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<SEC-DOCUMENT>/in/edgar/work/20000825/0000912057-00-039144/0000912057-00-039144.txt : 20000922
<SEC-HEADER>0000912057-00-039144.hdr.sgml : 20000922
ACCESSION NUMBER: 0000912057-00-039144
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 11
CONFORMED PERIOD OF REPORT: 20000528
FILED AS OF DATE: 20000825
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CONAGRA INC /DE/
CENTRAL INDEX KEY: 0000023217
STANDARD INDUSTRIAL CLASSIFICATION: [2011
] IRS NUMBER: 470248710
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0531
</COMPANY-DATA>
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 001-07275
FILM NUMBER: 709936
</FILING-VALUES>
BUSINESS ADDRESS:
STREET 1: ONE CONAGRA DR
CITY: OMAHA
STATE: NE
ZIP: 68102
BUSINESS PHONE: 4025954000
</BUSINESS-ADDRESS>
FORMER COMPANY:
FORMER CONFORMED NAME: NEBRASKA CONSOLIDATED MILLS CO
DATE OF NAME CHANGE: 19721201
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>a10-k.txt
<DESCRIPTION>FORM 10-K
<TEXT>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended MAY 28, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission File No. 1-7275
CONAGRA, INC.
-----------------------------------------------------
(Exact name of registrant, as specified in its charter)
A Delaware Corporation 47-0248710
- ---------------------- ------------------------
(State of incorporation or other jurisdiction (I.R.S. Employer Number)
of incorporation or organization)
One ConAgra Drive
Omaha, Nebraska 68102-5001
- ---------------------- ------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (402) 595-4000
-------------
Securities registered pursuant to section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ---------------------- ------------------------
Common Stock, $5.00 par value New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act:
- -----------------------------------------------------------
None
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 _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
At July 31, 2000, 492,326,241 common shares were outstanding. The aggregate
market value of the voting common stock of ConAgra, Inc. held by non-affiliates
on July 31, 2000, was approximately $10.1 billion.
Documents incorporated by reference are listed on page 2.
<PAGE>
Documents Incorporated by Reference
1. Portions of the Registrant's Annual Report to Stockholders for the fiscal
year ended May 28, 2000 are incorporated into Part I, Item 1; Part II,
Items 5, 7, 7A and 8; and Part IV, Item 14.
2. Portions of the Registrant's definitive Proxy Statement filed for
Registrant's 2000 Annual Meeting of Stockholders are incorporated into
Part III, Items 10, 11, 12, and 13.
2
<PAGE>
PART I
This Form 10-K report contains certain forward-looking statements, including
such statements in the documents incorporated herein by reference. 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.
ITEM 1. BUSINESS
a) General Development of Business
Nebraska Consolidated Mills Company, which was originally incorporated in
Nebraska on September 29, 1919, changed its name to ConAgra, Inc.
("ConAgra" or the "Company") on February 25, 1971, and since December 5,
1975, has been incorporated in Delaware.
Acquisitions have contributed substantially to ConAgra's sales and
earnings growth, both in the years of acquisition and in subsequent
years. Major acquisitions have included United Agri Products, Banquet
Foods, Country Pride Foods, Peavey Company, Monfort of Colorado, Morton,
Chun King and Patio frozen foods businesses, SIPCO (formerly Swift
Independent Packing Company), the assets of Armour Food Company,
Pillsbury's grain merchandising business, eight U.S. flour mills acquired
from International Multifoods, Beatrice Company, the assets of Elders'
beef, malt and wool businesses in Australia, Golden Valley Microwave
Foods, Universal Frozen Foods, MC Retail Foods, Van Camp's canned bean
and Wolf Brand Chili businesses, Canada Malting Company, Gilroy Foods,
GoodMark Foods, Nabisco's margarine and egg alternative businesses, and
Seaboard Poultry.
On August 24, 2000, ConAgra acquired International Home Foods for
approximately 41 million shares of ConAgra common stock and $825
million cash and the assumption of approximately $1.3 billion in
International Home Foods' debt. International Home Foods' significant
established brands include Chef Boyardee pasta products, PAM cooking
spray, Bumble Bee seafood and Gulden's mustard.
b) Financial Information about Reporting Segments
The Company's businesses are classified into three reporting segments:
Packaged Foods, Refrigerated Foods and Agricultural Products. The
contributions of each industry segment to net sales and operating profit,
and the identifiable assets attributable to each industry segment set
forth in Note 19 "Business Segments and Related Information" on pages 53
through 55 of the Company's 2000 Annual Report to Stockholders are
incorporated herein by reference.
c) Narrative Description of Business
General
ConAgra is one of the world's largest food companies. The Company
competes in multiple segments of the food business and focuses on adding
value for customers in the retail food, foodservice, and agricultural
product channels.
ConAgra's reporting segments are described below. The ConAgra companies
and locations, including distribution facilities, within each reporting
segment are described in Item 2.
3
<PAGE>
ITEM 1. BUSINESS (Continued)
Packaged Foods
In its Packaged Foods segment, ConAgra produces shelf-stable foods,
frozen foods, dairy case products, and foodservice products for retail,
foodservice and specialty markets.
Shelf-stable products include tomato products, cooking oils, popcorn,
soup, puddings, meat snacks, canned beans, canned pasta, canned chili,
cocoa mixes, and peanut butter. Shelf-stable major brands include Hunt's,
Healthy Choice, Wesson, Orville Redenbacher's, Slim Jim, Act II, Peter
Pan, Van Camp's, Beanee Weenee, Manwich, Hunt's Snack Pack, Swiss Miss,
Knott's Berry Farm, Chun King, La Choy, Gebhardt, Wolf Brand, Pemican,
Penrose, and Andy Capp's.
Frozen foods' products include dinners, entrees, snacks, ice cream, and
seafood. Frozen food major brands include Healthy Choice, Banquet, Marie
Callender's, Kid Cuisine, MaMa Rosa's, Papa G's, Gilardi's, The Max,
Morton, Patio, Chun King, and La Choy.
Dairy case products include tablespreads, cheeses, egg alternatives and
dessert toppings. Dairy case major brands include Parkay, Blue Bonnet,
Fleischmann's, Move Over Butter, Egg Beaters, Healthy Choice, County
Line, Reddi-wip, and Treasure Cave.
Foodservice products include potato products, ethnic food products,
hand-held dough-based products and other products primarily for
foodservice markets. Foodservice major brands are Lamb Weston,
Fernando's, Casa de Oro, Holly Ridge, and Rosarita.
Refrigerated Foods
In its Refrigerated Foods segment, ConAgra produces and markets fresh and
branded processed meats, beef and pork products, chicken, and turkey
products for retail, foodservice, institutional and specialty markets.
The processed meat products include hot dogs, bacon, ham, sausages, cold
cuts, turkey products and kosher products. Fresh meat products include
beef, pork and lamb. The poultry businesses include chicken and turkey
products.
Refrigerated Foods' major brands include Armour, Butterball, Cook's,
Country Pride, Decker, Monfort, Eckrich, Healthy Choice, To-Ricos, Texas
BBQ, Ready Crisp, Hebrew National, Brown 'N Serve, Golden Star, National
Deli and Swift Premium. In addition, the Company owns Australia Meat
Holdings Pty Ltd., a major Australian beef processor and exporter.
Agricultural Products
Through its Agricultural Products segment, ConAgra distributes crop
protection chemicals, fertilizers, seeds and information systems at
wholesale and retail levels. Major agricultural brands include Clean
Crop, ACA, Awaken, mPower(3) (e-merge), Savage, Shotgun, Saber,
Signature, and Loveland Industries. ConAgra markets these agricultural
products in Argentina, Bolivia, Canada, Chile, Ecuador, France, Peru,
South Africa, Taiwan, United Kingdom, United States, and Zimbabwe.
In the food ingredients sector, ConAgra primarily processes and
distributes ingredients for food and beverage products and meat and
poultry production. The ingredient processing businesses include flour
milling, specialty food ingredients and manufacturing, oat and corn
milling, dry edible bean processing and merchandising, and barley
malting. ConAgra also markets bulk agricultural commodities throughout
the world through its grain procurement and merchandising, food-related
commodity trading and commodity services.
The Agricultural Products businesses experience some seasonality. This
seasonality coincides with normal agricultural growing seasons.
4
<PAGE>
ITEM 1. BUSINESS (Continued)
The following comments pertain to each of the Company's reporting
segments.
ConAgra is a food company that operates in many different areas of the
food business, from basic agricultural inputs to production and sale of
branded consumer products. As a result, ConAgra uses many different raw
materials, the bulk of which are commodities. Raw materials are generally
available from several different sources and ConAgra presently believes
that it can obtain these as needed.
The Company experiences intense competition for sales of its principal
products in its major markets. The Company's products compete with widely
advertised, well-known, branded products, as well as private label
products. The Company has major competitors in all of its reporting
segments.
Quality control processes at principal manufacturing locations emphasize
applied research and technical services directed at product improvement
and quality control. In addition, the Refrigerated Foods and the Packaged
Foods segments conduct research activities related to the development of
new products.
Many of ConAgra's facilities and products are subject to various laws and
regulations administered by the United States Department of Agriculture,
the Federal Food and Drug Administration, and other federal, state, local
and foreign governmental agencies relating to the quality of products,
sanitation, safety and environmental control. The Company believes that
it complies with such laws and regulations in all material respects, and
that continued compliance with such regulations will not have a material
effect upon capital expenditures, earnings or the competitive position of
the Company.
ConAgra and its subsidiaries have more than 85,000 employees, primarily
in the United States.
d) Foreign Operations
The information, with respect to foreign operations, set forth in Note 19
"Business Segments and Related Information" on pages 53 through 55 of the
Company's 2000 Annual Report to Stockholders is incorporated herein by
reference.
ITEM 2. PROPERTIES
The Company's corporate headquarters are located in Omaha, Nebraska. The
headquarters and principal operating locations of each business are set forth on
the following list of "ConAgra Locations."
The Company maintains a number of distribution facilities, in addition to
distribution facilities and warehouse space available at substantially all of
its manufacturing facilities.
Utilization of manufacturing capacity varies by type of product manufactured,
plant and week. In general, ConAgra operates most of its manufacturing
facilities in excess of 80% of standard industry capacity. Standards vary by
industry from 40 hours per week to 144 hours per week.
Most principal manufacturing facilities are held in fee. However, certain
parcels of land, machinery and buildings, and substantially all of ConAgra's
transportation equipment used in its processing and merchandising operations,
are leased.
5
<PAGE>
ITEM 2. PROPERTIES (Continued)
PACKAGED FOODS
CONAGRA FROZEN PREPARED FOODS
Headquarters in Omaha, Nebraska.
CONAGRA FROZEN FOODS
Headquarters and Corporate sales office in Omaha,
Nebraska. Six plants in Arkansas, Iowa, Missouri and Virginia. Two broiler
growing and processing complexes in Arkansas. Product development facility
in Omaha, Nebraska.
GILARDI FOODS
Headquarters and sales office in Sidney, Ohio.
Three processing plants in Ohio and Oklahoma.
CONAGRA GROCERY PRODUCTS COMPANIES
Headquarters in Irvine, California.
CONAGRA GROCERY PRODUCTS COMPANY
Headquarters in Irvine, California.
Product development facility in Irvine. 13 manufacturing plants, 8
distribution centers and over 20 grocery and foodservice sales
offices serving the U.S. and Canada:
CONAGRA GROCERY PRODUCTS COMPANY INTERNATIONAL
CONAGRA GROCERY PRODUCTS COMPANY-GROCERY BRANDS
HUNT-WESSON FOODSERVICE COMPANY
HUNT-WESSON GROCERY PRODUCTS SALES COMPANY
CONAGRA FOODS LTD.
Headquarters in Manchester, England. Manufacturer of
microwave meals and snacks, supplying UK and other European countries.
GOLDEN VALLEY MICROWAVE FOODS
Headquarters in Edina, Minnesota.
Six plants in Iowa, Minnesota and Ohio. Popcorn storage warehouse in
Nebraska, product development facility in Eden Prairie, Minnesota and
microwave packaging production facility in Maple Grove, Minnesota.
GOODMARK FOODS, INC.
Headquarters in Raleigh, North Carolina
Manufacturer of branded meat snacks, specialty snacks and other convenient
food products, supplying mass-merchandisers, vending machines and grocery,
drug, club, convenience and video stores. Plants in North Carolina,
Pennsylvania and California.
6
<PAGE>
ITEM 2. PROPERTIES (Continued)
CONAGRA FOODSERVICE COMPANY
Headquarters in Boise, Idaho
LAMB-WESTON, INC.
Headquarters in Tri-Cities, Washington.
13 plants in Idaho, Oregon, Washington, Minnesota (50-percent owned) and
Alberta, Canada. Three plants in The Netherlands (50-percent owned) and one
plant in Turkey (50-percent owned). Product development facility in
Richland, Washington. International business development center in Boise,
Idaho.
FERNANDO'S FOODS CORPORATION
Headquarters in Los Angeles, California
One Mexican food processing facility in California.
CASA DE ORO
Headquarters in Omaha, Nebraska
Flour and corn tortilla processing facilities in Nebraska and Kentucky.
CONAGRA SIGNATURE MEATS GROUP
Headquarters in Greeley, Colorado
CHOICE ONE FOODS
Headquarters in Los Angeles, California
One meat processing facility in California
CONAGRA SIGNATURE MEATS - MONTGOMERY
Headquarters in Montgomery, Alabama
One meat processing facility in Alabama
CONAGRA SIGNATURE MEATS - ORLANDO
Headquarters in Sanford, Florida
One meat processing facility in Florida
CONAGRA SIGNATURE MEATS- SAN ANTONIO
Headquarters in San Antonio, Texas
One meat processing facility in Texas
ZOLL FOODS
Headquarters in South Holland, Illinois
One meat processing facility in Illinois
CONAGRA SEAFOOD COMPANIES
SINGLETON SEAFOOD
Headquarters in Tampa, Florida
One seafood processing facility in Florida.
MERIDIAN PRODUCTS
Headquarters in Santa Fe Springs, California
Seafood trading company with facilities in New Jersey, Texas and
Washington.
O'DONNELL-USEN U.S.A.
Headquarters and sales office in Tampa, Florida.
7
<PAGE>
ITEM 2. PROPERTIES (Continued)
DAIRY CASE
Headquarters in Indianapolis, Indiana
BEATRICE CHEESE COMPANY
Headquarters in Indianapolis, Indiana.
Six facilities located in six states include natural cheese manufacturing,
direct and indirect retail sales, foodservice sales, cheese importing and
aerosol.
BEATRICE FOODS
Headquarters in Indianapolis, Indiana
Two facilities in two states include margarine and egg product
manufacturing, direct and indirect retail sales and foodservice sales.
REFRIGERATED FOODS
PROCESSED MEATS COMPANIES
Headquarters in Downers Grove, Illinois.
ARMOUR SWIFT-ECKRICH
Product development in Downers Grove and 25 plants in 16 states, processed
meat plant in Panama, and a food distribution center in Puerto Rico,
serving:
ASE CONSUMER PRODUCTS COMPANY
ASE DELI/FOODSERVICE COMPANY
BUTTERBALL TURKEY COMPANY
DECKER FOOD COMPANY
NATIONAL FOODS, INC.
COOK FAMILY FOODS, LTD.
Headquarters in Lincoln, Nebraska.
Three plants in Nebraska, Kentucky and Missouri.
CONAGRA BEEF COMPANIES
Headquarters in Greeley, Colorado
AUSTRALIA MEAT HOLDINGS PTY LTD.
Headquarters in Dinmore, Australia.
Eight plants and feedlots in Australia.
CONAGRA CATTLE FEEDING COMPANY
Headquarters in Greeley, Colorado.
Three feedlots in Colorado.
One feedlot in Texas.
CONAGRA REFRIGERATED FOODS INTERNATIONAL SALES CORPORATION
Headquarters in Greeley, Colorado.
E. A. MILLER, INC.
Headquarters in Hyrum, Utah.
Processing facilities in Utah and a feedlot in Idaho.
8
<PAGE>
ITEM 2. PROPERTIES (Continued)
MONFORT BEEF AND LAMB COMPANY
Headquarters in Greeley, Colorado.
Ten plants in Colorado, Kansas, Nebraska, Texas, and Indiana.
MONFORT FOOD DISTRIBUTION CO.
Headquarters in Greeley, Colorado.
Eight sales and distribution branches in eight states.
MONFORT FRESH MEATS COMPANY
Headquarters in Greeley, Colorado.
Two plants in Idaho & Nebraska.
CONAGRA POULTRY COMPANY
Headquarters in Duluth, Georgia.
CONAGRA BROILER COMPANY
Headquarters in Duluth, Georgia.
12 broiler growing and processing divisions in Alabama, Arkansas, Georgia,
Kentucky, Louisiana, Tennessee, and Puerto Rico. Four further processing
cookplants in Georgia, Tennessee, West Virginia, and Louisiana.
PROFESSIONAL FOOD SYSTEMS
Headquarters in El Dorado, Arkansas.
13 sales and distribution units in nine states.
SWIFT & COMPANY
Headquarters in Greeley, Colorado.
Three pork processing plants in Iowa, Minnesota and Kentucky. One further
processing plant in California.
AGRICULTURAL PRODUCTS
CONAGRA AGRI PRODUCTS COMPANIES
Headquarters in Greeley, Colorado.
UNITED AGRI PRODUCTS COMPANIES
Headquarters in Greeley, Colorado. Over 470
field sales, administration, warehouse, rail, formulation and joint venture
locations in the United States, Canada, United Kingdom, Mexico, South
Africa, Chile, Bolivia, Ecuador, Argentina, France, Peru, Hong Kong, Taiwan
and Zimbabwe. Businesses are involved with crop protection products, seed,
liquid and dry fertilizer operations and one terminal facility.
CONAGRA TRADE GROUP
Headquarters in Omaha, Nebraska.
AGRICULTURAL DIVISION
Headquarters in Omaha, Nebraska. The Agricultural Division consists
of an extensive network of grain merchandising offices and grain
elevators in the United States and Canada. International marketing
is facilitated through offices in Mexico, Italy, Hong Kong and
Australia, and with representative agents throughout the world.
KBC EDIBLE BEANS
Headquarters in Stockton, California.
KBC Edible Beans operates an extensive network of facilities in the United
States and a facility in Argentina. International marketing is facilitated
through offices in Argentina, Chile, Switzerland and Hong Kong, and with
representative agents throughout the world.
9
<PAGE>
ITEM 2. PROPERTIES (Continued)
CONAGRA INTERNATIONAL FERTILIZER
Headquarters in Savannah, Georgia. ConAgra
International Fertilizer operations are facilitated through offices in the
United Kingdom, Hong Kong and Singapore.
CONAGRA ENERGY SERVICES AND FINANCIAL PRODUCTS
Headquarters in Omaha, Nebraska.
CONAGRA FOOD INGREDIENTS COMPANIES
Headquarters in Omaha, Nebraska.
GRAIN PROCESSING
Headquarters in Omaha, Nebraska.
25 flour mills in 14 states. Eight country elevators in South Dakota.
Two joint ventures in the U.S., one flour mill and one elevator. Corn
merchandising and processing facility in Kansas. Two oat processing
facilities in Nebraska and Canada. A flour mill, a dry corn mill and
grain trading in Puerto Rico.
INTERNATIONAL
Headquarters in Omaha, Nebraska.
Poultry, animal feed and processed meat facilities in Portugal and feed
plants in Spain. Four malt joint ventures with barley malting facilities in
the United States, Canada, Australia, the United Kingdom, and China, doing
business as ConAgra Malt. A food products distribution joint venture in
Mexico doing business as Verde Valle. Edible oil processing and grain
trading joint venture in India, doing business as Agro Tech Foods Limited.
Joint venture oilseed processing plant in Argentina, doing business as
Pecom Agra. A specialty marketing business with processed eggs, Mexican
food products, and food oils business headquartered in Texas. Two animal
feed plants in Georgia and Alabama.
INGREDIENTS
Headquarters in Omaha, Nebraska.
A food processing plant and research and development facility in Kentucky.
A dehydrated food ingredients plant and animal feed ingredients plant in
Minnesota. A spice plant and research and development facility in Illinois.
A seasoning plant and research and development facility in New Jersey.
Flavorings plants in New Jersey and Utah. Food ingredients distribution
business headquartered in Iowa with distribution centers in Texas, Illinois
and Colorado. A distributor of supplies and equipment for the food
processing industry in Texas. Chili products plants located in California,
New Mexico, and Santiago, Chile, with a research and development facility
in California. A garlic and onion dehydration and processing facility with
a supporting research and development facility in California and
dehydration and processing plants in Nevada and Oregon.
SERGEANT'S PET PRODUCTS COMPANY
Headquarters in Omaha, Nebraska. Distribution centers in Tennessee,
Colorado and Canada.
10
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
In fiscal 1991, ConAgra acquired Beatrice Company ("Beatrice"). As a result of
the acquisition and the significant pre-acquisition contingencies of the
Beatrice businesses and its former subsidiaries, the consolidated
post-acquisition financial statements of ConAgra reflect significant liabilities
associated with the estimated resolution of these contingencies. These include
various litigation and environmental proceedings related to businesses divested
by Beatrice prior to its acquisition by ConAgra. The environmental proceedings
include litigation and administrative proceedings involving Beatrice's status as
a potentially responsible party at 40 Superfund, proposed Superfund or
state-equivalent sites. Beatrice has paid or is in the process of paying its
liability share at 34 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 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.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
11
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT AS OF AUGUST 25, 2000
<TABLE>
<CAPTION>
Year Assumed
Name Title & Capacity Age Present Office
- ---- ---------------- --- --------------
<S> <C> <C> <C>
Bruce C. Rohde Chairman, Chief Executive Officer and President 51 1998
James P. O'Donnell Executive Vice President, Chief Financial Officer
and Corporate Secretary 52 1997
Jay D. Bolding Senior Vice President and Controller 40 1999
Kenneth W. Gerhardt Senior Vice President and Chief Information Officer 50 1998
Dwight J. Goslee Senior Vice President, Mergers and Acquisitions 50 1997
Owen C. Johnson Senior Vice President, Human Resources
and Administration 54 1998
Timothy P. McMahon Senior Vice President, Communication and
Marketing 46 2000
Stephen J. Tibey Senior Vice President, Supply Chain 52 1999
Kevin W. Tourangeau Senior Vice President, Operational Effectiveness 48 1999
Michael D. Walter Senior Vice President, Commodity Procurement
and Economic Strategy 50 2000
Linda S. Harty Vice President and Treasurer 40 1999
</TABLE>
The foregoing have held executive officer positions with ConAgra for the past
five years, except as follows:
Bruce C. Rohde became Vice Chairman of the Board and President in August 1996,
was named President and Chief Executive Officer in September 1997, and was named
Chairman of the Board in September 1998. He previously had been ConAgra's
general counsel since 1984. He was president of the Omaha-based law firm
McGrath, North, Mullin & Kratz, P.C. from 1984 to 1996.
Jay D. Bolding joined ConAgra in 1997 as Vice President, Business Processes and
Financial Analysis. He became Vice President, Controller in February 1999 and
was named Senior Vice President in June 2000. He was Vice President, Chief
Financial Officer and Treasurer of Allen & O'Hara, Inc., a construction and
property management company from 1995 to 1997. He was named to his current
position in May 1999.
Kenneth W. Gerhardt was Senior Vice President and Chief Information Officer of
Ameriserve Distribution, Inc. from 1997 to 1998. Prior to 1997, he worked for
Pepsico, Inc. in various capacities, including Vice President and Chief
Information Officer for Pepsico Food Services from 1996 to 1997; and Senior
Director, Information Technology for Pepsi Cola North American from 1994 to
1996.
