<PAGE>
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 August 30, 1998
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, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant, as specified in charter)
Delaware 47-0248710
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One ConAgra Drive, Omaha, Nebraska 68102-5001
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(Address of Principal Executive Offices) (Zip Code)
(402) 595-4000
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NA
- -------------------------------------------------------------------------------
(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] No [ ]
Number of shares outstanding of issuer's common stock, as of September 25,
1998 was 489,324,064.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions except per share amounts)
(unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
AUGUST 30, AUGUST 24,
1998 1997
------------ -----------
<S> <C> <C>
Net sales $ 6,483.4 $ 6,262.8
Costs and expenses
Cost of goods sold 5,565.9 5,379.4
Selling, administrative and general expenses 663.3 618.3
Interest expense 76.4 73.6
------------ -----------
6,305.6 6,071.3
------------ -----------
Income before income taxes 177.8 191.5
Income taxes 68.5 73.2
------------ -----------
Net income $ 109.3 $ 118.3
------------ -----------
------------ -----------
Income per share - basic $ .23 $ .25
------------ -----------
------------ -----------
Income per share - diluted $ .23 $ .25
------------ -----------
------------ -----------
</TABLE>
- -------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements.
2
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
AUGUST 30, AUGUST 24,
1998 1997
--------- ----------
<S> <C> <C>
Net income $ 109.3 $ 118.3
Other comprehensive income/(loss):
Currency translation adjustment (17.9) (11.5)
--------- ----------
Comprehensive income $ 91.4 $ 106.8
--------- ----------
--------- ----------
</TABLE>
- -------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements.
3
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions except shares)
(unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
ASSETS AUGUST 30, MAY 31, AUGUST 24,
1998 1998 1997
---------- --------- ----------
<S> <C> <C> <C>
Current assets
Cash and cash equivalents $ 10.8 $ 108.4 $ 26.6
Receivables, less allowance for doubtful accounts
of $78.3, $68.2 and $74.1 2,688.6 1,546.9 2,402.2
Inventories 3,806.4 3,540.8 3,660.1
Prepaid expenses 367.6 341.6 424.5
---------- --------- ----------
Total current assets 6,873.4 5,537.7 6,513.4
---------- --------- ----------
Property, plant and equipment 5,912.6 5,761.1 5,443.4
Less accumulated depreciation (2,390.8) (2,311.4) (2,136.1)
---------- --------- ----------
Property, plant and equipment, net 3,521.8 3,449.7 3,307.3
---------- --------- ----------
Brands, trademarks and goodwill 2,694.9 2,391.7 2,421.8
Other assets 438.6 429.4 377.6
---------- --------- ----------
$ 13,528.7 $ 11,808.5 $ 12,620.1
---------- --------- ----------
---------- --------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 4,187.5 $ 858.1 $ 3,216.1
Current installments of long-term debt 28.5 52.7 368.0
Accounts payable 1,051.9 1,971.0 1,078.4
Advances on sales 106.6 829.7 163.9
Other accrued liabilities 1,384.0 1,382.2 1,503.2
---------- --------- ----------
Total current liabilities 6,758.5 5,093.7 6,329.6
---------- --------- ----------
Senior long-term debt, excluding current installments 1,781.8 1,753.5 1,591.4
Other noncurrent liabilities 830.7 847.3 924.6
Subordinated debt 750.0 750.0 750.0
Preferred securities of subsidiary company 525.0 525.0 525.0
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000
shares; issued 519,448,104, 519,424,034 and 522,805,088 2,597.2 2,597.1 2,614.0
Additional paid-in capital 212.0 320.0 416.7
Retained earnings 1,373.9 1,337.7 1,133.4
Foreign currency translation adjustment (85.5) (67.6) (43.2)
Less treasury stock, at cost, common
shares 30,155,200, 30,011,958 and 34,284,418 (708.9) (705.2) (798.6)
---------- --------- ----------
3,388.7 3,482.0 3,322.3
Less unearned restricted stock and value of 19,830,815,
21,376,632 and 24,950,494 common shares held
in Employee Equity Fund (506.0) (643.0) (822.8)
---------- --------- ----------
Total common stockholders' equity 2,882.7 2,839.0 2,499.5
---------- --------- ----------
$ 13,528.7 $ 11,808.5 $ 12,620.1
---------- --------- ----------
---------- --------- ----------
- ------------------------------------------------------------------------------------------------------
</TABLE>
See notes to the condensed consolidated financial statements.
