ConAgra Foods Reports Strong Fiscal 2014 Second-Quarter EPS; Fiscal 2014 EPS Reaffirmed
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Fiscal 2014 Second-quarter Highlights (% cited vs. year-ago period
amounts, where applicable):
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Diluted EPS from continuing operations of $0.54 as reported and
$0.62 adjusted for items impacting comparability, up 4% as reported
and up 9% on a comparable basis.
-
The company implemented organizational changes during the quarter
that resulted in new reporting segments; a summary of major changes
from the prior segment reporting methods is included on page 7.
Historical amounts have been reclassified to conform to the new
segment presentation.
-
Consumer Foods posted flat sales and a double-digit rate of growth
in comparable operating profit.
-
Commercial Foods posted an increase in sales and a decrease in
operating profit, as planned. The decrease in profit was expected due
to previously disclosed customer transition issues in our Lamb Weston
potato products business.
-
The Private Brands segment includes most of the former Ralcorp
businesses as well as the private label business previously reported
within the Consumer Foods segment.
-
The company continues to expect full-year diluted EPS to be in the
range of $2.34 - $2.38, adjusted for items impacting comparability.
-
Debt reduction and other capital allocation goals are unchanged.
OMAHA, Neb.--(BUSINESS WIRE)--Dec. 19, 2013--
ConAgra Foods, Inc., (NYSE: CAG) one of North America’s leading food
companies, today reported results for the fiscal 2014 second quarter
ended Nov. 24, 2013. Diluted EPS from continuing operations was $0.54 as
reported for the fiscal second quarter, up 4% from $0.52 in the year-ago
period. Excluding $0.08 per diluted share of net expense in the current
quarter, and $0.05 of net expense in the year-ago period, from items
impacting comparability, current-quarter diluted EPS from continuing
operations of $0.62 was 9% above the comparable $0.57 earned in the
year-ago period. Items impacting comparability are summarized toward the
end of this release and reconciled for Regulation G purposes on page 11.
Gary Rodkin, ConAgra Foods’ chief executive officer, said, “We are
pleased that our fiscal second- quarter EPS came in stronger than
anticipated. Some of the EPS strength in the fiscal second quarter
reflected some volume that we were expecting early in the fiscal third
quarter, and we still expect good comparable EPS growth in the second
half of fiscal 2014. Challenging industry conditions make us cautious
about the near term, and our fiscal 2014 EPS guidance reflects this.
Taking our strong second-quarter EPS performance and the industry
environment into consideration, we are reaffirming our EPS goal in the
range of $2.34-$2.38, adjusted for items impacting comparability.”
Consumer Foods Segment
Branded food items sold worldwide
in retail channels.
The Consumer Foods segment posted sales of approximately $2 billion and
operating profit of $289 million, as reported. Sales were essentially
flat, reflecting flat volumes and flat price/mix. The sequentially
improved volume performance largely reflects changes in customer plans
that resulted in replenished retail inventory levels prior to the
holiday season. Ralcorp international sales are now part of this segment
but not in year-ago amounts because of the date of the acquisition;
contribution from this generated 1% favorable benefit to overall segment
sales. The impact of foreign exchange negatively impacted segment sales
by 1%.
-
Brands posting sales growth for the quarter include Hebrew
National, Hunt’s, Marie Callender’s, Reddi-wip, Ro*Tel, Rosarita, Slim
Jim, Wolf, and others. More brand details are in the Q document
accompanying this release.
-
Over the last few weeks, the company has seen improved consumption
trends for some key brands in response to recent merchandising
programs.
Operating profit of $289 million was 13% above year-ago amounts as
reported. After adjusting for $4 million of net expense in the current
quarter and $6 million of net expense in the year-ago period from items
impacting comparability, current quarter operating profit of $293
million increased 11% over comparable year-ago amounts. The comparable
profit growth reflects manageable inflation, supply chain productivity
initiatives, and a strong focus on selling, general, and administrative
(SG) related efficiencies. Advertising and consumer promotion costs
declined year-over-year, reflecting heavy investment a year ago,
rebalancing spending to strengthen promotional support, and a focus on
productivity.
Some of the sequential volume improvement in the fiscal second quarter
reflects business that was expected to occur early in the fiscal third
quarter, thus a shift in timing versus earlier plans. Given current
business conditions, the company is cautious about near-term volume
performance. The company currently expects overall comparable volumes
for this segment for the full fiscal year to be down slightly compared
with year-ago amounts. The company expects operating profit growth for
this segment in the back half of the fiscal year, largely due to a
combination of continued manageable inflation, supply chain productivity
initiatives, SG efficiencies which include a reduction in marketing
expense, and, to a lesser extent, the benefit of merchandising programs.
