduction in asset values for certain plan assets. Adjusted pension and post-retirement non-service income decreased $4 million to $13 million in the quarter.

In the quarter, equity method investment earnings were $33 million. The 45.8% increase on a reported basis and the 44.8% increase on an adjusted basis were primarily driven by favorable market conditions for the Ardent Mills joint venture.

In the quarter, the effective tax rate was (32.0)% compared to 22.9% in the prior-year period. The decrease was primarily driven by net non-cash income tax benefits associated with a restructuring of the ownership of our interest in the Ardent Mills joint venture. The adjusted effective tax rate was 21.3% compared to 23.0% in the prior-year period.

In the quarter, the Company paid a dividend of $0.275 per share.

Portfolio Update

On May 27, 2021, the Company completed the divestiture of the Egg Beaters liquid egg business. The business was reflected primarily within the Refrigerated & Frozen segment, and to a lesser extent within the International and Foodservice segments. The sale is expected to have an annualized impact of reducing reported net sales by approximately $40 million and adjusted EPS by approximately $0.01.

Dividend Update

Subsequent to quarter-end, the Company's Board of Directors approved an increase of the annual dividend from $1.10 per share to $1.25 per share. The Company's new quarterly dividend payment of $0.3125 per share of Conagra common stock will be paid on September 2, 2021 to stockholders of record as of the close of business on August 3, 2021.

Outlook

Management expects that consumer demand for its retail products will remain elevated versus historical levels during fiscal 2022, as consumers have developed new habits during the COVID-19 pandemic. However, the Company has recently experienced elevated cost of goods sold inflation, the rate of which increased during the fourth quarter of fiscal 2021. While the Company has taken, and expects to continue taking, appropriate actions to pull on multiple margin levers to counteract the impact of this inflation, including pricing and cost savings actions, the timing of the margin lever benefits is expected to be weighted towards the second half and therefore not expected to fully offset the input cost headwinds within fiscal 2022. This timing lag is expected to most acute in the first quarter. Therefore, the first quarter is expected to be the lowest margin quarter of the fiscal year.

The Company is providing the following updated fiscal 2022 guidance:

* Organic net sales growth is expected to be approximately flat compared to fiscal 2021 * Adjusted operating margin is expected to be approximately 16% * Adjusted EPS is expected to be approximately $2.50 * Adjusted EPS in the second half of the fiscal year is expected to be in-line with what was assumed for the second half of fiscal 2022 in the Company's prior fiscal 2022 guidance.

The above guidance is the Company's best estimate of its expected financial performance in fiscal 2022. The Company's ultimate fiscal 2022 performance will be highly dependent on factors including:

* how consumers purchase food as foodservice establishments continue to reopen and people return to in-office work and in-person school; * the cost of goods sold inflation the Company experiences; * consumers' response to inflation-justified price increases; and * the ability of the end-to-end supply chain to continue to operate effectively as the COVID-19 pandemic continues to evolve.

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 forward-looking non-GAAP financial measures impracticable. Please see the end of this release for more information.

Items Affecting Comparability of EPS

The following are included in the $0.64 EPS for the fourth quarter of fiscal 2021 (EPS amounts rounded and after tax). Please see the reconciliation schedules at the end of this release for additional details.

* Approximately $0.02 per diluted share of net expense related to restructuring plans * Approximately $0.01 per diluted share of net benefit related to corporate hedging derivative gains * Approximately $0.14 per diluted share of net expense related to brand impairment charges, primarily related to Udi's * Approximately $0.24 per diluted share of net non-cash income tax benefits associated with a restructuring of the ownership of our interest in the Ardent Mills joint venture * Approximately $0.03 per diluted share of net benefit related to a release of a valuation allowance on our capital loss carryforward primarily related to the Egg Beaters divestiture * Approximately $0.02 per diluted share of negative impact due to rounding

The following are included in the $0.41 EPS for the fourth 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 $0.03 per diluted share of net expense related to restructuring plans * Approximately $0.01 per diluted share of net benefit related to corporate hedging derivative gains * Approximately $0.07 per diluted share of net expense related to pension value adjustment * Approximately $0.23 per diluted share of net expense related to brand impairment charges * Approximately $0.01 per diluted share of net expense related to legal matters * Approximately $0.01 per diluted share of negative impact due to rounding

Definitions

Organic net sales excludes, from reported net sales, the impacts of foreign exchange, divested businesses and 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.

References to two-year compounded annualized numbers are calculated as: ([(1 + current year period's growth rate) * (1 + prior year period's growth rate)] ^ 0.5) - 1.

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 U.S. and 1-412-902-6506 for all other participants and using passcode 7112739. 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 July 13, 2022.