4
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
THIRTEEN WEEKS ENDED
AUGUST 30, AUGUST 24,
1998 1997
----------- ----------
<S> <C> <C>
Cash flows from operating activities
Net income $ 109.3 $ 118.3
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and other amortization 102.9 93.3
Goodwill amortization 17.2 17.5
Other noncash items (includes nonpension postretirement benefits) 35.1 26.2
Change in assets and liabilities before effects
from business acquisitions (3,127.9) (2,852.3)
----------- ----------
Net cash flows from operating activities (2,863.4) (2,597.0)
----------- ----------
Cash flows from investing activities
Additions to property, plant and equipment (112.2) (89.3)
Payment for business acquisitions (400.0) --
Sale of businesses and property, plant and equipment 4.9 136.7
Notes receivable and other items (2.1) 8.8
----------- ----------
Net cash flows from investing activities (509.4) 56.2
----------- ----------
Cash flows from financing activities
Net short-term borrowings 3,329.4 2,675.6
Proceeds from issuance of long-term debt 45.9 303.4
Repayment of long-term debt (42.2) (327.3)
Cash dividends paid (71.5) (61.3)
Cash distributions of pooled companies (1.2) (1.5)
Treasury stock purchases -- (140.7)
Employee Equity Fund stock transactions 6.4 11.9
Other items 8.4 0.4
----------- ----------
Net cash flows from financing activities 3,275.2 2,460.5
----------- ----------
Net increase (decrease) in cash and cash equivalents (97.6) (80.3)
Cash and cash equivalents at beginning of period 108.4 106.9
----------- ----------
Cash and cash equivalents at end of period $ 10.8 $ 26.6
----------- ----------
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to the condensed consolidated financial statements.
5
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED AUGUST 30, 1998
(COLUMNAR DATA IN MILLIONS)
1. ACCOUNTING POLICIES
The unaudited interim financial information included herein reflects the
adjustments (consisting solely of 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. Such interim information should be read in conjunction with
the financial statements and notes thereto included in the Company's
report on Form 8-K dated September 29, 1998, restated to give effect to
mergers accounted for as poolings of interest.
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.
ACCOUNTING CHANGES
In the first quarter of fiscal 1999, ConAgra adopted Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME
(SFAS No. 130), which establishes standards for reporting comprehensive
income in financial statements. Comprehensive income includes all changes
in equity during a period except those resulting from investments by or
distributions to stockholders. The adoption of this statement had no
impact on net income or shareholders' equity.
Comprehensive income for all periods presented consists of net income and
foreign currency translation adjustments. Amounts in prior year financial
statements have been reclassified to conform to SFAS No. 130 requirements.
ConAgra deems its foreign investments to be permanent in nature and does
not provide for taxes on currency translation adjustments arising from
converting the investment in a foreign currency to U.S. dollars. There
are no reclassification adjustments to be reported in periods presented.
2. BUSINESS COMBINATIONS
On July 31, 1998, GoodMark Foods, Inc. (GoodMark) merged with ConAgra
through an exchange of shares. ConAgra issued approximately 7.8 million
shares of common stock for all outstanding shares of GoodMark. On July 31,
1998, Fernando's Foods Corporation (Fernando's) merged with ConAgra
through an exchange of shares. ConAgra issued approximately 1.3 million
shares of common stock for all outstanding shares of Fernando's.
During fiscal 1998, ConAgra completed mergers with Hester Industries, Inc.
(Hester) and A.M. Gilardi & Sons, Inc. (Gilardi), exchanging 3.7 million
and 3.8 million shares of ConAgra stock, respectively, for all outstanding
shares of Hester and Gilardi.
The above business combinations have been accounted for as poolings of
interest. The historical financial statements of the Company have been
restated to give effect to the all of the above acquisitions as though the
companies had operated together from the beginning of the earliest period
presented.
6
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED AUGUST 30, 1998
(COLUMNAR DATA IN MILLIONS)
Results of operations of the acquired businesses prior to acquisition date
were as follows:
<TABLE>
<CAPTION>
THIRTEEN
WEEKS ENDED
AUGUST 24,
1997
-----------
<S> <C>
Net sales $ 122.4
Net income $ 8.2
</TABLE>
3. INCOME PER SHARE
The following table reconciles the income and average share amounts used
to compute both basic and diluted income per share:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
-------------------------
AUGUST 30, AUGUST 24,
1998 1997
---------- ----------
<S> <C> <C>
INCOME PER SHARE - BASIC
Net income $ 109.3 $ 118.3
-------- --------
-------- --------
Weighted average shares outstanding - basic 468.7 465.2
-------- --------
-------- --------
INCOME PER SHARE - DILUTED
Net income $ 109.3 $ 118.3
-------- --------
-------- --------
Weighted average shares outstanding - basic 468.7 465.2
Add shares contingently issuable upon
exercise of stock options 6.7 10.8
-------- --------
Weighted average shares outstanding - diluted 475.4 476.0
-------- --------
-------- --------
</TABLE>
4. INVENTORIES
The major classes of inventories are as follows:
<TABLE>
<CAPTION>
AUGUST 30, MAY 31, AUGUST 24,
1998 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Hedged commodities $ 1,152.6 $ 1,199.3 $ 1,100.9
Food products and livestock 1,291.6 1,263.3 1,430.3
Agricultural chemicals, fertilizer and feed 831.2 581.4 662.1
Other, principally ingredients and supplies 531.0 496.8 466.8
---------- ---------- ----------
$ 3,806.4 $ 3,540.8 $ 3,660.1
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
7
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEKS ENDED AUGUST 30, 1998
(COLUMNAR DATA IN MILLIONS)
5. CONTINGENCIES
In fiscal 1991, ConAgra acquired Beatrice Company ("Beatrice"). As a
result of the acquisition and the significant pre-acquisition tax and
other contingencies of the Beatrice businesses and its former
subsidiaries, the consolidated post-acquisition financial statements of
ConAgra reflected significant liabilities and valuation allowances
associated with the estimated resolution of these contingencies. The
material pre-acquisition tax contingencies were resolved in fiscal 1995.
Beatrice is also engaged in various litigation and environmental
proceedings related to businesses divested by Beatrice prior to its
acquisition by ConAgra. The environmental proceedings include litigation
and administrative proceedings involving Beatrice's status as a
potentially responsible party at 46 Superfund, proposed Superfund or state-
equivalent sites. Beatrice has paid or is in the process of paying its
liability share at 40 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.
ConAgra 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's financial condition, results of operations or
liquidity.
6. ACQUISITIONS
On August 17, 1998, ConAgra acquired the Egg Beaters and Tablespreads
businesses from Nabisco, Inc. for $400 million. The Tablespreads business
manufactures and markets margarine under Parkay, Blue Bonnet,
Fleischmann's, Touch of Butter, Chiffon and Move Over Butter brand names.
Egg Beaters is an egg alternative product. Annual sales of the combined
businesses are approximately $480 million. The acquisition was accounted
for as a purchase.
7. SUBSEQUENT EVENTS
On October 7, 1998, ConAgra issued $400 million of senior notes with an
interest rate of 7.00% due October 1, 2028. The notes were priced at
99.964% of par. On October 9, 1998, ConAgra issued $200 million of senior
notes with an interest rate of 5.50% due October 15, 2002. The notes were
priced at 99.981% of par. The proceeds of the note issuances were used to
reduce short-term debt.
8
<PAGE>
CONAGRA, 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 consolidated condensed
financial statements. Results for the thirteen-week period ended August 30,
1998 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, company 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.
All prior period results have been restated to give effect to mergers accounted
for as poolings of interest.
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.
Capital investment increased $55.4 million, or 0.8%, compared to May 31, 1998.
Working capital decreased $329.1 million, primarily due to increased short-term
borrowings for the Egg Beaters and Tablespreads acquisition. Normal seasonal
increases in accounts receivable and inventory were funded by short-term debt.
ConAgra invested $112.2 million in property, plant and equipment and $400
million for business acquisitions in the first quarter of fiscal 1999 compared
to $89.3 million in additions to property, plant and equipment in the same
quarter of fiscal 1998. Sales of property and businesses totaled $4.9 million
in the first quarter of fiscal 1999 versus $136.7 million in the first quarter
of fiscal 1998. Depreciation and amortization totaled $120.1 million in the
first quarter compared to $110.8 million in the same quarter last year.
The Company's objective is that senior long-term debt normally will not exceed
30 percent of total long-term debt plus equity. This objective was met for all
periods presented.
9
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
PART I -- FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OPERATING RESULTS
A summary of the period to period increases (decreases) in the principal
components of operations is shown below (dollars in millions, except per share
amounts).
<TABLE>
<CAPTION>
COMPARISON OF THE PERIODS ENDED
AUGUST 30, 1998 AND AUGUST 24, 1997
-----------------------------------
DOLLAR PERCENT
CHANGE CHANGE
-------- ------
<S> <C> <C>
Net sales $ 220.6 3.5%
Costs and expenses
Cost of goods sold 186.5 3.5
Selling, administrative and general expenses 45.0 7.3
Interest expense 2.8 3.8
-------- ------
234.3 3.9
-------- ------
Income before income taxes (13.7) (7.2)
Income taxes (4.7) (6.4)
-------- ------
Net income $ (9.0) (7.6)%
-------- ------
-------- ------
Income per share - basic $ (.02) (8.0)%
-------- ------
-------- ------
Income per share - diluted $ (.02) (8.0)%
-------- ------
-------- ------
</TABLE>
In ConAgra's Grocery & Diversified Products business segment, operating profit
increased 10 percent and sales increased 1 percent in fiscal 1999's first
quarter versus fiscal 1998's first quarter. The segment's three business groups
all contributed to first quarter operating profit growth. ConAgra Frozen Foods
increased unit volumes and operating profit. ConAgra Foodservice Sales Company,
which includes Lamb-Weston potato products, had significant operating profit
growth. ConAgra Grocery Products, the shelf-stable foods group, raised
operating profit supported by Hunt-Wesson's, Golden Valley's and GoodMark's
unit volume growth.
In ConAgra's Food Inputs & Ingredients business segment, operating profit
increased 13 percent and sales increased 11 percent in fiscal 1999's first
quarter versus fiscal 1998's first quarter. ConAgra's major crop inputs
business, United Agri Products, enjoyed substantial sales and operating profit
growth in fiscal 1999's first quarter. In the ingredients sector, commodity
services, international operations and specialty food ingredients achieved
operating profit growth, while operating profit was down in grain merchandising
and flour milling.
In ConAgra's Refrigerated Foods business segment, operating profit decreased 29
percent and sales were unchanged in fiscal 1999's first quarter versus fiscal
1998's first quarter. Lower pork and beef raw materials prices passed through
as lower selling prices constrained segment sales about 4 percent.
The branded packaged meats business increased first quarter unit volumes and
operating profit. A recent acquisition contributed to operating profit growth
in the cheese and tablespreads business. Poultry products and Australia beef
increased operating profit. Pork operating profit was down due to the effect of
procurement contracts. The principal cause of the segment's operating profit
decline was a sharp drop in U.S. beef processing as excess total protein supply
adversely impacted beef industry prices and margins.
10
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
PART I -- FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In total, ConAgra's fiscal 1999 first quarter net sales were $6.48 billion, up
3.5 percent from $6.26 billion in fiscal 1998's restated first quarter. Gross
margins improved to 14.2% of sales, up from 14.1% in the first quarter, fiscal
1998. Selling, administrative and general expenses increased $45 million or
7.3%, primarily relating to expansion of business or marketing of new products.
Interest expense was up $2.8 million, as lower interest rates offset the impact
of higher borrowing balances. For ConAgra in total, fiscal 1999 first quarter
net income was $109.3 million, down 8 percent from $118.3 million in fiscal
1998's restated first quarter. Fiscal 1999 first quarter diluted earnings per
share were 23 cents, down 8 percent from 25 cents in fiscal 1998's first
quarter as restated for pooling of interests with four businesses that
subsequently merged with ConAgra.
YEAR 2000
The Year 2000 ("Y2K") computer software compliance issues affect ConAgra and
most companies in the world. Historically, certain computer programs were
written using two digits rather than four to define the applicable year. As a
result, software may recognize a date using the two digits "00" as 1900 rather
than the year 2000. Computer programs that do not recognize the proper date
could generate erroneous data or cause systems to fail. ConAgra has
established a Y2K project office and has retained an independent consulting
group to provide assistance with regard to ConAgra's Y2K compliance. ConAgra's
Y2K project covers both traditional computer systems and infrastructure ("IT
systems") and computer-based manufacturing, logistical and related systems
("non-IT systems"). The Y2K project has six phases: systems inventory,
assessment, renovation, validation, implementation, and contingency planning.
ConAgra operates on a decentralized independent operating company ("IOC")
structure. Consequently, the Y2K project efforts may vary by IOC. For IT
systems, the status of the project generally ranges from assessment to
validation. For non-IT systems, the status of the project generally ranges
from assessment to renovation. Based on its assessment of its major
information technology systems, ConAgra expects that all necessary
modifications and/or replacements will be completed in a timely manner to
insure that each IOC's systems are Y2K compliant.
ConAgra's Y2K project also considers the readiness of significant customers and
suppliers. ConAgra does not have any suppliers or customers that are material
to its operations as a whole. Each IOC is verifying the readiness of suppliers
and customers that may be significant for such IOC.
Due to the decentralized IOC structure, there are few IT systems and non-IT
systems, the failure of which would have a material effect on ConAgra as a
whole. Such material systems include general ledger, payroll, fixed assets and
cash management systems. ConAgra's Y2K project includes contingency plans for
these systems that involve, among other things, manual workarounds and extra
staffing. ConAgra's Y2K project includes the development of a full contingency
plan for each IOC and ConAgra presently expects to have such contingency
arrangements completed by June 1999.
ConAgra has incurred approximately $10 million of Y2K project expenses to date.
Future expenses are expected to include $50 to $60 million of additional costs,
plus approximately $10 million of systems initiatives that have been
accelerated in connection with the Y2K project. Such cost estimates are based
upon presently available information and may change as ConAgra continues with
its Y2K project.
11
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
PART II -- OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
ConAgra issued 1,310,370 shares of its common stock during the first quarter
of fiscal 1999 in connection with the acquisition through merger of
Fernando's Foods Corporation. The common stock was issued in reliance on the
exemption from registration provided by Section 4 (2) of the Securities Act
of 1933 and Regulation D thereunder.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
There have been no material changes in the company's market risk during the
first quarter ended August 30, 1998.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
ConAgra's annual meeting of stockholders was held on September 24, 1998. The
stockholders elected five directors to serve three-year terms, ratified the
appointment of Deloitte & Touche to examine ConAgra's financial statements
for fiscal year 1999 and did not approve a stockholder proposal. Voting on
these items was as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
1. Election of Directors
FOR WITHHELD
Mogens C. Bay 408,869,925 8,436,312
Charles M. Harper 402,301,920 15,004,317
Carl E. Reichardt 402,719,786 14,586,451
Marjorie M. Scardino 408,833,634 8,472,603
Kenneth E. Stinson 408,873,916 8,432,321
2. Ratification of Accountants
FOR: 414,896,013
AGAINST: 1,385,559
ABSTAIN: 1,024,665
BROKER/NON-VOTES: -0-
3. Stockholder Proposal on Employment Reporting
FOR: 38,261,343
AGAINST: 315,664,236
ABSTAIN: 12,550,959
BROKER/NON-VOTES: 50,829,699
</TABLE>
ITEM 5. OTHER INFORMATION
ConAgra's Board of Directors elected Chief Executive Officer Bruce Rohde as
Chairman of ConAgra's Board of Directors on September 24, 1998. Mr. Rohde
had been Vice Chairman, President and Chief Executive Officer since September
1997. Mr. Rohde succeeds Philip B. Fletcher, who continues as a member of
ConAgra's Board of Directors and became Chairman of the Board's Executive
Committee.
12
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
PART II -- OTHER INFORMATION
On September 24, 1998, ConAgra's Board of Directors approved a 14.2% increase
in ConAgra's common stock dividend. The Board declared a quarterly common
stock cash dividend of 17.85 cents per share payable December 1, 1998 to
stockholders of record November 6, 1998. The quarterly dividend previously
was 15.625 cents per share. The new indicated annual dividend rate is 71.4
cents per share, up from the previous 62.5 cents per share.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
12 - Statement regarding computation of ratio of earnings to fixed
charges.
(B) Reports on Form 8-K
ConAgra filed a report on Form 8-K dated September 29, 1998 which
included consolidated selected financial data, consolidated management's
discussion and analysis of financial condition and results of operations,
consolidated financial statements and notes thereto, and financial
statement schedules, all restated to give effect to mergers accounted for
as poolings of interest.
CONAGRA, INC.
By:
/s/ James P. O'Donnell
----------------------------------
James P. O'Donnell
Executive Vice President,
Chief Financial Officer and
Corporate Secretary
By:
/s/ Kenneth W. DiFonzo
----------------------------------
Kenneth W. DiFonzo
Senior Vice President and
Controller
Dated this 13th day of October, 1998.
13
<PAGE>
CONAGRA, INC. AND SUBSIDIARIES
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
12 Statement regarding computation of ratio of
earnings to fixed charges 15
14
<PAGE>
EXHIBIT 12
CONAGRA, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in millions)
<TABLE>
<CAPTION>
THIRTEEN WEEKS
ENDED
AUGUST 30, 1998
---------------
<S> <C>
Fixed charges
Interest expense $ 91.7
Capitalized interest 1.6
Interest in cost of goods sold 4.2
One third of noncancelable lease rent 8.5
--------
Total fixed charges (A) $ 106.0
--------
--------
Earnings
Pretax income $ 177.8
Add fixed charges 106.0
Less capitalized interest (1.6)
--------
Earnings and fixed charges (B) $ 282.2
--------
--------
Ratio of earnings to fixed charges (B/A) 2.7
</TABLE>
For the purpose of computing the above ratio of earnings to fixed charges,
earnings consist of income before taxes and fixed charges. Fixed charges,
for the purpose of computing earnings, are adjusted to exclude interest
capitalized. Fixed charges include interest on both long and short-term debt
(whether said interest is expensed or capitalized and including interest
charged to cost of goods sold), and a portion of noncancelable rental expense
representative of the interest factor. The ratio is computed using the
amounts for ConAgra as a whole, including its majority-owned subsidiaries,
whether or not consolidated, and its proportionate share of any 50% owned
subsidiaries, whether or not ConAgra guarantees obligations of these
subsidiaries.
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-30-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-30-1998
<CASH> 10,800
<SECURITIES> 0
<RECEIVABLES> 2,766,900
<ALLOWANCES> 78,300
<INVENTORY> 3,806,400
<CURRENT-ASSETS> 6,873,400
<PP&E> 5,912,600
<DEPRECIATION> 2,390,800
<TOTAL-ASSETS> 13,528,700
<CURRENT-LIABILITIES> 6,758,500
<BONDS> 2,531,800
0
525,000
<COMMON> 2,597,200
<OTHER-SE> 285,500
<TOTAL-LIABILITY-AND-EQUITY> 13,528,700
<SALES> 6,483,400
<TOTAL-REVENUES> 6,483,400
<CGS> 5,565,900
<TOTAL-COSTS> 5,565,900
<OTHER-EXPENSES> 663,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76,400
<INCOME-PRETAX> 177,800
<INCOME-TAX> 68,500
<INCOME-CONTINUING> 109,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 109,300
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0.23
</TABLE>
