Form 8-K CONAGRA FOODS INC /DE/ For: Apr 07
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 7, 2016
ConAgra Foods, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 1-7275 | 47-0248710 | |
| (Commission File Number) |
(IRS Employer Identification No.) | |
| One ConAgra Drive | ||
| Omaha, NE | 68102 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
(402) 240-4000
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
On April 7, 2016, the Company issued a press release and posted a question and answer document (“Q&A”) on its website containing information on the Company’s third quarter fiscal 2016 financial results. The press release and Q&A are furnished with this Form 8-K as Exhibits 99.1 and 99.2, respectively.
The press release and Q&A include the non-GAAP financial measures of diluted earnings per share from continuing operations adjusted for items impacting comparability, adjusted operating profit for each of the Consumer Foods and Commercial Foods segments, adjusted unallocated corporate expense, effective tax rate excluding items impacting comparability and net debt. Management considers GAAP financial measures as well as such non-GAAP financial information in its evaluation of the Company’s financial statements and believes these non-GAAP measures provide useful supplemental information to assess the Company’s operating performance and financial position. To the extent required, these measures are reconciled in the press release and Q&A to the most directly comparable measures as reported in accordance with GAAP, and should be viewed in addition to, and not in lieu of, the Company’s diluted earnings per share, operating performance and financial measures as calculated in accordance with GAAP. The inability to predict the amount and timing of future items makes a detailed reconciliation of projections of diluted EPS and effective tax rate adjusted for items impacting comparability, impracticable.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit 99.1 | Press Release issued April 7, 2016 | |
| Exhibit 99.2 | Questions and Answers | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CONAGRA FOODS, INC. | ||||||
| Date: April 7, 2016 | By: | /s/ Lyneth Rhoten | ||||
| Name: | Lyneth Rhoten | |||||
| Title: | Vice President, Securities Counsel and Assistant Corporate Secretary | |||||
Exhibit Index
| Exhibit 99.1 | Press Release issued April 7, 2016 | |
| Exhibit 99.2 | Questions and Answers | |
Exhibit 99.1
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| News Release | ||
| For more information, please contact: | ||
| MEDIA: Jon Harris | ||
| 630-857-1440 | ||
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| ANALYSTS: Chris Klinefelter | ||
| 402-240-4154 | ||
CONAGRA FOODS FISCAL 2016 Q3 EPS ABOVE EXPECTATIONS;
STRONG PROFIT GROWTH AND MARGINS FOR BOTH SEGMENTS;
COMPLETION OF PRIVATE LABEL SALE ENABLES $2.15B DEBT REDUCTION;
ON TRACK WITH PLANNED SEPARATION INTO CONAGRA BRANDS AND LAMB WESTON
OMAHA, April 7, 2016 — 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. |
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| • | 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.
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CONAGRA FOODS
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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.
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CONAGRA FOODS
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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. |
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| • | 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
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CONAGRA FOODS
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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). |
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CONAGRA FOODS
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| • | 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.
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CONAGRA FOODS
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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.
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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.
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CONAGRA FOODS
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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: |
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| 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 | ) | — | |||||||||
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| 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 | ||||||||
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| Diluted EPS, adjusted for items impacting comparability |
$ | 0.68 | $ | 0.59 | 15 | % | ||||||
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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 | ||||||||||
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| Consumer Foods Segment Adjusted Operating Profit |
$ | 339 | $ | 289 | 17 | % | ||||||
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| Q3 FY16 | Q3 FY15 | |||||||
| *Diluted EPS from discontinued operations |
$ | 0.05 | $ | (2.70 | ) | |||
| Items impacting comparability: |
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| 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 | ) | — | |||||
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| Diluted EPS from discontinued operations, adjusted for items impacting comparability |
$ | 0.11 | $ | 0.06 | ||||
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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* |
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| Diluted EPS from continuing operations |
$ | 1.16 | ||
| Items impacting comparability: |
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| 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 | |||
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| Diluted EPS from continuing operations, adjusted for items impacting comparability |
$ | 1.56 | ||
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| Full Year FY15* |
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| Diluted EPS from continuing operations |
$ | 1.73 | ||
| Items impacting comparability: |
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| 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 | ) | ||
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| Diluted EPS from continuing operations, adjusted for items impacting comparability |
$ | 1.93 | ||
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| * Please | see written Q&A document for quarterly details. |
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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 |
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| Consumer Foods |
$ | 1,854.8 | $ | 1,899.7 | (2.4 | )% | ||||||
| Commercial Foods |
1,069.3 | 1,007.6 | 6.1 | % | ||||||||
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| Total |
2,924.1 | 2,907.3 | 0.6 | % | ||||||||
| OPERATING PROFIT |
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| Consumer Foods |
$ | 291.3 | $ | 266.0 | 9.5 | % | ||||||
| Commercial Foods |
175.0 | 144.5 | 21.1 | % | ||||||||
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| 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 |
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| Items excluded from segment operating profit: |
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| General corporate expense |
(155.5 | ) | (50.8 | ) | 206.1 | % | ||||||
| Interest expense, net |
(76.9 | ) | (79.8 | ) | (3.6 | )% | ||||||
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| Income from continuing operations before income taxes and equity method investment earnings |
$ | 233.9 | $ | 279.9 | (16.4 | )% | ||||||
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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.