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(r), Duncan Hines(r), Healthy Choice(r), Marie Callender's(r), Reddi-wip(r), and Slim Jim(r), as well as emerging brands, including Angie's(r) BOOMCHICKAPOP(r), Duke's(r), Earth Balance(r), Gardein(r), and Frontera(r), 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 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 coronavirus (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; disruptions or inefficiencies in our supply chain and/or operations, including from the COVID-19 pandemic; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; risks related to a material failure in or breach of our or our vendors' information technology systems; the amount and timing of future dividends, which remain subject to Board approval and depend on the market and other conditions; 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 attributable to Conagra Brands, free cash flow, net debt, net leverage ratio, 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 EPS, adjusted net income, 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)

FOURTH QUARTER

Thirteen Fourteen weeks weeks ended ended

May 30, May 31, Percent Change 2021 2020

Net sales $ 2,739.5 $ 3,287.9 (16.7) %

Costs and expenses:

Cost of goods sold 2,017.8 2,365.1 (14.7) %

Selling, general and administrative 435.3 532.0 (18.2) %expenses

Pension and postretirement (13.3) 27.3 N/Anon-service expense (income)

Interest expense, net 98.4 125.3 (21.5) %

Income before income taxes and 201.3 238.2 (15.5) %equity method investment earnings

Income tax expense (benefit) (75.2) 59.8 N/A

Equity method investment earnings 33.4 22.9 45.8 %

Net income $ 309.9 $ 201.3 54.0 %

Less: Net income (loss)attributable to noncontrolling 0.4 (0.1) N/Ainterests

Net income attributable to Conagra $ 309.5 $ 201.4 53.6 %Brands, Inc.

Earnings per share - basic

Net income attributable to Conagra $ 0.64 $ 0.41 56.1 %Brands, Inc.

Weighted average shares outstanding 480.6 487.6 (1.4) %

Earnings per share - diluted

Net income attributable to Conagra $ 0.64 $ 0.41 56.1 %Brands, Inc.

Weighted average share and share 482.7 489.2 (1.3) %equivalents outstanding

Conagra Brands, Inc.

Consolidated Statements of Earnings

(in millions)

(unaudited)

FOURTH QUARTER YEAR TO DATE

Fifty-two Fifty-three weeks weeks ended ended

May 30, May 31, 2020 Percent Change 2021

Net sales $ 11,184.7 $ 11,054.4 1.2 %

Costs and expenses:

Cost of goods sold 8,005.5 7,984.8 0.3 %

Selling, general and 1,403.0 1,622.5 (13.5) %administrative expenses

Pension and postretirement (54.5) (9.9) 453.0 %non-service income

Interest expense, net 420.4 487.1 (13.7) %

Income before income taxes and 1,410.3 969.9 45.4 %equity method investment earnings

Income tax expense 193.8 201.3 (3.7) %

Equity method investment earnings 84.4 73.2 15.2 %

Net income $ 1,300.9 $ 841.8 54.5 %

Less: Net income attributable to 2.1 1.7 21.2 %noncontrolling interests

Net income attributable to $ 1,298.8 $ 840.1 54.6 %Conagra Brands, Inc.

Earnings per share - basic

Net income attributable to $ 2.67 $ 1.72 55.2 %Conagra Brands, Inc.

Weighted average shares 485.8 487.3 (0.3) %outstanding

Earnings per share - diluted

Net income attributable to $ 2.66 $ 1.72 54.7 %Conagra Brands, Inc.

Weighted average share and share 487.8 488.6 (0.2) %equivalents outstanding

Conagra Brands, Inc.

Consolidated Balance Sheets

(in millions)

(unaudited)

May 30, May 31, 2021 2020

ASSETS

Current assets

Cash and cash equivalents $ 79.2 $ 553.3

Receivables, less allowance for doubtful accounts of 793.9 860.8$3.2 and $2.6

Inventories 1,734.0 1,364.8

Prepaid expenses and other current assets 95.0 93.9

Current assets held for sale - 13.1

Total current assets 2,702.1 2,885.9

Property, plant and equipment, net 2,608.5 2,365.4

Goodwill 11,373.5 11,361.5

Brands, trademarks and other intangibles, net 4,157.6 4,302.4

Other assets 1,349.3 1,273.4

Noncurrent assets held for sale 4.6 115.4

$ 22,195.6 $ 22,304.0

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Notes payable $ 707.4 $ 1.1

Current installments of long-term debt 23.1 845.5

Accounts payable 1,655.9 1,507.1

Accrued payroll 175.2 189.4

Other accrued liabilities 744.6 725.8

Current liabilities held for sale - 18.5

Total current liabilities 3,306.2 3,287.4

Senior long-term debt, excluding current installments 8,275.2 8,900.8

Other noncurrent liabilities 1,982.8 2,165.1

Total stockholders' equity 8,631.4 7,950.7

$ 22,195.6 $ 22,304.0

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)

Fifty-two Fifty-three weeks ended weeks ended

May 30, May 31, 2020 2021

Cash flows from operating activities:

Net income $ 1,300.9 $ 841.8

Adjustments to reconcile net income to net cashflows from operating activities:

Depreciation and amortization 387.7 388.9

Asset impairment charges 95.5 259.9

Loss on extinguishment of debt 68.7 1.0

Loss (gain) on divestitures (65.5) 2.2

Equity method investment earnings in excess of (27.9) (21.8)distributions

Stock-settled share-based payments expense 63.9 59.2

Contributions to pension plans (27.6) (17.5)

