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, 2009
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) 240-4000
(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, 2009, ConAgra Foods, Inc. issued a press release and posted a question and answer document on its website containing information on the second quarter fiscal 2010 financial results. The press release and Q&A are furnished with this Form 8-K as exhibits 99.1 and 99.2, respectively.

     The release includes the non-GAAP financial measures of adjusted unallocated corporate expense and adjusted earnings per share from continuing operations. Management considers GAAP financial measures as well as such non-GAAP financial information in its evaluation of the Company’s financial statements and believes these non-GAAP measures provide useful supplemental information to assess our operating performance. These measures are reconciled in the release to the measures as reported in accordance with GAAP, and should be viewed in addition to, and not in lieu of, our diluted earnings per share and operating performance measures as calculated in accordance with GAAP.

Item 9.01 Financial Statements and Exhibits

     (d) Exhibits

          Exhibit 99.1 Press Release issued December 21, 2009

          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, 2009	By:	/s/ Colleen Batcheler
		Name:	Colleen Batcheler
		Title:	Executive Vice President, General Counsel and Corporate Secretary

Exhibit Index

Exhibit 99.1	Press release issued December 21, 2009
Exhibit 99.2	Questions and Answers

EX-99.1

Exhibit 99.1

News Release

For more information, contact:

Teresa Paulsen      MEDIA

Vice President, Corporate Communication

ConAgra Foods, Inc.

tel: 402-240-5210

Chris Klinefelter      ANALYSTS

Vice President, Investor Relations

ConAgra Foods, Inc.

tel: 402-240-4154

www.conagrafoods.com

                  FOR IMMEDIATE RELEASE

CONAGRA FOODS REPORTS STRONG SECOND-QUARTER EPS
DRIVEN BY EXCELLENT CONSUMER FOODS GROWTH;
FULL YEAR EPS GUIDANCE RAISED

Second Quarter Highlights:

• Diluted EPS from continuing operations of $0.55 as reported, and $0.52 excluding items impacting comparability; up 45% as reported and up 21% on a comparable basis.

• Consumer Foods’ operating profits increased 31%.

• Consumer Foods’ sales increased 3% and unit volumes increased 2%.

• Commercial Foods’ operating profits increased 1%.

• Fiscal 2010 diluted EPS from continuing operations, excluding items impacting comparability, now expected to approach $1.73.

OMAHA, Neb., Dec. 21, 2009 — ConAgra Foods, Inc., (NYSE: CAG) one of North America’s leading packaged food companies, today reported results for the fiscal 2010 second quarter ended Nov. 29, 2009. Diluted EPS from continuing operations was $0.55 compared with $0.38 a year ago. Current quarter results include $0.03 per diluted share of net benefit, and prior year amounts included $0.05 of net expense, from items impacting comparability. Diluted EPS from continuing operations was up 45% as reported and 21% on a comparable basis.

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Items impacting comparability in the current year and prior year are summarized toward the end of this release.

Gary Rodkin, ConAgra Foods’ chief executive officer, commented, “Our strong performance this quarter reflects continued momentum in the Consumer Foods segment and gives us heightened confidence in our fiscal 2010 EPS outlook. Success with innovation and marketing drove significantly improved market shares and top-line progress in the Consumer Foods segment for the quarter, while a more favorable input cost environment and strong cost savings substantially contributed to profit growth. We are very pleased with our success this year and with the increased EPS outlook, and expect to continue demonstrating the earnings power of our company with consistent and sustainable growth.”

Consumer Foods Segment (64% of Year-to-date sales)
Branded and non-branded food sold in retail and foodservice channels.

The Consumer Foods segment posted sales of $2,078 million and operating profit of $330 million for the quarter. Top-line progress was broad-based. Sales increased 3% as reported, which includes an approximate 1% negative impact from lower sales of Slim Jim products given that brand’s ongoing recovery. SKU rationalization negatively impacted sales growth by approximately 1%.

