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
Date of report (Date of earliest event reported): June 26, 2014
ConAgra Foods, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 1-7275 | 47-0248710 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
One ConAgra Drive | ||
Omaha, NE | 68102 | |
(Address of Principal Executive Offices) | (Zip Code) |
(402) 240-4000
(Registrants 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):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | 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 June 26, 2014, ConAgra Foods, Inc. (the Company) issued a press release and posted a question and answer document (Q&A) on its website containing information on the Companys fourth quarter fiscal 2014 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 and Q&A include the non-GAAP financial measures of diluted earnings per share adjusted for items impacting comparability and adjusted operating profit for each of the Consumer Foods, Commercial Foods and Private Brands segments. Management considers GAAP financial measures as well as such non-GAAP financial information in its evaluation of the Companys financial statements and believes these non-GAAP measures provide useful supplemental information to assess the Companys operating performance and financial position. To the extent required, these measures are reconciled in the press release and Q&A to the most directly comparable measures as reported in accordance with GAAP, and should be viewed in addition to, and not in lieu of, the Companys diluted earnings per share, operating performance and financial measures as calculated in accordance with GAAP. The inability to predict the amount and timing of future items makes a detailed reconciliation of projections of diluted EPS and effective tax rate adjusted for items impacting comparability, impracticable.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1 | Press Release issued June 26, 2014 | |
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: June 26, 2014 |
By: |
/s/ Lyneth Rhoten | ||||
Name: Lyneth Rhoten | ||||||
Title: Vice President, Securities Counsel and Assistant Corporate Secretary |
Exhibit Index
Exhibit 99.1 | Press Release issued June 26, 2014 | |
Exhibit 99.2 | Questions and Answers |
Exhibit 99.1
![]() |
News Release |
For more information, contact: | ||
Teresa Paulsen MEDIA | ||
Vice President, | ||
Communication & External Relations | ||
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 Fiscal 2014 Fourth Quarter EPS;
Non-Cash Impairment Charges Recognized With No Impact on Comparable EPS;
Exceeds Operating Cash Flow and Debt Reduction Goals;
Commitment to Strong Dividend Reaffirmed
Fiscal 2014 fourth-quarter highlights (% cited vs. year-ago period amounts, where applicable):
| Diluted loss per share from continuing operations was $(0.76) as reported, due to significant impairment charges, vs. diluted EPS of $0.45 a year ago. Comparable EPS of $0.55 declined 8%. |
| Consumer Foods sales and comparable operating profit declined due to weak volumes. Volume and profit improvement initiatives are expected to improve results in fiscal 2015. |
| Commercial Foods sales and comparable operating profit were in line with year-ago amounts. |
| Private Brands sales were in line with year-ago amounts, while comparable operating profit decreased significantly. Pricing concessions necessitated by previously discussed operating challenges, as well as higher operating costs associated with business transition, weighed on results. |
| The segment will start to lap the impact of the pricing concessions in the back half of fiscal 2015, and benefit from a more efficient cost structure throughout all of fiscal 2015. |
| Due primarily to expectations for continued profit challenges for Private Brands and certain Consumer Foods brands, the company recognized $681 million of non-cash impairment charges, which are treated as items impacting comparability. |
| The company generated in excess of $1.5 billion of operating cash flow in fiscal 2014, above expectations. |
| The company repaid a significant amount of debt in the fiscal fourth quarter, resulting in total debt repayment in excess of $600 million for the full year, exceeding targets. |
| The Ardent Mills transaction closed on May 29, shortly after the close of the quarter, resulting in a cash distribution to ConAgra Foods of approximately $530 million, net of estimated tax. Most of this distribution will be used for debt reduction in fiscal 2015. |
| The company expects comparable EPS in fiscal 2015 to reflect a mid-single digit rate of growth over the comparable base of $2.17 in fiscal 2014. |
-more-
CONAGRA FOODS
page 2
| The company expects operating cash flow of approximately $1.6-$1.7 billion in fiscal 2015, and to repay approximately $1 billion of debt using a combination of operating cash flow and Ardent Mills net proceeds. |
| The company plans to continue its $1.00 per share annual dividend, and is committed to maintaining a strong dividend policy. |
OMAHA, Neb., June 26, 2014 ConAgra Foods, Inc., (NYSE: CAG) one of North Americas leading food companies, today reported results for the fiscal 2014 fourth quarter ended May 25, 2014. Diluted loss per share from continuing operations was $(0.76) as reported for the fiscal fourth quarter vs. diluted EPS of $0.45 in the year-ago period. After adjusting for items impacting comparability, current-quarter diluted EPS of $0.55 was 8% below the comparable $0.60 earned in the year-ago period. Items impacting comparability are summarized toward the end of this release and reconciled for Regulation G purposes on pages 12-13.
Gary Rodkin, ConAgra Foods chief executive officer, said, We are disappointed with fiscal 2014 overall, and we have a very focused sense of urgency directed toward improving our results. Despite the difficult year, we were able to generate substantial cash, meet our debt reduction commitments, and pay a strong dividend.
He continued, Our focus is on improving branded volumes through more effective trade, marketing, and resource allocation, particularly on several large underperforming brands. We expect private brand profitability to strengthen through organic growth, strong synergies, and gradually improving price/mix. Some of the challenges from fiscal 2014 will still be with us in fiscal 2015, although we believe results will gradually improve throughout the fiscal year. Given that, we consider fiscal 2015 to be a year of stabilization and recovery with a mid-single digit rate of EPS growth, which we expect to accelerate in fiscal 2016 and 2017 based on a stronger foundation. Throughout this period, we expect to benefit from strong productivity, robust cost synergies related to the Ralcorp acquisition, and SG&A efficiency and effectiveness initiatives. We will remain focused on growing our top line, continually improving our cost structure, and sound capital allocation.
-more-
CONAGRA FOODS
page 3
Consumer Foods Segment
Branded food items sold worldwide in retail channels.
