Today ConAgra Foods, Inc., (NYSE: CAG) reported results for the
fiscal 2015 fourth quarter ended May 31, 2015. Highlights:
- Diluted EPS from continuing operations
of $0.47 per share as reported, vs. a loss of $(0.95) a year ago.
After adjusting for items impacting comparability, diluted EPS of
$0.59 this quarter was ahead of $0.55 a year ago, as expected. An
extra week in the fourth quarter of fiscal 2015 favorably impacted
current-quarter amounts.
- Consumer Foods and Commercial Foods
posted operating profit growth after adjusting for items impacting
comparability, and including the benefit of the extra week.
- Private Brands posted an operating
profit decline after adjusting for items impacting comparability,
and including the benefit of the extra week.
- The company repaid approximately $1.1
billion of debt in fiscal 2015, resulting in cumulative debt
reduction of approximately $2.1 billion since the completion of the
Ralcorp transaction, which exceeded the $2.0 billion goal.
- The company plans to exit the Private
Brands operations.
- The company’s new plans for creating
long-term value center on a more aggressive approach to cost
reduction, growing consumer brands (Consumer Foods segment) and
Lamb Weston (within the Commercial Foods segment), as well as
balanced capital allocation. Details to be shared at an investor
event later this year.
CEO Perspective:
Sean Connolly, chief executive officer of ConAgra Foods, said,
“With fiscal year 2015 now behind us, we are now pursuing a
different plan to maximize value for our shareholders. Our new plan
will center on a more aggressive approach to driving margin
improvement through SG&A reductions, supply chain efficiencies
and other projects. It also sharpens our focus on growing our
Consumer Foods and Commercial Foods segments. We expect to
continually refine our portfolio with prudent divestitures and
acquisitions, and there will be a strong emphasis on deploying
capital in ways that benefit shareholders.”
He continued, “As I have intensely studied the situation in our
Private Brands operations over the last few months, it has become
clear that the time and energy the company is devoting to the
Private Brands turnaround represent a suboptimal use of our
resources. To prevent further distraction, we are pursuing the
divestiture of our Private Brands operations. Because the outcome
of our strategic review for the Private Brands operations will
influence our long-term financial outlook, we will wait until this
process is complete before sharing long-term financial commitments.
We expect to offer operating details of our plans as well as
long-term financial expectations at an investor event later this
year.”
“The underlying objective of the new strategic direction we are
sharing today is long-term shareholder value creation. While we
have a high degree of conviction in our plans, we also acknowledge
that markets and opportunities change over time. For this reason,
our management team and our board of directors approach long-term
plans in a practical and flexible manner. If we are convinced that
some other set of opportunities, or some other course of action,
improves our outlook or will better reward shareholders, we will
adapt our plans accordingly.”
Overall Quarterly Results
For the fiscal 2015 fourth quarter ended May 31, 2015, diluted
earnings per share from continuing operations were $0.47, vs. a
diluted loss per share of $(0.95) as reported for the fiscal 2014
fourth quarter. After adjusting for items impacting comparability,
comparable diluted EPS was $0.59 this quarter and $0.55 in the
year-ago period. Items impacting comparability are summarized
toward the end of this release and reconciled for Regulation G
purposes starting on page 11.
Consumer Foods Segment
Branded food items sold worldwide in retail
channels.
The Consumer Foods segment posted sales of approximately $1.9
billion and operating profit of $304 million, as reported.
Including the benefit of the extra week, sales increased 4% as
reported (rounded), with volume up 5%, 1% favorable impact from
price/mix, and 1% unfavorable impact of foreign exchange. The
company estimates that the extra week favorably impacted sales and
volume by approximately 7% for the quarter. The company increased
prices in some categories to cover commodity costs, and continues
to make progress with efficiencies in trade spending.
- After adjusting for the benefit of the
extra week, brands posting sales growth for the quarter include ACT
II, Hunt’s, Ro*Tel, DAVID, Reddi-wip, Slim Jim, PAM, PF Chang’s,
and Wolf.
