8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

December 21, 2006

Date of report (Date of earliest event reported)

ConAgra Foods, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

1-7275	47-0248710
(Commission File Number)	(IRS Employer Identification No.)
One ConAgra Drive
Omaha, NE	68102
(Address of Principal Executive Offices)	(Zip Code)

(402) 595-4000

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On December 21, 2006, ConAgra Foods, Inc. (the “Company”) issued a press release and posted a question and answer document on its website containing certain information on second quarter fiscal 2007 financial results. The press release and Q&A are furnished with this Form 8-K as exhibits 99.1 and 99.2, respectively. The press release contains the non-GAAP financial measures of adjusted earnings per share for the Company and adjusted operating profit at the Company’s Consumer Foods, Food and Ingredients and International Foods segments, each of which management believes provides a useful measure for investors in examining the Company’s operational results during the quarter and facilitates period-to-period comparisons.

Item 9.01 Financial Statements and Exhibits

Exhibit 99.1 Press Release issued December 21, 2006

Exhibit 99.2 Questions and Answers

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: December 21, 2006	By: /s/ Andre Hawaux
	Name: Andre Hawaux
	Title: Executive Vice President and
	Chief Financial Officer

Exhibit Index

Exhibit 99.1 Press release issued December 21, 2006....................................................................

Exhibit 99.2 Questions and Answers.......................................................................................

EX-99.1

FOR IMMEDIATE RELEASE

CONAGRA FOODS REPORTS STRONG FISCAL 2007 SECOND-QUARTER

EPS RESULTS; MARGIN EXPANSION DRIVES HIGHER

FISCAL YEAR 2007 EPS EXPECTATIONS

OMAHA, Neb., Dec. 21, 2006 — ConAgra Foods, Inc. (NYSE: CAG), one of North America’s leading packaged food companies, today reported results for the fiscal 2007 second quarter ended Nov. 26, 2006. Second-quarter fiscal 2007 diluted earnings per share were $0.43, 48% above the $0.29 earned in the year-ago period. Current-quarter diluted earnings per share of $0.43 include $0.03 per share of income from items that impact comparability; excluding these items, second-quarter diluted earnings per share were $0.40, up 38% from the comparable $0.29 in the year-ago period. Items impacting comparability are summarized toward the end of this release.

Gary Rodkin, chief executive officer of ConAgra Foods, commented, “Rapid expansion of our operating margins is helping build a solid foundation for the future. Together with earlier than expected completion of key divestitures, this is providing a significant boost to our fiscal 2007 results.”

He continued, “Our progress puts us on track for a better EPS performance this year than we originally expected, and is providing the fuel that will allow us to make increased marketing and innovation investments. Although we expect productivity gains to be the main driver of solid

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earnings performance throughout the remainder of fiscal 2007, our marketing investments will help us deliver future bottom-line improvements through top-line growth in key brands.”

Consumer Foods Segment (56% of YTD sales)

Branded consumer products sold in retail and foodservice channels;

excludes international consumer operations.

For the quarter, sales for the Consumer Foods segment were $1.8 billion, in line with the same period last year. Improved mix, pricing gains and more effective trade spending contributed to the solid sales performance for key brands. A list of major brand sales gains and declines is included in the question-and-answer supplement to this release and is posted on the company’s Web site.

• Sales for the company’s priority investment brands, which represented 75% of the segment sales, increased 2% overall.

• Sales for the balance of the segment decreased 6%, primarily from the divestiture of a refrigerated pizza business and declines in low-margin foodservice and private label items, some of which were intentionally phased out.

Segment operating profit was $287 million for the quarter, 17% above the $245 million reported for last year. Current-quarter operating profit of $287 million includes $28 million of restructuring charges; excluding these charges, operating profit was $315 million, up 29% over the $245 million reported for the year-ago period. The operating profit performance reflects cost savings, more effective trade spending and mix improvement, which more than offset increased advertising and promotion investment behind key brands. Profitability for the company’s priority investment brands increased, as did the profits for the lower-priority brands.

