-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OmeSerNGcyyRizvRBNs5kw0oLfQZkKyuBM2jQk7TVf6CfYaPuRNky4xj98eB9lDp jgzR744SYSFstw5INgLJTw== 0000900440-02-000038.txt : 20021004 0000900440-02-000038.hdr.sgml : 20021004 20021004125223 ACCESSION NUMBER: 0000900440-02-000038 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020919 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAGRA FOODS INC /DE/ CENTRAL INDEX KEY: 0000023217 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 470248710 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07275 FILM NUMBER: 02781751 BUSINESS ADDRESS: STREET 1: ONE CONAGRA DR CITY: OMAHA STATE: NE ZIP: 68102 BUSINESS PHONE: 4025954000 MAIL ADDRESS: STREET 1: ONE CONAGRA DRIVE CITY: OMAHA STATE: NE ZIP: 68102 FORMER COMPANY: FORMER CONFORMED NAME: NEBRASKA CONSOLIDATED MILLS CO DATE OF NAME CHANGE: 19721201 FORMER COMPANY: FORMER CONFORMED NAME: CONAGRA INC /DE/ DATE OF NAME CHANGE: 19920703 8-K 1 item2razor.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 September 19, 2002 Date of Report (Date of earliest event reported) ConAgra Foods, Inc. (Exact name of registrant as specified in its charter) Delaware 1-7275 47-0248710 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) One ConAgra Drive, Omaha, Nebraska 68102-5001 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (402) 595-4000 Item 2. Acquisition or Disposition of Assets. On September 19, 2002, ConAgra Foods, Inc. ("ConAgra Foods") completed a transaction whereby it sold its fresh beef and pork businesses to Swift Foods Company ("Swift Foods"), a venture 54% owned by HMTF Rawhide, L.P. and 46% owned by ConAgra Foods. HMTF Rawhide, L.P. is a limited partnership formed by Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse") and Greeley Investments, LLC (an affiliate of George N. Gillett, Jr.). The transaction was completed pursuant to an agreement, dated as of May 20, 2002, by and among ConAgra Foods, Inc., Swift Foods (formerly S & C Holdco, Inc.) and HMTF Rawhide, L.P., as amended by amendment no. 1, dated as of July 3, 2002, and amendment no. 2, dated as of September 3, 2002. On September 19, 2002, in connection with the closing of the transaction, ConAgra Foods received: - $766 million in cash; - a 46% equity interest in Swift Foods valued at $150 million; - a $30 million 8% secured promissory note issued by Monfort Finance Company, Inc., the cattle feeding business of Swift Foods; - $262 million payable by the cattle feeding business of Swift Foods to ConAgra Foods pursuant to a secured line of credit carrying an interest rate of LIBOR plus 3.5%; and - $150 million subordinated promissory note payable by S&C Holdco 2, a subsidiary of Swifts Foods, maturing in seven and one-half years, with paid-in-kind interest accruing at 8% for the first five years, 9% in the sixth year and 10% thereafter. The amount of consideration received was equivalent to the estimated book value of the business on September 19, 2002, and is subject to post-closing adjustments. ConAgra Foods also purchased $150 million of 12.5% senior subordinated notes issued by Swift & Company, a subsidiary of Swift Foods, as part of the transaction, which effectively reduced the amount of cash received. ConAgra Foods entered into a stockholders agreement with Hicks Muse and Swift Foods as part of the transaction. The agreement provides for the election of directors, registration rights, restrictions on transfer and other rights regarding the sale of Swift Foods common stock, the sale of the Swift Foods cattle feeding business and a right of ConAgra Foods to force the sale of Swift Foods after five years. The parties entered into a market-based preferred supplier agreement pursuant to which for an initial term of seven years, Swift & Company will supply fresh beef and pork products at fair market prices based on prior pricing practices between ConAgra Foods and its fresh beef and pork processing businesses. Additionally, pursuant to the revolving credit agreement referenced above, the secured line of credit limit is $350 million, with principal paid to ConAgra Foods as cattle and assets are sold, and bearing floating rate interest payable monthly. Item 7. Financial Statements and Exhibits. (b) Pro forma Financial Information The unaudited pro forma combined condensed financial statements, which give effect to the disposition by ConAgra Foods of it fresh beef and pork business for the year ended May 26, 2002 are attached as Exhibit 99.1. (c) Exhibits 2.1 Agreement, dated as of May 20, 2002, by and among ConAgra Foods, Inc., Swift Foods Company (formerly S & C Holdco, Inc.) and HMTF Rawhide, L.P., incorporated by reference to Exhibit 2.1 of ConAgra Foods' current report on Form 8-K dated May 21, 2002. 