Owen C. Johnson was Senior Vice President, Human Resources, Corporate
Communications and Administration of NISOURCE from 1990 to 1998. He joined
ConAgra in his current position in June 1998.
Timothy P. McMahon was Vice President, Marketing for ConAgra Trading and
Processing Companies from June 1997 to October 1997. Prior to that, he was
President of McMahon Marketing Communications Company for ten years. He became
Senior Vice President, Corporate Marketing Development in October 1997 and was
named to his current position in 2000.
12
<PAGE>
Stephen J. Tibey joined ConAgra in November 1999 as Senior Vice President Supply
Chain. Prior to his joining the Company, Mr. Tibey was with Kraft where he
served as Vice President, Operation Services from 1998 to 1999 and Vice
President, Distribution Operations from 1994 to 1998.
Kevin W. Tourangeau joined ConAgra in his current position in March 1999.
Previously he was with Randol Management Consultants, which he founded in 1998,
where he worked with major corporations, including ConAgra, to improve
operations and profitability.
Michael D. Walter joined ConAgra in 1989 as President of ConAgra Specialty Grain
Products. He was named to his current position in October 1996.
Linda S. Harty became Vice President and Treasurer in April 1999. Prior to her
joining the Company in April 1999, she worked for Kimberly-Clark where she
served as Assistant Treasurer from 1997 to 1999 and Manager, Accounting from
1992 to 1997.
<TABLE>
<CAPTION>
OTHER SIGNIFICANT EMPLOYEES OF THE REGISTRANT AS OF AUGUST 25, 2000
Year Assumed
Name Title & Capacity Age Present Office
- ---- ---------------- --- --------------
<S> <C> <C> <C>
Larry A. Carter President and Chief Operating Officer,
ConAgra Food Ingredients 48 2000
Raymond J. De Riggi President and Chief Operating Officer,
ConAgra Grocery Products Companies 52 1998
Timothy M. Harris President and Chief Operating Officer,
ConAgra Refrigerated Prepared Foods 44 1997
Gregory A. Heckman President and Chief Operating Officer,
ConAgra Trade Group 38 1996
R. Dean Hollis President and Chief Operating Officer,
ConAgra Frozen Prepared Foods 40 2000
Blake D. Lovette President and Chief Operating Officer,
ConAgra Poultry Company 57 1998
Floyd McKinnerney Chairman, United Agri Products Companies 63 1998
Richard A. Porter President and Chief Operating Officer,
ConAgra Foodservice Company 51 1998
Richard G. Scalise President and Chief Operating Officer,
ConAgra Dairy Case Companies 45 2000
John S. Simons President and Chief Operating Officer,
ConAgra Beef Companies 39 1999
</TABLE>
Larry A. Carter joined the Company in 1994 as the Vice President and Chief
Financial Officer of ConAgra's Trading and Processing Companies. He was named to
his current position in 2000.
Raymond J. De Riggi was President of United Specialty Food Ingredients Cos.
since 1995. He was named to his current position in June 1998.
13
<PAGE>
Timothy M. Harris was President of ConAgra Refrigerated Prepared Foods from 1995
to 1997. He was named to his current position in 1997.
Gregory A. Heckman joined the Company in 1984 and was named Vice President and
General Manager of ConAgra Commodity Services in 1995. He was named to his
current position in 1996.
R. Dean Hollis was Vice President, Trade Development ConAgra Frozen Foods from
1995 to 1998 and President of Gilardi Foods from 1998 to March 2000. He was
named to his current position in March 2000.
Blake D. Lovette was named to his current position upon joining the Company in
1998. Prior to joining the Company he owned and operated The Lovette Company, a
transportation and distribution company located in Wilkesboro, North Carolina.
Floyd McKinnerney was named to his current position in 1998. From 1987 to 1998
Mr. McKinnerney served as President and Chief Operating Officer of ConAgra Agri
Products Companies.
Richard A. Porter was President of Lamb Weston, Inc. from 1990 to 1998. He was
named to his current position in June 1998.
Richard G. Scalise joined the Company in 1997 as President of the ASE
Deli/Foodservice Company. He was named to his current position during 2000.
Prior to joining the Company, Mr. Scalise served as President and Chief
Executive Officer of H&M Corporation.
John S. Simons was Vice President, Red Meat Business Development with Excel,
Inc. (owned by Cargill, Inc.) from 1996 to 1999. He was Vice President and
General Manager, Canada for Excel from 1993 to 1996. He was named to his current
position in May 1999.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ConAgra's common stock is listed on the New York Stock Exchange. Ticker symbol:
CAG. At the end of fiscal 2000, 492.2 million shares of common stock were
outstanding, including 15.2 million shares held in the Company's Employee Equity
Fund. There were 34,000 shareholders of record, 31,000 holders via ConAgra's
401(k) plan for employees and more than 160,000 "street-name" beneficial holders
whose shares are held in names other than their own. During fiscal 2000, 297
million shares were traded, a daily average of approximately 1.2 million shares.
Quarterly information is incorporated herein by reference to Note 21 "Quarterly
Results (Unaudited)" on page 55 of the Company's 2000 Annual Report to
Stockholders.
14
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following table presents selected consolidated financial data for the
Company for each of the five fiscal years 1996 through 2000. All amounts are in
millions except per share data. Fiscal years 1996 through 1998 have been
restated to give effect to acquisitions accounted for as poolings of interests.
Prior years per share amounts have been adjusted to reflect the two-for-one
stock split which was effective October 1, 1997.
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED MAY 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
For the Year
Net sales $ 25,385.8 $ 24,594.3 $ 24,219.5 $ 24,445.2 $ 24,321.3
After-tax income from continuing
operations and before cumulative
effect of changes in accounting 413.0* 358.4** 641.8 637.9 211.8***
Net income 413.0* 358.4** 627.0 637.9 211.8***
Basic income per share
Continuing operations and before
cumulative effect of changes
in accounting $ .87* $ .76** $ 1.38 $ 1.36 $ .43***
Net income $ .87* $ .76** $ 1.35 $ 1.36 $ .43***
Diluted income per share
Continuing operations and before
cumulative effect of changes
in accounting $ .86* $ .75** $ 1.35 $1.34 $ .43***
Net income $ .86* $ .75** $ 1.32 $1.34 $ .43***
Cash dividends declared per
share of common stock $ .7890 $ .6918 $ .6050 $ .5275 $ .4600
At Year End
Total assets $ 12,295.8 $ 12,146.1 $ 11,808.5 $ 11,451.8 $ 11,364.2
Senior long-term
debt (noncurrent) 1,816.8 1,793.1 1,753.5 1,628.5 1,536.3
Subordinated long-term
debt (noncurrent) 750.0 750.0 750.0 750.0 750.0
Preferred securities of
subsidiary company 525.0 525.0 525.0 525.0 525.0
Redeemable preferred stock -- -- -- -- --
</TABLE>
* 2000 amounts include restructuring and restructuring-related charges:
before tax, $621.4 million; after tax, $385.3 million. Excluding the
charges, basic earnings per share were $1.68 and diluted earnings per share
were $1.67.
** 1999 amounts include restructuring charges: before tax, $440.8 million;
after tax, $337.9 million. Excluding the charges, basic earnings per share
were $1.48 and diluted earnings per share were $1.46.
*** 1996 amounts include restructuring charges: before tax, $507.8 million;
after tax, $356.3 million. Excluding the charges, basic earnings per share
were $1.19 and diluted earnings per share were $1.17.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated herein by reference to "Management's Discussion & Analysis" on
pages 32 through 39 of the Company's 2000 Annual Report to Stockholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Incorporated herein by reference to the subsection "Market Risk" in
"Management's Discussion & Analysis" on pages 38 and 39 of the Company's 2000
Annual Report to Stockholders.
15
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of ConAgra, Inc. and
Subsidiaries and Independent Auditors' Report set forth on pages 40 through 56
of the Company's 2000 Annual Report to Stockholders are incorporated herein by
reference:
Consolidated Statements of Earnings - Years ended May 28, 2000, May
30, 1999 and May 31, 1998
Consolidated Statements of Comprehensive Income - Years ended May 28,
2000, May 30, 1999 and May 31, 1998
Consolidated Balance Sheets - May 28, 2000, and May 30, 1999
Consolidated Statements of Common Stockholders' Equity - Years ended
May 28, 2000, May 30, 1999 and May 31, 1998
Consolidated Statements of Cash Flows - Years ended May 28, 2000, May
30, 1999 and May 31, 1998
Notes to Consolidated Financial Statements
The supplementary data regarding quarterly results of operations set
forth in Note 21 "Quarterly Results (Unaudited)" on page 55 of the
Company's 2000 Annual Report to Stockholders is incorporated herein
by reference.
Independent Auditors' Report
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference to "Board of Directors and Election" on pages 3
and 4 of the Company's Proxy Statement for its Annual Meeting of Stockholders to
be held on September 28, 2000. Information concerning all Executive Officers of
the Company is included in Part I above.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to (i) "Executive Compensation" through
"Benefit Plans and Retirement Programs" on pages 5 through 9 of the Company's
Proxy Statement, and (ii) information on director compensation on page 4 of the
Company's Proxy Statement for its Annual Meeting of Stockholders to be held on
September 28, 2000.
16
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to "Voting Securities and Ownership by Certain
Beneficial Owners" and "Voting Securities Owned by Executive Officers and
Directors" on page 2 of the Company's Proxy Statement for its Annual Meeting of
Stockholders to be held on September 28, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to (i) the last paragraph of "Directors'
Meetings and Compensation" on page 4 of the Company's Proxy Statement, and (ii)
the last paragraph of "Benefit Plans and Retirement Programs" on page 9 of the
Company's Proxy Statement for its Annual Meeting of Stockholders to be held on
September 28, 2000.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
a) List of documents filed as part of this report:
1. Financial Statements
All financial statements of the Company as set forth under Item 8 of
this report on Form 10-K.
2. Financial Statement Schedules
<TABLE>
<CAPTION>
Schedule Page
Number Description Number
-------- ----------- ------
<S> <C> <C>
II Valuation and Qualifying Accounts 18
</TABLE>
All other schedules are omitted because they are not applicable, or
not required, or because the required information is included in the
consolidated financial statements, notes thereto.
3. Exhibits
All exhibits as set forth on the Exhibit Index, which is incorporated
herein by reference.
b) Reports on Form 8-K
None.
17
<PAGE>
Schedule II
CONAGRA, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
For the Fiscal Years ended May 28, 2000, May 30, 1999 and May 31, 1998
(in millions)
<TABLE>
<CAPTION>
Additions
Balance at ----------------- Deductions Balance at
Beginning Charged from Close of
Description of Period to Income Other Reserves Period
- ----------- ---------- --------- ----- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended May 28, 2000:
Allowance for doubtful
receivables $ 60.0 44.4 .4(2) 42.0(1) $ 62.8
Year ended May 30, 1999:
Allowance for doubtful
receivables $ 68.2 29.9 .2(2) 38.3(1) $ 60.0
Year ended May 31, 1998:
Allowance for doubtful
receivables $ 67.9 29.1 .4(2) 29.2(1) $ 68.2
</TABLE>
(1) Bad debts charged off, less recoveries.
(2) Primarily reserve accounts of acquired businesses less reserve accounts of
divested businesses and foreign currency translation adjustments.
18
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Stockholders and Board of Directors
ConAgra, Inc.
Omaha, Nebraska
We have audited the consolidated financial statements of ConAgra, Inc. and
subsidiaries as of May 28, 2000, and May 30, 1999, and for each of the three
years in the period ended May 28, 2000, and have issued our report thereon dated
July 14, 2000; such financial statements and report are included in your 2000
Annual Report to Stockholders and are incorporated herein by reference. Our
audits also included the financial statement schedule of ConAgra, Inc. and
subsidiaries, listed in Item 14. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
July 14, 2000
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, ConAgra, Inc. has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on the 25th day of August, 2000.
CONAGRA, INC.
/s/ Bruce C. Rohde
-------------------------------------------------
Bruce C. Rohde
Chairman, Chief Executive Officer and President
/s/ James P. O'Donnell
-------------------------------------------------
James P. O'Donnell
Executive Vice President, Chief Financial Officer and
Corporate Secretary (Principal Financial Officer)
/s/ Jay D. Bolding
-------------------------------------------------
Jay D. Bolding
Senior Vice President, Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on the 25th day of August, 2000.
/s/ Bruce C. Rohde Director
- --------------------------------
Bruce C. Rohde
Mogens C. Bay* Director
Charles M. Harper* Director
Robert A. Krane* Director
Carl E. Reichardt* Director
Ronald W. Roskens* Director
Marjorie M. Scardino* Director
Walter Scott, Jr.* Director
Kenneth E. Stinson* Director
Clayton K. Yeutter* Director
* Bruce C. Rohde, by signing his name hereto, signs this Annual Report on behalf
of each person indicated. A Power-of-Attorney authorizing Bruce C. Rohde to
sign this Annual Report on Form 10-K on behalf of each of the indicated
Directors of ConAgra, Inc. has been filed herein as Exhibit 24.
By: /s/ Bruce C. Rohde
-------------------------------
Bruce C. Rohde
Attorney-In-Fact
20
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description Page No.
- ------ ----------- --------
<S> <C> <C>
3.1 ConAgra's Certificate of Incorporation, as amended, incorporated
herein by reference to ConAgra's annual report on Form 10-K for
the fiscal year ended May 26, 1996.
3.2 ConAgra's Bylaws, as amended, incorporated herein by reference to
ConAgra's quarterly report on Form 10-Q for the quarter ended
February 28, 1999.
4.1 Rights Agreement dated as of July 12, 1996, incorporated herein by
reference to ConAgra's current report on Form 8-K dated July 12,
1996.
4.2 Certificate of Adjustment dated October 1, 1997 to Rights
Agreement, incorporated herein by reference to ConAgra's quarterly
report on Form 10-Q for the quarter ended August 24, 1997.
4.3 Amendment to Rights Agreement dated as of July 10, 1998,
incorporated herein by reference to Exhibit 4.3 of ConAgra's
annual report on Form 10-K for the fiscal year ended May 31, 1998.
4.4 Form of documents establishing Series A, Series B and Series C
Preferred Securities of ConAgra Capital, L.L.C., incorporated
herein by reference to Exhibit 4.8 and Exhibit 4.14 of ConAgra's
registration on Form S-3 (033-56973).
10.1 ConAgra's Amended and Restated Long-Term
Senior Management Incentive Plan, Amendment
thereto, and Operational Document, and
Amendment thereto, incorporated herein by
reference to Exhibit 10.1 of ConAgra's annual report on Form 10-K
for the fiscal year ended May 25, 1997.
10.2 Second Amendment to ConAgra's Long-Term Senior
Management Incentive Plan Operational Document. 25
10.3 Form of Employment Agreement between ConAgra and its executive
officers, incorporated herein by reference to Exhibit 10.3 of
ConAgra's annual report on Form 10-K for the fiscal year ended May
31, 1998.
10.4 ConAgra's Employee Flexible Bonus Payment Plan, incorporated
herein by reference to Exhibit 10.4 of ConAgra's annual report on
Form 10-K for the fiscal year ended May 25, 1997.
</TABLE>
21
<PAGE>
EXHIBIT INDEX - (Continued)
<TABLE>
<CAPTION>
Number Description Page No.
- ------ ----------- --------
<S> <C> <C>
10.5 ConAgra's 1985 Stock Option Plan, with amendments thereto
incorporated herein by reference to Exhibit 10.5 of ConAgra's
annual report on Form 10-K for the fiscal year ended May 25, 1997.
10.6 ConAgra Non-Qualified CRISP Plan, incorporated herein by reference
to Exhibit 10.6 of ConAgra's annual report on Form 10-K for the
fiscal year ended May 30, 1999.
10.7 ConAgra Non-Qualified Pension Plan, and First Amendment thereto,
incorporated herein by reference to Exhibit 10.7 of ConAgra's
annual report on Form 10-K for the fiscal year ended May 30, 1999.
10.8 ConAgra Supplemental Pension and CRISP Plan for Change of Control,
incorporated herein by reference to Exhibit 10.8 of ConAgra's
annual report on Form 10-K for the fiscal year ended May 30, 1999.
10.9 ConAgra Incentives and Deferred Compensation Change of Control
Plan, incorporated herein by reference to Exhibit 10.9 of
ConAgra's annual report on Form 10-K for the fiscal year ended May
30, 1999
10.10 ConAgra 1990 Stock Plan, and amendments thereto. 27
10.11 ConAgra 1995 Stock Plan. 35
10.12 ConAgra Directors' Unfunded Deferred Compensation Plan, with
amendments thereto. 42
10.13 ConAgra Employee Equity Fund Trust Agreement, with Stock Purchase
Agreement and Revolving Promissory Note executed in connection
therewith, incorporated herein by reference to Exhibit 10.14 of
ConAgra's annual report on Form 10-K for the fiscal year ended May
25, 1997.
</TABLE>
22
<PAGE>
EXHIBIT INDEX - (Continued)
<TABLE>
<CAPTION>
Number Description Page No.
- ------ ----------- --------
<S> <C> <C>
10.14 Employment Contract between ConAgra and Bruce C. Rohde,
incorporated herein by reference to Exhibit 10.1 of ConAgra's
quarterly report on Form 10-Q for the quarter ended February 23,
1997.
10.15 Amendment dated February 16, 1998 to Bruce C. Rohde Employment
Contract, incorporated herein by reference to Exhibit 10.19 of
ConAgra's annual report on Form 10-K for the fiscal year ended May
31, 1998.
10.16 C. M. Harper Deferred Compensation Agreement dated March 15, 1976,
incorporated herein by reference to Exhibit 10.20 of ConAgra's
annual report on Form 10-K for the fiscal year ended May 31, 1998.
10.17 ConAgra Executive Incentive Plan incorporated herein by reference
to Exhibit 10.21 of ConAgra's annual report on Form 10-K for the
fiscal year ended May 30, 1999.
12 Statement regarding computation of ratio of earnings to fixed
charges and ratio of earnings to combined fixed charges and
preferred stock dividends 48
13 Pages 32 through 56 of ConAgra, Inc.'s Annual Report to
Stockholders for the fiscal year ended May 28, 2000, portions of
which are incorporated herein by reference. Those portions of
ConAgra, Inc.'s Annual Report to Stockholders that are not incorporated
herein by reference shall not be deemed to be filed as a part of this Report. 49
21 Subsidiaries of ConAgra 74
23 Consent of Deloitte & Touche LLP 78
24 Powers of Attorney 79
27 Financial Data Schedule
</TABLE>
23
<PAGE>
EXHIBIT INDEX - (Continued)
Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with respect
to ConAgra's long-term debt are not filed with this Form 10-K. ConAgra will
furnish a copy of any such long-term debt agreement to the Securities and
Exchange Commission upon request.
Except for those portions of ConAgra, Inc.'s Annual Report to Stockholders for
its fiscal year ended May 28, 2000 (such portions filed hereto as Exhibit 13)
specifically incorporated by reference in the report on Form 10-K, such annual
report is furnished solely for the information of the Securities and Exchange
Commission and is not to be deemed "filed" as part of this filing.
Items 10.1 through 10.17 are management contracts or compensatory plans filed as
exhibits pursuant to Item 14(c) of Form 10-K.
24
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>2
<FILENAME>ex-10_2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<PAGE>
EXHIBIT 10.2
AMENDMENT TO THE
CONAGRA LONG TERM SENIOR MANAGEMENT INCENTIVE PLAN
OPERATIONAL DOCUMENT
Effective November 29, 1990, the ConAgra Long Term Senior Management Incentive
Plan Operational Document ("Document") is amended as set forth below:
ARTICLE I
Section 4 is amended to read, as follows:
"4. COMPUTATION OF AWARD. The Committee shall compute the amount of the
Award for each fiscal year. A preliminary calculation of the Award shall be
made in July of each year. The preliminary calculation will be verified
after receipt of the audited financials for the year. The amount of the
Award shall be calculated according to the following steps:
"A. The fully diluted after-tax earnings per share shall be
calculated by dividing after-tax earnings for the fiscal year by
the weighted average of common and common equivalent shares that
are applicable to fully diluted earnings for the fiscal year.
"B. Calculate the Compounded Fully Diluted After-Tax Earnings Per
Share for the fiscal year. For fiscal year end 1996 and
fiscal years thereafter, the Compounded Fully Diluted After-
Tax Earnings Per Share for the fiscal year shall be the result
of multiplying 1.2762816 by the Base After-Tax Earnings Per
Share. The Base After-Tax Earnings Per Share shall be the 5-
year average of the Fully Diluted After-Tax Earnings Per Share
for the 7th, 6th, 5th, 4th and 3rd fiscal years preceding the
applicable fiscal year. The 1.2762816 is the factor used to
reflect a 5% compounding of the Base After-Tax Earnings Per
Share.
"For fiscal year ends preceding fiscal year ending 1996, the Base
5-Years Averages and factors set forth below shall be used to
calculate the Compounded Fully Diluted After-Tax Earnings Per
Share:
FYE BASE 5-YRS. AVERAGE FACTOR
1991 Preceding 12th, 11th, 10th 1.6288946
9th, 8th Fiscal Years
1992 Preceding 11th, 10th, 9th 1.5513282
8th, 7th Fiscal Years
1993 Preceding 10th, 9th, 8th 1.4774554
7th, 6th Fiscal Years
1994 Preceding 9th, 8th, 7th, 1.4071004
6th, 5th Fiscal Years
1995 Preceding 8th, 7th, 6th 1.3400956
5th, 4th Fiscal Years
25
<PAGE>
EXHIBIT 10.2 (CONTINUED)
"C. The Award shall be equal to 8% of the result of multiplying the
weighted average of common and common equivalent shares that are
applicable to fully diluted after-tax earnings for the year times
the excess of the fully diluted after-tax earnings per share for
the year over the Compounded Fully Diluted After-Tax Earnings Per
Share.
"After-tax earnings means income for the fiscal year after all taxes
but before a gain or loss on significant asset disposals and the
Award; provided, however, after-tax earnings shall be determined in
the sole and absolute discretion of the Committee. Prior to the
distribution of an Award, the Committee, in its sole and absolute
discretion, may reduce the amount of the Award and the share of any
participant in an Award."
ARTICLE II
Section 5 is amended to read, as follows:
"5. DISTRIBUTION. Each participant's share of the Award shall be made in
cash, or ConAgra stock, or part in ConAgra stock and part in cash, as
determined by the Committee. Normally, both the stock and the cash portions
will be distributed upon verification of the preliminary calculation.
However, at its sole and absolute discretion, the Committee may pay all or
a portion of the Award at such time as the Committee deems appropriate. Any
participant who is not employed on the payment date shall not receive a
payment unless the failure to be employed is on account of death, total and
permanent disability, or retirement.
"Each person who receives a distribution will be notified of:
"A. The amount distributed to him.
"B. Nature of any restrictions.
"C. The current fair market value of the participant's share of
the Award."
This Document has been adopted by the Board of Directors and Compensation
Committee of ConAgra, Inc. on November 29, 1990.
26
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>3
<FILENAME>ex-10_10.txt
<DESCRIPTION>EXHIBIT 10.10
<TEXT>
<PAGE>
EXHIBIT 10.10
THE CONAGRA 1990 STOCK PLAN
ARTICLE I
NAME AND PURPOSE
1.1 NAME. The name of the plan shall be The ConAgra 1990 Stock Plan ("Plan").
1.2 PURPOSE. The purpose of the Plan is to enable Employees and Directors to
share in the growth and prosperity of the Company by encouraging stock
ownership by Employees and Directors and to assist the Company to obtain
and retain key management personnel. Incentive Stock Options,
Nonqualified Stock Options, Restricted Shares, bargain stock, Stock
Appreciation Rights, bonuses of Company Stock and other types of stock
awards and cash may be granted under this Plan.