The Consumer Foods segment posted sales of approximately $1.8 billion for the quarter and operating profit of $177 million as reported. Sales declined 7%, with a 7% volume decrease, 1% favorable price/mix, and a 1% unfavorable impact of foreign exchange.
| While several brands posted weak volumes in the quarter, a meaningful portion of the overall volume decline was driven by Healthy Choice, Orville Redenbachers and Chef Boyardee (these collectively have annual sales in excess of $1 billion), which have continued to face volume and profit challenges. The company has product and promotion changes, as well as refinements to consumer communication under way, which are expected to gradually improve the volume and profit performance of these brands throughout fiscal 2015. |
| Overall category softness, as well as a shift in the timing of promotions, negatively impacted current quarter volumes. |
Operating profit of $177 million was 34% below year ago amounts, as reported. After adjusting for $91 million of expense in the current quarter (principally impairment charges) and $4 million of expense in the year-ago period from items impacting comparability, current quarter operating profit of $268 million was 3% below the comparable $275 million in the year-ago period. Cost savings in excess of inflation, as well as lower advertising and promotion expenses, offset a meaningful portion of the profit shortfall resulting from weak volumes. Regarding fiscal 2015, the company expects branded volume to improve gradually through a focus on faster-growing customer channels, opportunities in international markets, and more effective trade and marketing support.
Commercial Foods Segment
Specialty potato, bakery products, seasonings, blends, flavors, as well as consumer branded and private branded packaged food items, sold to foodservice and commercial channels worldwide.
-more-
CONAGRA FOODS
page 4
Sales for the Commercial Foods segment were $1.63 billion, up 1% compared with $1.61 billion in the year-ago period, as reported. Segment operating profit of $281 million was 49% above year-ago period amounts, as reported. After adjusting for $91 million of net benefit in the current quarter primarily related to gains on divesting mills in connection with the formation of the Ardent Mills joint venture, comparable current quarter operating profit of $190 million was 1% above year-ago period amounts.
Lamb Weston potato products posted sales and profit growth largely due to strong international volumes, as well as productivity initiatives that helped offset crop quality challenges. Flour milling sales decreased, reflecting the pass-through of lower wheat costs, and comparable milling profits declined reflecting market conditions.
After the close of the quarter, the Ardent Mills joint venture was formed, and the company contributed its milling operations for a 44% interest in Ardent Mills and cash proceeds. Other Ardent Mills details are discussed under the Capital Items portion of this document.
Private Brands
Private brand food items sold in domestic markets.
Sales for the Private Brands segment were approximately $1 billion in the quarter, in line with year-ago period amounts. The segment posted an operating loss of $573 million, as reported, due to impairment charges. After adjusting for $617 million of net expense from impairment charges and other items impacting comparability, current quarter operating profit of $44 million was $60 million below comparable year-ago period amounts. The significant profit decline reflects pricing concessions made earlier in the year necessitated by competitive bids and customer service issues; higher-than-planned operating costs resulting from business transition also weighed on profits.
While operating profits for the Private Brands segment are expected to remain below prior year amounts for the first half of fiscal 2015 given the pricing concessions, year-over-year performance in the second half of fiscal 2015 is expected to improve. This reflects pricing concessions to be lapped, new business to be added with favorable price/mix, and significant synergies and other operating efficiencies to be realized.
-more-
CONAGRA FOODS
page 5
Current projections are for modest sales and profit growth in this segment in fiscal 2015, and for growth to accelerate in fiscals 2016 and 2017. Over the long term, the company remains confident in the growth prospects for its private brands business based on the fundamental appeal to consumers, the strategic importance of private brands to trade customers, and value-added capabilities of the ConAgra Foods private brand operations.
Hedging Activities This language primarily relates to operations other than the companys milling operations or significant financing activities.
Hedge gains and losses are aggregated, and net amounts are reclassified from unallocated Corporate expense to the operating segments when the underlying commodity or foreign currency being hedged is expensed in segment cost of goods sold. The net of these activities resulted in $14 million of favorable impact in the current quarter and $37 million of unfavorable impact in the year-ago period. The company identifies these amounts as items impacting comparability.
Other Items
| Unallocated Corporate amounts were $65 million of expense in the current quarter and $181 million of expense in the year-ago period, as reported. After adjusting for $3 million of net expense in the current quarter, and $88 million of net expense in the year-ago period from items impacting comparability, current quarter expense of $62 million declined from $93 million in the year-ago period. The comparable decline largely reflects lower incentives, lower pension expense, and efficiency initiatives. |
| Equity method investment earnings were $12 million for the current quarter and $5 million in the year-ago period. The increase reflects improved results for Lamb Westons European potato joint venture. In future periods, earnings associated with the companys interest in Ardent Mills will be reported in equity method investment earnings. |
| Net interest expense was $93 million in the current quarter and $102 million in the year-ago period, reflecting debt reduction. |
-more-
CONAGRA FOODS
page 6
Capital Items
| During the quarter, the company repaid significant amounts of debt, resulting in more than $600 million of debt reduction for the fiscal year. The company plans to reduce debt by approximately $1 billion in fiscal 2015, using a combination of operating cash and net proceeds received from the formation of Ardent Mills. Once the fiscal 2015 goal is achieved, the company will have repaid approximately $2 billion of debt since the acquisition of Ralcorp in fiscal 2013. |
| Dividends for the current quarter totaled $105 million versus $104 million in the year-ago period, reflecting an increase in shares outstanding. |
| The company did not repurchase any shares of common stock during the quarter. |
| For the current quarter, capital expenditures for property, plant and equipment were $131 million, compared with $163 million in the year-ago period. Depreciation and amortization expense was approximately $156 million for the fiscal fourth quarter; this compares with a total of $145 million in the year-ago period. |
| Shortly after the end of the quarter, the company contributed its milling operations into Ardent Mills, a milling joint venture. In connection with the formation of this venture and the divestiture of three mills, ConAgra Foods received approximately $530 million of cash, net of estimated tax, and a 44% interest in Ardent Mills. In the first quarter of fiscal 2015, the company intends to adopt a new accounting standard that is expected to result in reclassifying the milling operations as discontinued operations, which will change the presentation of prior periods. ConAgra Foods portion of Ardent Mills profits will be reflected pretax within equity method investment earnings. ConAgra Foods expects to earn approximately $0.07-$0.09 less per diluted share in fiscal 2015 from Ardent Mills (including the benefit of lower interest expense from allocating Ardent-related proceeds toward debt reduction) than it earned in fiscal 2014 from its milling operations, on a comparable basis. |
-more-
CONAGRA FOODS
page 7
Outlook
The company expects fiscal 2015 EPS to reflect a mid-single digit rate of growth over the comparable fiscal 2014 EPS of $2.17. Fiscal 2016 and 2017 EPS is expected to show a high-single digit rate of annual EPS growth as the company benefits from a stronger underlying business, sizeable synergies, good productivity and efficiencies, and lower interest expense. Other long-term goals are unchanged.