Pension expense (benefit) (38.3) 5.9

Other items 9.1 10.3

Change in operating assets and liabilitiesexcluding effects of business acquisitions anddispositions:

Receivables 66.1 (43.8)

Inventories (364.3) 163.5

Deferred income taxes and income taxes payable, (92.5) 23.1net

Prepaid expenses and other current assets (8.5) (13.6)

Accounts payable 141.4 234.4

Accrued payroll (14.3) 15.9

Other accrued liabilities (60.2) (66.8)

Deferred employer payroll taxes 33.9 -

Net cash flows from operating activities 1,468.1 1,842.6

Cash flows from investing activities:

Additions to property, plant and equipment (506.4) (369.5)

Proceeds from divestitures, net of cash divested 160.9 194.6

Sale of property, plant and equipment 2.5 14.0

Purchase of marketable securities (11.8) (46.8)

Sale of marketable securities 14.5 53.8

Other items - 0.1

Net cash flows from investing activities (340.3) (153.8)

Cash flows from financing activities:

Issuances of commercial paper, maturities greater 298.6 -than 90 days

Repayment of commercial paper, maturities greater (298.6) -than 90 days

Net issuance of other short-term borrowings 706.3 0.1

Issuance of long-term debt 988.2 -

Repayment of long-term debt (2,514.5) (947.5)

Debt issuance costs (6.2) -

Repurchase of Conagra Brands, Inc. common shares (298.1) -

Payment of intangible asset financing arrangement (12.9) (13.6)

Cash dividends paid (474.6) (413.6)

Exercise of stock options and issuance of other (0.1) 4.8stock awards, including tax withholdings

Other items 2.3 (0.6)

Net cash flows from financing activities (1,609.6) (1,370.4)

Effect of exchange rate changes on cash and cash 7.7 (1.7)equivalents and restricted cash

Net change in cash and cash equivalents and (474.1) 316.7restricted cash

Cash and cash equivalents and restricted cash at 554.3 237.6beginning of period

Cash and cash equivalents and restricted cash at $ 80.2 $ 554.3end of period

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

Grocery & Refrigerated TotalQ4 FY21 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 1,084.9 $ 1,192.9 $ 228.9 $ 232.8 $ 2,739.5

Impact of foreign - - (17.4) - (17.4)exchange

Net sales from - (10.5) (0.1) (0.2) (10.8)divested businesses

Organic Net Sales $ 1,084.9 $ 1,182.4 $ 211.4 $ 232.6 $ 2,711.3

Year-over-year change (26.4) % (12.0) % (13.8) % 20.8 % (16.7) %- Net Sales

Impact of - - (6.5) - (0.5)foreign exchange (pp)

Impact of 53rd week 4.8 6.3 5.5 8.8 5.6(pp)

Net sales fromdivested businesses 2.6 0.2 0.1 1.4 1.5(pp)

Organic Net Sales (19.0) % (5.5) % (14.7) % 31.0 % (10.1) %

Volume (Organic) (19.8) % (8.9) % (21.2) % 30.2 % (12.8) %

Price/Mix 0.8 % 3.4 % 6.5 % 0.8 % 2.7 %

Grocery & Refrigerated TotalQ4 FY20 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 1,474.1 $ 1,355.4 $ 265.7 $ 192.7 $ 3,287.9

Impact of 53rd week ^2 (89.4) (90.0) (15.9) (13.0) (208.3)

Net sales from (45.4) (13.8) (1.8) (2.2) (63.2)divested businesses ^1

Organic Net Sales $ 1,339.3 $ 1,251.6 $ 248.0 $ 177.5 $ 3,016.4

Grocery & Refrigerated TotalFY21 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 4,637.5 $ 4,774.6 $ 938.6 $ 834.0 $ 11,184.7

Impact of foreign - - 1.4 - 1.4exchange

Net sales from (38.3) (40.8) (1.6) (2.1) (82.8)divested businesses

Organic Net Sales $ 4,599.2 $ 4,733.8 $ 938.4 $ 831.9 $ 11,103.3

Year-over-year change 0.4 % 4.7 % 1.4 % (12.4) % 1.2 %- Net Sales

Impact of foreign - - 0.2 - -exchange (pp)

Impact of 53rd week 2.0 2.1 1.8 1.2 1.9(pp)

Net sales fromdivested businesses 3.7 0.7 0.4 1.5 2.0(pp)

Organic Net Sales 6.1 % 7.5 % 3.8 % (9.7) % 5.1 %

Volume (Organic) 3.6 % 3.8 % (0.5) % (13.1) % 2.0 %

Price/Mix 2.5 % 3.7 % 4.3 % 3.4 % 3.1 %

Grocery & Refrigerated TotalFY20 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 4,617.1 $ 4,559.6 $ 925.3 $ 952.4 $ 11,054.4

Impact of 53rd week ^2 (89.4) (90.0) (15.9) (13.0) (208.3)

Net sales from (191.1) (64.2) (5.6) (17.7) (278.6)divested businesses ^1

Organic Net Sales $ 4,336.6 $ 4,405.4 $ 903.8 $ 921.7 $ 10,567.5

A portion of our Net sales from divested businesses relates to our private^1 label peanut butter business, which we exited in the third quarter of fiscal 2020. This exit occurred in waves and continued to produce net sales through the end of fiscal 2020.