Commercial Foods Segment
Specialty potato, seasonings,
blends, flavors, milled grain, as well as consumer branded and private
branded packaged food items and bakery products, sold to foodservice and
commercial channels worldwide.
Sales for the Commercial Foods segment were $1.6 billion, up 3%
over year-ago amounts as reported. The sales growth reflects $79 million
of benefit from acquisitions, specifically Ralcorp foodservice results
that are now part of this segment (but not in year-ago amounts because
of the date of the acquisition). Segment operating profit was $169
million, 13% below year-ago amounts as reported.
After adjusting for $9 million of net expense in the current quarter for
items impacting comparability, current quarter operating profit of $178
million declined 9% on a comparable basis.
Lamb Weston potato products’ profits were below year-ago amounts, as
expected, given that a major foodservice customer did not renew a
sizeable amount of potato business toward the end of last fiscal year.
Lamb Weston continues to expand business with other customers to recover
the lost volume. During the quarter, the company fully transitioned to
processing the current-year potato crop; the quality is below the level
expected, and this will negatively affect manufacturing costs and
margins for Lamb Weston over the next few quarters. Lamb Weston expects
good but slower-than-planned growth internationally largely because some
customers are facing short-term challenges in certain Asian markets.
Flour milling sales decreased, reflecting the pass-through of lower
wheat costs, while milling profits were in line with year-ago amounts.
Profits for the rest of the segment were in line with year-ago amounts,
favorably influenced by $5 million of contribution from the former
Ralcorp foodservice operations.
Private Brands
Private brand food items sold in domestic
markets.
Sales for the Private Brands segment were $1.1 billion in the quarter,
up more than $900 million over year-ago amounts. This growth reflects
the acquisition of the Ralcorp businesses; most of the former Ralcorp
businesses are classified within this segment (and not in year-ago
amounts because of the date of the acquisition). Operating profit for
this segment was $89 million as reported and $91 million adjusted for
items impacting comparability; the increase over prior-year amounts
reflects the acquisition. Under the recently implemented organizational
structure, the company has combined all of the private brand activities
across the company in the Private Brands segment; this positions it for
strong customer service and effective leveraging of the company’s
infrastructure to support long-term private brand growth opportunities.
Early feedback from major customers about the company’s long-term plans
and commitment to private brands categories, and the resulting growth
potential, has been very good.
The private brands operations are now focused on six major product
lines: bars, cereal, condiments, pasta, snacks, and retail bakery. Each
product group has a designated general manager with full profit
responsibility and cross-functional support designed to drive growth;
the company also has focused private brand selling efforts, with a
private brand sales leader for each retail customer team. While private
brands results so far this fiscal year have not been as strong as
planned, these organizational changes, as well as the accompanying focus
on improving customer partnerships, ensuring appropriate pricing
architecture, and winning new business, are expected to gradually
improve results over time. Overall, the former Ralcorp businesses are
expected to contribute about $0.25 per share of diluted EPS this fiscal
year, adjusted for items impacting comparability. This is in line with
original goals, with a significant portion of the profit contribution
coming from this new Private Brands segment.
Hedging Activities – This language primarily relates to
operations other than the company’s milling operations.
Hedge gains and losses are aggregated, and net amounts are reclassified
from unallocated Corporate expense to the operating segments when the
underlying commodity or foreign currency being hedged is expensed in
segment cost of goods sold. The net of these activities resulted in $9
million of unfavorable impact in the current quarter and $16 million of
unfavorable impact in the year-ago period. The company identifies these
amounts as items impacting comparability.
Other Items
-
Unallocated Corporate amounts were $106 million of expense in the
current quarter and $91 million of expense in the year-ago period.
Current-quarter amounts include $9 million of unfavorable
hedge-related impact and $29 million of net expense from other items
impacting comparability (details starting on page 8 of this release).
Year-ago period amounts include $16 million of unfavorable
hedge-related impact and $10 million of expense related to other items
impacting comparability. Excluding these amounts, unallocated
Corporate expense was $68 million for the current quarter and $65
million in the year-ago period.
-
Equity method investment earnings were $5 million for the current
quarter and $13 million in the year-ago period; the year-over-year
decline reflects a $3 million pension adjustment (identified as an
item impacting comparability), as well as difficult market conditions
for a European potato joint venture.