ARTICLE II
DEFINITIONS
2.1 "Board" means the Board of Directors of the Company.
2.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.3 "Committee" shall mean the Compensation Committee of the Board.
2.4 "Company" means ConAgra, Inc., a Delaware corporation.
2.5 "Company Stock" means shares of common stock issued by the Company.
2.6 "Director" means any person who is a member of the Board.
2.7 "Employee" means any person employed by the Employer or a Subsidiary.
2.8 "Employer" means the Company.
2.9 "Incentive Stock Option" means any option granted to a Participant under
the Plan, which the Committee intends at the time it is granted, to be an
incentive stock option within the meaning of Section 422A of the Code.
2.10 "Nonqualified Stock Option" means any stock option granted under the Plan
which is not an Incentive Stock Option.
2.11 "Optionee" is any Employee who is granted options under the Plan.
2.12 "Participant" shall mean any Employee or Director who meets the
requirements for Participation in the Plan as described in Article III.
2.13 "Qualifying Stock" means Company Stock which has been owned by the
Employee for at least six months prior to the date of exercise and has
not been used in a stock-for-stock swap transaction within the preceding
six months.
27
<PAGE>
EXHIBIT 10.10 (CONTINUED)
2.14 "Subsidiary" means a corporation which is a "subsidiary corporation" as
defined in section 425 of the Code.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Every Employee and Director shall be eligible to become a
Participant in the Plan.
3.2 PARTICIPATION. The Employees who shall participate in the Plan and
thereby be eligible to receive awards shall be such key Employees and
Directors as the Committee shall select from time to time. The Committee
shall determine the number of and the combination of stock options,
restricted stock, stock appreciation rights and other stock awards
granted.
3.3 DIRECTOR PARTICIPATION. Non-Employee Directors shall be granted annually
a Nonqualified Stock Option for 3,000 shares of Company Stock. In
addition, Non-Employee Directors shall be granted annually 600 shares of
Company Stock; such shares shall be issued without cost to each Non-
Employee Director from the Company's treasury shares.
The Nonqualified Stock Options and shares of Company Stock described in
this Section 3.3 shall be granted each year immediately following the
annual stockholders' meeting of the Company. The Nonqualified Stock
Options and shares of Company Stock shall be granted to those persons who
are Directors immediately following such meeting. Directors are not
eligible to receive any other Benefit under the Plan.
The number of shares referred to in this Section 3.3 shall be properly
adjusted if the number of issued shares shall be increased or reduced by
change in par value, combination, split-up, reclassification,
distribution of a dividend payable in stock, or the like.
ARTICLE IV
TYPES OF BENEFITS
Benefits under the Plan ("Benefits") may be granted in any one or any
combination of (a) Incentive Stock Options; (b) Nonqualified Stock Options; (c)
stock appreciation rights; (d) restricted stock awards; (e) bargain purchase of
common stock; (f) bonuses of common stock; (g) any other form of stock benefit;
or (h) cash.
Without limiting the Committee's authority, the Committee may: (a) make the
grant of Benefits conditional upon an election by a Participant to defer payment
of a portion of his salary; (b) give a Participant a choice between two Benefits
or combination of Benefits; (c) award Benefits in the alternative so that
acceptance of or exercise of one Benefit cancels the right of a Participant to
another; and (d) award Benefits in any combination or combinations and subject
to any condition or conditions consistent with, the terms of the Plan that the
Committee in its sole discretion may determine.
ARTICLE V
SHARES SUBJECT TO PLAN
The total number of shares for which options may be granted under this Plan
shall not exceed in the aggregate 6,000,000 shares; provided, if the merger of
the Company and Beatrice Company, as reflected in the Agreement
28
<PAGE>
EXHIBIT 10.10 (CONTINUED)
and Plan of Merger dated as of June 7, 1990, is consummated, such aggregate
number shall be 7,200,000 shares. This number shall be appropriately adjusted if
the number of issued shares shall be increased or reduced by change in par
value, combination, split-up, reclassification, distribution of a dividend
payable in stock, or the like. The shares issued under the Plan may be
authorized and unissued shares or treasury shares.
In the event that any outstanding option, restricted stock or other Benefit
issued pursuant to the Plan shall expire or terminate, the shares allocable to
the unexercised or forfeited portion of such Benefit may again be subject to an
award under the Plan. In addition, any shares which are used for the full or
partial payment of the purchase price (or applicable withholding taxes) for
shares with respect to which an option is exercised may again be used for an
award under the Plan.
ARTICLE VI
OPTIONS
The Committee from time to time may grant Incentive Stock Options and
Nonqualified Stock Options. Each option agreement between the Company and the
Participant shall be in such form and shall contain such provisions as the
Committee from time to time shall deem appropriate. Option agreements need not
be identical. The option agreements shall specify whether or not an option is an
Incentive Stock Option.
The terms of Incentive Stock Options granted shall include the following:
(a) The option price shall be fixed by the Committee in good faith, but
in no event be less than 100% of the fair market value of the shares
subject to the option on the date the option is granted.
(b) The Committee shall fix the term or duration of all Incentive Stock
Options issued under this Plan provided that such term shall not
exceed ten years after the date on which the option was granted and
shall not extend beyond the Optionee's employment with the Company.
The Committee shall also set the date or dates on, or after which,
each option may be exercised.
(c) The aggregate fair market value, determined as of the time the
Incentive Stock Option is granted, of the stock which may become
exercisable for the first time by any Employee during any calendar
year shall not exceed $100,000.
(d) Each Incentive Stock Option agreement (and amendments) shall contain
such terms and provisions, consistent with the requirements of this
Plan, as the Committee in its discretion shall determine, including
without limitation such terms and provisions as shall be requisite to
cause the options to qualify as Incentive Stock Options.
Options and similar Benefits (including Stock Appreciation Rights) shall
not be transferable otherwise than by will or the laws of descent and
distribution, and during the Participant's lifetime, such a Benefit shall be
exercisable only by the Participant.
Notwithstanding any other provisions of the Plan, no Incentive Stock Option
shall be granted to an Employee who, at the time the option is granted, owns
stock representing more than ten percent of the total combined voting power of
all classes of stock of the Employer. This stock ownership limitation will not
apply if the option price is at least 110 percent of the fair market value (at
the time the option is granted) of the stock subject to the option, and the
option by its terms is not exercisable more than five years from the date it is
granted.
The Committee may grant a replacement option (a "Replacement Option") to
any Employee who exercises all or part of an option granted under this Plan
using Qualifying Stock as payment for the purchase price. A
29
<PAGE>
EXHIBIT 10.10 (CONTINUED)
Replacement Option shall grant to the Employee the right to purchase, at the
fair market value as of the date of said exercise and grant, the number of
shares of stock equal to the sum of the number of whole shares (i) used by the
Employee in payment of the purchase price for the option which was exercised and
(ii) used by the Employee in connection with applicable withholding taxes on
such transaction. A Replacement Option may not be exercised for six months
following the date of grant, and shall expire on the same date as the option
which it replaces.
ARTICLE VII
RESTRICTED SHARES
The Committee from time to time may award restricted shares ("Restricted
Shares") to any Participant in the Plan. Each Participant who is awarded
Restricted Shares shall enter into an agreement with the Company in a form
specified by the Committee agreeing to the terms and conditions of the award and
such other matters consistent with the Plan as the Committee in its sole
discretion shall determine.
Restricted Shares awarded to Participants may not be sold, transferred,
pledged or otherwise encumbered during the restricted period commencing on the
date of the award and ending at such later date as the Committee may designate
at the time of the award. The Participant shall have the entire beneficial
ownership and all rights and privileges of a shareholder with respect to
Restricted Shares awarded to him, including the right to receive dividends and
the right to vote such Restricted Shares.
The Committee may provide any other terms or conditions with regard to
Restricted Shares that it deems appropriate. Restricted Shares and agreements
related thereto need not be identical.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
The Committee from time to time may grant stock appreciation rights ("Stock
Appreciation Rights") to any Participant in the Plan. A Stock Appreciation Right
shall be evidenced by a stock appreciation right agreement between the Company
and the Participant, which shall contain such terms and conditions consistent
with the Plan as the Committee from time to time shall deem appropriate.
A Stock Appreciation Right may be satisfied by the Company in cash or in
shares of common stock of the Company, as determined by the Committee. The
agreement may limit the maximum amount of appreciation taken into account under
a Stock Appreciation Right.
A Stock Appreciation Right may be granted in conjunction with an Incentive
Stock Option, a Nonqualified Stock Option, Restricted Shares or any other award
hereunder. At the discretion of the Committee, a Stock Appreciation Right may be
exercisable only to the extent that a related award is exercisable and only upon
surrender of a related award. In the event of the exercise of a Stock
Appreciation Right the exercise of which is conditioned upon surrender of a
related award, the number of shares that may be issued under this Plan shall be
reduced by the number of shares covered by the award or portion thereof
surrendered.
The Committee may provide any other terms or conditions with regard to
Stock Appreciation Rights that it deems appropriate. Stock Appreciation Rights
and agreements related thereto need not be identical.
ARTICLE IX
OTHER AWARDS
The Committee may grant any other cash, stock or stock-related awards to a
Participant under this Plan that the Committee deems appropriate, including, but
not limited to, the bargain purchase of Company Stock and stock bonuses. Any
such Benefits and any related agreements shall contain such terms and conditions
as the Committee deems appropriate. Such awards and agreements need not be
identical. With respect to any Benefit
30
<PAGE>
EXHIBIT 10.10 (CONTINUED)
under which shares of Company Stock are or may in the future be issued (other
than shares issued from the Company's treasury) for consideration other than
prior services, the amount of such consideration shall either (i) be equal to
the amount (such as the par value of such shares) required to be received by the
Company in order to comply with applicable state law or (ii) be equal to or
greater than 50% of the fair market value of such shares on the date of grant.
ARTICLE X
ADMINISTRATION
The Plan shall be administered by the Committee. A majority vote of the
Committee at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee for the purposes of this Plan.
The Committee shall have plenary authority in its discretion, but subject
to the express provisions of the Plan, to determine the terms of all Benefits
granted under the Plan including, without limitation, the purchase price, if
any, the Employees to whom, and the time or times at which Benefits shall be
granted, when an option can be exercised, or Restricted Shares, Stock
Appreciation Rights and other Benefits become forfeitable, and whether in whole
or in installments, and the number of shares covered by a Benefit; and to
interpret the Plan and to make all other determinations deemed advisable for the
administration of the Plan. All determinations of the Committee shall be made by
not less than a majority of its members. The Committee may designate Employees
of the Company to assist the Committee in the administration of the Plan and may
grant authority to such persons to execute option agreements or other documents
on behalf of the Committee.
Payment in full for the number of shares purchased under any Benefit,
including an option, shall be made to the Company at the time of such exercise.
The Committee, in its discretion, may provide that any Benefit by its terms may
permit a Participant to elect, subject to Committee approval, any of the
following alternative settlement methods: (i) cash equal to the excess of the
value of one share over the option or purchase price times the number of shares
as to which the award is exercised; (ii) the number of full shares having an
aggregate value not greater than the cash amount calculated under alternative
(i); (iii) any combination of cash and stock having an aggregate value not
greater than the cash amount calculated under alternative (i). For purposes of
determining an alternative settlement, the value per share shall be determined
under the same method as used to determine the option price in the case of stock
options.
Payment for such shares shall be made in cash, or with the consent of the
Committee, in shares of the Company's common stock, or a combination thereof.
The interpretation and construction by the Committee of any provisions of
the Plan or of any benefit granted under it shall be final. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any benefit granted under it.
ARTICLE XI
ADJUSTMENT UPON CHANGES OF STOCK
If any change is made on the shares of common stock of the Company by
reason of any merger, consolidation, reorganization, recapitalization, stock
dividend, split up, combination of shares, exchange of shares, change in
corporate structure, or otherwise, appropriate adjustments shall be made by the
Committee to the kind and maximum number of shares subject to the Plan and the
kind and number of shares and price per share of stock subject to each
outstanding Benefit. No fractional shares of stock shall be issued under the
Plan on account of any such adjustment, and rights to shares always shall be
limited after such an adjustment to the lower full share.
31
<PAGE>
EXHIBIT 10.10 (CONTINUED)
ARTICLE XII
MISCELLANEOUS
12.1 CONTINUATION OF EMPLOYMENT. Neither this Plan nor any Benefit granted
hereunder shall confer upon any Employee any right to continue in the
employment of the Company or limit in any respect the right of the
Company to terminate his employment at any time.
12.2 ADMINISTRATION. The Committee may make such rules and regulations and
establish such procedures as it deems appropriate for the administration
of the Plan. In the event of a disagreement as to the interpretation of
the Plan or any amendment hereto or any rule, regulation or procedure
thereunder or as to any right or obligation arising from or related to
the Plan, the decision of the Committee shall be final and binding.
12.3 WITHHOLDING. The Company shall have the right to withhold with respect to
any payments made to Participants under the Plan any taxes required by
law to be withheld because of such payments. With respect to any such
withholding:
(a) Each Participant shall take whatever action that the Committee
deems appropriate to comply with the law regarding withholding of
federal, state and local taxes.
(b) When a Participant is obligated to pay to the Company an amount
required to be withheld under applicable income tax laws in
connection with a Benefit, the Committee may, in its discretion
and subject to such rules as it may adopt, permit the Participant
to satisfy this obligation, in whole or in part, either (i) by
having the Company withhold from the shares to be issued upon the
exercise of an option or a stock appreciation right or upon the
receipt of a Benefit, shares having a fair market value that would
satisfy the withholding amount due or (ii) by delivering to the
Company already-owned shares to satisfy the withholding amount.
12.4 EFFECTIVE DATE. This Plan is effective on July 12, 1990 ("Effective
Date"). Benefits hereunder may be granted at any time subject to the
limitations contained within the Plan. No Company Stock may be issued
unless the Plan is approved by a vote of the holders of a majority of the
outstanding shares of the Company's common stock at a meeting of the
stockholders of the Company held within twelve months following the
Effective Date.
ARTICLE XIII
AMENDMENT, TERMINATION AND CHANGE IN CONTROL
13.1 AMENDMENT. The Board may amend the Plan from time to time as it deems
desirable and shall make any amendments which may be required so that
options intended to be Incentive Stock Options shall at all times
continue to be Incentive Stock Options for the purposes of the Code;
PROVIDED, HOWEVER, the Plan may not be amended to change the number of
shares subject to the Plan or decrease the price at which options may be
granted.
32
<PAGE>
EXHIBIT 10.10 (CONTINUED)
13.2 TERMINATION OF PLAN. The Board may in its discretion Terminate the Plan
at any time, but no such termination shall deprive Participants of their
rights under outstanding Benefits. Notwithstanding the preceding
sentence, no Incentive Stock Options may be granted pursuant to the Plan
later than ten years after the date the Plan is adopted or the date the
Plan is approved by the shareholders of the Company, whichever is
earlier.
13.3 CHANGE OF CONTROL. On the date of a Change of Control (as herein
defined), all outstanding options and stock appreciation rights shall
become immediately exercisable and all restrictions with respect to
Restricted Stock shall lapse. Following such a Change of Control, the
Committee shall grant the request of any Employee to pay for shares
purchased under any Benefit by using an alternative settlement method
described in the third paragraph of Article X. Change of Control shall
mean:
(a) The acquisition (other than from the Company) by any person,
entity or "group," within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange
Act"), (excluding, for this purpose, the Company or its
subsidiaries, or any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting
securities of the Company) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30%
or more of either the then outstanding shares of common stock or
the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of
directors; or
(b) Individuals who, as of the date hereof, constitute the Board
(as of the date hereof the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof
whose election, or nomination for the election by the Company's
stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be, for
purposes of this Agreement, considered as though such person were
a member of the Incumbent Board; or
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, with respect to which
persons who were the stockholders of the Company immediately prior
to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the combined voting
power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated Company's then outstanding
voting securities, or a liquidation or dissolution of the Company
or of the sale of all or substantially all of the assets of the
Company.
FIRST AMENDMENT TO THE CONAGRA 1990 STOCK PLAN
The ConAgra 1990 Stock Plan (the "Plan"), was approved by ConAgra
stockholders on September 27, 1990. The Plan is hereby amended by deleting in
its entirety the last sentence of Article V. The deleted sentence currently
reads as follows:
33
<PAGE>
EXHIBIT 10.10 (CONTINUED)
In addition, any shares which are used for the full or partial payment of
the purchase price (or applicable withholding taxes) for shares with
respect to which an option is exercised may again be used for an award
under the Plan.
SECOND AMENDMENT
TO THE
CONAGRA 1990 STOCK PLAN
Effective January 1, 1993, The ConAgra 1990 Stock Plan ("Plan") is amended,
as follows:
ARTICLE I
Section 2.14 of the Plan is amended to read, as follows:
"2.14 "Subsidiary" means any corporation which is a "subsidiary
corporation" as defined in Section 425 of the Code and any corporation,
partnership, joint venture or other entity which is, directly or
indirectly, at least 25% owned by the Company."
ARTICLE II
Article VI of the Plan is amended by the addition thereto of the following
paragraph:
"Notwithstanding any other provisions of the Plan, an Incentive Stock
Option may only be granted to Employees who are employed by the Company or
by a Subsidiary which is a "subsidiary corporation" as defined in Section
425 of the Code."
34
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>4
<FILENAME>ex-10_11.txt
<DESCRIPTION>EXHIBIT 10.11
<TEXT>
<PAGE>
EXHIBIT 10.11
CONAGRA 1995 STOCK PLAN
SECTION 1
NAME AND PURPOSE
1.1 Name. The name of the plan shall be the ConAgra 1995 Stock Plan
(the "Plan").
1.2. Purpose of Plan. The purpose of the Plan is to foster and promote
the long-term financial success of the Company and increase stockholder value
by (a) motivating superior performance by means of stock incentives, (b)
encouraging and providing for the acquisition of an ownership interest in the
Company by Employees and (c) enabling the Company to attract and retain the
services of a management team responsible for the long-term financial success
of the Company.
SECTION 2
DEFINITIONS
2.1 Definitions. Whenever used herein, the following terms shall have
the respective meanings set forth below:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Award" means any Option, Stock Appreciation Right, Restricted Stock,
Stock Bonus, or any combination thereof, including Awards combining
two or more types of Awards in a single grant.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Human Resources Committee of the Board, which
shall consist of two or more members, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 as promulgated
under the Act.
(f) "Company" means ConAgra, Inc., a Delaware corporation (and any
successor thereto) and its Subsidiaries.
(g) "Director Award" means an award of Stock and an award of a
Nonstatutory Stock Option granted to each Eligible Director pursuant
to Section 7.1 without any action by the Board or the Committee.
(h) "Eligible Director" means a person who is serving as a member of the
Board and who is not an Employee.
(i) "Employee" means any employee of the Company or any of its
Subsidiaries.
35
<PAGE>
EXHIBIT 10.11 (CONTINUED)
(j) "Fair Market Value" means, on any date, the closing price
of the Stock as reported on the New York Stock Exchange
(or on such other recognized market or quotation system
on which the trading prices of the Stock are traded or
quoted at the relevant time) on such date. In the event
that there are no Stock transactions reported on such
exchange (or such other system) on such date, Fair Market
Value shall mean the closing price on the immediately
preceding date on which Stock transactions were so
reported.
(k) "Option" means the right to purchase Stock at a stated price for a
specified period of time. For purposes of the Plan, an Option may be
either (i) an Incentive Stock Option within the meaning of Section 422
of the Code or (ii) a Nonstatutory Stock Option.
(l) "Participant" means any Employee designated by the Committee to
participate in the Plan.
(m) "Plan" means the ConAgra 1995 Stock Plan, as in effect from time to
time.
(n) "Restricted Stock" shall mean a share of Stock granted to a
Participant subject to such restrictions as the Committee may
determine.
(o) "Stock" means the Common Stock of the Company, par value $5.00 per
share.
(p) "Stock Appreciation Right" means the right, subject to
such terms and conditions as the Committee may determine,
to receive an amount in cash or Stock, as determined by
the Committee, equal to the excess of (i) the Fair Market
Value, as of the date such Stock Appreciation Right is
exercised, of the number shares of Stock covered by the
Stock Appreciation Right being exercised over (ii) the
aggregate exercise price of such Stock Appreciation
Right.
(q) "Stock Bonus" means the grant of Stock as compensation from the
Company, which may be in lieu of cash compensation otherwise
receivable by the Participant or in addition to such cash
compensation, and includes stock issued for service awards and other
Employee recognition programs.
(r) "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company owns, directly or indirectly, 25% or
more of the voting power or of the capital interest or profits
interest of such entity.
2.2 Gender and Number. Except when otherwise indicated by the context,
words in the masculine gender used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
36
<PAGE>
SECTION 3
ELIGIBILITY AND PARTICIPATION
Except as otherwise provided in Section 7.1, the only persons eligible to
participate in the Plan shall be those Employees selected by the Committee as
Participants.
SECTION 4
POWERS OF THE COMMITTEE
4.1 Power to Grant. The Committee shall determine the Participants to
whom Awards shall be granted, the type or types of Awards to be granted, and
the terms and conditions of any and all such Awards. The Committee may
establish different terms and conditions for different types of Awards, for
different Participants receiving the same type of Awards, and for the same
Participant for each Award such Participant may receive, whether or not
granted at different times.
4.2 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to prescribe, amend, and rescind rules and regulations relating to
the Plan, to provide for conditions deemed necessary or advisable to protect
the interests of the Company, and to make all other determinations necessary
or advisable for the administration and interpretation of the Plan in order
to carry out its provisions and purposes. Determinations, interpretations, or
other actions made or taken by the Committee pursuant to the provisions of
the Plan shall be final, binding, and conclusive for all purposes and upon
all persons. Notwithstanding anything else contained in the Plan to the
contrary, neither the Committee nor the Board shall have any discretion
regarding whether an Eligible Director receives a Director Award pursuant to
Section 7.1 or regarding the terms of any such Director Award, including,
without limitation, the number of shares subject to any such Director Award.
SECTION 5
STOCK SUBJECT TO PLAN
5.1 Number. Subject to the provisions of Section 5.3, the number of
shares of Stock subject to Awards (including Director Awards) under the Plan
may not exceed 11,000,000 shares of Stock. The shares to be delivered under
the Plan may consist, in whole or in part, of treasury Stock or authorized
but unissued Stock, not reserved for any other purpose. The maximum number of
shares of Stock with respect to which Awards may be granted to any one
Employee under the Plan is 10% of the aggregate number of shares of Stock
available for Awards under Section 5.1.
5.2 Cancelled, Terminated or Forfeited Awards. Any shares of Stock
subject to an Award which for any reason are cancelled, terminated or
otherwise settled without the issuance of any Stock shall again be available
for Awards under the Plan.
5.3 Adjustment in Capitalization. In the event of any Stock dividend or
Stock split, recapitalization (including, without limitation, the payment of
an extraordinary dividend), merger, consolidation, combination, spin-off,
distribution of assets to stockholders, exchange of shares, or other similar
corporate change, (i) the aggregate number of shares of Stock available for
Awards under Section 5.1 and (ii) the number of shares and exercise price
with respect to Options and the number, prices and dollar value of other
Awards, may be appropriately adjusted by the
37
<PAGE>
Committee, whose determination shall be conclusive. If, pursuant to the
preceding sentence, an adjustment is made to the number of shares of Stock
authorized for issuance under the Plan, a corresponding adjustment shall be
made to the number of shares subject to each Director Award thereafter
granted pursuant to Section 7.1.