Unit volumes increased 2% as reported, which includes an approximate 1% negative impact from lower sales of Slim Jim products and 1% negative impact from SKU rationalization efforts.

v Large brands that posted strong sales growth include Banquet, Chef Boyardee, Healthy Choice, Hunt’s, Marie Callender’s, Orville Redenbacher’s, Peter Pan, Snack Pack, and several others.

v More brand details can be found in the Q&A document accompanying this release.

Operating profit of $330 million was 31% ahead of last year’s $251 million; this significant growth occurred even with $24 million of increased marketing investment. The year-over-year profit improvement was due to a more favorable input cost environment, strong productivity savings, and good sales results. The company expects continued year-over-year operating profit growth for this

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CONAGRA FOODS
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segment for the rest of the fiscal year. The company estimates that Consumer Foods profitability was negatively impacted by approximately $7 million due to lower Slim Jim volumes and higher Slim Jim production costs in the fiscal second quarter.

Commercial Foods Segment (36% of year-to-date sales)
Specialty potato, dehydrated vegetable, seasonings, blends, flavors, and milled grain products
sold to foodservice and commercial channels worldwide.

Sales for the Commercial Foods segment were $1,095 million, 11% below last year’s $1,235 million; approximately $110 million of the sales decline was due to lower flour milling sales, which reflect the pass-through impact of lower underlying wheat costs. Segment operating profit was $160 million, 1% above last year’s $158 million. Lamb Weston profits improved, reflecting the positive impacts of higher prices necessitated by increased input costs, as well as plant efficiencies and a refinement to its product cost allocation process; these were partially offset by the negative impact on sales and volume of difficult food service industry conditions. Flour milling profitability increased due to mill efficiencies and favorable wheat market conditions. Profits for the rest of the segment were below year-ago amounts, reflecting continued difficult market conditions for key vegetable items.

Although the segment posted profit growth for the first half of the fiscal year largely due to higher-than-planned flour milling profits, on a full-year basis the company continues to expect the Commercial Foods segment to deliver operating profits in line with year-ago amounts due, in part, to expectations for continued softness in the food service industry.

Hedging Activities — This language primarily relates to operations other than the company’s milling operations.

The company recorded $6 million of net hedging benefit as unallocated Corporate expense in the current quarter, versus $48 million of net hedging loss as unallocated Corporate expense in the year-ago period. The company identifies both of these amounts as items impacting comparability. Those amounts are reclassified from unallocated Corporate expense to the operating segments when the underlying commodity being hedged is recognized in segment cost of goods sold.

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Other Items

• Corporate expense was $94 million for the quarter and $111 million in the year-ago period. Current quarter amounts include $6 million of benefit due to hedging activities, and prior year amounts include $48 million of hedge loss. Excluding these amounts, Corporate expense was $101 million for the quarter and $64 million in the year-ago period, with the year-over-year increase largely reflecting higher incentive accruals.

• Equity method investment earnings were $6 million for the second quarter, up from $2 million in the year-ago period.

• Net interest expense was $41 million in the current quarter compared with $43 million in the year-ago period; interest income from the notes receivable held in connection with the divestiture of the Trading & Merchandising operations benefited the current quarter and the year-ago period by approximately $20 million and $18 million, respectively.

• The effective tax rate for continuing operations for the quarter rounded to 33%, lower than planned due to the benefit of certain income tax credits and deductions that relate to previous periods. The benefit from this lower rate is cited as an item impacting comparability. Going forward, the company expects an effective tax rate of approximately 35% for continuing operations, excluding items impacting comparability.

Capital Items

• Dividends for the quarter totaled $84 million versus $86 million last year, reflecting fewer shares outstanding.

• For the quarter, capital expenditures from continuing operations for property, plant, and equipment were $123 million, compared with $115 million in the year-ago period. Depreciation and amortization expense from continuing operations was approximately $83 million for the quarter; this compares with a total of $79 million in the year-ago period.

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CONAGRA FOODS
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Raised EPS Outlook

The company now expects fiscal 2010 full-year diluted EPS from continuing operations, excluding items impacting comparability, to approach $1.73, reflecting the strong performance in the first half of the fiscal year. In a change from prior guidance, the company now expects the Slim Jim business interruption insurance recovery, estimated in the range of $0.05 per diluted share, to be recognized in fiscal 2011 instead of fiscal 2010.

