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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended
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May 31, 2026
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fiscal Year — The fiscal year of Conagra Brands, Inc. (“Conagra Brands”, “Company”, “we”, “us”, or “our”) ends the last Sunday in May. The fiscal years for the consolidated financial statements presented consist of a 53-week period for fiscal 2026 and 52-week periods for fiscal 2025 and 2024. Basis of Consolidation — The consolidated financial statements include the accounts of Conagra Brands, Inc. and all majority-owned subsidiaries. All significant intercompany investments, accounts, and transactions have been eliminated. Investments in Unconsolidated Affiliates — The investments in, and the operating results of, 50%-or-less-owned entities not required to be consolidated are included in the consolidated financial statements on the basis of the equity method of accounting. We review our investments in unconsolidated affiliates for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable. Evidence of a loss in value that is other than temporary includes the absence of an ability to recover the carrying amount of the investment, the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment, or, where applicable, estimated sales proceeds which are insufficient to recover the carrying amount of the investment. Management’s assessment as to whether any decline in value is other than temporary is based on our ability and intent to hold the investment and whether evidence indicating the carrying value of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. Management generally considers our investments in equity method investees to be strategic long-term investments. Therefore, management completes its assessments with a long-term viewpoint. If the fair value of the investment is determined to be less than the carrying value and the decline in value is considered to be other than temporary, an appropriate write-down is recorded based on the excess of the carrying value over the best estimate of fair value of the investment. Cash and Cash Equivalents — Cash and all highly liquid investments with an original maturity of three months or less at the date of acquisition, including short-term time deposits and government agency and corporate obligations, are classified as cash and cash equivalents. Receivables — Receivables from customers generally do not bear interest. Terms and collection vary by location and channel. The allowance for doubtful accounts represents our estimate of probable non-payments and credit losses in our existing receivables, as determined based on a review of past due balances and other specific account data. Account balances are written off against the allowance when we deem them uncollectible. The following table details the balances of our allowance for doubtful accounts and changes therein: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Balance at | ​ | ​ | Additions Charged | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | to Costs and | ​ | ​ | ​ | ​ | Deductions from | ​ | Balance at Close
​ | ​ | Period | ​ | ​ | Expenses | ​ | ​ | Other1 | ​ | Reserves2 | ​ | of Period
Year ended May 31, 2026 | ​ | $ | 3.6 | ​ | ​ | 0.4 | ​ | ​ | — | ​ | 0.1 | ​ | $ | 3.9
Year ended May 25, 2025 | ​ | $ | 3.0 | ​ | ​ | 1.6 | ​ | ​ | — | ​ | 1.0 | ​ | $ | 3.6
Year ended May 26, 2024 | ​ | $ | 2.7 | ​ | ​ | 0.6 | ​ | ​ | 0.2 | ​ | 0.5 | ​ | $ | 3.0
1 Primarily relates to translation. 2 Bad debts charged off and adjustments to previous reserves, less recoveries. ​ Inventories — We use the lower of cost (determined using an average costing method) or net realizable value for valuing inventories. Property, Plant and Equipment — Property, plant and equipment are carried at cost. Depreciation has been calculated using the straight-line method over the estimated useful lives of the respective classes of assets as follows: ​
​ | ​ | ​ | ​
​ | ​ | Years
Land improvements | ​ | ​ | 1 - 40
Buildings | ​ | ​ | 15 - 40
Machinery and equipment | ​ | ​ | 3 - 20
Furniture, fixtures, office equipment and other | ​ | ​ | 5 - 15
​ We review property, plant and equipment for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Recoverability of an asset considered “held-and-used” is determined by comparing the carrying amount of the asset to the undiscounted net cash flows expected to be generated from the use of the asset. If the carrying amount is greater than the undiscounted net cash flows expected to be generated by the asset, the asset’s carrying amount is reduced to its estimated fair value. An asset considered “held-for-sale” is reported at the lower of the asset’s carrying amount or fair value. During fiscal 2026, 2025, and 2024, our capital expenditures totaled $423.4 million, $389.3 million, and $388.1 million, respectively. Accrued and unpaid capital expenditures as of May 31, 2026, May 25, 2025, May 26, 2024, and May 28, 2023 totaled $113.2 million, $134.0 million, $119.3 million, and $128.3 million, respectively. Total depreciation expense for fiscal 2026, 2025, and 2024 was $352.9 million, $336.5 million, and $347.3 million, respectively. Goodwill and Other Identifiable Intangible Assets — Goodwill and other identifiable intangible assets with indefinite lives (e.g., brands or trademarks) are not amortized and are tested annually for impairment of value and whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include deterioration in general economic conditions, adverse changes in the markets in which an entity operates, increases in input costs that have negative effects on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill and other intangible assets. In testing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If we elect to perform a qualitative assessment and determine that an impairment is more likely than not, we are then required to perform a quantitative impairment test, otherwise no further analysis is required. We