2.2 Amendment No. 1, dated as of July 3, 2002, and Amendment No. 2, dated as of September 3, 2002, to Agreement, dated as of May 20, 2002, incorporated by reference to Exhibit 2.1 of ConAgra Foods' current report on Form 8-K dated September 3, 2002. 99.1 The unaudited pro forma combined condensed financial statements, which give effect to the disposition by ConAgra Foods of it fresh beef and pork business for the year ended May 26, 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CONAGRA FOODS, INC. Date: October 4, 2002 By: /s/ James P. O'Donnell --------------------------------- Name: James P. O'Donnell Title: Executive Vice President, Chief Financial Officer and Corporate Secretary EXHIBIT INDEX Exhibit Description Page 2.1 Agreement, dated as of May 20, 2002, by and among ConAgra Foods, Inc., Swift Foods Company (formerly S & C Holdco, Inc.) and HMTF Rawhide, L.P., incorporated by reference to Exhibit 2.1 of ConAgra Foods' current report on Form 8-K dated May 21, 2002. 2.2 Amendment No. 1, dated as of July 3, 2002, and Amendment No. 2, dated as of September 3, 2002, to Agreement, dated as of May 20, 2002, incorporated by reference to Exhibit 2.1 of ConAgra Foods' current report on Form 8-K dated September 3, 2002. 99.1 The unaudited pro forma combined condensed financial statements, which give effect to the disposition by ConAgra Foods of it fresh beef and pork business for the year ended May 26, 2002....... EX-99.1 3 proformas.txt Exhibit 99.1 UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS The following unaudited pro forma combined condensed financial statements give effect to ConAgra Foods, Inc.'s ("ConAgra Foods" or the "company") sale of a controlling interest in its fresh beef and pork operations to Swift Foods Company, a venture led by Hicks, Muse, Tate & Furst Incorporated and Greeley Investments, LLC (an affiliate of George N. Gillett, Jr.), on September 19, 2002, after giving effect to the pro forma adjustments described in the accompanying notes. The unaudited pro forma combined condensed financial statements are derived from the company's historical consolidated financial statements. The unaudited pro forma combined condensed statements of earnings give effect to the sale as if it had occurred at the beginning of the period presented and exclude non-recurring direct transaction costs which are expected to be incurred by the company of approximately $.03 to $.04 per share. The unaudited pro forma combined condensed balance sheet gives effect to the sale as if it had occurred on May 26, 2002. The unaudited pro forma combined condensed financial statements are presented for illustrative purposes only and do not purport to be indicative of the operating results or financial position that would have actually occurred if the sale had been in effect on the dates indicated, nor is it necessarily indicative of future operating results or financial position of the company. The unaudited pro forma combined condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included in the company's annual report on Form 10-K for the year ended May 26, 2002. CONAGRA FOODS, INC. Pro Forma Combined Condensed Statement of Earnings For the Year-Ended May 26, 2002 (Unaudited) (Amounts in Millions, Except Per Share Data) ConAgra Foods Elimination of Pro Forma Historical (1) Businesses Sold (2) -------------------------------- As Adjustments(3) Adjusted(5) Net sales.................. $27,629.6 ($7,732.9) $ -- $19,896.7 Costs and expenses: Cost of goods sold....... 23,536.5 (7,432.6) -- 16,103.9 Selling, general and administrative expenses.... 2,423.4 (106.7) (30.5) 2,286.2 Interest expense ........ 401.5 (1.8) (49.7) 350.0 ---------- ------------ ---- ----- 26,361.4 (7,541.1) (80.2) 18,740.1 ---------- ------------ ------ -------- Income before income taxes.. 1,268.2 (191.8) 80.2 1,156.6 Income taxes................ 483.2 (69.0) 18.9 433.1 ---------- ------------ ------ -------- Income before cumulative effect of change in 785.0 (122.8) 61.3 723.5 accounting Cumulative effect of change in accounting (2.0) -- -- (2.0) ----- -- -- ----- Net income $ 783.0 ($122.8) $ 61.3 $ 721.5 ======= ======== ====== ======= Earnings per share - basic: $ 1.48 $ 1.36 ======= ======= Earnings per share - diluted: $ 1.47 $ 1.35 ======= ======= See notes to unaudited pro forma combined condensed financial statements.
