Fiscal 2014 Third-quarter Highlights (% cited vs. year-ago
period amounts, where applicable):
- Diluted EPS from continuing
operations of $0.58 as reported vs. $0.28 a year ago. Comparable
EPS of $0.62 increased 13%.
- Consumer Foods sales declined in
line with expectations, and comparable operating profit was flat.
Challenges for a few key brands are weighing on overall segment
sales results. Strong productivity, lower marketing expense, and
other cost reductions benefited segment profits.
- Commercial Foods posted a slight
decline in sales and a decrease in operating profit, as expected.
The decrease in profit was due to previously discussed customer
transition and crop quality issues in the Lamb Weston potato
products business.
- Private Brands sales and comparable
operating profit increased substantially, although below original
expectations, as prior year results included only 27 days of
contribution from Ralcorp given the date of that
acquisition.
- The company continues to expect
full-year diluted EPS to be in the range of $2.22 - $2.25, adjusted
for items impacting comparability.
- Debt reduction and other capital
allocation goals are unchanged.
- The Ardent Mills transaction remains
on track for completion in the second quarter of calendar
2014.
ConAgra Foods, Inc., (NYSE: CAG) one of North America’s leading
food companies, today reported results for the fiscal 2014 third
quarter ended Feb. 23, 2014. Diluted EPS from continuing operations
was $0.58 as reported for the fiscal third quarter vs. $0.28 in the
year-ago period. After adjusting for items impacting comparability,
current-quarter diluted EPS of $0.62 was 13% above the comparable
$0.55 earned in the year-ago period. Items impacting comparability
are summarized toward the end of this release and reconciled for
Regulation G purposes on page 11.
Gary Rodkin, ConAgra Foods’ chief executive officer, said, “We
are on track with our EPS projections for the second half of this
fiscal year. As we have previously discussed, there are operating
challenges that have impacted segment performance and overall EPS
growth, but we are encouraged by some pockets of strength. This
quarter we posted good sales and market share performances for some
of our consumer brands, good international growth for our potato
operations, and continued improvement in the operations and
organization for our private brands. The synergies expected from
the former Ralcorp businesses are coming in slightly ahead of
plans, and we continue to make good progress on SG&A efficiency
initiatives. We reaffirm our full year fiscal 2014 EPS guidance,
and remain confident in our long-term strategy and outlook.”
Consumer Foods SegmentBranded food items
sold worldwide in retail channels.
The Consumer Foods segment posted sales of approximately $1.9
billion and operating profit of $266 million, as reported. Sales
declined, as expected, reflecting a 3% volume decrease and flat
price/mix. The impact of foreign exchange negatively impacted
segment sales by 1%.
- As previously discussed, some of the
volume decline in the fiscal third quarter reflects business that
occurred earlier than planned in the fiscal second quarter as part
of holiday promotions and changes in customer inventory levels,
thus a shift in timing.
- Brands posting sales growth for the
quarter include Bertolli, Hebrew National, Reddi-wip, Ro*Tel, Slim
Jim, Swiss Miss, Wolf and others. More brand details are in the
Q&A document accompanying this release.
- As previously discussed, Healthy
Choice, Orville Redenbacher’s and Chef Boyardee (which collectively
have annual sales in excess of $1 billion) continue to face
challenges and are posting substantial volume declines. The company
has important product changes, in-store initiatives, and
refinements to consumer communication under way, which are expected
to gradually improve the volume and profit performance of these
brands throughout fiscal 2015.
Operating profit of $266 million was 1% above year-ago amounts
as reported. After adjusting for $4 million of net expense in the
current quarter and $5 million of net expense in the year-ago
period from items impacting comparability, current quarter
operating profit of $270 million was in line with comparable
year-ago amounts. While top-line challenges weighed on
profitability, several factors favorably contributed to the
quarter’s profit performance, including manageable inflation,
supply chain productivity initiatives, lower incentive
compensation, and a strong focus on other selling, general, and
administrative (SG&A) related efficiencies. Advertising and
consumer promotion costs declined $15 million year-over-year,
reflecting a focus on efficiency.
Commercial Foods SegmentSpecialty
potato, seasonings, blends, flavors, milled grain, as well as
consumer branded and private branded packaged food items and bakery
products, sold to foodservice and commercial channels
worldwide.
