-----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, OdUc6iTnYMhKgTRJj5GmQb15p/6+2vFQ9nUrPxSs5pQ0k0Yut+M6lLIZZ3gVXmB0 iQit1qDeC77ti7YrpH9ZgA== 0000900440-03-000034.txt : 20030918 0000900440-03-000034.hdr.sgml : 20030918 20030918080036 ACCESSION NUMBER: 0000900440-03-000034 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030918 ITEM INFORMATION: FILED AS OF DATE: 20030918 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: 03900374 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: CONAGRA INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NEBRASKA CONSOLIDATED MILLS CO DATE OF NAME CHANGE: 19721201 8-K 1 cag8kq0104.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 18, 2003 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 12. Results of Operations and Financial Condition ConAgra Foods, Inc. issued a press release and posted a Q&A document on the company's website on September 18, 2003 with earnings information on the company's first quarter ended August 24, 2003. The press release and related Q&A are furnished with this Form 8-K as exhibits 99.1 and 99.2, respectively. The foregoing information, including exhibits 99.1 and 99.2 attached to this Form 8-K, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such filing. 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: September 18, 2003 By: /s/ J.P. O'Donnell ---------------------- Name: J.P. O'Donnell Title: Executive Vice President, Chief Financial Officer and Corporate Secretary EXHIBIT INDEX Exhibit Description Page No. 99.1 Press release dated September 18, 2003........................ 99.2 Questions and Answers......................................... EX-99.1 3 earningsrelease.txt FOR IMMEDIATE RELEASE CONAGRA FOODS REPORTS FIRST-QUARTER RESULTS, EXPECTS SOLID EARNINGS PERFORMANCE FOR FISCAL 2004 FIRST Quarter 2004 Highlights (versus a year ago): o EPS = $0.37 vs. $0.43 last year. >> Several items affect year-over-year comparisons: o Prior year includes $0.05 per diluted share of earnings from businesses the company no longer owns and the impact of an accounting change. o Current year includes $0.07 per diluted share of earnings, reflecting the net effect of tax matters, legal settlements, and an accounting change. >> Current quarter results reflect growth in Agricultural Products earnings, improved interest expense, and lower first quarter profits for Packaged Foods and Food Ingredients. >> Earnings from discontinued chicken operations were $0.01 per diluted share lower in the current year than in the prior year. The company expects to complete the divestiture of its chicken business in the second fiscal quarter. OMAHA, Neb., Sept. 18, 2003--Today ConAgra Foods, Inc. (NYSE: CAG), one of America's leading packaged food companies, reported first quarter diluted EPS of $0.37 for the quarter ended Aug. 24, 2003, compared with $0.43 last fiscal year. As expected, the company's first-quarter sales and EPS were below last year, reflecting strategic divestitures completed during fiscal 2003. Sales were $4.4 billion compared with $6.6 billion last year, following the divestiture of the fresh beef, pork, canned seafood, and cheese businesses. Net income was $195 million compared with $228 million last fiscal year. Bruce Rohde, chairman and chief executive officer, commented, "We've made a significant and deliberate transformation of our portfolio to have a higher-quality mix of businesses. Our first quarter is typically one of the lightest of our fiscal year, and, because of that and divestitures, we planned for this fiscal year's first-quarter sales and earnings to be below last year's. However, with our improved business mix, we expect a solid earnings performance for the full fiscal year. We have focused our resources on profit-enhancing initiatives in the areas of brand building, sales and marketing execution, customer service capabilities, and cost-savings programs. Our businesses have identified and are aggressively pursuing cost-saving opportunities to reduce complexity, improve efficiency, and drive solid earnings performance. The target is improved overall margins, better returns on invested capital, and a solid earnings performance this fiscal year and next." Packaged Foods Packaged