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Food and Ingredients Segment (30% of YTD sales)

Specialty potato, dehydrated vegetable, seasonings, blends, flavors, and milled grain products

sold to foodservice and commercial channels worldwide.

For the quarter, sales for the Food and Ingredientssegment were $886 million, 10% ahead of last year. The increase reflects higher flour prices driven by increased input costs, stronger volumes for potato products, as well as better prices and sales mix across several other product lines.

Segment operating profit was $118 million for the quarter, 28% ahead of the $92 million reported for last year. Current-quarter operating profit of $118 million includes $26 million of gains resulting from a divestiture and an insurance settlement; excluding these gains, operating profit was $92 million, roughly equal to the $92 million reported for the year-ago period. On a comparable basis, operating profit growth for potato products and other operations offset lower milling margins resulting from higher input costs.

Trading and Merchandising Segment (9% of YTD sales)

Trading and merchandising agricultural commodities, fertilizer, and energy worldwide.

For the quarter, sales for the Trading and Merchandising segment were $297 million, 3% ahead of year-ago amounts. Segment operating profit was $39 million, 19% ahead of the $33 million reported for last year. Strong results for energy trading more than offset the operating profit declines for agricultural commodities and wholesale fertilizer operations.

International Foods Segment (5% of YTD sales)

Branded consumer products sold internationally to retail channels.

For the quarter, sales for the International Foods segment were $154 million, 1% below year-ago amounts. Segment operating profit was $18 million for the quarter, ahead of the $15 million reported for last year. Current-quarter operating profit of $18 million includes a gain of $4 million resulting from divesting a non-core asset; excluding this gain, operating profit was $14 million, slightly below the $15 million reported for the year-ago period. On a comparable basis, an operating

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profit decline for Mexican operations and an increase in overall marketing investment offset operating profit increases for Canadian operations and other markets.

Other Items

• Corporate expense was $92 million for the quarter, including $4 million of expense related to restructuring charges and a $7 million benefit resulting from a favorable resolution of franchise tax matters. For the same quarter last year, corporate expense was $103 million, including $19 million of expense related to the accelerated recognition of benefits in connection with the transition of certain executives.

• Equity method investment earnings were $13 million for the second quarter and included a gain of $4 million related to the sale of the company’s interest in a malt joint venture. For the same quarter last year, equity investments posted a loss of $17 million and included approximately $24 million of impairment charges related to the malt joint venture.

• Net interest expense for the quarter was $52 million compared with $69 million last year, primarily reflecting significant debt repayment over the last year and greater interest income resulting from divestiture proceeds.

• Several factors impacting the effective tax rate are summarized toward the end of this document in the list of major items impacting comparability. The company plans for a tax rate of 36% on pretax earnings excluding items that impact comparability.

Capital Items

• During the quarter, the company completed the following:

Ø The sale of its refrigerated packaged meats businesses,

Ø The sale of its interest in a malt joint venture,

Ø The sale of its note receivable from Swift Foods,

Ø The sale of the Mama Rosa refrigerated pizza business, and

Ø The sale of an oat milling operation.

Combined gross pretax proceeds from the above transactions were approximately $740 million.

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• The company repurchased approximately 5.8 million shares of common stock during the second quarter at a total cost of approximately $150 million. At quarter-end, the company had approximately $500 million of authorized repurchases remaining under its share repurchase program.

• Dividends paid during the quarter totaled $92 million versus $141 million last year.

• For the quarter, capital expenditures from continuing operations for property, plant, and equipment were $66 million, compared with $60 million in the year-ago period. Depreciation and amortization expense from continuing operations was approximately $88 million for the quarter; this compares with a total of $74 million in the year-ago period.

• During the quarter, the company announced an exchange offer to refinance a portion of its outstanding long-term debt securities:

Ø The company is exchanging approximately $200 million of its 9.75% notes due 2021 and $300 million of its 6.75% notes due 2011 for approximately $500 million of 5.82% notes due 2017 and cash.