Sales for the Commercial Foods segment were $1.5 billion, down
slightly compared with $1.5 billion a year-ago (rounded) as
reported. Current-quarter sales include some benefit from
acquisitions, specifically legacy Ralcorp foodservice results,
which had only 27 days of contribution in year-ago amounts because
of the date of the acquisition. Segment operating profit was $163
million, 12% below year-ago amounts as reported. After adjusting
for $17 million of net expense in the current quarter and $10
million of net expense in year-ago amounts from items impacting
comparability, comparable current-quarter operating profit of $180
million declined 8% versus $196 million a year ago.
Lamb Weston potato products’ profits were below year-ago
amounts, as expected, given that a major foodservice customer did
not renew a sizeable amount of potato business toward the end of
last fiscal year. Lamb Weston continues to expand business with
other customers; margins are lower-than-planned because of the
customer mix shift as well as weaker-than-planned potato crop
quality. Lamb Weston is achieving good growth internationally
despite the fact that some customers are facing short-term
challenges in certain Asian markets. Flour milling sales decreased,
reflecting the pass-through of lower wheat costs as well as lower
volumes, while milling profits increased over year-ago amounts due
to favorable mix and efficiencies. Overall segment profits also
reflect lower incentive compensation expense.
Private BrandsPrivate brand food items
sold in domestic markets.
Sales for the Private Brands segment were $1.1 billion in the
quarter, up more than $600 million over year-ago amounts. This
increase reflects the acquisition of the Ralcorp businesses; sales
from most of the former Ralcorp businesses are reported within this
segment. Year-ago amounts include only 27 days of contribution from
Ralcorp because of the date of the acquisition. Operating profit
for this segment was $45 million as reported and $66 million
adjusted for items impacting comparability; the increase over
prior-year amounts reflects the acquisition.
As previously discussed, profitability for the Private Brands
segment is below plan this fiscal year in part due to sales force
and supply chain transition issues, as well as pricing actions
implemented in response to competitive pressure. As part of
improving connections with customers as the company works through
those issues, and to remain competitive in the marketplace, the
company has made deliberate pricing concessions to protect volumes;
these concessions have negatively impacted margins. The margin
pressures are expected to continue throughout the remainder of the
fiscal year and have been reflected in the current EPS guidance.
The company has made organizational, pricing, and customer service
improvements that are expected to gradually improve performance
over time.
Hedging Activities – This language primarily relates to
operations other than the company’s 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 $52 million of favorable impact in the
current quarter and $27 million of unfavorable impact in the
year-ago period. The company identifies these amounts as items
impacting comparability.
Other Items
- Unallocated Corporate amounts were $50
million of expense in the current quarter and $199 million of
expense in the year-ago period, as reported.
- Current-quarter amounts include:
- $52 million of favorable hedge-related
impact.
- $55 million of unfavorable impact
related to settling interest rate derivatives and recognizing the
loss in the current quarter. This is connected to the company’s
decision to forego refinancing debt that matures in the fiscal
fourth quarter.
- $13 million of integration and
restructuring costs.
- Prior-year period amounts include:
- $27 million of unfavorable
hedge-related impact, and
- $85 million of other expenses from
items impacting comparability.
- Excluding these amounts, unallocated
Corporate expense was $34 million for the current quarter and $87
million in the year-ago period. The comparable decline largely
reflects lower incentive and pension costs.
- Equity method investment earnings were
$11 million for the current quarter and $12 million in the year-ago
period.
- Net interest expense was $95 million in
the current quarter and $71 million in the year-ago period; the
increase reflects the incremental interest related to the debt
incurred to fund acquisitions, principally Ralcorp.
Capital Items
- Dividends for the current quarter
totaled $105 million versus $101 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 $139 million,
compared with $107 million in the year-ago period. Depreciation and
amortization expense was approximately $156 million for the fiscal
third quarter; this compares with a total of $113 million in the
year-ago period.