Major Items Impacting Second-quarter Fiscal 2010 EPS Comparability

Included in the $0.55 diluted EPS from continuing operations for the second quarter of fiscal 2010 (EPS amounts rounded and after tax):

• Approximately $0.02 per diluted share of net benefit from a lower-than-planned effective income tax rate.

• Approximately $0.01 per diluted share of net benefit related to the net gains on derivatives used to hedge input costs, temporarily classified in unallocated Corporate expense. This benefit will be reclassified to the operating segments when underlying items are recognized in segment results.

Included in the $0.38 diluted EPS from continuing operations for the second quarter of fiscal 2009 (EPS amounts rounded and after tax):

• Approximately $0.06 per diluted share of net expense related to the net losses on derivatives used to hedge input costs, temporarily classified in unallocated Corporate expense. This expense will be reclassified to the operating segments when underlying items are recognized in segment results.

• Approximately $0.01 per diluted share of net benefit from a lower-than-planned effective income tax rate.

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Discussion of Results

ConAgra Foods will host a conference call at 9:30 a.m. EST today to discuss the results. Following the company’s remarks, the call will include a question-and-answer session with the investment community. Domestic and international participants may access the conference call toll-free by dialing 1-888-806-6215 and 1-913-312-6677, respectively. No confirmation or pass code is needed. This conference call also can be accessed live on the Internet at http://investor.conagrafoods.com.

A rebroadcast of the conference call will be available after 1 p.m. EST today. To access the digital replay, a pass code number will be required. Domestic participants should dial 1-888-203-1112, and international participants should dial 1-719-457-0820 and enter pass code 9314857. 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 http://investor.conagrafoods.com. To view recent company news, please visit http://media.conagrafoods.com.

ConAgra Foods, Inc., (NYSE: CAG) is one of North America’s leading food companies, with brands in 97 percent of America’s households. Consumers find Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt’s, Marie Callender’s, Orville Redenbacher’s, PAM, Peter Pan, Reddi-wip and many other ConAgra Foods brands in grocery, convenience, mass merchandise, and club stores. ConAgra Foods also has a strong business-to-business presence, supplying potato, other vegetable, spice and grain products to a variety of well-known restaurants, foodservice operators and commercial customers. For more information, please visit us at www.conagrafoods.com.

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Note on Forward-looking Statements

This release contains forward-looking statements. 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 for updating 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 other things, availability and prices of raw materials; the impact of the accident at the Garner manufacturing facility, including the ultimate costs incurred and the amounts received under insurance policies; product pricing; future economic circumstances; industry conditions; the company’s ability to execute its operating plans; the success of the company’s innovation, marketing, and cost-savings initiatives; the competitive environment and related market conditions; operating efficiencies; the ultimate impact of the company’s recalls; 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
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Regulation G Disclosure

Continuing Operations

Below is a reconciliation of diluted earnings per share exclusive of items impacting comparability.

Q2 FY10 EPS from Continuing Operations
Reconciliation for Regulation G Purposes

							Year-over-year
	Q2 FY10			Q2 FY09			% change
Diluted EPS*	$	0.55		$	0.38			45	%
Items impacting comparability:
(Benefit)/Expense related to mark-to-market impact of derivatives		(0.01	)		0.06
(Benefit)/Expense of lower-than-planned effective income tax rate		(0.02	)		(0.01	)
Diluted EPS excluding items impacting comparability	$	0.52		$	0.43			21	%

*Items impacting comparability are each rounded to the nearest penny

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ConAgra Foods, Inc.

