康尼格拉食品 (CAG) 2005 Q3 法說會逐字稿

Good morning.

My name is Marvin and I will be your conference facilitator today.

At this time I would like to welcome everyone to the ConAgra Foods third quarter Management discussion.

All lines have been placed on mute to prevent any background noise.

At this time we will begin the discussion.

Hello and welcome to ConAgra Foods discussion of third quarter fiscal 2005 results.

I'm Chris Kleinfelter, the Investor Relations contact for the Company.

With me are Bruce Rohde, our Chairman and CEO, Frank Sklarsky, our Chief Financial Officer, Dennis O'Brien, Chief Operating Officer of our Retail Products segment, Allan Lutz, Chief Operating Officer of our Products segment and Greg Heckman, Chief Operating Officer of our Food Ingredients segment.

Today we released third quarter earnings of $0.31 per share.

That includes $0.03 per share of net expense from items impacting comparability that we detail in the release.

The other item I should mention is that we consider these results preliminary because there are unresolved tax matters relating to historical amounts that Frank will say more about in a minute.

Over the next few minutes you will hear from Bruce about the quarter.

You'll hear from Dennis, Allan and Greg about what is taking place in their segments, and you'll hear from Frank about financial matters.

We always detail the impacts of the quarter's performance in both the news release and in the Q&A document that adds a number of details, so I will refer you to those because they contain a variety of items.

Today's comments also include some nonGAAP financial measures, so I will refer you to the Company's reconciliation in today's press release, which is posted on the Company's website.

And, as usual, we will be making some forward-looking statements.

Although we are making those statements in good faith and while we are confident about our direction, as you know, we don't have any guarantee about the results that we will achieve in the future.

So I will refer you to our note on forward-looking statements in our earnings release.

So if you would like to read more about the factors and risks which can influence and affect our business, I'll refer you to the documents that we filed with the SEC.

With that out of the way, we will get started and I will turn it over to Bruce.

Thanks Chris.

There's a lot to cover today.

This is a quarter in which we have a wide variety of things under way.

Things are moving very rapidly and there is a lot to digest, so let me start with some perspective and place things into three categories.

The first category items includes: the basic business matters that shaped our operating performance for the third quarter and affects our outlook for the fourth quarter.

In a moment I'm going to provide you an overview of those items and Dennis, Allan and Greg will individually comment on the specifics for their segments.

The second category consists of those items impacting year-over-year comparability.

Because there are so many actions underway, there are at least eight comparability items detailed at the end of today's press release.

Dennis, Allan and Greg will each comment on any that fall into their respective business segments, and because there are some that don't fall within those segments, Frank will give a recap on the others.

The third category is the historical income tax items which grow out of foreign tax credits and capital loss carry-forwards, which we currently estimate to be in the range of $150 million to $200 million.

This is very important, as it's the reason we consider today's numbers preliminary.

Frank and his finance team have delved into this as since his arrival and it's part of our Sarbanes-Oxley 404 work, so he will brief you on this matter and after he does, I have some more comments on this topic.

So right now, let's recap the quarter.

With an EPS of $0.31, we had an okay performance in the sense that it was ahead of what we thought it would be when we released news about the quarter last month.

When you take into consideration the $0.03 of net expenses that Chris just mentioned, but it's still much weaker than we were expecting when we put our internal plans together a year ago.

In hindsight, with the exception of the tax matters, the quarter is a composite of some bright spots, a number of distractions and a number of growing pains that created temporary setbacks but seeded long-term benefits.

A word on the bright spots.

Each segment had some of them.

For example, retail had several brands with solid results.

Foodservice posted a good showing with specialty potato products, and Food Ingredients posted another good quarter with its trading and merchandising activities.

We also made progress reducing some other core operating expenses.

We successfully monetized some assets we are holding as a part of the divestiture strategy for both beef and poultry.

Both of those developed in line with our strategies, and as a result, we retired a significant amount of debt.

So those items all point to progress.

However, on an operational basis, working against all of that progress, and, unfortunately, overshadowing it, were three major factors.

First was significantly lower packaged meat margins.

Second, several manufacturing issues resulted in missed volumes, missed margins and a weaker mix primarily because we didn't plan well enough as we phased in new equipment and production location changes.

And third, but to a much lesser extent, but, of course, with much more notoriety, we had some disruption that came about as we shifted into our strategic SAP information platforms.

