UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 26, 2023

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 Number: 1-7275

CONAGRA BRANDS, INC.

(Exact name of registrant as specified in its charter)

Delaware	47-0248710
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
222 W. Merchandise Mart Plaza, Suite 1300 Chicago, Illinois	60654
(Address of principal executive offices)	(Zip Code)

(312) 549-5000

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $5.00 par value	CAG	New York Stock Exchange

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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  ☒     No  ☐

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.

Large accelerated filer  ☒ Accelerated filer  ☐ Non-accelerated filer    ☐ 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 transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Number of shares outstanding of issuer's common stock as of February 26, 2023 was 476,906,797.

Table of Contents

PART I. FINANCIAL INFORMATION		1
Item 1	Financial Statements	1
	Unaudited Condensed Consolidated Statements of Earnings for the Thirteen and Thirty-Nine Weeks Ended February 26, 2023 and February 27, 2022	1
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Thirteen and Thirty-Nine Weeks Ended February 26, 2023 and February 27, 2022	2
	Unaudited Condensed Consolidated Balance Sheets as of February 26, 2023 and May 29, 2022	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended February 26, 2023 and February 27, 2022	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4	Controls and Procedures	36
PART II. OTHER INFORMATION		36
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 6	Exhibits	37
Signatures		38
Exhibit 31.1
Exhibit 31.2
Exhibit 32
Exhibit 101
Exhibit 104

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions except per share amounts)

(unaudited)

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	February 26, 2023			February 27, 2022			February 26, 2023			February 27, 2022
Net sales	$	3,086.5		$	2,913.7		$	9,303.7		$	8,625.9
Costs and expenses:
Cost of goods sold		2,247.7			2,216.5			6,822.3			6,500.5
Selling, general and administrative expenses		348.8			338.0			1,463.1			993.5
Pension and postretirement non-service income		(6.0	)		(16.1	)		(18.2	)		(48.3	)
Interest expense, net		104.2			94.6			301.6			283.7
Income before income taxes and equity method investment earnings		391.8			280.7			734.9			896.5
Income tax expense		100.1			109.9			237.0			263.8
Equity method investment earnings		50.5			48.1			149.0			97.8
Net income	$	342.2		$	218.9		$	646.9		$	730.5
Less: Net income attributable to noncontrolling interests		0.5			0.5			0.8			1.2
Net income attributable to Conagra Brands, Inc.	$	341.7		$	218.4		$	646.1		$	729.3
Earnings per share — basic
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.72		$	0.45		$	1.35		$	1.52
Earnings per share — diluted
Net income attributable to Conagra Brands, Inc. common stockholders	$	0.71		$	0.45		$	1.34		$	1.51

See Notes to the Condensed Consolidated Financial Statements.

1

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(in millions)

(unaudited)

	Thirteen Weeks Ended
	February 26, 2023									February 27, 2022
	Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount			Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount
Net income	$	442.3		$	(100.1	)	$	342.2		$	328.8		$	(109.9	)	$	218.9
Other comprehensive income:
Derivative adjustments:
Unrealized derivative adjustments		(3.5	)		0.8			(2.7	)		2.1			(0.6	)		1.5
Reclassification for derivative adjustments included in net income		(1.6	)		0.4			(1.2	)		(0.4	)		0.2			(0.2	)
Unrealized currency translation gains		4.3			—			4.3			10.7			—			10.7
Pension and post-employment benefit obligations:
Reclassification for pension and post-employment benefit obligations included in net income		(1.1	)		0.3			(0.8	)		(0.9	)		0.3			(0.6	)
Comprehensive income		440.4			(98.6	)		341.8			340.3			(110.0	)		230.3
Comprehensive income (loss) attributable to noncontrolling interests		(0.8	)		(0.2	)		(1.0	)		0.6			(0.2	)		0.4
Comprehensive income attributable to Conagra Brands, Inc.	$	441.2		$	(98.4	)	$	342.8		$	339.7		$	(109.8	)	$	229.9