- The company is currently preparing for
the formation of Ardent Mills, a joint venture into which the
company expects to contribute its milling operations. As discussed
in the company’s 8-K filed on Feb. 10, 2014, that transaction is
expected to close in the second quarter of calendar 2014, subject
to reaching agreement with the U.S. Department of Justice,
financing and other customary closing conditions. The company will
offer more details on the specifics of the venture in connection
with the close of the transaction.
- The company is preparing to divest a
small operation within the Private Brands segment; historical
amounts have been adjusted slightly to reflect the reclassification
of this business as discontinued operations.
Outlook
The company continues to expect fiscal 2014 diluted EPS,
adjusted for items impacting comparability, to be in the range of
$2.22-$2.25. The company continues to expect operating cash flow of
approximately $1.4 billion in fiscal 2014, and to repay
approximately $550 million of debt before the end of the fiscal
year. After repaying approximately $550 million of debt in fiscal
2014, this will amount to slightly more than $950 million of
cumulative net debt repayment since the acquisition of Ralcorp.
Consistent with past practice, the company will communicate
details on expectations for fiscal 2015 EPS performance with the
fiscal 2014 year-end release; as previously disclosed, the company
expects comparable EPS growth in fiscal 2015 at a rate lower than
the original double-digit target.
The company’s long-term EPS growth rates, and multi-year synergy
goals related to the Ralcorp acquisition, are unchanged from prior
estimates. The company expects at least 10% annual comparable EPS
growth in the fiscal 2016-2017 period, largely due to the benefit
of Ralcorp-related synergies; the company continues to expect the
Ralcorp transaction to generate $300 million of annual pretax
cost-related synergies by the end of fiscal 2017.
Major Items Impacting Third-quarter Fiscal 2014 EPS
Comparability
Included in the $0.58 diluted EPS from continuing operations for
the third quarter of fiscal 2014 (EPS amounts rounded and after
tax):
- Approximately $0.08 per diluted share
of net benefit, or $52 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 $0.08 per diluted share
of net expense, or $55 million pretax, related to the settlement of
interest rate derivative hedges that were initiated in prior years
in anticipation of refinancing debt that matures in the fourth
quarter of fiscal 2014. Based on an assessment of the company’s
debt repayment alternatives, the company has decided to forego
refinancing that debt, and has therefore recognized the derivative
loss in earnings immediately.
- Approximately $0.06 per diluted share
of net expense, or $38 million pretax, resulting from restructuring
and integration (including acquisition-related restructuring). $21
million of this is classified within the results of the Private
Brands segment (mostly SG&A), $13 million is classified as
unallocated Corporate expense (SG&A), and $4 million is
classified within the Consumer Foods segment (mostly
SG&A).
- Approximately $0.04 per diluted share
of net benefit due to resolving U.S. and foreign tax matters
related to transactions occurring in prior years.
- Approximately $0.02 per diluted share
of net expense, or $17 million pretax, resulting from impairment of
assets in the Commercial Foods segment (SG&A).
Included in the $0.28 diluted EPS from continuing operations for
the third quarter of fiscal 2013 (EPS amounts rounded and after
tax):
- Approximately $0.16 per diluted share
of net expense, or $103 million pretax, resulting from acquisition,
acquisition-related restructuring, integration, and transaction
costs. $81 million is within unallocated Corporate expense (all of
which is in SG&A), $17 million is within the Private Brands
results (all cost of goods sold, “COGS”) and $5 million is within
Consumer Foods ($2 million in COGS, $3 million in SG&A).
- Approximately $0.04 per diluted share
of net expense, or $27 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 expense related to unusual tax matters resulting from
acquisition costs.
- Approximately $0.02 per diluted share
of net expense, or $10 million pretax, related to impairment
charges for assets within the Commercial Foods segment.
- Approximately $0.01 per diluted share
of net expense, or $5 million pretax, related to historical legal
and environmental matters, classified within unallocated Corporate
expense.
- Note: There is an impact of
approximately $0.01 per diluted share impact from rounding, as well
as results from businesses that have been subsequently reclassified
as discontinued operations. Due to the anticipated sale of a small
business within the Private Brands segment, and the divestiture of
another small operation completed earlier in fiscal 2014, small
amounts historically included in diluted EPS from continuing
operations, adjusted for items impacting comparability, and thus
part of the original basis for comparison, have been reclassified
as 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 1-800-500-3170 and
1-719-457-2602, 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 9669257. 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 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; the
timing to consummate the potential joint venture combining the
flour milling businesses of ConAgra Foods, Cargill, Incorporated,
and CHS Inc.; ConAgra Foods’ ability to realize the synergies and
benefits contemplated by the potential joint venture; 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.