Foods segment sales were $2.7 billion, compared with $2.9 billion last year. The year-over-year sales decrease reflects the divestiture of the canned seafood and cheese processing operations. During the quarter, sales grew for many key categories and brands, including frozen meals (Banquet, Healthy Choice, and Kid Cuisine), canned pasta (Chef Boyardee), tomato products (Hunt's), whipped toppings (Reddi-wip), cooking spray (PAM), dinner kits (Banquet Homestyle Bakes), liquid eggs (Egg Beaters), meat snacks (Slim Jim and Pemmican), chili (Wolf), oil (Wesson), sausages (Eckrich and Brown 'N Serve), and others. Some brands that did not post sales gains for the quarter include Armour, Blue Bonnet, Butterball, Marie Callender's, Orville Redenbacher's, and Van Camp's. The company is particularly encouraged by favorable results for some of its large frozen brands. During the quarter, the company invested in new branded retail products in frozen meals, shelf-stable meals, snacks, and dessert categories as part of a plan to fuel profitable future growth. Overall sales for the company's foodservice operations declined slightly for the quarter, primarily in processed and specialty meats, but some key product lines showed sales growth and the industry is showing positive signs in certain segments. Volumes for deli customers grew while volumes for retail and foodservice customers declined. Marketing mix improved during the quarter as part of an ongoing program to target a greater percentage of marketing resources toward consumer connections and usage. Overall segment operating profit declined to $284 million from $353 million. Operating profit and margins reflect overall volume declines and unfavorable mix. The Packaged Foods segment will continue to focus its resources on brand building, product mix, customer service, and productivity initiatives as part of its ongoing plan to grow Packaged Foods sales and profits and expand margins. Food Ingredients During the quarter, sales for the Food Ingredients segment were $574 million compared with $591 million last year. Sales results reflect higher flour prices which were more than offset by expected lower volumes for some basic ingredients operations. Operating profits declined to $31 million, reflecting higher input costs for the flour business and lower profits for some merchandising operations. Agricultural Products During the first quarter, operating profits for the Agricultural Products segment increased to $58 million compared with $39 million in the prior year, reflecting improved customer and product mix and effective cost management. Sales were $1.1 billion, down slightly as part of a plan to improve customer mix. The company's Agricultural Products segment consists of results for UAP (United Agri Products), which distributes crop inputs to the grower community. Interest, Corporate Expense, Depreciation & Capital Expenditures From Continuing Operations Net interest expense for the quarter was $66 million compared with $84 million the prior year. Capital expenditures totaled $78 million compared with $91 million last year. Depreciation and amortization expense was approximately $91 million for the quarter versus $108 million a year ago. Dividends paid were $131 million compared with $124 million. Corporate expense was $92 million compared with $67 million last year - the increase largely reflects the resolution of litigation described below. Rohde concluded, "We have been progressively reshaping the company toward a richer business mix and building customer-focused resources. Our goal is to become America's Favorite Food Company with a portfolio of favorite products for grocery, restaurant, and ingredient customers, supported by superior customer service capabilities. We continue to make important changes to our portfolio of businesses so that all of our resources are strategically aligned with our goals to profitably and efficiently serve customers. We look forward to reporting on our progress." Items Affecting Year-Over-Year Comparability of Results Items in the first quarter of fiscal 2003 that are not repeated in first quarter of fiscal 2004: o Prior year results include $0.05 per diluted share of earnings from businesses the company no