also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test. Under the goodwill qualitative assessment, various events and circumstances that would affect the estimated fair value of a reporting unit are identified (similar to impairment indicators above). Furthermore, management considers the results of the most recent quantitative impairment test completed for a reporting unit and compares the weighted average cost of capital between the current and prior years for each reporting unit. Under the goodwill quantitative impairment test, the evaluation of impairment involves comparing the current fair value of each reporting unit to its carrying value, including goodwill. We estimate the fair value using level 3 inputs as defined by the fair value hierarchy. Refer to Note 19 for the definition of the levels in the fair value hierarchy. The inputs used to calculate the fair value include a number of subjective factors, such as estimates of future cash flows, estimates of our future cost structure, discount rates for our estimated cash flows, required level of working capital, assumed terminal value, and time horizon of cash flow forecasts. In certain circumstances, we also utilize a guideline public company method which is based on market multiples and our estimated earnings before interest, taxes, depreciation and amortization (“EBITDA”) that considers public companies that are comparable to our reporting units. In assessing indefinite-lived intangible assets not subject to amortization for impairment, we have the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of such an intangible asset is less than its carrying amount. If we determine that it is not more likely than not that the fair value of such an intangible asset is less than its carrying amount, then we are not required to perform any additional tests for assessing intangible assets for impairment. However, if we conclude otherwise or elect not to perform the qualitative assessment, then we are required to perform a quantitative impairment test that involves a comparison of the estimated fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. In fiscal 2026, 2025, and 2024 we elected to perform a quantitative impairment test for indefinite-lived intangible assets not subject to amortization. The estimates of fair value of intangible assets not subject to amortization are determined using a “relief from royalty” methodology, which is used in estimating the fair value of our brands/trademarks. Discount rate assumptions are based on an assessment of the risk inherent in the projected future cash flows generated by the respective intangible assets. Also subject to judgment are assumptions about royalty rates. Identifiable intangible assets with definite lives (e.g., licensing arrangements with contractual lives or customer relationships) are amortized over their estimated useful lives and tested for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may be impaired. Identifiable intangible assets with definite lives are evaluated for impairment using a process similar to that used in evaluating elements of property, plant and equipment. If impaired, the asset is written down to its fair value. Refer to Note 9 for discussion of the impairment charges related to goodwill and intangible assets in fiscal 2026, 2025, and 2024. Fair Values of Financial Instruments — Unless otherwise specified, we believe the carrying value of financial instruments approximates their fair value. Environmental Liabilities — Environmental liabilities are accrued when it is probable that obligations have been incurred and the associated amounts can be reasonably estimated. We use third-party specialists to assist management in appropriately measuring the obligations associated with environmental liabilities. Such liabilities are adjusted as new information develops or circumstances change. We do not discount our environmental liabilities as the timing of the anticipated cash payments is not fixed or readily determinable. Management’s estimate of our potential liability is independent of any potential recovery of insurance proceeds or indemnification arrangements. We do not reduce our environmental liabilities for potential insurance recoveries. Employment-Related Benefits — Employment-related benefits associated with pensions, postretirement health care benefits, and workers’ compensation are expensed as such obligations are incurred. The recognition of expense is impacted by estimates made by management, such as discount rates used to value these liabilities, future health care costs, and employee accidents incurred but not yet reported. We use third-party specialists to assist management in appropriately measuring the obligations associated with employment-related benefits. We recognize changes in the fair value of pension plan assets and net actuarial gains or losses in excess of 10% of the greater of the market-related value of plan assets or the plan’s projected benefit obligation (the “corridor”) in current period expense annually as of our measurement date, which is our fiscal year-end, or when measurement is required otherwise under accounting principles generally accepted in the United States of America (“U.S. GAAP”). Revenue Recognition — Our revenues primarily consist of the sale of food products that are sold to retailers and foodservice customers through direct sales forces, broker, and distributor arrangements. These revenue contracts generally have single performance obligations. Revenue, which includes shipping and handling charges billed to the customer, is reported net of variable consideration and consideration payable to our customers, including applicable discounts, returns, allowances, trade promotion, consumer coupon redemption, unsaleable product, and other costs. Amounts billed and due from our customers are classified as receivables and require payment on a short-term basis and, therefore, we do not have any significant financing components. We recognize revenue when (or as) performance obligations are satisfied by transferring control of the goods to customers. Control