Regulation G Disclosure Below is
a reconciliation of Q3 FY14 and Q3 FY13 diluted earnings per share
from continuing operations, Consumer Foods segment operating
profit, Commercial Foods segment operating profit, and Private
Brands segment operating profit. Amounts may be impacted by
rounding.
Q3 FY14 & Q3 FY13 Diluted EPS from
Continuing Operations Q3 FY14 Q3 FY13 %
change Diluted EPS from continuing operations $
0.58 $ 0.28 107% Items impacting
comparability: Net expense related to settlement of interest rate
derivatives 0.08 - Restructuring and integration costs (including
acquisition-related restructuring) 0.06 0.02 Transaction costs -
0.15 Net expense related to impairment costs in the Commercial
Foods segment 0.02 0.02 Net expense (benefit) related to
unallocated mark-to-market impact of derivatives (0.08 ) 0.04 Net
expense (benefit) related to the resolution of certain tax matters
(0.04 ) 0.03 Net expense related to historical legal, insurance,
and environmental matters - 0.01 Note: Amounts impacted by
rounding. Minor amounts in FY13 EPS from continuing operations have
been subsequently reclassed to discontinued operations due to
divestitures. - -
Diluted EPS
adjusted for items impacting comparability $ 0.62
$ 0.55 13% Consumer
Foods Segment Operating Profit Reconciliation (Dollars
in millions)
Q3 FY14 Q3 FY13 % change
Consumer Foods Segment Operating Profit $ 266
$ 265 1% Restructuring, integration, and
transactions costs (including acquisition-related restructuring)
4 5
Consumer Foods Segment
Adjusted Operating Profit $ 270 $
270 0% Commercial Foods Segment
Operating Profit Reconciliation (Dollars in millions)
Q3 FY14 Q3 FY13 % change Commercial Foods
Segment Operating Profit $ 163 $
186 -12% Net expense related to impairment costs
17 10
Commercial Foods
Segment Adjusted Operating Profit $ 180
$ 196 -8% Private Brands
Segment Operating Profit Reconciliation (Dollars in
millions)
Q3 FY14 Private Brands Segment Operating
Profit $ 45 Restructuring, integration, and
transactions costs (including acquisition-related restructuring)
21
Private Brands Segment Adjusted Operating
Profit $ 66 ConAgra Foods,
Inc. Segment Operating Results (in millions) (unaudited)
THIRD QUARTER 13 Weeks Ended 13 Weeks Ended
February 23, 2014
February 24, 2013 Percent Change
SALES
Consumer Foods $ 1,870.4 $ 1,939.0 (3.5)% Commercial Foods 1,456.0
1,466.9 (0.7)% Private Brands 1,063.3 427.9
148.5% Total 4,389.7 3,833.8
14.5%
OPERATING
PROFIT
Consumer Foods $ 266.3 $ 264.6 0.6% Commercial Foods 163.5 186.2
(12.2)% Private Brands 44.7 7.0 538.6%
Total operating profit for segments 474.5 457.8 3.6%
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 (49.5 ) (198.6 ) (75.1)% Interest
expense, net (95.0 ) (70.6 ) 34.6% Income from
continuing operations before income taxes and equity method
investment earnings $ 330.0 $ 188.6 75.0%
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.
ConAgra Foods, Inc. Segment Operating Results (in
millions) (unaudited) THIRD QUARTER 39 Weeks
Ended 39 Weeks Ended
February 23, 2014
February 24, 2013 Percent Change
SALES
Consumer Foods $ 5,535.9 $ 5,629.3 (1.7)% Commercial Foods 4,563.9
4,455.8 2.4% Private Brands 3,167.3 778.2
307.0% Total 13,267.1 10,863.3
22.1%
OPERATING
PROFIT
Consumer Foods $ 722.3 $ 730.0 (1.1)% Commercial Foods 493.8 541.9
(8.9)% Private Brands 198.1 20.9 847.8%
Total operating profit for segments 1,414.2 1,292.8 9.4%
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 (278.6 ) (247.7 ) 12.5% Interest
expense, net (286.0 ) (173.3 ) 65.0% Income from
continuing operations before income taxes and equity method
investment earnings $ 849.6 $ 871.8 (2.5)%
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.
