FINANCIAL INSTRUMENTS, RISK MANAGEMENT ACTIVITIES, AND FAIR VALUES

FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, receivables, accounts payable, other current liabilities, and notes payable

approximate fair value. Marketable securities are carried at fair value. As of May 31, 2026, and May 25, 2025, a comparison of cost

and market values of our marketable debt and equity securities is as follows:


	Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
	Fiscal Year		Fiscal Year		Fiscal Year		Fiscal Year
In Millions	2026	2025	2026	2025	2026	2025	2026	2025
Available for sale debt securities	$2.3	$2.3	$2.3	$2.3	$—	$—	$—	$—
Equity securities	0.3	0.3	4.6	4.9	4.3	4.6	—	—
Total	$2.6	$2.6	$6.9	$7.2	$4.3	$4.6	$—	$—

There were no realized gains or losses from sales of marketable securities in fiscal 2026 and 2025. Gains and losses are determined by

specific identification.

Classification of marketable securities as current or noncurrent is dependent upon our intended holding period and the security’s

maturity date. The aggregate unrealized gains and losses on available for sale debt securities, net of tax effects, are classified in AOCI

within stockholders’ equity.

Scheduled maturities of our marketable securities are as follows:


	Marketable Securities
In Millions	Cost	Fair Value
Under 1 year (current)	$2.3	$2.3
Equity securities	0.3	4.6
Total	$2.6	$6.9

As of May 31, 2026, we had $2.3 million of marketable debt securities pledged as collateral for derivative contracts.

RISK MANAGEMENT ACTIVITIES

As a part of our ongoing operations, we are exposed to market risks such as changes in interest and foreign currency exchange rates

and commodity and equity prices. To manage these risks, we may enter into various derivative transactions (e.g., futures, options, and

swaps) pursuant to our established policies.

COMMODITY PRICE RISK

Many commodities we use in the production and distribution of our products are exposed to market price risks. We utilize derivatives

to manage price risk for our principal ingredients and energy costs, including grains (oats, wheat, and corn), oils (principally soybean),

natural gas, and diesel fuel. Our primary objective when entering into these derivative contracts is to achieve certainty with regard to

the future price of commodities purchased for use in our supply chain. We manage our exposures through a combination of purchase

orders, long-term contracts with suppliers, exchange-traded futures and options, and over-the-counter options and swaps. We offset

our exposures based on current and projected market conditions and generally seek to acquire the inputs at as close as possible to or

below our planned cost.

We use derivatives to manage our exposure to changes in commodity prices. We do not perform the assessments required to achieve

hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded

currently in cost of sales in our Consolidated Statements of (Loss) Earnings.

Although we do not meet the criteria for cash flow hedge accounting, we believe that these instruments are effective in achieving our

objective of providing certainty in the future price of commodities purchased for use in our supply chain. Accordingly, for purposes of

measuring segment operating performance these gains and losses are reported in unallocated corporate items outside of segment

operating results until such time that the exposure we are managing affects earnings. At that time we reclassify the gain or loss from

unallocated corporate items to segment operating profit, allowing our operating segments to realize the economic effects of the

derivative without experiencing any resulting mark-to-market volatility, which remains in unallocated corporate items.

Unallocated corporate items for fiscal 2026, 2025, and 2024 included:


	Fiscal Year
In Millions	2026	2025	2024
Net gain (loss) on mark-to-market valuation of commodity positions	$62.0	$(37.4)	$(15.4)
Net (gain) loss on commodity positions reclassified from unallocated corporate items to segment operating profit	(19.2)	52.8	40.0
Net mark-to-market revaluation of certain grain inventories	5.6	0.3	14.5
Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items	$48.4	$15.7	$39.1

As of May 31, 2026, the net notional value of commodity derivatives was $126.0 million, of which $48.2 million related to

agricultural inputs and $77.8 million related to energy inputs. As of May 25, 2025, the net notional value of commodity derivatives

was $227.1 million, of which $134.6 million related to agricultural inputs and $92.5 million related to energy inputs. These contracts

relate to inputs that generally will be utilized within the next 12 months.