longer owns and the impact of an accounting change. o The results for the first quarter of the company's last fiscal year included approximately $0.04 per diluted share of earnings due to businesses the company no longer owns-fresh beef and pork (divested September 2002), canned seafood (divested May 2003), and cheese (divested May 2003), and also included $0.01 per diluted share of earnings from a change in accounting relating to the required adoption of SFAS 142, which deals with intangibles. Included in the results for the first quarter of fiscal 2004: o Current year results include net $0.07 per diluted share of earnings, reflecting tax matters, legal settlements, and an accounting change relating to SFAS 143, which deals with asset retirement obligations. o The results for the first quarter of fiscal 2004 included approximately $0.02 per diluted share of expense from the cumulative effect of a change in accounting related to the required adoption of SFAS 143, which deals with asset retirement obligations. o The results for the first quarter of fiscal 2004 include approximately $0.03 per diluted share of litigation expense related to a choline cloride joint venture with DuPont that was sold in 1997. That expense is reported as part of the corporate expense and is not part of the operating segment results. o The results for the first fiscal quarter of 2004 include approximately $0.12 per diluted share of earnings related to tax matters. Recently, the company closed out some interest rate swaps put in place as part of a strategy to hedge interest costs associated with long-term debt. As a result, the company's effective tax rate for the quarter was reduced, as the company on a go-forward basis will utilize capital loss carry-forwards generated from the business disposition process. The quarterly benefit from tax matters also includes amounts related to finalizing IRS audits of the company's federal tax returns. The overall quarterly benefit from tax matters results in an effective tax rate of approximately 9% for the quarter. This is substantially lower than the 38% effective tax rate expected for the remainder of the fiscal year. Discontinued Operations During the quarter, earnings from discontinued chicken operations were $0.01 per diluted share lower than in the same quarter last year, reflecting market conditions. The company expects to complete the sale of its chicken business to Pilgrim's Pride Corp. in the second fiscal quarter. Reclassification During the quarter, the bulk fertilizer business was moved from the Agricultural Products segment to the Food Ingredients segment because that business fits with and is managed with the company's other basic inputs operations. Historical segment results have been changed to reflect this and are available in the question-and-answer document relating to this release on the company's Web site at www.conagrafoods.com under the section for Investors. ConAgra Foods, Inc., (NYSE: CAG) is one of North America's leading packaged food companies, serving consumer grocery retailers, as well as restaurants and other foodservice establishments. Popular ConAgra Foods consumer brands include: ACT II, Armour, Banquet, Blue Bonnet, Butterball, Chef Boyardee, Cook's, Eckrich, Gulden's, Healthy Choice, Hebrew National, Hunt's, Kid Cuisine, Knott's Berry Farm, La Choy, Louis Kemp, Marie Callender's, Orville Redenbacher's, Parkay, Reddi-wip, Slim Jim, PAM, Pemmican, Peter Pan, Snack Pack, Swiss Miss, Van Camp's, Wesson, and many others. For more information, please visit us at www.conagrafoods.com. Discussion of Results A discussion of ConAgra Foods' first quarter results by Bruce Rohde, chairman and chief executive officer, Jim O'Donnell, executive vice president and chief financial officer, and Chris Klinefelter, vice president of investor relations, will be available today at 8:30 a.m. EDT. To access the discussion, call toll-free at 1-877-447-8217. International callers should dial 1-706-679-0415. On the Internet you may access the discussion at http://www.conagrafoods.com/investors No passcode or call identification number is needed for the call at 8:30 a.m. EDT. A digital replay of the discussion will be available after 9:30 a.m. EDT at 