With regard to specific fiscal 2015 assumptions, the company expects:
| Consumer Foods volume to sequentially improve throughout fiscal 2015. |
| Commercial Foods to show good sales and profit growth; its results will be restated to reflect the reclassification of milling results to discontinued operations. |
| Private Brands profits to grow modestly over fiscal 2014 amounts, although down year-over-year in the first half of the fiscal year due to pricing concessions yet to be lapped. Private Brands sales are expected to increase modestly for the fiscal year. |
| Strong productivity as well as synergies related to the Ralcorp acquisition. Together these are expected to be approximately $350 - $375 million for the entire company in fiscal 2015, which should more than offset the expected 2-3% inflation planned for fiscal 2015. Segment expectations described above reflect these amounts. |
| More than $50 million of Selling, General & Administrative (SG&A) savings generated by efficiency initiatives. |
| Higher incentives. |
| $30 million of lower interest expense resulting from the fiscal 2014 debt repayment. |
| The benefit of an extra week in fiscal 2015 versus fiscal 2014. |
| To earn $0.07-$0.09 per share less from Ardent Mills (and related capital allocation) than it earned from the milling operations last fiscal year. |
| To generate at least $1.6-$1.7 billion of operating cash flow, and to repay approximately $1 billion of debt from a combination of operating cash flow and net proceeds received from the formation of Ardent Mills. |
| With regard to the mid-single digit EPS growth expected in fiscal 2015, the company currently expects the EPS growth to be concentrated in the second half of the fiscal year. The company currently expects comparable EPS in the fiscal 2015 first quarter to be slightly below comparable year-ago amounts. |
-more-
CONAGRA FOODS
page 8
Major Items Impacting Fourth-quarter Fiscal 2014 EPS Comparability
Included in the $(0.76) diluted loss per share from continuing operations for the fourth quarter of fiscal 2014 (EPS amounts rounded and after tax):
| Approximately $1.47 per diluted share of expense, or $681 million pretax, a substantial portion of which is not tax deductible, from impairment charges and the corresponding impact on diluted share count. Approximately $605 million of this is classified within the Private Brands segment (SG&A), $73 million is classified within the Consumer Foods segment (SG&A), and $3 million is classified as unallocated Corporate expense. |
| Approximately $0.13 per diluted share benefit, or $91 million pretax, from selling three flour mills prior to the formation of Ardent Mills. This gain is classified within the Commercial Foods segment (SG&A). |
| Approximately $0.08 per diluted share of expense, or $58 million pretax, resulting from restructuring, transaction, and integration costs. $18 million is classified within the Consumer Foods segment (SG&A), $5 million is classified within the Commercial Foods segment (SG&A), $12 million is classified within the Private Brands segment (SG&A), and $23 million is classified within unallocated Corporate expense. |
| Approximately $0.06 per diluted share of benefit from unusual tax items, which included favorable tax adjustments resulting from changes in legal structure and state tax filing positions and the resolution of certain foreign income tax matters. |
| Approximately $0.02 per diluted share of benefit, or $14 million pretax, from the mark-to-market impact of derivatives used to hedge input costs, temporarily classified in unallocated Corporate expense. Hedge gains and losses are aggregated, and net amounts are reclassified from unallocated Corporate expense to the operating segments when the underlying commodity or foreign currency being hedged is expensed in segment cost of goods sold. |
| Approximately $0.02 per diluted share of benefit, or $10 million pretax, related to historical legal matters, a portion of which is not tax deductible; this is classified within unallocated Corporate expense. |
-more-
CONAGRA FOODS
page 9
| Approximately $0.01 per diluted share of benefit, or $5 million pretax, resulting from a gain on the sale of a non-operating asset in the Commercial Foods segment (SG&A). |
Included in the $0.45 diluted EPS from continuing operations for the fourth quarter of fiscal 2013 (EPS amounts rounded and after tax):
| Approximately $0.10 per diluted share of net expense, or $67 million pretax, resulting from restructuring, integration, and transaction costs (including acquisition-related restructuring). $61 million is within unallocated Corporate expense ($11 million in cost of goods sold, $50 million in SG&A), $4 million is within Consumer Foods (all SG&A), and $2 million is within Private Brands (SG&A). |
| Approximately $0.05 per diluted share of net expense, or $37 million pretax, related to the mark-to-market impact of derivatives used to hedge input costs, temporarily classified in unallocated Corporate expense. Hedge gains and losses are aggregated, and net amounts are reclassified from unallocated Corporate expense to the operating segments when the underlying commodity or foreign currency being hedged is expensed in segment cost of goods sold. |
| Approximately $0.03 per diluted share of net benefit, or $22 million pretax, related to historical legal matters, classified within unallocated Corporate expense. |
| Approximately $0.02 per diluted share of net expense, or $12 million pretax, related to the year-end re-measurement of certain pensions, as well as the cost of early retirement of debt; this is classified within unallocated Corporate expense. |
| Approximately $0.01 per diluted share of acquisition-related tax expense. |
Discussion of Results
ConAgra Foods will host a conference call at 9:30 a.m. EDT today to discuss the results. Following the companys 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 1-800-500-0311 and 1-719-325-2118, respectively. No confirmation or pass code is needed. This conference call also can be accessed live on the Internet at http://investor.conagrafoods.com.