INTEREST RATE RISK

We are exposed to interest rate volatility with regard to future issuances of fixed-rate debt, existing fixed-rate debt with interest rate

reset features, and existing and future issuances of floating-rate debt. Primary exposures include U.S. Treasury rates, Secured

Overnight Financing Rate (SOFR), European Interbank Offered Rate (Euribor), the Euro mid-market swap rate, and commercial paper

rates in the United States and Europe. We use interest rate swaps, forward-starting interest rate swaps, and treasury locks to hedge our

exposure to interest rate changes, to reduce the volatility of our financing costs, and to achieve a desired proportion of fixed-rate

versus floating-rate debt, based on current and projected market conditions. Generally under these swaps, we agree with a counterparty

to exchange the difference between fixed-rate and floating-rate interest amounts based on an agreed upon notional principal amount.

Floating Interest Rate Exposures — Floating-to-fixed interest rate swaps are accounted for as cash flow hedges, as are all hedges of

forecasted issuances of debt. Effectiveness is assessed based on either the perfectly effective hypothetical derivative method or

changes in the present value of interest payments on the underlying debt. Effective gains and losses deferred to AOCI are reclassified

into earnings over the life of the associated debt.

Fixed Interest Rate Exposures — Fixed-to-floating interest rate swaps are accounted for as fair value hedges with effectiveness

assessed based on changes in the fair value of the underlying debt and derivatives, using incremental borrowing rates currently

available on loans with similar terms and maturities.

During the fourth quarter of fiscal 2025, we entered into a €750.0 million notional amount interest rate swap to convert our €750.0

million fixed-rate senior notes due April 17, 2032, to a floating rate.

During the second quarter of fiscal 2025, in advance of planned debt financing, we entered into $350.0 million of treasury locks. The

treasury locks were terminated during the second quarter of fiscal 2025, in conjunction with the Company’s issuance of $750.0 million

of fixed-rate senior notes due January 30, 2035. Upon termination, a gain of $0.1 million was recognized in AOCI and will be

amortized through interest expense over the respective term of the debt.

During the second quarter of fiscal 2025, we entered into a $750.0 million notional amount interest rate swap to convert our $750.0

million of fixed-rate senior notes due January 30, 2030, to a floating rate.

During the second quarter of fiscal 2025, our $500.0 million notional amount interest rate swap to convert our $500.0 million of fixed-

rate senior notes due November 18, 2025, to a floating rate was called by the counterparty prior to the maturity date. The previously

existing swap was designated as a fair value hedge, and concurrent with the swap being called, we ceased recording market value

adjustments to the associated hedged debt.

As of May 31, 2026, the pre-tax amount of cash-settled interest rate hedge activity remaining in AOCI was a $13.2 million pre-tax

loss. This will be reclassified to earnings over the remaining term of the related underlying debt. The amount expected to be

reclassified from AOCI to net interest in fiscal 2027 is a $1.5 million pre-tax loss.

The notional amounts of our interest rate derivatives, with maturity dates ranging from January 2030 through April 2032, were as

follows:


In Millions	May 31, 2026	May 25, 2025
Pay-floating swaps - notional amount	$1,624.4	$2,283.9

FOREIGN EXCHANGE RISK

Foreign currency fluctuations affect our net investments in foreign subsidiaries and foreign currency cash flows related to third party

purchases, intercompany loans, product shipments, and foreign-denominated debt. We are also exposed to the translation of foreign

currency earnings to the U.S. dollar. Our principal exposures are to the Australian dollar, Brazilian real, British pound sterling,

Canadian dollar, Chinese renminbi, euro, Japanese yen, Mexican peso, and Swiss franc. We primarily use foreign currency forward

contracts to selectively hedge our foreign currency cash flow exposures. We also generally swap our nonfunctional currency

intercompany loans back to U.S. dollars or the functional currency of the entity with foreign exchange exposure. The gains or losses

on these derivatives offset the foreign currency revaluation gains or losses recorded in earnings on the associated borrowings. We

generally do not hedge more than 18 months in advance.

