Today ConAgra Foods, Inc. (NYSE: CAG) reported results for the
fiscal 2016 third quarter ended February 28, 2016.
Highlights (% cited
indicates change vs. year-ago amounts, where applicable. SG&A
refers to selling, general, and administrative expense, and COGS
refers to cost of goods sold)
- Diluted EPS from continuing operations
as reported was $0.41, compared with $0.49 in the year-ago
period.
- After adjusting for items impacting
comparability, diluted comparable EPS of $0.68 this quarter was
ahead of $0.59 in the year-ago period. As previously communicated,
guidance for this quarter, as well as the basis for comparison in
the year-ago period, included contribution from discontinued
operations.
- Current quarter diluted EPS from
discontinued operations (amounting to $0.05 as reported, and $0.11
adjusted for items impacting comparability) reflects about two
months of results from the divested private label operations and
includes approximately $36 million of pretax benefit, or $0.05 per
diluted share of after-tax benefit, from the absence of private
label-related depreciation and amortization expense. As previously
discussed, this is due to the classification of the private label
assets as held for sale during the quarter. The private label
operations were divested during the quarter.
- Consumer Foods improved comparable
operating margins by over 300 basis points and drove strong
double-digit comparable operating profit growth with a deliberate
focus on price/mix, good productivity, and favorable input
costs.
- Commercial Foods posted comparable
operating profit growth in excess of 20% and expanded margins,
reflecting volume increases across the segment as well as lower
costs. Lamb Weston posted good volume performance, reflecting
the lapping of the impact of the West Coast port labor
dispute.
- The company completed the divestiture
of the private label business during the quarter, receiving in
excess of $2.6 billion in proceeds. The company has utilized a
significant portion of the proceeds to reduce debt by approximately
$2.15 billion so far, and as part of a balanced capital allocation
program plans to utilize more of the remaining proceeds for further
debt reduction. The company is committed to an investment grade
credit rating.
CEO Perspective:
Sean Connolly, CEO of ConAgra Foods commented, “Our results for
the quarter exceeded our expectations as our actions to drive
improved profitability continued to take hold. Our focus on
improving price/mix and driving efficiencies is enabling us to
enhance our overall fundamentals in both of our segments resulting
in solid comparable operating profit growth and expanding operating
margins.”
He continued, “With the sale of our private label business
completed, we are focused on successfully executing our plans to
reduce costs and deliver improved price/mix, while continuing to
segment our portfolio to enable more impactful marketing and
support investments to drive future innovation and deliver improved
margins and shareholder value. We are on track to establish two
independent segments with excellent operating foundations as we
separate into two pure-play companies in the fall.”
Overall Quarterly Results
For the fiscal 2016 third quarter ended February 28, 2016,
diluted earnings per share from continuing operations were $0.41 as
reported, vs. $0.49 for the third quarter of fiscal 2015. After
adjusting for items impacting comparability, comparable diluted EPS
was $0.68 this quarter and $0.59 in the year-ago period. Items
impacting comparability are summarized and reconciled for
Regulation G purposes starting on page 10.
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 $291 million in the fiscal third
quarter, as reported. Sales declined 2%, with a 4% volume decrease,
3% favorable price/mix, and a negative 1% impact of foreign
exchange (all rounded) compared to year-ago period amounts.
The company has emphasized margins over volume this fiscal year
as part of building a healthy foundation. In connection with this,
the company has implemented changes to improve the efficiency of
trade spending, increased list prices on Banquet products and other
brands in connection with product improvements and selected
commodity pass-through, and focused on improving mix. These factors
played a significant role in the quarter’s 4% volume decline and
significant margin expansion.
- Brands posting sales growth for the
quarter include Marie Callender’s, Hunt’s, Slim Jim, Reddi-wip,
Ro*Tel, PAM, and others.
- Other brand details are in the written
Q&A document accompanying this release.
Segment operating profit was $291 million versus $266 million in
the year-ago period, as reported. After adjusting for $48 million
of net expense in the current quarter, and $23 million of net
expense in the year-ago period from items impacting comparability,
current quarter comparable operating profit of $339 million
increased 17% over comparable year-ago amounts. Comparable
operating margin expanded by over 300 basis points. In addition to
the benefits of price/mix, good productivity and overall lower
commodity input costs also contributed to the strong quarterly
profit performance. Advertising investment increased $10 million,
or 12% compared to year-ago period amounts, as part of our strategy
to increase support behind high-potential brand equities. Foreign
exchange negatively impacted profitability by approximately $12
million this quarter. Year-ago profit included a significant hedge
loss, which favorably impacted the comparison this quarter.