	Thirty-Nine Weeks Ended
	February 26, 2023									February 27, 2022
	Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount			Pre-Tax Amount			Tax (Expense) Benefit			After- Tax Amount
Net income	$	883.9		$	(237.0	)	$	646.9		$	994.3		$	(263.8	)	$	730.5
Other comprehensive income:
Derivative adjustments:
Unrealized derivative adjustments		3.9			(1.0	)		2.9			1.8			(0.5	)		1.3
Reclassification for derivative adjustments included in net income		(3.2	)		0.9			(2.3	)		(1.0	)		0.3			(0.7	)
Unrealized currency translation losses		(17.5	)		—			(17.5	)		(22.7	)		—			(22.7	)
Pension and post-employment benefit obligations:
Unrealized pension and post-employment benefit obligations		1.6			—			1.6			2.1			(0.2	)		1.9
Reclassification for pension and post-employment benefit obligations included in net income		(3.4	)		1.0			(2.4	)		(2.6	)		0.8			(1.8	)
Comprehensive income		865.3			(236.1	)		629.2			971.9			(263.4	)		708.5
Comprehensive loss attributable to noncontrolling interests		(4.3	)		(0.3	)		(4.6	)		(1.3	)		(0.4	)		(1.7	)
Comprehensive income attributable to Conagra Brands, Inc.	$	869.6		$	(235.8	)	$	633.8		$	973.2		$	(263.0	)	$	710.2

See Notes to the Condensed Consolidated Financial Statements.

2

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in millions except share data)

(unaudited)

	February 26, 2023			May 29, 2022
ASSETS
Current assets
Cash and cash equivalents	$	71.2		$	83.3
Receivables, less allowance for doubtful accounts of $3.7 and $3.9		960.0			867.4
Inventories		2,307.1			1,966.7
Prepaid expenses and other current assets		116.4			116.3
Total current assets		3,454.7			3,033.7
Property, plant and equipment		6,045.8			5,896.3
Less accumulated depreciation		(3,343.8	)		(3,159.1	)
Property, plant and equipment, net		2,702.0			2,737.2
Goodwill		11,178.1			11,329.2
Brands, trademarks and other intangibles, net		3,564.5			3,857.8
Other assets		1,554.9			1,477.2
	$	22,454.2		$	22,435.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable	$	658.0		$	184.3
Current installments of long-term debt		516.6			707.3
Accounts payable		1,563.9			1,864.6
Accrued payroll		159.0			151.7
Other accrued liabilities		663.5			610.9
Total current liabilities		3,561.0			3,518.8
Senior long-term debt, excluding current installments		8,081.2			8,088.2
Other noncurrent liabilities		1,873.7			1,965.9
Total liabilities		13,515.9			13,572.9
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000 shares; issued 584,219,229		2,921.2			2,921.2
Additional paid-in capital		2,368.2			2,324.6
Retained earnings		6,720.0			6,550.7
Accumulated other comprehensive loss		(23.5	)		(11.2	)
Less treasury stock, at cost, 107,312,432 and 104,157,169 common shares		(3,119.5	)		(2,997.6	)
Total Conagra Brands, Inc. common stockholders' equity		8,866.4			8,787.7
Noncontrolling interests		71.9			74.5
Total stockholders' equity		8,938.3			8,862.2
	$	22,454.2		$	22,435.1

See Notes to the Condensed Consolidated Financial Statements.

3

Conagra Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)

	Thirty-Nine Weeks Ended
	February 26, 2023			February 27, 2022
Cash flows from operating activities:
Net income	$	646.9		$	730.5
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		277.0			285.6
Asset impairment charges		417.7			72.7
Equity method investment earnings in excess of distributions		(69.8	)		(59.7	)
Stock-settled share-based payments expense		68.8			26.8
Contributions to pension plans		(9.6	)		(8.6	)
Pension benefit		(10.4	)		(38.5	)
Other items		(1.1	)		(31.6	)
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions:
Receivables		(96.7	)		(120.7	)
Inventories		(340.4	)		(57.0	)
Deferred income taxes and income taxes payable, net		(58.8	)		38.4
Prepaid expenses and other current assets		2.4			(34.7	)
Accounts payable		(157.9	)		(12.0	)
Accrued payroll		7.4			(32.4	)
Other accrued liabilities	53.4				19.3
Deferred employer payroll taxes		(25.5	)		(25.5	)
Net cash flows from operating activities		703.4			752.6
Cash flows from investing activities:
Additions to property, plant and equipment		(267.4	)		(364.2	)
Sale of property, plant and equipment		3.1			18.0
Purchase of marketable securities		(3.4	)		(2.5	)
Sale of marketable securities		3.4			2.4
Proceeds from divestitures		—			0.1
Other items		4.1			3.3
Net cash flows from investing activities		(260.2	)		(342.9	)
Cash flows from financing activities:
Issuance of short-term borrowings, maturities greater than 90 days		239.5			392.6
Repayment of short-term borrowings, maturities greater than 90 days		(259.8	)		(392.6	)
Net issuance (repayment) of other short-term borrowings, maturities less than or equal to 90 days		388.2			(344.6	)
Issuance of long-term debt		500.0			499.1
Repayment of long-term debt		(708.0	)		(43.1	)
Debt issuance costs		(4.1	)		(2.5	)
Repurchase of Conagra Brands, Inc. common shares		(150.0	)		(50.0	)
Payment of intangible asset financing arrangement		—			(12.6	)
Cash dividends paid		(466.4	)		(431.9	)
Exercise of stock options and issuance of other stock awards, including tax withholdings		0.9			(14.1	)
Other items		5.2			(7.3	)
Net cash flows from financing activities		(454.5	)		(407.0	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(0.8	)		(3.2	)
Net change in cash and cash equivalents and restricted cash		(12.1	)		(0.5	)
Cash and cash equivalents and restricted cash at beginning of period		83.3			80.2
Cash and cash equivalents and restricted cash at end of period	$	71.2		$	79.7