Ø Total cash payments (premium) to exchanging note holders will be approximately $90 million and will be amortized over the life of the new debt.

Outlook

Based on excellent progress to date, the company expects fiscal 2007 diluted EPS, excluding items impacting comparability, to be in the range of $1.28 - $1.33. This reflects the benefit from the earlier than expected completion of key divestitures and ongoing progress with cost savings, mix and trade spend effectiveness, as well as the benefit from share repurchases already completed. The company is not planning for its Trading and Merchandising segment to repeat the exceptional performance it had in the third quarter of last year. The company is planning for increased marketing investment in the second half of the year.

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Major Items Affecting Second-Quarter Fiscal 2007 EPS Comparability

Included in the $0.43 diluted EPS for the second quarter of fiscal 2007 (EPS amounts rounded and after tax):

• Expense of $0.04 per diluted share, or $34 million pretax, for restructuring charges related to programs designed to reduce the company’s ongoing operating costs. These primarily include $28 million (COGS of $17 million and SG&A of $11 million) of expense within the Consumer Foods segment and $4 million of expense within corporate.

• Gain of $0.03 per diluted share, or $21 million pretax, resulting from the sale of an oat milling operation, classified within the results of the Food and Ingredients segment, and the sale of a non-core asset within the International Foods segment.

• Benefit of $0.02 per diluted share, largely the result of favorable tax outcomes relating to the sale of the company’s interest in a malt joint venture. There is a $4 million pretax gain classified within the results of equity method investment earnings (loss), and other related tax benefits reflected in income taxes.

• Gain of $0.01 per diluted share, or $8 million pretax, resulting from an insurance settlement related to a fire, classified within the results of the Food and Ingredients segment.

• Benefit of $0.01 per diluted share, or $7 million pretax, resulting from a favorable resolution of franchise tax matters.

• Expense of $0.02 per diluted share resulting from net unfavorable tax settlements and changes in estimates.

• Income of $0.02 per diluted share from discontinued operations.

Included in the $0.29 diluted EPS for the second quarter of fiscal 2006 (EPS amounts rounded and after tax):

• Expense of $0.05 per diluted share resulting from asset impairment charges associated with the malt joint venture, classified within the results of equity method investment earnings (loss).

• Expense of $0.02 per diluted share related to the accelerated recognition of benefits in connection with the transition of certain executives, classified within corporate.

• Income of $0.07 per diluted share from discontinued operations.

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Discussion of Results

ConAgra Foods will host a conference call at 9:30 a.m. EST today to discuss second-quarter 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 1-800-819-9193 and 1-913-981-4911, respectively. No confirmation or pass code is needed. This conference call also can be accessed live on the Internet at www.conagrafoods.com/investors.

A rebroadcast of the conference call will be available after 1 p.m. EST on Dec. 21, 2006. To access the digital replay, a pass code will be required. Domestic participants should dial 1-888-203-1112 and international participants should dial 1-719-457-0820 and enter pass code 4798142. A rebroadcast also will be available on the company’s Web site.

In addition, the company has posted a question-and-answer supplement relating to this release at www.conagrafoods.com/investors. To view recent company news, please visit www.conagrafoods.com/media.

ConAgra Foods, Inc. (NYSE:CAG), is one of North America's leading packaged food companies, serving grocery retailers, as well as restaurants and other foodservice establishments. Popular ConAgra Foods consumer brands include: Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, Reddi-wip, and many others.

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 views and assumptions of future events and financial performance and are subject to uncertainty and changes in circumstances. The company undertakes no responsibility to update these statements. Readers of this release should understand that these statements are not guarantees of performance or results. Many factors could affect the company’s actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements. These factors include, among

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other things, future economic circumstances, industry conditions, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, the company’s ability to execute its operating and restructuring plans, 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. The company cautions readers not to place undue reliance on any forward-looking statements included in this release, which speak only as of the date made.