Segment Operating Results
(in millions)

	SECOND QUARTER
	13 Weeks Ended			13 Weeks Ended
	November 29, 2009			November 23, 2008			Percent Change
SALES
Consumer Foods	$	2,078.1		$	2,017.0			3.0	%
Commercial Foods		1,094.5			1,234.7			(11.4	)%
Total		3,172.6			3,251.7			(2.4	)%
OPERATING PROFIT
Consumer Foods	$	330.0		$	251.2			31.4	%
Commercial Foods		159.7			157.7			1.3	%
Total operating profit for segments		489.7			408.9			19.8	%
Reconciliation of total operating profit to income from continuing operations before income taxes and equity method investment earnings
Items excluded from segment operating profit:
General corporate expense		(94.4	)		(111.4	)		(15.3	)%
Interest expense, net		(40.6	)		(42.7	)		(4.9	)%
Income from continuing operations before income taxes and equity method investment earnings	$	354.7		$	254.8			39.2	%

Segment operating profit excludes general corporate expense, equity method investment earnings, and net interest expense. Management believes such amounts are not directly associated with segment performance results for the period. Management believes the presentation of total operating profit for segments facilitates period-to-period comparison of results of segment operations.

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ConAgra Foods, Inc.

Segment Operating Results
(in millions)

	SECOND QUARTER
	26 Weeks Ended			26 Weeks Ended
	November 29, 2009			November 23, 2008			Percent Change
SALES
Consumer Foods	$	3,938.2		$	3,866.3			1.9	%
Commercial Foods		2,195.8			2,441.9			(10.1	)%
Total		6,134.0			6,308.2			(2.8	)%
OPERATING PROFIT
Consumer Foods	$	579.9		$	437.5			32.5	%
Commercial Foods		300.5			291.6			3.1	%
Total operating profit for segments		880.4			729.1			20.8	%
Reconciliation of total operating profit to income from continuing operations before income taxes and equity method investment earnings
Items excluded from segment operating profit:
General corporate expense		(195.0	)		(208.8	)		(6.6	)%
Interest expense, net		(82.1	)		(92.8	)		(11.5	)%
Income from continuing operations before income taxes and equity method investment earnings	$	603.3		$	427.5			41.1	%

Segment operating profit excludes general corporate expense, equity method investment earnings, and net interest expense. Management believes such amounts are not directly associated with segment performance results for the period. Management believes the presentation of total operating profit for segments facilitates period-to-period comparison of results of segment operations.

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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			Percent
	November 29, 2009			November 23, 2008			Change
Net sales	$	3,172.6		$	3,251.7			(2.4	)%
Costs and expenses:
Cost of goods sold		2,317.3			2,565.2			(9.7	)%
Selling, general and administrative expenses		460.0			389.0			18.3	%
Interest expense, net		40.6			42.7			(4.9	)%
Income from continuing operations before income taxes and equity method investment earnings		354.7			254.8			39.2	%
Income tax expense		117.4			84.6			38.8	%
Equity method investment earnings		5.9			1.9			210.5	%
Income from continuing operations		243.2			172.1			41.3	%
Loss from discontinued operations, net of tax		(4.0	)		(3.6	)		11.1	%
Net income	$	239.2		$	168.5			42.0	%
Less: Net income (loss) attributable to noncontrolling interests		(0.5	)		0.4			N/A
Net income attributable to ConAgra Foods, Inc.	$	239.7		$	168.1			42.6	%
Earnings per share – basic
Income from continuing operations	$	0.55		$	0.38			44.7	%
Loss from discontinued operations		(0.01	)		—			(100.0	)%
Net income	$	0.54		$	0.38			42.1	%
Weighted average shares outstanding		443.2			447.1			(0.9	)%
Earnings per share – diluted
Income from continuing operations	$	0.55		$	0.38			44.7	%
Loss from discontinued operations		(0.01	)		(0.01	)		—
Net income	$	0.54		$	0.37			45.9	%
Weighted average share and share equivalents outstanding		446.2			449.5			(0.7	)%