1-800-642-1687 and at 1-706-645-9291 for international callers. The conference identification number for the digital replay for domestic and international callers is 1782217. The company has posted question-and-answer information relating to this release and an audio archive of management's discussion at http://www.conagrafoods.com/investors. See ConAgra Foods' Web site for recent news at http://www.conagrafoods.com. Note on Forward-Looking Statements: This news release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. Future economic circumstances, industry conditions, company performance and financial results, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital, actions of governments and regulatory factors affecting the company's businesses and other risks described in the company's reports filed with the Securities and Exchange Commission are examples of factors, among others, that could cause actual results to differ materially from those described in the forward-looking statements. The company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. ConAgra Foods, Inc. Segment Operating Results In millions FIRST QUARTER - 13 Weeks Ended ------------------------------ August 24, 2003 August 25, 2002 Percent Change --------------- --------------- ------- SALES Packaged Foods $2,721.4 $2,889.0 (5.8)% Food Ingredients 574.2 590.7 (2.8)% Agricultural Products 1,098.1 1,111.8 (1.2)% Meat Processing - 1,962.3 (100.0)% ------- -------- Total 4,393.7 6,553.8 (33.0)% ------- -------- ------- OPERATING PROFIT Packaged Foods $284.0 $353.1 (19.6)% Food Ingredients 30.7 38.6 (20.5)% Agricultural Products 58.3 38.6 51.0% Meat Processing - 46.2 (100.0)% ---- ------ Total operating profit 373.0 476.5 (21.7)% for segments Reconciliation of total operating profit to income from continuing operations before income tax and cumulative effect of changes in accounting Items excluded from segment operating profit: General corporate expense 92.2 67.2 37.2% Interest expense, net 65.7 83.5 (21.3)% Equity method investment 9.5 7.8 21.8% earnings --- --- Income from continuing operations before income tax and cumulative effect of $224.6 $333.6 (32.7)% changes in accounting ====== ====== Segment operating profit excludes general corporate expense, equity method investment earnings and net interest expense. Management believes such expenses 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 Statement of Earnings In millions, except per share amounts FIRST QUARTER - 13 Weeks Ended August 24, 2003 August 25, 2002 Percent Change Net sales $4,393.7 $6,553.8 (33.0)% -------- -------- Costs and expenses Cost of goods sold 3,543.1 5,575.2 (36.4)% Selling, general and 569.8 569.3 0.1% administrative expenses Interest expense, net 65.7 83.5 (21.3)% ----------- ----------- 4,178.6 6,228.0 (32.9)% Equity method investment earnings 9.5 7.8 21.8% --- --- Income from continuing operations before income tax and cumulative effect of changes in accounting 224.6 333.6 (32.7)% Income taxes 20.9 123.0 (83.0)% --------------- ---------------- Income from continuing operations 203.7 210.6 (3.3)% before cumulative effect of changes in accounting Income from discontinued operations 2.9 13.1 (77.9)% --- ---- Income before cumulative effect of 206.6 223.7 (7.6)% changesin accounting Cumulative effect of changes (11.7) 3.9 N/A in accounting ------ --- Net Income $ 194.9 $ 227.6 (14.4)% ======= ======= Income per share - basic Income from continuing operations $0.38 $0.40 (5.0)% Income from discontinued operations 0.01 0.02 (50.0)% Cumulative effect of changes in (0.02) 0.01 N/A accounting ------ ---- Net income $0.37 $0.43 (14.0)% ===== ===== Weighted average shares outstanding 530.0 527.7 0.4% ===== ===== Income per share - diluted Income from continuing operations $0.38 $0.40 (5.0)% Income from discontinued operations 0.01 0.02 (50.0)% Cumulative effect of changes in (0.02) 0.01 N/A accounting ------ ---- Net income $0.37 $0.43 (14.0)% ===== ===== Weighted average shares and share equivalents outstanding 531.5 530.5 0.2% ===== ===== ConAgra Foods, Inc. Consolidated Balance Sheets In millions ASSETS August 24, 2003 August 25, 2002 Current assets Cash and cash equivalents $ 680.7 $ 17.4 Receivables, less allowance for doubtful