CONAGRA FOODS, INC. Pro Forma Combined Condensed Balance Sheet May 26, 2002 (Unaudited) (Amounts in Millions, Except Share Data) ConAgra Foods Elimination of Pro Forma ASSETS Historical (1) Businesses Sold (2) Adjustments(4) As Adjusted Current assets Cash and cash equivalents....... $ 157.9 $ -- $ 602.1 $ 760.0 Receivables, net................ 1,393.6 (273.2) -- 1,120.4 Inventories..................... 4,304.7 (682.5) -- 3,622.2 Other current assets............ 577.7 (20.6) 557.1 ------------ ----------- -- Total current assets.......... 6,433.9 (976.3) 602.1 6,059.7 ------------ ----------- ----- ------- Property, plant and equipment, net 3,893.9 (553.1) -- 3,340.8 Brands, trademarks and goodwill, net 4,747.6 (76.2) -- 4,671.4 Other assets...................... 420.8 (13.7) 766.1 1,173.2 ------------ ------------ ---------- --------- $15,496.2 $(1,619.3) $ 1,368.2 $ 15,245.1 ========= ========== ========= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable................... $ 30.9 $ -- $ -- $ 30.9 Current installments of long-term debt......................... 209.0 -- -- 209.0 Accounts payable................ 2,165.3 (228.8) -- 1,936.5 Other accrued liabilities....... 1,908.2 (72.3) 50.0 1,885.9 -------- ------- --------- Total current liabilities..... 4,313.4 (301.1) 50.0 4,062.3 ----------- --------- ------- --------- Senior long-term debt, excluding current installments............ 4,991.6 -- -- 4,991.6 Other non-current liabilities..... 955.9 -- -- 955.9 Subordinated debt................. 752.1 -- -- 752.1 Preferred securities of subsidiary company......................... 175.0 -- -- 175.0 Total common stockholders' equity 4,308.2 (1,318.2) 1,318.2 4,308.2 ----------- ------------ ------- ------- $15,496.2 $(1,619.3) $ 1,368.2 $ 15,245.1 ========= ========== ======= ========== See notes to unaudited pro forma combined condensed financial statements.