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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		Percent
	November 29, 2009			November 23, 2008		Change
Net sales	$	6,134.0		$	6,308.2		(2.8	)%
Costs and expenses:
Cost of goods sold		4,562.2			5,030.2		(9.3	)%
Selling, general and administrative expenses		886.4			757.7		17.0	%
Interest expense, net		82.1			92.8		(11.5	)%
Income from continuing operations before income taxes and equity method investment earnings		603.3			427.5		41.1	%
Income tax expense		208.4			150.6		38.4	%
Equity method investment earnings		14.8			2.8		428.6	%
Income from continuing operations		409.7			279.7		46.5	%
Income (loss) from discontinued operations, net of tax		(5.3	)		331.2		N/A
Net income	$	404.4		$	610.9		(33.8	)%
Less: Net income (loss) attributable to noncontrolling interests		(1.2	)		0.4		N/A
Net income attributable to ConAgra Foods, Inc.	$	405.6		$	610.5		(33.6	)%
Earnings per share – basic
Income from continuing operations	$	0.93		$	0.61		52.5	%
Income (loss) from discontinued operations		(0.02	)		0.72		N/A
Net income	$	0.91		$	1.33		(31.6	)%
Weighted average shares outstanding		443.2			458.5		(3.3	)%
Earnings per share – diluted
Income from continuing operations	$	0.92		$	0.61		50.8	%
Income (loss) from discontinued operations		(0.01	)		0.71		N/A
Net income	$	0.91		$	1.32		(31.1	)%
Weighted average share and share equivalents outstanding		445.8			461.0		(3.3	)%

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ConAgra Foods, Inc.

Consolidated Balance Sheets
(in millions)

	November 29, 2009		November 23, 2008
ASSETS
Current assets Cash and cash equivalents	$	490.2	$	132.1
Receivables, less allowance for doubtful accounts of $10.2 and $14.4		861.6		972.1
Inventories		2,192.2		2,275.3
Prepaid expenses and other current assets		307.9		455.5
Current assets held for sale		—		5.5
Total current assets		3,851.9		3,840.5
Property, plant and equipment, net		2,690.0		2,558.2
Goodwill		3,494.0		3,474.4
Brands, trademarks and other intangibles, net		834.7		824.3
Other assets		695.9		1,062.6
Noncurrent assets held for sale		—		10.7
	$	11,566.5	$	11,770.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes payable	$	1.2	$	300.1
Current installments of long-term debt		260.5		316.8
Accounts payable		956.4		1,019.5
Accrued payroll		184.1		175.5
Other accrued liabilities		605.3		860.0
Total current liabilities		2,007.5		2,671.9
Senior long-term debt, excluding current installments		3,027.2		2,856.6
Subordinated debt		195.9		195.9
Other noncurrent liabilities		1,351.3		1,271.7
Common stockholders’ equity		4,984.6		4,774.6
	$	11,566.5	$	11,770.7

#  #  #

EX-99.2

Exhibit 99.2

Q2 FY10 Question & Answer
December 21, 2009

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

- Andy Capp’s	- Marie Callender’s
- Banquet	- Orville Redenbacher’s
- Chef Boyardee	- Peter Pan
- Crunch ‘n Munch	- Reddi-wip
- Healthy Choice	- Ro*Tel
- Hebrew National	- Rosarita
- Hunt’s	- Snack Pack
- Libby’s	- Swiss Miss
- Manwich

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

- ACT II	- PAM
- Blue Bonnet	- Parkay
- DAVID	- Slim Jim
- Egg Beaters	- Wesson
- Kid Cuisine	- Wolf

3.	What were unit volume changes for the quarter in the Consumer Foods and Commercial Foods Segments?
	Consumer Foods unit volumes increased 2%, as reported, which includes an approximate 1% negative impact from lower Slim Jim shipments as that business recovers, and a 1% negative impact from SKU rationalization.
	Commercial Foods volume was down 2%.
4.	How much was total depreciation and amortization from continuing operations for the quarter?
	Approximately $83 million (versus approximately $79 million in Q2 FY09)

