CONAGRA BRANDS INC.

Previous wording

Readers of this report should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. These risks, uncertainties, and factors include, among other things: risks associated with general economic and industry conditions, including inflation, reduced consumer confidence and spending, recessions, increased energy costs, supply chain challenges, labor shortages, and geopolitical conflicts; 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 the Company’s competitive environment, cost structure, and related market conditions; risks related to our ability to execute operating and value creation plans and achieve returns on our investments and targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; risks related to the availability and prices of commodities and other supply chain resources, including raw materials, packaging, energy, and transportation, weather conditions, health pandemics or outbreaks of disease, actual or threatened hostilities or war, or other geopolitical uncertainty; risks related to our ability to respond to changing consumer preferences and the success of our innovation and marketing investments; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks related to the effectiveness of our hedging activities and ability to respond to volatility in commodities; disruptions or inefficiencies in our supply chain and/or operations; risks related to the ultimate impact of, including reputational harm caused by, any product recalls and product liability or labeling litigation, including litigation related to lead-based paint and pigment and cooking spray; risks related to the seasonality of our business; risks associated with our co-manufacturing arrangements and other third-party service provider dependencies; risks associated with actions of governments and regulatory bodies that affect our businesses, including the ultimate impact of new or revised regulations or interpretations including to address climate change or implement changes to taxes and tariffs; risks related to the Company’s ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters, including as a result of evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and change…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Readers of this report should understand that these forward-looking statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. These risks, uncertainties, and factors include: risks associated with general economic and industry conditions, including inflation, reduced consumer confidence and spending, declining benefits or increased limitations under government food assistance programs for consumers, rising unemployment, recessions, increased energy costs, supply chain challenges, increased tariffs and taxes, labor cost increases or shortages, currency rate fluctuations, actual or threatened hostilities or war, and or other geopolitical conflicts; risks related to the availability and prices of commodities and other supply chain resources, including raw materials, packaging, energy, and transportation, weather conditions, health pandemics or outbreaks of disease, or other geopolitical uncertainty; disruptions or inefficiencies in our supply chain and/or operations; risks related to the effectiveness of our hedging activities and ability to respond to volatility in commodities; risks related to the ultimate impact of, including reputational harm caused by, any product recalls and product liability or labeling litigation, including litigation related to lead-based paint and pigment and cooking spray; risks related to our ability to execute operating and value creation plans and achieve returns on our investments and targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; 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 the Company’s competitive environment, cost structure, and related market conditions; risks related to our ability to respond to changing consumer preferences including health and wellness perceptions and the success of our innovation and marketing investments; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks related to the seasonality of our business; risks associated with our contract manufacturing arrangements and other third-party service provider dependencies; risks associated with actions of governments and regulatory bodies that affect our businesses, including the ultimate impact of new or revised regulations or interpretations including to address climate change; risks related to the Company’s ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters, including as a result of evolving…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

remain subject to Board approval and depend on market and other conditions; the amount and timing of future stock repurchases; and other risks described in our reports filed from time to time with the Securities and Exchange Commission (the “SEC”). We caution readers not to place undue reliance on any forward-looking statements included in this report, which speak only as of the date of this report. We undertake no responsibility to update these statements, except as required by law.

Current wording

our ability to protect our intellectual property rights; risks relating to acquisition, divestiture, joint venture or investment activities; the amount and timing of future dividends, which remain subject to Board approval and depend on market and other conditions; the amount and timing of future stock repurchases; and other risks described in our reports filed from time to time with the U.S. Securities and Exchange Commission (the “SEC”). We caution readers not to place undue reliance on any forward-looking statements included in this report, which speak only as of the date of this report. We undertake no responsibility to update these statements, except as required by law.

Previous wording

Fiscal 2024 performance compared to fiscal 2023 reflected a decrease in net sales, with organic (excludes the impacts of foreign exchange) decreases in our Grocery & Snacks and Refrigerated & Frozen segments, partially offset by increases in our International and Foodservice segments. The overall decrease in net sales was primarily due to lower consumption trends, consumer behavior shifts, and strategic trade investment as consumers continue to adapt to the current environment of new reference prices. Overall gross profit increased primarily as a result of higher productivity, lower transportation costs, and lower inventory write-offs, which were partially offset by input cost inflation, lower net sales, and unfavorable operating leverage. Excluding items impacting comparability, overall segment operating profit increased in our Grocery & Snacks, International, and Foodservice segments, which was more than offset by a decrease in our Refrigerated & Frozen segment. Corporate expenses were lower primarily due to lower share-based payment expense and items impacting comparability, as discussed below. Selling, general and administrative ("SG&A") expenses were higher due primarily to items impacting comparability and higher payroll and incentive compensation expense. We recognized lower equity method investment earnings, higher interest expense, and higher income tax expense, in each case compared to fiscal 2023. Excluding items impacting comparability, our effective tax rate was slightly lower compared to fiscal 2023.