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ConAgra Foods, Inc.
Segment Operating Results
In millions
	SECOND QUARTER
	13 Weeks Ended	13 Weeks Ended
	November 26, 2006	November 27, 2005	Percent Change
SALES
Consumer Foods	$ 1,752.2	$ 1,753.2	(0.1)%
Food and Ingredients	885.7	805.3	10.0%
Trading and Merchandising	297.3	288.6	3.0%
International Foods	153.5	154.9	(0.9)%
Total	3,088.7	3,002.0	2.9%
OPERATING PROFIT
Consumer Foods	$ 286.7	$ 244.6	17.2%
Food and Ingredients	118.0	91.9	28.4%
Trading and Merchandising	38.9	32.7	19.0%
International Foods	18.2	14.9	22.1%
Total operating profit for segments	461.8	384.1	20.2%
Reconciliation of total operating profit to income from continuing operations before income taxes and equity method investment earnings (loss)
Items excluded from segment operating profit:
General corporate expense	(91.6)	(103.1)	(11.2)%
Interest expense, net	(52.1)	(68.6)	(24.1)%
Income from continuing operations before income taxes and equity method investment earnings (loss)	$ 318.1	$ 212.4	49.8%

Segment operating profit excludes general corporate expense, equity method investment earnings (loss) 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.

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ConAgra Foods, Inc.
Segment Operating Results
In millions
	SECOND QUARTER
	26 Weeks Ended	26 Weeks Ended
	November 26, 2006	November 27, 2005	Percent Change
SALES
Consumer Foods	$ 3,261.8	$ 3,252.7	0.3%
Food and Ingredients	1,717.2	1,575.8	9.0%
Trading and Merchandising	502.7	548.6	(8.4)%
International Foods	295.6	298.7	(1.0)%
Total	5,777.3	5,675.8	1.8%
OPERATING PROFIT
Consumer Foods	$ 467.3	$ 411.0	13.7%
Food and Ingredients	224.3	188.3	19.1%
Trading and Merchandising	54.5	86.2	(36.8)%
International Foods	31.3	25.2	24.2%
Total operating profit for segments	777.4	710.7	9.4%
Reconciliation of total operating profit to income from continuing operations before income taxes and equity method investment earnings (loss)
Items excluded from segment operating profit:
General corporate expense	(181.4)	(176.0)	3.1%
Gain on sale of Pilgrim’s Pride Corporation common stock	-	329.4	(100.0)%
Interest expense, net	(110.1)	(141.0)	(21.9)%
Income from continuing operations before income taxes and equity method investment earnings (loss)	$ 485.9	$ 723.1	(32.8)%

Segment operating profit excludes general corporate expense, gain on sale of Pilgrim’s Pride Corporation common stock, equity method investment earnings (loss) 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.

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ConAgra Foods, Inc.
Consolidated Statements of Earnings
In millions, except per share amounts	SECOND QUARTER
	13 Weeks Ended	13 Weeks Ended
	November 26, 2006	November 27, 2005	Percent Change
Net sales	$ 3,088.7	$ 3,002.0	2.9%
Costs and expenses:
Cost of goods sold	2,278.4	2,270.6	0.3%
Selling, general and administrative expenses	440.1	450.4	(2.3)%
Interest expense, net	52.1	68.6	(24.1)%
Income from continuing operations before income taxes and equity method investment earnings (loss)	318.1	212.4	49.8%
Income tax expense	123.1	79.5	54.8%
Equity method investment earnings (loss)	12.6	(16.7)	NA
Income from continuing operations	207.6	116.2	78.7%
Income from discontinued operations, net of tax	12.0	36.3	(66.9)%
Net income	$ 219.6	$ 152.5	44.0%
Earnings per share – basic
Income from continuing operations	$ 0.41	$ 0.22	86.4%
Income from discontinued operations	0.02	0.07	(71.4)%
Net income	$ 0.43	$ 0.29	48.3%
Weighted average shares outstanding	508.3	518.7	(2.0)%
Earnings per share – diluted
Income from continuing operations	$ 0.41	$ 0.22	86.4%
Income from discontinued operations	0.02	0.07	(71.4)%
Net income	$ 0.43	$ 0.29	48.3%
Weighted average share and share equivalents outstanding	511.3	521.0	(1.9)%