These are the same three items we told you about in our press release about a month ago.

The only real news about these items is that we now know more precisely the relative degree of impact from them.

The first two items, meat and manufacturing issues, were by far the two most significant operational matters.

The disruption from Project Nucleus startup was much less a factor than the other two because of how well things straightened out as the quarter progressed.

Our people did a fine job making much better use of the SAP platform as they became more acclimated to it.

In the packaged meat operations, which reside mostly in Retail but also in Foodservice, the issues were straightforward.

Protein costs were higher than we planned for.

They didn't abate and our pricing strategies did not keep pace.

Even where we took price increases, we didn't do it as quickly as we should have or could have.

So, we are making changes to the pricing process to fix that so we respond more quickly in the future.

There is also opportunity here.

There is no doubt we can improve some of our offerings in this area of our business and we can eliminate some SKUs that are compressing margins.

There are a number of SKUs that clog the system.

So, we've got plans underway to simplify.

And this quarter's performance provides a lot of motivation to get that done.

To help put the packaged meats issue in perspective, gross margins are about a third lower in those operations than they were a year ago.

That's a huge drop.

And profitability for those operations is down more than $45 million, year over year.

That means about $0.05 a share to us.

So obviously, this significantly impacted our overall results.

The next topic that I would like to talk about it is the changes we have underway in our manufacturing network.

We are making changes to the network to become more efficient, and that means that in some cases, we are putting in some new equipment.

In other cases, it means we are transferring and consolidating production runs for efficiency, all with the purpose of generating better margins and achieving better absorption.

We will get the efficiencies over time, but as we made some of these manufacturing shifts, we wound up with some product shortages we had to work out of this quarter.

We weren't able to keep up with demand, so we missed both sales and margin opportunities during this time of transition.

We simply didn't link the sales and operations plans as well as we would have liked, and that is the reason we weren't able to keep pace with demand for some very popular products.

Since this is mostly in the retail segment, Dennis will get into this more in a few minutes.

The good news is this.

His team has a lot of this under control and progress is being made.

The last thing that I want to mention about operational challenges and disruption this quarter relates to implementing Project Nucleus.

For those of you who have been following this for awhile, you know that we have been strategically linking key functions.

That means manufacturing, marketing, sales and customer interfaces, with an integrated and sophisticated SAP information systems platform.

This is already showing its capabilities to make us much more efficient and reliable, but it is a huge undertaking by a lot of people to get there.

There is real business value to doing this, and that is why we are doing the heavy lifting now to get this accomplished and get it behind us.

The sequence of events this last quarter is this.

On December 1st , we transferred all of our order to cash activities, and that means trade promotions, order fill, invoicing, transportation and collection activities, across our retail operations and most of our Foodservice operations on to the new Nucleus platform.

It was an aggressive implementation that covered a lot of territory and complex issues in a very compressed period of time.

To the extent it had bugs in it.

They didn't surface until mid-January when we got into the January collection cycle for the December business.

That said, we had to jump in with both feet at some point in this process.

So we are glad we took the step in the third quarter, in spite of the interim pain, because it's increased our capabilities and will save on the overall implementation process in the long run.

Any time a company undertakes something like this, there are issues to work through and ConAgra Foods is no exception.

I want to stress that the Nucleus issues this quarter were relatively minor in the overall scheme of things, particularly given the magnitude of the new capabilities that we acquired and the disruption that we experienced was largely self-inflicted as we went through our own learning curve.

The challenges were within our own organization as we learned new disciplines.

It was not a fault of the information platforms that we inaugurated, nor was it the fault of the advice on how we went about to doing this.

On that score, I would say that our vendor partner SAP has been and continues to be an extremely valuable resource for us.

Overall, we are very pleased with the SAP product and weekly we are seeing the kinks worked out and progress increasing.

For example, right now our fill rates and delivery times are now already higher than a year ago.

So, while there were some new year surprises in the month of January and some things to work through during the quarter, by and large , the disruption that occurred was relatively small when you take into consideration that the implementation was probably one of the more complex installations in North America.

Overall, the Nucleus Project is a highly worthwhile investment.

Our Nucleus system is the key to giving us the visibility we need to make important decisions that drive efficiencies and excellent customer service.

And I'm glad we got the big steps and the order-to-cash implementation behind us.

With that fundamental in place, the organization is gaining institutional knowledge and operational dexterity.

