-----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, OeL9UoGPmnGTFpI9OnArjnzMc8DYs3bsmDHolPKZl9DjhlMxn6lGhhtloLjidr54 RKYTLILCa0yMe6hicKIi5Q== 0000900440-04-000009.txt : 20040325 0000900440-04-000009.hdr.sgml : 20040325 20040325081434 ACCESSION NUMBER: 0000900440-04-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030325 ITEM INFORMATION: FILED AS OF DATE: 20040325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAGRA FOODS INC /DE/ CENTRAL INDEX KEY: 0000023217 STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000] 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: 04688392 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 cag8k.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 March 25, 2004 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 March 25, 2004 with earnings information on the company's third quarter ended February 22, 2004. 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: March 25, 2004 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 March 25, 2004............................. 99.2 Questions and Answers.......................................... EX-99.1 3 pressrel.txt FOR IMMEDIATE RELEASE CONAGRA FOODS REPORTS SOLID THIRD-QUARTER EARNINGS WITH STRONG SALES AND OPERATING PROFITS THIRD QUARTER 2004 Highlights: o Diluted EPS = $0.38 vs. $0.30 last year. Current quarter results include $0.03 of expense related to cost-saving initiatives and $0.02 of income from discontinued operations. Items affecting year-over-year EPS comparability are detailed toward the end of this release. o Sales = $3.6 billion, essentially equal with last year; sales increased 4% on a comparable basis, after adjusting for $155 million of sales from divested businesses in prior year results. o Packaged Foods sales and operating profits were strong. Sales for the top 30 consumer brands grew 6% as a whole, with several growing at a double-digit rate. o Food Ingredients sales increased, and operating profit improved significantly due to improved results for specialty ingredient products. o Approximately 8.3 million shares repurchased during the quarter. YEAR TO DATE 2004 Highlights: o Year-to-date diluted EPS = $1.26 vs. $1.18 in the prior year. o Sales = $10.8 billion, below last year's sales of $13.5 billion due to divestitures. Sales have increased 2% on a comparable basis, after adjusting for $2.9 billion of sales from divested businesses in prior year results. OMAHA, Neb., March 25, 2004--ConAgra Foods, Inc. (NYSE: CAG), one of America's leading packaged food companies, today reported earnings of $203 million, or $0.38 per diluted share, for the third quarter ended Feb. 22, 2004; this represents an $0.08 per share increase over last year's earnings of $161 million, or $0.30 per diluted share. Sales were $3.6 billion, essentially equal with last year; on a comparable basis, sales were 4% ahead of last year after adjusting for $155 million of sales from divested businesses in last year's results. Bruce Rohde, chairman and chief executive officer, commented, "This was a very solid quarter. We are particularly encouraged by sales and category share trends for several key brands and products, as well as progress with many customers. We are continuing our focus on top-line growth, mix improvement, and operations initiatives as part of our plan to improve profit margins and returns on capital." Current quarter operating profit was $451 million, above $446 million last year. On a comparable basis, after adjusting for $24 million of expense in the current quarter related to implementing cost-saving initiatives and $15 million of contribution in last year's results from businesses since divested, operating profit increased 10% over last year. For the first nine months of fiscal 2004, earnings were $668 million, or $1.26 per diluted share, ahead of $624 million, or $1.18 per diluted share last year. Sales were $10.8 billion, below last year's sales of $13.5 billion due to divestitures. Sales were up 2% on a comparable basis after adjusting for $2.9 billion of sales from divested businesses in prior year results. Year-to-date operating profit totaled $1.3 billion, below $1.4 billion last year. On a comparable basis, operating profit was essentially equal with last year after adjusting for $90 million of profits from divested businesses in prior year results and $38 million of costs in the current year related to implementing cost-saving initiatives. Operating Efficiency Initiatives - Costs