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ConAgra Foods, Inc.
Consolidated Statements of Earnings
In millions, except per share amounts	SECOND QUARTER
	26 Weeks Ended	26 Weeks Ended
	November 26, 2006	November 27, 2005	Percent Change
Net sales	$ 5,777.3	$ 5,675.8	1.8%
Costs and expenses:
Cost of goods sold	4,304.0	4,273.7	0.7%
Selling, general and administrative expenses	877.3	867.4	1.1%
Interest expense, net	110.1	141.0	(21.9)%
Gain on sale of Pilgrim’s Pride Corporation common stock	-	329.4	(100.0)%
Income from continuing operations before income taxes and equity method investment earnings (loss)	485.9	723.1	(32.8)%
Income tax expense	184.6	257.1	(28.2)%
Equity method investment earnings (loss)	14.8	(30.6)	NA
Income from continuing operations	316.1	435.4	(27.4)%
Income from discontinued operations, net of tax	70.2	64.4	9.0%
Net income	$ 386.3	$ 499.8	(22.7)%
Earnings per share – basic
Income from continuing operations	$ 0.62	$ 0.84	(26.2)%
Income from discontinued operations	0.14	0.12	16.7%
Net income	$ 0.76	$ 0.96	(20.8)%
Weighted average shares outstanding	509.2	518.4	(1.8)%
Earnings per share – diluted
Income from continuing operations	$ 0.62	$ 0.84	(26.2)%
Income from discontinued operations	0.13	0.12	8.3%
Net income	$ 0.75	$ 0.96	(21.9)%
Weighted average share and share equivalents outstanding	511.8	520.8	(1.7)%

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ConAgra Foods, Inc.
Consolidated Balance Sheets
In millions
	November 26, 2006	November 27, 2005
ASSETS
Current assets
Cash and cash equivalents	$ 803.5	$             687.4
Receivables, less allowance for doubtful accounts
of $25.0 and $31.2	1,115.5	1,301.4
Inventories	2,587.7	2,449.4
Prepaid expenses and other current assets	1,213.3	558.9
Current assets held for sale	-	460.2
Total current assets	5,720.0	5,457.3
Property, plant and equipment, net	2,154.7	2,333.9
Goodwill	3,442.4	3,446.1
Brands, trademarks and other intangibles, net	796.5	800.1
Other assets	242.9	428.4
Noncurrent assets held for sale	-	839.1
	$ 12,356.5	$ 13,304.9
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable	$ 5.6	$ 10.7
Current installments of long-term debt	20.8	920.4
Accounts payable	992.7	976.8
Advances on sales	149.4	211.4
Accrued payroll	291.7	227.1
Other accrued liabilities	1,488.0	1,296.1
Current liabilities held for sale	-	66.7
Total current liabilities	2,948.2	3,709.2
Senior long-term debt, excluding current installments	3,131.7	3,036.8
Subordinated debt	400.0	400.0
Other noncurrent liabilities	1,132.5	1,127.8
Noncurrent liabilities held for sale	-	5.0
Common stockholders' equity	4,744.1	5,026.1
	$ 12,356.5	$ 13,304.9

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EX-99.2

ConAgra Foods

Q2 FY07 Question & Answer

December 21, 2006

1. What were some examples of major brands in the Consumer Foods segment posting sales growth for the quarter?

DAVID

Egg Beaters

Healthy Choice

Hebrew National

Hunt’s

Kid Cuisine

Marie Callender’s

Manwich

Orville Redenbacher’s

PAM

Parkay

Peter Pan

Reddi-wip

Rosarita

Slim Jim

Swiss Miss

Wesson

Wolf

2. What were some examples of major brands in the Consumer Foods segment posting sales declines for the quarter?

ACT II

Banquet

Blue Bonnet

Chef Boyardee

Knott’s Berry Farm

LaChoy

Libby’s

VanCamp’s

3. How much was total depreciation and amortization (all types) from continuing operations for the quarter?

Approximately $88 million (versus approximately $74 million in Q2 2006)