-
Net interest expense was $95 million in the current quarter and $53
million in the year-ago period; the increase reflects the incremental
interest related to the debt incurred to fund acquisitions,
principally Ralcorp.
Capital Items
-
Dividends for the current quarter totaled $106 million versus $97
million in the year-ago period, reflecting an increase in shares
outstanding.
-
The company repurchased approximately 2 million shares of common stock
during the quarter for approximately $69 million.
-
For the current quarter, capital expenditures for property, plant and
equipment were $151 million, compared with $81 million in the year-ago
period; approximately $28 million of the increase relates to Ralcorp.
The comparable increase reflects several significant planned plant
expansions and improvements. Depreciation and amortization expense was
approximately $146 million for the fiscal second quarter; this
compares with a total of $94 million in the year-ago period.
Approximately $48 million of the increase in depreciation and
amortization relates to Ralcorp.
-
The company is currently preparing for the formation of Ardent Mills,
a joint venture into which the company expects to contribute its
milling operations. The details of that transaction, which is now
expected to close in the first quarter of calendar 2014, were
announced on March 5, 2013. While the company expects approximately
$0.03 of EPS dilution this fiscal year, as previously discussed, due
to the formation of the venture, over the long term, the venture’s
profit growth is expected to be accretive to ConAgra Foods’ EPS.
Outlook
The company continues to expect fiscal 2014 diluted EPS, adjusted for
items impacting comparability, to be in the range of $2.34-$2.38. This
takes into account the stronger-than-planned fiscal second quarter EPS
contribution, as well as caution about the overall business environment,
the impact of the quality issues in this year’s potato crop at Lamb
Weston, and the gradual nature of the executional improvements underway
in the Private Brands segment.
The company’s long-term EPS growth rates, and multi-year synergy goals
related to the Ralcorp acquisition, are unchanged from prior estimates.
The company expects at least 10% annual comparable EPS growth in the
fiscal 2015-2017 period, and expects the Ralcorp transaction to generate
$300 million of annual pretax cost-related synergies by the end of
fiscal 2017.
Segment Changes Implemented During the Fiscal Second Quarter, 2014
The Consumer Foods segment, which reported
approximately $9.0 billion in sales for fiscal 2013 under the prior
reporting structure, has been changed as follows:
-
It no longer includes results for store brands (reflecting
approximately $700 million of revenue in fiscal 2013; store brands are
now part of the recently created Private Brands segment),
-
It no longer includes results for foodservice sales of retail branded
products (reflecting approximately $800 million of revenue in fiscal
2013; foodservice is now part of the Commercial Foods segment), and
-
It now includes international sales previously part of the Ralcorp
business segment(s) results (owned less than a year, with the
international sales from Ralcorp expected to generate approximately
$60 million in FY14 sales).
The Commercial Foods segment, which
reported sales of approximately $5.2 billion in fiscal 2013 under the
prior reporting structure, has been changed as follows:
-
It now includes the foodservice results that were previously part of
the Consumer Foods segment (see above for sales quantification).
-
It now includes the frozen bakery foodservice results that were
previously part of the Ralcorp business segment(s) (owned less than a
year, with the foodservice sales from Ralcorp expected to generate
approximately $300 million in FY14 sales).
The Private Brands segment has been
recently created, and includes:
-
A significant portion of the results of the former Ralcorp businesses
(owned less than a year, and this portion of the former Ralcorp
segment is expected to generate $3.7 billion of sales in fiscal 2014);
-
The store brands results that were previously part of the Consumer
Foods segment (see above for sales quantification).
Major Items Impacting Second-quarter Fiscal 2014 EPS Comparability
Included in the $0.54 diluted EPS from continuing operations for the
second quarter of fiscal 2014 (EPS amounts rounded and after tax):
-
Approximately $0.05 per diluted share of net expense, or $35 million
pretax, resulting from restructuring, integration, and transaction
costs (including acquisition-related restructuring). $29 million of
this is classified as unallocated Corporate expense (SG), $4 million
is classified within the Consumer Foods segment (essentially all
SG), and $2 million is classified within the Private Brands segment
(essentially all SG).
-
Approximately $0.01 per diluted share of net expense, or $9 million
pretax, related to the mark-to-market impact of derivatives used to
hedge input costs, temporarily classified in unallocated Corporate
expense. Hedge gains and losses are aggregated, and net amounts are
reclassified from unallocated Corporate expense to the operating
segments when the underlying commodity or foreign currency being
hedged is expensed in segment cost of goods sold.