That takes effort but it's well worth it.

And this is an example of where we're going to take a long-term view of things, in spite of the heavy lifting, and make what we consider to be appropriate investments in human resource commitments to build institutional learning and a stronger company.

So, net -- net at this point, the production issues are much better and won't impact the fourth quarter like they did the third, and the same can be said for our Nucleus progress

Regarding the packaged meats business, we are focused on pricing opportunities, product changes and SKU reduction efforts.

But improvement there will be much more gradual, and it is very likely that the fourth quarter performance for that business will again be below a year ago.

But based on what we know now, just not as far below a year ago as it has been so far this fiscal year.

The next point I want to make, before I turn this over to Dennis, is that you will see that we took some charges this quarter related to our manufacturing network.

We are always looking to be more efficient, which might require us to open or close or consolidate or reconfigure either plants, warehouses, distribution centers and so forth, but we only do this when we are convinced it is best for the long-term.

And we made some decisions this quarter that resulted in some charges.

I wish we could give you more notice when we do this, but operationally and competitively, that is not practical.

So, we want you to be aware of the fact that we will do this occasionally and when we do, we will certainly call the charges out to you so you know how much they are and you can treat your models accordingly.

With that, I will turn this over to Dennis, and I've got some further comments that I'll make after Frank has made his, and addresses the foreign tax credits and capital loss carryovers.

Thank you, Bruce.

I'm going to spend a few minutes on the highlights for the Retail Product segment this quarter.

Sales were down 1 percent to 2.1 billion and profits were down 8 percent to $303 million.

While several brands grew, overall volumes were down 3 percent with pricing up 2 percent .

There were $17 million of legal settlement issues and $10 million of impairment costs that impact comparability that we detail in the release.

As Bruce outlined, packaged meat's performance, product availability associated with manufacturing capacity challenges and, to a lesser extent, complications from Project Nucleus, drove the weak performance.

But I do want to stress that there were strong points and successes that I will talk about.

I'll deal with the challenges first.

Packaged meats was the main problem area.

It's roughly a 2.5 billion business on a yearly basis, or north of $600 million in net sale on a quarterly basis to the retail segment.

This business' operating earnings were $45 million below year-ago levels.

Protein input costs were up, yet our price increases this year have not been sufficient to offset the cost increases.

The types of products we're talking about are lunch meats, hot dogs, bacon and hams, with great brand names like Armor, Eckridge, Brown-n-Serve, Healthy Choice, Hebrew National and others.

So we have a great set of resources to work with as we renovate our products, take prices up appropriately and reduce marginally profitable SKUs.

While this segment of the business has had it tough for several quarters now, this business has produced very strong profits under better conditions in the past and we look forward to achieving those results in the future.

As far as the outlook for the fourth quarter for the packaged meats part of retail, our performance should be better than they were in the third quarter.

But, as Bruce stated, probably not ahead of last year.

Moving on to manufacturing.

In simple terms, we planned poorly, meaning we didn't produce enough to meet growing demand.

That occurred at a time when we were making changes to our manufacturing network, meaning we moved product from one facility to another.

Or in other situations, put in new equipment that had to be put through trial runs, et cetera.

Production shortages impacted Hebrew National, Egg Beaters, Banquet Crock Pot Classics, Slim Jim, Reddi-Whip and a few others.

That temporarily impacted plant throughput rates, category shares, customer service and cost of doing business.

The majority of these challenges have now been put behind us and we are aggressively moving to restore the positive momentum we enjoyed in the first half.

On balance, there were some bright spots.

The marketing and efficiency initiatives that have been part of our organization for several quarters now are paying off.

Even with the challenge we faced during the quarter, sales for the top 30 brands, which are more than 80 percent of our revenue, grew 3 percent.

And some of our biggest brands, Act II, Banquet, Chef Boyardee, Egg Beaters, Hunts, Marie Callender S, PAM, Snack Pack and others, as we highlight in the release, continued to perform well across a variety of grocery store, mass merchandiser, convenience, dollar store, and other retailer formats.

This represents several successive quarters of growth for these key items, which is meaningful because our performance is now again strong, comparable to last year during the same time.

We get there with fact-based, brand-building programs that you have heard us describe before, by growing our distribution and by getting better marketing return on investment.

Additionally, one very successful item you have heard me talk about before is Banquet Crock Pot Classics, the first frozen meal for the crock pot.