Commercial Foods Segment
Specialty potato, seasonings, blends, flavors,
and bakery products, as well as consumer branded and private label
packaged food items, sold to restaurants, foodservice and
commercial channels worldwide.
Sales for the Commercial Foods segment were $1.1 billion, up 6%
over year-ago amounts (rounded). Sales for Lamb Weston’s potato
operations grew across North America as well as in international
markets. International sales performance for Lamb Weston was
notably strong, reflecting the lapping of the impact of the West
Coast port labor dispute in the year-ago period, as well as
improving demand across several international markets.
Segment operating profit of $175 million increased 21% from
year-ago period amounts. Lamb Weston made the most significant
contribution to the segment’s profit increase, reflecting increased
global volumes, due in part to the benefit of lapping the West
Coast port labor dispute. Profits for the remainder of the segment
grew modestly.
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 $3 million of net benefit
in the current quarter and $4 million of net benefit 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 $155
million of expense in the current quarter and $51 million of
expense in the year-ago period. Current-quarter amounts include $3
million of hedge-related benefit, as well as $85 million of expense
related to other items impacting comparability. Year-ago period
amounts include $4 million of hedge-related benefit, and $3 million
of other expense related to other items impacting comparability.
Excluding these amounts, unallocated Corporate expense was $73
million for the current quarter and $52 million in the year-ago
period; this increase principally reflects higher incentive
compensation expenses.
- Equity method investment earnings were
$45 million for the current quarter and $33 million in the year-ago
period, as reported. Excluding $18 million of benefit in the
current quarter from the termination of a pension by a foreign
equity method investment, current quarter equity method investment
earnings of $27 million decreased from $33 million a year ago. The
comparable decline is due to unfavorable grain market conditions
impacting Ardent Mills performance.
- Net interest expense was $77 million in
the current quarter and $80 million in the year-ago period.
Capital Items
- Dividends for the quarter totaled $109
million versus $107 million in the year-ago period.
- The company did not repurchase any
shares during the quarter.
- The company reduced debt by
approximately $2.15 billion during the quarter, as it utilized a
significant portion of the proceeds from the divestiture of the
private label operations. As part of balanced capital allocation,
the company plans for further debt reduction, and reiterates its
commitment to an investment grade credit rating.
- For the current quarter, capital
expenditures for property, plant and equipment from continuing
operations were $100 million, compared with $83 million in the
year-ago period. Depreciation and amortization expense was
approximately $93 million for the fiscal third quarter; this
compares with a total of $92 million in the year-ago period.
Discontinued Operations:
Diluted EPS from discontinued operations (the private label
operations) in the fiscal third quarter of 2016 was $0.05 as
reported, and $0.11 after adjusting for items impacting
comparability; this reflects approximately 2 months of contribution
from the private label operations prior to the divestiture on
February 1, 2016. The company’s previous EPS guidance included
expected contribution from the private label operations. As
previously noted, because the private label operations were
classified as assets held for sale in the quarter, there was no
depreciation or amortization expense for these assets. This
benefitted EPS from discontinued operations in the third quarter by
approximately $0.05 per diluted share, or $36 million pretax this
quarter, as expected.
Loss per diluted share from discontinued operations in the third
quarter of fiscal 2015 was $(2.70), reflecting sizeable impairment
charges, and diluted per share income from discontinued operations
for that period was approximately $0.06 after adjusting for items
impacting comparability. See page 10 for details of items impacting
comparability in the current and prior year.
Outlook
Given the recent divestiture of the private label business,
which is classified within discontinued operations in current and
prior periods, the company’s diluted EPS guidance for fiscal 2016
is now based on expectations for comparable results for continuing
operations.
- Fiscal 2016 year-to-date diluted EPS
from continuing operations totals $1.16 as reported, and $1.56
adjusted for items impacting comparability, detailed as part of the
Regulation G reconciliation on page 11.
- The company expects full year fiscal
2016 diluted EPS from continuing operations, adjusted for items
impacting comparability, to be in the range of $2.05 - $2.07.
Please see the Regulation G reconciliation on page 11 of this
document, as well as the Q&A document accompanying this
release, for details on EPS from continuing operations.