-
Approximately $0.01 of net expense, or $9 million pretax, related to
impairment of assets in the Commercial Foods segment, all SG
-
Approximately $0.01 of net expense, or $3 million pretax, related to
the re-measurement of pensions at an international potato venture,
classified within equity method investment earnings.
Included in the $0.52 diluted EPS from continuing operations for the
second quarter of fiscal 2013 (EPS amounts rounded and after tax):
-
Approximately $0.03 per diluted share of net expense, or $16 million
pretax, resulting from acquisition and acquisition-related
restructuring costs. $6 million (rounded) of these are in the Consumer
Foods segment ($3 million in cost of goods sold (COGS) and $3 million
in SG expense, and $10 million are in unallocated Corporate SG
-
Approximately $0.02 per diluted share of net expense, or $16 million
pretax, related to the mark-to-market impact of derivatives used to
hedge input costs, temporarily classified in unallocated Corporate
expense. Hedge gains and losses are aggregated, and net amounts are
reclassified from unallocated Corporate expense to the operating
segments when the underlying commodity or foreign currency being
hedged is expensed in segment cost of goods sold.
Discussion of Results
ConAgra Foods will host a conference call at 9:30 a.m. EST today to
discuss the results. Following the company’s remarks, the call will
include a question-and-answer session with the investment community.
Domestic and international participants may access the conference call
toll-free by dialing 1-877-675-4753 and 1-719-325-4857, respectively. No
confirmation or pass code is needed. This conference call also can be
accessed live on the Internet at http://investor.conagrafoods.com.
A rebroadcast of the conference call will be available after 1 p.m. EST
today. To access the digital replay, a pass code number will be
required. Domestic participants should dial 1-888-203-1112, and
international participants should dial 1-719-457-0820 and enter pass
code 7883761. A rebroadcast also will be available on the company’s
website.
In addition, the company has posted a question-and-answer supplement
relating to this release at http://investor.conagrafoods.com.
To view recent company news, please visit http://media.conagrafoods.com.
ConAgra Foods, Inc., (NYSE: CAG) is one of North America's largest
packaged food companies with branded and private branded food found in
99 percent of America’s households, as well as a strong commercial foods
business serving restaurants and foodservice operations globally.
Consumers can find recognized brands such as Banquet®, Chef Boyardee®,
Egg Beaters®, Healthy Choice®, Hebrew National®, Hunt's®, Marie
Callender's®, Orville Redenbacher's®, PAM®, Peter Pan®, Reddi-wip®, Slim
Jim®, Snack Pack® and many other ConAgra Foods brands, along with food
sold by ConAgra Foods under private brand labels, in grocery,
convenience, mass merchandise, club and drug stores. Additionally,
ConAgra Foods supplies frozen potato and sweet potato products as well
as other vegetable, spice, bakery and grain products to commercial and
foodservice customers. ConAgra Foods operates ReadySetEat.com, an
interactive recipe website that provides consumers with easy dinner
recipes and more. For more information, please visit us at www.conagrafoods.com.
Note on Forward-looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on management’s current
expectations and are subject to uncertainty and changes in
circumstances. These risks and uncertainties include, among other
things: ConAgra Foods’ ability to realize the synergies and benefits
contemplated by the acquisition of Ralcorp and its ability to promptly
and effectively integrate the business of Ralcorp; the timing to
consummate the potential joint venture combining the flour milling
businesses of ConAgra Foods, Cargill, and CHS; ConAgra Foods’ ability to
realize the synergies and benefits contemplated by the potential joint
venture; the availability and prices of raw materials, including any
negative effects caused by inflation or adverse weather conditions; the
effectiveness of ConAgra Foods’ product pricing, including any pricing
actions and promotional changes; future economic circumstances; industry
conditions; ConAgra Foods’ ability to execute its operating and
restructuring plans; the success of ConAgra Foods’ cost-saving
initiatives, innovation, and marketing investments; the competitive
environment and related market conditions; operating efficiencies; the
ultimate impact of any ConAgra Foods product recalls; access to capital;
ConAgra Foods’ success in efficiently and effectively integrating its
acquisitions; actions of governments and regulatory factors affecting
ConAgra Foods’ businesses, including the Patient Protection and
Affordable Care Act; the amount and timing of repurchases of ConAgra
Foods’ common stock and debt, if any; and other risks described in
ConAgra Foods’ reports filed with the Securities and Exchange
Commission, including its most recent annual report on Form 10-K and
subsequent reports on Forms 10-Q and 8-K. Investors and security holders
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they are made. ConAgra Foods
disclaims any obligation to update or revise statements contained in
this press release to reflect future events or circumstances or
otherwise.