- The company continues to make good
progress in fast growing channels including club, dollar, and
convenience.
- Other brand details are in the written
Q&A document accompanying this release.
Operating profit of $304 million was significantly above $176
million a year-ago as reported. After adjusting for $15 million of
net expense in the current quarter and $91 million of net expense
in the year-ago period from items impacting comparability, and
including the benefit of the extra week, current quarter operating
profit of $319 million increased 20% over comparable year-ago
amounts. In addition to the benefit of the extra week, the
comparable operating profit growth reflects productivity which more
than offset higher protein and packaging costs, favorable mix, and
the benefit of pricing and trade spend efficiencies. Strong
operating margins enabled a $7 million increase in advertising and
promotion expense (an increase of 13%), and offset approximately
$14 million unfavorable impact of foreign exchange.
Commercial Foods Segment
Specialty potato, seasonings, blends, flavors,
and bakery products, as well as consumer branded and private
branded packaged food items, sold to restaurants, foodservice and
commercial channels worldwide.
Sales for the Commercial Foods segment were $1.2 billion and
operating profit was $154 million, as reported, ahead of prior year
amounts. The company estimates that the extra week favorably
impacted sales and volume by approximately 7%. Sales for Lamb
Weston’s potato operations grew, although international sales were
impacted by the West Coast port labor dispute as well as challenges
facing quick-serve customers in key Asian markets. The West Coast
port dispute was settled in late February 2015, and Lamb Weston’s
international shipments have been gradually improving; the company
expects to reach normal shipment levels in the first half of fiscal
2016. Sales for the rest of the segment grew.
After adjusting for items impacting comparability, current
quarter operating profit increased 3%, reflecting the benefit of
the extra week. Lamb Weston comparable profits grew modestly,
largely reflecting good domestic performance and efficiencies from
good raw potato crop quality. Profits for the rest of the
businesses in the segment grew modestly.
Private Brands
Private brand food items sold in domestic
markets.
As reported, sales for the Private Brands segment were $1
billion, down slightly. The company estimates that the extra week
favorably impacted sales and volume by approximately 7%.
The segment posted an operating loss of $(25 million), as
reported, due to impairment and restructuring charges. After
adjusting for $56 million of net expense from items impacting
comparability in the current quarter, and $618 million of expense
from items impacting comparability in year-ago period amounts
(mostly impairment charges), comparable operating profit declined
30%, which includes the benefit of the extra week.
Higher commodity costs negatively impacted profits, as did lower
volumes. Ongoing margin management initiatives are expected to
improve profitability. The company has implemented a
reorganization, and is highly focused on improving execution; this
should strengthen customer relationships and volume performance
gradually over time.
Hedging Activities
Hedge gains and losses are generally 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 $19 million of favorable
impact in the current quarter and $14 million of favorable impact
in the year-ago period. The company identifies these amounts as
items impacting comparability within the discussion of unallocated
Corporate results.
Other Items
- Unallocated Corporate amounts were $62
million of expense in the current quarter and $61 million of
expense in the year-ago period. Current-quarter amounts include $19
million of hedge-related benefit and $16 million of net expense
from other items impacting comparability ($7 million of the $16
million of expense relates to mark-to-market pension adjustments).
Year-ago period amounts include $14 million of hedge-related
benefit and $16 million of expense related to other items impacting
comparability. Excluding these amounts, unallocated Corporate
expense was $65 million for the current quarter and $59 million in
the year-ago period.
- Equity method investment earnings were
$30 million for the current quarter and $12 million in the year-ago
period; the year-over-year increase mostly reflects the inclusion
of profits for the company’s Ardent Mills joint venture (which are
not in year-ago amounts due to the timing of the transaction). The
operations of the former ConAgra Mills business for the fourth
quarter of 2014 are included in results of discontinued
operations.
- Net interest expense was $89 million in
the current quarter and $93 million in the year-ago period; the
decrease reflects lower debt resulting from debt repayment.