Reflected In Segment Results The company has several operating efficiency initiatives underway that are intended to improve the company's cost structure, margins, and competitive position. Implementing these initiatives resulted in approximately $38 million, or $0.04 per diluted share of expense year-to-date, which includes $24 million, or $0.03 per diluted share, in the third quarter. Most of those expenses are reflected in the operating profit for the Packaged Foods segment. The company currently plans for approximately $0.04 per diluted share of similar charges in the fourth quarter, and will report on those expenses in its fourth-quarter earnings release. Packaged Foods Sales were $3 billion for the quarter, down slightly from last year due to divestitures. Sales were up 4% year-over-year on a comparable basis, adjusting for $155 million of sales from divested businesses in prior year results. Sales to all customer channels - retail, foodservice, and deli - posted year-over-year increases for the quarter. o The company's top 30 consumer brands, which represent close to two-thirds of the segment revenues, grew greater than 6% as a group. Category shares for several brands have improved in recent periods. o Several major consumer brands posted sales gains, including Armour, Banquet, Chef Boyardee, Cook's, Egg Beaters, Hebrew National, Hunt's, Marie Callender's, PAM, Peter Pan, Reddi-wip, Rosarita, Slim Jim, Snack Pack, Swiss Miss, and Wesson, with many of these achieving double-digit sales increases. o Sales to foodservice customers grew due to increased business with key customers and growth in certain product lines. Sales growth for the quarter was primarily attributable to marketing strategy and distribution gains for various items, as well as improved sales execution by dedicated sales teams assigned to serving specific customers and higher selling prices for some products necessitated by rising input costs. Other factors also contributed to sales growth, including the fact that the company's product line includes items that are on trend with a variety of consumer preferences and product platforms such as health and wellness, convenience, carbohydrate-conscious, and snacks. Segment operating profit for the quarter was $396 million, below the $416 million posted last year. On a comparable basis, operating profit was 5% higher than last year after adjusting for $24 million of expense relating to cost-saving initiatives in the current quarter, as well as $15 million of contribution last year from businesses since divested. Increasing input costs, which were not yet fully offset by higher selling prices for certain of the company's products, affected the rate of profit growth. As previously announced, the company is implementing customer service and operating efficiency improvement initiatives that result in absorbing incremental expense in the short term but which are being undertaken to provide cost savings and customer service benefits in the future. As a result of progress with these initiatives, the segment incurred $24 million, or $0.03 per diluted share, of expense during the third quarter. The purpose of these cost-saving and customer service improvement initiatives, along with top-line growth programs, is to drive market share, future profit growth, and margin expansion opportunities within this segment. Year-to-date sales for the Packaged Foods reporting segment reached $8.9 billion, below $9.2 billion last year due to divestitures. Sales were 2% ahead of last year on a comparable basis, adjusting for $461 million of sales from divested businesses in the fiscal 2003 year-to-date amounts. Operating profit was $1.1 billion, below $1.2 billion last year. On a comparable basis, operating profit was 3% below last year, adjusting for $41 million of contribution from divested businesses in the fiscal 2003 year-to-date amounts as well as $31 million of expense this fiscal year related to implementing cost-saving initiatives. Food Ingredients During the quarter, sales for the Food Ingredients segment increased 4% to $630 million. Operating profit improved significantly to $55 million this year compared with $30 million last year. The profit increase reflects a slightly improved business environment and more efficient operations for specialty dehydrated, seasonings and flavors, and milled product lines, as well as the fact that prior year amounts included unfavorable inventory adjustments. The sales