Current wording

Fiscal 2025 performance compared to fiscal 2024 reflected a decrease in net sales, with organic (excludes the impacts of foreign exchange, acquisitions, and divestitures) decreases in our Grocery & Snacks, Refrigerated & Frozen, and Foodservice segments, partially offset by an increase in our International segment. Overall gross profit decreased primarily as a result of lower net sales, input cost inflation, and unfavorable operating leverage, partially offset by productivity. Excluding items impacting comparability, overall segment operating profit decreased in all of our segments compared to the prior year. Corporate expenses and selling, general and administrative (“SG&A”) expenses were higher primarily due to items impacting comparability, as discussed below, partially offset by lower incentive compensation expense. We recognized higher equity method investment earnings, lower interest expense, and lower income tax expense, in each case compared to fiscal 2024. Excluding items impacting comparability, our effective tax rate was lower compared to fiscal 2024.

Previous wording

Diluted earnings per share were $0.72 and $1.42 in fiscal 2024 and 2023, respectively. Diluted earnings per share were affected by lower net income as well as several significant items affecting the comparability of year-over-year results (see*“Items Impacting Comparability”* below).

Current wording

Diluted earnings per share were $2.40 and $0.72 in fiscal 2025 and 2024, respectively. The increase in diluted earnings per share reflected higher net income. See*“Items Impacting Comparability”* below as several significant items affected the comparability of year-over-year results.

Previous wording

We also have experienced a reduction to our volumes due to lower consumption trends seen throughout the industry and consumer behavior shifts, including retail channel preferences. We expect consumer trends to continue to evolve and our volumes to improve over time, however, economic pressures on consumers, including the challenges of high inflation, may continue to negatively impact our volumes throughout fiscal 2025. We will continue to evaluate the evolving macroeconomic environment to take action to mitigate the impact on our business, consolidated results of operations, and financial condition.

Current wording

Our industry is anticipating increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies including increasing or fluctuating tariffs. We expect inflation and tariffs to negatively impact ourcosts of goods sold in fiscal 2026. We expect consumer trends to continue to evolve and our volumes to improve over time; however, in the near-term, we expect economic pressures on consumers, including the challenges of high inflation and the impact of increased or fluctuating tariffs, and related price increases, to continue to negatively impact our volumes throughout fiscal 2026. We also expect foreign exchange rates to continue to negatively impact our earnings through fiscal 2026. We will continue to evaluate the evolving macroeconomic environment to take action to mitigate the impact on our business, consolidated results of operations, and financial condition.

Previous wording

Net sales for fiscal 2024 in our Foodservice segment included an increase in price/mix of 6.7% compared to fiscal 2023, reflecting inflation-driven pricing. Volumes decreased by 5.7% compared to fiscal 2023. The decrease in volumes was driven by the ongoing impact of lost business, ongoing softness in restaurant traffic, and the elasticity impact from inflation-driven pricing actions.

Current wording

Net sales for fiscal 2025 in our Foodservice segment included a decrease in organic volume of 8.1% compared to fiscal 2024, driven by the ongoing softness in restaurant traffic and the impact of lost business from the prior year. Organic price/mix increased by 3.3% compared to fiscal 2024, reflecting inflation-driven pricing. Additionally, we estimate that net sales in our Foodservice segment during fiscal 2025 were impacted by approximately $3 million due to the temporary manufacturing disruptions in ourHebrew National®business.

Previous wording

SG&A expenses totaled $2.48 billion for fiscal 2024, an increase of $291.1 million compared to fiscal 2023. SG&A expenses for fiscal 2024 reflected the following:

Current wording

SG&A expenses totaled $1.54 billion for fiscal 2025, an increase of $49.8 million compared to fiscal 2024. SG&A expenses for fiscal 2025 reflected the following:

Previous wording

In fiscal 2024, pension and postretirement non-service income was $10.3 million, a decrease of $13.9 million compared to fiscal 2023. Fiscal 2024 reflected higher interest costs, partially offset by a benefit of $11.5 million related primarily to our annual remeasurement of an hourly pension plan liability.

Current wording

In fiscal 2025, pension and postretirement non-service income was $25.9 million, an increase of $15.6 million compared to fiscal 2024. Fiscal 2025 reflected lower interest costs and a non-cash settlement gain of $13.0 million associated with a partial transfer of our U.S. defined benefit pension plan obligation to a third-party insurance provider through the purchase of an annuity contract. Fiscal 2024 included a benefit of $11.5 million related primarily to our annual remeasurement of an hourly pension plan liability.

Previous wording

In fiscal 2024, net interest expense was $430.5 million, an increase of $20.9 million, or 5.1%, from fiscal 2023. The increase was driven by a higher weighted average interest rate on outstanding debt. See Note 3,“Long-Term Debt”, to the Consolidated Financial Statements contained in this report for further discussion.