Organic net sales growth excludes the impact of fiscal 2020's 53^rd week,^2 which was calculated as one-sixth of our last month's net sales (which included a total of six weeks). One-sixth of our last month's net sales from businesses divested during fiscal 2021 are now being reflected within Net sales from divested businesses.

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

Grocery & Refrigerated TotalQ4 FY20 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 1,474.1 $ 1,355.4 $ 265.7 $ 192.7 $ 3,287.9

Impact of foreign - - 18.8 - 18.8exchange

Impact of 53rd week ^2 (91.6) (91.0) (16.1) (13.1) (211.8)

Net sales from (0.3) - - - (0.3)divested businesses ^1

Organic Net Sales $ 1,382.2 $ 1,264.4 $ 268.4 $ 179.6 $ 3,094.6

Year-over-year change 44.1 % 23.3 % 18.6 % (27.9) % 25.8 %- Net Sales

Impact of - - 8.4 - 0.7foreign exchange (pp)

Impact of 53rd week (9.0) (8.3) (7.2) (4.9) (8.1)(pp)

Net sales fromdivested businesses 5.3 2.6 - 1.3 3.1(pp)^ 3

Organic Net Sales 40.4 % 17.6 % 19.8 % (31.5) % 21.5 %

Volume (Organic) 38.0 % 17.8 % 18.0 % (34.2) % 21.0 %

Price/Mix 2.4 % (0.2) % 1.8 % 2.7 % 0.5 %

Grocery & Refrigerated TotalQ4 FY19 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 1,022.6 $ 1,099.2 $ 224.0 $ 267.4 $ 2,613.2

Net sales from (37.9) (23.4) - (5.1) (66.4)divested businesses ^1

Organic Net Sales $ 984.7 $ 1,075.8 $ 224.0 $ 262.3 $ 2,546.8

Grocery & Refrigerated TotalFY20 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 4,617.1 $ 4,559.6 $ 925.3 $ 952.4 $ 11,054.4

Impact of foreign - - 18.2 - 18.2exchange

Impact of 53rd week ^2 (91.6) (91.0) (16.1) (13.1) (211.8)

Net sales from (406.3) (567.6) (46.0) (57.7) (1,077.6)acquired businesses

Net sales from (69.2) (23.2) - (11.2) (103.6)divested businesses ^1

Organic Net Sales $ 4,050.0 $ 3,877.8 $ 881.4 $ 870.4 $ 9,679.6

Year-over-year change 17.7 % 22.1 % 7.0 % (6.2) % 15.9 %- Net Sales

Impact of foreign - - 2.1 - 0.2exchange (pp)

Impact of 53rd week (2.3) (2.4) (1.9) (1.3) (2.2)(pp)

Net sales fromacquired businesses (9.9) (15.1) (5.1) (6.1) (11.1)(pp)^ 3

Net sales fromdivested businesses 3.7 1.5 2.4 3.7 2.8(pp)^

Net sales from sold - - - 0.2 -Trenton plant (pp)

Organic Net Sales 9.2 % 6.1 % 4.5 % (9.7) % 5.6 %

Volume (Organic) 9.8 % 5.0 % 3.9 % (12.6) % 5.2 %

Price/Mix (0.6) % 1.1 % 0.6 % 2.9 % 0.4 %

Grocery & Refrigerated TotalFY19 Snacks International Foodservice Conagra & Frozen Brands

Net Sales $ 3,923.6 $ 3,735.4 $ 864.4 $ 1,015.0 $ 9,538.4

Net sales from (215.0) (80.7) (21.2) (49.2) (366.1)divested businesses ^1

Net sales from sold - - - (2.0) (2.0)Trenton plant

Organic Net Sales $ 3,708.6 $ 3,654.7 $ 843.2 $ 963.8 $ 9,170.3

A portion of our Net sales from divested businesses relates to our private^ label peanut butter business, which we exited in the third quarter of fiscal1 2020. This exit occurred in waves and continued to produce net sales through the end of fiscal 2020.

Organic net sales growth excludes the impact of fiscal 2020's 53^rd week,^2 which was calculated as one-sixth of our last month's net sales (which included a total of six weeks).

^3 Percentage points may include rounding to bridge the change in reported net sales to the change in organic net sales.