Major Items Impacting Third-quarter Fiscal 2016 EPS
Comparability
Included in the $0.41 diluted EPS from continuing operations for
the third quarter of fiscal 2016 (EPS amounts rounded and after
tax):
- Approximately $0.16 per diluted share
of net expense, or $109 million pretax, related to restructuring
charges. $61 million of this is classified within unallocated
Corporate expense (all SG&A) and $48 million is classified
within the Consumer Foods segment ($36 million COGS / $12 million
SG&A).
- Approximately $0.04 per diluted share
of net expense, or $24 million pretax, related to the early
extinguishment of debt (all Corporate SG&A).
- Approximately $0.03 per diluted share,
or $18 million pretax, of net benefit related to pension
termination at affiliate Lamb-Weston Meijer, classified within the
results of equity method investment earnings.
- Note: Comparable EPS contribution from
the private label operations, now classified as discontinued
operations, was approximately $0.11 per diluted share. Contribution
from the private label operations was included in original
guidance. The $0.11 per diluted share excludes $0.06 of net expense
from items impacting comparability, detailed as part of the
Regulation G reconciliation on page 10.
Included in the $0.49 diluted EPS from continuing operations for
the third quarter of fiscal 2015 (EPS amounts rounded and after
tax).
- Approximately $0.03 per diluted share
of net expense, or $15 million pretax, resulting from goodwill
impairment charges related to the private label snacks business and
now part of Consumer Foods (all SG&A).
- Approximately $0.02 per diluted share
of net expense, or $11 million pretax, resulting from restructuring
and integration costs. $8 million is classified within the Consumer
Foods segment ($2 million in COGS, $6 million in SG&A), and $3
million of this is classified as unallocated Corporate expense (all
SG&A).
- Approximately $0.01 per diluted share
of net benefit, or $4 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.
Note: Prior year comparable EPS included approximately $0.06
from operations subsequently reclassified to discontinued
operations. The $0.06 per diluted share excludes items impacting
comparability, the largest of which is $2.75 of expense related to
impairment charges. These amounts are detailed as part of the
Regulation G table on page 10.
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 1-877-852-6581 and
1-719-325-4751, 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 1631271. 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.
About ConAgra Foods
ConAgra Foods, Inc., (NYSE: CAG), is one of North America's
leading packaged food companies with recognized brands such as
Marie Callender's®, Healthy Choice®, Slim Jim®, Hebrew National®,
Orville Redenbacher's®, Peter Pan®, Reddi-wip®, PAM®, Snack Pack®,
Banquet®, Chef Boyardee®, Egg Beaters®, Hunt’s® and many other
ConAgra Foods brands found in grocery, convenience, mass
merchandise and club stores. ConAgra Foods also has a strong
business-to-business presence, supplying frozen potato and sweet
potato products as well as other vegetable, spice and grain
products to a variety of well-known restaurants, foodservice
operators and commercial customers. For more information, please
visit us at www.conagrafoods.com.
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 complete the
spin-off of its Lamb Weston business on a tax-free basis, within
the expected time frame or at all; ConAgra Foods’ ability to
execute its operating and restructuring plans and achieve its
targeted operating efficiencies, cost-saving initiatives, and trade
optimization programs; ConAgra Foods’ ability to successfully
execute its long-term value creation strategy; 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 efforts, whether through pricing actions or changes in
promotional strategies; the ultimate outcome of litigation,
including litigation related to the lead paint and pigment matters
and the accident at its former Garner plant; 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; the success of ConAgra Foods’
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 Q3 FY16 and Q3 FY15 diluted
earnings per share from continuing operations, and Consumer Foods
segment operating profit, adjusted for items impacting
comparability. Amounts may be impacted by rounding.