Current wording

In fiscal 2025, net interest expense was $416.7 million, a decrease of $13.8 million, or 3.2%, from fiscal 2024. The decrease was driven by an overall reduction of our debt balances. See Note 4,“Long-Term Debt”, to the Consolidated Financial Statements contained in this report for further discussion.

Previous wording

We include our share of the earnings of certain affiliates based on our economic ownership interest in the affiliates. Our most significant affiliate is the Ardent Mills joint venture. Our share of earnings from our equity method investment earnings were $177.6 million and $212.0 million for fiscal 2024 and 2023, respectively. Ardent Mills earnings for fiscal 2024 reflected slightly lower volume trends as seen throughout the industry, partially offset by improved product margins.

Current wording

We include our share of the earnings of certain affiliates based on our economic ownership interest in the affiliates. Our most significant affiliate is the Ardent Mills joint venture. Our share of earnings from our equity method investment earnings were $182.4 million and $177.6 million for fiscal 2025 and 2024, respectively. Ardent Mills earnings for fiscal 2025 reflected improved commodity revenue, partially offset by continued lower volume trends as seen throughout the industry. Results for fiscal 2025 included charges of $7.2 million related to Ardent Mills restructuring activities.

Previous wording

Our income tax expense was $262.5 million and $218.7 million in fiscal 2024 and 2023, respectively. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was approximately 43.0% and 24.2% for fiscal 2024 and 2023, respectively. The higher effective tax rate was largely due to the goodwill impairment that we recorded in our Sides, Components, Enhancers reporting unit. See Note 14,“Pre-Tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report for a further discussion on the change in effective tax rates.

Current wording

Our income tax expense was $3.7 million and $262.5 million in fiscal 2025 and 2024, respectively. The decrease in our income tax expense was principally related to a release of a valuation allowance from a federal audit settlement that gave rise to a $225.8 million tax benefit in fiscal 2025. The effective tax rate (calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings) was approximately 0.3% and 43.0% for fiscal 2025 and 2024, respectively. See Note 14,“Pre-Tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report for a further discussion on the change in effective tax rates.

Previous wording

We expect our effective tax rate in fiscal 2025, exclusive of any unusual transactions or tax events, to be approximately 23-24%.

Current wording

We expect our effective tax rate in fiscal 2026, exclusive of any unusual transactions or tax events, to be approximately 23%.

Previous wording

Diluted earnings per share in fiscal 2024 and 2023 were $0.72 and $1.42, respectively. The decrease in diluted earnings per share reflected lower net income. See*“Items Impacting Comparability”* above as several significant items affected the comparability of year-over-year results of operations.

Current wording

Diluted earnings per share in fiscal 2025 and 2024 were $2.40 and $0.72, respectively. The increase in diluted earnings per share reflected higher net income. See*“Items Impacting Comparability”* above as several significant items affected the comparability of year-over-year results of operations.

Previous wording

At May 26, 2024, we had a revolving credit facility (the “Revolving Credit Facility”) with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $2.0 billion (subject to increase to a maximum aggregate principal amount of $2.5 billion with the consent of the lenders). The Revolving Credit Facility matures on August 26, 2027 and is unsecured. The Company may request the term of the Revolving Credit Facility be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. We have historically used a credit facility principally as a back-up for our commercial paper program. As of May 26, 2024, there were no outstanding borrowings under the Revolving Credit Facility.

Current wording

At May 25, 2025, we had a revolving credit facility (the “Revolving Credit Facility”) with a syndicate of financial institutions providing for a maximum aggregate principal amount outstanding at any one time of $2.0 billion (subject to increase to a maximum aggregate principal amount of $2.5 billion with the consent of the lenders). The Revolving Credit Facility matures on August 26, 2027 and is unsecured. The Company may request the term of the Revolving Credit Facility be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. We have historically used a credit facility principally as a back-up for our commercial paper program. As of May 25, 2025, there were no outstanding borrowings under the Revolving Credit Facility. On June 27, 2025, subsequent to our fiscal year end, we terminated and replaced our existing revolving credit facility by entering into an amendment which extends the maturity date to June 27, 2030.

Previous wording

We had $586.0 million outstanding under our commercial paper program as of May 26, 2024 and $576.0 million outstanding as of May 28, 2023. The highest level of borrowings during fiscal 2024 was $697.0 million.

Current wording

We had $259.0 million outstanding under our commercial paper program as of May 25, 2025 and $586.0 million outstanding as of May 26, 2024. The highest level of borrowings during fiscal 2025 was $1.0 billion.