4. How much was total depreciation and amortization (all types) from continuing operations for the fiscal year-to-date?

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Approximately $177 million (versus $149 million through Q2 2006)

5. How much were capital expenditures from continuing operations for the quarter?

Approximately $66 million (versus approximately $60 million in Q2 2006)

6. How much were capital expenditures from continuing operations for the fiscal year-to-date?

Approximately $111 million (versus $120 million through Q2 2006)

7. What was the net interest expense for the quarter?

Approximately $52 million (versus approximately $69 million in Q2 2006)

8. What was the net interest expense for the fiscal year-to-date?

Approximately $110 million (versus approximately $141 million through Q2 2006)

9. What was corporate expense for the quarter?

Approximately $92 million, including approximately $4 million of expense related to restructuring charges and a $7 million benefit resulting from a favorable franchise tax resolution (versus approximately $103 million in Q2 2006, including $19 million of expense related to the accelerated recognition of benefits in connection with the transition of certain executives)

10. How much did the company pay in dividends during the quarter?

$92 million

11. How much did the company pay in dividends fiscal year-to-date?

$185 million

12. What was the weighted average number of diluted shares outstanding for the quarter?

511 million shares

13. What were the gross margins and operating margins for the quarter ($ amounts in millions, rounded)?

Gross margin = gross profit* divided by net sales

Gross margin = $810/$3,089 = 26.2%

Operating margin = segment operating profit** divided by net sales

Operating margin = $462/$3,089 = 15.0%

* Gross profit = net sales – costs of goods sold ($3,089 – $2,279 = $810)

**See second-quarter segment operating results for a reconciliation of operating profit to income from continuing operations before income taxes and equity method investment earnings (loss). Income from continuing operations before income taxes and equity method investment earnings (loss), divided by net sales = $318/$3,089 = 10.3%.

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14. What is included in the company’s net debt at the end of the quarter (in millions)?

	Q2 FY07	Q2 FY06
Total debt*	$3,558	$4,368
Less: Cash on hand	$ 804	$ 687
Net debt total	$2,754	$3,681

* Total debt = notes payable, short-term debt, long-term debt, and subordinated debt.

15. What is the net debt to total capital ratio at quarter end?

37% currently and 42% a year ago

This ratio is defined as net debt divided by the sum of net debt plus shareholder equity. See question #14 for the components of net debt.

16. What is the projected tax rate for continuing operations for the second half of fiscal 2007 (rounded)?

The company plans for a tax rate of 36% on pretax earnings excluding items that impact comparability.

17. What are the projected capital expenditures for fiscal 2007?

Approximately $450 million

18. What is the expected net interest expense for fiscal 2007?

Approximately $225 million

19. What was the impact of adopting FAS123R during the quarter?

Expensing of stock options resulted in recognizing increased expense of approximately $5 million pretax.

20. Where were the second quarter’s restructuring charges classified within Consumer Foods and Corporate?

Consumer Foods:

Cost of goods sold—approximately $17 million

SG&A expense—approximately $11 million

Corporate:

SG&A expense—approximately $4 million.

21. As reported in the earnings release and prior releases, what are the main items in the second-quarter fiscal 2007 diluted EPS that will affect comparability with second-quarter fiscal 2006 diluted EPS?