-more-
CONAGRA FOODS
page 10
A rebroadcast of the conference call will be available after 1 p.m. EDT 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 9659870. A rebroadcast also will be available on the companys website.
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 Americas largest packaged food companies with branded and private branded food found in 99 percent of Americas households, as well as a strong commercial foods business serving restaurants and foodservice operations globally. Consumers can find recognized brands such as Banquet®, Chef Boyardee®, Egg Beaters®, Healthy Choice®, Hebrew National®, Hunts®, Marie Callenders®, Orville Redenbachers®, PAM®, Peter Pan®, Reddi-wip®, Slim Jim®, Snack Pack® and many other ConAgra Foods brands, along with food sold by ConAgra Foods under private brand labels, in grocery, convenience, mass merchandise, club and drug stores. Additionally, ConAgra Foods supplies frozen potato and sweet potato products as well as other vegetable, seasoning blends, flavors, and bakery products to commercial and foodservice customers. ConAgra Foods operates ReadySetEat.com, an interactive recipe website that provides consumers with easy dinner recipes and more. For more information, please visit us at www.conagrafoods.com.
Note on Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on managements current expectations and assumptions and are subject to certain risks, uncertainties and changes in circumstances that could cause actual results to differ materially from potential results discussed in the forward-looking statements. These risks and uncertainties include, among other things: ConAgra Foods ability to realize the synergies and benefits contemplated by the acquisition of Ralcorp Holdings, Inc. (Ralcorp) and its ability to promptly and effectively integrate the business of Ralcorp; ConAgra Foods ability to realize the synergies and benefits contemplated by the recently
-more-
CONAGRA FOODS
page 11
formed joint venture combining the flour milling businesses of ConAgra Foods, Cargill, Incorporated, and CHS Inc.; risks and uncertainties associated with intangible assets, including any future goodwill impairment charges; the availability and prices of raw materials, including any negative effects caused by inflation or adverse weather conditions; the effectiveness of ConAgra Foods product pricing, including product innovation, any pricing actions and changes in promotional strategies; the ultimate outcome of litigation, including the lead paint matter; future economic circumstances; industry conditions; ConAgra Foods ability to execute its operating and restructuring plans; the success of ConAgra Foods cost-savings initiatives, and innovation and marketing investments; the competitive environment; operating efficiencies; the ultimate impact of any ConAgra Foods product recalls; access to capital; actions of governments and regulatory factors affecting ConAgra Foods businesses, including the Patient Protection and Affordable Care Act; the amount and timing of repurchases of ConAgra Foods common stock and debt, if any; and other risks described in ConAgra Foods reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors and security holders are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. ConAgra Foods disclaims any obligation to update or revise statements contained in this press release to reflect future events or circumstances or otherwise.
-more-
CONAGRA FOODS
page 12
Regulation G Disclosure
Below is a reconciliation of Q4 FY14 and Q4 FY13 diluted earnings per share from continuing operations, Consumer Foods segment operating profit, Commercial Foods segment operating profit, Private Brands segment operating profit, and FY14 and FY13 diluted earnings per share from continuing operations, adjusted for items impacting comparability. Amounts may be impacted by rounding.
Q4 FY14 & Q4 FY13 Diluted EPS from Continuing Operations
Q4 FY14 | Q4 FY13 | % change | ||||||||||
Diluted EPS from continuing operations |
$ | (0.76 | ) | $ | 0.45 | N/A | ||||||
Items impacting comparability: |
||||||||||||
Net expense related to impairment charges, including the impact on diluted share count |
1.47 | | ||||||||||
Net benefit related to sale of flour mills |
(0.13 | ) | | |||||||||
Net expense related to restructuring, transaction, and integration costs |
0.08 | 0.10 | ||||||||||
Net expense (benefit) related to unusual tax matters |
(0.06 | ) | 0.01 | |||||||||
Net expense (benefit) related to unallocated mark-to-market impact of derivatives |
(0.02 | ) | 0.05 | |||||||||
Net benefit related to historical legal matters |
(0.02 | ) | (0.03 | ) | ||||||||
Net gain from sale of non-operating asset in the Commercial Foods segment |
(0.01 | ) | | |||||||||
Net expense related to year-end remeasurement of pensions and early retirement of debt |
| 0.02 | ||||||||||
|
|
|
|
|
|
|||||||
Diluted EPS adjusted for items impacting comparability |
$ | 0.55 | $ | 0.60 | -8 | % | ||||||
|
|
|
|
|
|
Consumer Foods Segment Operating Profit Reconciliation
(Dollars in millions) | Q4 FY14 | Q4 FY13 | % change | |||||||||
Consumer Foods Segment Operating Profit |
$ | 177 | $ | 270 | -34 | % | ||||||