The net notional value of foreign exchange derivatives were as follows:


In Millions	May 31, 2026	May 25, 2025
Foreign exchange derivatives - notional amount	$1,432.1	$831.3

We also have net investments in foreign subsidiaries that are denominated in euros. We hedged a portion of these net investments by

issuing euro-denominated commercial paper and foreign exchange forward contracts. A portion of these net investments are hedged

with euro-denominated bonds as follows:


In Millions	May 31, 2026	May 25, 2025
Euro-denominated bonds - principal amount	€5,084.5	€4,742.8

As of May 31, 2026, we had deferred net foreign currency transaction losses of $218.7 million in AOCI associated with net

investment hedging activity.

EQUITY INSTRUMENTS

Equity price movements affect our compensation expense as certain investments made by our employees in our deferred compensation

plan are revalued. We use equity swaps to manage this risk. The net notional amount of our equity swap contracts, with maturity dates

ranging from November 2026 through April 2027, were as follows:


In Millions	May 31, 2026	May 25, 2025
Equity swap contracts - notional amount	$227.0	$202.7

FAIR VALUE MEASUREMENTS AND FINANCIAL STATEMENT PRESENTATION

The fair values of our assets, liabilities, and derivative positions recorded at fair value and their respective levels in the fair value

hierarchy as of May 31, 2026, and May 25, 2025, were as follows:


		May 31, 2026		May 25, 2025
In Millions	Fair Value Hierarchy Levels	Assets	Liabilities	Assets	Liabilities
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)	2	$0.8	$(21.1)	$5.0	$(11.4)
Foreign exchange contracts (a) (c)	2	4.7	(7.5)	4.1	(13.5)
Total		5.5	(28.6)	9.1	(24.9)

Derivatives not designated as hedging instruments:
Foreign exchange contracts (a) (c)	2	1.6	(6.5)	0.2	(1.3)
Commodity contracts (a) (d) (e)	1, 2	40.3	(1.1)	1.5	(7.6)
Grain contracts (a) (d)	2	5.4	(1.4)	2.2	(4.0)
Total		47.3	(9.0)	3.9	(12.9)

Other assets and liabilities reported at fair value:
Marketable investments (a) (f) (g)	1, 2	40.6	—	7.2	—
Long-lived assets (h)	2	1.5	—	2.0	—
Total		42.1	—	9.2	—
Total assets, liabilities, and derivative positions recorded at fair value		$94.9	$(37.6)	$22.2	$(37.8)

(a)These contracts and investments are recorded as prepaid expenses and other current assets, other assets, other current liabilities or other

liabilities, as appropriate, based on whether in a gain or loss position. Certain marketable investments are recorded as cash and cash equivalents.

(b)Based on Euribor, SOFR, and swap rates. As of May 31, 2026, the carrying amount of hedged debt designated as the hedged item in a fair value

hedge was $1,603.5 million and was classified on the Consolidated Balance Sheets within long-term debt. As of May 31, 2026, the cumulative

amount of fair value hedging basis adjustments was $20.9 million. As of May 25, 2025, the carrying amount of hedged debt designated as the

hedged item in a fair value hedge was $2,280.6 million, of which $675.6 million and $1,605.0 million was classified on the Consolidated

Balance Sheet within current portion of long-term debt and long-term debt, respectively. As of May 25, 2025, the cumulative amount of fair

value hedging basis adjustments was $3.2 million.

(c)Based on observable market transactions of spot currency rates and forward currency prices.

(d)Based on prices of futures exchanges and recently reported transactions in the marketplace.

(e)Commodity contract assets as of May 31, 2026, include Level 2 assets of $40.3 million. Commodity contract liabilities as of May 31, 2026,

include Level 2 liabilities of $1.1 million. Commodity contract assets as of May 25, 2025, include Level 1 and Level 2 assets of $0.6 million and

$0.9 million, respectively. Commodity contract liabilities as of May 25, 2025, include Level 1 and Level 2 liabilities of $0.2 million and $7.4

million, respectively.

(f)Based on prices of common stock, mutual fund net asset values, and bond matrix pricing.

(g)Marketable investment assets as of May 31, 2026, include Level 1 and Level 2 assets of $4.6 million and $36.0 million, respectively. Marketable

investment assets as of May 25, 2025, include Level 1 and Level 2 assets of $4.9 million and $2.3 million, respectively.