ConAgra Foods, Inc. Consolidated Statements of
Earnings (in millions, except per share amounts)
(unaudited)
THIRD QUARTER 13 Weeks Ended 13 Weeks Ended
February 23, 2014
February 24, 2013
Percent Change
Net sales $ 4,389.7
$
3,833.8
14.5% Costs and expenses: Cost of goods sold 3,414.5 2,962.9 15.2%
Selling, general and administrative expenses 550.2 611.7 (10.1)%
Interest expense, net 95.0 70.6 34.6%
Income from continuing operations before
income taxes and equity method investment earnings
330.0 188.6 75.0% Income tax expense 90.3 77.7 16.2% Equity
method investment earnings 11.2 12.0
(6.7)% Income from continuing operations 250.9 122.9 104.1%
Income (loss) from discontinued operations, net of tax (14.0
) 0.5 N/A Net income $ 236.9
$
123.4
92.0% Less: Net income attributable to noncontrolling
interests 2.6 3.4 (23.5)% Net income
attributable to ConAgra Foods, Inc. $ 234.3
$
120.0
95.2% Earnings per share – basic Income from
continuing operations $ 0.59
$
0.29
103.4% Loss from discontinued operations (0.03 ) -
100.0% Net income attributable to ConAgra Foods, Inc. $ 0.56
$
0.29
93.1% Weighted average shares outstanding
421.2 410.7 2.6% Earnings per share –
diluted Income from continuing operations $ 0.58
$
0.28
107.1% Income (loss) from discontinued operations (0.03 )
0.01 N/A Net income attributable to ConAgra Foods,
Inc. $ 0.55
$
0.29
89.7% Weighted average share and share equivalents
outstanding
427.3 417.8 2.3%
ConAgra Foods, Inc. Consolidated Statements of Earnings (in
millions, except per share amounts)
(unaudited)
THIRD QUARTER 39 Weeks Ended 39 Weeks Ended
February 23, 2014
February 24, 2013
Percent Change
Net sales $ 13,267.1
$
10,863.3
22.1% Costs and expenses: Cost of goods sold 10,450.1 8,262.2 26.5%
Selling, general and administrative expenses 1,681.4 1,556.0 8.1%
Interest expense, net 286.0 173.3 65.0%
Income from continuing operations before
income taxes and equity method investment earnings
849.6 871.8 (2.5)% Income tax expense 240.9 311.2 (22.6)%
Equity method investment earnings 20.6 32.4
(36.4)% Income from continuing operations 629.3
593.0
6.1%
Income (loss) from discontinued
operations, net of tax
7.2
(0.9
)
N/A Net income $ 636.5
$
592.1
7.5% Less: Net income attributable to noncontrolling
interests 9.2 10.4 (11.5)%
Net income attributable to ConAgra Foods,
Inc.