increase largely reflects fluctuating market prices and a more favorable environment for commodity inputs. For the first nine months, sales for the Food Ingredients segment totaled $1.8 billion, about equal with last year, while operating profit for the first nine months was $142 million, 23% above last fiscal year-to-date. Expense of $7 million related to implementing cost-saving initiatives is included in the segment's fiscal 2004 year-to-date operating profit. Discontinued Operations and Earnings from Equity Method Investments During the quarter, diluted EPS from discontinued operations totaled $0.02, generated by the company's receipt of rebates paid to United Agri Products (UAP) by its suppliers. The company sold essentially all of UAP, a crop inputs distribution company, in November 2003. As part of the transaction agreement, ConAgra Foods is entitled to the actual rebates UAP receives from its suppliers subsequent to November 2003 related to the previous crop year. Equity method investment earnings for the quarter were $2 million, compared with $12 million for the same quarter last year. Year-to-date results for equity method investment earnings were $29 million, compared with $27 million for the same period last fiscal year. Capital Resource Management o The company repurchased approximately 8.3 million shares of common stock during the fiscal third quarter at a total cost of approximately $218 million. o During the quarter, the company received approximately $25 million for the partial redemption of preferred securities issued by the buyer of UAP as part of that divestiture; as a result, preferred securities of the buyer of UAP owned by ConAgra Foods now total $35 million. o Continuing operations - fiscal third quarter: For the quarter, capital expenditures for property, plant, and equipment totaled $91 million compared with $87 million last year. Depreciation and amortization expense was approximately $89 million for the quarter versus $89 million a year ago. Dividends paid totaled $138 million. Net interest expense for the quarter was $62 million compared with $64 million last year. o Continuing operations - year-to-date: For the first nine months of fiscal year 2003, capital expenditures for property, plant, and equipment were $247 million, compared with $259 million last year. Depreciation and amortization expense amounted to $263 million versus $286 million last year. Dividends paid totaled $400 million. Net interest expense was $196 million, compared with $217 million last fiscal year. Change in Accounting During the quarter, the company adopted Financial Accounting Standards Board Interpretation Number 46 (FIN 46), which addresses the accounting for certain entities including those that lease property to the company. Adopting FIN 46 had no significant impact on the company's income statement. As a result of adopting FIN 46 and thus consolidating certain entities and de-consolidating others, the following balance sheet changes were made: o Total assets increased by $267 million. o Total liabilities increased by $269 million, reflecting an increase in interest-bearing debt and other noncurrent liabilities of approximately $444 million, partially offset by a reduction of $175 million in subsidiary preferred securities. New Product News During the quarter, the company introduced its new line of convenient, prepared, carbohydrate-controlled frozen meals, Life Choice, which was designed for consumers who prefer tasty and filling products that have fewer carbohydrates. ConAgra Foods is the first major food manufacturer to market a new and complete line of great-tasting frozen meals designed specifically for carbohydrate-conscious consumers. As of today, Life Choice has achieved national availability after being introduced as recently as January 19. Based on favorable customer reaction to the product, the company is optimistic about the products' prospects. Outlook Rohde commented, "Our fiscal third quarter showed encouraging results, particularly with regard to overall sales growth and how quickly our Life Choice products were introduced and accepted into the market. Although our industry is facing increasing input costs, as well as cycles in the economy, we expect a solid finish for our fiscal year, which ends in May. We look forward to reporting on our progress." Major Items Affecting Year-Over-Year EPS Comparability of Third-Quarter Results Included in the results for third quarter of fiscal 