SECTION 6
STOCK OPTIONS
6.1 Grant of Options. Options may be granted to Participants at such
time or times as shall be determined by the Committee. Options granted under
the Plan may be of two types: (i) Incentive Stock Options and (ii)
Nonstatutory Stock Options. The Committee shall have complete discretion in
determining the number of Options, if any, to be granted to a Participant.
Each Option shall be evidenced by an Option agreement that shall specify the
type of Option granted, the exercise price, the duration of the Option, the
number of shares of Stock to which the Option pertains, the exercisability
(if any) of the Option in the event of death, retirement, disability or
termination of employment, and such other terms and conditions not
inconsistent with the Plan as the Committee shall determine.
6.2 Option Price. Nonstatutory Stock Options and Incentive Stock Options
granted pursuant to the Plan shall have an exercise price which is not less
than the Fair Market Value on the date the Option is granted.
6.3 Exercise of Options. Options awarded to a Participant under the Plan
shall be exercisable at such times and shall be subject to such restrictions
and conditions as the Committee may impose, subject to the Committee's right
to accelerate the exercisability of such Option in its discretion.
Notwithstanding the foregoing, no Option shall be exercisable for more than
ten years after the date on which it is granted.
6.4 Payment. The Committee shall establish procedures governing the
exercise of Options, which shall require that written notice of exercise be
given and that the Option price be paid in full in cash or cash equivalents,
including by personal check, at the time of exercise or pursuant to any
arrangement that the Committee shall approve. The Committee may, in its
discretion, permit a Participant to make payment (i) in Stock already owned
by the Participant valued at its Fair Market Value on the date of exercise
(if such Stock has been owned by the Participant for at least six months) or
(ii) by electing to have the Company retain Stock which would otherwise be
issued on exercise of the Option, valued at its Fair Market Value on the date
of exercise. As soon as practicable after receipt of a written exercise
notice and full payment of the exercise price, the Company shall deliver to
the Participant a certificate or certificates representing the acquired
shares of Stock.
6.5 Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, no term of this Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of any Participant affected
thereby, to cause any Incentive Stock Option previously granted to fail to
qualify for the Federal income tax treatment afforded under Section 421 of
the Code. In furtherance of the foregoing, (i) the aggregate Fair Market
Value of shares of Stock (determined at the time of grant of each Option)
with respect to which Incentive Stock Options are exercisable for the first
time by an Employee during any calendar year shall not exceed $100,000 or
such other amount as may be required by the Code, (ii) an Incentive Stock
Option may not be exercised more than three months following termination of
employment (except as the Committee may otherwise determine in the event of
death or disability), and (iii) if the Employee receiving an Incentive Stock
Option owns Stock possessing more than 10% of the total combined voting power
of all classes of Stock of the Company, the exercise price of the Option
shall be at least 110% of Fair Market Value and the Option shall not be
exercisable after the expiration of five years from the date of grant. An
Incentive Stock Option may be granted only to Employees who are employed by
the Company or a "subsidiary corporation" as defined in Section 425 of the
Code.
38
<PAGE>
SECTION 7
DIRECTOR AWARDS
7.1 Amount of Award. Each Eligible Director shall receive annually (i) a
grant of a Nonstatutory Stock Option for 4,500 shares of Stock and (ii) a
grant of 900 shares of Stock from the Company's treasury shares. Such grants
shall be made each year immediately following the annual meeting of Company
stockholders to those persons who are Eligible Directors immediately
following such meeting.
7.2 No Other Awards. An Eligible Director shall not receive any other
Award under the Plan.
SECTION 8
STOCK APPRECIATION RIGHTS
8.1 SAR's In Tandem with Options. Stock Appreciation Rights may be
granted to Participants in tandem with any Option granted under the Plan,
either at or after the time of the grant of such Option, subject to such
terms and conditions, not inconsistent with the provisions of the Plan, as
the Committee shall determine. Each Stock Appreciation Right shall only be
exercisable to the extent that the corresponding Option is exercisable, and
shall terminate upon termination or exercise of the corresponding Option.
Upon the exercise of any Stock Appreciation Right, the corresponding Option
shall terminate.
8.2 Other Stock Appreciation Rights. Stock Appreciation Rights may also
be granted to Participants separately from any Option, subject to such terms
and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine.
SECTION 9
RESTRICTED STOCK
9.1 Grant of Restricted Stock. The Committee may grant Restricted Stock
to Participants at such times and in such amounts, and subject to such other
terms and conditions not inconsistent with the Plan as it shall determine.
Each grant of Restricted Stock shall be subject to such restrictions, which
may relate to continued employment with the Company, performance of the
Company, or other restrictions, as the Committee may determine. Each grant of
Restricted Stock shall be evidenced by a written agreement setting forth the
terms of such Award.
9.2 Removal of Restrictions. The Committee may accelerate or waive such
restrictions in whole or in part at any time in its discretion.
SECTION 10
STOCK BONUSES
10.1 Grant of Stock Bonuses. The Committee may grant a Stock Bonus to a
Participant at such times and in such amounts, and subject to such other
terms and conditions not inconsistent with the Plan, as it shall determine.
10.2 Effect on Compensation. The Committee may from time to time grant a
Stock Bonus in lieu of salary or cash bonuses otherwise payable to a
Participant.
39
<PAGE>
SECTION 11
AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
11.1 General. The Board may from time to time amend, modify or terminate
any or all of the provisions of the Plan, subject to the provisions of this
Section 11.1. The Board may not change the Plan in a manner which would
prevent outstanding Incentive Stock Options granted under the Plan from being
Incentive Stock Options without the consent of the optionees concerned.
Furthermore, the Board may not make any amendment which would (i) materially
modify the requirements for participation in the Plan, (ii) increase the
number of shares of Stock subject to Awards under the Plan pursuant to
Section 5.1, or (iii) make any other amendments which would cause the Plan
not to comply with Rule 16b-3 under the Act, in each case without the
approval of the Company's stockholders. No amendment or modification shall
affect the rights of any Employee with respect to a previously granted Award,
nor shall any amendment or modification affect the rights of any Eligible
Director pursuant to a previously granted Director Award.
11.2 Termination of Plan. No further Options shall be granted under the
Plan subsequent to September 30, 2005, or such earlier date as may be
determined by the Board.
SECTION 12
MISCELLANEOUS PROVISIONS
12.1 Nontransferability of Awards. No Awards granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution;
provided, the Committee may grant Options which are transferable, without
payment of consideration, to immediate family members of the Participant or
to trusts or partnerships for such family members, with any such transferee
subject to all conditions of the Option. Subject to the preceding sentence,
all rights with respect to Awards granted to a Participant under the Plan
shall be exercisable during the Participant's lifetime only by such
Participant and all rights with respect to any Director Awards granted to an
Eligible Director shall be exercisable during the Director's lifetime only by
such Eligible Director.
12.2 Beneficiary Designation. Each Participant under the Plan may from
time to time name any beneficiary or beneficiaries (who may be named
contingent or successively) to whom any benefit under the Plan is to be paid
or by whom any right under the Plan is to be exercised in case of his death.
Each designation will revoke all prior designations by the same Participant
shall be in a form prescribed by the Committee, and will be effective only
when filed in writing with the Committee. In the absence of any such
designation, Awards outstanding at death may be exercised by the
Participant's surviving spouse, if any, or otherwise by his estate.
12.3 No Guarantee of Employment or Participation. Nothing in the Plan
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or
any Subsidiary. No Employee shall have a right to be selected as a
Participant, or, having been so selected, to receive any future Awards.
12.4 Tax Withholding. The Company shall have the power to withhold, or
require a Participant or Eligible Director to remit to the Company, an amount
sufficient to satisfy federal, state, and local withholding tax requirements
on any Award under the Plan, and the Company may defer issuance of Stock
until such requirements are satisfied. The Committee may, in its discretion,
permit a Participant to elect, subject to such conditions as the Committee
shall impose, (i) to have shares of Stock otherwise issuable under the Plan
withheld by the Company or (ii) to deliver to the Company previously acquired
shares of Stock, in each case having a Fair Market Value sufficient to
satisfy all or part of the Participant's estimated total federal, state and
local tax obligation associated with the transaction.
40
<PAGE>
12.5 Change of Control. On the date of a Change of Control (as herein
defined), all outstanding Options and Stock Appreciation Rights shall become
immediately exercisable and all restrictions with respect to Restricted Stock
shall lapse. Change of Control shall mean:
(a) The acquisition (other than from the Company) by any
person, entity or "group," within the meaning of Section
13(d)(3) or 14(d)(2) of the Act (excluding, for this
purpose, the Company or its subsidiaries, or any employee
benefit plan of the Company or its subsidiaries which
acquires beneficial ownership of voting securities of the
Company) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Act) of 30% or more of
either the then outstanding shares of common stock or
the combined voting power of the Company's then
outstanding voting securities entitled to vote generally
in the election of directors; or
(b) Individuals who, as of the date hereof, constitute the
Board (as of the date hereof the "Incumbent Board") cease
for any reason to constitute at least a majority of the
Board, provided that any person becoming a director
subsequent to the date hereof whose election, or
nomination for the election by the Company's
stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be, for purposes of this Plan, considered as
though such person were a member of the Incumbent Board;
or
(c) Approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case,
with respect to which persons who were the stockholders
of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter,
own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the
reorganized, merged or consolidated company's then
outstanding voting securities, or a liquidation or
dissolution of the Company or of the sale of all or
substantially all of the assets of the Company.
12.6 Company Intent. The Company intends that the Plan comply in all
respects with Rule 16b-3 under the Act, and any ambiguities or
inconsistencies in the construction of the Plan shall be interpreted to give
effect to such intention.
12.7 Requirements of Law. The granting of Awards and the issuance of
shares of Stock shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or securities
exchanges as may be required.
12.8 Effective Date. The Plan shall be effective upon its adoption by
the Board subject to approval by the Company's stockholders at the 1995
annual stockholders' meeting.
12.9 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of
Delaware.
41
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>5
<FILENAME>ex-10_12.txt
<DESCRIPTION>EXHIBIT 10.12
<TEXT>
<PAGE>
EXHIBIT 10.12
CONAGRA, INC., DIRECTORS' UNFUNDED
DEFERRED COMPENSATION PLAN
ConAgra, Inc., in the interest of providing the most attractive
alternatives to its directors in the manner of allocating the director's
compensation and at the same time not incurring additional expense to the
Company, does hereby establish the "ConAgra, Inc., Directors' Unfunded Deferred
Compensation Plan," with the following terms and conditions:
1. The Plan shall be named the "ConAgra, Inc., Directors' Unfunded
Deferred Compensation Plan" (hereinafter described as "The Plan").
2. The Plan shall be available on a voluntary basis to all directors
who receive fees based on a rate per month or for attendance at meetings.
Any director who qualifies may signify his intention to defer all or any
proportion of his fees based on a rate per month or for attendance at
meetings for the ensuing year by giving written notice to the Company prior
to December 31st of the current year of his intention to defer this
compensation and the extent to which he desires the compensation deferred.
The formula he elects to defer compensation shall remain in effect from
year to year unless he notifies the Company in writing by December 31st of
his intention to modify or terminate his participation in The Plan in the
ensuing year. Any person elected to the Board who was not a director on the
preceding December 31st may elect before his term begins to defer all or
part of the above described compensation for the balance of the calendar
year following such election and for succeeding calendar years on the same
basis as other directors.
3. The Company shall maintain a separate memorandum account of the
fees deferred by each participant and the Company shall credit said account
semi-annually on January 1st and July 1st of each year with interest on the
balance held in the fund for the prior six months. The rate of interest to
be credited shall be the prime rate of interest on such date as charged by
The First National Bank of Chicago. The Company shall annually supply the
director participating in The Plan a statement of his account.
4. Amounts deferred under The Plan together with accumulated interest,
including interest accruing after the participant ceases to be a director,
shall be distributed in ten semi-annual installments on January 1st and
July 1st of each year after the year in which the participant in The Plan
ceases to be a director, provided that if the participant dies prior to
payment in full of all amounts due him under The Plan, the balance of the
account shall be payable to his estate in full on January 1st of the year
following his death. In addition, after a participant ceases to be a
director, upon his request, the other directors at their sole discretion
may authorize a different method of payment including a lump sum payment.
If for any reason the directors determine it to be in the best interests of
the Company or the participant to pay the participant in full including a
determination that the participant upon termination becomes a proprietor,
officer, partner, employee or otherwise becomes affiliated with any
business that
42
<PAGE>
EXHIBIT 10.12 (CONTINUED)
is in competition with the Company, the Company may make a payment in full
to said participant when he ceases to be a director without his consent.
5. This Plan may be amended, suspended, terminated or modified by the
vote of a majority of the Board of Directors of the Company at any time
provided that such amendment, modification, suspension or termination shall
not affect the obligation of the Company to pay to the participants the
amounts accrued or credited to said account up to December 31st of the year
in which said action is taken concerning The Plan by the Board of
Directors.
6. This Plan shall not apply to Honorary Directors or persons holding
similar titles and if a participant ceases to be a director and becomes an
Honorary Director or holds some similar title, for purposes of this Plan it
shall be determined that he has ceased to be a director.
7. Unless notified to the contrary, all notices under this Plan shall
be sent in writing to the Company by mailing to the "Office of the
Secretary," ConAgra, Inc., Kiewit Plaza, Omaha, Nebraska 68131. All notices
to the participants shall be sent to the address which is their record
address for notices as directors of the Company unless a participant, by
written notice, otherwise directs.
8. This Plan is subject to the approval of the Board of Directors of
the Company by a resolution and, if such resolution is adopted, shall
become effective December 20, 1971, and the Company shall commence to defer
compensation to the participants commencing in the calendar year 1972.
43
<PAGE>
EXHIBIT 10.12 (CONTINUED)
FIRST AMENDMENT TO THE
CONAGRA, INC., DIRECTORS' UNFUNDED
DEFERRED COMPENSATION PLAN
The ConAgra, Inc., Directors' Unfunded Deferred Compensation Plan, is
amended, as follows:
ARTICLE I
Paragraph 2 is amended in its entirety to read, as follows:
"2. The Plan shall be available on a voluntary basis to all
directors who receive directors' fees from ConAgra. Any director who
qualifies may signify his intention to defer all or any proportion of his
fees for the following year by giving written notice to ConAgra, prior to
December 31st of the current year, of his intention to defer this
compensation and the extent to which he desires the compensation deferred.
Such amount shall be deferred in cash and credited to the director's
Interest-Bearing Account. The formula the director elects to defer
compensation shall remain in effect from year to year unless he notifies
ConAgra, in writing, by December 31st of his intention to modify or
terminate his participation in the Plan the following year. Any person
elected to the Board who was not a director on the preceding December 31st
may elect before his term begins to defer all or part of the above
described compensation for the balance of the calendar year following such
election and for succeeding calendar years on the same basis as other
directors. In addition, a director may make a one-time irrevocable election
to defer all or a portion of his compensation in the form of ConAgra Common
Stock; amounts so deferred shall be credited to the director's Stock
Account, which shall be a book entry by the Company payable in shares of
ConAgra Common Stock as provided in paragraph 4 of this Plan. A director
may also make a one-time irrevocable election to transfer all or a portion
of the director's Interest-Bearing Account to the director's Stock Account.
Such election may not be made prior to the effective date of this amendment
(as described in Article IV below) and shall be subject to any limitations
imposed by law or regulation."
ARTICLE II
Paragraph 3 is amended in its entirety to read, as follows:
"3. ConAgra shall establish and maintain two deferred compensation
accounts for each director: (i) a Stock Account, to which there shall be
credited as a book entry the portion of cash compensation which the
director has elected to defer in the form of Common Stock and any transfers
from the Interest-Bearing Account and (ii) an Interest-Bearing Account to
which all other deferred cash compensation shall be credited.
At the end of each calendar quarter, there shall be credited to the
respective Accounts the deferred compensation accrued during such quarter.
If a director has elected to defer cash compensation in the form of Common
Stock, a book entry in the amount of the number of full shares to be
credited to the Stock Account for each quarter shall be determined on the
basis of the closing price of the Common Stock on the last trading day of
the quarter as reported for New York Stock Exchange- Composite
Transactions, and any amount which would represent a fractional share shall
be credited to the director's Interest-Bearing Account.
44
<PAGE>
EXHIBIT 10.12 (CONTINUED)
Dividend equivalents on shares credited to a director's Stock Account
shall be credited by book entry at the end of each quarter to his or her
Stock Account in the form of full shares of Common Stock; any amount which
would represent a fractional share shall be credited to his or her
Interest-Bearing Account.
The Interest-Bearing Account shall be credited semiannually (on each
January 1st and July 1st), with interest on the balance held in the fund
for the prior six months. The rate of interest to be credited shall be the
prime rate of interest on such date as charged by The First National Bank
of Chicago.
The Company shall annually supply the director participating in the
Plan a statement of his total interest in the Plan."
ARTICLE III
Paragraph 4 is amended in its entirety to read, as follows:
"4. Amounts deferred under the Plan together with accumulated
interest, including interest accruing after the participant ceases to be a
director, shall be distributed in ten semiannual installments on January
1st and July 1st of each year after the year in which the participant in
the Plan ceases to be a director, provided that if the participant dies
prior to payment in full of all amounts due him under the Plan, the balance
of the account shall be payable to his designated beneficiary. The
beneficiary designation shall be revocable and shall be made in writing in
a manner provided by ConAgra. In addition, after a participant ceases to be
a director, upon his request, the Executive Committee of the Board at their
sole discretion may authorize a different method of payment including a
lump sum payment. If for any reason the Executive Committee of the Board
determines it to be in the best interests of ConAgra or the participant to
pay the participant in full including a determination that the participant
upon termination becomes a proprietor, officer, partner, employee or
otherwise becomes affiliated with any business that is in competition with
ConAgra, ConAgra may make a payment in full to said participant when he
ceases to be a director without his consent. Payment of the aggregate
number of shares credited by book entry to a director's Stock Account shall
be made in shares of Common Stock."
ARTICLE IV
This Amendment shall be effective on the date of its approval by a vote of
the holders of a majority of the outstanding shares of the Company's common
stock at a meeting of the stockholders of the Company.
45
<PAGE>
EXHIBIT 10.12 (CONTINUED)
SECOND AMENDMENT TO THE
CONAGRA, INC. DIRECTORS' UNFUNDED
DEFERRED COMPENSATION PLAN
The ConAgra, Inc. Directors' Unfunded Deferred Compensation Plan, is
amended, as follows:
ARTICLE I
Paragraph 4 is amended in its entirety to read, as follows:
"4. Amounts deferred under the Plan together with accumulated
interest, including interest accruing after the participant ceases to be a
director, shall be distributed in twenty semiannual installments on January
1st and July 1st of each year after the year in which the participant in
the Plan ceases to be a director, provided that if the participant dies
prior to payment in full of all amounts due him under the Plan, the balance
of the account shall be payable to his designated beneficiary. The
beneficiary designation shall be revocable and shall be made in writing in
a manner provided by ConAgra. In addition, after a participant ceases to be
a director, upon his request, the Executive Committee of the Board at their
sole discretion may authorize a different method of payment including a
lump sum payment. If for any reason the Executive Committee of the Board
determines it to be in the best interests of ConAgra or the participant to
pay the participant in full including a determination that the participant
upon termination becomes a proprietor, officer, partner, employee or
otherwise becomes affiliated with any business that is in competition with
ConAgra, ConAgra may make a payment in full to said participant when he
ceases to be a director without his consent. Payment of the aggregate
number of shares credited by book entry to a director's Stock Account shall
be made in shares of Common Stock."
THIRD AMENDMENT TO THE CONAGRA, INC.,
DIRECTORS' UNFUNDED DEFERRED COMPENSATION PLAN
The ConAgra, Inc., Directors' Unfunded Deferred Compensation Plan, is amended,
as follows:
ARTICLE I
Paragraph 4 of the Plan is amended in its entirety to read, as follows:
"4. Amounts deferred under the Plan together with accumulated interest,
including interest accruing after the participant ceases to be a director,
shall be distributed in twenty (20) semi-annual installments on January 1
and July 1 of each year after the year in which the participant in the Plan
ceases to be a director, provided that a participant may also, upon
becoming a participant in the Plan, elect to receive payment of deferred
amounts (i) in a lump sum at a date certain or (ii) in semi-annual
installments over a period elected by the participant commencing at the
date certain elected by the
46
<PAGE>
EXHIBIT 10.12 (CONTINUED)
participant. Participants in the Plan as of the date of adoption of this
amendment may also elect, within sixty (60) days of such adoption, any of
the three payment alternatives described above. If the participant dies
prior to the payment in full of all amounts due him under the Plan, the
balance of the account shall be payable to his designated beneficiary in a
lump sum. The beneficiary designation shall be revocable and should be made
in writing in a manner provided by ConAgra. In addition, at the request of
a participant, the Executive Committee of the Board, at their sole
discretion, may authorize a change in the method of payment elected by a
participant. If for any reason, the Executive Committee of the Board
determines it to be in the best interest of ConAgra or the participant to
pay the participant in full, including a determination that the participant
upon termination becomes a proprietor, officer, partner, employer or
otherwise becomes affiliated with any business that is in competition with
ConAgra, ConAgra may make a payment in full to said participant when he or
she ceases to be a director without his or her consent. Payment of the
aggregate number of shares credited by book entry to a Director's Stock
Account shall be made in shares of Common Stock."
47
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>6
<FILENAME>ex-12.txt
<DESCRIPTION>EXHIBIT 12
<TEXT>
<PAGE>
EXHIBIT 12
CONAGRA, INC. AND SUBSIDIARIES
Computation of Ratios of Earnings to Fixed Charges and of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
(Dollars in millions)
<TABLE>
<CAPTION>
Fiscal Year Ended
------------------------------------------------------------------------
1996 1997 1998 1999 2000
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Fixed Charges As Defined:
Interest expense $ 365.5 $ 353.1 $ 368.9 $ 368.3 $ 351.3
Capitalized interest 5.8 11.2 11.4 6.9 5.5
Interest in cost of goods sold 27.5 21.8 19.1 20.0 31.4
Preferred distributions of subsidiary 43.5 44.2 44.3 41.4 43.0
One third of non-cancelable lease rent 40.6 37.7 38.8 39.8 33.5
---------- ---------- ---------- ---------- ----------
Total fixed charges (A) 482.9 468.0 482.5 476.4 464.7
Add preferred stock dividends of the Company 14.6 - - - -
---------- ---------- ---------- ---------- ----------
Total fixed charges and preferred stock
dividends (B) $ 497.5 $ 468.0 $ 482.5 $ 476.4 $ 464.7
========== ========== ========== ========== ==========
Earnings as Defined:
Pretax income after elimination of
undistributed earnings of equity method
investees $ 437.8 $ 1,043.6 $ 1,020.8 $ 668.9 $ 654.1
Add fixed charges 497.5 468.0 482.5 476.4 464.7
Less capitalized interest (5.8) (11.2) (11.4) (6.9) (5.5)
---------- ---------- ---------- ---------- ----------
Earnings and fixed charges (C) $ 929.5 $ 1,500.4 $ 1,491.9 $ 1,138.4 $ 1,113.3
========== ========== ========= ========== ==========
Ratio of earnings to fixed charges (C/A) 1.9* 3.2 3.1 2.4** 2.4***
Ratio of earnings to combined fixed charges and
preferred stock dividends (C/B) 1.9* 3.2 3.1 2.4** 2.4***
</TABLE>
* In 1996, pretax income includes restructuring charges of $507.8 million.