Regulation G Disclosure
Below is a reconciliation of Q2 FY14 and Q2 FY13 diluted earnings per
share from continuing operations, Consumer Foods segment operating
profit, Commercial Foods segment operating profit, and Private Brands
segment operating profit. Amounts may be impacted by rounding.
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Q2 FY14 Q2 FY13 Diluted EPS from Continuing Operations
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Q2 FY14
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Q2 FY13
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% change
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Diluted EPS from continuing operations
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$
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0.54
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$
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0.52
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4%
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Items impacting comparability:
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Restructuring, integration, and transactions costs (including
acquisition-related restructuring)
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0.05
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0.03
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Net expense related to unallocated mark-to-market impact of
derivatives
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0.01
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0.02
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Net expense related to impairment costs in the Commercial Foods
segment
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0.01
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-
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Net expense related to re-measurement of pensions at an
international joint venture
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0.01
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-
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Diluted EPS adjusted for items impacting comparability
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$
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0.62
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$
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0.57
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9%
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Consumer Foods Segment Operating Profit Reconciliation
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(Dollars in millions)
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Q2 FY14
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Q2 FY13
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% change
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Consumer Foods Segment Operating Profit
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$
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289
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$
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257
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13%
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Restructuring, integration, and transactions costs (including
acquisition-related restructuring)
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4
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6
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Consumer Foods Segment Adjusted Operating Profit
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$
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293
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$
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263
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11%
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Commercial Foods Segment Operating Profit Reconciliation
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(Dollars in millions)
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|
Q2 FY14
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|
Q2 FY13
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% change
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Commercial Foods Segment Operating Profit
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$
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169
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$
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195
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|
-13%
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Net expense related to impairment costs
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9
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-
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Commercial Foods Segment Adjusted Operating Profit
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$
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178
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$
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195
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-9%
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Private Brands Segment Operating Profit Reconciliation
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(Dollars in millions)
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Q2 FY14
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Private Brands Segment Operating Profit
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$
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89
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|
|
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Restructuring, integration, and transactions costs (including
acquisition-related restructuring)
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2
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|
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Private Brands Segment Adjusted Operating Profit
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$
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91
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ConAgra Foods, Inc.
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Segment Operating Results
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(in millions)
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(unaudited)
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SECOND QUARTER
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13 Weeks Ended
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13 Weeks Ended
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November 24, 2013
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November 25, 2012
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Percent Change
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SALES
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Consumer Foods
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$
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2,016.1
|
|
|
$
|
2,023.5
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(0.4)%
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Commercial Foods
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|
|
1,574.0
|
|
|
|
1,526.3
|
|
|
3.1%
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Private Brands
|
|
|
1,123.8
|
|
|
|
177.4
|
|
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533.5%
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Total
|
|
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4,713.9
|
|
|
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3,727.2
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26.5%
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OPERATING PROFIT
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Consumer Foods
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$
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288.9
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|
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$
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256.7
|
|
|
12.5%
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Commercial Foods
|
|
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169.2
|
|
|
|
194.7
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(13.1)%
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Private Brands
|
|
|
89.4
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|
|
|
7.0
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|
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1177.1%
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Total operating profit for segments
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|
|
547.5
|
|
|
|
458.4
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|
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19.4%
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|
|
|
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|
|
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Reconciliation of total operating profit to income from
continuing operations before income taxes and equity method
investment earnings
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Items excluded from segment operating profit:
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|
|
|
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|
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General corporate expense
|
|
|
(105.5
|
)
|
|
|
(90.6
|
)
|
|
16.4%
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Interest expense, net
|
|
|
(95.4
|
)
|
|
|
(53.4
|
)
|
|
78.7%
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Income from continuing operations before income taxes and equity
method investment earnings
|
|
$
|
346.6
|
|
|
$
|
314.4
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|
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10.2%
|
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Segment operating profit excludes general corporate expense, equity
method investment earnings, and net interest expense. Management
believes such amounts are not directly associated with segment
performance results for the period. Management believes the presentation
of total operating profit for segments facilitates period-to-period
comparison of results of segment operations.
ConAgra Foods, Inc.