CONAGRA FOODS, INC. Notes to Unaudited Pro Forma Combined Condensed Financial Statements (Amounts in Millions, Except Per Share Data) On September 19, 2002, ConAgra Foods, Inc. sold a controlling interest in its fresh beef and pork businesses to Swift Foods Company ("Swift"), a venture controlled by Hicks, Muse, Tate & Furst Incorporated and Greeley Investments, LLC (an affiliate of George N. Gillett, Jr.). The aggregate consideration received by ConAgra Foods at September 19, 2002 was equal to the adjusted net book value (subject to post-closing adjustments) of the businesses sold and consisted of approximately $766 million in cash, a $150 million equity interest in Swift, $180 million in promissory notes from subsidiaries of Swift, and $262 million in advances to the domestic cattle feeding business under a $350 million credit line. ConAgra Foods, Inc. also purchased $150 million senior subordinated notes from a subsidiary of Swift, as part of the transaction. The unaudited pro forma combined condensed financial statements are based on the following: 1. The historical consolidated financial statements of ConAgra Foods, Inc. as of and for the year ended May 26, 2002. 2. The elimination of the assets, liabilities and operating results of the businesses sold. 3. The unaudited pro forma statement of earnings adjustments reflecting: a. The company's equity in earnings of $30.5 million for the venture's operations based on its 46% ownership interest. b. A reduction in net interest expense relating to (i) the assumed repayment of short-term borrowing with the cash proceeds received in the transaction at the company's weighted average short-term interest rate of 3.2%, (ii) interest income on the $180 million of 8% promissory notes, (iii) interest income on the $150 million 12.5% senior subordinated note and (iv) net interest income on the domestic cattle feeding credit line as follows: Reduction in interest expense $19.4 Increase in interest income: Promissory notes 14.4 Senior subordinated notes 9.4 Cattle feeding credit line 6.5 ------ $49.7 The company has the ability to sell or dispose of its interest in the $150 senior subordinated notes after a six-month period and, as a result, has only reflected interest income on these notes for that period of time. c. The tax effects of the taxable adjustments at an estimated effective tax rate of 38%. 4. The unaudited pro forma balance sheet adjustments are as follows: Actual cash received on September 19, 2002 $ 765.7 Purchased senior subordinated notes (150.0) Increase in book value from May 26, 2002 to Sept. 19, 2002 (a) (13.6) ------ Pro forma net cash received as of May 26, 2002 $ 602.1 Other assets: Equity investment 150.0 Promissory notes receivable 150.0 Senior subordinated notes receivable 150.0 Cattle feeding assets sold (b) 316.1 766.1 ------ (50.0) Cattle feeding liabilities sold (b) ------- Net adjustments $1,318.2 (a) Actual cash received is based on estimated adjusted net book value (subject to post-closing adjustments) as of September 19, 2002. Pro forma cash received is based on a closing balance sheet date of May 26, 2002. (b) The company will continue to finance the domestic cattle feeding operations with a secured credit line of up to $350 million and a $30 million promissory note. Accordingly, although the company has legally divested this operation, in accordance with applicable accounting literature the company will continue to include the assets and liabilities of the cattle feeding business within its consolidated balance sheet. The notes receivable to ConAgra Foods, Inc. relating to the cattle feeding financing are therefore reflected as the net assets of the cattle feeding operations. The cattle feeding assets and liabilities included in the adjustments table reflect the net assets of the domestic cattle feeding operations as of the pro forma acquisition date of May 26, 2002. 5. The unaudited pro forma combined condensed financial statements exclude non-recurring direct transaction costs expected to be incurred by the company of approximately $.03 - $.04 per share. 6. The pro forma ratio of earnings to fixed charges for the year ended May 26, 2002 is as follows: Fixed Charges as Defined: Interest expense $ 416.1 Capitalized interest 5.7 Interest in cost of goods sold 20.6 Preferred distributions of subsidiary 25.1 One third of non-cancelable lease rent 43.1 ---------- Total fixed charges (A) $ 510.6 ========= Earnings as Defined: Pretax income after elimination of undistributed earnings of equity method investees $1,109.1 Add fixed charges 510.6 Less capitalized interest (5.7) ------------ Earnings and fixed charges (B) $1,614 ======== Ratio of earnings to fixed charges (B/A) 3.2 7. The following is certain pro forma financial information for fiscal 2002 with respect to the impact of the transaction on the company's Meat Processing reporting segment. Meat Processing Elimination of Pro Forma Historical Businesses Sold Adjustments As Adjusted Net Sales $ 10,023.5 $ (7,732.9) $ -- $ 2,290.6 Operating Profit (a) $ 269.3 $ (192.3) $ 30.5 $ 107.5 (a) Operating profit is profit before interest, goodwill amortization, general corporate expense and income taxes.
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