Capital Items
- The company repaid approximately $1.1
billion of debt this fiscal year, resulting in cumulative debt
repayment of $2.1 billion since the completion of the Ralcorp
transaction in fiscal 2013.
- Dividends for the quarter totaled $107
million versus $105 million in the year-ago period, reflecting an
increase in shares outstanding.
- The company repurchased approximately
332,000 shares of common stock during the quarter for approximately
$12 million.
- For the current quarter, capital
expenditures for property, plant and equipment were $154 million,
compared with $117 million in the year-ago period. Depreciation and
amortization expense was approximately $149 million for the fiscal
fourth quarter; this compares with a total of $150 million in the
year-ago period.
Outlook
The company will offer details on full-year fiscal 2016 expected
EPS, as well as long-term financial guidance, at an investor event
likely to be scheduled for the fall of 2015. This event will be
scheduled after the company completes its assessment of strategic
alternatives for the Private Brands operations, and determines
SG&A reduction targets and investment needs for the remainder
of the company.
With regard to first quarter of fiscal 2016, which the company
expects to be unaffected by the outcome of the review of strategic
alternatives for the Private Brands operations, the company expects
EPS, adjusted for items impacting comparability, to be roughly in
line with comparable year-ago amounts.
With regard to plans for the rest of the company, the company’s
new focus will be on:
- Productivity, notably within SG&A,
but also in terms of supply chain and trade spending. The company
sees significant margin potential through these initiatives.
- Driving profitable growth in the
Consumer Foods segment and at Lamb Weston potato operations (within
the Commercial Foods segment). This will involve further portfolio
segmentation, and investing behind the highest-potential categories
in a disciplined manner. Investment may include marketing,
infrastructure, innovation, and acquired businesses. The company
expects some additional divestitures as it continues to refine the
asset mix.
- Balanced capital allocation that
includes growing the dividend over time, increasing share
repurchases, and having an investment-grade balance sheet.
Financial expectations and operating details regarding the above
will be shared as part of the investor event later this year.
Major Items Impacting Fourth-quarter Fiscal 2015 EPS
Comparability
Included in the $0.47 diluted EPS from continuing operations for
the fourth quarter of fiscal 2015 (EPS amounts rounded and after
tax). These include references to selling, general, and
administrative (SG&A) expense, and cost of goods sold
(COGS):
- Approximately $0.09 per diluted share
of net expense, or $45 million pretax, related to the impairment of
goodwill and other intangible assets, a portion of which is not tax
deductible. $40 million of this is classified within the Private
Brands segment (SG&A) and $5 million of this is classified
within the Consumer Foods segment (SG&A).
- Approximately $0.05 per diluted share
of net expense, or $35 million pretax, resulting from restructuring
and integration costs. $16 million of this is classified within the
Private Brands segment ($4 million of COGS/$12 million of
SG&A), $10 million is classified within the Consumer Foods
segment ($6 million of COGS/$4 million of SG&A), and $9 million
of this is classified as unallocated Corporate expense
(SG&A).
- Approximately $0.03 per diluted share
of net benefit, or $19 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 generally 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 $0.01 per diluted share
of net expense, or $7 million pretax, related to the mark-to-market
impact of pension amounts.Note: The company estimates that the
extra week in the fiscal 2015 fourth quarter added approximately
$0.04 of benefit per diluted share.
Included in the $(0.95) 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 $0.09 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 ($3 million COGS/$15 million
SG&A), $5 million is classified within the Commercial Foods
segment (SG&A), $12 million is classified within the Private
Brands segment ($9 million COGS/$3 million 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 generally
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.
- 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).
- Note: in the fourth quarter of fiscal
2014, comparable EPS included approximately $0.05 of net
contribution from items previously classified within continuing
operations (primarily profits from flour milling), which have been
reclassified to discontinued operations.