(h)In fiscal 2026 and 2025, we recorded $29.4 million of non-cash impairment charges and immaterial non-cash impairment charges, respectively,

to write down certain long-lived assets to their fair value. Fair value was based on recently reported transactions for similar assets in the

marketplace. These assets were associated with previously announced restructuring actions described in Note 4.

We did not significantly change our valuation techniques from prior periods.

The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments. Where quoted

prices are not available, fair value is estimated using discounted cash flows and market-based expectations for interest rates, credit risk

and the contractual terms of the debt instruments. As of May 31, 2026, the fair value and carrying amount of our long-term debt,

including the current portion, were $12,968.8 million and $13,469.6 million, respectively. As of May 25, 2025, the fair value and

carrying amount of our long-term debt, including the current portion, were $13,579.5 million and $14,201.6 million, respectively.

Information related to our cash flow hedges, fair value hedges, and other derivatives not designated as hedging instruments for the

fiscal years ended May 31, 2026, and May 25, 2025, follows:


	Interest Rate Contracts		Foreign Exchange Contracts		Equity Contracts		Commodity Contracts		Total
	Fiscal Year		Fiscal Year		Fiscal Year		Fiscal Year		Fiscal Year
In Millions	2026	2025	2026	2025	2026	2025	2026	2025	2026	2025
Derivatives in Cash Flow Hedging Relationships:
Amount of gain (loss) recognized in OCI	$—	$0.1	$6.6	$(8.1)	$—	$—	$—	$—	$6.6	$(8.0)
Amount of net gain (loss) reclassified from AOCI into earnings (a)	1.4	(0.2)	(3.1)	2.5	—	—	—	—	(1.7)	2.3
Derivatives in Fair Value Hedging Relationships:
Amount of net gain recognized in earnings (b)	3.4	3.0	—	—	—	—	—	—	3.4	3.0
Derivatives Not Designated as Hedging Instruments:
Amount of net gain (loss) recognized in earnings (c)	$—	$—	$8.4	$(16.0)	$38.4	$6.3	$67.9	$(22.0)	$114.7	$(31.7)

(a)Gain (loss) reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for

foreign exchange contracts. For the fiscal year ended May 31, 2026, the amount of loss reclassified from AOCI into cost of sales was $4.2

million and the amount of gain reclassified from AOCI into SG&A was $1.1 million. For the fiscal year ended May 25, 2025, the amount of

gain reclassified from AOCI into cost of sales was $12.7 million and the amount of loss reclassified from AOCI into SG&A was $10.2 million.

(b)Gain recognized in earnings is reported in interest, net for interest rate contracts.

(c)Gain (loss) recognized in earnings is reported in SG&A and after-tax earnings from joint ventures for foreign exchange contracts, SG&A for

equity contracts, and cost of sales for commodity contracts.

The following tables reconcile the net fair values of assets and liabilities subject to offsetting arrangements that are recorded in our

Consolidated Balance Sheets to the net fair values that could be reported in our Consolidated Balance Sheets:


	May 31, 2026					May 25, 2025
In Millions	Gross Amount	Gross Amount Offset on Balance Sheet	Net Amount (a)	Gross Amount Not Offset on Balance Sheet (c)	Net Amount (b)	Gross Amount	Gross Amount Offset on Balance Sheet	Net Amount (a)	Gross Amount Not Offset on Balance Sheet (c)	Net Amount (b)
Assets:
Commodity contracts	$40.3	$—	$40.3	$(1.1)	$39.2	$1.5	$—	$1.5	$(1.0)	$0.5
Interest rate contracts	1.8	—	1.8	—	1.8	4.6	—	4.6	(2.2)	2.4
Foreign exchange contracts	7.6	—	7.6	(0.5)	7.1	4.3	—	4.3	(3.8)	0.5
Equity contracts	6.4	—	6.4	(6.0)	0.4	3.8	—	3.8	(1.0)	2.8
Total	$56.1	$—	$56.1	$(7.6)	$48.5	$14.2	$—	$14.2	$(8.0)	$6.2

Liabilities:
Commodity contracts	$(1.1)	$—	$(1.1)	$1.1	$—	$(7.6)	$—	$(7.6)	$1.0	$(6.6)
Interest rate contracts	(21.2)	—	(21.2)	16.4	(4.8)	(18.3)	—	(18.3)	2.2	(16.1)
Foreign exchange contracts	(0.5)	—	(0.5)	0.5	—	(14.8)	—	(14.8)	3.8	(11.0)
Equity contracts	(14.0)	—	(14.0)	6.0	(8.0)	(1.0)	—	(1.0)	1.0	—
Total	$(36.8)	$—	$(36.8)	$24.0	$(12.8)	$(41.7)	$—	$(41.7)	$8.0	$(33.7)

(a) Net fair value as recorded in our Consolidated Balance Sheets.