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

Grocery Refrigerated Corporate TotalQ4 FY21 & Snacks & Frozen International Foodservice Expense Conagra Brands

Operating Profit $ 203.6 $ 117.5 $ 26.0 $ 18.9 $ (79.6) $ 286.4

Restructuring 1.9 6.9 - - 7.1 15.9plans

Acquisitions and - - - - 1.0 1.0divestitures

Net gain ondivestiture of (0.1) (3.3) - - - (3.4)businesses

Brand impairment 13.0 76.9 1.0 - - 90.9charges

Consulting fees - - - - 0.7 0.7on tax matters

Legal matters - - - - 0.3 0.3

Corporatehedging - - - - (8.4) (8.4)derivativelosses (gains)

Adjusted $ 218.4 $ 198.0 $ 27.0 $ 18.9 $ (78.9) $ 383.4Operating Profit

Operating Profit 18.8 % 9.9 % 11.4 % 8.2 % 10.5 %Margin

AdjustedOperating Profit 20.1 % 16.6 % 11.8 % 8.2 % 14.0 %Margin

Year-over-year %change - (32.2) % (30.3) % (4.0) % 1750.2 % (25.1) % (26.7) %Operating Profit

Year-over year %change - (38.1) % (25.9) % (24.3) % 1750.2 % (16.1) % (31.8) %AdjustedOperating Profit

Year-over-yearbps change - (380) bps (310) bps (162) bps 762 bps (311) bpsAdjustedOperating Profit

Grocery Refrigerated Corporate TotalQ4 FY20 & Snacks & Frozen International Foodservice Expense Conagra Brands

Operating Profit $ 300.4 $ 168.5 $ 27.1 $ 1.0 $ (106.2) $ 390.8

Restructuring 9.2 3.5 0.2 - 9.5 22.4plans

Acquisitions and - - - - 1.7 1.7divestitures

Brand impairment 42.9 95.0 8.3 - - 146.2charges

Legal matters - - - - 5.0 5.0

Corporatehedging - - - - (3.7) (3.7)derivativelosses (gains)

Adjusted $ 352.5 $ 267.0 $ 35.6 $ 1.0 $ (93.7) $ 562.4Operating Profit

Operating Profit 20.4 % 12.4 % 10.2 % 0.5 % 11.9 %Margin

AdjustedOperating Profit 23.9 % 19.7 % 13.4 % 0.5 % 17.1 %Margin

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

Grocery & Refrigerated Corporate TotalFY21 Snacks & Frozen International Foodservice Expense Conagra Brands

Operating Profit $ 1,093.8 $ 836.5 $ 131.8 $ 78.9 $ (364.8) $ 1,776.2

Restructuring 27.8 26.8 (0.1) - 23.4 77.9plans

Acquisitions and - - - - 5.7 5.7divestitures

Net gain ondivestiture of (55.1) (3.3) - - - (58.4)businesses

Brand impairment 13.0 76.9 1.0 - - 90.9charges

Earlyextinguishment - - - - 68.7 68.7of debt

Consulting fees - - - - 7.2 7.2on tax matters

Legal matters - - - - 2.6 2.6

Corporatehedging - - - - (15.6) (15.6)derivativelosses (gains)

Adjusted $ 1,079.5 $ 936.9 $ 132.7 $ 78.9 $ (272.8) $ 1,955.2Operating Profit

Operating Profit 23.6 % 17.5 % 14.0 % 9.5 % 15.9 %Margin

AdjustedOperating Profit 23.3 % 19.6 % 14.1 % 9.5 % 17.5 %Margin

Year-over-year %change - 19.5 % 19.1 % 31.0 % (19.2) % (1.0) % 22.7 %Operating Profit

Year-over year %change - 3.4 % 9.4 % 20.0 % (19.2) % (5.2) % 7.4 %AdjustedOperating Profit

Year-over-yearbps change - 67 bps 83 bps 219 bps (79) bps 101 bpsAdjustedOperating Profit

Grocery & Refrigerated Corporate TotalFY20 Snacks & Frozen International Foodservice Expense Conagra Brands

Operating Profit $ 915.2 $ 702.2 $ 100.6 $ 97.6 $ (368.5) $ 1,447.1

Restructuring 58.4 15.8 1.6 - 63.1 138.9plans

Acquisitions and 3.0 - - - 2.3 5.3divestitures

Impairment ofbusinesses held 31.4 27.6 - - - 59.0for sale

Brand impairment 46.4 110.8 8.3 - - 165.5charges

Loss ondivestiture of 1.5 0.2 - - - 1.7businesses

Contract (11.9) - - - - (11.9)settlement gain

Legal matters - - - - 3.5 3.5

Environmental - - - - 6.6 6.6matters

Corporatehedging - - - - 5.5 5.5derivativelosses (gains)

Adjusted $ 1,044.0 $ 856.6 $ 110.5 $ 97.6 $ (287.5) $ 1,821.2Operating Profit

Operating Profit 19.8 % 15.4 % 10.9 % 10.3 % 13.1 %Margin

AdjustedOperating Profit 22.6 % 18.8 % 11.9 % 10.3 % 16.5 %Margin

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

Selling, Diluted EPS Income before Net income from income Gross general and Operating income taxes and Income Income attributable attributableQ4 FY21 profit profit ^1 equity method tax tax to Conagra to Conagra administrative investment expense rate Brands, Inc. Brands, Inc earnings common expenses stockholders

Reported $ 721.7 $ 435.3 $ 286.4 $ 201.3 $ (75.2) (32.0) % $ 309.5 $ 0.64

% of Net Sales 26.3 % 15.9 % 10.5 %

Restructuring 8.0 7.9 15.9 15.9 4.1 11.8 0.02plans

Acquisitions and - 1.0 1.0 1.0 0.3 0.7 -divestitures

Corporatehedging (8.4) - (8.4) (8.4) (2.1) (6.3) (0.01)derivativelosses (gains)