Excluding the charges, the "ratio of earnings to fixed charges" and the
"ratio of earnings to combined fixed charges and preferred stock dividends"
were 3.0 and 2.9, respectively. See Note 2 on page 41 of the Company's 1996
Annual Report to Stockholders.
** In 1999, pretax income includes restructuring charges of $440.8 million.
Excluding the charges, the "ratio of earnings to fixed charges" and the
"ratio of earnings to combined fixed charges and preferred stock dividends"
were 3.3. See Note 3 on pages 45 and 46 of the Company's 2000 Annual Report
to Stockholders.
*** In 2000, pretax income includes restructuring and restructuring-related
charges of $621.4 million. Excluding the charges, the "ratio of earnings to
fixed charges" and the "ratio of earnings to combined fixed charges and
preferred stock dividends" were 3.7. See Note 3 on pages 45 and 46 of the
Company's 2000 Annual Report to Stockholders.
48
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>7
<FILENAME>ex-13.txt
<DESCRIPTION>EXHIBIT 13
<TEXT>
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
Our discussion and analysis is intended to give our stockholders a summary of
the major topics relevant to our financial performance and condition. This
discussion should be read in conjunction with our financial statements and
related notes. Years cited in this discussion refer to ConAgra's May-ending
fiscal years.
In 1999, ConAgra announced Operation Overdrive, a series of initiatives designed
to accelerate growth in sales and profit by aligning ConAgra's resources by
customer channel, increasing investment in brands and market position and
removing excess costs and capital. The implementation of Operation Overdrive
contributed to the performance of all ConAgra's business segments in 2000, most
notably through cost savings and efficiency gains. A portion of the cost savings
associated with Operation Overdrive has been reinvested, as planned, in
ConAgra's marketing programs in an effort to build for the future. ConAgra
expects this trend of increased marketing investment to continue in the
foreseeable future.
2000 vs. 1999
BUSINESS SEGMENT HIGHLIGHTS
<TABLE>
<CAPTION>
- --------------------- ------------------- --------------------- ---------------------
FY 2000 Operating
Profit Excluding
Restructuring FY 2000
DOLLARS IN MILLIONS FY 2000 Sales Charges Operating Profit
===================== =================== ===================== =====================
% Change % Change % Change
Segment From FY From FY From FY
$ 1999 $ 1999 $ 1999
- --------------------- ------------------- --------------------- ---------------------
<S> <C> <C> <C>
Packaged Foods $ 7,713.5 4% $ 1,087.9 11% $ 778.4 (17%)
- --------------------- ------------------- --------------------- ---------------------
Refrigerated Foods 12,522.2 8% 490.7 33% 322.7 3,333%
- --------------------- ------------------- --------------------- ---------------------
TOTAL FOOD BUSINESS 20,235.7 6% 1,578.6 17% 1,101.1 16%
- --------------------- ------------------- --------------------- ---------------------
Agricultural Products 5,150.1 (8%) 331.1 (8%) 187.2 (41%)
- --------------------- ------------------- --------------------- ---------------------
CONAGRA TOTAL $25,385.8 3% $ 1,909.7 12% $1,288.3 2%
===================== =================== ===================== =====================
</TABLE>
Packaged Foods sales grew 4% for the fiscal year to reach $7,714 million,
largely the result of gains in ConAgra's french fry and specialty meat
operations, both of which focus on the foodservice channel. Sales growth was
also driven by gains for ConAgra's shelf-stable grocery snack products,
including Slim Jim, Orville Redenbacher's, Act II, and Hunt's Snack Pack, as
well as some of ConAgra's most significant frozen foods brands, specifically
Banquet and Marie Callender's. Segment sales growth was slowed by declines for
Wesson Oil, Healthy Choice, and ConAgra's commodity cheese operations. ConAgra
has recently introduced several new Healthy Choice items to address the sales
declines. Sales declines for commodity cheese were expected as ConAgra divested
commodity cheese assets during the fiscal year. ConAgra expects to continue
increasing its marketing investment for the Packaged Foods segment for the
foreseeable future in an effort to grow sales in the segment's most promising
categories.
Refrigerated Foods sales grew 8% for the year to reach $12,522 million,
reflecting gains for the beef, pork, poultry, and processed meat operations.
Strong consumer demand fueled the segment's sales growth, as did ConAgra's
increased emphasis on value-added products and increased marketing investment.
The best-performing brands for 2000 in ConAgra's processed meat operations
included Butterball, Cook's, Eckrich, and Hebrew National.
Agricultural Products sales declined 8% to $5,150 million for the year, mostly
due to the impact of lower grain volumes and prices on ConAgra's Trade Group.
Sales for United Agri Products, the segment's largest sales contributor, were
essentially flat for the year.
ConAgra's cost of goods sold for 2000 includes $223 million of
restructuring-related charges resulting in a consolidated gross profit of $4,180
million in 2000. Cost of goods sold in 1999 did not include any
restructuring-related charges. Excluding restructuring-related charges, overall
gross profit (sales less cost of goods sold) grew 9% to $4,403 million and gross
margin (gross profit as a percent of sales) improved to 17%, as compared to 16%
in 1999, primarily due to increased food volumes, a better product mix, more
efficient processes, and favorable industry conditions for the beef operations.
Although all of ConAgra's business segments reported an increase in gross
margin, ConAgra's fresh beef and pork operations experienced the most dramatic
increases. Due to declines in sales, gross profit for the Agricultural Products
segment declined modestly compared to last year, although gross margin for the
segment improved due to more efficient operations. ConAgra's gross margin has
steadily grown over the last few years, reflecting an improving business mix and
efficiency gains.
Selling, general and administrative (SG&A) expenses for 2000 include $76 million
of restructuring-related charges resulting in consolidated SG&A expenses of
$2,888 million. SG&A of $2,598 million in 1999 did not include any
restructuring-related charges. Excluding restructuring-related charges, SG&A
expenses increased 8% to $2,812 million, primarily as a result of increased
investment in Operation Overdrive related personnel, services, and marketing
support. Advertising and promotion expense increased at a double-digit rate,
reflecting ConAgra's commitment to building for the future. SG&A expenses were
11% of sales during 2000, unchanged compared to 1999.
32 ConAgra, Inc. 2000 Annual Report
49
<PAGE>
Packaged Foods operating profit (earnings before interest, goodwill
amortization, general corporate expense, and income taxes) for 2000 decreased
17% to $778 million due to increased restructuring and restructuring-related
charges. Excluding restructuring and restructuring-related charges, operating
profit grew 11% to $1,088 million as ConAgra's french fry and specialty meat
businesses, which are focused on the foodservice channel, posted improvement in
profitability. Gains were also made in the frozen foods and grocery products
businesses; profit growth in frozen foods was primarily driven by growth for
Banquet and Marie Callender's, while growth for the grocery products division
was mostly the result of gains for Hunt's pudding products as well as other
snack items, including Slim Jim and Act II. Volume and profit declines for
Healthy Choice, certain non-core nonperishable products, and ConAgra's commodity
cheese operations slowed the rate of overall segment operating profit growth. In
addition to sales gains and product mix improvement, cost savings and efficiency
gains favorably impacted operating profit growth.
Operating profit for Refrigerated Foods grew to $323 million in 2000 due to
significantly lower restructuring and restructuring-related charges. Excluding
restructuring and restructuring-related charges, operating profit grew 33% to
$491 million as results for beef and pork showed significant improvement over
the prior year. Strong consumer demand for fresh red meat as well as operating
improvements drove the profitability gains for beef and pork. Processed meat
profitability improved over last year due to increased volumes and operating
efficiencies. Butterball, Cook's, Eckrich, and Hebrew National were the
strongest performing processed meat brands. Profitability for poultry declined
compared to last year, mostly as a result of unfavorable industry conditions due
to oversupply of poultry inventories.
Agricultural Products operating profit for 2000 declined 41% to $187 million due
primarily to increased restructuring and restructuring-related charges.
Excluding restructuring and restructuring-related charges, operating profit
declined 8% to $331 million, as lower grain volumes and prices negatively
influenced the results for the ConAgra Trade Group. Profits for United Agri
Products and ConAgra's grain processing business increased for the year,
primarily due to operating improvements.
ConAgra's total operating profit for 2000 grew 2% to $1,288 million. Excluding
restructuring and restructuring-related charges, operating profit grew 12% to
$1,910 million.
As part of Operation Overdrive, ConAgra implemented restructuring initiatives
that resulted in pre-tax total charges of $621 million and $441 million during
2000 and 1999, respectively. These restructuring initiatives are part of
ConAgra's efforts to improve margins by streamlining operations and becoming
more efficient. When originally announced in May of 1999, the restructuring plan
was expected to span three fiscal years and result in total charges of up to
$1,300 million. However, during 2000, ConAgra moved rapidly to capture
operational efficiencies and cost savings by accelerating the implementation of
the restructuring plan. Accordingly, ConAgra incurred the final charges
associated with its restructuring plan during 2000, thus completing its
restructuring plan in only two fiscal years with restructuring plan charges
(2000 and 1999) totaling less than $1,100 million. On both a pre-tax and after
tax-basis, less than 20% of these charges result in cash outlays.
Total pre-tax cost savings associated with the restructuring plan are currently
projected to approximate $180 million in each of the next two fiscal years,
while 2000 cost savings approximated $100 million. These actual and planned cost
savings are primarily a result of reducing duplicative efforts, lowering
employee-related expenses and, to a lesser degree, reducing future depreciation
and amortization costs. Accordingly, these cost savings positively impact
ConAgra's "cost of goods sold" and "selling, general and administrative" line
items within its consolidated statements of earnings.
The following is a breakdown of the restructuring and restructuring-related
charges by segment and category for 2000.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Packaged Refrigerated Agricultural
DOLLARS IN MILLIONS Foods Foods Products Total
===========================================================================
<S> <C> <C> <C> <C>
Restructuring/Impairment
charges $ 109.9 $ 131.3 $ 81.0 $ 322.2
Accelerated Depreciation 128.2 10.9 - 139.1
Inventory Markdowns 46.2 11.2 57.1 114.5
Other 25.2 14.6 5.8 45.6
- ---------------------------------------------------------------------------
Total $ 309.5 $ 168.0 $ 143.9 $ 621.4
===========================================================================
</TABLE>
Of the $621 million of pre-tax charges incurred in 2000, $223 million is
included in cost of goods sold, $76 million is included in SG&A expense, and the
remaining $322 million is reflected as restructuring and impairment charges on
ConAgra's consolidated statements of earnings.
In 2000, the pre-tax charges of $621 million reduced net income by $385 million,
or $.81 per diluted share. Essentially all of the restructuring and
restructuring-related charges in 2000 resulted in a
33 ConAgra, Inc. 2000 Annual Report
50
<PAGE>
tax benefit. Of the pre-tax charges incurred in 2000, $154 million represents a
cash expense. Reflecting the tax deductibility of these cash expenses, the
after-tax cash expense related to the 2000 charges totals $95 million.
Of the $441 million of pre-tax charges incurred in 1999, $39 million related to
the Packaged Foods segment, $359 million related to the Refrigerated Foods
segment, and $43 million related to the Agricultural Products segment. The $441
million charge is classified as restructuring and impairment charges in
ConAgra's consolidated statements of earnings.
In 1999, the pre-tax charges of $441 million reduced net income by $338 million,
or $.71 per diluted share. Of the $441 million charge, $277 million resulted in
a tax benefit. Of the charges incurred in 1999, $52 million represented a cash
expense. Reflecting the tax deductibility of this cash expense, the after-tax
cash expense of the restructuring charges totaled $32 million.
For the restructuring initiative as a whole (amounts reported in 2000 and 1999),
the total charges of $1,062 million reduced after-tax earnings for 1999 and
2000, combined, by $723 million. Of the $1,062 million of pre-tax charges, $206
million represents a cash expense, while the after-tax cash expense related to
the restructuring initiative totals $127 million.
Of the total $1,062 million of charges incurred during 2000 and 1999, $223
million is included in cost of goods sold, $76 million is included in SG&A
expense, and the remaining $763 million is reflected as restructuring and
impairment charges on the consolidated statements of earnings for these years.
As part of the restructuring initiative associated with Operation Overdrive,
approximately 8,450 employees received notification of their termination. Of
this amount, approximately 5,250 have been terminated. In addition, 31
production facilities were closed, 106 non-production facilities were closed,
and 18 non-core businesses were divested. For more detail on the restructuring
and restructuring-related charges related to Operation Overdrive, refer to Note
3 to the consolidated financial statements.
For 2000, interest expense was $303 million, a decline of $13 million, or 4%,
over the prior year, primarily due to better management of accounts receivable,
inventory, and capital expenditures. During the fourth quarter of 2000, interest
expense grew compared to the fourth quarter of 1999 due to higher interest
rates, as well as a debt-financed acquisition that was completed in January of
2000.
Income before taxes declined 2% to $666 million in 2000 as a result of increased
restructuring and restructuring-related charges. Excluding restructuring and
restructuring-related charges, income before taxes grew 15% to $1,288 million.
The effective tax rate for 2000 was 38% both before and after the impact of
restructuring and restructuring-related charges. Net income in 2000 reached $413
million, or $.86 per diluted share, a 15% increase as compared to 1999.
Excluding restructuring charges, net income was $798 million, or $1.67 per
share, representing 14% growth in diluted earnings per share over 1999.
During the year, ConAgra's largest acquisition was Seaboard Farms, the poultry
division of Seaboard Corporation. The company paid approximately $360 million in
cash for this acquisition. During 2000, ConAgra made other smaller acquisitions
and paid for these acquisitions in cash and ConAgra common stock. The effect of
these acquisitions on ConAgra's operating results for 2000 was not significant.
In June 2000, ConAgra signed a definitive agreement to acquire International
Home Foods. International Home Foods' reported net sales for the most recent
twelve months were approximately $2.1 billion. ConAgra expects the results of
operations from International Home Foods to be reported in its Packaged Foods
segment for 2001.
1999 VS. 1998 - 1999 had 52 weeks versus 53 weeks in 1998. The effect on
earnings was not material.
BUSINESS SEGMENT HIGHLIGHTS
<TABLE>
<CAPTION>
- ------------------------ ---------------- -------------------- ---------------------
FY 1999 Operating
Profit Excluding
Restructuring FY 1999
Dollars in millions FY 1999 Sales Charges Operating Profit
======================== ================ ==================== =====================
% Change % Change % Change
Segment From FY From FY From FY
$ 1998 $ 1998 $ 1998
- ------------------------ ---------------- -------------------- ---------------------
<S> <C> <C> <C>
Packaged Foods $ 7,426.6 3% $ 980.3 - $ 941.3 (4%)
Refrigerated Foods 11,591.4 2% 368.0 80% 9.4 (95%)
- ------------------------ ---------------- -------------------- ---------------------
TOTAL FOOD BUSINESS 19,018.0 2% 1,348.3 14% 950.7 (20%)
- ------------------------ ---------------- -------------------- ---------------------
Agricultural Products 5,576.3 (1%) 358.0 (8%) 314.8 (19%)
- ------------------------ ---------------- -------------------- ---------------------
CONAGRA TOTAL $24,594.3 2% $1,706.3 8% $1,265.5 (20%)
======================== ================ ==================== =====================
</TABLE>
Packaged Foods sales grew 3% to $7,427 million, mostly due to the tablespreads
and Egg Beaters acquisition. Gains in cheese, frozen foods, value-added
foodservice chicken, and pizza products also contributed to the segment's sales
growth. Shelf-stable products experienced a downturn in sales, mainly as a
result of lower volumes due to the intense competitive environment.
34 ConAgra, Inc. 2000 Annual Report
51
<PAGE>
Sales rose 2% in Refrigerated Foods to $11,591 million as domestic beef, pork,
and poultry experienced volume gains and as the meat trading business expanded.
The Australian beef business and branded processed meats contributed
significantly to the sales improvement. Continued low commodity prices in
protein markets slowed the rate of segment sales growth.
Sales for the Agricultural Products segment declined 1% to $5,576 million,
mostly due to low commodity prices and reduced volume in the grain merchandising
and trading businesses. Crop inputs, however, posted solid sales growth.
Excluding the impact of dispositions, Agricultural Products' sales were up
slightly in 1999 compared to 1998. For ConAgra in total, lower commodity selling
prices reduced 1999 sales by $275 million (1%). This was more than offset by the
impact of acquisitions, net of dispositions.
In 1999, gross profit (net sales minus cost of goods sold) increased 6% to
$4,038 million, while gross margin (gross profit as a percent of sales) for 1999
and 1998 was 16%. Gross profit and margin gains in Refrigerated Foods were the
major factors in the improvement. Gross profit from Packaged Foods rose, largely
due to the tablespreads and Egg Beaters acquisition, while the segment's gross
margin was relatively unchanged from 1998. Excluding the impact of dispositions,
Agricultural Products experienced gross profit and gross margin gains over 1998.
SG&A expenses increased $130 million, or 5%, in 1999, while SG&A as a percent of
sales was 11% in 1999 and 10% in 1998. Increases occurred in all segments, as
well as in the general corporate component. Business expansion, mainly in crop
inputs, and the tablespreads and Egg Beaters acquisition accounted for most of
the increase. Corporate expenses were impacted by Y2K spending, increased
staffing for new systems initiatives, and higher expenses associated with
Operation Overdrive initiatives.
Packaged Foods 1999 operating profit (earnings before interest, goodwill
amortization, general corporate expense and income taxes) decreased 4% to $941
million. Excluding restructuring charges, operating profit for Packaged Foods
was $980 million, essentially unchanged from the prior year. Meat snacks,
microwave popcorn, potato products, value-added foodservice chicken, and pizza
products all improved operating profits in 1999, while frozen foods,
shelf-stable products, cheese and seafood operating profits declined. The
tablespreads and Egg Beaters acquisition was a key contributor of operating
profit to the segment.
Operating profit for the Refrigerated Foods segment decreased 95% to $9 million
for 1999 due to restructuring charges. Excluding restructuring charges,
operating profit for Refrigerated Foods was $368 million, an improvement of 80%
over 1998. Operating profit increased in all of the major businesses: branded
processed meats, beef, pork, and poultry. Volume growth and stabilization of
commodity prices drove the improvement.
Agricultural Products 1999 operating profit decreased 19% to $315 million
primarily due to restructuring charges. Excluding restructuring charges,
operating profit for Agricultural Products declined 8% to $358 million.
Increased profitability for specialty food ingredients, crop inputs, and
international agricultural operations was more than offset by operating profit
decreases in grain merchandising and trading operations. Low commodity prices
and low volume caused most of the decrease.
ConAgra's total operating profit for 1999 was $1,266 million as compared to
$1,573 million in 1998. Excluding restructuring charges, ConAgra's total
operating profit for 1999 was $1,706 million, up 8% over the prior year.
In 1999, net interest expense increased 5% to $317 million. Higher borrowings
were somewhat offset by lower short-term interest rates and the impact of
one-week's reduction in interest due to the 52- versus 53-week year. Income
before taxes in 1999 was $682 million, a decrease of 34% from 1998. Excluding
restructuring charges, pre-tax income was $1,123 million, up 8%. The effective
tax rate for 1999 was 47.5% as compared to 38.3% for 1998. The increase was a
result of the non-deductibility of certain intangible asset write-downs incurred
in conjunction with ConAgra's restructuring plan. Excluding the impact of the
restructuring charges in 1999, ConAgra's effective tax rate was 38%, essentially
unchanged from 1998.
Net income in 1999 was $358 million, a decrease of 43% as compared to 1998.
Fiscal 1998 did not reflect any restructuring charges. Excluding restructuring
charges, 1999 net income was $696 million, up 11% as compared to 1998. Net
income for 1998 included a $15 million charge for the cumulative effect of a
change in accounting principle.
Diluted earnings per share in 1999 were $.75, down 43% as compared to 1998.
Fiscal 1998 includes a charge of $.03 per diluted share for the cumulative
effect of a change in accounting principle. Excluding restructuring charges,
1999 diluted earnings per share were $1.46, up 11% over 1998.
FINANCIAL CONDITION AND CASH FLOW
CAPITAL RESOURCES - 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.
35 ConAgra, Inc. 2000 Annual Report
52
<PAGE>
CAPITAL INVESTMENT
<TABLE>
<CAPTION>
- ----------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999 % Change
- ----------------------------------------------------------
<S> <C> <C> <C>
Working capital $ 477.3 $ 269.7 77%
- ---------------------------------------------------------
Property, plant &
equipment, net 3,584.0 3,614.2 (1%)
Intangible assets, net 2,366.0 2,408.7 (2%)
Other noncurrent assets 379.3 467.1 (19%)
- ---------------------------------------------------------
Total noncurrent assets 6,329.3 6,490.0 (2%)
- ---------------------------------------------------------
Capital investment $ 6,806.6 $ 6,759.7 1%
- ---------------------------------------------------------
</TABLE>
During 2000, capital investment increased $47 million, or 1%. The $208 million
increase in working capital was partially offset by a $161 million decrease in
noncurrent assets. Investments in property, plant and equipment, including
acquisitions, totaled $829 million. The investments were offset by $593 million
of depreciation expense (including $139 million of accelerated depreciation),
$168 million in asset write-downs in connection with the 2000 restructuring
charges, and net asset retirements of $98 million.
Intangible assets are mainly goodwill related to acquisitions, principally
associated with ConAgra's acquisition of Beatrice Company in 1991. This goodwill
represents valuable assets such as respected brands with significant marketplace
acceptance. In 2000, increases in intangible assets were more than offset by
amortization and write-downs of impaired assets. Goodwill amortization was $63
million in 2000 and $69 million in 1999.
ConAgra financed its capital investment as shown in the following table:
CAPITALIZATION
<TABLE>
<CAPTION>
- ---------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999 % Change
=========================================================
<S> <C> <C> <C>
Senior long-term debt $ 1,816.8 $ 1,793.1 1%
Other noncurrent
liabilities 750.7 782.8 (4%)
Subordinated
long-term debt 750.0 750.0 -
Subsidiary's preferred
securities 525.0 525.0 -
Common stockholders'
equity 2,964.1 2,908.8 2%
- ---------------------------------------------------------
Total capitalization $ 6,806.6 $ 6,759.7 1%
- ---------------------------------------------------------
</TABLE>
In 2000, senior long-term debt, excluding the current portion of long-term debt,
increased $24 million. There were no significant issuances or retirements of
debt.
Other noncurrent liabilities consist of estimated postretirement health care and
pension benefits, and to a lesser extent, deferred income taxes and reserves for
estimated legal and environmental liabilities Beatrice Company incurred before
its acquisition by ConAgra. It will require a number of years to resolve
remaining issues related to the Beatrice liabilities. Resolution over time will
use cash, but is not expected to affect earnings adversely because ConAgra
believes reserves are adequate.
ConAgra's long-standing policy is to purchase on the open market shares of
ConAgra's common stock to replace shares issued for employee incentive and
benefit programs and smaller acquisitions accounted for as purchases if such
issuances will dilute earnings per share. In 2000, ConAgra made no purchases of
ConAgra's common stock on the open market. Common stockholders' equity increased
$55 million in 2000 mainly because net income and the value of shares issued
exceeded cash dividends declared and the foreign currency translation
adjustment.
CASH FLOW - Cash provided by operating activities was $691 million in 2000,
compared to $1,180 million in 1999. The decrease in 2000 versus 1999 was
primarily the result of lower advances on sales in Agricultural Products and
Refrigerated Foods, offset in part by a lower level of receivables increases,
mainly in Agricultural Products. The restructuring and restructuring-related
charges did not have a significant impact on cash flow in 2000. Depreciation and
other amortization increased $43 million in 2000 as compared to 1999.