See Notes to the Condensed Consolidated Financial Statements.

4

Conagra Brands, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(columnar dollars in millions except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying Condensed Consolidated Financial Statements of Conagra Brands, Inc. (the "Company", "Conagra Brands", "we", "us", or "our") have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. The unaudited financial information reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented. During the second quarter of fiscal 2023, assets of $58.9 million and liabilities of $4.1 million as of May 29, 2022 were reclassified to assets and liabilities held and used within our Condensed Consolidated Balance Sheets as we no longer met the held for sale criteria. All other adjustments are of a normal recurring nature. The results of operations for any quarter or a partial fiscal year period are not necessarily indicative of the results to be expected for other periods or the full fiscal year. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended May 29, 2022. There were no significant changes to our accounting policies from those disclosed in Note 1, "Summary of Significant Accounting Policies", to the Consolidated Financial Statements in that Form 10-K.

2. RESTRUCTURING ACTIVITIES

Conagra Restructuring Plan

In fiscal 2019, senior management initiated a restructuring plan for costs incurred in connection with actions taken to improve selling, general and administrative ("SG&A") expense effectiveness and efficiencies and to optimize our supply chain network (the "Conagra Restructuring Plan"). Although we remain unable to make good faith estimates relating to the entire Conagra Restructuring Plan, we are reporting on actions initiated through the end of the third quarter of fiscal 2023, including the estimated amounts or range of amounts for each major type of costs expected to be incurred, and the charges that have resulted or will result in cash outflows. As of February 26, 2023, we had approved the incurrence of $185.0 million ($57.2 million of cash charges and $127.8 million of non-cash charges) for several projects associated with the Conagra Restructuring Plan. As of February 26, 2023, we had incurred or expected to incur $154.4 million of charges ($51.4 million of cash charges and $103.0 million of non-cash charges) for actions identified as of such date under the Conagra Restructuring Plan. In the third quarter and first three quarters of fiscal 2023, we recognized charges of $1.6 million and $7.5 million, respectively, in connection with the Conagra Restructuring Plan. In the third quarter and first three quarters of fiscal 2022, we recognized charges of $10.5 million and $25.6 million, respectively, in connection with the Conagra Restructuring Plan. We expect to incur costs related to the Conagra Restructuring Plan over a multi-year period.

We anticipate that we will recognize the following pre-tax expenses in association with the Conagra Restructuring Plan (amounts include charges recognized from plan inception through the third quarter of fiscal 2023):

	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Accelerated depreciation	$	33.2	$	40.5	$	—	$	—	$	—	$	73.7
Other cost of goods sold		8.7		2.5		—		—		—		11.2
Total cost of goods sold		41.9		43.0		—		—		—		84.9
Severance and related costs		11.5		1.2		1.3		0.3		4.8		19.1
Asset impairment (net of gains on disposal)		21.9		0.9		0.1		—		—		22.9
Contract/lease termination		0.5		0.1		—		—		0.1		0.7
Consulting/professional fees		0.6		2.4		—		—		5.7		8.7
Other SG&A		12.9		4.1		—		—		0.5		17.5
Total SG&A		47.4		8.7		1.4		0.3		11.1		68.9
Total	$	89.3	$	51.7	$	1.4	$	0.3	$	11.1	$	153.8
Pension and postretirement non-service income												0.6
Consolidated total											$	154.4

5

 

During the third quarter of fiscal 2023, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

	Grocery & Snacks			Refrigerated & Frozen		Corporate		Total
Accelerated depreciation	$	—		$	0.3	$	—	$	0.3
Other cost of goods sold		—			0.1		—		0.1
Total cost of goods sold		—			0.4		—		0.4
Severance and related costs		(0.2	)		—		(0.2)		(0.4)
Consulting/professional fees		0.3			0.1		0.1		0.5
Other SG&A		0.1			1.1		(0.1)		1.1
Total SG&A		0.2			1.2		(0.2)		1.2
Total	$	0.2		$	1.6	$	(0.2)	$	1.6

Included in the above results are $1.3 million of charges that have resulted or will result in cash outflows and $0.3 million in non-cash charges.