Previous wording

During the fourth quarter of fiscal 2024, we entered into an unsecured Term Loan with a financial institution and borrowed the full principal amount, $300.0 million, available thereunder (the “2024 Term Loan”). The net proceeds, along with the issuance of commercial paper and operating cash flows, were used to repay the $1.00 billion aggregate principal amount of our 4.30% senior notes on their maturity date of May 1, 2024. The 2024 Term Loan matures on April 29, 2025.

Current wording

During the fourth quarter of fiscal 2025, we entered into an unsecured Term Loan with a financial institution and borrowed the full principal amount, $200.0 million, available thereunder (the “2025 Term Loan”). The net proceeds were used to repay outstanding borrowings under our commercial paper program. On June 4, 2025, subsequent to our fiscal year end, we repaid $100.0 million of the $200.0 million aggregate principal amount outstanding under the 2025 Term Loan with a portion of the proceeds received in connection with the sale of ourChef Boyardee® business. The 2025 Term Loan matures on October 29, 2025.

Previous wording

During the second quarter of fiscal 2024, we prepaid $250.0 million of the $500.0 million aggregate principal amount outstanding under our unsecured Term Loan Agreement, dated August 26, 2023 (the "2023 Term Loan"). The repayment was funded by operating cash flows and the issuance of commercial paper. The remaining balance of the 2023 Term Loan matures on August 26, 2025.

Current wording

During the second quarter of fiscal 2025, we repaid the remaining $250.0 million aggregate principal amount outstanding under our unsecured Term Loan Agreement, dated August 26, 2023 (the “2023 Term Loan”). The repayment was primarily funded by operating cash flows.

Previous wording

Additional information about our long-term debt balances as of May 26, 2024 can be found in Note 3,“Long-Term Debt”, to the Consolidated Financial Statements contained in this report. The weighted-average coupon interest rate of the long-term debt obligations outstanding as of May 26, 2024, was approximately 4.9%.

Current wording

See Note 4,“Long-Term Debt”and Note 5, “Credit Facilities and Borrowings”, to the Consolidated Financial Statements contained in this report for additional information on our debt transactions. The weighted-average coupon interest rate of the long-term debt obligations outstanding as of May 25, 2025, was approximately 4.9%.

Previous wording

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

Current wording

billion aggregate principal amount of 4.6% senior notes maturing in November 2025 that we expect to pay and/or refinance using available sources which may include the investment grade note market, bank loans, commercial paper, and cash on hand. We continuously evaluate opportunities to refinance our debt; however, any refinancing is subject to market conditions and other factors, including financing options that may be available to us from time to time, and there can be no assurance that we will be able to successfully refinance any debt on commercially acceptable terms at all.

Previous wording

We repurchase shares of our common stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our Board. Under our current share repurchase authorization, we may repurchase our shares periodically over several years, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions. The share repurchase authorization has no expiration date. We did not repurchase any shares of common stock during fiscal 2024. The Company’s total remaining share repurchase authorization as of May 26, 2024 was $916.6 million.

Current wording

We repurchase shares of our common stock from time to time after considering market conditions and in accordance with repurchase limits authorized by our Board. Under our current share repurchase authorization, we may repurchase our shares periodically over several years, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions. The share repurchase authorization has no expiration date. During fiscal 2025, we repurchased 2.1 million shares of our common stock under this authorization for an aggregate of $64.0 million. The Company’s total remaining share repurchase authorization as of May 25, 2025 was $852.6 million.

Previous wording

The liability for gross unrecognized tax benefits related to uncertain tax positions was $21.7 million as of May 26, 2024. See Note 14,“Pre-Tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report for information related to income taxes.

Current wording

The liability for gross unrecognized tax benefits related to uncertain tax positions was $11.0 million as of May 25, 2025. See Note 14,“Pre-Tax Income and Income Taxes”, to the Consolidated Financial Statements contained in this report for information related to income taxes.

Previous wording

As of May 26, 2024, we had an aggregate funded pension asset of $164.2 million and an aggregate unfunded postretirement benefit obligation totaling $44.4 million. We expect to make payments totaling approximately $11.7 million and $6.6 million in fiscal 2025 to fund our pension and postretirement plans, respectively. See Note 18,“Pension and Postretirement Benefits”, to the Consolidated Financial Statements and*“Critical Accounting Estimates – Employee-Related Benefits”* contained in this report for further discussion of our pension obligation and factors that could affect estimates of these obligations.

Current wording

As of May 25, 2025, we had an aggregate funded pension asset of $253.0 million and an aggregate unfunded postretirement benefit obligation totaling $48.3 million. We expect to make payments totaling approximately $11.0 million and $6.6 million in fiscal 2026 to fund our pension and postretirement plans, respectively. See Note 18,“Pension and Postretirement Benefits”, to the Consolidated Financial Statements and*“Critical Accounting Estimates – Employee-Related Benefits”* contained in this report for further discussion of our pension obligation and factors that could affect estimates of these obligations.