Advertising andpromotion - 75.2 - - - - -expenses ^2

Net gain ondivestiture of - (3.4) (3.4) (3.4) (5.6) 2.2 -businesses

Brand impairment - 90.9 90.9 90.9 21.0 69.9 0.14charges

Consulting fees - 0.7 0.7 0.7 0.2 0.5 -on tax matters

Legal matters - 0.3 0.3 0.3 - 0.3 -

Taxrestructuring ofArdent Mills - - - - 115.6 (115.6) (0.24)ownershipinterest

Capital lossvaluation - - - - 12.2 (12.2) (0.03)allowanceadjustment

Rounding - - - - - - 0.02

Adjusted $ 721.3 $ 262.7 $ 383.4 $ 298.3 $ 70.5 21.3 % $ 260.8 $ 0.54

% of Net Sales 26.3 % 9.6 % 14.0 %

Year-over-year %of net sales (172) bps (29) bps (143) bpschange -reported

Year-over-year %of net sales (194) bps 22 bps (311) bpschange -adjusted

Year-over-yearchange - (21.8) % (18.2) % (26.7) % (15.5) % N/A 53.6 % 56.1 %reported

Year-over-yearchange - (22.4) % (14.7) % (31.8) % (34.4) % (35.9) % (29.1) % (28.0) %adjusted

Selling, Diluted EPS Income before Net income from income Gross general and Operating income taxes and Income Income attributable attributableQ4 FY20 profit profit ^1 equity method tax tax to Conagra to Conagra administrative investment expense rate Brands, Inc. Brands, Inc earnings common expenses stockholders

Reported $ 922.8 $ 532.0 $ 390.8 $ 238.2 $ 59.8 22.9 % $ 201.4 $ 0.41

% of Net Sales 28.1 % 16.2 % 11.9 %

Restructuring 10.2 12.2 22.4 22.4 5.6 16.8 0.03plans

Acquisitions and - 1.7 1.7 1.7 0.4 1.3 -divestitures

Corporatehedging (3.7) - (3.7) (3.7) (0.9) (2.8) (0.01)derivativelosses (gains)

Advertising andpromotion - 59.2 - - - - -expenses ^2

Pensionvaluation - - - 44.8 11.2 33.6 0.07adjustment

Adjustment togain on Ardent - - - - - 0.1 -Mills JV assetsale

Brand impairment - 146.2 146.2 146.2 34.0 112.2 0.23charges

Legal matters - 5.0 5.0 5.0 1.3 3.7 0.01

Unusual tax - - - - (1.3) 1.3 -items

Rounding - - - - - - 0.01

Adjusted $ 929.3 $ 307.7 $ 562.4 $ 454.6 $ 110.1 23.0 % $ 367.6 $ 0.75

% of Net Sales 28.3 % 9.4 % 17.1 %

Selling, Diluted EPS Income before Net income from income Gross general and Operating income taxes and Income Income attributable attributableQ4 FY19 profit profit ^1 equity method tax tax to Conagra to Conagra administrative investment expense rate Brands, Inc. Brands, Inc earnings common expenses stockholders

Reported $ 708.0 $ 394.7 $ 313.3 $ 187.8 $ 71.8 36.5 % $ 126.5 $ 0.26

% of Net Sales 27.1 % 15.1 % 12.0 %

Restructuring 1.3 29.6 30.9 30.9 7.7 23.2 0.05plans

Acquisitions and - 2.3 2.3 2.3 0.4 1.9 -divestitures

Intangibleimpairment - 89.6 89.6 89.6 20.8 66.9 0.14charges ^3

Corporatehedging (2.0) - (2.0) (2.0) (0.5) (1.5) -derivativelosses (gains)

Advertising andpromotion - 73.9 - - - - -expenses ^2

Inventory fairvalue mark-up 1.7 - 1.7 1.7 0.4 1.3 -rollout

Legal matters - (39.1) (39.1) (39.1) (10.0) (29.1) (0.06)

Fair valueadjustment ofcash settleableequity awards - 3.5 3.5 3.5 (1.8) 5.3 0.01issued inconnection withPinnacleacquisition

Gain ondivestiture of - (56.2) (56.2) (56.2) (30.7) (25.5) (0.05)businesses

Pensionvaluation - - - 4.3 1.1 3.2 0.01adjustment

Capital lossvaluation - - - - 8.1 (8.1) (0.02)allowanceadjustment

Unusual tax - - - - (10.5) 10.5 0.02items

Adjusted $ 709.0 $ 291.1 $ 344.0 $ 222.8 $ 56.8 24.5 % $ 174.6 $ 0.36

% of Net Sales 27.1 % 11.1 % 13.2 %

Operating profit is derived from taking Income from continuing operations^1 before income taxes and equity method investment earnings, adding back Interest expense, net and removing Pension and postretirement non-service income.