This new product is well on its way to approaching north of $100 million in annualized sales.

The other thing I would like to congratulate our team on is good cost control.

We are very focused on cost control and efficiency efforts and have made good progress.

Without this progress, we would have posted a weaker quarter.

Net -- net, several operations within the segment posted solid profit results.

Unfortunately, that has been more than offset by the challenge in the packaged meats business that are previously described.

As we go forward, we remain committed to the marketing initiatives that drive strong brands, profitable new products, appropriate marketing investment mix and dollars, building new distribution and profitably growing category share.

The tools that we will now have at our disposal because of the Project Nucleus will definitely help us going forward.

They will provide visibility to the items that will make us more efficient and customer responsive.

And they will help make our ongoing SKU rationalization efforts that much more impactful.

With that, I look forward to updating you on a stronger fourth quarter and I will now turn it over to Allan.

Allan?

Thank you, Dennis.

I will also take a few minute to recap the highlights for Foodservice for the quarter we just posted.

As you can see in today's release, our sales were up 1 percent to 886 million.

But current quarter profits of 33 million were not quite half of last year.

A lot of that decline is driven by impairment charges related to strategy charges in the culinary manufacturing network, as well as fire damage at one of our specialty potato facilities.

We detail these costs in the release.

If we exclude these items impacting comparability for the quarter to discuss core operating performance, operating profits are still down compared to last year.

The decline is mostly due to the operating challenges Bruce and Dennis mentioned.

These issues impacted the culinary business, which includes Foodservice packaged meats representing about $0.5 billion dollars a year in sale or more than $100 million per quarter.

To put things in context, our culinary platform also includes pizzas, sauces, frozen meals, dessert toppings, ethnic foods and branded consumer products like Egg Beaters and Reddi-Whip.

Our specialty potato business, however, posted a strong performance for the quarter, due to increased volumes and further customer expansion.

The other product platform, seafood, was negatively impacted by issues relating to tariffs on imported shrimp and the resulting competitive dynamics.

It's the same situation as last quarter.

To give a brief reminder, as you may have read about in the news, there have been changes in tariffs on shrimp products over the last several months and that has caused some disruption in the market.

We think some of this disruption will work itself through eventually, but it requires us to develop and implement a sourcing strategy that provides a wide range of options for our products and our customers.

We are continually working on having the right mix of suppliers so we can manage through these changing dynamics.

With regard to the bigger picture for our segment, as you have heard me say before, our agenda in Foodservice is to be a meaningful partner to our customer base, bringing a strong product portfolio and integrated R&D capabilities together in a way that allows us to add value for our customers.

We have done a lot of heavy lifting during the fiscal year to integrate our operations so that we work better to leverage our marketplace strengths.

After all, we are one of the largest manufacturers and marketers of foodservice in the United States.

And we share product ideas, talent, and resources with other ConAgra Foods retail and ingredients operation.

So we have a great deal of opportunity to further distinguish ourselves as a world-class, value-added partner with our customers.

We will continue to make this happen through the marketing and operating strategies that are an integral part of our corporation's initiatives designed to improve margins and returns.

While these are challenging times for us, we are convinced of the long-term power of our business proposition.

And I am confident our financial results will ultimately demonstrate this.

With that, I will turn it over to Greg Heckman.

Thank you, Allan.

I'd like to spend a few minutes on the quarter's results.

In the Food Ingredients segment, we produce a variety of specialty food ingredients that are used by food manufacturers, food service operators and other ingredient companies.

Examples include natural spices, seasoning blends, savory flavors, dehydrated onion. garlic and capsicums, as well as a broad portfolio of wheat flours, oat and barley products.

With these types of products, we have some very strong brands.

Brands that aren't really known by individual consumers but which are definitely known by our trade customers who rely on our high quality ingredients.

In this segment we also distribute ingredients and we trade inputs and commodities like energy, grains and fertilizer.

For the quarter we just posted, our sales were up 9 percent to $608 million and our profits were up 10 percent to $60 million.

And those results include $15 million of charges from revaluing assets as we make some strategic changes to our manufacturing network.

Most of that sales and profit growth is due to a favorable environment for the trading operations in inputs and commodities.

The market prices and volatility for those items have driven our strong performance and they resulted in strong profits for the quarter due to unusual market conditions.