accounts of $89.4 1,571.3 1,910.6 and $111.0 Inventories 3,443.1 4,472.8 Prepaid and other current assets 562.5 666.6 Current assets from discontinued 316.1 372.0 operations ----- ----- Total current assets 6,573.7 7,439.4 Property, plant and equipment, net 2,794.5 3,415.5 Goodwill 3,830.5 3,906.8 Brands, trademarks and other intangibles, 833.5 878.9 net Other assets 1,149.7 431.4 Non-current assets from discontinued 357.3 472.0 operations ----- ----- Total assets $15,539.2 $16,544.0 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable $ 161.9 $1,229.8 Current installments of long-term debt 520.4 208.5 Accounts payable 1,616.2 1,537.0 Advances on sales 180.4 180.4 Other accrued liabilities 1,740.4 1,690.9 Current liabilities from discontinued 149.6 142.8 operations ----- ----- Total current liabilities 4,368.9 4,989.4 Senior long-term debt, excluding 4,525.9 5,055.9 current installments Other non-current liabilities 950.6 1,057.4 Non-current liabilities from 16.8 31.8 discontinued operations Subordinated debt 758.4 760.9 Preferred securities of a subsidiary 175.0 175.0 company Common stockholders' equity 4,743.6 4,473.6 ------- ------- Total liabilities and stockholders'$15,539.2 $16,544.0 equity ========= ========= EX-99.2 4 qanda1q.txt Q&A: Q1 FY2004 1. What are the major items affecting the comparability of Q1 FY04 diluted EPS of $0.37 with the Q1 FY03 diluted EPS of $0.43? Fiscal 2004 First Quarter EPS $0.37 Items Included in 2004 First Quarter EPS: Tax related benefit $0.12 Increase in litigation reserve ($0.03) Expense related to adopting SFAS 143 ($0.02) ------- Net Impact on Quarter $0.07 Fiscal 2003 First Quarter EPS $0.43 Items Included in 2003 First Quarter EPS: Profits from businesses since divested $0.04 Benefit related to adopting SFAS 142 $0.01 ----- Net Impact on Quarter $0.05 2. What were the sales and volume changes for the Packaged Foods segment for the quarter, excluding divested businesses? Year-over-year, Packaged Foods sales were down $168 million - that difference is mostly due to divestitures. Volume was down 5%, reflecting mix and pricing changes. 3. In terms of sales, what were some of the key categories and major brands that posted growth? Frozen Meals: Banquet, Healthy Choice and Kid Cuisine Canned Pasta: Chef Boyardee Tomato Products: Hunt's Whipped Toppings: Reddi-wip Cooking Spray: PAM Dinner Kits: Banquet Homestyle Bakes Liquid Eggs: Egg Beaters Meat Snacks: Slim Jim and Pemmican Chili: Wolf Oil: Wesson Dinner Sausage: Eckrich Breakfast Sausage: Brown 'N Serve 4. In terms of sales, what were some of the large brands that posted declines? Armour Blue Bonnet Butterball Marie Callender's Orville Redenbacher's Van Camp's 5. How much was total Depreciation and Amortization (all types) for the quarter? Note: These amounts do not contain results for chicken operations, which are now considered discontinued operations. Approximately $91 million (vs. $108 million in Q1 2003). $90 million of depreciation (vs. $106 million in Q1 2003) $1 million of other amort. (vs. $2 million in Q1 2003) 6. How much were Capital Expenditures during the quarter? Note: These amounts do not contain results for chicken operations*, which are now considered discontinued operations. Approximately $78 million (vs. $91 million in Q1 2003). * Capital Expenditures for the chicken business were approximately $9 million in the quarter (vs. $6 million in Q1 2003). 7. What was the net interest expense for the quarter? $66 million. 8. What is included in the company's net debt at the end of the quarter (in millions)? Q1FY04 Q1FY03 Total Debt* & Preferred Securities $6,142 $7,430 Less: Cash On Hand $ 681 $ 17 ------- -------- Total $5,461 $7,413 * Total debt = short-term debt, long-term debt, and subordinated debt 9. What was Corporate Expense for the quarter? $92 million (vs. $67 million in Q1 2003). 10. What was the main factor driving the increase in Corporate Expense for the quarter? The increase largely reflects litigation expense related to a chloine cloride joint venture with DuPont that was sold in 1997. That expense is reported as part of the corporate expense and is not part of the operating segment results. 11. How much did you pay in dividends during the quarter? $131 million. 