2004: o Current quarter results include expense of approximately $0.03 per diluted share related to implementing cost-savings initiatives. o Current quarter results include earnings of approximately $0.02 per diluted share related to discontinued operations. Items in third quarter of fiscal 2003 that are not repeated in the third quarter of fiscal 2004: o Prior year results include $0.08 per diluted share of loss from discontinued operations. o Prior year results include $0.01 per diluted share of expense from costs related to the beef and pork divestiture transactions. ConAgra Foods, Inc. (NYSE: CAG) is one of North America's largest 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, Brown 'N Serve, Butterball, Chef Boyardee, Cook's, Crunch 'n Munch, DAVID, Decker, Eckrich, Egg Beaters, Fleischmann's, Golden Cuisine, Gulden's, Healthy Choice, Hebrew National, Hunt's, Kid Cuisine, Knott's Berry Farm, La Choy, Lamb Weston, Libby's, Life Choice, Lightlife, Lunch Makers, MaMa Rosa's, Manwich, Marie Callender's, Orville Redenbacher's, PAM, Parkay, Pemmican, Peter Pan, Reddi-wip, Rosarita, Ro*Tel, Slim Jim, Snack Pack, Swiss Miss, Van Camp's, Wesson, Wolf, and many others. For more information, please visit us at www.conagrafoods.com. Discussion of Results A discussion of ConAgra Foods' third-quarter results will be available today at 8:30 a.m. EST. 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. EST. A digital replay of the discussion will be available after 9:30 a.m. EST at 1-800-642-1687 and at 1-706-645-9291 for international callers. The conference identification number for the digital replay for domestic callers and international callers is 5377576. The company has posted a question-and-answer supplement 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 THIRD QUARTER - 13 Weeks Ended ------------------------------------------------------------- February 22, 2004 February 23, 2003 Percent Change ------------------- ------------------ ------------------ SALES Packaged Foods $ 2,967.5 $ 3,009.3 (1.4) % Food Ingredients 630.2 605.0 4.2 % ------------------- ------------------ Total 3,597.7 3,614.3 (0.5)% ------------------- ------------------ OPERATING PROFIT Packaged Foods $ 396.0 $ 416.2 (4.9)% Food Ingredients 54.5 29.8 82.9% ------------------- ------------------ Total operating profit for segments 450.5 446.0 1.0% 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 corporate expense 76.3 88.7 (14.0)% Interest expense, net 62.0 63.6 (2.5)% Equity method investment earnings 1.9 11.8 (83.9)% ------------------- ------------------ Income from continuing operations before income tax and cumulative effect of changes in accounting $ 314.1 $ 305.5 2.8% =================== ==================
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. Segment Operating Results In millions THIRD QUARTER - 39 Weeks Ended ------------------------------------------------------------- February 22, 2004 February 23, 2003 Percent Change ------------------- ------------------ ------------------ SALES Packaged Foods $ 8,916.6 $ 9,193.2 (3.0) % Food Ingredients 1,849.5 1,845.2 0.2 % Meat Processing - 2,468.7 (100.0)% ------------------- ------------------ Total 10,766.1 13,507.1 (20.3)% ------------------- ------------------ OPERATING PROFIT Packaged Foods $ 1,123.3 $ 1,225.2 (8.3)% Food Ingredients 142.4 115.5 23.3% Meat Processing - 49.0 (100.0)% ------------------- ------------------ Total operating profit for segments 1,265.7 1,389.7 (8.9)% 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 247.2 273.7 (9.7)% Interest expense, net 195.9 216.6 (9.6)% Equity method investment earnings 29.4 27.1 8.5% ------------------- ------------------ Income from continuing operations before income tax and cumulative effect of changes in accounting $ 852.0 $ 926.5 (8.0)% =================== ==================