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Summary of major items included in diluted EPS of $0.43 for the second quarter of fiscal 2007	Second Quarter FY07
Expense related to restructuring program	$0.04
Gain related to the sale of an oat milling operation and a non-core asset	$0.03
Benefit related to the sale of a malt joint venture	$0.02
Gain from a fire insurance settlement	$0.01
Benefit from a favorable resolution of franchise tax matters	$0.01
Expense from net unfavorable tax settlements and changes in estimates	$0.02
Income from discontinued operations	$0.02

Summary of major item included in diluted EPS of $0.29 for the second quarter of fiscal 2006	Second Quarter FY06
Impairment charges related to a joint venture	$0.05
Expense related to accelerated recognition of benefits in connection with transition of certain executives	$0.02
Income from discontinued operations	$0.07

22. Does the company have any comment on how the recent divestitures should impact SG&A cost reduction goals?

The company is aggressively pursuing SG&A cost reductions, particularly focusing on costs that were associated with the recently divested businesses. As part of the divestiture agreements, the company is providing some transition services to the buyers; the company will therefore not significantly change all of the applicable SG&A activities or reduce the related costs until it stops providing the services. The buyers are reimbursing the company for these services, and the company considers the amount of the reimbursement to roughly represent amounts identified for cost reduction once the services and reimbursement have stopped. Excluding reimbursement for direct pass-through costs, buyer payment to ConAgra Foods during the fiscal 2007 second quarter was approximately $6 million for fixed-cost related items.

23. Given the changes to discontinued operations and other items in fiscal 2006 that occurred after the fourth quarter fiscal 2006 earnings release, what are the major items impacting EPS comparability for continuing operations in the second half of fiscal 2006?

Major Items Affecting Third-Quarter Fiscal 2006 EPS

Included in the $0.19 diluted EPS from Continuing Operations (EPS amounts rounded and after tax):

• Expense of $0.06 per diluted share, or $50 million pretax, for restructuring charges related to programs designed to reduce the company’s ongoing operating costs. These are classified as $41 million of expense within the Consumer Foods segment (Cost of Goods Sold of $5 million and SG&A expense of $36 million) and $9 million of SG&A expense within corporate.

• Expense of $0.06 per diluted share, or $47 million pretax, for a charge related to a note receivable from Swift and Company, which is classified as SG&A expense within corporate.

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• Expense of $0.02 per diluted share, or $17 million pretax, reflecting the adjustment of a litigation reserve which is included within corporate.

• Benefit of $0.02 per diluted share for a lower than normal tax rate.

• Expense of $0.02 per diluted share, or $9 million pretax, resulting from asset impairment charges associated with an equity method investment, and classified within the results of equity method investment earnings (loss); this amount is not tax deductible.

Major Items Affecting Fourth-Quarter Fiscal 2006 EPS

Included in the $0.11 diluted EPS from Continuing Operations (EPS amounts rounded and after tax):

• Expense of $0.09 per diluted share, or $79 million pretax, for restructuring charges related to programs designed to reduce the company’s ongoing operating costs. These are classified as $44 million of expense within the Consumer Foods segment (Cost of Goods Sold of $15 million and SG&A expense of $29 million), $5 million of SG&A expense within the Food and Ingredients segment, and $30 million of SG&A expense within corporate.

• Expense of $0.04 per diluted share, or $36 million pretax, for a charge related to a note receivable, which is included within corporate.

• Expense of $0.05 per diluted share, or $24 million, resulting from asset impairment charges associated with an equity method investment, and classified within the results of equity method investment earnings (loss). There is no tax benefit related to these charges.

• Expense of $0.03 per diluted share, or $26 million pretax, for a charge related to early retirement of debt, which is included within corporate.

• Benefit of $0.04 per diluted share for a lower than normal tax rate.

Note on Forward-Looking Statements:

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current views and assumptions of future events and financial performance and are subject to uncertainty and changes in circumstances. The company undertakes no responsibility to update these statements. Readers of this document should understand that these statements are not guarantees of performance or results. Many factors could affect the company’s actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements. These factors include, among other things, future economic circumstances, industry conditions, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, the company’s ability to execute its operating and restructuring plans, 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. The company cautions readers not to place undue reliance on any forward-looking statements included in this document, which speak only as of the date made.

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