Discussion of Results
ConAgra Foods will host a conference call at 9:30 a.m. EDT 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 1-877-419-6591 and
1-719-325-4878, 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. 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 9995721. A rebroadcast also
will be available on the company’s 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 America's
largest packaged food companies with branded and private branded
food found in 99 percent of America’s 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®, Hunt's®, Marie Callender's®, Orville
Redenbacher's®, 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, spice, bakery and grain 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 management’s
current expectations and are subject to uncertainty and changes in
circumstances. These risks and uncertainties include, among other
things: ConAgra Foods’ ability to successfully execute an exit
option for its Private Brands operations within the expected time
frame or at all; ConAgra Foods’ ability to realize the synergies
and benefits contemplated by the Ardent Mills joint venture; risks
and uncertainties associated with intangible assets, including any
future goodwill or intangible assets impairment charges; the
availability and prices of raw materials, including any negative
effects caused by inflation or 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
litigation related to the lead paint and pigment matters; future
economic circumstances; industry conditions; the effectiveness of
ConAgra Foods’ hedging activities, including volatility in
commodities that could negatively impact ConAgra Foods’ derivative
positions and, in turn, ConAgra Foods’ earnings; ConAgra Foods’
ability to execute its operating and restructuring plans and
achieve operating efficiencies; the success of ConAgra Foods’
cost-saving initiatives, innovation, and marketing investments; the
competitive environment and related market conditions; 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; the costs, disruption and diversion
of management’s attention associated with campaigns commenced by
activist investors; 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.
Regulation G Disclosure Below is a
reconciliation of Q4 FY15 and Q4 FY14 diluted earnings per share
from continuing operations, Consumer Foods segment operating
profit, Commercial Foods segment operating profit, and Private
Brands segment operating profit, adjusted for items impacting
comparability. Amounts may be impacted by rounding.
Q4
FY15 & Q4 FY14 Diluted EPS from Continuing Operations
Q4 FY15 Q4 FY14 % change Diluted EPS
from continuing operations $ 0.47 $
(0.95 ) N/A Items impacting comparability: Net
expense related to impairment of goodwill and other intangible
assets, including the impact on diluted share count 0.09 1.47 Net
expense related to restructuring, transaction, and integration
costs 0.05 0.09 Net expense related to year-end remeasurement of
pensions 0.01 - Net benefit related to unallocated mark-to-market
impact of derivatives (0.03 ) (0.02 ) Net gain from sale of
non-operating asset in the Commercial Foods segment - (0.01 ) Net
benefit related to historical legal matters - (0.02 ) Net benefit
related to unusual tax matters - (0.06 )
Diluted EPS from continuing operations, adjusted for items
impacting comparability $ 0.59 $
0.50 Net EPS contribution previously within continuing
operations and subsequently reclassified to discontinued
operations: From milling operations - 0.18 Net benefit related to
sale of flour mills - (0.13 )
Diluted EPS adjusted for items impacting comparability
$ 0.59 $ 0.55 7
% Consumer Foods Segment Operating Profit
Reconciliation (Dollars in millions)
Q4 FY15
Q4 FY14 % change Consumer Foods Segment Operating
Profit $ 304 $ 176 73
% Restructuring, integration, and transactions costs 10 18
Intangible impairment charges 5 73
Consumer Foods Segment Adjusted Operating Profit
$ 319 $ 267 20
% Commercial Foods Segment Operating Profit