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ConAgra Foods, Inc.
Segment Operating Results
(in millions)
(unaudited)
| THIRD QUARTER | ||||||||||||
| Thirty-nine weeks ended |
Thirty-nine weeks ended |
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| February 28, 2016 | February 22, 2015 | Percent Change | ||||||||||
| SALES |
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| Consumer Foods |
$ | 5,531.6 | $ | 5,642.0 | (2.0 | )% | ||||||
| Commercial Foods |
3,283.8 | 3,169.5 | 3.6 | % | ||||||||
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| Total |
8,815.4 | 8,811.5 | — | % | ||||||||
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| OPERATING PROFIT |
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| Consumer Foods |
$ | 857.8 | $ | 758.9 | 13.0 | % | ||||||
| Commercial Foods |
477.7 | 412.2 | 15.9 | % | ||||||||
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| 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 |
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| Items excluded from segment operating profit: |
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| General corporate expense |
(425.3 | ) | (248.2 | ) | 71.4 | % | ||||||
| Interest expense, net |
(236.8 | ) | (241.8 | ) | (2.1 | )% | ||||||
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| Income from continuing operations before income taxes and equity method investment earnings |
$ | 673.4 | $ | 681.1 | (1.1 | )% | ||||||
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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.
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ConAgra Foods, Inc.
Consolidated Statements of Operations
(in millions)
(unaudited)
| THIRD QUARTER | ||||||||||||
| Thirteen weeks ended |
Thirteen weeks ended |
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| February 28, 2016 | February 22, 2015 | Percent Change | ||||||||||
| Net sales |
$ | 2,924.1 | $ | 2,907.3 | 0.6 | % | ||||||
| Costs and expenses: |
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| 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 | % | ||||||||
|
|
|
|
|
|
|
|||||||
-more-
CONAGRA FOODS
page 15
ConAgra Foods, Inc.
Consolidated Statements of Operations
(in millions)
(unaudited)
| THIRD QUARTER | ||||||||||||
| Thirty-nine weeks ended |
Thirty-nine weeks 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 | % | ||||||||
|
|
|
|
|
|
|
|||||||
-more-
CONAGRA FOODS
page 16
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 | |||||
|
|
|
|
|
|||||
-more-
CONAGRA FOODS
page 17
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 | ||||
|
|
|
|
|
|||||
# # #
Exhibit 99.2
Q3 FY16 Question & Answer
April 7, 2016
| 1. | What were some examples of brands in the Consumer Foods segment posting comparable sales growth for the quarter? |
| - Andy Capp’s |
- La Choy | - PAM | - Rosarita | |||
| - Blue Bonnett |
- Manwich | - PF Chang’s | - Slim Jim | |||
| - DAVID |
- Marie Calender’s | - Parkay | - Wolf | |||
| - Egg Beater’s |
- Odom’s Tennessee Pride | - Reddi-wip | ||||
| - Hunt’s |
- Orville Redenbacher’s | - Ro*Tel |
Sales for Kid Cuisine were in line with the prior year’s quarter.
| 2. | What were some examples of brands in the Consumer Foods segment posting comparable sales declines for the quarter? |
| - ACT II |
- Healthy Choice | - Swiss Miss | ||||
| - Banquet |
- Hebrew National | - Van Camp’s | ||||
| - Bertolli |
- Libby’s | - Wesson | ||||
| - Chef Boyardee |
- Peter Pan | |||||
| - Crunch ’n Munch |
- Snack Pack |
| 3. | How much were capital expenditures from continuing operations for the quarter? |
Approximately $100 million in Q3 FY16 (versus approximately $83 million in Q3 FY15).
| 4. | How much was total depreciation and amortization from continuing operations for the quarter? |
Approximately $93 million in Q3 FY16 (versus approximately $92 million in Q3 FY15).
| 5. | What was the net interest expense for the quarter? |
Approximately $77 million in Q3 FY16 (versus approximately $80 million in Q3 FY15).
| 6. | What was Corporate expense for the quarter? |
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.