Cash provided by operating activities was $1,180 million in 1999, compared to
$623 million in 1998. The increase in 1999 versus 1998 was primarily the result
of higher advances on sales in Agricultural Products and Refrigerated Foods and
a lower level of inventory increases, mainly in Refrigerated Foods. The
restructuring charges had minimal impact on cash flow in 1999, since the
majority of the charges related to write-downs of assets. Depreciation and other
amortization increased $41 million in 1999 as compared to 1998.
Cash used for investing activities was $811 million in 2000. ConAgra invested
$539 million in property, plant and equipment and its investment in businesses
acquired, net of disposals, totaled $236 million in 2000. This was mainly due to
the $360 million acquisition of the assets of Seaboard Farms.
Cash used for investing activities was $1,010 million in 1999. ConAgra invested
$662 million in property, plant and equipment and its investment in businesses
acquired, net of disposals, totaled $373 million in 1999. This was mainly due to
the $400 million acquisition of the tablespreads and Egg Beaters business.
36 ConAgra, Inc. 2000 Annual Report
53
<PAGE>
In 1998, cash used for investing activities was $395 million. ConAgra invested
$584 million in property, plant and equipment, down from the prior year.
Proceeds from businesses sold in 1998 exceeded cash acquisition expenditures by
$192 million as ConAgra issued common stock for certain acquisitions.
In 2001, ConAgra expects to invest $525 million to $550 million in additions to
property, plant and equipment of present businesses. Capital projects in 2000
and planned for 2001 are broadly based investments in modernization, efficiency
and capacity expansion. In addition, capital (excluding assumption of debt and
issuance of common stock) required in connection with the International Home
Foods' acquisition is estimated at $900 million for 2001.
Cash provided by financing activities in 2000 was $215 million. ConAgra
increased short-term borrowings $403 million and accounts receivable sold by
$165 million. Long-term debt repayments totaled $33 million in 2000. Cash
dividends paid totaled $375 million, up 20%. The dividend rate was up 14% in
2000 over the prior year and the remaining increase was caused by a larger
number of shares outstanding, mainly issued for acquisitions. No stock was
repurchased in 2000.
Cash used for financing activities in 1999 was $215 million. ConAgra issued $595
million of senior notes, with $396 million issued at 7% and $199 million issued
at 5.5%. Long-term debt repayments totaled $70 million in 1999, and ConAgra
reduced the amount of short-term borrowings backed by long-term credit
agreements, and classified as long-term, by $532 million. Accounts receivable
sold increased by $126 million during 1999. Cash dividends paid totaled $312
million, up 19%. The dividend rate was up 14% in 1999 over the prior year and
the remaining increase was caused by a larger number of shares outstanding,
mainly issued for acquisitions. The cost of stock repurchased in 1999 totaled
$31 million. Short-term debt decreased slightly during 1999.
In 1998, cash used for financing activities was $226 million. ConAgra repaid
$368 million of senior long-term debt and reduced the amount of short-term
borrowings backed by long-term credit agreements, and classified as long-term,
by $123 million. ConAgra issued $312 million of senior long-term notes, with
$300 million issued at 6.7%. The cost of stock repurchased by ConAgra was $153
million in 1998. Cash dividends paid totaled $263 million, up 14%. Short-term
borrowings, used primarily to fund working capital needs, increased $318 million
in 1998.
FINANCING OBJECTIVES - ConAgra's primary financing objective is to maintain a
conservative balance sheet that provides the flexibility to pursue ConAgra's
growth objectives. This is defined as using appropriate levels of equity and
long-term debt to finance noncurrent assets and permanent working capital needs.
Short-term debt is used to finance liquid and seasonal asset requirements.
ConAgra's long-term debt objective is that senior long-term debt will not
normally exceed 30% of total long-term debt plus equity. Long-term subordinated
debt is treated as equity due to its preferred stock characteristics. ConAgra's
policy has been that it would temporarily exceed this self-imposed limit for a
major strategic acquisition that is intended to create value for shareholders
over the long term. In management's view, the fiscal 2001 acquisition of
International Home Foods, represents such an opportunity.
ConAgra's short-term debt objective is that, at the end of their natural fiscal
year, most ConAgra businesses will eliminate short-term debt used to finance
assets other than hedged commodity inventories.
ConAgra met its long-term debt objective every year from 1976 through 2000,
except 1991 and 1992 when it temporarily exceeded its self-imposed long-term
debt limitation to acquire Beatrice. ConAgra has met its short-term debt
objective for the past 25 years.
ConAgra has access to a wide variety of financing markets. Public debt offerings
and private debt placements provide long-term financing. At the end of 2000,
ConAgra's senior debt ratings were BBB+ (Fitch), Baa1 (Moody's), and BBB+
(Standard & Poor's), all investment grade ratings.
Short-term credit is provided by the sale of commercial paper and bank
financing. Commercial paper borrowings are backed by multiyear bank credit
facilities. During 2000, short-term borrowing continued at interest rates below
the prime rate. Short-term debt averaged $2.74 billion in 2000 compared to $3.05
billion in 1999, excluding short-term borrowings classified as long-term. Lower
working capital requirements for most of the year caused the decrease in
short-term debt. ConAgra uses cancelable and noncancelable leases in its
financing activities, particularly for transportation equipment. In 2000,
cancelable lease expense was $189 million versus $155 million in 1999, and
noncancelable lease expense was $97 million versus $118 million in 1999.
To maintain a conservative financial position, ConAgra focuses on cash flow as
well as its balance sheet. ConAgra's plans incorporate cash flow sufficient to
meet financing obligations, maintain capital investment, and pay stockholder
dividends even if a severe and unexpected decline in earnings occurs. This
measure of cash-flow adequacy provides an effective tool for managing ConAgra's
leverage.
37 ConAgra, Inc. 2000 Annual Report
54
<PAGE>
ASSET LIQUIDITY - Many of ConAgra's businesses are current asset intensive.
Inventory and accounts receivable were 1.5 times property, plant and equipment
at the end of 2000 and 1999. The seasonal nature and liquidity of ConAgra's
current asset investments explain ConAgra's significant use of short-term debt
and emphasis on repaying short-term debt at year end. From time to time, ConAgra
also obtains product financing for certain commodity inventories, classified as
advances on sales in the Consolidated Balance Sheets.
As in prior years, ConAgra's reported net sales understate the degree to which
current assets turn over during the year. For 2000, total sales invoiced to
customers were approximately $33.1 billion versus $25.4 billion reported net
sales. This is because commodity trading transactions reflect margin accounting
whereby only gross profit is reported in sales.
ConAgra's current ratio (current assets divided by current liabilities) was 1.09
to 1 at the end of 2000 and 1.05 to 1 at the end of 1999. ConAgra's consolidated
current ratio is a composite of various current ratios appropriate for its
individual businesses. ConAgra focuses more on appropriate use of short-term
debt and trade credit financing than on the absolute level of its current ratio.
Some ConAgra businesses are able to generate substantial trade credit that does
not result in financing costs.
MARKET RISK - The principal market risks affecting ConAgra are exposure to
changes in commodity or energy prices and interest rates on debt. While ConAgra
does have international operations, and operates in international markets, it
considers its market risk in such activities to be immaterial.
COMMODITIES - ConAgra operates in many areas of the food industry, from basic
agricultural inputs to production and sale of branded consumer products. As a
result, ConAgra uses various raw materials, many of which are commodities. Raw
materials are generally available from several different sources, and ConAgra
presently believes that it can obtain them as needed.
Commodities are subject to price fluctuations that may create price risk.
Generally, it is ConAgra's intent to hedge commodities in order to mitigate this
price risk. While this may tend to limit ConAgra's ability to participate in
gains from commodity price fluctuations, it also tends to reduce the risk of
loss from changes in commodity prices.
ConAgra has established policies that limit the amount of unhedged inventory
positions permissible for ConAgra's operating companies. ConAgra's operating
companies are generally limited to a dollar risk exposure stated in relation to
equity capital.
ConAgra typically purchases certain commodities such as wheat, corn, oats,
soybeans, soybean meal, soybean oil, cattle, and hogs for use in its processing
businesses. In addition, ConAgra purchases and sells certain commodities such as
wheat, corn, soybeans, soybean meal, soybean oil, and oats in its trading
businesses. The commodity price risk associated with these activities can be
hedged by selling (or buying) the underlying commodity, or by using an
appropriate derivative commodity instrument. The particular hedging instrument
used by ConAgra depends on a number of factors, including availability of
appropriate derivative instruments. ConAgra utilizes exchange-traded futures and
options as well as non-exchange-traded derivatives, in which case ConAgra
monitors the amount of associated credit risk.
The following table presents one measure of market risk exposure using
sensitivity analysis. Market risk exposure is defined as the change in the fair
value of the derivative commodity instruments assuming a hypothetical change of
10% in market prices. Actual changes in market prices may differ from
hypothetical changes. Fair value was determined using quoted market prices and
was based on ConAgra's net derivative position by commodity at each month end
during the fiscal year. The market risk exposure analysis excludes the
underlying commodity positions that are being hedged. The underlying commodities
hedged have a high inverse correlation to price changes of the derivative
commodity instrument.
Effect of 10% Change in Fair Value
<TABLE>
<CAPTION>
- ----------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
==========================================================
<S> <C> <C>
Processing Businesses
Grains/Food
High $ 38.0 $ 24.4
Low 24.3 12.8
Average 30.2 17.1
Meats
High 49.5 48.8
Low 22.8 13.4
Average 34.5 32.3
Trading Businesses
Grains
High 18.6 21.9
Low 11.1 12.6
Average 15.7 16.4
Meats
High 7.6 5.9
Low 1.2 -
Average 3.1 1.4
- ----------------------------------------------------------
</TABLE>
38 ConAgra, Inc. 2000 Annual Report
55
<PAGE>
ENERGY - ConAgra's operating companies incur substantial energy costs in their
manufacturing facilities and incur higher operating expenses as a result of
increases in energy costs. ConAgra hedges its operations against adverse price
movements in energy costs, primarily natural gas and electricity. In addition,
ConAgra's energy subsidiary may trade derivative commodity and financial
instruments when markets are favorable for such activity. Trading is limited in
terms of maximum dollar exposure and monitored to ensure compliance with these
limits. Exchange-traded derivative commodity instruments and non-exchange-traded
swaps and options are used. ConAgra monitors the amount of associated
counter-party credit risk for non-exchange-traded transactions.
The following presents one measure of market risk exposure using sensitivity
analysis. Market risk exposure is defined as the change in the fair value of the
derivative commodity and financial instruments assuming a hypothetical change of
10% in market prices. Actual changes in market prices may differ from
hypothetical changes. Fair value was determined using quoted market prices, if
available, and was based on the subsidiary's net derivative position by
commodity at each month end during the fiscal year. The market risk exposure
analysis excludes the anticipated energy requirements or physical delivery
commitments that are being hedged by these instruments.
Effect of 10% Change in Fair Value
<TABLE>
<CAPTION>
- --------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999
========================================================
<S> <C> <C>
Energy
High $ 5.6 $ 8.7
Low 0.2 0.7
Average 2.0 4.3
- --------------------------------------------------------
</TABLE>
INTEREST RATES - ConAgra has used interest rate swaps to hedge adverse interest
rate changes on a portion of its short-term debt. During 2000 and 1999 these
swaps effectively changed the interest rate on a portion of short-term debt from
a variable rate to a fixed rate, thus reducing ConAgra's exposure to interest
rate risk. The average short-term debt covered by swaps was $380 million for
2000 and $870 million for 1999. A one hundred basis-point change in interest
rates on average short-term borrowings would have impacted net interest expense
by $24.7 million and $27.9 million for 2000 and 1999, respectively.
FOREIGN OPERATIONS - Transactions denominated in a currency other than an
entity's functional currency are generally hedged to reduce market risk. ConAgra
principally uses non-exchange-traded contracts to effect this coverage. Market
risk on such transactions is not material to ConAgra's results of operations or
financial position. ConAgra's market risk from translation of foreign-based
entities' annual profit and loss, and from amounts permanently invested in
foreign subsidiaries, is not material.
ACCOUNTING CHANGES - In June 1998, Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging Activities, was
issued. This standard will become effective for the company in fiscal 2002. The
company has not quantified the impact, if any, resulting from adoption of this
standard.
In December 1999, SEC Staff Accounting Bulletin (SAB) No. 101, Revenue
Recognition in Financial Statements, was issued. This SAB will become effective
for the company in fiscal 2001. The company has not quantified the impact, if
any, resulting from the adoption of this SAB.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements in the Letter to Shareholders,
business description and review sections, and Management's Discussion &
Analysis. 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.
The brand names in this annual report are owned or licensed by ConAgra Brands,
Inc., or its affiliates.
39 ConAgra, Inc. 2000 Annual Report
56
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
ConAgra, Inc., and Subsidiaries
<TABLE>
<CAPTION>
For the fiscal years ended May
- -----------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS EXCEPT PER-SHARE AMOUNTS 2000 1999 1998
=======================================================================================================================
<S> <C> <C> <C>
Net sales $ 25,385.8 $ 24,594.3 $ 24,219.5
Costs and expenses
Cost of goods sold* 21,205.9 20,556.2 20,409.0
Selling, general and administrative expenses* 2,888.2 2,598.4 2,468.8
Interest expense 303.4 316.6 300.7
Restructuring/Impairment charges (Note 3) 322.2 440.8 -
- -----------------------------------------------------------------------------------------------------------------------
24,719.7 23,912.0 23,178.5
- -----------------------------------------------------------------------------------------------------------------------
Income before income taxes and cumulative effect of change in accounting 666.1 682.3 1,041.0
Income taxes 253.1 323.9 399.2
- -----------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of change in accounting 413.0 358.4 641.8
Cumulative effect of change in accounting - - (14.8)
- -----------------------------------------------------------------------------------------------------------------------
NET INCOME $ 413.0 $ 358.4 $ 627.0
- -----------------------------------------------------------------------------------------------------------------------
INCOME PER SHARE - BASIC
Income before cumulative effect of change in accounting $ .87 $ .76 $ 1.38
Cumulative effect of change in accounting - - (.03)
- -----------------------------------------------------------------------------------------------------------------------
NET INCOME $ .87 $ .76 $ 1.35
- -----------------------------------------------------------------------------------------------------------------------
INCOME PER SHARE - DILUTED
Income before cumulative effect of change in accounting $ .86 $ .75 $ 1.35
Cumulative effect of change in accounting - - (.03)
- -----------------------------------------------------------------------------------------------------------------------
NET INCOME $ .86 $ .75 $ 1.32
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Other restructuring-related items in fiscal 2000 include accelerated
depreciation of $108.3 million and inventory markdowns of $114.5 million
included in cost of goods sold and $30.8 million of accelerated
depreciation and $45.6 million of restructuring plan implementation costs
included in selling, general and administrative expenses.
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
ConAgra, Inc., and Subsidiaries
<TABLE>
<CAPTION>
For the fiscal years ended May
- ---------------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999 1998
============================================================================================================================
<S> <C> <C> <C>
NET INCOME $ 413.0 $ 358.4 $ 627.0
- ----------------------------------------------------------------------------------------------------------------------------
Other comprehensive income (loss)
Currency translation adjustment (37.2) 1.7 (35.9)
- ----------------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME $ 375.8 $ 360.1 $ 591.1
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
40 ConAgra, Inc. 2000 Annual Report
57
<PAGE>
CONSOLIDATED BALANCE SHEETS
ConAgra, Inc., and Subsidiaries
<TABLE>
<CAPTION>
MAY 28 May 30
- ---------------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS EXCEPT PER-SHARE AMOUNTS 2000 1999
===========================================================================================================================
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 157.6 $ 62.8
Receivables, less allowance for doubtful accounts of $62.8 and $60.0 1,606.8 1,637.5
Inventories 3,787.3 3,639.9
Prepaid expenses 414.8 315.9
- ---------------------------------------------------------------------------------------------------------------------------
Total current assets 5,966.5 5,656.1
- ---------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment
Land 147.1 161.2
Buildings, machinery and equipment 5,430.3 5,205.8
Other fixed assets 537.0 426.9
Construction in progress 327.4 419.9
- ---------------------------------------------------------------------------------------------------------------------------
6,441.8 6,213.8
Less accumulated depreciation (2,857.8) (2,599.6)
- ---------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 3,584.0 3,614.2
- ---------------------------------------------------------------------------------------------------------------------------
Brands, trademarks and goodwill, at cost less accumulated amortization of $748.3 and $668.2 2,366.0 2,408.7
Other assets 379.3 467.1
- ---------------------------------------------------------------------------------------------------------------------------
$ 12,295.8 $ 12,146.1
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 1,255.5 $ 837.9
Current installments of long-term debt 20.6 21.1
Accounts payable 2,044.6 2,036.5
Advances on sales 888.7 1,191.7
Accrued payroll 258.9 269.4
Other accrued liabilities 1,020.9 1,029.8
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities 5,489.2 5,386.4
- ---------------------------------------------------------------------------------------------------------------------------
Senior long-term debt, excluding current installments 1,816.8 1,793.1
Other noncurrent liabilities 750.7 782.8
Subordinated debt 750.0 750.0
Preferred securities of subsidiary company 525.0 525.0
Commitments and contingencies - -
Common stockholders' equity
Common stock of $5 par value, authorized 1,200,000,000 shares;
issued 524,137,617 and 519,648,673 2,620.7 2,598.2
Additional paid-in capital 147.5 219.4
Retained earnings 1,420.7 1,369.8
Foreign currency translation adjustment (103.1) (65.9)
Less treasury stock, at cost, common shares of 31,925,505 and 31,475,678 (760.2) (749.9)
- ---------------------------------------------------------------------------------------------------------------------------
3,325.6 3,371.6
Less unearned restricted stock and value of 15,246,068 and 17,184,831
common shares held in Employee Equity Fund (361.5) (462.8)
- ---------------------------------------------------------------------------------------------------------------------------
Total common stockholders' equity 2,964.1 2,908.8
- ---------------------------------------------------------------------------------------------------------------------------
$ 12,295.8 $ 12,146.1
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
41 ConAgra, Inc. 2000 Annual Report
58
<PAGE>
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
ConAgra, Inc., and Subsidiaries
<TABLE>
<CAPTION>
For the fiscal years ended May
- -----------------------------------------------------------------------------------------------------------------------------------
Foreign EEF*
Additional Currency Stock
Common Common Paid-in Retained Translation Treasury and
COLUMNAR AMOUNTS IN MILLIONS Shares Stock Capital Earnings Adjustment Stock Other Total
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT MAY 25, 1997 522.7 $ 1,306.8 $ 636.9 $ 2,125.7 $ (31.7) $ (655.1) $ (811.6) $2,571.0
Shares issued
Stock option and incentive plans .6 2.8 4.0 .5 7.3
EEF*: stock option, incentive and
other employee benefit plans 34.7 70.5 105.2
Fair market valuation of EEF shares (97.1) 97.1 -
Acquisitions 1.3 6.7 .4 3.3 2.2 12.6
Shares acquired for incentive plans (172.7) 1.0 (171.7)
Shares retired (5.2) (26.2) (93.7) 119.9 -
Two-for-one stock split 1,307.0 (258.9) (1,048.1) -
Foreign currency translation adjustment (35.9) (35.9)
Dividends declared
Common stock, $.605 per share (273.6) (273.6)
Pooled companies (2.9) (2.9)
Net income 627.0 627.0
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MAY 31, 1998 519.4 2,597.1 320.0 1,337.7 (67.6) (705.2) (643.0) 2,839.0
Shares issued
Stock option and incentive plans .2 1.1 1.8 .5 3.4
EEF*: stock option, incentive and
other employee benefit plans 13.6 62.3 75.9
Fair market valuation of EEF shares (116.4) 116.4 -
Acquisitions .4 2.2 2.6
Shares acquired for incentive plans (47.6) 1.5 (46.1)
Shares retired (.2) .2 -
Foreign currency translation adjustment 1.7 1.7
Dividends declared
Common stock, $.69175 per share (324.9) (324.9)
Pooled companies (1.2) (1.2)
Net income 358.4 358.4
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MAY 30, 1999 519.6 2,598.2 219.4 1,369.8 (65.9) (749.9) (462.8) 2,908.8
Shares issued
Stock option and incentive plans .5 2.4 2.5 .4 5.3
EEF*: stock option, incentive and
other employee benefit plans 9.4 26.1 35.5
Fair market valuation of EEF shares (70.0) 70.0 -
Acquisitions 4.0 20.1 (13.7) 13.4 19.8
Shares acquired for incentive plans (.1) (10.7) 5.2 (5.6)
Foreign currency translation adjustment (37.2) (37.2)
Dividends declared
Common stock, $.789 per share (375.5) (375.5)
Net income 413.0 413.0
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT MAY 28, 2000 524.1 $ 2,620.7 $ 147.5 $1,420.7 $ (103.1) $ (760.2) $ (361.5) $2,964.1
===================================================================================================================================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
* Employee Equity Fund (Note 12)
42 ConAgra, Inc. 2000 Annual Report
59
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
ConAgra, Inc., and Subsidiaries
<TABLE>
<CAPTION>
For the fiscal years ended May
- -----------------------------------------------------------------------------------------------------------------------
DOLLARS IN MILLIONS 2000 1999 1998
=======================================================================================================================
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 413.0 $ 358.4 $ 627.0
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and other amortization 473.1 430.4 389.0
Goodwill amortization 63.4 69.4 67.8
Restructuring and other restructuring-related charges (including
accelerated depreciation) 621.4 440.8 -
Cumulative effect of change in accounting - - 24.0
Other noncash items (includes nonpension postretirement benefits) 49.9 87.8 86.5
Change in assets and liabilities before effects from business acquisitions
Receivables (106.0) (296.0) (191.4)
Inventories and prepaid expenses (181.2) (68.0) (270.5)
Accounts payable and accrued liabilities (642.6) 156.7 (109.2)
- -----------------------------------------------------------------------------------------------------------------------
NET CASH FLOWS FROM OPERATING ACTIVITIES 691.0 1,179.5 623.2
- -----------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
Additions to property, plant and equipment (539.3) (662.3) (583.7)
Payment for business acquisitions (390.1) (421.9) (33.7)
Sale of businesses and property, plant and equipment 154.6 48.5 225.9
Notes receivable and other items (36.6) 25.5 (3.9)
- -----------------------------------------------------------------------------------------------------------------------
NET CASH FLOWS FROM INVESTING ACTIVITIES (811.4) (1,010.2) (395.4)
- -----------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
Net short-term borrowings 402.7 (22.7) 317.7
Proceeds from issuance of long-term debt 33.1 595.2 311.8
Repayment of long-term debt (32.6) (602.5) (490.8)
Accounts receivable sold 165.0 125.5 (10.0)
Cash dividends paid (375.0) (312.4) (263.2)
Cash distributions of pooled companies - (1.2) (3.8)
Other items 22.0 3.2 (88.0)
- -----------------------------------------------------------------------------------------------------------------------
NET CASH FLOWS FROM FINANCING ACTIVITIES 215.2 (214.9) (226.3)
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 94.8 (45.6) 1.5
Cash and cash equivalents at beginning of year 62.8 108.4 106.9
- -----------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 157.6 $ 62.8 $ 108.4
=======================================================================================================================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
43 ConAgra, Inc. 2000 Annual Report
60
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ConAgra, Inc., and Subsidiaries
Years ended May 28, 2000, May 30, 1999, and May 31, 1998
COLUMNAR AMOUNTS IN MILLIONS EXCEPT PER-SHARE AMOUNTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR - The fiscal year of ConAgra, Inc., ("ConAgra" or the "company")
ends the last Sunday in May. The fiscal years for the consolidated financial
statements presented consist of 52-week periods (fiscal 2000 and 1999) or
53-week periods (fiscal 1998).
The accounts of two wholly-owned subsidiaries, ConAgra Fertilizer company and
United Agri Products, Inc., have been consolidated on the basis of a year ending
in February. Such fiscal period corresponds with those companies' natural
business year.
BASIS OF CONSOLIDATION - The consolidated financial statements include the
accounts of ConAgra, Inc., and all majority-owned subsidiaries. The investments
in and the operating results of 50%-or-less-owned entities are included in the
financial statements on the basis of the equity method of accounting. All
significant intercompany investments, accounts, and transactions have been
eliminated.
INVENTORIES - Grain, flour, and major feed ingredient inventories are hedged to
the extent practicable and are generally stated at market, including adjustment
to market of open contracts for purchases and sales. Short-term interest expense
incurred to finance hedged inventories is included in cost of goods sold in
order to properly reflect gross profits on hedged transactions. Inventories not
hedged are priced at the lower of average cost (first-in, first-out) or market.
PROPERTY AND DEPRECIATION - Property, plant and equipment are carried at cost.
Depreciation has been calculated using primarily the straight-line method over
the estimated useful lives of the respective classes of assets as follows:
Buildings 15 - 40 years
Machinery and equipment 5 - 20 years
Other fixed assets 5 - 15 years
BRANDS, TRADEMARKS, GOODWILL AND LONG-LIVED ASSETS - Brands, goodwill arising
from the excess of cost of investment over fair value of net assets at date of
acquisition, and trademarks are amortized using the straight-line method,
principally over a period of 40 years. An impairment is recognized when future
undiscounted cash flows of assets are estimated to be insufficient to recover
their related carrying value. The company considers continued operating losses,
or significant and long-term changes in business conditions, to be its primary
indicators of potential impairment. In measuring impairment, the company looks
to quoted market prices, if available, or the best information available in the
circumstance.
Recoverability of goodwill not identified with impaired assets is evaluated on
the basis of management's estimates of future undiscounted operating income
associated with the acquired business.
DERIVATIVE INSTRUMENTS - The company uses derivatives for the purpose of hedging
commodity price and, to a lesser extent, interest rate exposure, that exist as a
part of its ongoing business operations.
INTEREST RATE SWAP AGREEMENTS - The company utilizes interest rate swap
agreements to reduce the risk of changes in interest rates. Interest
differentials to be paid or received on such swaps are recognized in the
statement of earnings as incurred, as a component of interest expense.
COMMODITY CONTRACTS - The company uses commodity futures and option contracts,
swaps, and forward contracts to reduce the risk of price fluctuations in various
commodities traded or used in its businesses. In the trading businesses,
commodity contracts are marked-to-market and the related gains or losses
recorded in the statement of earnings. The company's processing businesses
reflect commodity contract gains and losses as adjustments to the basis of
underlying hedged commodities purchased; gains or losses are recognized in the
statement of earnings as a component of cost of goods sold upon sale of the
hedged commodity.
In general, derivatives used as hedges must be effective at reducing the risk
associated with the exposure being hedged and must be designated as a hedge at
the inception of the contract. Changes in market values of derivative
instruments must be highly correlated with changes in market values of
underlying hedged items both at inception of the hedge and over the life of the
hedge contract. Deferred gains or losses related to any instrument 1) designated
but ineffective as a hedge of existing assets, liabilities, or firm commitments,
or 2) designated as a hedge of an anticipated transaction which is no longer
likely to occur, are recognized immediately in the statement of earnings.
Cash flows related to derivative financial instruments are classified in the
statements of cash flows in a manner consistent with those of transactions being
hedged.
FAIR VALUES OF FINANCIAL INSTRUMENTS - Unless otherwise specified, the company
believes the book value of financial instruments approximates their fair value.
44 ConAgra, Inc. 2000 Annual Report
61
<PAGE>
REVENUE RECOGNITION - Revenue is recognized when title to finished product
passes to the customer. Revenue is recognized as the net amount to be received
after deducting estimated amounts for discounts, trade allowances, and product
returns.
NET SALES - Gross profits earned from commodity trading activities, which are
included in net sales, total $148.0 million, $147.3 million, and $214.3 million
for fiscal 2000, 1999, and 1998, respectively.
Sales and cost of sales, if reported on a gross basis for these activities,
would be increased by $7.7 billion, $4.9 billion, and $6.0 billion for fiscal
2000, 1999, and 1998, respectively.
COMPREHENSIVE INCOME - Comprehensive income for all periods presented consists
of net income and foreign currency translation adjustments. 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.
ACCOUNTING CHANGES - In June 1998, Statement of Financial Accounting Standards
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, was
issued. This standard will become effective for the company in fiscal 2002. The
company has not quantified the impact, if any, resulting from adoption of this
standard.
In December 1999, SEC Staff Accounting Bulletin (SAB) No. 101, REVENUE
RECOGNITION IN FINANCIAL STATEMENTS, was issued. This SAB will become effective
for the company in fiscal 2001. The company has not quantified the impact, if
any, resulting from the adoption of this SAB.
In fiscal 1998, the company recorded an after-tax charge of $14.8 million to
comply with Emerging Issues Task Force (EITF) Issue No. 97-13. This EITF
requires business process re-engineering costs associated with computer systems
development to be expensed as incurred. Previously, the company capitalized such
costs.
USE OF ESTIMATES - Preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates or assumptions affect reported amounts of
assets, liabilities, revenue, and expenses as reflected in the financial
statements. Actual results could differ from estimates.
RECLASSIFICATIONS - Certain reclassifications have been made to prior year
amounts to conform to current year classifications.
2. BUSINESS COMBINATIONS
In the third quarter of fiscal 2000, ConAgra acquired the assets of Seaboard
Farms, the poultry division of Seaboard Corporation, for approximately $360
million. Seaboard Farms produces and markets value-added poultry products
primarily to foodservice customers and has annual sales of approximately $480
million. The acquisition was accounted for as a purchase, with the business
acquired being included in the financial statements subsequent to the date of
acquisition.
In the first quarter of fiscal 1999, ConAgra acquired the table-spreads and Egg
Beaters business 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. The
results of operations of the businesses acquired are included in the financial
statements subsequent to the date of acquisition.
During fiscal 1998, ConAgra completed mergers with GoodMark Foods, Inc.,
Fernando's Foods Corporation, Hester Industries, Inc., and A.M. Gilardi & Sons,
Inc. In each of the these transactions, ConAgra issued common stock for all of
the outstanding shares of the merged companies with each transaction being
accounted for as a pooling-of-interests. The historical financial statements of
the company were restated to give effect to all of the fiscal 1998 acquisitions
as though the companies had operated together from the beginning of the earliest
period presented.
Net sales and net income for the fiscal 1998 acquired businesses were $379.0
million and $13.8 million, respectively, for the 1998 period prior to
acquisition date.
3. OPERATION OVERDRIVE
During the fourth quarter of fiscal 1999, the company approved a restructuring
plan expected to span three fiscal years in connection with its previously
announced initiative, "Operation Overdrive." However, the restructuring plan was
completed within two fiscal years as the plan's final charges were incurred in
the fourth quarter of fiscal 2000. The restructuring plan was aimed at improving
future profitability by eliminating overcapacity and streamlining operations.
The pre-tax charge of the plan totaled $1,062.2 million with $621.4 million and
$440.8 million recognized in fiscal 2000 and 1999, respectively.
45 ConAgra, Inc. 2000 Annual Report
62
<PAGE>
Fiscal 2000 charges are as follows:
<TABLE>
<CAPTION>
Packaged Refrigerated Agricultural
Foods Foods Products Total
=========================================================================
<S> <C> <C> <C> <C>
Accelerated depreciation $ 128.2 $ 10.9 $ - $ 139.1
Inventory markdowns 46.2 11.2 57.1 114.5
Restructuring plan
implementation costs 25.2 14.6 5.8 45.6
Restructuring/Impairment
charges 109.9 131.3 81.0 322.2
- -------------------------------------------------------------------------
Total $ 309.5 $ 168.0 $ 143.9 $ 621.4
Fiscal 1999 charges are
as follows:
Restructuring/Impairment
charges $ 39.0 $ 358.6 $ 43.2 $ 440.8
=========================================================================
</TABLE>
The fiscal 2000 charges are reflected in the company's consolidated statements
of earnings as follows: accelerated depreciation of $108.3 million and $30.8
million is included in cost of goods sold and selling, general and
administrative expenses, respectively; inventory markdowns are included in cost
of goods sold; plan implementation costs (primarily third-party consulting
costs) are also included in selling, general and administrative expenses. For
fiscal 2000 and fiscal 1999, restructuring/impairment charges are reflected as
such and result from asset impairments, employee-related costs and contractual
termination costs.
Included in fiscal 2000 and 1999 consolidated statements of earnings are asset
impairment charges of approximately $213.5 million and $388.4 million,
respectively. Fiscal 2000 asset impairment charges include $171.4 million in
write-downs of property, plant and equipment and $42.1 million in reductions of
intangible and other assets. The fiscal 2000 property, plant and equipment
write-downs occurred primarily in the Refrigerated Foods segment as a result of
management's decision to reorganize certain protein businesses. Fiscal 1999
asset impairment charges include $183.5 million in write-downs of property,
plant and equipment and $204.9 million in reductions of intangible and other
assets. The fiscal 1999 intangible and other asset write-downs occurred
primarily in the Refrigerated Foods segment as a result of management's decision
to consolidate and reorganize its turkey businesses.
Accelerated depreciation results from revisions in the estimated useful lives of
assets to be disposed of that the company does not have the current ability to
remove from operations. Inventory markdowns represent losses on the carrying
value of non-strategic inventory resulting from the closure of facilities and
discontinuation of certain products.
In association with the restructuring plan, the company closed a total of 31
production facilities, 106 non-production locations (e.g., storage,
distribution, administrative, etc.) and sold 18 non-core businesses. The
historical operating results and gains/losses associated with sold businesses or
facilities were not material.
Approximately 8,450 employees received notification of their termination as a
result of the restructuring plan, primarily in manufacturing and operating
facilities. This total represents an increase of approximately 1,750 individuals
from the original estimate, and resulted primarily from updated estimates
associated with existing restructuring initiatives. In addition, other exit
costs (consisting of lease termination and other contractual termination costs)
occurred as a result of the restructuring plan. Such activity is as follows:
<TABLE>
<CAPTION>
Severance Other Exit
(IN MILLIONS, EXCEPT HEADCOUNT) Amount Headcount Costs
================================================================
<S> <C> <C> <C>
Fiscal 1999 activity:
Charges to income $ 45.1 3,160 $ 7.3
Utilized (6.1) (260) -
- ----------------------------------------------------------------
Balance, May 30, 1999 39.0 2,900 7.3
Fiscal 2000 activity:
Charges to income 57.8 5,290 50.9
Utilized (44.3) (4,990) (21.5)
- ----------------------------------------------------------------
Balance, May 28, 2000 $ 52.5 3,200 $ 36.7
================================================================
</TABLE>
4. INCOME PER SHARE
Basic income per share is calculated on the basis of weighted average
outstanding common shares. Diluted income per share is computed on the basis of
weighted average outstanding common shares plus equivalent shares assuming
exercise of stock options and conversion of outstanding convertible securities,
where dilutive.
The following table reconciles the income and average share amounts used to
compute both basic and diluted income per share:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
2000 1999 1998
=======================================================================
<S> <C> <C> <C>
NET INCOME
Income before cumulative effect
of change in accounting $ 413.0 $ 358.4 $ 641.8
Cumulative effect of change in
accounting - - (14.8)
- -----------------------------------------------------------------------
Net income $ 413.0 $ 358.4 $ 627.0
=======================================================================
INCOME PER SHARE - BASIC
Weighted average shares
outstanding 475.7 470.0 465.5
=======================================================================
INCOME PER SHARE - DILUTED
Weighted average shares
outstanding - basic 475.7 470.0 465.5
Add shares contingently issuable
upon exercise of stock options 2.9 6.7 9.8
- -----------------------------------------------------------------------
Weighted average shares
outstanding 478.6 476.7 475.3
=======================================================================
</TABLE>
46 ConAgra, Inc. 2000 Annual Report
63
<PAGE>
At the end of fiscal years 2000, 1999, and 1998, there were 16.2 million, 8.9
million, and 4.9 million options outstanding, respectively, with exercise prices
exceeding the market value of common stock that were therefore excluded from the
computation of shares contingently issuable upon exercise of the options.
5. RECEIVABLES
The company has agreements to sell interests in pools of receivables, in an
amount not to exceed $950 million at any one time. Participation interests in
new receivables may be sold as collections reduce previously sold participation
interests. The participation interests are sold at a discount that is included
in selling, general and administrative expenses in the consolidated statements
of earnings. Gross proceeds from the sales were $814 million and $649 million at
fiscal year-end 2000 and 1999, respectively.
6. INVENTORIES
The major classes of inventories are as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
2000 1999
======================================================================
<S> <C> <C>
Hedged commodities $ 1,305.7 $ 1,306.2
Food products and livestock 1,350.7 1,144.7
Agricultural chemicals, fertilizer, and feed 671.9 597.4
Other, principally ingredients and supplies 459.0 591.6
- ----------------------------------------------------------------------
$ 3,787.3 $ 3,639.9
======================================================================
</TABLE>
7. CREDIT FACILITIES AND BORROWINGS
At May 28, 2000, the company had credit lines from banks which totaled
approximately $5.5 billion, including: $1.8 billion of long-term revolving
credit facilities maturing in September 2003; $1.8 billion short-term revolving
credit facilities maturing in September 2000; and uncompensated bankers'
acceptance and money market loan facilities approximating $1.9 billion.
Borrowings under the revolver agreements are at or below prime rate and may be
prepaid without penalty. The company pays fees for its revolving credit
facilities.
The company finances its short-term needs with bank borrowings, commercial paper
borrowings, and bankers' acceptances. The average consolidated short-term
borrowings outstanding under these facilities for the 2000 fiscal year were
$2,739 million. This excludes an average of $186 million of short-term
borrowings that were classified as long-term throughout the fiscal year (see
Note 8). The highest period-end short-term indebtedness during fiscal 2000 was
$3,159.2 million. Short-term borrowings were at rates below prime. The weighted
average interest rate was 5.85% and 5.58%, respectively, for fiscal 2000 and
1999.
At May 28, 2000, the company had no interest rate swap agreements in effect. At
May 30, 1999, the company had outstanding interest rate swap agreements
effectively changing the interest rate exposure on $650 million of short-term
borrowings from variable to a 5.8% fixed rate. The swap agreements matured in
fiscal 2000. At May 31, 1998, the company had outstanding interest rate swap
agreements effectively changing the interest rate exposure on $600 million of
short-term borrowings from variable to a 6% fixed rate. The swap agreements
matured in fiscal 1999. The net cost in fiscal 2000, 1999, and 1998, and the
estimated fair value of these agreements as of May 30, 1999, were not material.
8. SENIOR LONG-TERM DEBT, SUBORDINATED DEBT
AND LOAN AGREEMENTS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
2000 1999
============================================================================
<S> <C> <C>
Senior Debt
Commercial paper backed by long-term
revolving credit agreement $ 164.5 $ 153.2
7.00% senior debt due in 2028 396.5 396.4
6.70% senior debt due in 2027
(redeemable at option of holders in 2009) 300.0 300.0
7.125% senior debt due in 2026
(redeemable at option of holders in 2006) 397.8 397.7
9.875% senior debt due in 2006 100.0 100.0
5.50% senior debt due in 2002 199.3 199.0
9.87% to 9.95% unsecured senior notes
due in various amounts through 2009 39.4 53.7
8.1% to 9.0% publicly issued unsecured
medium-term notes due in various
amounts through 2004 117.0 117.0
5.75% to 9.28% Industrial Development
Revenue Bonds (collateralized by plant
and equipment) due on various dates
through 2017 46.2 29.0
Miscellaneous unsecured 56.1 47.1
- ----------------------------------------------------------------------------
Total senior debt $ 1,816.8 $ 1,793.1
- ----------------------------------------------------------------------------
Subordinated Debt
9.75% subordinated debt due in 2021 400.0 400.0
7.375% to 7.4% subordinated debt due
through 2005 350.0 350.0
- ----------------------------------------------------------------------------
Total subordinated debt $ 750.0 $ 750.0
- ----------------------------------------------------------------------------
Total long-term debt, excluding
current installments $ 2,566.8 $ 2,543.1
============================================================================
</TABLE>
The aggregate minimum principal maturities of the long-term debt for each of the
five fiscal years following May 28, 2000, are as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------
<S> <C>
2001 $ 20.6
2002 124.2
2003 373.6
2004 12.6
2005 370.0
=========================================================
</TABLE>
Under the long-term credit facility referenced in Note 7, the company has
agreements that allow it to borrow up to $1.8 billion through September 2003.
47 ConAgra, Inc. 2000 Annual Report
64
<PAGE>
The most restrictive note agreements (the revolving credit facilities and
certain privately placed long-term debt) require the company to repay the debt
if consolidated funded debt exceeds 60% of consolidated capital base or if fixed
charges coverage is less than 1.75 to 1.0 as such terms are defined in
applicable agreements.
Net interest expense consists of:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
2000 1999 1998
================================================================
<S> <C> <C> <C>
Long-term debt $ 198.4 $ 194.6 $ 206.9
Short-term debt 139.1 166.5 143.2
Interest income (28.6) (37.6) (38.0)
Interest capitalized (5.5) (6.9) (11.4)
- ----------------------------------------------------------------
$ 303.4 $ 316.6 $ 300.7
================================================================
</TABLE>
Net interest paid was $299.9 million, $308.5 million, and $300.6 million in
fiscal 2000, 1999, and 1998, respectively.
Short-term debt interest expense of $31.4 million, $20.0 million, and $19.1
million in fiscal 2000, 1999, and 1998, respectively, incurred to finance hedged
inventories, has been charged to cost of goods sold.
The carrying amount of long-term debt (including current installments) was
$2,587.4 million and $2,564.2 million as of May 28, 2000, and May 30, 1999,
respectively. Based on current market rates primarily provided by outside
investment bankers, the fair value of this debt at May 28, 2000, and May_30,
1999, was estimated at $2,417.0 million and $2,665.1 million, respectively. The
company's long-term debt is generally not callable until maturity.
9. OTHER NONCURRENT LIABILITIES
Other noncurrent liabilities consist of:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
2000 1999
=====================================================================
<S> <C> <C>
Legal and environmental liabilities primarily
associated with the company's acquisition
of Beatrice Company (acquired in
fiscal 1991) $ 165.2 $ 169.2
Estimated postretirement health care
and pensions 596.7 589.2
Deferred taxes and other 52.7 100.4
- ---------------------------------------------------------------------
814.6 858.8
Less estimated current portion 63.9 76.0
- ---------------------------------------------------------------------
$ 750.7 $ 782.8
=====================================================================
</TABLE>
10. PREFERRED SECURITIES OF SUBSIDIARY COMPANY
ConAgra Capital, L.C., an indirectly controlled subsidiary of the company, has
the following Preferred Securities outstanding:
4 MILLION SHARES OF 9% SERIES A CUMULATIVE PREFERRED
("SERIES A SECURITIES")
Distributions are payable monthly.
7 MILLION SHARES OF SERIES B ADJUSTABLE RATE CUMULATIVE PREFERRED ("SERIES B
SECURITIES")
Distributions are payable monthly at a rate per annum, which is adjusted
quarterly to 95% of the highest of three U.S. Treasury security indices,
subject to a floor of 5.0% and a ceiling of 10.5% per annum. The
distribution rate in fiscal 2000 ranged from 5.6% to 6.3%.
10 MILLION SHARES OF 9.35% SERIES C CUMULATIVE PREFERRED
("SERIES C SECURITIES")
Distributions are payable monthly.
For financial statement purposes, distributions on these Securities are included
in selling, general and administrative expenses in the company's consolidated
statements of earnings as such amounts represent minority interests.
The above Securities were issued at a price of $25 per share. All such
Securities are non-voting (except in certain limited circumstances), and are
guaranteed on a limited basis by ConAgra and, in certain limited circumstances,
are exchangeable for debt securities of ConAgra. The Securities are redeemable
at the option of ConAgra Capital, L.C., (with ConAgra's consent) in whole or in
part, at $25 per security plus accumulated and unpaid distributions to the date
fixed for redemption.
11. CAPITAL STOCK
The company has authorized shares of preferred stock as follows:
Class B- $50 par value; 150,000 shares
Class C- $100 par value; 250,000 shares
Class D- without par value; 1,100,000 shares
Class E- without par value; 16,550,000 shares
There were no preferred shares issued or outstanding as of May 28, 2000.
12. EMPLOYEE EQUITY FUND
In fiscal 1993, the company established a $700 million Employee Equity Fund
("EEF"), a grantor trust, to pre-fund future stock-related obligations of the
company's compensation and benefit plans. The EEF supports existing, previously
approved employee plans that use ConAgra common stock.
48 ConAgra, Inc. 2000 Annual Report
65
<PAGE>
For financial reporting purposes, the EEF is consolidated with ConAgra. The fair
market value of the shares held by the EEF is shown as a reduction to common
stockholders' equity in the company's consolidated balance sheets. All dividends
and interest transactions between the EEF and ConAgra are eliminated.
Differences between cost and fair value of shares held and/or released are
included in consolidated additional paid-in capital. Following is a summary of
shares held by the EEF:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
2000 1999
==================================================================
<S> <C> <C>
Shares held (in millions) 15.2 17.2
Cost - per share $ 14.552 $ 14.552
Cost - total 221.9 250.1
Fair market value - per share $ 22.9375 $ 26.0625
Fair market value - total 349.7 447.9
- ------------------------------------------------------------------
</TABLE>
13. STOCK OPTIONS AND RIGHTS
Stock option plans approved by the stockholders provide for granting of options
to employees for purchase of common stock generally at prices equal to fair
market value at the time of grant, and for issuance of restricted or bonus stock
without direct cost to the employee. During fiscal 2000, 1999, and 1998,
respectively, 126,000 shares, 195,825 shares, and 274,926 shares of restricted
stock (including stock issued under incentive plans) were issued. The value of
the restricted stock, equal to fair market value at the time of grant, is being
amortized as compensation expense over the vesting period. This compensation
expense was not significant for fiscal 2000, 1999, and 1998. Options become
exercisable under various vesting schedules and generally expire 10 years after
the date of grant. Option shares and prices are adjusted for common stock splits
and changes in capitalization.
The changes in the outstanding stock options during the three years ended May
28, 2000, are summarized below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
2000 1999 1998
===================================================================================
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Beginning of year 23.5 $ 22.86 23.6 $ 20.91 23.1 $ 17.01
Granted 6.0 23.35 4.8 28.15 5.2 33.57
Exercised (1.8) 13.41 (3.3) 14.70 (3.4) 13.80
Canceled (2.1) 27.20 (1.6) 26.76 (1.3) 20.52
End of year 25.6 $ 23.30 23.5 $ 22.86 23.6 $ 20.91
Exercisable
at end of year 16.2 $ 21.56 14.4 $ 19.58 13.8 $ 16.99
- -----------------------------------------------------------------------------------
</TABLE>
The following summarizes information about stock options outstanding as of May
28, 2000:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Options Outstanding Options Exercisable
================================================================================
Weighted Weighted Weighted
Average Average Average
Remaining Exercise Exercise
Range of Exercise Price Shares Life Price Shares Price
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 4.97 - $ 6.42 0.1 1.0 $ 5.09 0.1 $ 5.09
7.63 - 11.33 0.6 0.4 10.63 0.6 10.63
11.54 - 16.88 5.1 3.2 14.83 5.1 14.83
19.06 - 29.00 16.0 7.7 24.11 8.2 23.39
29.50 - 36.81 3.8 7.4 33.71 2.2 33.72
$ 4.97 - $ 36.81 25.6 6.6 $ 23.30 16.2 $ 21.56
- --------------------------------------------------------------------------------
</TABLE>
The company has elected to account for its employee stock option plans using the
intrinsic value method of accounting. Accordingly, no compensation expense is
recognized for stock options because the exercise price of the stock options
equals the market price of the underlying stock on the date of the grant.