Reconciliation (Dollars in millions)
Q4 FY15
Q4 FY14 % change Commercial Foods Segment
Operating Profit $ 154 $ 150
3 % Restructuring costs - 5 Gain on sale of
non-operating assets - (5 )
Commercial Foods Segment Adjusted Operating Profit $
154 $ 150 3 %
Private Brands Segment Operating Profit
Reconciliation (Dollars in millions)
Q4 FY15
Q4 FY14 % change Private Brands Segment Operating
Profit (Loss) $ (25 ) $ (573
) N/A Restructuring, integration, and transactions
costs 16 13 Impairment of fixed assets, goodwill and other
intangible assets 40 605
Private Brands Segment Adjusted Operating Profit $
31 $ 44 -30 %
ConAgra Foods, Inc. Segment Operating Results (in
millions) (unaudited) FOURTH QUARTER Fourteen weeks ended
Thirteen weeks ended May 31, 2015 May 25, 2014
Percent Change
SALES
Consumer Foods $ 1,859.7 $ 1,779.7 4.5 % Commercial Foods 1,225.8
1,149.8 6.6 % Private Brands 1,019.2 1,029.9
(1.0 )% Total 4,104.7 3,959.4
3.7 %
OPERATING PROFIT
(LOSS)
Consumer Foods $ 303.8 $ 176.0 72.6 % Commercial Foods 154.1 150.2
2.6 % Private Brands (24.7 ) (573.4 ) (95.7 )% Total
operating profit (loss) for segments 433.2 (247.2 ) N/A
Reconciliation of total operating profit (loss) to income from
continuing operations before income taxes and equity method
investment earnings Items excluded from segment operating
profit (loss): General corporate expense (62.2 ) (61.0 ) 2.0 %
Interest expense, net (88.6 ) (93.1 ) (4.8 )% Income
(loss) from continuing operations before income taxes and equity
method investment earnings $ 282.4 $ (401.3 ) N/A
Segment operating profit (loss) 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.
ConAgra Foods, Inc. Segment Operating Results (in
millions) (unaudited) FOURTH QUARTER
Fifty-three weeksended
Fifty-two weeksended
May 31, 2015 May 25, 2014 Percent Change
SALES
Consumer Foods $ 7,304.4 $ 7,315.7 (0.2 )% Commercial Foods 4,463.2
4,332.2 3.0 % Private Brands 4,064.8 4,195.7
(3.1 )% Total 15,832.4 15,843.6
(0.1 )%
OPERATING PROFIT
(LOSS)
Consumer Foods $ 1,069.7 $ 892.0 19.9 % Commercial Foods 568.5
537.7 5.7 % Private Brands (1,456.7 ) (373.4 ) 290.1
% Total operating profit for segments 181.5 1,056.3 (82.8 )%
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 (345.1 ) (315.6 ) 9.3 % Interest
expense, net (331.9 ) (379.4 ) (12.5 )% Income (loss)
from continuing operations before income taxes and equity method
investment earnings $ (495.5 ) $ 361.3 N/A
Segment operating profit (loss) 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.
ConAgra Foods, Inc. Consolidated Statements of
Operations (in millions) (unaudited) FOURTH QUARTER
Fourteen weeksended
Thirteen weeksended
May 31, 2015 May 25, 2014 Percent Change Net sales $ 4,104.7
$ 3,959.4 3.7 % Costs and expenses: Cost of goods sold 3,192.0
3,115.9 2.4 % Selling, general and administrative expenses 541.7
1,151.7 (53.0 )% Interest expense, net 88.6 93.1
(4.8 )% Income (loss) from continuing operations before
income taxes and equity method investment earnings 282.4 (401.3 )
N/A Income tax expense 105.0 7.0 1,400.0 % Equity method
investment earnings 29.5 12.1 143.8 % Income
(loss) from continuing operations 206.9 (396.2 ) N/A Income from
discontinued operations, net of tax 4.6 74.8
(93.9 )% Net income (loss) $ 211.5 $ (321.4 ) N/A Less: Net income
attributable to noncontrolling interests 2.3 2.8
(17.9 )% Net income (loss) attributable to ConAgra Foods,
Inc. $ 209.2 $ (324.2 ) N/A Earnings (loss) per share -
basic Income (loss) from continuing operations $ 0.48 $
(0.95 ) N/A Income from discontinued operations 0.01
0.18 (94.4 )% Net income (loss) attributable to ConAgra
Foods, Inc. $ 0.49 $ (0.77 ) N/A Weighted average shares
outstanding 427.8 422.0 1.4 % Earnings
(loss) per share - diluted Income (loss) from continuing
operations $ 0.47 $ (0.95 ) N/A Income from discontinued operations
0.01 0.18 (94.4 )% Net income (loss)
attributable to ConAgra Foods, Inc. $ 0.48 $ (0.77 ) N/A
Weighted average share and share equivalents outstanding
432.8 422.0 2.6 % ConAgra Foods, Inc.