Q3 FY16 & Q3 FY15 Diluted EPS
from Continuing Operations Q3 FY16 Q3 FY15
% change Diluted EPS from continuing operations
$ 0.41 $ 0.49 -16 % Items
impacting comparability: Net expense related to restructuring
charges 0.16 0.02 Net expense related to debt tender offer 0.04 -
Net benefit related to Lamb Weston pension plan settlement (0.03 )
- Net expense related to goodwill impairment charges - 0.03 Net
benefit related to unallocated mark-to-market impact of derivatives
- (0.01 ) Rounding (0.01 ) -
Diluted EPS
from continuing operations, adjusted for items impacting
comparability $ 0.57 $ 0.53 Net EPS
contribution subsequently reclassified to discontinued operations
(included in guidance/base)*:
$ 0.11 $
0.06 Diluted EPS, adjusted for items
impacting comparability $ 0.68 $
0.59 15 % Consumer Foods
Segment Operating Profit Reconciliation (Dollars in
millions)
Q3 FY16 Q3 FY15 % change Consumer
Foods Segment Operating Profit $ 291 $
266 9 % Net expense related to restructuring
charges 48 8 Net expense related to goodwill impairment charges
- 15
Consumer Foods Segment
Adjusted Operating Profit $ 339 $
289 17 %
Q3 FY16 Q3 FY15
*Diluted EPS from discontinued operations $
0.05 $ (2.70 ) Items impacting
comparability: Net expense related to impairment charges $ 0.05 $
2.75 Net expense related to extinguishment of debt 0.01 - Net
expense related to unusual tax matters 0.01 - Net expense related
to restructuring charges - 0.01 Rounding (0.01 ) -
Diluted EPS from discontinued operations, adjusted for
items impacting comparability $ 0.11
$ 0.06
Regulation G Disclosure (cont.)
Below is a reconciliation of the thirty-nine weeks ended
February 28, 2016 and full FY15 diluted earnings per share from
continuing operations, adjusted for items impacting comparability.
Amounts may be impacted by rounding.
Thirty-nine weeks ended Feb. 28.
2016* Diluted EPS from continuing operations $
1.16 Items impacting comparability: Net expense related to
restructuring charges 0.37 Net expense related to debt tender offer
0.04 Net benefit related to Lamb Weston pension plan settlement
(0.03 ) Net expense related to unusual tax matters 0.02
Diluted EPS from continuing operations, adjusted for
items impacting comparability $ 1.56
Full Year FY15* Diluted EPS from
continuing operations $ 1.73 Items impacting
comparability: Net expense related to restructuring and integration
costs (including acquisition-related restructuring) 0.08 Net
expense related to impairment of goodwill and other intangible
assets 0.05 Net expense related to unallocated mark-to-market
impact of derivatives 0.05 Net expense related to extinguishment of
debt 0.04 Net benefit related to historical legal matters (0.02 )
Net expense related to year-end remeasurement of pensions 0.01 Net
benefit related to unusual tax matters (0.01 )
Diluted
EPS from continuing operations, adjusted for items impacting
comparability $ 1.93 *Please
see written Q&A document for quarterly details.
ConAgra Foods, Inc. Segment Operating Results (in millions)
(unaudited) THIRD QUARTER Thirteen
weeks ended Thirteen weeks ended February 28, 2016 February 22,
2015 Percent Change
SALES
Consumer Foods $ 1,854.8 $ 1,899.7 (2.4 )% Commercial Foods 1,069.3
1,007.6 6.1 % Total 2,924.1 2,907.3 0.6 %
OPERATING
PROFIT
Consumer Foods $ 291.3 $ 266.0 9.5 % Commercial Foods 175.0
144.5 21.1 % Total operating profit for segments 466.3 410.5
13.6 %
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 (155.5 ) (50.8 ) 206.1 % Interest
expense, net (76.9 ) (79.8 ) (3.6 )% Income from continuing
operations before income taxes and equity method investment
earnings $ 233.9 $ 279.9 (16.4 )%
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 Thirty-nine weeks
Thirty-nine weeks ended ended February 28, 2016 February 22,
2015 Percent Change
SALES
Consumer Foods $ 5,531.6 $ 5,642.0 (2.0 )% Commercial Foods 3,283.8
3,169.5 3.6 % Total 8,815.4 8,811.5 — %
OPERATING
PROFIT
Consumer Foods $ 857.8 $ 758.9 13.0 % Commercial Foods 477.7
412.2 15.9 % Total operating profit for segments 1,335.5
1,171.1 14.0 %
Reconciliation of total operating profit
to income from continuing operations before income taxes and equity
method investment earnings Items excluded from segment
operating profit: General corporate expense (425.3 ) (248.2 ) 71.4
% Interest expense, net (236.8 ) (241.8 ) (2.1 )% Income from
continuing operations before income taxes and equity method
investment earnings $ 673.4 $ 681.1 (1.1 )%
Segment operating profit excludes general corporate expense,
equity method investment earnings, and net interest expense.
Management believes such amounts are not directly associated with
segment performance results for the period. Management believes the
presentation of total operating profit for segments facilitates
period-to-period comparison of results of segment operations.