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 measure2 provides useful supplemental information to assess the Company's operating performance. Please note that A&P is not removed from adjusted profit measures.

Includes charges related to consolidated joint ventures. These charges are^ recorded at 100% for all line items before Net income attributable to3 Conagra Brands, Inc. Net income attributable to Conagra Brands, Inc. excludes Net income (loss) attributable to noncontrolling interests.

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

Selling, Diluted EPS Income before Net income from income Gross general and Operating income taxes and Income Income attributable attributable toFY21 profit profit ^1 equity method tax tax to Conagra Conagra administrative investment expense rate Brands, Inc. Brands, Inc earnings common expenses stockholders

Reported $ 3,179.2 $ 1,403.0 $ 1,776.2 $ 1,410.3 $ 193.8 13.0 % $ 1,298.8 $ 2.66

% of Net Sales 28.4 % 12.5 % 15.9 %

Restructuring 37.1 40.8 77.9 77.9 19.6 58.3 0.12plans

Acquisitionsand - 5.7 5.7 5.7 1.4 4.3 0.01divestitures

Corporatehedging (15.6) - (15.6) (15.6) (3.9) (11.7) (0.02)derivativelosses (gains)

Advertisingand promotion - 258.0 - - - - -expenses ^2

Net gain ondivestiture of - (58.4) (58.4) (58.4) (29.2) (29.2) (0.06)businesses

Brandimpairment - 90.9 90.9 90.9 21.0 69.9 0.14charges

Earlyextinguishment - 68.7 68.7 68.7 17.2 51.5 0.11of debt

Consultingfees on tax - 7.2 7.2 7.2 1.8 5.4 0.01matters

Legal matters - 2.6 2.6 2.6 0.6 2.0 -

Taxrestructuringof Ardent - - - - 115.6 (115.6) (0.24)Millsownershipinterest

Capital lossvaluation - - - - 37.0 (37.0) (0.08)allowanceadjustment

Unusual tax - - - - 7.6 (7.6) (0.02)items

Rounding - - - - - - 0.01

Adjusted $ 3,200.7 $ 987.5 $ 1,955.2 $ 1,589.3 $ 382.5 22.9 % $ 1,289.1 $ 2.64

% of Net Sales 28.6 % 8.8 % 17.5 %

Year-over-year% of net sales 66 bps (213) bps 279 bpschange -reported

Year-over-year% of net sales 50 bps (73) bps 101 bpschange -adjusted

Year-over-yearchange - 3.6 % (13.5) % 22.7 % 45.4 % (3.7) % 54.6 % 54.7 %reported

Year-over-yearchange - 3.0 % (6.5) % 7.4 % 14.6 % 12.7 % 15.6 % 15.8 %adjusted

Selling, Diluted EPS Income before Net income from income Gross general and Operating income taxes and Income Income attributable attributable toFY20 profit profit ^1 equity method tax tax to Conagra Conagra administrative investment expense rate Brands, Inc. Brands, Inc earnings common expenses stockholders

Reported $ 3,069.6 $ 1,622.5 $ 1,447.1 $ 969.9 $ 201.3 19.3 % $ 840.1 $ 1.72

% of Net Sales 27.8 % 14.7 % 13.1 %

Restructuring 33.2 105.7 138.9 139.5 32.7 106.8 0.22plans

Acquisitionsand - 5.3 5.3 5.3 1.4 3.9 0.01divestitures

Corporatehedging 5.5 - 5.5 5.5 1.4 4.1 0.01derivativelosses (gains)

Advertisingand promotion - 230.7 - - - - -expenses ^2

Pensionsettlement and - - - 42.9 10.8 32.1 0.07valuationadjustment

Gain on ArdentMills JV asset - - - - (1.0) (3.1) (0.01)sale

Impairment ofbusinesses - 59.0 59.0 59.0 4.0 55.0 0.11held for sale

Contractsettlement - (11.9) (11.9) (11.9) (3.0) (8.9) (0.02)gain

Brandimpairment - 165.5 165.5 165.5 38.5 127.0 0.26charges

Legal matters - 3.5 3.5 3.5 0.9 2.6 0.01

Environmental - 6.6 6.6 6.6 1.6 5.0 0.01matters

Loss ondivestiture of - 1.7 1.7 1.7 (0.2) 1.9 -businesses

Unusual tax - - - - 51.2 (51.2) (0.10)items

Rounding - - - - - - (0.01)

Adjusted $ 3,108.3 $ 1,056.4 $ 1,821.2 $ 1,387.5 $ 339.6 23.2 % $ 1,115.3 $ 2.28

% of Net Sales 28.1 % 9.6 % 16.5 %

Operating profit is derived from taking Income from continuing operations^1 before income taxes and equity method investment earnings, adding back Interest expense, net and removing Pension and postretirement non-service income.