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 Statements of Earnings In millions, except per share amounts THIRD QUARTER - 13 Weeks Ended --------------------------------------------------------------- February 22, February 23, Percent 2004 2003 Change ------------------- ------------------ ------------------- Net sales $ 3,597.7 $ 3,614.3 (0.5)% Costs and expenses: Cost of goods sold 2,792.8 2,774.4 0.7% Selling, general and administrative expenses 430.7 482.6 (10.8)% Interest expense, net 62.0 63.6 (2.5)% ------------------- ------------------- 3,285.5 3,320.6 (1.1)% Equity method investment earnings 1.9 11.8 (83.9)% ------------------- ------------------- Income from continuing operations before income taxes and cumulative effect of changes in accounting 314.1 305.5 2.8% Income tax expense 122.3 105.2 16.3% ------------------- ------------------- Income from continuing operations before cumulative effect of changes in accounting 191.8 200.3 (4.2)% Income (loss) from discontinued operations, net of tax 12.9 (39.3) N/A Cumulative effect of changes in accounting (1.4) - N/A ------------------- ------------------- Net income $ 203.3 $ 161.0 26.3% =================== =================== Earnings per share - basic Income from continuing operations before cumulative effect of changes in accounting $ 0.36 $ 0.38 (2.7)% Income (loss) from discontinued operations 0.02 (0.08) N/A Cumulative effect of changes in accounting - - - ------------------- ------------------- Net income $ 0.38 $ 0.30 26.7% =================== =================== Weighted average shares outstanding 527.8 528.9 (0.2)% =================== =================== Earnings per share - diluted Income from continuing operations before cumulative effect of changes in accounting $ 0.36 $ 0.38 (2.7)% Income (loss) from discontinued operations 0.02 (0.08) N/A Cumulative effect of changes in accounting - - - ------------------- ------------------- Net income $ 0.38 $ 0.30 26.7% =================== =================== Weighted average share and share equivalents 531.9 531.2 0.1% outstanding =================== ===================
ConAgra Foods, Inc. Consolidated Statements of Earnings In millions, except per share amounts THIRD QUARTER - 39 Weeks Ended --------------------------------------------------------------- February 22, February 23, Percent 2004 2003 Change ------------------- ------------------- ------------------- Net sales $ 10,766.1 $ 13,507.1 (20.3)% Costs and expenses: Cost of goods sold 8,358.3 10,904.7 (23.4)% Selling, general and administrative expenses 1,389.3 1,486.4 (6.5)% Interest expense, net 195.9 216.6 (9.6)% ------------------- ------------------- 9,943.5 12,607.7 (21.1)% Equity method investment earnings 29.4 27.1 8.5% ------------------- ------------------- Income from continuing operations before income taxes and cumulative effect of changes in accounting 852.0 926.5 (8.0)% Income tax expense 251.7 329.9 (23.7)% ------------------- ------------------- Income from continuing operations before cumulative effect of changes in accounting 600.3 596.6 0.6% Income from discontinued operations, net of tax 81.1 23.9 239.3% Cumulative effect of changes in accounting (13.1) 3.9 N/A ------------------- ------------------- Net income $ 668.3 $ 624.4 7.0% =================== =================== Earnings per share - basic Income from continuing operations before cumulative effect of changes in accounting $ 1.13 $ 1.13 - Income from discontinued operations 0.15 0.04 275.0% Cumulative effect of changes in accounting (0.02) 0.01 N/A ------------------- ------------------- Net income $ 1.26 $ 1.18 6.8% =================== =================== Weighted average shares outstanding 528.9 528.4 0.1% =================== =================== Earnings per share - diluted Income from continuing operations before cumulative effect of changes in accounting 1.13 $ 1.12 0.9% Income from discontinued operations 0.15 0.05 200.0% Cumulative effect of changes in accounting (0.02) 0.01 N/A ------------------- ------------------- Net income $ 1.26 $ 1.18 6.8% =================== =================== Weighted average share and share equivalents 532.2 530.9 0.2% outstanding =================== ===================
ConAgra Foods, Inc. Consolidated Balance Sheets In millions February 22, February 23, 2004 2003 --------------------- -------------------- ASSETS Current assets Cash and cash equivalents $ 533.7 $ 78.0 Divestiture proceeds receivable 36.0 - Receivables, less allowance for doubtful accounts of $37.2 and $42.0 1,238.4 932.2 Inventories 3,027.3 3,089.9 Prepaid expenses and other current assets 501.8 704.9 Current assets of discontinued operations 145.7 1,469.8 --------------------- -------------------- Total current assets 5,482.9 6,274.8 Property, plant and equipment, net 2,867.4 2,720.4 Goodwill 3,806.4 3,816.2 Brands, trademarks and other intangibles, net 824.7 862.1 Other assets 1,484.3 1,210.6 Noncurrent assets of discontinued operations 10.0 627.6 --------------------- -------------------- $ 14,475.7 $ 15,511.7 ===================== ==================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable $ 42.6 $ 160.2 Current installments of long-term debt 373.1 508.5 Accounts payable 857.5 1,038.5 Advances on sales 239.2 175.9 Other accrued liabilities 1,554.5 1,700.3 Current liabilities of discontinued operations 116.7 691.3 --------------------- -------------------- Total current liabilities 3,183.6 4,274.7 Senior long-term debt, excluding current installments 4,557.7 4,595.2 Subordinated debt 754.5 763.1 Preferred securities of subsidiary company - 175.0 Other noncurrent liabilities 1,103.6 1,046.5 Noncurrent liabilities of discontinued operations 0.1 17.0 Common stockholders' equity 4,876.2 4,640.2 --------------------- -------------------- $ 14,475.7 $ 15,511.7 ===================== ====================
EX-99.2 4 qanda3q04.txt ConAgra Foods Q3FY04 Question & Answer March 25, 2004 1. What were Packaged Foods sales and volume changes for the quarter, excluding the impact of divestitures in prior year amounts? As reported, Packaged Foods sales of $3 billion in the third quarter of fiscal 2004 were essentially equal to last year. On a comparable basis, Packaged Foods sales increased 4% over last year, adjusting for $155 million of sales in last year's amounts related to businesses which have since been divested. Packaged Foods volumes decreased 1% due to divestitures, but increased 2% on a comparable basis. 2. Packaged Foods sales were strong. What were some examples of consumer brands posting sales growth for the quarter? Armour Banquet Blue Bonnet Chef Boyardee Cook's Egg Beaters Hebrew National Hunt's Marie Callender's PAM Peter Pan Reddi-wip Slim Jim Snack Pack Swiss Miss Wesson 3. What were some examples of consumer brands posting sales declines for the quarter? ACT II Butterball Eckrich Healthy Choice Kid Cuisine LaChoy MaMa Rosa's Orville Redenbacher's Parkay 4. What were the major items affecting sales comparability for the third quarter? Fiscal 2004 third quarter sales of $3.6 billion were essentially equal to last year. In last year's third quarter, there were $155 million of sales from businesses since divested; those amounts were in the Packaged Foods segment. After adjusting for those sales in prior year amounts: o Packaged Foods sales increased 4% year-over-year, as explained in the answer to question #1, and o Overall sales increased 4% year-over-year as well. 5. What were the major items affecting operating profit comparability for the third quarter? Fiscal 2004 third quarter total operating profit of $451 million was essentially equal to $446 million last year, as reported. Packaged Foods operating profit was $396 million, less than $416 million last year, as reported. In last year's third quarter, there were $15 million of operating profits from businesses since divested; those amounts were in the Packaged Foods segment results. In the third quarter of this year, there were $24 million of expenses relating to cost saving initiatives, most of which were in the Packaged Foods segment. After adjusting for these items: o Packaged Foods operating profit increased 5% o Overall operating profit increased 10% 6. What are the major items affecting the comparability of Q3 FY04 diluted EPS of $0.38 with the Q3 FY03 diluted EPS of $0.30? o Third quarter fiscal 2004 diluted EPS of $0.38 includes $0.03 per share of expense related to implementing operating improvement initiatives and $0.02 per share of earnings from discontinued operations. o Third quarter fiscal 2003 diluted EPS of $0.30 includes $0.08 of loss from discontinued operations, and $0.01 per share of expense related to divesting the fresh beef and pork business. 7. How much was total Depreciation and Amortization (all types) from continuing operations for the quarter? Approximately $89 million (vs. $89 million in Q3 2003). $88 million of depreciation (vs. $87 million in Q3 2003) $1 million of other amort. (vs. $2 million in Q3 2003) 8. How much was total Depreciation and Amortization (all types) from continuing operations for fiscal year-to-date? Approximately $263 million (vs. $286 million through Q3 2003). $261 million of depreciation (vs. $281 million through Q3 2003) $2 million of other amort. (vs. $5 million through Q3 2003) 9. How much were Capital Expenditures from continuing operations for the quarter? Approximately $91 million (vs. $87 million in Q3 2003). 10. How much were Capital Expenditures from continuing operations for fiscal year-to-date? Approximately $247 million (vs. $259 million through Q3 2003). 