1
| 7. | How much did the company pay in dividends during the quarter? |
Approximately $109 million in Q3 FY16 (versus approximately $107 million in Q3 FY15).
| 8. | What was the weighted average number of diluted shares outstanding for the quarter (rounded)? |
Approximately 440 million shares for the quarter.
| 9. | Did the company repurchase any shares during the quarter? |
The company did not repurchase any shares of common stock during the quarter.
| 10. | What is included in the company’s net debt at the end of the quarter (rounded, in millions)? |
| Q3 FY16 | ||||
| Total debt* |
$ | 5,500 | ||
| Less: Cash on hand |
$ | 503 | ||
|
|
|
|||
| Net debt |
$ | 4,997 | ||
| * | Total debt = notes payable, short-term debt, long-term debt, and subordinated debt. |
| 11. | What is the net-debt-to-total-capital ratio at quarter end? |
The net-debt-to-total-capital ratio for the quarter was 57%.
This ratio is defined as net debt divided by the sum of net debt plus shareholders’ equity. See question No. 10 for the components of net debt.
| 12. | What is the projected tax rate for FY16? |
The company expects the tax rate to be in the range of 33-34%, excluding items impacting comparability. The company acknowledges that the quarterly rates may be different from this, given the timing of certain matters, but the overall rate is expected to approximate 33-34%.
| 13. | What are the projected capital expenditures for FY16 from continuing operations? |
Total capital expenditures for fiscal 2016 are projected to be approximately $430 million.
| 14. | What is the projected depreciation and amortization expense for FY16 from continuing operations? |
Total depreciation and amortization for fiscal 2016 is projected to be approximately $350 million.
| 15. | What is the projected net interest expense for FY16? |
Net interest expense for fiscal 2016 is projected to be approximately $300 million.
2
| 16. | What is the current presentation of the quarterly segment sales and operating profits for fiscal year 2016 year-to-date and fiscal year 2015 as reported, given the sale of the private label operations? |
ConAgra Foods, Inc.
Segment Operating Results
(in millions)
(unaudited)
| Fiscal 2015 | Fiscal 2016 | |||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Total | Q1 | Q2 | Q3 | Total | ||||||||||||||||||||||||||||
| SALES |
||||||||||||||||||||||||||||||||||||
| Consumer Foods |
$ | 1,699.3 | $ | 2,043.0 | $ | 1,899.7 | $ | 1,923.3 | $ | 7,565.3 | $ | 1,693.6 | $ | 1,983.2 | $ | 1,854.8 | $ | 5,531.6 | ||||||||||||||||||
| Commercial Foods |
1,066.2 | 1,095.7 | 1,007.6 | 1,202.2 | 4,371.7 | 1,102.6 | 1,111.9 | 1,069.3 | 3,283.8 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total |
2,765.5 | 3,138.7 | 2,907.3 | 3,125.5 | 11,937.0 | 2,796.2 | 3,095.1 | 2,924.1 | 8,815.4 | |||||||||||||||||||||||||||
| OPERATING PROFIT |
||||||||||||||||||||||||||||||||||||
| Consumer Foods |
192.0 | 300.9 | 266.0 | 309.0 | 1,067.9 | 240.6 | 325.9 | 291.3 | 857.8 | |||||||||||||||||||||||||||
| Commercial Foods |
120.5 | 147.2 | 144.5 | 154.0 | 566.2 | 140.0 | 162.7 | 175.0 | 477.7 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Total operating profit for segments |
312.5 | 448.1 | 410.5 | 463.0 | 1,634.1 | 380.6 | 488.6 | 466.3 | 1,335.5 | |||||||||||||||||||||||||||
| Reconciliation of operating profit to income from continuing operations before income taxes and equity method investment earnings |
||||||||||||||||||||||||||||||||||||
| Items excluded from segment operating profit: |
||||||||||||||||||||||||||||||||||||
| General corporate expense |
(115.0 | ) | (82.4 | ) | (50.8 | ) | (55.7 | ) | (303.9 | ) | (84.9 | ) | (184.9 | ) | (155.5 | ) | (425.3 | ) | ||||||||||||||||||
| Interest expense, net |
(83.3 | ) | (78.7 | ) | (79.8 | ) | (88.1 | ) | (329.9 | ) | (80.3 | ) | (79.6 | ) | (76.9 | ) | (236.8 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Income from continuing operations before income taxes and equity method investment earnings |
$ | 114.2 | $ | 287.0 | $ | 279.9 | $ | 319.2 | $ | 1,000.3 | $ | 215.4 | $ | 224.1 | $ | 233.9 | $ | 673.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
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.
3
| 17. | What is the current presentation of the quarterly income statement for fiscal year 2016 year-to-date and fiscal year 2015 as reported, given the sale of the private label operations? |
ConAgra Foods, Inc.
Income Statement for Fiscal 2015 and 2016
(in millions)
(unaudited)
| Fiscal 2015 | Fiscal 2016 | |||||||||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | Total | Q1 | Q2 | Q3 | Total | ||||||||||||||||||||||||||||
| Net sales |
$ | 2,765.5 | $ | 3,138.7 | $ | 2,907.3 | $ | 3,125.5 | $ | 11,937.0 | $ | 2,796.2 | $ | 3,095.1 | $ | 2,924.1 | $ | 8,815.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Costs and expenses: |
||||||||||||||||||||||||||||||||||||
| COGS |
2,174.2 | 2,381.0 | 2,187.3 | 2,318.9 | 9,061.4 | 2,095.2 | 2,266.6 | 2,123.7 | 6,485.5 | |||||||||||||||||||||||||||
| SG&A expenses |
393.8 | 392.0 | 360.3 | 399.3 | 1,545.4 | 405.4 | 524.7 | 489.6 | 1,419.7 | |||||||||||||||||||||||||||
| Interest expense, net |
83.3 | 78.7 | 79.8 | 88.1 | 329.9 | 80.3 | 79.6 | 76.9 | 236.8 | |||||||||||||||||||||||||||
| Income from continuing operations before income taxes and equity method investment earnings |
114.2 | 287.0 | 279.9 | 319.2 | 1,000.3 | 215.4 | 224.1 | 233.9 | 673.4 | |||||||||||||||||||||||||||
| Income tax expense |
44.4 | 102.9 | 100.6 | 114.1 | 362.0 | 85.0 | 83.3 | 91.0 | 259.3 | |||||||||||||||||||||||||||
| Equity method investment earnings |
25.6 | 34.0 | 33.0 | 29.5 | 122.1 | 37.0 | 25.3 | 44.7 | 107.0 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Income from continuing operations |
95.4 | 218.1 | 212.3 | 234.6 | 760.4 | 167.4 | 166.1 | 187.6 | 521.1 | |||||||||||||||||||||||||||
| Income (loss) from discontinued operations, net of tax |
389.1 | (202.2 | ) | (1,165.0 | ) | (23.1 | ) | (1,001.2 | ) | (1,319.8 | ) | (6.8 | ) | 18.7 | (1,307.9 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
| Net income (loss) |
484.5 | 15.9 | (952.7 | ) | 211.5 | (240.8 | ) | (1,152.4 | ) | 159.3 | 206.3 | (786.8 | ) | |||||||||||||||||||||||
| Less noncontrolling interests |
2.2 | 5.9 | 1.4 | 2.3 | 11.8 | 1.7 | 4.4 | 1.7 | 7.8 | |||||||||||||||||||||||||||
| Net income (loss) attributable to CAG |
$ | 482.3 | $ | 10.0 | $ | (954.1 | ) | $ | 209.2 | $ | (252.6 | ) | $ | (1,154.1 | ) | $ | 154.9 | $ | 204.6 | $ | (794.6 | ) | ||||||||||||||
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| 18. | Given the changes to segment reporting, and thus continuing operations, with the sale of the private label operations, what is the presentation of diluted EPS from continuing operations by quarter for fiscal 2015 and fiscal 2016 YTD? Which previously discussed items impacting comparability apply to these amounts? |
FY16 Year-to-Date Diluted EPS from Continuing Operations*
| Q1 FY16 | Q2 FY16 | Q3 FY16 | Q4 FY16 | FY16 YTD | ||||||||||||||||
| Diluted EPS from continuing operations |
$ | 0.38 | $ | 0.37 | $ | 0.41 | $ | 1.16 | ||||||||||||
| Items impacting comparability: |
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| Net expense related to restructuring charges |
0.02 | 0.19 | 0.16 | 0.37 | ||||||||||||||||
| Net expense related to debt tender offer |
— | — | 0.04 | 0.04 | ||||||||||||||||
| Net benefit related to Lamb Weston pension plan settlement |
— | — | (0.03 | ) | (0.03 | ) | ||||||||||||||
| Net benefit of unusual tax matters |
— | 0.02 | — | 0.02 | ||||||||||||||||
| Rounding |
0.01 | — | (0.01 | ) | — | |||||||||||||||
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| Diluted EPS from continuing operations, adjusted for items impacting comparability |
$ | 0.41 | $ | 0.58 | $ | 0.57 | $ | — | $ | 1.56 | ||||||||||
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FY15 Diluted EPS from Continuing Operations*
| Q1 FY15 | Q2 FY15 | Q3 FY15 | Q4 FY15 | Full FY15 | ||||||||||||||||
| Diluted EPS from continuing operations |
$ | 0.22 | $ | 0.49 | $ | 0.49 | $ | 0.54 | $ | 1.73 | ||||||||||
| Items impacting comparability: |
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| Net expense related to restructuring and integration charges |
0.02 | 0.02 | 0.02 | 0.02 | 0.08 | |||||||||||||||
| Net expense related to impairment expense |
— | 0.01 | 0.03 | 0.01 | 0.05 | |||||||||||||||
| Net (benefit) expense related to unallocated mark-to-market impact of derivatives |
0.05 | 0.03 | (0.01 | ) | (0.03 | ) | 0.05 | |||||||||||||
| Net expense related to extinguishment of debt |
0.04 | — | — | — | 0.04 | |||||||||||||||
| Net benefit related to historical legal matters |
(0.01 | ) | — | — | — | (0.02 | ) | |||||||||||||
| Net expense of related to year-end remeasurement of pensions |
— | — | — | 0.01 | 0.01 | |||||||||||||||
| Net benefit of unusual tax matters |
— | (0.01 | ) | — | — | (0.01 | ) | |||||||||||||
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| Diluted EPS from continuing operations, adjusted for items impacting comparability |
$ | 0.32 | $ | 0.54 | $ | 0.53 | $ | 0.55 | $ | 1.93 | ||||||||||
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| * | Amounts may be impacted by rounding. |
5
Supplemental details relating to items impacting comparability for fiscal 2015 (amounts may be impacted by rounding)
| --------Pretax Expense Classification by Segment -------- | ||||||||||||||||||||
| Diluted EPS Impact | ||||||||||||||||||||
| expense (benefit) | Pretax $ (mm) | Consumer Foods | Commercial Foods | Corporate | ||||||||||||||||
| Fiscal Q1 2015 |
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| Restructuring and integration |
$ | 0.02 | $ | 15 | $ | 10 | $ | 4 | $ | 1 | ||||||||||
| Mark-to-market hedge |
$ | 0.05 | $ | 33 | $ | — | $ | — | $ | 33 | ||||||||||
| Debt Extinguishment |
$ | 0.04 | $ | 25 | $ | — | $ | — | $ | 25 | ||||||||||
| Historical Legal Matters |
$ | (0.01 | ) | $ | (6 | ) | $ | — | $ | — | $ | (6 | ) | |||||||
| Fiscal Q2 2015 |
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| Restructuring and integration |
$ | 0.02 | $ | 12 | $ | 8 | $ | — | $ | 4 | ||||||||||
| Mark-to-market hedge |
$ | 0.03 | $ | 22 | $ | — | $ | — | $ | 22 | ||||||||||
| Impairment |
$ | 0.01 | $ | 6 | $ | 6 | $ | — | $ | — | ||||||||||
| Unusual Tax |
$ | (0.01 | ) | N/A | N/A | N/A | N/A | |||||||||||||
| Fiscal Q3 2015 |
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| Restructuring and integration |
$ | 0.02 | $ | 11 | $ | 8 | $ | — | $ | 3 | ||||||||||
| Mark-to-market hedge |
$ | (0.01 | ) | $ | (4 | ) | $ | — | $ | — | $ | (4 | ) | |||||||
| Impairment |
$ | 0.03 | $ | 15 | $ | 15 | $ | — | $ | — | ||||||||||
| Fiscal Q4 2015 |
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| Restructuring and integration |
$ | 0.02 | $ | 15 | $ | 10 | $ | — | $ | 5 | ||||||||||
| Mark-to-market hedge |
$ | (0.03 | ) | $ | (18 | ) | $ | — | $ | — | $ | (18 | ) | |||||||
| Impairment |
$ | 0.01 | $ | 5 | $ | 5 | $ | — | $ | — | ||||||||||
| Pension |
$ | 0.01 | $ | 7 | $ | — | $ | — | $ | 7 | ||||||||||
6
Note on Forward-looking Statements:
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on 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 document to reflect future events or circumstances or otherwise.
7