$ 627.3
$
581.7
7.8% Earnings per share – basic Income from
continuing operations $ 1.47
$
1.42
3.5% Income from discontinued operations 0.02
- 100.0% Net income attributable to ConAgra Foods, Inc. $
1.49
$
1.42
4.9% Weighted average shares outstanding 421.1
408.4 3.1% Earnings per share – diluted
Income from continuing operations $ 1.45
$
1.40
3.6% Income from discontinued operations 0.01
- 100.0% Net income attributable to ConAgra Foods, Inc. $
1.46
$
1.40
4.3% Weighted average share and share equivalents
outstanding
427.4 414.5 3.1%
ConAgra Foods, Inc. Consolidated Balance Sheets (in millions)
(unaudited)
February 23, 2014
May 26, 2013
ASSETS Current assets Cash and cash equivalents $ 239.2 $
183.9
Receivables, less allowance for doubtful
accounts of $7.4 and $7.6
1,275.6 1,279.4 Inventories 2,498.7 2,340.9 Prepaid expenses and
other current assets 451.1 510.8 Current assets held for sale
56.0 64.8 Total current assets
4,520.6
4,379.8
Property, plant and equipment, net 3,819.7 3,757.6 Goodwill
8,427.2 8,426.7 Brands, trademarks and other intangibles, net
3,308.2 3,403.6 Other assets 270.7 293.5 Noncurrent assets held for
sale 86.9 144.1 $ 20,433.3 $
20,405.3
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Notes payable $ 145.6 $ 185.0 Current installments of
long-term debt 585.1 517.9 Accounts payable 1,486.0 1,498.1 Accrued
payroll 167.4 287.0 Other accrued liabilities 850.1 908.5 Current
liabilities held for sale 6.3 4.8 Total
current liabilities 3,240.5 3,401.3 Senior long-term debt,
excluding current installments 8,564.8 8,691.0 Subordinated debt
195.9 195.9 Other noncurrent liabilities 2,714.1 2,754.0 Noncurrent
liabilities held for sale 0.2 0.1 Total stockholders' equity
5,717.8 5,363.0 $ 20,433.3 $ 20,405.3
ConAgra Foods, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows (in millions)
(unaudited)
Thirty-nine weeks ended
February 23, 2014
February 24, 2013
Cash flows from operating activities: Net income $ 636.5 $ 592.1
Income (loss) from discontinued operations 7.2
(0.9 ) Income from continuing operations 629.3 593.0 Adjustments to
reconcile income from continuing operations to net cash flows from
operating activities: Depreciation and amortization 447.4 298.1
Asset impairment charges 34.5 19.8 Earnings of affiliates in excess
of distributions (2.9 ) (11.8 ) Share-based payments expense 45.9
52.8 Contributions to pension plans (13.7 ) (14.7 ) Pension expense
(6.7 ) 16.5 Terminated forward starting swap payable 54.9 — Other
items 1.4 (37.7 ) Change in operating assets and liabilities
excluding effects of business acquisitions and dispositions:
Accounts receivable 14.2 (12.8 ) Inventory (157.8 ) (234.8 )
Deferred income taxes and income taxes payable, net 47.1 68.1
Prepaid expenses and other current assets (22.4 ) (32.7 ) Accounts
payable (10.3 ) 43.8 Accrued payroll (119.5 ) 88.0 Other accrued
liabilities (4.0 ) (54.8 ) Net cash flows from
operating activities — continuing operations 937.4 780.8 Net cash
flows from operating activities — discontinued operations
4.9 0.9 Net cash flows from operating
activities 942.3 781.7 Cash flows from
investing activities: Additions to property, plant and equipment
(471.0 ) (286.0 ) Sale of property, plant and equipment 15.0 7.6
Purchase of businesses, net of cash acquired (40.9 ) (5,017.7 )
Investment in equity method investee — (1.8 )
Net cash flows from investing activities — continuing operations
(496.9 ) (5,297.9 ) Net cash flows from investing activities —
discontinued operations 53.1 (3.1 ) Net cash
flows from investing activities (443.8 ) (5,301.0 )
Cash flows from financing activities: Net short-term borrowings
(39.3 ) (38.9 ) Issuance of long-term debt — 6,217.7 Debt issuance
costs — (56.6 ) Repayment of long-term debt (71.2 ) (911.8 )
Issuance of ConAgra Foods, Inc. common shares — 269.3 Repurchase of
ConAgra Foods, Inc. common shares (100.0 ) (245.0 ) Cash dividends
paid (315.5 ) (296.6 ) Exercise of stock options and issuance of
other stock awards 87.4 197.2 Other items —
2.2 Net cash flows from financing activities (438.6 )
5,137.5 Effect of exchange rate changes on cash and
cash equivalents (4.6 ) 2.6 Net change in cash and cash equivalents
55.3 620.8 Cash and cash equivalents at beginning of period
183.9 103.0 Cash and cash equivalents at end
of period $ 239.2 $ 723.8
ConAgra Foods, Inc.MediaTeresa Paulsen,
402-240-5210Vice President, Communication & External
RelationsorAnalystsChris Klinefelter, 402-240-4154Vice
President, Investor Relationswww.conagrafoods.com
ConAgra Brands (NYSE:CAG)
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