Previous wording

As of May 26, 2024, our unconditional purchase obligations (i.e., obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as “take-or-pay” contracts) totaled approximately $2.53 billion. Approximately $1.80 billion of this balance is due in fiscal 2025. Included in this amount are open purchase orders and other supply agreements totaling approximately $1.49 billion, which are generally settleable in the ordinary course of business in less than one year. Warehousing service agreements totaling approximately $562 million make up a majority of our remaining unconditional purchase obligations with various terms of up to 10 years.

Current wording

As of May 25, 2025, our unconditional purchase obligations (i.e., obligations to transfer funds in the future for fixed or minimum quantities of goods or services at fixed or minimum prices, such as “take-or-pay” contracts) totaled approximately $2.89 billion. Approximately $1.73 billion of this balance is due in fiscal 2026. Included in this amount are open purchase orders and other supply agreements totaling approximately $1.37 billion, which are generally settleable in the ordinary course of business in less than one year. Warehousing service agreements totaling approximately $916 million make up a majority of our remaining unconditional purchase obligations with various terms of up to 10 years.

Previous wording

We continue to make investments in our business and operating facilities. Our preliminary estimate of capital expenditures for fiscal 2025 is approximately $500 million.

Current wording

We continue to make investments in our business and operating facilities. Our preliminary estimate of capital expenditures for fiscal 2026 is approximately $450 million.

Previous wording

In fiscal 2024, we used $14.9 million of cash, which was the net result of $2.02 billion generated from operating activities, $375.0 million used in investing activities, $1.66 billion used in financing activities, and an increase of $1.2 million due to the effects of changes in foreign currency exchange rates.

Current wording

In fiscal 2025, we used $11.0 million of cash, which was the net result of $1.69 billion generated from operating activities, $542.2 million used in investing activities, $1.16 billion used in financing activities, and a decrease of $2.4 million due to the effects of changes in foreign currency exchange rates.

Previous wording

Cash generated from operating activities totaled $2.02 billion in fiscal 2024, as compared to $995.4 million generated in fiscal 2023. The increase in operating cash flows for fiscal 2024 compared to fiscal 2023 was primarily driven by a reduction in our inventory balances, which were impacted by lower net sales volumes in addition to an inventory rebuild from previous supply chain constraints in fiscal 2023. Other changes in working capital were positively impacted by decreased accounts receivables and extended payment terms with certain vendors resulting in reduced cash outflows for accounts and other payables. Operating cash flows in fiscal 2024 also benefited from higher dividend payments received from one of our equity method investments.

Current wording

Cash generated from operating activities totaled $1.69 billion in fiscal 2025, as compared to $2.02 billion generated in fiscal 2024. The decrease in operating cash flows for fiscal 2025 compared to fiscal 2024 was primarily driven by lower operating profits, lower dividend payments received from one of our equity method investments, and higher inventory balances. These decreases were partially offset by the accelerated receipt of our outstanding receivables in exchange for a slightly higher prompt pay discount, which increased our cash flow from operations by approximately $140 million. Operating cash flows in fiscal 2025 also benefited from lower tax payments as a result of lower taxable income and recent interactions with the U.S. Internal Revenue Service (“IRS”) allowing for additional tax deductions.

Previous wording

Cash used in investing activities totaled $375.0 million in fiscal 2024 compared to $354.9 million in fiscal 2023. Net cash outflows from investing activities in fiscal 2024 and 2023 consisted primarily of capital expenditures totaling $388.1 million and $362.2 million, respectively.

Current wording

Cash used in investing activities totaled $542.2 million in fiscal 2025 compared to $375.0 million in fiscal 2024. Investing activities in fiscal 2025 consisted primarily of capital expenditures totaling $389.3 million, and the purchases of an existing contract manufacturer and Sweetwood Smoke & Co. for a total of $230.6 million, net of cash acquired, which were partially offset by net proceeds totaling $76.8 million from the sale of our ownership stake in ATFL. Investing activities in fiscal 2024 consisted primarily of capital expenditures totaling $388.1 million.

Previous wording

Cash used in financing activities totaled $1.66 billion in fiscal 2024 compared to $631.6 million in fiscal 2023. Financing activities in fiscal 2024 principally reflected repayments of long-term debt of $1.77 billion, the issuance of long-term debt totaling $500.0 million, net short-term borrowing issuances of $290.6 million, and cash dividends paid of $659.3 million. Financing activities in fiscal 2023 reflected repayments of long-term debt of $712.4 million, the issuance of long-term debt totaling $500.0 million, net short-term borrowing issuances of $351.4 million, cash dividends paid of $623.8 million, and common stock repurchases of $150.0 million.