is transferred upon delivery of the goods to the customer. Shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs. We assess the goods and services promised in our customers’ purchase orders and identify a performance obligation for each promise to transfer a good or service (or bundle of goods or services) that is distinct. We offer various forms of trade promotions and the methodologies for determining these provisions are dependent on local customer pricing and promotional practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance. Our promotional activities are conducted either through the retail trade or directly with consumers and include activities such as in-store displays and events, feature price discounts, consumer coupons, and loyalty programs. The costs of these activities are recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. Differences between estimated expense and actual redemptions are recognized as a change in management estimate in a subsequent period. Advertising Costs — Advertising costs are expensed as incurred. Advertising and promotion expenses totaled $279.4 million, $263.2 million, and $289.6 million in fiscal 2026, 2025, and 2024, respectively, and are included in selling, general and administrative (“SG&A”) expenses. Research and Development — We incurred expenses of $62.7 million, $60.8 million, and $61.4 million for research and development activities in fiscal 2026, 2025, and 2024, respectively. Comprehensive Income — Comprehensive income includes net income, currency translation adjustments, certain derivative-related activity, and changes in prior service cost and net actuarial gains (losses) from pension (for amounts not in excess of the 10% “corridor”) and postretirement health care plans. On foreign investments we deem to be essentially permanent in nature, we do not provide for taxes on currency translation adjustments arising from converting an investment denominated in a foreign currency to U.S. dollars. A deferred tax liability is recorded on currency translation adjustments related to undistributed foreign earnings that are not deemed to be permanently reinvested. The following table details the accumulated balances for each component of other comprehensive income, net of tax: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2026 | ​ | 2025
Currency translation losses, net of reclassification adjustments | ​ | $ | (50.3) | ​ | $ | (65.8)
Derivative adjustments, net of reclassification adjustments | ​ | ​ | 19.8 | ​ | ​ | 22.0
Pension and postretirement benefit obligations, net of reclassification adjustments | ​ | ​ | 37.9 | ​ | ​ | 60.1
Accumulated other comprehensive income | ​ | $ | 7.4 | ​ | $ | 16.3
​ The following table summarizes the reclassifications from accumulated other comprehensive income into income (loss): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Affected Line Item in the Consolidated Statement | ​
​ | ​ | 2026 | ​ | 2025 | ​ | 2024 | ​ | of Operations1 | ​
Net derivative adjustments: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash flow hedges | ​ | $ | (2.3) | ​ | $ | (2.7) | ​ | $ | (3.5) | ​ | Interest expense, net | ​
Cash flow hedges | ​ | ​ | (2.5) | ​ | ​ | (4.1) | ​ | ​ | (4.7) | ​ | Equity method investment earnings | ​
​ | ​ | ​ | (4.8) | ​ | ​ | (6.8) | ​ | ​ | (8.2) | ​ | Total before tax | ​
​ | ​ | ​ | 1.2 | ​ | ​ | 1.7 | ​ | ​ | 2.0 | ​ | Income tax expense | ​
​ | ​ | $ | (3.6) | ​ | $ | (5.1) | ​ | $ | (6.2) | ​ | Net of tax | ​
Pension and postretirement benefit obligations: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net prior service benefit | ​ | $ | (0.2) | ​ | $ | (0.1) | ​ | $ | (0.1) | ​ | Pension and postretirement non-service income | ​
Net actuarial gain | ​ | ​ | (3.4) | ​ | ​ | (5.1) | ​ | ​ | (4.7) | ​ | Pension and postretirement non-service income | ​
Pension settlement | ​ | ​ | 2.7 | ​ | ​ | (13.0) | ​ | ​ | 1.1 | ​ | Pension and postretirement non-service income | ​
​ | ​ | ​ | (0.9) | ​ | ​ | (18.2) | ​ | ​ | (3.7) | ​ | Total before tax | ​
​ | ​ | ​ | 0.3 | ​ | ​ | 4.4 | ​ | ​ | 0.9 | ​ | Income tax expense | ​
​ | ​ | $ | (0.6) | ​ | $ | (13.8) | ​ | $ | (2.8) | ​ | Net of tax | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Currency translation losses | ​ | $ | — | ​ | $ | 41.8 | ​ | $ | — | ​ | Selling, general and administrative expenses 2 | ​
​ | ​ | ​ | — | ​ | ​ | 41.8 | ​ | ​ | — | ​ | Total before tax | ​
​ | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | Income tax expense | ​
​ | ​ | $ | — | ​ | $ | 41.8 | ​ | $ | — | ​ | Net of tax | ​
​ 1 Amounts in parentheses indicate income recognized in the Consolidated Statements of Operations. 2 Amount represents the reclassification for currency translation losses in connection with the sale of ATFL (see Note 7). Foreign Currency Transaction Gains and Losses — We recognized net foreign currency transaction gains of $2.1 million and $1.3 million in fiscal 2026 and 2024, respectively, and net foreign currency transaction losses of $2.6 million in fiscal 2025 in SG&A expenses. Business Combinations — We use the acquisition method in accounting for acquired businesses. Under the acquisition method, our financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Reclassifications and other changes — Certain prior year amounts have been reclassified to conform with current year presentation. Use of Estimates — Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect reported amounts of assets, liabilities, revenues, and expenses as reflected in the consolidated financial statements. Actual results could differ from these estimates. New Accounting Standards — In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, to provide more detailed income tax disclosure requirements. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid. We adopted this ASU in the fourth quarter of fiscal 2026 and added certain disclosures to Note 14, Pre-tax Income and Income Taxes. The disclosures were applied retrospectively and impacted all prior periods presented.

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