ConAgra Foods, Inc. Consolidated Statements of Operations
(in millions) (unaudited) THIRD QUARTER Thirteen
weeks Thirteen weeks ended ended February 28, 2016
February 22, 2015 Percent Change Net sales $ 2,924.1 $ 2,907.3 0.6
% Costs and expenses: Cost of goods sold 2,123.7 2,187.3 (2.9 )%
Selling, general and administrative expenses 489.6 360.3 35.9 %
Interest expense, net 76.9 79.8 (3.6 )% Income from
continuing operations before income taxes and equity method
investment earnings 233.9 279.9 (16.4 )% Income tax expense
91.0 100.6 (9.5 )% Equity method investment earnings 44.7
33.0 35.5 % Income from continuing operations 187.6 212.3
(11.6 )% Income (loss) from discontinued operations, net of tax
18.7 (1,165.0 ) N/A Net income (loss) $ 206.3
$ (952.7 ) N/A Less: Net income attributable to
noncontrolling interests 1.7 1.4 21.4 % Net income
(loss) attributable to ConAgra Foods, Inc. $ 204.6 $ (954.1
) N/A Earnings (loss) per share - basic Income
from continuing operations $ 0.42 $ 0.49 (14.3 )% Income (loss)
from discontinued operations 0.04 (2.72 ) N/A Net
income (loss) attributable to ConAgra Foods, Inc. $ 0.46 $
(2.23 ) N/A Weighted average shares outstanding 435.7
427.1 2.0 % Earnings (loss) per share -
diluted Income from continuing operations $ 0.41 $ 0.49
(16.3 )% Income (loss) from discontinued operations 0.05
(2.70 ) N/A Net income (loss) attributable to ConAgra Foods,
Inc. $ 0.46 $ (2.21 ) N/A Weighted average
share and share equivalents outstanding 439.6 432.3
1.7 % ConAgra Foods, Inc. Consolidated Statements of
Operations (in millions) (unaudited) THIRD QUARTER
Thirty-nine weeks Thirty-nine weeks ended ended
February 28, 2016 February 22, 2015 Percent Change Net sales $
8,815.4 $ 8,811.5 — % Costs and expenses: Cost of goods sold
6,485.5 6,742.5 (3.8 )% Selling, general and administrative
expenses 1,419.7 1,146.1 23.9 % Interest expense, net 236.8
241.8 (2.1 )% Income from continuing
operations before income taxes and equity method investment
earnings 673.4 681.1 (1.1 )% Income tax expense 259.3 247.9
4.6 % Equity method investment earnings 107.0
92.6 15.6 % Income from continuing operations 521.1 525.8
(0.9 )% Loss from discontinued operations, net of tax
(1,307.9 ) (978.1 ) 33.7 % Net loss $ (786.8 ) $ (452.3 )
74.0 % Less: Net income attributable to noncontrolling interests
7.8 9.5 (17.9 )% Net loss attributable
to ConAgra Foods, Inc. $ (794.6 ) $ (461.8 ) 72.1 % Earnings
(loss) per share - basic Income from continuing operations $
1.17 $ 1.21 (3.3 )% Loss from discontinued operations (3.01
) (2.30 ) 30.9 % Net loss attributable to ConAgra Foods,
Inc. $ (1.84 ) $ (1.09 ) 68.8 % Weighted average shares
outstanding 433.3 425.5 1.8 %
Earnings (loss) per share - diluted Income from continuing
operations $ 1.16 $ 1.20 (3.3 )% Loss from discontinued operations
(2.99 ) (2.27 ) 31.7 % Net loss attributable to
ConAgra Foods, Inc. $ (1.83 ) $ (1.07 ) 71.0 % Weighted
average share and share equivalents outstanding 437.6
430.8 1.6 % ConAgra Foods, Inc.