During the first three quarters of fiscal 2023, we recognized the following pre-tax expenses for the Conagra Restructuring Plan:

	Grocery & Snacks		Refrigerated & Frozen		Corporate		Total
Accelerated depreciation	$	—	$	0.3	$	—	$	0.3
Other cost of goods sold		—		0.3		—		0.3
Total cost of goods sold		—		0.6		—		0.6
Severance and related costs		(0.2)		—		0.5		0.3
Contract/lease termination		0.1		0.1		—		0.2
Consulting/professional fees		0.3		0.1		3.5		3.9
Other SG&A		0.2		2.2		0.1		2.5
Total SG&A		0.4		2.4		4.1		6.9
Total	$	0.4	$	3.0	$	4.1	$	7.5

Included in the above results are $7.2 million in charges that have resulted or will result in cash outflows and $0.3 million in non-cash charges.

We recognized the following cumulative (plan inception to February 26, 2023) pre-tax expenses for the Conagra Restructuring Plan in our Condensed Consolidated Statement of Earnings:

	Grocery & Snacks		Refrigerated & Frozen		International		Foodservice		Corporate		Total
Accelerated depreciation	$	33.2	$	39.9	$	—	$	—	$	—	$	73.1
Other cost of goods sold		8.7		2.6		—		—		—		11.3
Total cost of goods sold		41.9		42.5		—		—		—		84.4
Severance and related costs		11.4		1.2		1.3		0.3		4.9		19.1
Asset impairment (net of gains on disposal)		21.9		0.8		0.1		—		—		22.8
Contract/lease termination		0.5		0.1		—		—		0.1		0.7
Consulting/professional fees		0.3		0.1		—		—		5.2		5.6
Other SG&A		12.8		3.3		—		—		0.4		16.5
Total SG&A		46.9		5.5		1.4		0.3		10.6		64.7
Total	$	88.8	$	48.0	$	1.4	$	0.3	$	10.6	$	149.1
Pension and postretirement non-service income												0.6
Consolidated total											$	149.7

Included in the above results are $47.4 million of charges that have resulted or will result in cash outflows and $102.3 million in non-cash charges.

6

 

Liabilities recorded for the Conagra Restructuring Plan and changes therein for the first three quarters of fiscal 2023 were as follows:

	Balance at May 29, 2022		Costs Incurred and Charged to Expense		Costs Paid or Otherwise Settled			Changes in Estimates			Balance at February 26, 2023
Severance and related costs	$	3.2	$	1.3	$	(2.8	)	$	(1.0	)	$	0.7
Contract/lease termination		—		0.2		(0.2	)		—			—
Consulting/professional fees		1.7		3.9		(5.4	)		—			0.2
Other costs		0.2		2.8		(3.0	)		—			—
Total	$	5.1	$	8.2	$	(11.4	)	$	(1.0	)	$	0.9

Pinnacle Integration Restructuring Plan

As of the end of the first quarter of fiscal 2023, we had substantially completed our restructuring and integration plan related to our acquisition of Pinnacle Foods, Inc. ("Pinnacle") in 2018 for the purpose of achieving significant cost synergies (the "Pinnacle Integration Restructuring Plan"). In the third quarter and first three quarters of fiscal 2023, we recognized charges of $0.9 million and $1.7 million, respectively, in connection with the Pinnacle Integration Restructuring Plan. In the third quarter and first three quarters of fiscal 2022, we recognized charges of $0.2 million and $13.3 million, respectively, in connection with the Pinnacle Integration Restructuring Plan.

We had recognized $295.0 million in pre-tax expenses ($13.0 million in cost of goods sold and $282.0 million in SG&A expenses) from the inception of this plan through  February 26, 2023, related to our continuing operations. Included in these results were $266.9 million of cash charges and $28.1 million of non-cash charges. Our total pre-tax expenses for the Pinnacle Integration Restructuring Plan related to our continuing operations are expected to be $346.4 million ($284.7 million of cash charges and $61.7 million of non-cash charges). The remaining charges relate primarily to certain leased facilities that are not expected to be used in their current capacity through the contractual lease term.          