Restructuring, integration, and transactions costs (including acquisition-related restructuring) |
18 | 4 | ||||||||||
Intangible asset impairment charges |
73 | | ||||||||||
|
|
|
|
|
|
|||||||
Consumer Foods Segment Adjusted Operating Profit |
$ | 268 | $ | 275 | -3 | % | ||||||
|
|
|
|
|
|
Commercial Foods Segment Operating Profit Reconciliation
(Dollars in millions) | Q4 FY14 | Q4 FY13 | % change | |||||||||
Commercial Foods Segment Operating Profit |
$ | 281 | $ | 189 | 49 | % | ||||||
Restructuring costs |
5 | | ||||||||||
Gain on sale of non-operating assets |
(5 | ) | | |||||||||
Gain on sale of flour mills |
(91 | ) | | |||||||||
|
|
|
|
|
|
|||||||
Commercial Foods Segment Adjusted Operating Profit |
$ | 190 | $ | 189 | 1 | % | ||||||
|
|
|
|
|
|
Private Brands Segment Operating Profit Reconciliation
(Dollars in millions) | Q4 FY14 | Q4 FY13 | % change | |||||||||
Private Brands Segment Operating Profit |
$ | (573 | ) | $ | 102 | N/A | ||||||
Restructuring, integration, and transactions costs (including acquisition-related restructuring) |
12 | 2 | ||||||||||
Goodwill and intangible asset impairment charges |
605 | | ||||||||||
|
|
|
|
|
|
|||||||
Private Brands Segment Adjusted Operating Profit |
$ | 44 | $ | 104 | -58 | % | ||||||
|
|
|
|
|
|
-more-
CONAGRA FOODS
page 13
FY14 and FY13 Diluted EPS from Continuing Operations
Total FY14 | Total FY13 | % change | ||||||||||
Diluted EPS from continuing operations |
$ | 0.70 | $ | 1.85 | -62 | % | ||||||
Items impacting comparability: |
||||||||||||
Net expense related to intangible asset impairment charges |
1.46 | | ||||||||||
Net expense related to restructuring, transaction, and integration costs |
0.25 | 0.32 | ||||||||||
Net expense (benefit) related to unusual tax matters |
(0.16 | ) | 0.04 | |||||||||
Net benefit related to sale of flour mills |
(0.13 | ) | | |||||||||
Net expense related to settlement of interest rate derivatives |
0.08 | | ||||||||||
Net benefit related to unallocated mark-to-market impact of derivatives |
(0.05 | ) | (0.07 | ) | ||||||||
Net expense related to impairment costs, net of gain on sale of non-operating asset, in the Commercial Foods segment |
0.03 | 0.02 | ||||||||||
Net benefit related to historical legal, insurance, and environmental matters |
(0.02 | ) | | |||||||||
Net expense related to year-end remeasurement of pensions and early retirement of debt |
0.01 | 0.02 | ||||||||||
Note: EPS contribution subsequently reclassed to discontinued operations originally in guidance |
0.01 | | ||||||||||
Rounding |
(0.01 | ) | (0.02 | ) | ||||||||
|
|
|
|
|
|
|||||||
Diluted EPS adjusted for items impacting comparability |
$ | 2.17 | $ | 2.16 | 0 | % | ||||||
|
|
|
|
|
|
-more-
CONAGRA FOODS
page 14
ConAgra Foods, Inc.
Segment Operating Results
(in millions)
(unaudited)
FOURTH QUARTER | ||||||||||||
13 Weeks Ended | 13 Weeks Ended | |||||||||||
May 25, 2014 | May 26, 2013 | Percent Change | ||||||||||
SALES |
||||||||||||
Consumer Foods |
$ | 1,779.7 | $ | 1,922.1 | (7.4 | )% | ||||||
Commercial Foods |
1,627.2 | 1,611.2 | 1.0 | % | ||||||||
Private Brands |
1,029.9 | 1,030.0 | 0.0 | % | ||||||||
|
|
|
|
|||||||||
Total |
4,436.8 | 4,563.3 | (2.8 | )% | ||||||||
|
|
|
|
|||||||||
OPERATING PROFIT |
||||||||||||
Consumer Foods |
$ | 177.1 | $ | 270.2 | (34.5 | )% | ||||||
Commercial Foods |
280.8 | 189.4 | 48.3 | % | ||||||||
Private Brands |
(573.1 | ) | 102.2 | N/A | ||||||||
|
|
|
|
|||||||||
Total operating profit (loss) for segments |
(115.2 | ) | 561.8 | N/A | ||||||||
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 |
(65.0 | ) | (181.3 | ) | (64.1 | )% | ||||||
Interest expense, net |
(93.0 | ) | (102.3 | ) | (9.1 | )% | ||||||
|
|
|
|
|||||||||
Income (loss) from continuing operations before income taxes and equity method investment earnings |
$ | (273.2 | ) | $ | 278.2 | N/A | ||||||
|
|
|
|
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.
-more-
CONAGRA FOODS
page 15
ConAgra Foods, Inc.
Segment Operating Results
(in millions)
(unaudited)
FOURTH QUARTER | ||||||||||||
52 Weeks Ended | 52 Weeks Ended | |||||||||||
May 25, 2014 | May 26, 2013 | Percent Change | ||||||||||
SALES |
||||||||||||
Consumer Foods |
$ | 7,315.5 | $ | 7,551.4 | (3.1 | )% | ||||||
Commercial Foods |
6,191.2 | 6,067.0 | 2.0 | % | ||||||||
Private Brands |
4,195.9 | 1,808.2 | 132.0 | % | ||||||||
|
|
|
|
|||||||||
Total |
17,702.6 | 15,426.6 | 14.8 | % | ||||||||
|
|
|
|
|||||||||
OPERATING PROFIT |
||||||||||||
Consumer Foods |
$ | 899.4 | $ | 1,000.2 | (10.1 | )% | ||||||
Commercial Foods |
774.6 | 731.3 | 5.9 | % | ||||||||
Private Brands |
(375.0 | ) | 123.1 | N/A | ||||||||
|
|
|
|
|||||||||
Total operating profit for segments |
1,299.0 | 1,854.6 | (30.0 | )% | ||||||||
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 |
(343.6 | ) | (429.0 | ) | (19.9 | )% | ||||||
Interest expense, net |
(379.0 | ) | (275.6 | ) | 37.5 | % | ||||||
|
|
|
|
|||||||||
Income from continuing operations before income taxes and equity method investment earnings |
$ | 576.4 | $ | 1,150.0 | (49.9 | )% | ||||||
|
|
|
|
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.
-more-
CONAGRA FOODS
page 16
ConAgra Foods, Inc.