Consolidated Statements of Operations (in millions) (unaudited)
FOURTH QUARTER
Fifty-three weeksended
Fifty-two weeksended
May 31, 2015 May 25, 2014 Percent Change Net sales $
15,832.4 $ 15,843.6 (0.1 )% Costs and expenses: Cost of goods sold
12,523.9 12,331.7 1.6 % Selling, general and administrative
expenses 3,472.1 2,771.2 25.3 % Interest expense, net 331.9
379.4 (12.5 )% Income (loss) from continuing
operations before income taxes and equity method investment
earnings (495.5 ) 361.3 N/A Income tax expense 234.0 220.1
6.3 % Equity method investment earnings 122.1
32.5 275.7 % Income (loss) from continuing operations (607.4
) 173.7 N/A Income from discontinued operations, net of tax
366.6 141.4 159.3 % Net income (loss) $ (240.8
) $ 315.1 N/A Less: Net income attributable to
noncontrolling interests 11.8 12.0 (1.7
)% Net income (loss) attributable to ConAgra Foods, Inc. $ (252.6 )
$ 303.1 N/A Earnings (loss) per share - basic
Income (loss) from continuing operations $ (1.46 ) $ 0.38 N/A
Income from discontinued operations 0.86 0.34
152.9 % Net income (loss) attributable to ConAgra Foods,
Inc. $ (0.60 ) $ 0.72 N/A Weighted average shares
outstanding 426.1 421.3 1.1 %
Earnings (loss) per share - diluted Income (loss) from
continuing operations $ (1.46 ) $ 0.37 N/A Income from discontinued
operations 0.86 0.33 160.6 % Net income
(loss) attributable to ConAgra Foods, Inc. $ (0.60 ) $ 0.70
N/A Weighted average share and share equivalents outstanding
426.1 427.5 (0.3 )%
ConAgra Foods, Inc. Consolidated Balance Sheet (in millions)
(unaudited) May 31, 2015 May 25, 2014
ASSETS Current
assets Cash and cash equivalents $ 183.1 $ 141.3
Receivables, less allowance for doubtful
accounts of $4.6 and $4.0
972.9 1,058.4 Inventories 2,201.2 2,077.0 Prepaid expenses and
other current assets 310.5 322.4 Current assets held for sale
— 631.7 Total current assets 3,667.7 4,230.8
Property, plant and equipment, net 3,608.1 3,636.0 Goodwill 6,300.3
7,828.5 Brands, trademarks and other intangibles, net 3,030.0
3,204.9 Other assets 936.1 220.4 Noncurrent assets held for sale
— 198.9 $ 17,542.2 $ 19,319.5
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities
Notes payable $ 7.9 $ 141.8 Current installments of long-term debt
1,008.0 84.1 Accounts payable 1,358.3 1,349.3 Accrued payroll 218.2
154.3 Other accrued liabilities 717.8 748.1 Current liabilities
held for sale — 164.8 Total current liabilities
3,310.2 2,642.4 Senior long-term debt, excluding current
installments 6,693.0 8,524.6 Subordinated debt 195.9 195.9 Other
noncurrent liabilities 2,733.1 2,599.4 Noncurrent liabilities held
for sale — 2.0 Total stockholders' equity 4,610.0
5,355.2 $ 17,542.2 $ 19,319.5
ConAgra Foods, Inc.