Current wording

Cash used in financing activities totaled $1.16 billion in fiscal 2025 compared to $1.66 billion in fiscal 2024. Financing activities in fiscal 2025 principally reflected repayments of long-term debt of $281.3 million, net short-term borrowing repayments of $125.6 million, cash dividends paid of $669.2 million, and common stock repurchases of $64.0 million. Financing activities in fiscal 2024 principally reflected repayments of long-term debt of $1.77 billion, the issuance of long-term debt totaling $500.0 million, net short-term borrowing issuances of $290.6 million, and cash dividends paid of $659.3 million.

Previous wording

The Company had cash and cash equivalents of $77.7 million at May 26, 2024, and $93.3 million at May 28, 2023, of which $66.7 million at May 26, 2024, and $84.9 million at May 28, 2023, was held in foreign countries. A deferred tax liability is provided for certain undistributed foreign earnings that are not considered to be indefinitely reinvested or cannot be remitted in a tax-neutral transaction. Other undistributed foreign earnings are invested indefinitely and therefore we have not provided deferred taxes on those earnings.

Current wording

The Company had cash and cash equivalents of $68.0 million at May 25, 2025 and $77.7 million at May 26, 2024, of which $61.6 million at May 25, 2025 and $66.7 million at May 26, 2024 was held in foreign countries. A deferred tax liability is provided for certain undistributed foreign earnings that are not considered to be indefinitely reinvested or cannot be remitted in a tax-neutral transaction. Other undistributed foreign earnings are invested indefinitely and therefore we have not provided deferred taxes on those earnings.

Previous wording

Marketing Costs—We offer various forms of trade promotions which are mostly recorded as a reduction in revenue. The methodologies for determining these provisions are dependent on local customer pricing and promotional practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance. Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in-store displays and events, feature price discounts, consumer coupons, and loyalty programs. The costs of these activities are recognized as a reduction of revenue at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. Differences between estimated expense and actual redemptions are recognized as a change in management estimate in a subsequent period.

Current wording

The methodologies for determining trade promotions and consumer incentives are dependent on local customer pricing practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance. Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in-store displays and events, feature price discounts, consumer coupons, and loyalty programs. The costs of these activities are recognized as a reduction of revenue at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. Differences between estimated expense and actual redemptions are recognized as a change in management estimate in a subsequent period.

Previous wording

We have recognized trade promotion liabilities of $120.4 million as of May 26, 2024. Changes in the assumptions used in estimating the cost of any individual customer marketing program would not result in a material change in our results of operations or cash flows.

Current wording

We have recognized trade promotion and advertising liabilities of $131.5 million as of May 25, 2025. Changes in the assumptions used in estimating the cost of any individual customer marketing program would not result in a material change in our results of operations or cash flows.

Previous wording

Employee-Related Benefits—We incur certain employment-related expenses associated with our pension plans. In order to measure the annual expense associated with these pension benefits, management must make a variety of estimates including, but not limited to, discount rates used to measure the present value of certain liabilities, assumed rates of return on assets set aside to fund these expenses, employee turnover rates, and anticipated mortality rates. The estimates used by management are based on our historical experience as well as current facts and circumstances. We use third-party specialists to assist management in appropriately measuring the expense associated with these pension benefits. Different estimates used by management could result in us recognizing different amounts of expense over different periods of time.

Current wording

Employee-Related Benefits—We incur certain employment-related expenses associated with our pension plans. In order to measure the annual expense associated with these pension benefits, management must make a variety of estimates including discount rates used to measure the present value of certain liabilities, assumed rates of return on assets set aside to fund these expenses, and anticipated mortality rates. The estimates used by management are based on our historical experience as well as current facts and circumstances. We use third-party specialists to assist management in appropriately measuring the expense associated with these pension benefits. Different estimates used by management could result in us recognizing different amounts of expense over different periods of time.

Previous wording

We have recognized a pension liability of $95.9 million and $101.6 million as of the end of fiscal 2024 and 2023, respectively. We also have recognized a pension asset of $260.1 million and $249.9 million as of the end of fiscal 2024 and 2023, respectively, as certain individual plans of the Company had a positive funded status.

Current wording

We have recognized a pension liability of $89.8 million and $95.9 million as of the end of fiscal 2025 and 2024, respectively. We also have recognized a pension asset of $342.8 million and $260.1 million as of the end of fiscal 2025 and 2024, respectively, as certain individual plans of the Company had a positive funded status.

Previous wording

We recognized a pension benefit from Company plans of $0.6 million, $13.9 million, and $54.4 million in fiscal 2024, 2023, and 2022, respectively. Such amounts reflect the year-end write-off of actuarial losses (gains) in excess of 10% of our pension liability of $(12.5) million, $0.1 million, and $(2.9) million in fiscal 2024, 2023, and 2022, respectively. This also reflected expected returns on plan assets of $141.3 million, $145.9 million, and $145.4 million in fiscal 2024, 2023, and 2022, respectively. We contributed $12.2 million, $12.5 million, and $11.5 million to our pension plans in fiscal 2024, 2023, and 2022, respectively. We anticipate contributing approximately $11.7 million to our pension plans in fiscal 2025.