Consolidated Statements of Earnings
(in millions, except per share amounts)
(unaudited)
FOURTH QUARTER | ||||||||||||
13 Weeks Ended | 13 Weeks Ended | |||||||||||
May 25, 2014 | May 26, 2013 | Percent Change |
||||||||||
Net sales |
$ | 4,436.8 | $ | 4,563.3 | (2.8 | )% | ||||||
Costs and expenses: |
||||||||||||
Cost of goods sold |
3,531.3 | 3,602.2 | (2.0 | )% | ||||||||
Selling, general and administrative expenses |
1,085.7 | 580.6 | 87.0 | % | ||||||||
Interest expense, net |
93.0 | 102.3 | (9.1 | )% | ||||||||
|
|
|
|
|||||||||
Income (loss) from continuing operations before income taxes and equity method investment earnings |
(273.2 | ) | 278.2 | N/A | ||||||||
Income tax expense |
57.3 | 89.5 | (36.0 | )% | ||||||||
Equity method investment earnings |
12.2 | 5.1 | 139.2 | % | ||||||||
|
|
|
|
|||||||||
Income (loss) from continuing operations |
(318.3 | ) | 193.8 | N/A | ||||||||
Income (loss) from discontinued operations, net of tax |
(3.1 | ) | 0.2 | N/A | ||||||||
|
|
|
|
|||||||||
Net income (loss) |
$ | (321.4 | ) | $ | 194.0 | N/A | ||||||
|
|
|
|
|||||||||
Less: Net income attributable to noncontrolling interests |
2.8 | 1.8 | 55.6 | % | ||||||||
|
|
|
|
|||||||||
Net income (loss) attributable to ConAgra Foods, Inc. |
$ | (324.2 | ) | $ | 192.2 | N/A | ||||||
|
|
|
|
|||||||||
Earnings per share basic |
||||||||||||
Income (loss) from continuing operations |
$ | (0.76 | ) | $ | 0.46 | N/A | ||||||
Income (loss) from discontinued operations |
(0.01 | ) | | (100.0 | )% | |||||||
|
|
|
|
|||||||||
Net income (loss) attributable to ConAgra Foods, Inc. |
$ | (0.77 | ) | $ | 0.46 | N/A | ||||||
|
|
|
|
|||||||||
Weighted average shares outstanding |
422.0 | 418.4 | 0.9 | % | ||||||||
|
|
|
|
|||||||||
Earnings per share diluted |
||||||||||||
Income (loss) from continuing operations |
$ | (0.76 | ) | $ | 0.45 | N/A | ||||||
Income (loss) from discontinued operations |
(0.01 | ) | | (100.0 | )% | |||||||
|
|
|
|
|||||||||
Net income (loss) attributable to ConAgra Foods, Inc. |
$ | (0.77 | ) | $ | 0.45 | N/A | ||||||
|
|
|
|
|||||||||
Weighted average share and share equivalents outstanding |
422.0 | 426.2 | (1.0 | )% | ||||||||
|
|
|
|
-more-
CONAGRA FOODS
page 17
ConAgra Foods, Inc.
Consolidated Statements of Earnings
(in millions, except per share amounts)
(unaudited)
FOURTH QUARTER | ||||||||||||
52 Weeks Ended | 52 Weeks Ended | |||||||||||
May 25, 2014 | May 26, 2013 | Percent Change |
||||||||||
Net sales |
$ | 17,702.6 | $ | 15,426.6 | 14.8 | % | ||||||
Costs and expenses: |
||||||||||||
Cost of goods sold |
13,980.1 | 11,864.4 | 17.8 | % | ||||||||
Selling, general and administrative expenses |
2,767.1 | 2,136.6 | 29.5 | % | ||||||||
Interest expense, net |
379.0 | 275.6 | 37.5 | % | ||||||||
|
|
|
|
|||||||||
Income from continuing operations before income taxes and equity method investment earnings |
576.4 | 1,150.0 | (49.9 | )% | ||||||||
Income tax expense |
298.2 | 400.7 | (25.6 | )% | ||||||||
Equity method investment earnings |
32.8 | 37.5 | (12.5 | )% | ||||||||
|
|
|
|
|||||||||
Income from continuing operations |
311.0 | 786.8 | (60.5 | )% | ||||||||
Income (loss) from discontinued operations, net of tax |
4.1 | (0.7 | ) | N/A | ||||||||
|
|
|
|
|||||||||
Net income |
$ | 315.1 | $ | 786.1 | (59.9 | )% | ||||||
|
|
|
|
|||||||||
Less: Net income attributable to noncontrolling interests |
12.0 | 12.2 | (1.6 | )% | ||||||||
|
|
|
|
|||||||||
Net income attributable to ConAgra Foods, Inc. |
$ | 303.1 | $ | 773.9 | (60.8 | )% | ||||||
|
|
|
|
|||||||||
Earnings per share basic |
||||||||||||
Income from continuing operations |
$ | 0.71 | $ | 1.88 | (62.2 | )% | ||||||
Income from discontinued operations |
0.01 | | 100.0 | % | ||||||||
|
|
|
|
|||||||||
Net income attributable to ConAgra Foods, Inc. |
$ | 0.72 | $ | 1.88 | (61.7 | )% | ||||||
|
|
|
|
|||||||||
Weighted average shares outstanding |
421.3 | 410.8 | 2.6 | % | ||||||||
|
|
|
|
|||||||||
Earnings per share diluted |
||||||||||||
Income from continuing operations |
$ | 0.70 | $ | 1.85 | (62.2 | )% | ||||||
Income from discontinued operations |
| | N/A | |||||||||
|
|
|
|
|||||||||
Net income attributable to ConAgra Foods, Inc. |
$ | 0.70 | $ | 1.85 | (62.2 | )% | ||||||
|
|
|
|
|||||||||
Weighted average share and share equivalents outstanding |
427.5 | 417.6 | 2.4 | % | ||||||||
|
|
|
|
-more-
CONAGRA FOODS
page 18
ConAgra Foods, Inc.