12. What was the weighted average number of diluted shares outstanding for the quarter? 531.5 million shares. 13. What was the approximate effective tax rate for the quarter (rounded)? 9% 14. What were the gross margins and operating margins this quarter ($ amounts in millions, rounded)? Gross Margin = Gross Profit* divided by Sales Gross Margin = $851/$4,394 = 19.4% Operating Margin = Segment Operating Profit** divided by Sales Operating Margin = $373/$4,394 = 8.5% * Gross Profit equals Sales - Costs of Goods Sold ($4,394 - $3,543 = $851) ** See first quarter segment operating results for a reconciliation of operating profit to income from continuing operations before income tax and cumulative effect of changes in accounting. 15. What was the trade working capital position at quarter end? Trade working capital is defined as the net position of Accounts Receivable + Inventory less Current Operating Liabilities (Accounts Payable, Accrued Expenses, and Advances on Sales). Q1FY04 Q1FY03 Accounts Receivable $1,571 $1,911 Inventory $3,443 $4,473 Less: Accounts Payable $1,616 $1,537 Less: Accrued Expenses $1,740 $1,691 Less: Advances on Sales $ 180 $ 180 Net Position $1,478 $2,976 16. What is the estimate of the effective tax rate for the remaining quarters of fiscal 2004? Approximately 38%. 17. What are projected Capital Expenditures for fiscal 2004? $420 million. 18. What is the expected net interest expense for fiscal 2004? Approximately $260 million. 19. You mentioned that you liquidated interest rate swaps recently. How does that alter your short-term earnings outlook? o We use swaps as part of a strategy to hedge against interest rate risk. o We entered some swaps approximately 2 years ago when, for strategic reasons, we converted some short-term debt to long-term debt. o Recently we liquidated those swaps and, as a result, locked in interest rates on some debt instruments. o The income statement impact of the benefit of the swaps is a reduction of interest expense, and has already been anticipated in our interest expense estimate of $260 million for fiscal 2004. Thus we have no alteration of our short-term earnings outlook as a result of liquidating the swaps. o Accounting for swaps is complex. The benefit of the swaps is recognized over the term of the debt instruments hedged. For this reason, our interest expense in fiscal 2005 through 2008 is expected to continue to reflect the interest rates we have locked in, and will be reflected in our estimates for interest expense as we provide them annually. 20. The company continues to make changes to its portfolio. Why? The company is concentrating its capital in branded and value-added food opportunities. This is part of an ongoing agenda to improve the strength and consistency of earnings by focusing on businesses with higher margin opportunities and lower volatility. Accordingly, the company divested fresh beef and pork, canned seafood, and cheese operations. In addition, the company reached an agreement to sell its chicken business. 21. When does the company expect to complete the sale of its chicken business? In the second quarter of fiscal 2004. 22. Why has there been a change to historical segment classifications? During the quarter, the bulk fertilizer business was moved from the Agricultural Products segment to the Food Ingredients segment because that business fits with and is managed with the company's other basic inputs operations. Therefore, historical results have been changed to reflect this move. Overall current and historical diluted EPS does not change as a result of the classification changes. 