Consolidated Balance Sheet (in millions) (unaudited)
February 28, 2016 May 31, 2015
ASSETS Current assets
Cash and cash equivalents $ 502.6 $ 164.7 Receivables, less
allowance for doubtful accounts of $4.7 and $4.1 849.6 773.6
Inventories 1,835.5 1,711.9 Prepaid expenses and other current
assets 335.6 273.2 Current assets held for sale 4.2 744.3
Total current assets 3,527.5 3,667.7 Property, plant and equipment,
net 2,645.7 2,687.7 Goodwill 4,682.2 4,699.5 Brands, trademarks and
other intangibles, net 1,371.8 1,313.4 Other assets 960.0 927.0
Noncurrent assets held for sale — 4,246.9 $ 13,187.2
$ 17,542.2
LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities Notes payable $ 36.6 $ 7.9 Current
installments of long-term debt 560.4 1,008.0 Accounts payable
1,007.8 1,138.8 Accrued payroll 213.1 211.2 Other accrued
liabilities 797.7 650.3 Current liabilities held for sale —
294.0 Total current liabilities 2,615.6 3,310.2 Senior long-term
debt, excluding current installments 4,706.8 6,693.0 Subordinated
debt 195.9 195.9 Other noncurrent liabilities 1,935.8 2,022.1
Noncurrent liabilities held for sale 0.6 711.0 Total stockholders'
equity 3,732.5 4,610.0 $ 13,187.2 $ 17,542.2
ConAgra Foods, Inc. and
Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in millions) (unaudited)
Thirty-nine weeks ended Feb. 28, 2016
Feb. 22, 2015 Cash flows from operating activities:
Net loss $ (786.8 ) $ (452.3 ) Loss from discontinued operations
(1,307.9 ) (978.1 ) Income from continuing operations 521.1 525.8
Adjustments to reconcile income from continuing operations to net
cash flows from operating activities: Depreciation and amortization
281.7 283.8 Asset impairment charges 8.4 24.7 Lease cancellation
expense 55.6 — Loss on extinguishment of debt 23.9 24.6 Earnings of
affiliates in excess of distributions (31.9 ) (56.7 ) Share-based
payments expense 54.3 42.9 Contributions to pension plans (9.3 )
(9.4 ) Pension expense (benefit) 25.6 (6.9 ) Other items 4.6 15.2
Change in operating assets and liabilities excluding effects of
business acquisitions and dispositions: Accounts receivable (127.7
) 18.9 Inventory (121.4 ) (245.0 ) Deferred income taxes and income
taxes payable, net (184.2 ) 26.6 Prepaid expenses and other current
assets 1.8 (53.5 ) Accounts payable (92.3 ) (25.2 ) Accrued payroll
30.7 47.5 Other accrued liabilities 60.5 (35.5 ) Net cash
flows from operating activities — continuing operations 501.4 577.8
Net cash flows from operating activities — discontinued operations
193.7 162.7 Net cash flows from operating activities
695.1 740.5 Cash flows from investing activities:
Additions to property, plant and equipment (279.7 ) (240.6 ) Sale
of property, plant and equipment 24.6 15.4 Purchase of business,
net of cash acquired — (74.7 ) Purchase of intangible assets (10.4
) — Return of investment in equity method investee — 391.4 Other
items 0.3 — Net cash flows from investing activities
— continuing operations (265.2 ) 91.5 Net cash flows from investing
activities — discontinued operations 2,521.6 40.7 Net
cash flows from investing activities 2,256.4 132.2
Cash flows from financing activities: Net short-term borrowings
28.7 284.1 Issuance of long-term debt 30.0 550.0 Repayment of
long-term debt (2,521.4 ) (1,491.2 ) Repurchase of ConAgra Foods,
Inc. common shares — (35.1 ) Cash dividends paid (323.5 ) (318.2 )
Exercise of stock options and issuance of other stock awards 208.1
113.8 Other items (6.2 ) (12.5 ) Net cash flows from financing
activities — continuing operations (2,584.3 ) (909.1 ) Net cash
flows from financing activities — discontinued operations (45.2 )
(1.7 ) Net cash flows from financing activities (2,629.5 ) (910.8 )
Effect of exchange rate changes on cash and cash equivalents (2.5 )
(7.7 ) Net change in cash and cash equivalents 319.5 (45.8 )
Discontinued operations cash activity included above: Add: Cash
balance included in assets held for sale at beginning of period
18.4 64.9 Less: Cash balance included in assets held for sale at
end of period — 27.5 Cash and cash equivalents at beginning of
period 164.7 118.2 Cash and cash equivalents at end
of period $ 502.6 $ 109.8
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version on businesswire.com: http://www.businesswire.com/news/home/20160407005241/en/
ConAgra Foods, Inc.MEDIA:Jon Harris,
630-857-1440Jon.Harris@ConAgraFoods.comorANALYSTS:Chris
Klinefelter, 402-240-4154Chris.Klinefelter@ConAgraFoods.com
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