That part of our business has had a good string of quarters, but we don't expect that to continue indefinitely because the profits for that business are determined by the cyclical nature of the marketplace for commodities.

Grain-based ingredients also posted profit growth for the quarter.

As a whole, our flour volumes are ahead of last year and market prices are better.

And that is a big part of the profit increase from those types of items.

For the quarter, our dehydrated products like onion, garlic, capsicums and vegetables posted lower year-over-year profits.

That's mostly due to a difficult cost environment and competitive conditions.

We expect the ongoing marketing, operating and information systems initiatives Bruce has mentioned before, to help us improve the fundamentals of those operations over time.

Our focus is on profitable growth for our highest potential products.

We have new sales opportunities with our seasonings, blends and flavoring items, our whole grain products and our grilled and roasted vegetables, all of which allow us to give our trade customer ingredients with great taste and reliable quality.

And which allow those trade customers to make products that appeal to a wide range of consumers, including those focused on health and wellness.

Our ability to connect with our customers is well supported by our company's centers of excellence, which our integrated R&D facilities were great ideas across product platforms, temperature states and customer channels are shared, so that we use our insight to provide quality products that meet and exceed our customers' expectations.

So, to summarize on that point, we have the internal R&D and customer channel resources to leverage to profitably grow our most promising products.

Thank you for your interest in our company.

I will now turn it over to Frank Sklarsky, our Chief Financial Officer.

Thanks, Greg.

I'm now going spend a few minutes providing some overall financial highlights, an update on capital issues, some insight into tax matters mentioned in our earnings release, and a brief fourth quarter outlook.

The first item I would like to discuss relates to our outlook.

Our EPS this quarter was $0.3, including items that impact comparability that had a negative impact of $0.03 per share in total.

Excluding these items, our results were slightly higher than we thought they would be when we made our outlook comments last month.

So why is it higher?

In a nutshell, the difference relates primarily to a strong finish in our Food Ingredients merchandising and trading operations.

The operating issues that we communicated in our release last month, and which Bruce, Dennis and Allan mentioned in their commentary, had an impact about where we expected, with packaged meats having the greatest impact, followed by production and to a lesser extent, Project Nucleus.

Altogether, the operating challenges should be less of an issue in the fourth quarter than in the third.

As stated by others on the call, however, refrigerated meats continues to pose some challenges and the trading and merchandising activities within the Food Ingredients business is, by definition, unpredictable and subject to volatility.

That part of the segment has had a string of very strong quarters and we are simply being realistic about the fact that the environment will not stay as favorable as it has been on an indefinite basis.

So, any sequential quarterly improvement will have to result from previously mentioned improvements in our basic operational execution initiatives.

Overall, we are hopeful we can deliver a modest level of improvement in our fourth quarter results versus Q3, excluding items that impact comparability.

The next thing I want to mention is our progress with a few capital items.

We sold about 40 percent of our position in Pilgrim's Pride Corporation stock, or 10 million shares for over $280 million, booking a pretax gain of $185 million.

We also substantially completed liquidating cattle feeding assets that we received in connection with financing we provided Swift Foods as part of the beef deal two years ago.

When we started the liquidation last fall, we worked to recover about $300 million.

During the quarter we collected another 121 million, making the total $267 million, so we only have a bit more to go.

We also retired over $800 million of debt as part of our capital allocation discipline.

That makes almost 1.2 billion so far this fiscal year.

That goes along with over $600 million of stock we repurchased over the last five quarters and $140 million of dividends we paid during the quarter.

And the next area I'd like to talk about is the numerous items in this quarter's EPS that impact comparability.

To make it simple, we had $0.22 worth of EPS benefit from selling Pilgrim's Pride shares at a gain.

However, we also had $0.25 worth of net expense from several other items.

Within the $0.25 of net expense are $0.20 worth of impact from adjustments in value for either facilities, brands or businesses.

As many of you know, from time to time there are events that warrant the reassessment of the carrying value of certain items on the books, whether it is plans to close a plant, sell a facility, revisions to marketing efforts or based upon any unsolicited offers that might be received, for facilities or business entities.

Just to clarify, this does not mean we entirely wrote off these assets.

It simply means that based upon events or new information in the third quarter , we revalued them using current knowledge or assumptions and this resulted in lower valuations than we had on the books.

So we had to book a reduction in value.