23. What are the revisions to historical segment results as a result of the classification change that took place this quarter? Please see the attached tables - One shows segment information, the other shows entire P/L information. ConAgra Foods ($USD, in Millions) - ------------------------------------------------------------------------------------------------------------------------------------ FY 2002 FY 2003 - ------------------------------------------------------------------------------------------------------------------------------------ Q1 FY02 Q2 FY02 Q3 FY02 Q4 FY02 Total Q1 FY03 Q2 FY03 Q3 FY03 Q4 FY03 Total Segment Sales Packaged Foods $2,965.9 $3,310.4 $3,065.7 $3,155.3 $12,497.3 $2,889.0 $3,294.9 $3,009.3 $3,072.9 $12,266.1 Food Ingredients 576.0 598.6 608.6 551.5 2,334.7 590.7 649.5 605.0 614.3 2,459.5 Meat Processing 2,115.9 1,976.9 1,740.7 1,899.9 7,733.4 1,962.3 506.4 - - 2,468.7 Agricultural 1,409.8 972.6 376.8 318.4 3,077.6 1,111.8 1,022.0 376.9 281.5 2,792.2 Products Total 7,067.6 6,858.5 5,791.8 5,925.1 25,643.0 6,553.8 5,472.8 3,991.2 3,968.7 19,986.5 Segment Operating Profit Packaged Foods 317.4 414.8 421.9 436.6 1,590.7 353.1 455.9 415.5 418.0 1,642.5 Food Ingredients 50.7 55.8 62.6 31.4 200.5 38.6 48.7 31.8 17.0 136.1 Meat Processing 55.7 67.6 20.7 43.8 187.8 46.2 2.8 0.7 49.7 99.4 Agricultural 64.5 (10.0) (60.4) (31.4) (37.3) 38.6 31.0 (37.4) 14.8 47.0 Products Total 488.3 528.2 444.8 480.4 1,941.7 476.5 538.4 410.6 499.5 1,925.0 Reconciliation of total operating profit to income from continuing operations before income tax and cumulative effect of changes in accounting Items excluded from segment operating profit: General and 82.3 59.9 65.6 71.5 279.3 67.2 119.8 89.8 133.7 410.5 corporate expense Interest expense, 104.0 99.7 93.9 103.5 401.1 83.5 69.8 63.9 59.1 276.3 net Equity method 8.2 6.5 3.5 9.0 27.2 7.8 6.8 11.4 11.9 37.9 investment earnings Goodwill Amortization 27.2 27.8 26.4 26.7 108.1 - - - - - ------------------------------------------------------------------------------------------------------------- Income from continuing operations before 283.0 $ 347.3 $ 262.4 $ 287.7 $ 1,180.4 $ 333.6 $ 355.6 $ 268.3 $ 318.6 $ 1,276.1 income tax and cumulative---------------------------------------------------------------------------------------------------------- effect of changes in accounting
Segment operating profit excludes general corporate expense, equity method investment earnings, goodwill and net interest expense. Management believes such expenses 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. Income Statement for FY02 and FY03 (in millions) Q1 FY02 Q2 FY02 Q3 FY02 Q4 FY02 Total FY 02 Q1 FY03 Q2 FY03 Q3 FY03 Q4 FY03 Total FY 03 - ----------------------------------------------------------------------------------------------------------------------------------- Net sales $7,067.6 $6,858.5 $5,791.8 $5,925.1 $ 25,643.0 $6,553.8 $5,472.8 $3,991.2 $3,968.7 $ 19,986.5 ----------------------------------------------------------------------------------------------------------- Costs and expenses Costs of goods sold 6,052.0 5,789.4 4,853.4 4,970.8 21,665.6 5,575.2 4,416.0 3,104.6 3,067.8 16,163.6 SG&A expenses 636.8 628.6 585.6 572.1 2,423.1 569.3 638.2 565.8 535.1 2,308.4 Interest expenses, net 104.0 99.7 93.9 103.5 401.1 83.5 69.8 63.9 59.1 276.3 ---------------------------------------------------------------------------------------------------------- 6,792.8 6,517.7 5,532.9 5,646.4 24,489.8 6,228.0 5,124.0 3,734.3 3,662.0 18,748.3 Equity method investment 8.2 6.5 3.5 9.0 27.2 7.8 6.8 11.4 11.9 37.9 earnings ---------------------------------------------------------------------------------------------------------- Income from continuing operations before income taxes and cumulative effect of changes in 283.0 347.3 262.4 287.7 1,180.4 333.6 355.6 268.3 318.6 1,276.1 accounting Income taxes 106.9 130.8 99.3 108.3 445.3 123.0 128.6 90.9 93.5 436.0 ----------------------------------------------------------------------------------------------------------- Income from continuing 176.1 216.5 163.1 179.4 735.1 210.6 227.0 177.4 225.1 840.1 operations before cumulative effect of changes in accounting Income (loss) from 14.3 15.1 7.7 12.8 49.9 13.1 8.8 (16.4) (74.7) (69.2) discontinued operations Income before cumulative effect of changes in 190.4 231.6 170.8 192.2 785.0 223.7 235.8 161.0 150.4 770.9 accounting Cumulative effect of (2.0) - - - (2.0) 3.9 - - - 3.9 changes in accounting ------------------------------------------------------------------------------------------------------ Net income $ 188.4 $ 231.6 $ 170.8 $ 192.2 $ 783.0 $ 227.6 $ 235.8 $ 161.0 $ 150.4 $ 774.8 - -----------------------------------------------------------------------------------------------------------------------------------
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