3. DEBT AND REVOLVING CREDIT FACILITY

During the third quarter of fiscal 2023, we repaid the remaining outstanding $437.0 million aggregate principal amount of our 3.20% senior notes on their maturity date of January 25, 2023. The repayment was primarily funded by the issuance of commercial paper.

During the first quarter of fiscal 2023, we entered into an unsecured Term Loan Agreement (the "Term Loan Agreement") with a syndicate of financial institutions. The Term Loan Agreement provided for delayed draw term loans to the Company in an aggregate principal amount of up to $500.0 million. The Term Loan Agreement matures on August 26, 2025. During the second quarter of fiscal 2023, we borrowed the full $500.0 million aggregate principal amount available under the Term Loan Agreement. The proceeds were used to repay the full outstanding $250.0 million aggregate principal amount of our 3.25% senior notes on their maturity date of September 15, 2022, as well as to repay outstanding borrowings under our commercial paper program. Borrowings under the Term Loan Agreement bear interest at the sum of Term SOFR (as defined in the Term Loan Agreement), plus a 0.10% per annum rate spread adjustment, plus a percentage spread (ranging from 0.90% per annum to 1.375% per annum) based on the Company's senior unsecured long-term indebtedness ratings. The Company may voluntarily prepay term loans under the Term Loan Agreement, in whole or in part, without premium or penalty, subject to certain conditions. As of February 26, 2023, there were $500.0 million of borrowings outstanding under the Term Loan Agreement.

During the first quarter of fiscal 2022, we issued $500.0 million aggregate principal amount of 0.500% senior notes due August 11, 2023.

In the first quarter of fiscal 2023, we entered into a Second Amended and Restated Revolving Credit Agreement (the "Revolving Credit Agreement") with a syndicate of financial institutions providing for a revolving credit facility in 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 consent of the lenders). The revolving credit facility provided for under the Revolving Credit Agreement replaced the Company's revolving credit facility under the prior revolving credit agreement, which was terminated. The revolving credit facility provided for under the Revolving Credit Agreement matures on August 26, 2027 and is unsecured. The Company may request the term of the Revolving Credit Agreement be extended for additional one-year or two-year periods from the then-applicable maturity date on an annual basis. As of February 26, 2023, there were no outstanding borrowings under the Revolving Credit Agreement.

7

 

The Revolving Credit Agreement generally requires our ratio of earnings before interest, taxes, depreciation and amortization ("EBITDA") to interest expense not to be less than 3.0 to 1.0 and our ratio of funded net debt to EBITDA not to exceed 4.75 to 1.0 through the third quarter of fiscal 2023 and 4.5 to 1.0 for each quarter thereafter, with each ratio to be calculated on a rolling four-quarter basis. As of February 26, 2023, we were in compliance with all financial covenants under the Revolving Credit Agreement.

As of  February 26, 2023 and May 29, 2022, we had $569.0 million and $180.0 million, respectively, outstanding under our commercial paper program.

We enter into various supplier financing arrangements to facilitate supply from our vendors. Balance sheet classification is based on the nature of the arrangement and amounts are classified as either Accounts payable or Notes payable within our Condensed Consolidated Balance Sheets. We have concluded that certain obligations to our suppliers, including amounts due and scheduled payment terms, are impacted by third-party service programs and therefore we have classified certain amounts outstanding under these programs as Notes payable. We had approximately $85.4 million of short-term borrowings as of  February 26, 2023 related to these arrangements.

Net interest expense consists of:

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	February 26, 2023			February 27, 2022			February 26, 2023			February 27, 2022
Long-term debt	$	101.2		$	97.9		$	299.3		$	292.5
Short-term debt		6.0			0.6			10.0			1.7
Interest income		(1.1	)		(0.5	)		(2.6	)		(1.1	)
Interest capitalized		(1.9	)		(3.4	)		(5.1	)		(9.4	)
	$	104.2		$	94.6		$	301.6		$	283.7

4. GOODWILL AND OTHER IDENTIFIABLE INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the first three quarters of fiscal 2023 was as follows:

	Grocery & Snacks		Refrigerated & Frozen		International			Foodservice		Total
Balance as of May 29, 2022	$	4,692.4	$	5,611.2	$	292.8		$	732.8	$	11,329.2
Currency translation		—		—		(9.4	)		—		(9.4	)