Current wording

We recognized a pension benefit from Company plans of $19.6 million, $0.6 million, and $13.9 million in fiscal 2025, 2024, and 2023, respectively. Such amounts reflect the year-end write-off of actuarial losses (gains) in excess of 10% of our pension liability of $(3.5) million, $(12.5) million, and $0.1 million in fiscal 2025, 2024, and 2023, respectively. This also reflected expected returns on plan assets of $146.3 million, $141.3 million, and $145.9 million in fiscal 2025, 2024, and 2023, respectively. We contributed $11.9 million, $12.2 million, and $12.5 million to our pension plans in fiscal 2025, 2024, and 2023, respectively. We anticipate contributing approximately $11.0 million to our pension plans in fiscal 2026.

Previous wording

Based on this information, the weighted-average discount rate selected by us for determination of the interest cost component of our pension expense was 5.41% for fiscal 2024, 4.09% for fiscal 2023, and 2.29% for fiscal 2022. The weighted-average discount rate selected by us for determination of the service cost component of our pension expense was 5.60% for fiscal 2024, 4.74% for fiscal 2023, and 3.50% for fiscal 2022. We selected a weighted-average discount rate of 5.72% and 5.51% for determination of service and interest expense, respectively, for fiscal 2025. A 25-basis point increase in our discount rate assumption as of the end of fiscal 2024 would increase our annual pension expense for our pension plans by $2.5 million. A 25-basis point decrease in our discount rate assumption as of the end of fiscal 2024 would decrease our annual pension expense for our pension plans by $2.6 million. For our year-end pension obligation determination, we selected discount rates of 5.58% and 5.50% for fiscal years 2024 and 2023, respectively.

Current wording

Based on this information, the weighted-average discount rate selected by us for determination of the interest cost component of our pension expense was 5.51% for fiscal 2025, 5.41% for fiscal 2024, and 4.09% for fiscal 2023. The weighted-average discount rate selected by us for determination of the service cost component of our pension expense was 5.72% for fiscal 2025, 5.60% for fiscal 2024, and 4.74% for fiscal 2023. We selected a weighted-average discount rate of 6.17% and 5.41% for determination of service and interest expense, respectively, for fiscal 2026. A 50-basis point increase in our discount rate assumption as of the end of fiscal 2025 would increase our annual pension expense for our pension plans by $3.2 million. A 50-basis point decrease in our discount rate assumption as of the end of fiscal 2025 would decrease our annual pension expense for our pension plans by $3.6 million. For our year-end pension obligation determination, we selected discount rates of 5.91% and 5.58% for fiscal years 2025 and 2024, respectively.

Previous wording

Another significant assumption used to account for our pension plans is the expected long-term rate of return on plan assets. In developing the assumed long-term rate of return on plan assets for determining pension expense, we consider long-term historical returns (arithmetic average) of the plan’s investments, the asset allocation among types of investments, estimated long-term returns by investment type from external sources, and the current economic environment. Based on this information, we selected 5.00% for the weighted-average expected long-term rate of return on plan assets for determining our fiscal 2024 pension expense. A 25-basis point increase/decrease in our weighted-average expected long-term rate of return assumption as of the beginning of fiscal 2024 would decrease/increase annual pension expense for our pension plans by $7.1 million. A 25-basis point increase/decrease in our expected long-term rate of return assumption as of the beginning of fiscal 2025 would decrease/increase annual pension expense for our pension plans by $6.6 million. We selected a weighted-average expected rate of return on plan assets of 5.53% to be used to determine our pension expense for fiscal 2025.

Current wording

Another significant assumption used to account for our pension plans is the expected long-term rate of return on plan assets. In developing the assumed long-term rate of return on plan assets for determining pension expense, we consider long-term historical returns (arithmetic average) of the plan’s investments, the asset allocation among types of investments, estimated long-term returns by investment type from external sources, and the current economic environment. Based on this information, we selected a weighted-average expected long-term rate of return on plan assets of 5.53% and 5.89% for determining our fiscal 2025 and 2026 pension expense, respectively. A 50-basis point increase/decrease in our expected long-term rate of return assumption as of the beginning of fiscal 2026 would decrease/increase annual pension expense for our pension plans by $9.4 million.

Previous wording

We reduce the carrying amounts of indefinite-lived intangible assets, and goodwill to their fair values when the fair value of such assets is determined to be less than their carrying amounts (i.e., assets are deemed to be impaired). Fair value is estimated using a “relief from royalty” methodology for our indefinite-lived intangible assets and is typically estimated using a discounted cash flow method for our goodwill, which requires us to estimate the future cash flows anticipated to be generated by the particular reporting unit being tested for impairment as well as to select a discount rate to measure the present value of the anticipated cash flows. In certain circumstances, we also utilize a guideline public company method which is based on market multiples and our estimated EBITDA that considers public companies that are comparable to our reporting units. When determining future cash flow estimates under the guideline public company method or discounted cash flow method, we consider historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or estimates for selected EBITDA multiples and future cash flows could produce different impairment amounts (or none at all) for goodwill and indefinite-lived intangible assets. For further information on our indefinite-lived intangible assets and goodwill, see Note 1, “Summary of Significant Accounting Policies”, to the Consolidated Financial Statements contained in this report.

Current wording

We reduce the carrying amounts of indefinite-lived intangible assets, and goodwill to their fair values when the fair value of such assets is determined to be less than their carrying amounts (i.e., assets are deemed to be impaired). Fair value is estimated using a “relief from royalty” methodology for our indefinite-lived intangible assets and is typically estimated using a discounted cash flow method for our goodwill, which requires us to estimate the future cash flows anticipated to be generated by the particular reporting unit being tested for impairment as well as to select a discount rate to measure the present value of the anticipated cash flows. In certain circumstances, we also utilize a guideline public company method which is based on market multiples and our estimated EBITDA that considers public companies that are comparable to our reporting units. When determining future cash flow estimates under the guideline public company method or discounted cash flow method, we consider historical results adjusted to reflect current and anticipated operating conditions. Estimating future cash flows requires significant judgment by management in such areas as future economic conditions, industry-specific conditions, product pricing, and necessary capital expenditures. The use of different assumptions or

Previous wording

As of May 26, 2024, we have goodwill of $10.58 billion, indefinite-lived intangibles of $2.03 billion and definite-lived intangibles of $681.6 million. Historically, we have experienced material impairments in brand intangibles and goodwill as a result of declining sales, reductions to our assumed royalty rates due to lower-than-expected profit margins, and other economic conditions such as increases to interest rates. In the fourth quarter of fiscal 2024, we recorded goodwill impairments of $526.5 million in our Sides, Components, Enhancers reporting unit. The carrying value in our Sides, Components, Enhancers reporting unit was approximately $3.2 billion as of our fiscal 2024 annual impairment testing date and was the only reporting unit with 10% or less excess fair value over carrying value as of that date. For our Sides, Components, Enhancers reporting unit, we selected a discount rate of 8.50% and a long-term growth rate that approximated 1%.

Current wording

As of May 25, 2025, we have goodwill of $10.50 billion, indefinite-lived intangibles of $1.80 billion and definite-lived intangibles of $620.6 million. Historically, we have experienced material impairments in brand intangibles and goodwill as a result of declining sales, reductions to our assumed royalty rates due to lower-than-expected profit margins, and other economic conditions such as increases to interest rates.

Previous wording

In fiscal 2024, 2023, and 2022, we recorded total indefinite-lived intangibles impairments of $430.2 million, $589.2 million, and $209.0 million, respectively, primarily related to brands acquired as part of the Pinnacle acquisition that were recorded at fair value in fiscal 2019. We continue to be more susceptible to impairment charges in the future if our long-term sales forecasts, royalty rates, and other assumptions change as a result of lower than expected performance or other economic conditions. We will monitor these assumptions as management continues to achieve gross margin improvement and long-term sales growth. Discount rates, long-term growth rates, and royalty rates used to estimate the fair value of our domestic retail brands with 10% or less excess fair value over carrying amount as of the fiscal 2024 annual impairment test were as follows:

Current wording

In fiscal 2025, 2024, and 2023, we recorded total indefinite-lived intangibles impairments of $72.1 million, $430.2 million, and $589.2 million, respectively, primarily related to brands acquired as part of the Pinnacle acquisition that were recorded at fair value in fiscal 2019. We continue to be susceptible to impairment charges in the future if our long-term sales forecasts, royalty rates, and other assumptions change as a result of lower than expected performance or other economic conditions. We will monitor these assumptions as management continues to achieve gross margin improvement and long-term sales growth. Discount rates, long-term growth rates, and royalty rates used to estimate the fair value of our domestic retail brands with 10% or less excess fair value over carrying amount as of the fiscal 2025 annual impairment test were as follows:

Previous wording

If we had changed the assumptions used to estimate the fair value of our reporting unit and brands with 10% or less excess fair value over carrying amount as of the fiscal 2024 annual impairment test, these isolated changes, which are reasonably possible to occur, would have led to the following increase/(decrease) in the aggregate fair value of this reporting unit and certain brands (in millions):

Current wording

If we had changed the assumptions used to estimate the fair value of our brands with 10% or less excess fair value over carrying amount as of the fiscal 2025 annual impairment test, these isolated changes, which are reasonably possible to occur, would have led to the following increase/(decrease) in the aggregate fair value of certain brands (in millions):