(b) Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.

(c) Fair value of assets or liabilities that could be reported net in our Consolidated Balance Sheets. As of May 31, 2026, this includes no collateral received and $16.4 million of collateral

pledged related to derivative instruments. As of May 25, 2025, this includes no collateral received or pledged related to derivative instruments.

AMOUNTS RECORDED IN ACCUMULATED OTHER COMPREHENSIVE LOSS

As of May 31, 2026, the after-tax amounts of unrealized losses in AOCI related to hedge derivatives follows:


In Millions	After-Tax (Loss)/Gain
Unrealized loss from interest rate cash flow hedges	$(8.2)
Unrealized gain from foreign currency cash flow hedges	3.4
After-tax loss in AOCI related to hedge derivatives	$(4.8)

The net amount of pre-tax gains and losses in AOCI as of May 31, 2026, that we expect to be reclassified into net earnings within the

next 12 months is a $3.9 million net loss.

CREDIT-RISK-RELATED CONTINGENT FEATURES

Certain of our derivative instruments contain provisions that require us to maintain an investment grade credit rating on our debt from

each of the major credit rating agencies. If our debt were to fall below investment grade, the counterparties to the derivative

instruments could request full collateralization on derivative instruments in net liability positions. The aggregate fair value of all

derivative instruments with credit-risk-related contingent features that were in a liability position on May 31, 2026, was $29.2 million.

We have posted $16.4 million collateral under these contracts.

CONCENTRATIONS OF CREDIT AND COUNTERPARTY CREDIT RISK

During fiscal 2026, customer concentration was as follows:


Percent of total	Consolidated	North America Retail	North America Foodservice	International	North America Pet
Walmart (a):
Net sales	22%	31%	11%	3%	17%
Accounts receivable		19%	8%	12%	19%
Five largest customers:
Net sales		54%	57%	30%	66%

(a) Includes Walmart Inc. and its affiliates.

No customer other than Walmart accounted for 10 percent or more of our consolidated net sales.

We enter into interest rate, foreign exchange, and certain commodity and equity derivatives, primarily with a diversified group of

highly rated counterparties. We continually monitor our positions and the credit ratings of the counterparties involved and, by policy,

limit the amount of credit exposure to any one party. These transactions may expose us to potential losses due to the risk of

nonperformance by these counterparties; however, we have not incurred a material loss. We also enter into commodity futures

transactions through various regulated exchanges.

The amount of loss due to the credit risk of the counterparties, should the counterparties fail to perform according to the terms of the

contracts, is $14.0 million. We have no collateral held against these contracts. Under the terms of our swap agreements, some of our

transactions require collateral or other security to support financial instruments subject to threshold levels of exposure and

counterparty credit risk. Collateral assets are either cash or U.S. Treasury instruments and are held in a trust account that we may

access if the counterparty defaults.

We offer certain suppliers access to third-party services that allow them to view our scheduled payments online. The third-party

services also allow suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party.

We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third parties, or any

financial institutions concerning these services, including not providing any form of guarantee and not pledging assets as security to

the third parties or financial institutions. All of our accounts payable remain as obligations to our suppliers as stated in our supplier

The roll forward of our obligations payable to suppliers who utilize these third-party services is as follows:


In Millions	2026	2025
Balance as of beginning of fiscal year	$1,427.5	$1,404.4
Additions, including foreign currency translation	4,130.8	4,116.8
Payments	(4,158.7)	(4,093.7)
Balance as of end of fiscal year	$1,399.6	$1,427.5

As of May 31, 2026, $1,356.5 million of our obligations were included in accounts payable and $43.1 million were included in

liabilities held for sale. As of May 25, 2025, $1,427.5 million of our obligations were included in accounts payable.