Consolidated Balance Sheets
(in millions)
(unaudited)
May 25, 2014 | May 26, 2013 | |||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 183.1 | $ | 183.9 | ||||
Receivables, less allowance for doubtful accounts of $5.3 and $7.6 |
1,230.8 | 1,279.4 | ||||||
Receivable on sale of flour milling assets |
162.4 | | ||||||
Inventories |
2,292.6 | 2,340.9 | ||||||
Prepaid expenses and other current assets |
361.9 | 510.8 | ||||||
Current assets held for sale |
| 64.8 | ||||||
|
|
|
|
|||||
Total current assets |
4,230.8 | 4,379.8 | ||||||
Property, plant and equipment, net |
3,811.9 | 3,757.6 | ||||||
Goodwill |
7,836.5 | 8,426.7 | ||||||
Brands, trademarks and other intangibles, net |
3,205.8 | 3,403.6 | ||||||
Other assets |
270.5 | 293.5 | ||||||
Noncurrent assets held for sale |
10.9 | 144.1 | ||||||
|
|
|
|
|||||
$ | 19,366.4 | $ | 20,405.3 | |||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities |
||||||||
Notes payable |
$ | 141.8 | $ | 185.0 | ||||
Current installments of long-term debt |
84.2 | 517.9 | ||||||
Accounts payable |
1,492.4 | 1,498.1 | ||||||
Accrued payroll |
156.6 | 287.0 | ||||||
Other accrued liabilities |
767.4 | 908.5 | ||||||
Current liabilities held for sale |
| 4.8 | ||||||
|
|
|
|
|||||
Total current liabilities |
2,642.4 | 3,401.3 | ||||||
Senior long-term debt, excluding current installments |
8,571.7 | 8,691.0 | ||||||
Subordinated debt |
195.9 | 195.9 | ||||||
Other noncurrent liabilities |
2,601.2 | 2,754.0 | ||||||
Noncurrent liabilities held for sale |
| 0.1 | ||||||
Total stockholders equity |
5,355.2 | 5,363.0 | ||||||
|
|
|
|
|||||
$ | 19,366.4 | $ | 20,405.3 | |||||
|
|
|
|
-more-
CONAGRA FOODS
page 19
ConAgra Foods, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Fifty-two weeks ended | ||||||||
May 25, 2014 | May 26, 2013 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 315.1 | $ | 786.1 | ||||
Income (loss) from discontinued operations |
4.1 | (0.7 | ) | |||||
|
|
|
|
|||||
Income from continuing operations |
311.0 | 786.8 | ||||||
Adjustments to reconcile income from continuing operations to net cash flows from operating activities: |
||||||||
Depreciation and amortization |
602.9 | 443.4 | ||||||
Asset impairment charges |
720.0 | 20.2 | ||||||
(Gain) loss on sale of fixed assets |
(85.2 | ) | 10.9 | |||||
Earnings of affiliates less than (in excess of) distributions |
13.3 | (11.1 | ) | |||||
Share-based payments expense |
60.2 | 67.4 | ||||||
Contributions to pension plans |
(18.3 | ) | (19.8 | ) | ||||
Pension expense |
(5.9 | ) | 23.5 | |||||
Other items |
(6.3 | ) | (8.6 | ) | ||||
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions: |
||||||||
Accounts receivable |
63.3 | (72.3 | ) | |||||
Inventory |
49.4 | 19.5 | ||||||
Deferred income taxes and income taxes payable, net |
23.3 | 123.4 | ||||||
Prepaid expenses and other current assets |
4.0 | (22.0 | ) | |||||
Accounts payable |
(5.2 | ) | 6.5 | |||||
Accrued payroll |
(130.0 | ) | 109.9 | |||||
Other accrued liabilities |
(44.9 | ) | (69.2 | ) | ||||
|
|
|
|
|||||
Net cash flows from operating activities continuing operations |
1,551.6 | 1,408.5 | ||||||
Net cash flows from operating activities discontinued operations |
(0.4 | ) | 3.7 | |||||
|
|
|
|
|||||
Net cash flows from operating activities |
1,551.2 | 1,412.2 | ||||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Additions to property, plant and equipment |
(602.4 | ) | (453.7 | ) | ||||
Sale of property, plant and equipment |
42.5 | 18.0 | ||||||
Purchase of businesses, net of cash acquired |
(39.9 | ) | (5,018.8 | ) | ||||
Purchase of intangible assets |
(1.0 | ) | (4.8 | ) | ||||
Investment in equity method investee |
| (1.5 | ) | |||||
|
|
|
|
|||||
Net cash flows from investing activities continuing operations |
(600.8 | ) | (5,460.8 | ) | ||||
Net cash flows from investing activities discontinued operations |
86.7 | (5.0 | ) | |||||
|
|
|
|
|||||
Net cash flows from investing activities |
(514.1 | ) | (5,465.8 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Net short-term borrowings |
(43.2 | ) | 145.0 | |||||
Issuance of long-term debt |
| 6,217.7 | ||||||
Debt issuance costs |
| (56.6 | ) | |||||
Repayment of long-term debt |
(569.2 | ) | (2,074.0 | ) | ||||
Issuance of ConAgra Foods, Inc. common shares |
| 269.2 | ||||||
Repurchase of ConAgra Foods, Inc. common shares |
(100.0 | ) | (245.0 | ) | ||||
Cash dividends paid |
(420.9 | ) | (400.7 | ) | ||||
Exercise of stock options and issuance of other stock awards |
103.7 | 274.4 | ||||||
Other items |
(4.5 | ) | 3.0 | |||||
|
|
|
|
|||||
Net cash flows from financing activities |
(1,034.1 | ) | 4,133.0 | |||||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
(3.8 | ) | 1.5 | |||||
Net change in cash and cash equivalents |
(0.8 | ) | 80.9 | |||||
Cash and cash equivalents at beginning of period |
183.9 | 103.0 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 183.1 | $ | 183.9 | ||||
|
|
|
|
###
Exhibit 99.2
Q4 FY14 Question & Answer
June 26, 2014
1. | What were some examples of brands in the Consumer Foods segment posting sales growth for the quarter? |
| Andy Capps |
| Bertolli |
| Reddi-wip |
| Ro*Tel |
| Slim Jim |
2. | What were some examples of brands in the Consumer Foods segment posting sales declines for the quarter? |
ACT II |
Hebrew National |
Marie Callenders | Snack Pack | |||
Banquet |
Healthy Choice |
Orville Redenbachers | Swiss Miss | |||
Blue Bonnet |
Hunts |
PAM | Van Camps | |||
Chef Boyardee |
Kid Cuisine |
PF Changs | Wesson | |||
Crunch n Munch |
La Choy |
Parkay | Wolf | |||
DAVID |
Libbys |
Peter Pan | ||||
Egg Beaters |
Manwich |
Rosarita |
3. | What were unit volume changes for the quarter in the Consumer Foods and Commercial Foods segments? |
Consumer Foods volume decreased 7%.