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 measure2 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)

Q4 FY21 Q4 FY20 % Change

Equity method investment earnings $ 33.4 $ 22.9 45.8 %

Adjustment to gain on Ardent Mills JV - 0.1asset sale

Adjusted equity method investment $ 33.4 $ 23.0 44.8 %earnings

FY21 FY20 % Change

Equity method investment earnings $ 84.4 $ 73.2 15.2 %

Gain on Ardent Mills JV asset sale - (4.1)

Adjusted equity method investment $ 84.4 $ 69.1 21.9 %earnings

Q4 FY21 Q4 FY20 % Change

Pension and postretirement non-service $ (13.3) $ 27.3 N/Aincome

Pension valuation adjustment - (44.8)

Adjusted pension and postretirement $ (13.3) $ (17.5) (24.1) %non-service income

FY21 FY20 % Change

Pension and postretirement non-service $ (54.5) $ (9.9) 453.0 %income

Restructuring plans - (0.6)

Pension settlement and valuation - (42.9)adjustment

Adjusted pension and postretirement $ (54.5) $ (53.4) 2.2 %non-service income

May 30, May 31, % Change 2021 2020

Net cash flows from operating activities $ 1,468.1 $ 1,842.6 (20.3) %

Additions to property, plant and (506.4) (369.5) 37.1 %equipment

Free cash flow $ 961.7 $ 1,473.1 (34.7) %

Q4FY21 Q4 FY20 Q2 FY19

Notes payable $ 707.4 $ 1.1 $ 0.9

Current installments of long-term debt 23.1 845.5 17.2

Senior long-term debt, excluding current 8,275.2 8,900.8 11,349.5installments

Subordinated debt - - 195.9

Total Debt $ 9,005.7 $ 9,747.4 $ 11,563.5

Less: Cash 79.2 553.3 442.3

Net Debt $ 8,926.5 $ 9,194.1 $ 11,121.2

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

FY21

Net Debt $ 8,926.5

Net income attributable to Conagra Brands, Inc. $ 1,298.8

Add Back: Income tax expense 193.8

Income tax expense attributable to noncontrolling interests (0.8)

Interest expense, net 420.4

Depreciation 328.0

Amortization 59.7

Earnings before interest, taxes, depreciation, and amortization $ 2,299.9(EBITDA)

Restructuring plans ^1 45.0

Acquisitions and divestitures 5.7

Corporate hedging derivative gains (15.6)

Consulting fees on tax matters 7.2

Net gain on divestiture of businesses (58.4)

Legal matters 2.6

Early extinguishment of debt 68.7

Brand impairment charges 90.9

Adjusted EBITDA $ 2,446.0

Net Debt to Adjusted EBITDA 3.6

^1 Excludes comparability items related to depreciation.

Conagra Brands, Inc.

Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures

(in millions)

Q4 FY21 Q4 FY20 % Change

Net income attributable to Conagra Brands, Inc. $ 309.5 $ 201.4 53.6 %

Add Back: Income tax expense (benefit) (75.2) 59.8

Income tax expense attributable to noncontrolling (0.2) (0.6)interests

Interest expense, net 98.4 125.3

Depreciation 83.2 81.5

Amortization 14.9 14.9

Earnings before interest, taxes, depreciation, $ 430.6 $ 482.3 (10.7) %and amortization

Restructuring plans ^1 8.7 13.6

Acquisitions and divestitures 1.0 1.7

Corporate hedging derivative losses (gains) (8.4) (3.7)

Pension valuation adjustment - 44.8

Brand impairment charges 90.9 146.2

Consulting fees on tax matters 0.7 -

Net gain on divestiture of businesses (3.4) -

Legal matters 0.3 5.0

Adjustment to gain on Ardent Mills JV asset sale - 0.1

Adjusted Earnings before interest, taxes, $ 520.4 $ 690.0 (24.6) %depreciation, and amortization

^1 Excludes comparability items related to depreciation.

FY21 FY20 % Change

Net income attributable to Conagra Brands, Inc. $ 1,298.8 $ 840.1 54.6 %

Add Back: Income tax expense 193.8 201.3

Income tax expense attributable to (0.8) (0.9)noncontrolling interests

Interest expense, net 420.4 487.1

Depreciation 328.0 329.1

Amortization 59.7 59.8

Earnings before interest, taxes, depreciation, $ 2,299.9 $ 1,916.5 20.0 %and amortization

Restructuring plans ^1 45.0 106.5

Acquisitions and divestitures 5.7 5.3

Corporate hedging derivative losses (gains) (15.6) 5.5

Pension settlement and valuation adjustment - 42.9

Early extinguishment of debt 68.7 -

Consulting fees on tax matters 7.2 -

Impairment of businesses held for sale - 59.0

Net loss (gain) on divestiture of businesses (58.4) 1.7

Legal matters 2.6 3.5

Environmental matters - 6.6

Contract settlement gain - (11.9)

Brand impairment charges 90.9 165.5

Gain on Ardent Mills JV asset sale - (4.1)

Adjusted Earnings before interest, taxes, $ 2,446.0 $ 2,297.0 6.5 %depreciation, and amortization

^1 Excludes comparability items related to depreciation.

For more information, please contact:MEDIA: Mike Cummins312-549-5257 Michael.Cummins@conagra.com

INVESTORS: Brian Kearney312-549-5002 IR@conagra.com

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SOURCE Conagra Brands, Inc.