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Segment Operating Results
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(in millions)
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(unaudited)
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SECOND QUARTER
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26 Weeks Ended
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26 Weeks Ended
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November 24, 2013
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November 25, 2012
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Percent Change
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SALES
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Consumer Foods
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$
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3,665.5
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$
|
3,690.3
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(0.7)%
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Commercial Foods
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|
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3,107.9
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|
|
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2,988.9
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4.0%
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Private Brands
|
|
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2,138.0
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|
|
|
350.3
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510.3%
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Total
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8,911.4
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|
|
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7,029.5
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26.8%
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|
|
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|
|
|
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OPERATING PROFIT
|
|
|
|
|
|
|
Consumer Foods
|
|
$
|
456.0
|
|
|
$
|
465.4
|
|
|
(2.0)%
|
Commercial Foods
|
|
|
330.3
|
|
|
|
355.7
|
|
|
(7.1)%
|
Private Brands
|
|
|
156.4
|
|
|
|
13.9
|
|
|
1025.2%
|
Total operating profit for segments
|
|
|
942.7
|
|
|
|
835.0
|
|
|
12.9%
|
|
|
|
|
|
|
|
Reconciliation of total operating profit to income from
continuing operations before income taxes and equity method
investment earnings
|
|
|
|
|
|
|
Items excluded from segment operating profit:
|
|
|
|
|
|
|
General corporate expense
|
|
|
(229.2
|
)
|
|
|
(49.1
|
)
|
|
366.8%
|
Interest expense, net
|
|
|
(191.0
|
)
|
|
|
(102.7
|
)
|
|
86.0%
|
Income from continuing operations before income taxes and equity
method investment earnings
|
|
$
|
522.5
|
|
|
$
|
683.2
|
|
|
(23.5)%
|
|
|
|
|
|
|
|
Segment operating profit excludes general corporate expense, equity
method investment earnings, and net interest expense. Management
believes such amounts are not directly associated with segment
performance results for the period. Management believes the presentation
of total operating profit for segments facilitates period-to-period
comparison of results of segment operations.
ConAgra Foods, Inc.
|
|
|
|
|
|
|
Consolidated Statements of Earnings
|
|
|
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
(unaudited)
|
|
SECOND QUARTER
|
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
|
|
|
|
|
|
|
Percent
|
|
|
November 24, 2013
|
|
November 25, 2012
|
|
Change
|
Net sales
|
|
$
|
4,713.9
|
|
$
|
3,727.2
|
|
|
26.5%
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
3,699.2
|
|
|
2,865.6
|
|
|
29.1%
|
Selling, general and administrative expenses
|
|
|
572.7
|
|
|
493.8
|
|
|
16.0%
|
Interest expense, net
|
|
|
95.4
|
|
|
53.4
|
|
|
78.7%
|
Income from continuing operations before income taxes and equity
method investment earnings
|
|
|
346.6
|
|
|
314.4
|
|
|
10.2%
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
117.9
|
|
|
109.7
|
|
|
7.5%
|
Equity method investment earnings
|
|
|
5.3
|
|
|
12.8
|
|
|
(58.6)%
|
Income from continuing operations
|
|
|
234.0
|
|
|
217.5
|
|
|
7.6%
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
18.4
|
|
|
(1.0
|
)
|
|
N/A
|
|
|
|
|
|
|
|
Net income
|
|
$
|
252.4
|
|
$
|
216.5
|
|
|
16.6%
|
Less: Net income attributable to noncontrolling interests
|
|
|
3.7
|
|
|
4.9
|
|
|
(24.5)%
|
Net income attributable to ConAgra Foods, Inc.
|
|
$
|
248.7
|
|
$
|
211.6
|
|
|
17.5%
|
|
|
|
|
|
|
|
Earnings per share – basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.55
|
|
$
|
0.52
|
|
|
5.8%
|
Income from discontinued operations
|
|
|
0.04
|
|
|
-
|
|
|
100.0%
|
Net income attributable to ConAgra Foods, Inc.
|
|
$
|
0.59
|
|
$
|
0.52
|
|
|
13.5%
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
421.1
|
|
|
405.9
|
|
|
3.7%
|
|
|
|
|
|
|
|
Earnings per share – diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.54
|
|
$
|
0.52
|
|
|
3.8%
|
Income (loss) from discontinued operations
|
|
|
0.04
|
|
|
(0.01
|
)
|
|
N/A
|
Net income attributable to ConAgra Foods, Inc.
|
|
$
|
0.58
|
|
$
|
0.51
|
|
|
13.7%
|
|
|
|
|
|
|
|
Weighted average share and share equivalents outstanding
|
|
|
427.0
|
|
|
411.7
|
|
|
3.7%
|
|
|
|
|
|
|
|
ConAgra Foods, Inc.
