Conagra Brands Annual Report 2017 Conagra Brands, Inc., Annual Report 2017 Brands, Inc., Conagra 222 Merchandise Mart Plaza Suite 1300 Chicago, IL 60654 ©Conagra Brands, Inc. All rights reserved. FELLOW SHAREHOLDERS BOARD OF DIRECTORS LEADERSHIP Fiscal 2017 marked our second full year of transformation. Execution excellence will also remain a hallmark of our Bradley A. Alford Joie A. Gregor Sean M. Connolly San Marino, CA Scottsdale, AZ President and Chief Executive Officer Looking back, we’ve accomplished a lot. We reshaped culture. We will continue to drive unnecessary cost out Former Chief Executive Officer Retired Managing Director for our company and portfolio of brands – exiting non-core of our business, and drive ongoing efficiencies throughout and Chairman of Nestlé USA Leadership Development of Colleen Batcheler businesses including Spicetec Flavors & Seasonings® and our operations. (food and beverage company) Warburg Pincus, LLC Executive Vice President, JM Swank.® We flawlessly executed the Lamb Weston® Director since 2015 (private equity firm) General Counsel and spin-off. We’ve also modernized our portfolio through the We are optimistic our plans and strategies will generate Director since 2009 Corporate Secretary acquisition of on-trend brands like Frontera,® Duke’s® and strong cash flows and create shareholder value. That’s Thomas K. Brown ® Dearborn, MI Rajive Johri Dave Biegger BIGS, and our transformation continues with the pending why your board of directors approved a new $1 billion Retired Group Vice President of Global Greenwich, CT Executive Vice President, ® sale of the Wesson brand. share repurchase program to complement our current Purchasing of Ford Motor Company Former President and Director of Chief Supply Chain Officer solid dividend payout. (automobile manufacturer) First National Bank of Omaha At the same time, we took aggressive action to reduce Director since 2013 (banking institution) Charisse Brock costs, upgrade the quality of our revenue base and Before closing, I want to note one thing that hasn’t Director since 2009 Executive Vice President, Stephen G. Butler Chief Human Resources Officer jumpstart innovation across the company. In short, we’ve and won’t change: the priority we place on corporate Leawood, KS Richard H. Lenny overhauled our culture, growth capabilities and shareholder citizenship. Fiscal 2017 marked the sixth consecutive Retired Chairman and Chicago, IL Brian Davison value focus behind a new management team and an year that Conagra Brands was included in the Chief Executive Officer of KPMG LLP Former Chairman and Chief Executive Senior Vice President, energized new corporate headquarters. Dow Jones SustainabilityTM North America Index, (national public accounting firm) Officer of The Hershey Company Strategy and Business Development one of the world’s most recognizable sustainability Director since 2003 (confectionery and snack products) Director since 2009 Our actions have led to stronger, more consistent indices. Conagra Brands employees around the world Derek De La Mater Sean M. Connolly Executive Vice President, performance. In fiscal year 2017: are delivering our financial results while making our Chicago, IL Ruth Ann Marshall President of Sales communities a better place to live and work – by personally President and Chief Executive Officer Fisher Island, FL • Adjusted gross margin¹ increased volunteering thousands of hours, and by developing and of Conagra Brands, Inc. Retired President of MasterCard Jon Harris 180 basis points to 30.2%. implementing projects that save the company millions of Director since 2015 International’s Americas division Senior Vice President, • Adjusted operating margin¹ increased dollars while diverting thousands of tons of waste from (payments industry) Chief Communications Officer Thomas W. Dickson Director since 2007 310 basis points to 15.8%. landfills, conserving hundreds of million gallons of water Charlotte, NC David Marberger • Adjusted diluted EPS from continuing operations¹ and reducing greenhouse gas emissions by thousands Former President and Craig P. Omtvedt Executive Vice President, increased 33.8% to $1.74. of metric tons. Chief Executive Officer of Palm Beach, FL Chief Financial Officer • We repurchased $1 billion of stock and Harris Teeter Supermarkets, Inc. Retired Senior Vice President paid $415 million in dividends. These are exciting times for Conagra Brands, and I want (Grocery) and Chief Financial Officer of Tom McGough Fortune Brands, Inc. to thank our talented and dedicated Conagra Brands Director since 2016 President, Operating Segments (consumer home products) Clearly, we’ve been busy – but our work is not finished. employees, who continue to embrace change and execute Steven F. Goldstone Director since 2016 Darren Serrao We are seeing a healthier, less promotional business our strategy while serving our customers with excellence. Ridgefield, CT Executive Vice President, emerge. But we still have a lot of opportunity to build Manager of Silver Spring Group Chief Growth Officer margins and improve our growth prospects. Thank you for your continued support of Conagra Brands. (private investment firm); Retired Chairman of Robert Wise Nabisco Group Holdings Senior Vice President, We will continue to innovate and strengthen existing Sincerely, (consumer products company) Corporate Controller brands with contemporary attributes most wanted and Director since 2003 and non-Executive demanded by consumers. Our innovation capabilities are Chairman since October 2005 accelerating, and you will see our new products hit the market throughout fiscal 2018. We’ll also continue to further renovate our brand portfolio by acquiring new assets and Sean M. Connolly potentially divesting assets that no longer fit. We expect President and Chief Executive Officer that, over time, a greater percentage of our sales will come THIS IS A GREENER from loyal households and generate higher margins. ANNUAL REPORT The paper for this publication is FSC® certified and meets the strict standards of the Forest Stewardship Council,® which promotes environmentally appropriate, socially beneficial and economically viable management of the world’s forests. ¹ This measure is a non-GAAP financial measure. For a reconciliation of this measure to the most directly comparable GAAP measure, please see Reconciliation For Regulation G Purposes beginning on page 110. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 28, 2017 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-7275 _________________________________________________ CONAGRA BRANDS, INC. (Exact name of registrant as specified in its charter) __________________________________________________ Delaware 47-0248710 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 222 W. Merchandise Mart Plaza, Suite 1300 Chicago, Illinois 60654 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code (312) 549-5000 ___________________________________________________ Securities registered pursuant to section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $5.00 par value New York Stock Exchange Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨ Emerging growth company ¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended