UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended FebruaryAugust 27, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-7275
--------------------------------------------------------------- -------------------------------------------------------------------------------
CONAGRA FOODS, INC.
--------------------------------------------------------------- -------------------------------------------------------------------------------
(Exact name of registrant, as specified in charter)
Delaware 47-0248710
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One ConAgra Drive, Omaha, Nebraska 68102-5001
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(402) 595-4000
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NACONAGRA, INC.
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes /x/[X] No / /[ ]
Number of shares outstanding of issuer's common stock, as of March 26,September 24, 2000
was 492,238,619.533,378,100.
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
CONAGRA FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions except per share amounts)
(unaudited)
- -------------------------------------------------------------------------------
THIRTEEN WEEKS ENDED
THIRTY-NINE WEEKS ENDED
FEBRUARYAUGUST 27, FEBRUARY 28, FEBRUARY 27, FEBRUARY 28,AUGUST 29,
2000 1999
2000 1999
----------- ----------- ----------- -------------------- ---------
Net sales $ 5,797.86,801.6 $ 5,693.3 $ 18,994.3 $ 18,581.16,593.6
Costs and expenses
Cost of goods sold * 4,780.2 4,686.2 15,859.0 15,550.6(1) 5,754.7 5,617.4
Selling, general and administrative and general expenses * 678.3 640.4 2,142.4 1,962.6(1) 735.1 732.3
Interest expense 80.3 88.0 233.9 255.476.1 76.2
Restructuring/Impairment charges 27.7 - 61.4 -
----------- ----------- ----------- -----------
5,566.5 5,414.6 18,296.7 17,768.6
----------- -----------3.5
----------- -----------
Income before income taxes 231.3 278.7 697.6 812.5235.7 164.2
Income taxes 87.9 107.3 265.1 312.889.6 62.4
----------- ----------- ----------- -------------------------
Net income $ 143.4146.1 $ 171.4 $ 432.5 $ 499.7
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------101.8
=========== ===========
Income per share - basic $ .30.31 $ .36 $ .91 $ 1.06
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------.22
=========== ===========
Income per share - diluted $ .30 $ .36 $ .90 $ 1.05
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
- --------------------------------------------------------------------------------.21
=========== ===========
* Other restructuring-related items for- ------------------------------------------------------------------------------
(1)For the thirteen weeks and thirty-nine
weeks ended February 27, 2000 include:August 29, 1999, other restructuring-related
items include accelerated depreciation of $19.6$31.0 million and $84.4 million, respectively, included in cost of goods sold;
$18.8 million and $30.3 million, respectively, of accelerated depreciation
included in selling, administrative and general expenses; inventory
markdowns of $7.7$8.6 million and $41.4 million, respectively, included in cost of goods sold, and restructuring plan implementation costs$4.0 million of
$10.8 million
and $18.6 million, respectively,accelerated depreciation included in selling, general and administrative
and
general expenses. For the thirteen weeks and thirty-nine weeks ended
February 27, 2000, total restructuring and restructuring-related charges
were $84.6 million and $236.1 million, respectively.
See notes to the condensed consolidated financial statements.
2
CONAGRA FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
THIRTEEN WEEKS ENDED
THIRTY-NINE WEEKS ENDED
FEBRUARYAUGUST 27, FEBRUARY 28, FEBRUARY 27, FEBRUARY 28,AUGUST 29,
2000 1999
2000 1999--------- -----------
----------- ----------- -----------
Net income $ 143.4146.1 $ 171.4 $ 432.5 $ 499.7101.8
Other comprehensive income/income (loss):
Currency translation adjustment (9.2) (4.2) (13.6) 1.0
----------- -----------8.6 (6.5)
----------- -----------
Comprehensive income $ 134.2154.7 $ 167.2 $ 418.9 $ 500.7
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------95.3
=========== ===========
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements.
3
CONAGRA FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions except per share amount)amounts)
(unaudited)
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
ASSETS FEBRUARYAUGUST 27, MAY 30, FEBRUARY 28, AUGUST 29,
2000 19992000 1999
---------- ----------- ---------------------
Current assets
Cash and cash equivalents $ 17.482.0 $ 62.8157.6 $ 22.910.7
Receivables, less allowance for doubtful accounts
of $82.2, $60.0$73.2, $62.8 and $85.1 1,973.9 1,637.5 2,447.8$78.7 2,638.3 1,606.8 2,615.5
Inventories 4,236.7 3,639.9 4,008.54,452.5 3,787.3 4,012.1
Prepaid expenses 307.3 315.9 320.7
----------478.8 414.8 334.8
----------- --------------------- -----------
Total current assets 6,535.3 5,656.1 6,799.9
----------7,651.6 5,966.5 6,973.1
----------- --------------------- -----------
Property, plant and equipment 6,766.1 6,213.8 6,227.66,828.5 6,441.8 6,389.1
Less accumulated depreciation (3,013.3) (2,599.6) (2,579.9)
----------(2,950.2) (2,857.8) (2,783.7)
----------- --------------------- -----------
Property, plant and equipment, net 3,752.8 3,614.2 3,647.7
----------3,878.3 3,584.0 3,605.4
----------- --------------------- -----------
Brands, trademarks and goodwill net 2,404.2 2,408.7 2,627.34,607.0 2,366.0 2,396.0
Other assets 423.0 467.1 462.0
----------412.9 379.3 404.1
----------- --------------------- -----------
$ 13,115.316,549.8 $ 12,146.112,295.8 $ 13,536.9
---------- ----------- ----------
---------- ----------- ----------13,378.6
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 2,406.33,536.6 $ 837.91,255.5 $ 2,653.73,415.7
Current installments of long-term debt 19.0 21.1 19.220.6 20.6 19.9
Accounts payable 2,130.3 2,036.5 2,225.42,066.5 2,044.6 1,645.1
Advances on sales 156.2 1,191.7 180.7148.7 888.7 125.3
Other accrued liabilities 1,354.9 1,299.2 1,376.9
----------1,445.8 1,279.8 1,348.0
----------- --------------------- -----------
Total current liabilities 6,066.7 5,386.4 6,455.9
----------7,218.2 5,489.2 6,554.0
----------- --------------------- -----------
Senior long-term debt, excluding current installments 1,871.7 1,793.1 1,888.03,399.3 1,816.8 1,810.1
Other noncurrent liabilities 809.5 782.8 787.8770.3 750.7 790.9
Subordinated debt 750.0 750.0 750.0
Preferred securities of subsidiary company 525.0 525.0 525.0
Commitments and contingencies - - -
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000
shares; issued 524,129,789, 519,648,673565,202,119, 524,137,617 and 519,621,865 2,620.6 2,598.2 2,598.1523,852,872 2,826.0 2,620.7 2,619.2
Additional paid-in capital 38.3 219.4 298.9729.1 147.5 175.0
Retained earnings 1,537.2 1,369.8 1,595.21,469.7 1,420.7 1,397.2
Foreign currency translation adjustment (79.5) (65.9) (66.6)(94.5) (103.1) (72.4)
Less treasury stock, at cost, common
shares 31,883,927, 31,475,67832,066,747, 31,925,505 and 30,991,229 (759.3) (749.9) (735.5)
----------31,645,189 (764.1) (760.2) (754.3)
----------- ----------
3,357.3 3,371.6 3,690.1----------- -----------
4,166.2 3,325.6 3,364.7
Less unearned restricted stock and value of 15,602,138,
17,184,83114,158,601,
15,246,068 and 18,089,36716,379,449 common shares held in
Employee Equity Fund (264.9) (462.8) (559.9)
----------(279.2) (361.5) (416.1)
----------- --------------------- -----------
Total common stockholders' equity 3,092.4 2,908.8 3,130.2
---------- ----------- ----------3,887.0 2,964.1 2,948.6
$ 13,115.316,549.8 $ 12,146.112,295.8 $ 13,536.9
---------- ----------- ----------
---------- ----------- ----------13,378.6
=========== =========== ===========
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements.
4
CONAGRA FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
- --------------------------------------------------------------------------------------------------------------------------------------------------------------
THIRTY-NINETHIRTEEN WEEKS ENDED
FEBRUARYAUGUST 27, FEBRUARY 28,AUGUST 29,
2000 1999
--------- ------------------- ----------
Cash flows from operating activities:
Net income $ 432.5146.1 $ 499.7101.8
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and other amortization 339.7 321.1117.1 114.4
Goodwill amortization 47.8 51.716.3 16.1
Restructuring/impairment chargesImpairment and other restructuring-related
charges (includes accelerated depreciation) 236.1 - 47.1
Other noncash items (includes nonpension postretirement benefits) 60.6 66.132.0 32.6
Change in assets and liabilities before effects
fromof business acquisitions (2,052.9) (1,804.1)(2,177.5) (2,747.3)
--------- -------------------
Net cash flows from operating activities (936.2) (865.5)(1,866.0) (2,435.3)
--------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment (333.8) (439.9)
Payment(112.4) (111.6)
Payments for business acquisitions (374.8) (401.4)(908.4) -
Sale of businesses and property, plant and equipment 46.0 13.350.1 6.1
Notes receivable and other items (31.6) 4.4
---------(15.0) 8.5
---------- ---------
Net cash flows from investing activities (694.2) (823.6)(985.7) (97.0)
--------- ---------
Cash flows from financing activities:
Net short-term borrowings 1,553.5 1,793.12,402.1 2,550.9
Proceeds from issuance of long-term debt 71.4 595.21,197.8 17.2
Repayment of long-term debt (16.8) (495.9)(.9) (5.9)
Repayment of acquired company's debt (729.3) -
Cash dividends paid (278.6) (240.8)
Cash distributions of pooled companies - (1.2)
Employee Equity Fund stock transactions - 7.0(100.4) (87.9)
Other items 255.5 (53.8)6.8 5.9
--------- ---------
Net cash flows from financing activities 1,585.0 1,603.62,776.1 2,480.2
--------- ---------
Net change in cash and cash equivalents (45.4) (85.5)(75.6) (52.1)
Cash and cash equivalents at beginning of period 157.6 62.8 108.4
--------- ---------
Cash and cash equivalents at end of period $ 17.482.0 $ 22.9
--------- ---------
--------- ---------10.7
========= =========
- -------------------------------------------------------------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements.
5
CONAGRA FOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTY-NINETHIRTEEN WEEKS ENDED FEBRUARYAUGUST 27, 2000
(COLUMNAR DOLLARS IN MILLIONS)
1. ACCOUNTING POLICIES
The unaudited interim financial information included herein reflects
normal recurring adjustments which are, in the opinion of management,
necessary for a fair presentation of the results of operations,
financial position, and cash flows for the periods presented. These
consolidated condensed financial statements should be read in
conjunction with the consolidated financial statements and related
notes included in the Company'sConAgra Foods, Inc. (the "Company") fiscal 19992000
annual report on Form 10-K.
The results of operations for any interim period are not necessarily
indicative of the results to be expected for other interim periods or
the full year.
Certain prior year amounts have been reclassified in order to conform
towith current year classifications.
In December 1999, SEC Staff Accounting Bulletin (SAB) No. 101, REVENUE
RECOGNITION IN FINANCIAL STATEMENTS, was issued. This SAB will become
effective for the Company in fiscal 2001. The Company has not
quantified the impact, if any, resulting from the adoption of this SAB.
In July 2000, the FASB's Emerging Issues Task Force (EITF) reached a
consensus on EITF Issue No. 00-14, ACCOUNTING FOR COUPONS, REBATES, AND
DISCOUNTS. This EITF Issue will become effective for the Company in
fiscal 2001. The Company has not quantified the impact, if any,
resulting from the adoption of this EITF Issue.
2. ACQUISITIONS
On August 24, 2000, the Company acquired all of the outstanding shares
of common stock and stock options of International Home Foods ("IHF")
in a transaction accounted for as a purchase business combination. As
part of the acquisition, the Company issued approximately 41 million
shares of Company common stock and assumed options to acquire
approximately 5 million post-acquisition shares of Company common stock
with an aggregate fair value of approximately $850 million. In
addition, the Company paid approximately $875 million in cash to the
IHF shareholders and assumed approximately $1.1 billion of debt. IHF's
results of operations did not impact the Company's results during the
first quarter of fiscal 2001 as the acquisition was completed at the
conclusion of the quarter.
The Company preliminarily allocated the excess of the purchase price
over the net assets acquired to goodwill. The purchase price allocation
will be completed upon finalization of asset and liability valuations.
In connection with this acquisition, the Company expects to consolidate
certain plants and will include the associated costs as part of the
purchase price allocation. Goodwill arising from the transaction will
be amortized on a straight-line basis over a period of 40 years.
On September 15, 2000, the Company issued $600 million of 7.5% senior
notes, due September 15, 2005, $750 million of 7.875% senior notes, due
September 15, 2010 and $300 million of 8.25% senior notes, due
September 15, 2030. The net proceeds were used to reduce outstanding
borrowings under short-term credit facilities with maturities less than
six months and bearing interest at a rate between 6.7% and 6.8% per
annum. In addition, the Company assumed $385
6
CONAGRA FOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 2000
(COLUMNAR DOLLARS IN MILLIONS)
million of IHF 10.375% senior secured notes due in 2006 and redeemed
the notes on October 6, 2000.
The Company's unaudited pro forma results of operations for the
thirteen weeks ended August 27, 2000 and August 29, 1999, assuming the
acquisition of IHF occurred as of the beginning of the periods
presented are as follows:
THIRTEEN WEEKS ENDED
AUGUST 27, AUGUST 29,
2000 1999
---------- ----------
Net sales $ 7,239.7 $ 7,022.2
Net income 156.9 139.1
Income per share - diluted .30 .27
3. OPERATION OVERDRIVE
During the fourth quarter of fiscal 1999,2000, the Company approvedcompleted a 36-month
restructuring plan in connection with its previously announced
initiative, "Operation Overdrive." The restructuring plan iswas aimed at
eliminating overcapacity, streamlining operations and improving future
profitability through margin improvement and expense reductions. The
total pre-tax charge of the plan is presently estimated at $880totaled $1,062.2 million with a pre-tax charge recorded
to date of $676.9 million. In accordance with generally accepted accounting
principles, the remaining cost will be recognized when employees are
notified of separation or when appropriate restructuring plan costs result
in accruable expenses.
Of the $676.9$621.4 million
recognized to date,and $440.8 million ($337.9 million
net of tax) was recognized in fiscal 2000 and 1999, respectively.
Included in the Company's first quarter of fiscal 2000 are
restructuring plan charges of $47.1 million, as follows:
PACKAGED REFRIGERATED AGRICULTURAL
FOODS FOODS PRODUCTS TOTAL
----- ----- -------- -----
Accelerated depreciation $ 27.4 $ 7.6 $ - $ 35.0
Inventory markdowns - .1 8.5 8.6
Restructuring/Impairment 1.4 .4 1.7 3.5
-------- -------- -------- --------
Total $ 28.8 $ 8.1 $ 10.2 $ 47.1
======== ======== ======== ========
The $47.1 million charge ($29.2 million net of tax) was recognized in the
first quarter of fiscal 2000 $104.4consisted of the following: $31.0 million
($64.7 million net of tax) was recognized in the second quarter of fiscal
2000, and the remaining $84.6 million ($52.5 million net of tax) was
recognized in the third quarter of fiscal 2000. Fiscal 2000 third quarter
charges were as follows:
Packaged Refrigerated Agricultural
Foods Foods Products Total
------- ------- ------ -------
Accelerated depreciation $ 37.1 $ 1.3 $ - $ 38.4
Inventory markdowns .4 3.2 4.1 7.7
Restructuring plan implementation costs 4.0 5.1 1.7 10.8
Restructuring/Impairment charges 10.5 2.1 15.1 27.7
------- ------- ------ -------
Total $ 52.0 $ 11.7 $ 20.9 $ 84.6
------- ------- ------ -------
------- ------- ------ -------
6
For the thirty-nine weeks ended February 27, 2000, the Company has
recognized $236.1 million ($146.4 million net of tax) for
restructuring/impairment charges and other restructuring-related charges as
follows:
Packaged Refrigerated Agricultural
Foods Foods Products Total
------- ------- ------ -------
Accelerated depreciation $ 104.5 $ 10.2 $ - $ 114.7
Inventory markdowns 15.0 3.2 23.2 41.4
Restructuring plan implementation costs 6.7 9.5 2.4 18.6
Restructuring/Impairment charges 23.1 14.8 23.5 61.4
------- ------- ------ -------
Total $ 149.3 $ 37.7 $ 49.1 $ 236.1
------- ------- ------ -------
------- ------- ------ -------
The third quarter and year-to date charges are reflected in the Company's
Consolidated Statements of Earnings as follows: accelerated depreciation of
$19.6 million and $84.4 million, respectively, is
included in cost of goods sold;sold resulting from accelerated depreciation
of $18.8on certain assets; $8.6 million and $30.3 million,
respectively, is included in selling, administrative and general expenses;
inventory markdowns are included in cost of goods sold; plan implementation
costs (primarily third-party consulting costs) aresold for
inventory markdowns; $4.0 million included in selling, general and
administrative expenses resulting from accelerated depreciation on
certain assets; and general expenses; and$3.5 million included in restructuring/impairment
charges are reflected as suchresulting primarily from contractual termination and result from asset impairments, employee
related
costs and contractual termination costs.
Certain assets to be disposed of that arewere not immediately removed from
operations arewere depreciated on an accelerated basis over their
remaining useful lives. Inventory markdowns representrepresented losses onto write
down the carrying value of non-strategic inventory resulting from the
closure of facilities and discontinuation of certain products.
In association with the restructuring plan, the Company has, to date,
closed a totalApproximately 8,450 employees received notification of 13 production facilities, 70 non-production locations
(e.g., storage, distribution, administrative, etc.) and sold nine non-core
businesses. The historical operating results and gains/losses associated
with sold businesses or facilities were not material.
Approximately 7,000 employee separations will occurtheir
termination as a result of the restructuring plan, primarily in
manufacturing and operating facilities. This total represents an increase of approximately 300 individuals from the
original estimate, and results from updated estimates associated with
existing restructuring initiatives. In addition, other exit
7
CONAGRA FOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 2000
(COLUMNAR DOLLARS IN MILLIONS)
costs (consisting of lease termination and other contractual
termination costs) will occuroccurred as a result of the restructuring plan.
Such activity recognized
to date is as follows:
Severance Other Exit
Amount Headcount Costs
--------SEVERANCE OTHER EXIT
AMOUNT HEADCOUNT COSTS
------ --------- ---------------
Fiscal 1999 activity:
Charges to income $ 45.1 3,160 $ 7.3
Utilized (6.1) (260) -
-------- --------- --------------- --------
Balance, May 30, 1999 39.0 2,900 7.3
Fiscal 2000 activity, to date:activity:
Charges to income 23.4 2,340 15.257.8 5,290 50.9
Utilized (33.7) (4,130) (12.4)(44.3) (4,990) (21.5)
-------- --------- --------------- --------
Balance, FebruaryMay 28, 2000 52.5 3,200 36.7
Fiscal 2001 activity:
Utilized (10.8) (1,300) (13.6)
-------- ----- --------
Balance, August 27, 2000 $ 28.7 1,11041.7 1,900 $ 10.1
-------- --------- ----------
-------- --------- ----------23.1
======== ===== ========
7
3.4. INCOME PER SHARE
The following table reconciles the income and average share amounts
used to compute both basic and diluted income per share (amounts in millions):share:
THIRTEEN WEEKS ENDED
THIRTY-NINE WEEKS ENDED
------------------------- -------------------------
FEB.AUGUST 27, FEB. 28, FEB. 27, FEB. 28,AUGUST 29,
2000 1999
2000 1999
----------- ----------- ----------- --------------------- ----------
NET INCOME $ 143.4146.1 $ 171.4 $ 432.5 $ 499.7
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------101.8
=========== ===========
INCOME PER SHARE - BASIC
Weighted average shares outstanding - basic 476.5 470.8 475.3 469.8
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------478.7 473.1
=========== ===========
INCOME PER SHARE - DILUTED
Weighted average shares outstanding - basic 476.5 470.8 475.3 469.8478.7 473.1
Add shares contingently issuable upon
exercise of stock options 2.3 7.8 3.4 7.2
----------- -----------1.9 4.6
----------- -----------
Weighted average shares outstanding - diluted 478.8 478.6 478.7 477.0
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------480.6 477.7
=========== ===========
4.5. INVENTORIES
The major classes of inventories are as follows:
FEB.AUGUST 27, MAY 30, FEB. 28, AUGUST 29,
2000 19992000 1999
------------ ------------ ------------
Hedged commodities $ 1,290.71,133.8 $ 1,306.21,305.7 $ 1,308.51,108.0
Food products and livestock 1,382.4 1,144.7 1,321.51,714.5 1,350.7 1,345.9
Agricultural chemicals, fertilizer and feed 788.5 597.4 682.11,041.5 671.9 922.9
Other, principally ingredients and supplies 775.1 591.6 696.4562.7 459.0 635.3
------------ ------------ ------------
$ 4,236.74,452.5 $ 3,639.93,787.3 $ 4,008.5
------------ ------------ ------------
------------ ------------ ------------4,012.1
============ ============ ============
5.8
CONAGRA FOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 2000
(COLUMNAR DOLLARS IN MILLIONS)
6. CONTINGENCIES
In fiscal 1991, ConAgrathe Company acquired Beatrice Company ("Beatrice"). As
a result of the acquisition and the significant pre-acquisition
contingencies of the Beatrice businesses and its former subsidiaries,
the consolidated post-acquisition financial statements of ConAgrathe Company
reflect significant liabilities associated with the estimated
resolution of these contingencies. These include various litigation and
environmental proceedings related to businesses divested by Beatrice
prior to its acquisition by ConAgra.the Company. The environmental proceedings
include litigation and administrative proceedings involving Beatrice's
status as a potentially responsible party at 42 Superfund, proposed
Superfund or state-equivalent sites. Beatrice has paid or is in the
process of paying its liability share at 3734 of these sites. Substantial
reserves for these matters have been established based on the Company's
best estimate of its undiscounted remediation liabilities, which
estimates include evaluation of investigatory studies, extent of
required cleanup, the known volumetric contribution of Beatrice and
other potentially responsible parties and its experience in remediating
sites.
8
ConAgraThe Company is a party to a number of other lawsuits and claims arising
out of the operation of its businesses. After taking into account
liabilities recorded for all of the foregoing matters, management
believes the ultimate resolution of such matters should not have a
material adverse effect on ConAgra'sthe Company's financial condition, results
of operations or liquidity.
6. ACQUISITIONS
On January 3, 2000, ConAgra acquired Seaboard Farms, the poultry division
of Seaboard Corporation, for approximately $360 million. Seaboard Farms
produces and markets value-added poultry products primarily to foodservice
customers and has annual sales of approximately $480 million. The
acquisition was accounted for as a purchase.
7. BUSINESS SEGMENTS
The Company has three segments, which are organized based upon similar
economic characteristics and are similar in the similaritynature of products and
services offered, the nature of production processes, the type or class
of customer and distribution methods. Packaged Foods includes companies
that produce shelf-stable and frozen foods. This segment markets food
products in retail and foodservice channels. Refrigerated Foods
includes companies that produce and market branded processed meats,
beef, pork, chicken and turkey. Both the Packaged Foods and Refrigerated Foods segments marketThis segment markets food products in
retail and foodservice channels. Agricultural Products includes
companies involved in distribution of agricultural inputs and
procurement, processing, trading and distribution of commodity food
ingredients and agricultural commodities.
Intersegment sales have been recorded at amounts approximating market.
Operating profit for each segment is based on net sales less all
identifiable operating expenses and includes the related equity in
earnings of companies included on the basis of the equity method of
accounting. General corporate expenses,expense, goodwill amortization, interest
expense and income taxes have been excluded from segment operations.
The Company
operates principally in the United States.
9
CONAGRA FOODS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED AUGUST 27, 2000
(COLUMNAR DOLLARS IN MILLIONS)
THIRTEEN WEEKS ENDED
FEBRUARYAUGUST 27, FEBRUARY 28,AUGUST 29,
2000 1999
------------ ------------
Sales to unaffiliated customers
Packaged Foods $ 1,920.01,747.9 $ 1,894.61,736.8
Refrigerated Foods 3,046.0 2,808.93,343.6 3,121.1
Agricultural Products 831.8 989.81,710.1 1,735.7
------------ ------------
Total $ 5,797.86,801.6 $ 5,693.3
------------ ------------
------------ ------------6,593.6
============ ============
Intersegment sales
Packaged Foods $ 9.910.0 $ 4.111.9
Refrigerated Foods 97.5 55.170.2 50.4
Agricultural Products 47.6 43.058.9 53.4
------------ ------------
155.0 102.2139.1 115.7
Intersegment elimination (155.0) (102.2)(139.1) (115.7)
------------ ------------
Total $ - $ -
------------ ------------
------------ ------------=========== ===========
Net sales
Packaged Foods $ 1,929.91,757.9 $ 1,898.71,748.7
Refrigerated Foods 3,143.5 2,864.03,413.8 3,171.5
Agricultural Products 879.4 1,032.81,769.0 1,789.1
Intersegment elimination (155.0) (102.2)(139.1) (115.7)
------------ ------------
Total $ 5,797.86,801.6 $ 5,693.3
------------ ------------
------------ ------------6,593.6
============ ============
Operating profit*
Packaged Foods $ 238.3206.6 $ 267.4169.4
Refrigerated Foods 98.7 83.7108.2 109.5
Agricultural Products 47.0 76.995.0 59.8
------------ ------------
Total operating profit 384.0 428.0409.8 338.7
Interest expense 80.3 88.076.1 76.2
General corporate expenses 56.5 43.881.7 82.2
Goodwill amortization 15.9 17.516.3 16.1
------------ ------------
Income before tax $ 231.3235.7 $ 278.7
------------ ------------
------------ ------------164.2
============ ============
* Thirteen weeks ended February 27, 2000August 29, 1999 includes before-tax restructuring/
impairment chargesrestructuring
and other restructuring-related charges of $84.6$47.1 million. The charges were
included in operating profit as follows: $52.0$28.8 million in Packaged
Foods; $11.7$8.1 million in Refrigerated Foods; and $20.9$10.2 million in
Agricultural Products.
As a result of the Company's acquisition of IHF, the Packaged Foods
segment's total assets have increased by approximately $3.1 billion, or
67%, as compared to fiscal year end May 28, 2000.
10
THIRTY-NINE WEEKS ENDED
FEBRUARY 27, FEBRUARY 28,
2000 1999
------------ ------------
Sales to unaffiliated customers
Packaged Foods $ 5,743.9 $ 5,580.8
Refrigerated Foods 9,276.9 8,589.2
Agricultural Products 3,973.5 4,411.1
------------ ------------
Total $ 18,994.3 $ 18,581.1
------------ ------------
------------ ------------
Intersegment sales
Packaged Foods $ 34.5 $ 29.2
Refrigerated Foods 221.7 166.5
Agricultural Products 140.3 193.5
------------ ------------
396.5 389.2
Intersegment elimination (396.5) (389.2)
------------ ------------
Total $ - $ -
------------ ------------
------------ ------------
Net sales
Packaged Foods $ 5,778.4 $ 5,610.0
Refrigerated Foods 9,498.6 8,755.7
Agricultural Products 4,113.8 4,604.6
Intersegment elimination (396.5) (389.2)
------------ ------------
Total $ 18,994.3 $ 18,581.1
------------ ------------
------------ ------------
Operating profit*
Packaged Foods $ 645.0 $ 730.7
Refrigerated Foods 332.1 261.9
Agricultural Products 195.4 274.4
------------ ------------
Total operating profit 1,172.5 1,267.0
Interest expense 233.9 255.4
General corporate expenses 193.2 147.4
Goodwill amortization 47.8 51.7
------------ ------------
Income before tax $ 697.6 $ 812.5
------------ ------------
------------ ------------
* Thirty-nine weeks ended February 27, 2000 includes before-tax
restructuring/impairment charges and other restructuring-related charges
of $236.1 million. The charges were included in operating profit as
follows: $149.3 million in Packaged Foods; $37.7 million in Refrigerated
Foods; and $49.1 million in Agricultural Products.
11
CONAGRA FOODS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Following is management's discussion and analysis of certain significant factors
which have affected the Company's financial condition and operating results for
the periods included in the accompanying condensed consolidated financial
statements. Results for the thirteen and thirty-nine week periodsthirteen-week period ended FebruaryAugust 27, 2000 are not
necessarily indicative of results that may be attained in the future.
This report contains forward-looking statements. The statements reflect
management's current views and estimates of future economic circumstances,
industry conditions, Companycompany performance and financial results. The statements
are based on many assumptions and factors including availability and prices of
raw materials, product pricing, competitive environment and related market
conditions, operating efficiencies, access to capital and actions of
governments. Any changes in such assumptions or factors could produce
significantly different results.
OPERATION OVERDRIVE
During fiscal 1999, ConAgra commenced an initiative ("Operation Overdrive") to
improve financial results by aligning the Company's resources by customer
channel, eliminate duplicative costs and capital, and increase investment in
market position. A major focus of Operation Overdrive is to ensure that each of
ConAgra's operating companies works together to increase the level of sales
captured internally. Year-to-date, total sales between ConAgra operating
companies (both intersegment and intrasegment sales) have increased by
approximately $150 million, or 21.3 percent, over the same period in the prior
fiscal year.
In the fourth quarter of fiscal 1999, as part of Operation Overdrive, the
Company announced a restructuring plan covering a 36-month period aimed at
consolidating capacity, streamlining operations and improving profitability
through margin improvement and expense reductions. The total pre-tax charge of
the plan is presently estimated at $880 million. Pretax savings associated with
the Company's restructuring plan are currently projected to be approximately
$460 million during the plan's first three years ($95 million in fiscal 2000,
$155 million in fiscal 2001, and $210 million in fiscal 2002). These planned
savings are primarily a result of reducing duplicative efforts, lowering
employee-related expense, and reducing future depreciation and amortization
costs. Accordingly, the Company anticipates these savings will positively impact
the Company's "cost of goods sold" and "selling, administrative and general"
line items within its Consolidated Statements of Earnings.
In connection with its 36-month restructuring plan, the Company anticipates
incurring cash expenses of $195 million, offset partially by approximately $70
million in cash proceeds from business and facility dispositions. The Company
expects to fund this $125 million pre-tax net cash outlay through cash generated
by its ongoing operations. The approximate pre-tax net cash outlay, by year of
associated expense, is as follows (dollars in millions):
1999 $ 36
2000 42
2001 38
2002 9
--------
Total $ 125
--------
--------
Net cash outlays associated with the restructuring plan were previously
estimated to be $90 million over the 36-month restructuring plan. The increase
is primarily due to a decrease in the estimated proceeds from asset
dispositions, coupled with additional costs associated with existing
restructuring initiatives.
12
During the third quarter of fiscal 2000, the Company recognized
restructuring/impairment charges and other restructuring-related costs
("restructuring charges") of $84.6 million ($52.5 million net of tax), bringing
total restructuring charges recorded from fiscal 1999 to date to $676.9 million
($484.3 million net of tax). Of the $84.6 million charge recognized in the third
quarter, $26.3 million will require cash expenditures resulting from contractual
terminations, employee-related costs and third-party consulting costs. The
remaining $58.3 million are non-cash charges resulting from asset impairments,
accelerated depreciation and inventory markdowns associated with the Company's
restructuring plan.
For fiscal 2000 year-to date, the Company recognized restructuring charges of
$236.1 million ($146.4 million net of tax). Of the $236.1 million charge, $57.2
million will require cash expenditures resulting from contractual terminations,
employee-related costs and third-party consulting costs. The remaining $178.9
million are non-cash charges resulting from asset impairments, accelerated
depreciation and inventory markdowns associated with the Company's restructuring
plan.
In association with the restructuring plan, the Company has, to date, closed a
total of 13 production facilities, 70 non-production locations (e.g., storage,
distribution, administrative, etc.) and sold nine non-core businesses. The
historical operating results and gains/losses associated with sold businesses or
facilities were not material.
The Company recorded net income of $143.4 million or $.30 diluted income per
share for the third quarter of fiscal 2000. Excluding restructuring charges, the
Company's net income was $195.9 million or $.41 diluted income per share.
Accordingly, the after-tax effect of restructuring charges on the Company's
third quarter of fiscal 2000 was $52.5 million or $.11 diluted income per share.
Fiscal 2000 year-to date, the Company recorded net income of $432.5 million or
$.90 diluted income per share. Excluding restructuring charges, the Company's
net income was $578.9 million or $1.21 diluted income per share. Accordingly,
the after-tax effect of restructuring charges for fiscal 2000 year-to date was
$146.4 million or $.31 diluted income per share.
FINANCIAL CONDITION
ConAgra's earnings are generated principally from its capital investment, which
consists of working capital (current assets less current liabilities) plus all
noncurrent assets. Capital investment is financed with stockholders' equity,
long-term debt and other noncurrent liabilities.
CapitalOn August 24, 2000, the Company acquired all of the outstanding International
Home Foods ("IHF") common stock and assumed options exercisable post-acquisition
for shares of Company common stock for total consideration of approximately $1.7
billion plus the assumption of approximately $1.1 billion in debt. Primarily as
a result of this acquisition, capital investment increased $288.9 million, or 4.3 percent,approximately $2.5
billion as compared to May 30,
1999. Working28, 2000, consisting of a $43.9 million working
capital increased $198.9 million,decrease and noncurrent assets increased
$90.0 million. Thea $2.6 billion increase in working capital was primarily caused by normal
seasonal increases in accounts receivable and inventory which were partially
funded by short-termnoncurrent assets. In addition,
senior long-term debt as well as current year acquisitions.
Year-to-date, ConAgra has invested $333.8 million in property, plant and
equipment compared to $439.9 million for the same period in fiscal 1999. The
decrease of $106.1 million, or 24.1 percent, is reflective of the Company's
ongoing efforts to critically analyze its capital expenditure process.
Year-to-date, investments in business acquisitions were $374.8 millionincreased approximately $1.6 billion as compared to $401.4May
28, 2000, primarily as a result of the IHF acquisition.
On September 15, 2000, the Company issued $600 million forof 7.5% senior notes, due
September 15, 2005, $750 million of 7.875% senior notes, due September 15, 2010
and $300 million of 8.25% senior notes, due September 15, 2030. The net proceeds
were used to reduce outstanding borrowings under short-term credit facilities
with maturities less than six months and bearing interest at a rate between 6.7%
and 6.8% per annum. In addition, the same periodCompany assumed $385 million of IHF 10.375%
senior secured notes due in fiscal 1999.2006 and redeemed the notes on October 6, 2000.
The Company's long-term debt objective is that senior long-term debt normally will not
normally exceed 30 percent30% of total long-term debt plus equity. For purposes of computing the
ratio, preferred securities of subsidiary company areLong-term subordinated
debt is treated as equity due to theirits preferred stock characteristics. This objective was metThe
Company's policy has been that it would temporarily exceed this self-imposed
limit for all periods
presented.
13
a major strategic acquisition that is intended to create value for
shareholders over the long term. In management's view, the fiscal 2001
acquisition of IHF represents such an opportunity.
OPERATING RESULTS
A summary of the period to period increases (decreases) in the principal
components of operations, both before and after restructuring and other
restructuring-related charges ("restructuring charges") recognized in the first
quarter of fiscal 2000, is shown below (dollars in millions, except per share
amounts).
11
CONAGRA FOODS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIRTEEN WEEKS ENDED
THIRTY-NINE WEEKS ENDED
FEB.AUGUST 27, 2000 AND FEB. 28,AUGUST 29, 1999
FEB. 27, 2000 AND FEB. 28, 1999
------------------------------- -------------------------------
POST- PRE- POST- PRE------------------------------------
EXCLUDING
AS RESTRUCTURING
RESTRUCTURING RESTRUCTURING RESTRUCTURING
DOLLAR CHANGE DOLLAR CHANGE DOLLAR CHANGE DOLLAR CHANGE
------------- ------------- ------------- -------------REPORTED CHARGES
-------- -------
Net sales $ 104.5208.0 $ 104.5 $ 413.2 $ 413.2208.0
Costs and expenses
Cost of goods sold 94.0 66.7 308.4 182.6137.3 176.9
Selling, general and administrative and general expenses 37.9 8.3 179.8 130.92.8 6.8
Interest expense (7.7) (7.7) (21.5) (21.5)(0.1) (0.1)
Restructuring/Impairment charges 27.7(3.5) -
61.4 -
------------- ------------- ------------- -------------
151.9 67.3 528.1 292.0
------------- ------------- ------------- ------------------------- -----------
Income before income taxes (47.4) 37.2 (114.9) 121.271.5 24.4
Income taxes (19.4) 12.7 (47.7) 42.0
------------- ------------- ------------- -------------27.2 9.3
----------- -----------
Net income $ (28.0)44.3 $ 24.5 $ (67.2) $ 79.2
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------15.1
=========== ===========
Income per share - basic $ (.06)0.09 $ .05 $ (.15) $ .16
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------0.03
=========== ===========
Income per share - diluted $ (.06)0.09 $ .05 $ (.15) $ .16
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------0.03
=========== ===========
In ConAgra'scomparison to fiscal 2000 first quarter, the Company's fiscal 2001 first
quarter diluted income per share was $.30, an increase of $.09, or 42.9 percent;
operating profit was $409.8 million, an increase of $71.1 million, or 21.0
percent; and net income was $146.1 million, an increase of $44.3 million, or
43.5 percent. Excluding restructuring charges recognized in the first quarter of
fiscal 2000, the Company's fiscal 2001 first quarter diluted income per share
increased $.03, or 11.1 percent; operating profit increased $24.0 million, or
6.2 percent; and net income increased $15.1 million, or 11.5 percent. The first
quarter of fiscal 2001 did not include restructuring charges.
In the Company's Packaged Foods segment, third quarter sales increased 1.3$11.1 million, or 0.6
percent, as compared to $1,920.0 million.first quarter fiscal 2000. Operating profit decreased 10.9increased
$37.2 million, or 22.0 percent, as compared to $238.3 million,
down from last year's third quarterthe same period in fiscal 2000.
The sales and operating profit increases were achieved, in part, due to strong
results in the Company's french fry and specialty meats businesses as well as
restructuring charges recognized in the first quarter of $267.4 million.fiscal 2000 which did
not recur in the first quarter of fiscal 2001. The segment's recently acquired
IHF operations did not impact the segment's results during the first quarter of
fiscal 2001 as the acquisition was completed at the conclusion of the quarter.
Excluding restructuring charges recognized in the first quarter of fiscal 2000,
operating profit increased 8.6$8.4 million or 4.2 percent or
$22.9 million. Forover the first nine months, sales increased 2.9 percent to
$5,743.9 million. Operating profit decreased 11.7 percent to $645.0 million from
last year's first nine months operating profit of $730.7 million. Excluding
restructuring charges, the segment's operating profit increased 8.7 percent, or
$63.6 million. The segment's third quarter and first nine months operating
profit improvement, excluding restructuring charges, were primarily driven by
strong year-to-year performance improvementsame period in
ConAgra's foodservice and grocery
products units.fiscal 2000.
In the Company's Refrigerated Foods segment, third quarter sales increased 8.4$222.5 million, or
7.1 percent compared to $3,046.0 million.the same period in fiscal 2000. Operating profit
decreased $1.3 million, or 1.2 percent, versus the same period in fiscal 2000.
Both sales and operating profits for the quartersegment's beef and branded processed
meat operations increased, 17.9
percent to $98.7 million from $83.7 millionhowever, oversupply in fiscal 1999's third quarter.the poultry industry resulted
in operating profit declines for the segment in total. Excluding restructuring
charges operating profit increased 31.9 percent, or
$26.7 million. Forrecognized in the first nine months sales increased 8.0 percent, and
operating profit increased 26.8 percent to $332.1 million from $261.9 million.
Excluding restructuring charges, operating profit for the segment's first nine
months increased 41.2 percent, or $107.9 million. The segment's beef, pork and
prepared meats units achieved sales and operating profit increases for both the
third quarter and first nine months of fiscal 2000, and wereoperating profit
decreased 8.0 percent, or $9.4 million, as compared to fiscal 2000 first
quarter.
In the primary driversCompany's Agricultural Products segment, sales decreased $25.6 million,
or 1.5 percent as compared to the same period in fiscal 2000, primarily due to
dispositions of the segment's improved performancecertain low-margin, non-core businesses. Operating profit
increased $35.2 million, or 58.9 percent over the same period in fiscal 1999.
142000,
12
In ConAgra's AgriculturalCONAGRA FOODS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
primarily as a result of strong results in the segment's United Agri Products
segment, thirdbusiness unit as well as restructuring charges recognized in the first
quarter sales decreased 16.0
percent to $831.8 million. Operating profit decreased 38.9 percent from $76.9
million to $47.0 million forof fiscal 2000 which did not recur in the quarter.first quarter of fiscal
2001. Excluding restructuring charges operating profit decreased 11.7 percent, or $9.0 million. Forrecognized in the first nine
months sales in this segment decreased 9.9 percent, and operating profit
decreased 28.8 percent from $274.4 million to $195.4 million. Excluding
restructuring charges, the segment's first nine months operating profit
decreased 10.9 percent, or $29.9 million. The segment's results were negatively
impacted by low grain prices and volumes.
For the Company in total, net income was $143.4 million for the third quarter,
while diluted earnings per share was $.30, a decrease of $.06 from the third quarter of
fiscal 1999. Excluding restructuring charges, net income was $195.92000, operating profit increased 35.7 percent, or $25.0 million,
while diluted earnings per share was $.41, an increase of $.05, as
compared to prior year's third quarter. Interest expense for the thirdversus first quarter decreased by $7.7 million, or 8.8 percent, as compared to the third quarter of
fiscal 1999 due to the Company carrying lower short-term debt balances.
For the first nine months of fiscal 2000, ConAgra's net income was $432.5
million, while diluted earnings per share was $.90, a decrease of $.15 as
compared to the first nine months of fiscal 1999. Excluding restructuring
charges, net income was $578.9 million, while diluted earnings per share was
$1.21, an increase of $.16 as compared to the first nine months of fiscal 1999.
As compared to the first nine months of fiscal 1999, selling, administrative and
general expenses, excluding restructuring charges, increased $130.9 million, or
6.7 percent, due in part to an increase in advertising and promotion costs and
information systems' integration costs. Interest expense for the first nine
months of fiscal 2000 decreased by $21.5 million, or 8.4 percent, as compared to
the first nine months of fiscal 1999 due to the Company carrying lower
short-term debt balances.
152000.
13
CONAGRA FOODS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURESDISCLOSURE ABOUT MARKET RISK
There have been no material changes in the Company's market risk during the
thirty-nine weeksfirst quarter ended FebruaryAugust 27, 2000. For additional information, refer to pages
38 through 40and 39 of the Company's 19992000 Annual Report to Stockholders, incorporated by
reference into the Company's annual report on Form 10-K for the fiscal year
ended May 30, 1999.
1628, 2000.
14
CONAGRA FOODS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
The Company's annual meeting of stockholders was held on September 28,
2000. The stockholders elected three directors to serve three-year terms,
ratified the appointment of Deloitte & Touche LLP to audit the Company's
financial statements for fiscal year 2001, approved the ConAgra 2000 Stock
Plan and approved the Company's name change to ConAgra Foods, Inc. Voting
on these items was as follows:
1. Election of Directors
FOR WITHHELD
Robert A. Krane 390,476,218 11,997,798
Bruce Rohde 385,891,488 16,582,528
Walter Scott, Jr. 390,360,202 12,113,814
2. Ratification of Independent Accountants
FOR: 399,537,010
AGAINST: 1,359,380
ABSTAIN: 1,577,626
BROKER/NON-VOTES: 0
3. Approval of the ConAgra 2000 Stock Plan
FOR: 298,691,710
AGAINST: 38,441,089
ABSTAIN: 3,440,341
BROKER/NON-VOTES: 61,900,876
4. Approval of the Company name change to ConAgra Foods, Inc.
FOR: 380,560,192
AGAINST: 20,005,287
ABSTAIN: 1,908,537
BROKER/NON-VOTES: 0
ITEM 5. OTHER INFORMATION
(A) On September 28, 2000, the Company's Board of Directors authorized an
11 percent increase in the Company's common stock dividend and declared
a quarterly common stock cash dividend of 22.5 cents per share, payable
December 1, 2000 to stockholders of record October 27, 2000. The prior
quarterly dividend was 20.35 cents per share. The new indicated annual
dividend rate is 90.0 cents per share, up from the previous 81.4 cents
per share.
(B) The unaudited pro forma combined condensed financial statements, which
give effect to the acquisition of International Home Foods by the
Company under the purchase method of accounting for the thirteen weeks
ended August 27, 2000 and the fiscal year ended May 28, 2000, are
attached hereto as Exhibit 99.1.
15
CONAGRA FOODS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
3.1 - ConAgra Foods' Certificate of Incorporation, as amended
10.1 - ConAgra 2000 Stock Plan
12 - Statement regarding computation of ratio of earnings to fixed
charges
27 - Financial Data Schedule
99.1 - The unaudited pro forma combined condensed financial
statements, which give effect to the acquisition of
International Home Foods by ConAgra Foods under the purchase
method of accounting.
(B) Reports on Form 8-K
There were no reportsThe Company filed a report on Form 8-K dated June 22, 2000 announcing
an agreement and plan of merger between the Company and International
Home Foods, Inc. The Company subsequently filed duringa report on Form 8-K
dated August 24, 2000, announcing the quarter coveredcompletion of the merger which
included financial statements of International Home Foods and unaudited
pro forma information giving effect to the merger under the purchase
method of accounting based upon the periods presented by this report.the Company's
then filed financial statements. The Company filed a report on Form 8-K
dated September 5, 2000, with additional unaudited pro forma
information giving effect to the merger based upon the period presented
by the Company's Form 10-K for the fiscal year ended May 28, 2000.
CONAGRA FOODS, INC.
By:
/s/ James P. O'Donnell
--------------------------------------------------------------
James P. O'Donnell
Executive Vice President,
Chief Financial Officer and
Corporate Secretary
By:
/s/ Jay D. Bolding
--------------------------------------------------------------
Jay D. Bolding
Senior Vice President, and Controller
Dated this 11th day of April,October, 2000.
1716
CONAGRA FOODS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
12 Statement regarding computation of ratio of 19
earnings to fixed charges
27 Financial Data Schedule 20
EXHIBIT DESCRIPTION PAGE
3.1 ConAgra Foods' Certificate of Incorporation, as 18
amended
10.1 ConAgra 2000 Stock Plan 63
12 Statement regarding computation of ratio of 71
earnings to fixed charges
27 Financial Data Schedule
99.1 The unaudited pro forma combined condensed 72
financial statements, which give effect to the acquisition
of International Home Foods by ConAgra Foods under the
purchase method of accounting.
17