and Subsidiaries Consolidated Statements of Cash Flows
(in millions) For the Fiscal Years Ended May
2015 2014 2013 Cash flows from
operating activities:
Net income (loss)
$ (240.8 ) $ 315.1 $ 786.1
Income from discontinued operations
366.6 141.5 87.8
Income (loss) from continuing
operations
(607.4 ) 173.6 698.3 Adjustments to reconcile income from
continuing operations to net cash flows from operating activities:
Depreciation and amortization 592.3 577.3 418.6 Asset impairment
charges 1,615.3 720.0 20.2
Loss on sale of fixed assets
14.3 5.1 10.5 Earnings of affiliates less than (in excess of)
distributions (30.8 ) 13.6 (11.7 ) Share-based payments expense
68.3 59.5 67.0 Contributions to pension plans (13.5 ) (18.3 ) (19.8
) Pension expense (6.0 ) (5.9 ) 23.5 Other items 11.7 (36.2 ) (9.1
) Change in operating assets and liabilities excluding effects of
business acquisitions and dispositions: Accounts receivable 93.8
48.8 (52.2 ) Inventory (119.8 ) 12.5 56.1 Deferred income taxes and
income taxes payable, net (102.0 ) 50.5 126.4 Prepaid expenses and
other current assets (9.3 ) 1.5 (13.3 ) Accounts payable (15.9 )
25.4 18.3 Accrued payroll 70.5 (126.0 ) 104.2 Other accrued
liabilities (87.8 ) (46.8 ) (66.7 ) Net cash
flows from operating activities - continuing operations 1,473.7
1,454.6 1,370.3 Net cash flows from operating activities -
discontinued operations 6.9 114.0
41.9 Net cash flows from operating activities
1,480.6 1,568.6 1,412.2 Cash
flows from investing activities: Additions to property, plant and
equipment (471.9 ) (592.3 ) (422.6 ) Sale of property, plant and
equipment 20.6 42.5 18.0 Purchase of businesses, net of cash
acquired (95.7 ) (39.9 ) (5,018.8 ) Purchase of intangible assets —
— (4.8 ) Return of investment in equity method investee 391.4 — —
Investment in equity method investee — —
(1.5 ) Net cash flows from investing activities -
continuing operations (155.6 ) (589.7 ) (5,429.7 ) Net cash flows
from investing activities - discontinued operations 114.0
58.2 (36.1 ) Net cash flows from
investing activities (41.6 ) (531.5 ) (5,465.8
) Cash flows from financing activities: Net short-term borrowings
(150.0 ) (43.2 ) 145.0 Issuance of long-term debt 550.0 — 6,217.7
Debt issuance costs (2.3 ) — (56.6 ) Repayment of long-term debt
(1,495.2 ) (569.2 ) (2,074.0 ) Issuance of ConAgra Foods, Inc.
common shares — — 269.2 Repurchase of ConAgra Foods, Inc. common
shares (50.0 ) (100.0 ) (245.0 ) Cash dividends paid (425.2 )
(420.9 ) (400.7 ) Exercise of stock options and issuance of other
stock awards 153.8 103.7 274.4 Other items (11.3 )
(4.5 ) 3.0 Net cash flows from financing activities -
continuing operations (1,430.2 ) (1,034.1 )
4,133.0 Net cash flows from financing activities -
discontinued operations — — —
Net cash flows from financing activities (1,430.2 )
(1,034.1 ) 4,133.0 Effect of exchange rate
changes on cash and cash equivalents (8.8 ) (3.8 ) 1.5 Net change
in cash and cash equivalents — (0.8 ) 80.9 Add: Cash balance
included in assets held for sale at beginning of period 41.8 33.0
17.1 Less: Cash balance included in assets held for sale at end of
period — (41.8 ) (33.0 ) Cash and cash equivalents at beginning of
year 141.3 150.9 85.9
Cash and cash equivalents at end of year $ 183.1 $ 141.3
$ 150.9
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version on businesswire.com: http://www.businesswire.com/news/home/20150630005281/en/
ConAgra Foods, Inc.MediaTeresa Paulsen,
402-240-5210orAnalystsChris Klinefelter,
402-240-4154www.conagrafoods.com
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