|
|
|
|
|
|
|
Consolidated Statements of Earnings
|
|
|
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
(unaudited)
|
|
SECOND QUARTER
|
|
|
26 Weeks Ended
|
|
26 Weeks Ended
|
|
|
|
|
|
|
|
|
Percent
|
|
|
November 24, 2013
|
|
November 25, 2012
|
|
Change
|
Net sales
|
|
$
|
8,911.4
|
|
$
|
7,029.5
|
|
|
26.8%
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
7,065.8
|
|
|
5,299.3
|
|
|
33.3%
|
Selling, general and administrative expenses
|
|
|
1,132.1
|
|
|
944.3
|
|
|
19.9%
|
Interest expense, net
|
|
|
191.0
|
|
|
102.7
|
|
|
86.0%
|
Income from continuing operations before income taxes and equity
method investment earnings
|
|
|
522.5
|
|
|
683.2
|
|
|
(23.5)%
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
151.8
|
|
|
233.5
|
|
|
(35.0)%
|
Equity method investment earnings
|
|
|
9.4
|
|
|
20.4
|
|
|
(53.9)%
|
Income from continuing operations
|
|
|
380.1
|
|
|
470.1
|
|
|
(19.1)%
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
19.5
|
|
|
(1.4
|
)
|
|
N/A
|
|
|
|
|
|
|
|
Net income
|
|
$
|
399.6
|
|
$
|
468.7
|
|
|
(14.7)%
|
Less: Net income attributable to noncontrolling interests
|
|
|
6.6
|
|
|
7.0
|
|
|
(5.7)%
|
Net income attributable to ConAgra Foods, Inc.
|
|
$
|
393.0
|
|
$
|
461.7
|
|
|
(14.9)%
|
|
|
|
|
|
|
|
Earnings per share – basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.89
|
|
$
|
1.14
|
|
|
(21.9)%
|
Income (loss) from discontinued operations
|
|
|
0.04
|
|
|
(0.01
|
)
|
|
N/A
|
Net income attributable to ConAgra Foods, Inc.
|
|
$
|
0.93
|
|
$
|
1.13
|
|
|
(17.7)%
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
421.0
|
|
|
406.5
|
|
|
3.6%
|
|
|
|
|
|
|
|
Earnings per share – diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.87
|
|
$
|
1.12
|
|
|
(22.3)%
|
Income from discontinued operations
|
|
|
0.05
|
|
|
-
|
|
|
100.0%
|
Net income attributable to ConAgra Foods, Inc.
|
|
$
|
0.92
|
|
$
|
1.12
|
|
|
(17.9)%
|
|
|
|
|
|
|
|
Weighted average share and share equivalents outstanding
|
|
|
427.5
|
|
|
411.8
|
|
|
3.8%
|
|
|
|
|
|
|
|
ConAgra Foods, Inc.
|
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
|
(in millions)
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
November 24, 2013
|
|
May 26, 2013
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
192.7
|
|
$
|
183.9
|
Receivables, less allowance for doubtful accounts of $7.2 and $7.6
|
|
|
1,415.1
|
|
|
1,286.2
|
Inventories
|
|
|
2,776.1
|
|
|
2,390.3
|
Prepaid expenses and other current assets
|
|
|
371.7
|
|
|
515.6
|
Current assets held for sale
|
|
|
-
|
|
|
3.8
|
Total current assets
|
|
|
4,755.6
|
|
|
4,379.8
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
3,932.3
|
|
|
3,850.4
|
Goodwill
|
|
|
8,455.9
|
|
|
8,444.1
|
Brands, trademarks and other intangibles, net
|
|
|
3,355.9
|
|
|
3,418.1
|
Other assets
|
|
|
286.7
|
|
|
293.5
|
Noncurrent assets held for sale
|
|
|
-
|
|
|
19.4
|
|
|
$
|
20,786.4
|
|
$
|
20,405.3
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Notes payable
|
|
$
|
233.7
|
|
$
|
185.0
|
Current installments of long-term debt
|
|
|
584.9
|
|
|
517.9
|
Accounts payable
|
|
|
1,783.7
|
|
|
1,501.6
|
Accrued payroll
|
|
|
179.2
|
|
|
287.2
|
Other accrued liabilities
|
|
|
948.0
|
|
|
909.6
|
Total current liabilities
|
|
|
3,729.5
|
|
|
3,401.3
|
|
|
|
|
|
Senior long-term debt, excluding current installments
|
|
|
8,575.2
|
|
|
8,691.0
|
Subordinated debt
|
|
|
195.9
|
|
|
195.9
|