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5.	How much were capital expenditures from continuing operations for the quarter?
	Approximately $123 million (versus approximately $115 million in Q2 FY09)
6.	What was the net interest expense for the quarter?
	Approximately $41 million (versus approximately $43 million in Q2 FY09)
7.	What was corporate expense for the quarter?
	Approximately $94 million for the quarter (versus approximately $111 million in Q2 FY09). The current quarter includes $6 million of benefit due to hedging activities. Prior-year amounts include $48 million of hedge loss.
8.	What were dividends for the quarter?
	Approximately $84 million (versus approximately $86 million in Q2 FY09)
9.	What was the weighted average number of diluted shares outstanding for the quarter (rounded)?
	Approximately 446 million shares for the quarter
10.	What were the gross margins and operating margins for the quarter ($ amounts in millions, rounded)?
	Gross margin = segment gross profit* divided by net sales
	Gross margin = $849/$3,173 = 27%
	Operating margin = segment operating profit** divided by net sales
	Operating margin = $490/$3,173 = 15%

*	Gross profit = net sales – costs of goods sold ($3,173 – $2,324 = $849)
**	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 = $355/$3,173 = 11%.

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

	Q2 FY10		Q2 FY09
Total debt*	$	3,485	$	3,669
Less: Cash on hand	$	490	$	132
Net debt total	$	2,995	$	3,537

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

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12.	What is the net debt to total capital ratio at quarter end?
	38% currently and 43% a year ago
	This ratio is defined as net debt divided by the sum of net debt plus shareholder equity. See question #11 for the components of net debt.
13.	What was the effective tax rate for the quarter?
	The effective tax rate for continuing operations for the quarter was 33%.
14.	What is the projected tax rate for fiscal year 2010?
	The company plans for a tax rate of 35%, excluding items impacting comparability.
15.	What are the projected capital expenditures for fiscal year 2010?

• Approximately $475 million will be invested in the needs and opportunities identified as of the end of fiscal year 2009.

• The company plans to invest an additional $90 million in fiscal year 2010 as part of the construction of the Delhi, Louisiana, sweet potato processing plant. The company expects this investment to be partially offset by significant tax incentives.

• Related to current plans for the recovery of the Slim Jim manufacturing operations, the company has committed to invest approximately $35 million. The company will provide revised estimates for these amounts as more details are known. The company expects to be reimbursed for most of these amounts by insurance proceeds.

16.	What is the expected net interest expense for fiscal year 2010?
	Net interest expense is expected to be approximately $165 million, including interest income from notes payable to ConAgra Foods resulting from the Trading & Merchandising divestiture.
17.	How much does the company estimate it will receive from business interruption insurance related to the Slim Jim business?
	While the company will receive substantial proceeds in fiscal year 2010 related to business interruption, it will not recognize the recovery as income until the claim is fully settled, expected to be in fiscal year 2011. The company currently estimates the business interruption recovery to be in the range of $0.05 per diluted share, which when recognized in fiscal year 2011, will be treated as an item impacting comparability.
18.	What impact did expenses and insurance recovery related to the Garner, North Carolina, accident have on the company’s operating results in Q2 FY10 (unrelated to business interruption)?
	Although the net impact of the following items was immaterial to Consumer Foods’ operating profit for the quarter, Consumer Foods’ results in the second quarter of fiscal 2010 include approximately $7 million of expense ($4 million in cost of goods sold, $3 million in SG&A expense) and approximately that same amount of benefit from insurance recovery (all of which is classified as a reduction of Consumer Foods SG&A expense) related to the Garner, North Carolina, accident. These amounts are in

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	addition to the reduced operating profit resulting from lower Slim Jim volumes and higher production costs.
19.	How much of a benefit did the refinement to the cost-allocation process for the Lamb Weston Specialty Potato operations impact first half results?
	Approximately $0.02 per diluted share of benefit in the first half of fiscal year 2010, principally in the second quarter, which approximates the negative impact in the back half of the fiscal year, which will be principally in the fourth quarter. This refinement does not have a material impact on full-year results.

Note on Forward-looking Statements:

This release contains forward-looking statements. 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 for updating 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 other things: availability and prices of raw materials; the impact of the accident at the Garner manufacturing facility, including the ultimate costs incurred and the amounts received under insurance policies; product pricing; future economic circumstances; industry conditions; the company’s ability to execute its operating plans; the success of the company’s innovation, marketing, and cost-savings initiatives; the competitive environment and related market conditions; operating efficiencies; the ultimate impact of the company’s recalls; 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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