11. What was the net interest expense for the quarter? $62 million. 12. What was the net interest expense fiscal year-to-date? $196 million. 13. What is included in the company's net debt at the end of the quarter (in millions)? Q3FY04 Q3FY03 Total Debt* $5,728 $6,202 Less: Cash On Hand $ 534 $ 78 ------- ------- Total $5,194 $6,124 * Total debt = short-term debt, long-term debt, subordinated debt, and subsidiary preferred securities. 14. How is the company's balance sheet affected with the adoption of FIN46? o Assets increased $267 million o Liabilities increased by $269 million, reflecting an increase in interest bearing debt and other noncurrent liabilities of $444 million, partially offset by a reduction of $175 million in subsidiary preferred securities. 15. What was Corporate Expense for the quarter? Approximately $76 million (vs. approximately $89 million in Q3 2003). 16. What was Corporate Expense for the fiscal-year-to-date? Approximately $247 million (vs. approximately $274 million through Q3 2003). 17. How much did you pay in dividends during the quarter? $138 million. 18. How much did you pay in dividends fiscal year-to-date? $400 million. 19. What was the weighted average number of diluted shares outstanding for the quarter? 531.9 million shares. 20. What was the approximate effective tax rate for the quarter (rounded)? 39% 21. What were the gross margins and operating margins this quarter ($ amounts in millions, rounded)? Gross Margin = Gross Profit* divided by Sales Gross Margin = $805/$3,598 = 22.4% Operating Margin = Segment Operating Profit** divided by Sales Operating Margin = $451/$3,598 = 12.5% * Gross Profit equals Sales - Costs of Goods Sold ($3,598 - $2,793 = $805) **See third quarter segment operating results for a reconciliation of operating profit to income from continuing operations. Income from Continuing Operations divided by Sales = $314/$3,598 = 8.7%. 22. What was the trade working capital position at quarter end, excluding amounts for discontinued operations? Trade working capital is defined as the net position of Accounts Receivable plus Inventory less Current Operating Liabilities (Accounts Payable, Accrued Expenses, and Advances on Sales). Q3FY04 Q3FY03 Accounts Receivable $1,239 $ 932 Inventory $3,027 $3,090 Less: Accounts Payable $ 858 $1,039 Less: Accrued Expenses $1,555 $1,700 Less: Advances on Sales $ 239 $ 176 ------- ------- Net Position $1,614 $1,107 23. What was the main reason for the year-over-year increase in accounts receivable? Due to our strong cash position, we did not sell as many accounts receivable to third parties this year as we did last year. That resulted in a year-over-year increase in our accounts receivable. 24. What is the estimate of the effective tax rate for the fourth quarter of fiscal 2004? Approximately 37%. 25. What are projected Capital Expenditures for fiscal 2004? $325-$350 million. 26. What is the expected net interest expense for fiscal 2004? Approximately $ 275 million. 27. The company refers to cost saving and operating improvement initiatives that have started and which will continue over the next several quarters. Does the company have any additional comments on that? o As part of efforts to improve the company's cost structure, margins, and competitive position, the company is currently implementing a series of initiatives that will better align and utilize the company's collective resources. o These initiatives were started in the first half of fiscal 2004, and are expected to continue for the next several quarters. These initiatives include: >> Elimination of duplicative costs and overhead >> Consolidation of selected plants and support functions >> Streamlining and improving our ability to do business with our customers, distributors, and brokers >> Realignment of business organizations o Implementing these initiatives results in costs. In the current quarter, such costs were approximately $0.03 per share, and are included in the operating results for the Packaged Foods and Food Ingredients segments. For the remainder of fiscal 2004, those costs are expected to be approximately $0.04 per share; these initiatives are expected to be more than offset by cost savings in the future. o The company expects to incur additional costs, and to subsequently realize cost savings greater than those additional costs in future years as it gradually implements these initiatives. -----END PRIVACY-ENHANCED MESSAGE-----