I will also say that within the $0.20, there is a charge for the uninsured portion of a fire casualty that occurred during the third quarter and that $0.20 is classified either in segment performance or in the equity method investment earnings.

Also in the $0.25 of total net expense are $0.03 of charges related to early retirement of debt.

This will be positive, all things considered, so we took that action.

The $0.25 also includes $0.04 worth of charges related to previously disclosed SEC matters.

And while nothing has been settled with the SEC , as we proceed in our discussions with them, we have to make the appropriate adjustments to our accruals, based upon the latest information we have.

And lastly, within the $0.25 of net expense is $0.02 of favorable impact for legal settlements.

The last part I would like to discuss today is in the area of historical errors related to accounting for income taxes.

That today's numbers are preliminary and that no comparative or historical information is given within the release because we are still in the process of getting that information completed.

Recently we undertook a review of income taxes.

This was part of a review made because in general, our tax rate is at the upper end of our peer group.

In addition, this was also part of performing our reviews in connection with compliance with our Sarbanes-Oxley Section 404 certification process.

As part of this review, over the past several days we've identified some historical errors related to accounting for income taxes.

These were principally in the complex area of foreign tax credits and the computation of basis for loss carry-forward.

We are currently engaged in the process of correcting these errors, and these errors relate only to taxes.

They do not relate to operations, sales, segment profitability or our overall profit before taxes. but only to income taxes and consequently net income and EPS.

As I said, we discovered the errors as we were reviewing our controls as part of the Sarbanes-Oxley 404 certification process and in conjunction with tax audits and as part of changes and improvements we've been making, consistent with our new financial leadership objectives.

We will restate historical results with the corrected tax amounts, and at that time we will give the comparative financial information we normally do. and that should all happen when we file our 10-Q as soon as possible.

The restatement is not expected to impact previously reported revenue or income from continuing operations before income taxes, but is expected to increase tax expense and therefore reduce after-tax profits principally in fiscal 2003 and 2004.

Based upon information as of this date, the Company's preliminary estimate of the increased tax expense is in the range of $150 million to $200 million for the relevant periods, and we will be making corresponding cash payments for these amounts.

So with that, I will conclude my comments by saying that while we have had some short-term challenges, we are moving quickly to build a more capable organization and an ever-improving set of processes for the long-term with the initiatives we described earlier.

This is a journey, and with any journey there are some great leaps forward and occasionally a few difficulties along the way.

But that does not change our ultimate destination and we look forward to the opportunity to highlight further progress in our business operations and profitability, along with balance sheet and cash flow metrics over the next several quarters.

With that, I believe Bruce has some final comments.

Thanks, Frank.

My last comment is about leadership and a culture that does the right things.

Frank just addressed historical errors related to accounting for income taxes.

It is important to underscore that he and his team uncovered those problems, surfaced them and are correcting them with all due speed.

While I don't like the news any better than you do, I'm proud of these people.

It is unpleasant business to deal with errors, or in the case of this quarter, to come out early to investors and detail operational challenges.

But in each case it was the right thing to do and in each case it makes the Company stronger in the long run.

At the same time, as we deal with the day-to-day challenges of running this business, we still need to keep our eyes on the ball for all of the major initiatives we have underway to better serve our customers, to operate more efficiently and to deliver brands and quality products that consumers prefer.

As you heard from Dennis, Allan, Greg and Frank, all eyes are very much on the ball.

There are brands that are growing.

There are businesses that are improving their operations.

Capital is being repositioned.

Debt being paid down.

Operating improvements are the order of the day.

This team is focused on regaining the momentum that it has been building.

We made a lot of progress in transforming the structure of this Company, so we're not about to let up now as we're in the midst of transforming and integrating the various core activities that support the transformation.

And over time, we look for progress as a result of these efforts to be readily apparent and positive, spurring not only efficiency but growth.

My thanks to the many people who are making this happen and thank you for your interest in ConAgra Foods.

This concludes the business portion of the remarks and thank you for your interest in our company.

Just as a reminder, these remarks will be archived at 1-800-642-1487 for domestic callers and 1-706-645-9291 for international callers.

The pass code is 4029057.

The call will also be archived on the web at www.conagrafoods.com in the section for investors, where you can also find the question-and-answer document relating to this release.

As always, we are available for discussions at 402-595-4684.

Thank you very much.

At this time this concludes the ConAgra Foods management discussion.

You may now disconnect.