Commercial Foods volume increased 4%.
4. | How much was total depreciation and amortization from continuing operations for the quarter? |
Approximately $156 million (versus approximately $145 million in Q4 FY13).
5. | How much was total depreciation and amortization from continuing operations for the full fiscal year? |
Approximately $603 million (versus approximately $443 million in FY13).
6. | How much were capital expenditures from continuing operations for the quarter? |
Approximately $131 million (versus approximately $163 million in Q4 FY13).
7. | How much were capital expenditures from continuing operations for the full fiscal year? |
Approximately $602 million (versus approximately $454 million in FY13)
8. | What was the net interest expense for the quarter? |
Approximately $93 million (versus approximately $102 million in Q4 FY13); reflecting debt reduction.
9. | What was the net interest expense for the full fiscal year? |
Approximately $379 million (versus approximately $276 million in FY13); the increase reflects the incremental interest related to the debt incurred to fund acquisitions, principally Ralcorp.
10. | What was Corporate expense for the quarter? |
Unallocated Corporate amounts were $65 million of expense in the quarter and $181 million of expense in the year-ago period, as reported. After adjusting for $3 million of net expense in the current quarter, and $88 million of net expense in the year-ago period from items impacting comparability, current quarter expense of $62 million declined from $93 million in the year-ago period. The comparable decline largely reflects lower incentives, lower pension expense, and efficiency initiatives.
11. | How much did the company pay in dividends during the quarter? |
Approximately $105 million (versus approximately $104 million in Q4 FY13), reflecting an increase in shares outstanding.
12. | How much did the company pay in dividends for the full fiscal year? |
Approximately $421 million (versus approximately $401 million in FY13)
13. | What was the weighted average number of diluted shares outstanding for the quarter and full fiscal year (rounded)? |
Approximately 422 million shares for the quarter; approximately 428 million shares for the full fiscal year.
14. | Did the company repurchase any shares during the quarter? |
No, the company did not repurchase any shares during the quarter.
2
15. | What is included in the companys net debt at the end of the quarter (rounded, in millions)? |
Q4 FY14 | ||||
Total debt* |
$ | 8,994 | ||
Less: Cash on hand |
$ | 183 | ||
|
|
|||
Net debt |
$ | 8,811 |
* | Total debt = notes payable, short-term debt, long-term debt, and subordinated debt. |
16. | What is the net debt to total capital ratio at quarter end? |
The net-debt-to-total-capital ratio for the quarter was 62%.
This ratio is defined as net debt divided by the sum of net debt plus shareholders equity. See question No. #15 for the components of net debt.
17. | How much were milling sales and comparable operating profits in fiscal 2014? |
Sales were approximately $1.9 billion and operating profit was approximately $145 million.
18. | What is the projected tax rate for FY15? |
The company expects the tax rate to be in the range of 34%, excluding items impacting comparability. The company acknowledges that the quarterly rates may be different from this, given the timing of certain matters, but that the overall rate is expected to approximate 34%.
19. | What are the projected capital expenditures for FY15? |
Total capital expenditures for fiscal 2015 are projected to be approximately $600 million.
20. | What is the projected depreciation and amortization expense for FY15? |
Total depreciation and amortization for fiscal 2015 is projected to be approximately $560 million.
21. | What is the expected net interest expense for FY15? |
Net interest expense for fiscal 2015 is projected to be approximately $330 million.
3
Note on Forward-looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on managements current expectations and assumptions and are subject to certain risks, uncertainties and changes in circumstances that could cause actual results to differ materially from potential results discussed in the forward-looking statements. These risks and uncertainties include, among other things: ConAgra Foods ability to realize the synergies and benefits contemplated by the acquisition of Ralcorp Holdings, Inc. (Ralcorp) and its ability to promptly and effectively integrate the business of Ralcorp; ConAgra Foods ability to realize the synergies and benefits contemplated by the recently formed joint venture combining the flour milling businesses of ConAgra Foods, Cargill, Incorporated, and CHS Inc.; risks and uncertainties associated with intangible assets, including any future goodwill impairment charges; the availability and prices of raw materials, including any negative effects caused by inflation or adverse weather conditions; the effectiveness of ConAgra Foods product pricing, including product innovation, any pricing actions and changes in promotional strategies; the ultimate outcome of litigation, including the lead paint matter; future economic circumstances; industry conditions; ConAgra Foods ability to execute its operating and restructuring plans; the success of ConAgra Foods cost-savings initiatives, and innovation and marketing investments; the competitive environment; operating efficiencies; the ultimate impact of any ConAgra Foods product recalls; access to capital; actions of governments and regulatory factors affecting ConAgra Foods businesses, including the Patient Protection and Affordable Care Act; the amount and timing of repurchases of ConAgra Foods common stock and debt, if any; and other risks described in ConAgra Foods reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors and security holders are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. ConAgra Foods disclaims any obligation to update or revise statements contained in this document to reflect future events or circumstances or otherwise.
4