Other noncurrent liabilities
|
|
|
2,724.1
|
|
|
2,754.1
|
Total stockholders' equity
|
|
|
5,561.7
|
|
|
5,363.0
|
|
|
$
|
20,786.4
|
|
$
|
20,405.3
|
|
|
|
|
|
ConAgra Foods, Inc. and Subsidiaries
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
(in millions)
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-six weeks ended
|
|
|
November 24,
|
|
November 25,
|
|
|
2013
|
|
2012
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
399.6
|
|
|
$
|
468.7
|
|
Income (loss) from discontinued operations
|
|
19.5
|
|
|
(1.4
|
)
|
Income from continuing operations
|
|
380.1
|
|
|
470.1
|
|
Adjustments to reconcile income from continuing operations to net
cash flows from operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
292.4
|
|
|
185.3
|
|
Asset impairment charges
|
|
14.8
|
|
|
4.6
|
|
Earnings of affiliates less than (in excess of) distributions
|
|
1.3
|
|
|
(5.4
|
)
|
Share-based payments expense
|
|
32.1
|
|
|
27.8
|
|
Contributions to pension plans
|
|
(10.1
|
)
|
|
(10.1
|
)
|
Pension expense
|
|
(4.5
|
)
|
|
11.4
|
|
Other items
|
|
(4.9
|
)
|
|
(11.1
|
)
|
Change in operating assets and liabilities excluding effects of
business acquisitions and dispositions:
|
|
|
|
|
|
|
Accounts receivable
|
|
(133.8
|
)
|
|
(109.9
|
)
|
Inventory
|
|
(385.7
|
)
|
|
(333.7
|
)
|
Deferred income taxes and income taxes payable, net
|
|
106.6
|
|
|
(2.8
|
)
|
Prepaid expenses and other current assets
|
|
65.3
|
|
|
19.7
|
|
Accounts payable
|
|
270.0
|
|
|
226.1
|
|
Accrued payroll
|
|
(107.9
|
)
|
|
(13.3
|
)
|
Other accrued liabilities
|
|
40.1
|
|
|
21.8
|
|
Net cash flows from operating activities — continuing operations
|
|
555.8
|
|
|
480.5
|
|
Net cash flows from operating activities — discontinued operations
|
|
(0.1
|
)
|
|
(1.9
|
)
|
Net cash flows from operating activities
|
|
555.7
|
|
|
478.6
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
(332.2
|
)
|
|
(179.1
|
)
|
Sale of property, plant and equipment
|
|
12.1
|
|
|
3.9
|
|
Purchase of businesses, net of cash acquired
|
|
(39.6
|
)
|
|
(268.6
|
)
|
Investment in equity method investee
|
|
—
|
|
|
(1.5
|
)
|
Net cash flows from investing activities — continuing operations
|
|
(359.7
|
)
|
|
(445.3
|
)
|
Net cash flows from investing activities — discontinued operations
|
|
54.7
|
|
|
(1.3
|
)
|
Net cash flows from investing activities
|
|
(305.0
|
)
|
|
(446.6
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Net short-term borrowings
|
|
48.7
|
|
|
(40.0
|
)
|
Issuance of long-term debt
|
|
—
|
|
|
743.0
|
|
Repayment of long-term debt
|
|
(50.7
|
)
|
|
(34.2
|
)
|
Repurchase of ConAgra Foods, Inc. common shares
|
|
(100.0
|
)
|
|
(238.6
|
)
|
Cash dividends paid
|
|
(210.4
|
)
|
|
(195.3
|
)
|
Exercise of stock options and issuance of other stock awards
|
|
70.3
|
|
|
102.9
|
|
Other items
|
|
0.8
|
|
|
1.5
|
|
Net cash flows from financing activities
|
|
(241.3
|
)
|
|
339.3
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(0.6
|
)
|
|
2.5
|
|
Net change in cash and cash equivalents
|
|
8.8
|
|
|
373.8
|
|
Cash and cash equivalents at beginning of period
|
|
183.9
|
|
|
103.0
|
|
Cash and cash equivalents at end of period
|
|
$
|
192.7
|
|
|
$
|
476.8
|
|
Source: ConAgra Foods, Inc.
ConAgra Foods, Inc.
MEDIA
Teresa Paulsen,
402-240-5210
Vice President, Communication External Relations
or
ANALYSTS
Chris
Klinefelter, 402-240-4154
Vice President, Investor Relations
www.conagrafoods.com
|
|