Pro forma information regarding net income and income per share is required by
SFAS No. 123, assuming the company accounted for its employee stock options
using the fair value method. The fair value of options was estimated at the date
of the grant using the Black-Scholes option pricing model with the following
weighted average assumptions for 2000, 1999, and 1998, respectively: risk-free
interest rate of 6.33%, 4.29%, and 6.03%; a dividend yield of 2.2%, 2.2%, and
2.1%; expected volatility of 20.6%, 20.0%, and 19.1%; and an expected option
life of six years. The weighted average fair value of options granted in fiscal
2000, 1999, and 1998 was $6.21, $6.12, and $8.53, respectively. Pro forma net
income and income per share are as follows (because SFAS No. 123 is applicable
only to options granted subsequent to fiscal 1995, its pro forma effect was not
fully reflected until fiscal 2000):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
2000 1999 1998
=================================================================================
<S> <C> <C> <C>
Pro forma net income $ 393.3 $ 344.3 $ 615.9
Pro forma basic income per share .83 .73 1.32
Basic income per share - as reported .87 .76 1.35
Pro forma diluted income per share .82 .72 1.30
Diluted income per share - as reported .86 .75 1.32
- ---------------------------------------------------------------------------------
</TABLE>
At May 28, 2000, approximately 2.8 million shares were reserved for granting
additional options and restricted or bonus stock awards.
Each share of common stock carries with it one-half preferred stock purchase
right ("Right"). The Rights become exercisable 10 days after a person (an
"Acquiring Person") acquires or commences a tender offer for 15% or more of the
company's common stock.
49 ConAgra, Inc. 2000 Annual Report
66
<PAGE>
Each Right entitles the holder to purchase one one-thousandth of a share of a
new series of Class E Preferred Stock at an exercise price of $200, subject to
adjustment. The Rights expire on July 12, 2006, and may be redeemed at the
option of the company at $.01 per Right, subject to adjustment. Under certain
circumstances, if (i) any person becomes an Acquiring Person or (ii) the company
is acquired in a merger or other business combination after a person becomes an
Acquiring Person, each holder of a Right (other than the Acquiring Person) will
have the right to receive, upon exercise of the Right, shares of common stock
(of the company under (i) and of the acquiring company under (ii)) having a
value of twice the exercise price of the Right. The Rights were issued pursuant
to a dividend declared by the company's Board of Directors on July 12, 1996,
payable to stockholders of record on July 24, 1996. The one Right for each
outstanding share was adjusted to one-half Right for each share effective
October 1, 1997, as a result of the two-for-one stock split. At May 28, 2000,
the company had reserved one million Class E preferred shares for exercise of
the Rights.
14. PRETAX INCOME AND INCOME TAXES
Income before taxes and cumulative effect of change in accounting consisted of
the following:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
2000 1999 1998
- -------------------------------------------------------------------
<S> <C> <C> <C>
United States $ 590.0 $ 570.8 $ 968.9
Foreign 76.1 111.5 72.1
- -------------------------------------------------------------------
$ 666.1 $ 682.3 $ 1,041.0
===================================================================
</TABLE>
The provision for income taxes includes the following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------
2000 1999 1998
- ---------------------------------------------------------
<S> <C> <C> <C>
Current
Federal $ 272.6 $ 280.7 $ 287.0
State 23.3 52.1 56.6
Foreign 33.3 24.5 12.3
- ---------------------------------------------------------
$ 329.2 $ 357.3 $ 355.9
- ---------------------------------------------------------
Deferred
Federal (70.1) (30.0) 38.8
State (6.0) (3.4) 4.5
Foreign - - -
- ---------------------------------------------------------
(76.1) (33.4) 43.3
- ---------------------------------------------------------
$ 253.1 $ 323.9 $ 399.2
=========================================================
</TABLE>
Income taxes computed by applying statutory rates to income before income taxes
are reconciled to the provision for income taxes set forth in the consolidated
statements of earnings as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
2000 1999 1998
========================================================================
<S> <C> <C> <C>
Computed U.S. federal
income taxes $ 233.1 $ 238.8 $ 364.3
State income taxes, net of
U.S. federal tax benefit 11.9 31.6 39.7
Nondeductible amortization of
goodwill and other intangibles 18.1 21.5 20.1
Export and jobs tax credits (19.2) (12.2) (7.5)
Permanent differences due to
restructuring/impairment charges - 57.3 -
Other 9.2 (13.1) (17.4)
- ------------------------------------------------------------------------
$ 253.1 $ 323.9 $ 399.2
========================================================================
</TABLE>
Income taxes paid were $441.5 million, $344.5 million, and $282.3 million in
fiscal 2000, 1999, and 1998, respectively. The Internal Revenue Service has
closed examinations of the company's tax returns through fiscal 1995. The IRS
has proposed certain adjustments for later years, some of which are being
contested by the company. The company believes that it has made adequate
provisions for income taxes payable.
The tax effect of temporary differences and carryforwards that give rise to
significant portions of deferred tax assets and liabilities consist of the
following:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
2000 1999
- ---------------------------------------------------------------------------------
Assets Liabilities Assets Liabilities
=================================================================================
<S> <C> <C> <C> <C>
Depreciation and
amortization $ - $ 462.3 $ - $ 361.2
Nonpension
postretirement benefits 157.9 - 171.1 -
Other noncurrent liabilities
which will give rise to
future tax deductions 185.7 - 194.2 -
Accrued expenses 141.4 - 76.5 -
Restructuring/Impairment
and restructuring-related
charges 304.7 - 150.6 -
Other 83.1 136.2 68.3 128.5
- ---------------------------------------------------------------------------------
$ 872.8 $ 598.5 $ 660.7 $ 489.7
=================================================================================
</TABLE>
15. COMMITMENTS
The company leases certain facilities and transportation equipment under
agreements that expire at various dates. Management expects that in the normal
course of business, leases that expire will be renewed or replaced by other
leases. Substantially all leases require payment of property taxes, insurance,
and maintenance costs in addition to rental payments.
50 ConAgra, Inc. 2000 Annual Report
67
<PAGE>
A summary of rent expense charged to operations follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------
2000 1999 1998
==============================================================
<S> <C> <C> <C>
Cancelable $ 189.4 $ 154.8 $ 153.2
Noncancelable 97.5 117.9 115.1
- --------------------------------------------------------------
$ 286.9 $ 272.7 $ 268.3
==============================================================
</TABLE>
A summary of noncancelable operating lease commitments for fiscal years
following May 28, 2000, is as follows:
<TABLE>
<CAPTION>
Type of property
- ---------------------------------------------------------------------
Real and Other Transportation
Property Equipment
=====================================================================
<S> <C> <C>
2001 $ 79.9 $ 14.7
2002 72.9 9.7
2003 57.4 4.4
2004 47.7 1.6
2005 36.6 1.5
Later years 84.4 1.8
- ---------------------------------------------------------------------
$ 378.9 $ 33.7
=====================================================================
</TABLE>
The company had letters of credit, performance bonds, and other commitments and
guarantees outstanding at May 28, 2000, aggregating approximately $207.8
million.
16. CONTINGENCIES
In fiscal 1991, ConAgra acquired Beatrice Company ("Beatrice"). As a result of
the acquisition and the significant pre-acquisition contingencies of the
Beatrice businesses and its former subsidiaries, the consolidated
post-acquisition financial statements of ConAgra reflect significant liabilities
associated with the estimated resolution of these contingencies. These include
various litigation and environmental proceedings related to businesses divested
by Beatrice prior to its acquisition by ConAgra. The environmental proceedings
include litigation and administrative proceedings involving Beatrice's status as
a potentially responsible party at 40 Superfund, proposed Superfund or
state-equivalent sites. Beatrice has paid or is in the process of paying its
liability share at 34 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 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.
17. DERIVATIVE FINANCIAL INSTRUMENTS
The company uses interest rate swaps to manage its interest rate risk, as
outlined in Note 7. In addition, the company's energy subsidiary uses derivative
financial instruments in its trading activities in energy markets. At May 28,
2000, the company's energy subsidiary was party to natural gas price swaps with
a notional value of $230.2 million. The swap agreements are settled in cash
based on the difference between a fixed and floating (index-based) price for the
underlying commodity. All swaps expire within 12 months, while most have a
duration of no more than six months. At May 30, 1999, the notional value of
these financial instruments was $265.9 million. All contracts are
marked-to-market, with gains and losses recorded in the consolidated statements
of earnings consistent with all trading business activity within the company.
The company performs credit assessments on all counterparties and obtains
additional guarantees of financial performance, if deemed necessary. The
predominance of these trades are swaps, where the company pays or receives only
the difference between the contract value and the market value. The amount at
risk is therefore limited to the gain on the swap. The company does not
anticipate any material loss because of nonperformance by a counterparty.
Certain of the company's operations use foreign exchange forwards to hedge fixed
purchase and sales commitments denominated in a foreign currency. The fair value
of these foreign exchange positions was not material.
18. PENSION AND POSTRETIREMENT BENEFITS
RETIREMENT PENSION PLANS
The company and its subsidiaries have defined benefit retirement plans ("Plan")
for eligible salaried and hourly employees. Benefits are based on years of
credited service and average compensation or stated amounts for each year of
service. The company funds these plans in accordance with the minimum and
maximum limits established by law.
51 ConAgra, Inc. 2000 Annual Report
68
<PAGE>
Components of pension benefit costs and weighted average actuarial assumptions
are:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
2000 1999 1998
===============================================================
<S> <C> <C> <C>
PENSION BENEFIT COST
Service cost $ 55.7 $ 48.5 $ 44.4
Interest cost 103.2 97.7 92.5
Expected return on plan assets (114.6) (101.4) (92.4)
Amortization of prior
service costs 4.3 3.8 4.4
Amortization of transition
obligation (2.7) (2.7) (2.7)
Recognized net actuarial loss 3.4 1.9 2.3
Curtailment (gain) loss and
special benefits 3.3 - (.1)
- ---------------------------------------------------------------
Pension benefit cost -
Company plans 52.6 47.8 48.4
Pension benefit cost -
Multiemployer plans 9.4 9.1 9.5
- ---------------------------------------------------------------
Total pension benefit cost $ 62.0 $ 56.9 $ 57.9
- ---------------------------------------------------------------
ACTUARIAL ASSUMPTIONS
Discount rate 6.75% 7.25% 7.50
Long-term rate of return on
plan assets 9.25 8.75 9.25
Long-term rate of compensation
increase 5.50 5.50 5.50
- ---------------------------------------------------------------
</TABLE>
The change in projected benefit obligation, change in plan assets, and funded
status of the plans at February 29, 2000, and February 28, 1999, were:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
2000 1999
===============================================================
<S> <C> <C>
CHANGE IN PROJECTED BENEFIT OBLIGATION
Projected benefit obligation at
beginning of year $ 1,561.2 $ 1,376.3
Service cost 55.7 48.5
Interest cost 103.2 97.7
Plan participants' contributions 0.1 0.1
Amendments 3.2 4.3
Actuarial loss (gain) (156.4) 110.6
Curtailment/Settlement loss 2.4 -
Other 0.5 1.4
Benefits paid (80.7) (77.7)
- ---------------------------------------------------------------
Projected benefit obligation at
end of year 1,489.2 1,561.2
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
2000 1999
=================================================================
<S> <C> <C>
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning
of year 1,535.8 1,504.6
Actual return on plan assets 189.2 103.8
Employer contributions 16.9 13.9
Plan participants' contributions 0.1 0.1
Investment and administrative expenses (9.4) (10.7)
Other 0.2 1.8
Benefits paid (80.7) (77.7)
- -----------------------------------------------------------------
Fair value of plan assets at end of year 1,652.1 1,535.8
- -----------------------------------------------------------------
FUNDED STATUS 162.9 (25.4)
Unrecognized actuarial gain (355.3) (135.3)
Unrecognized prior service cost 22.9 27.4
Unrecognized transition amount (6.6) (9.3)
- -----------------------------------------------------------------
Accrued benefit cost $ (176.1) $ (142.6)
=================================================================
ACTUARIAL ASSUMPTIONS
Discount rate 7.50% 6.75%
Long-term rate of compensation increase 5.50 5.50
- -----------------------------------------------------------------
</TABLE>
The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for pension plans with accumulated benefit obligations in excess
of plan assets at February 29, 2000, and February 28, 1999, were:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
2000 1999
===============================================================
<S> <C> <C>
Projected benefit obligation $ 192.9 $ 229.6
Accumulated benefit obligation 182.7 215.7
Fair value of plan assets 116.8 143.2
- ---------------------------------------------------------------
</TABLE>
Plan assets are primarily invested in equity securities, corporate and
government debt securities, and common trust funds. Included in plan assets are
5.1 million shares of the company's common stock at a fair market value of $83.2
million and $152.7 million at February 29, 2000, and February 28, 1999,
respectively.
Certain employees of the company are covered under defined contribution plans.
The expense related to these plans was $31.1 million, $29.7 million, and $29.0
million in fiscal 2000, 1999, and 1998, respectively.
52 ConAgra, Inc. 2000 Annual Report
69
<PAGE>
POSTRETIREMENT BENEFITS
The company's postretirement plans provide certain medical and dental benefits
to qualifying U.S. employees.
Components of postretirement benefit costs and weighted average actuarial
assumptions are:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
2000 1999 1998
=================================================================
<S> <C> <C> <C>
POSTRETIREMENT BENEFIT COST
Service cost $ 2.8 $ 2.8 $ 2.7
Interest cost 22.1 24.7 25.1
Expected return on plan assets (0.5) (0.6) (0.7)
Amortization of prior service cost (2.1) (0.1) (0.1)
Amortization of transition obligation 0.1 0.1 0.1
Recognized net actuarial (gain) loss (3.8) (3.0) (3.7)
Curtailment (gain) loss (9.3) - 0.1
- -----------------------------------------------------------------
$ 9.3 $ 23.9 $ 23.5
=================================================================
ACTUARIAL ASSUMPTIONS
Discount rate 6.75% 7.25% 7.50%
Long-term rate of return on
plan assets 13.70 13.70 13.70
- -----------------------------------------------------------------
</TABLE>
The change in accumulated benefit obligation, change in plan assets, and funded
status of the plans at February 29, 2000, and February 28, 1999, were:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
2000 1999
=================================================================
<S> <C> <C>
CHANGE IN ACCUMULATED BENEFIT OBLIGATION
Accumulated benefit obligation at
beginning of year $ 350.7 $ 351.5
Service cost 2.8 2.8
Interest cost 22.1 24.7
Plan participants' contributions 2.1 2.6
Actuarial (gain) loss (15.7) (5.5)
Acquisition - 5.6
Benefits paid (35.5) (31.0)
Plan amendments (11.2) -
- -----------------------------------------------------------------
Accumulated benefit obligation at end
of year 315.3 350.7
- -----------------------------------------------------------------
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year 5.3 5.5
Actual return on plan assets 0.7 0.7
Employer contributions 32.5 27.5
Plan participants' contributions 2.1 2.6
Benefits paid (35.5) (31.0)
- -----------------------------------------------------------------
Fair value of plan assets at end of year 5.1 5.3
- -----------------------------------------------------------------
FUNDED STATUS (310.2) (345.4)
Unrecognized net gain (104.6) (92.5)
Unrecognized transition amount 0.6 0.7
Unrecognized prior service cost (1.2) (1.4)
- -----------------------------------------------------------------
Accrued benefit cost $ (415.4) $ (438.6)
=================================================================
ACTUARIAL ASSUMPTIONS
Discount rate 7.50% 6.75%
- -----------------------------------------------------------------
</TABLE>
Benefit costs were generally estimated assuming retiree health care costs would
increase at a 5.5% annual rate.
A one percentage point change in assumed health care cost rates would have the
following effect:
<TABLE>
<CAPTION>
- --------------------------------------------------------------
One Percent One Percent
Increase Decrease
==============================================================
<S> <C> <C>
Total service and interest
cost components $ 2.7 $ (2.3)
Postretirement benefit obligation 26.2 (22.7)
- --------------------------------------------------------------
</TABLE>
The company generally intends to fund claims as reported.
19. BUSINESS SEGMENTS AND RELATED INFORMATION
The company has three segments, which are organized based upon similar economic
characteristics and are similar in the nature of products and services offered,
the nature of production processes, the type or class of customer, and
distribution methods. Packaged Foods includes companies that produce
shelf-stable and frozen foods. This segment markets food products in retail and
foodservice channels. Refrigerated Foods includes companies that produce and
market branded processed meats, beef, pork, chicken, and turkey. Agricultural
Products includes companies involved in distribution of agricultural inputs and
procurement, processing, trading and distribution of commodity food ingredients
and agricultural commodities.
Intersegment sales have been recorded at amounts approximating market. Operating
profit for each segment is based on net sales less all identifiable operating
expenses and includes the related equity in earnings of companies included on
the basis of the equity method of accounting. General corporate expense,
goodwill amortization, interest expense, and income taxes have been excluded
from segment operations. All assets other than cash and those assets related to
the corporate office have been identified with the segments to which they
relate.
53 ConAgra, Inc. 2000 Annual Report
70
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998
================================================================================================================================
<S> <C> <C> <C>
Sales to unaffiliated customers
Packaged Foods $ 7,713.5 $ 7,426.6 $ 7,192.2
Refrigerated Foods 12,522.2 11,591.4 11,416.2
Agricultural Products 5,150.1 5,576.3 5,611.1
- --------------------------------------------------------------------------------------------------------------------------------
Total $ 25,385.8 $ 24,594.3 $ 24,219.5
================================================================================================================================
Intersegment sales
Packaged Foods $ 48.6 $ 38.2 $ 34.1
Refrigerated Foods 341.4 213.1 193.4
Agricultural Products 188.7 288.0 220.0
- --------------------------------------------------------------------------------------------------------------------------------
578.7 539.3 447.5
Intersegment elimination (578.7) (539.3) (447.5)
- --------------------------------------------------------------------------------------------------------------------------------
Total $ - $ - $ -
================================================================================================================================
Net sales
Packaged Foods $ 7,762.1 $ 7,464.8 $ 7,226.3
Refrigerated Foods 12,863.6 11,804.5 11,609.6
Agricultural Products 5,338.8 5,864.3 5,831.1
Intersegment elimination (578.7) (539.3) (447.5)
- --------------------------------------------------------------------------------------------------------------------------------
Total $ 25,385.8 $ 24,594.3 $ 24,219.5
================================================================================================================================
Operating profit (Note a)
Packaged Foods $ 778.4 $ 941.3 $ 978.1
Refrigerated Foods 322.7 9.4 204.6
Agricultural Products 187.2 314.8 390.2
- --------------------------------------------------------------------------------------------------------------------------------
Total operating profit 1,288.3 1,265.5 1,572.9
Interest expense 303.4 316.6 300.7
General corporate expenses 255.4 197.2 163.4
Goodwill amortization 63.4 69.4 67.8
- --------------------------------------------------------------------------------------------------------------------------------
Income before tax and cumulative effect of change in accounting $ 666.1 $ 682.3 $ 1,041.0
================================================================================================================================
Identifiable assets
Packaged Foods $ 4,621.2 $ 4,758.9 $ 4,327.5
Refrigerated Foods 3,665.7 3,407.3 3,830.3
Agricultural Products 3,251.5 3,580.3 3,249.1
Corporate 757.4 399.6 401.6
- --------------------------------------------------------------------------------------------------------------------------------
Total $ 12,295.8 $ 12,146.1 $ 11,808.5
================================================================================================================================
Additions to property, plant and equipment - including businesses acquired
Packaged Foods $ 227.2 $ 375.4 $ 263.2
Refrigerated Foods 459.6 226.0 206.9
Agricultural Products 81.8 136.1 124.1
Corporate 59.9 25.7 8.6
- --------------------------------------------------------------------------------------------------------------------------------
Total $ 828.5 $ 763.2 $ 602.8
================================================================================================================================
Depreciation and amortization
Packaged Foods $ 263.0 $ 241.1 $ 221.6
Refrigerated Foods 184.7 193.7 175.9
Agricultural Products 73.3 63.2 56.8
Corporate 15.5 1.8 2.5
- --------------------------------------------------------------------------------------------------------------------------------
Total $ 536.5 $ 499.8 $ 456.8
================================================================================================================================
</TABLE>
Note a: Fiscal 2000 includes before-tax restructuring and restructuring-related
charges of $621.4 million (Note 3). These charges were included in operating
profit as follows: $309.5 million in Packaged Foods, $168.0 million in
Refrigerated Foods, and $143.9 million in Agricultural Products. Fiscal 1999
includes before-tax restructuring charges of $440.8 million (Note 3). The fiscal
1999 charges were included in operating profit as follows: $39.0 million in
Packaged Foods, $358.6 million in Refrigerated Foods, and $43.2 million in
Agricultural Products.
54 ConAgra, Inc. 2000 Annual Report
71
<PAGE>
The operations of the company are principally in the United States. Operations
outside the United States are worldwide with no single foreign country or
geographic region being significant to the consolidated operations. Foreign net
sales were $3.6 billion in each of the following fiscal years: 2000, 1999, and
1998. Net sales are attributed to countries based on location of customer. The
company's long-lived assets located outside of the United States are not
significant.
20. SUBSEQUENT EVENT
On June 22, 2000, the company signed a definitive agreement to acquire
International Home Foods. The definitive agreement provides that International
Home Foods' shareholders will receive a targeted value of $22 per share, $11 of
which will be paid in cash and the balance will be paid in ConAgra stock. The
stock portion of the consideration is subject to adjustment based on the trading
price of ConAgra stock prior to the closing of the transaction. The transaction
is valued at approximately $2.9 billion, consisting of the consideration above
and the assumption of $1.3 billion of debt. The acquisition is subject to
customary closing conditions, including approval by International Home Foods'
shareholders and regulatory authorities.
21. QUARTERLY RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Net Income(Loss) Dividends
Net Gross Income Per Share Stock Market Price Declared
Sales Profit (Loss) Basic Diluted High Low Per Share
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000
First $ 6,593.6 $ 976.2 $ 101.8 (1) $ .22 (1) $ .21 (1) $ 28.13 $ 24.06 $ .17850
Second 6,602.9 1,141.5 187.3 (2) .39 (2) .39 (2) 26.50 21.50 .20350
Third 5,797.8 1,017.6 143.4 (3) .30 (3) .30 (3) 24.63 15.88 .20350
Fourth 6,391.5 1,044.6 (19.5)(4) (.04)(4) (.04)(4) 23.25 15.06 .20350
- -----------------------------------------------------------------------------------------------------------------------------
YEAR $25,385.8 $4,179.9 $ 413.0 (5) $ .87 (5) $ .86 (5) $ 28.13 $ 15.06 $ .7890
=============================================================================================================================
1999
First $ 6,483.4 $ 917.5 $ 109.3 $ .23 $ .23 $ 33.25 $ 22.56 $ .15625
Second 6,404.4 1,105.9 219.0 .47 .46 32.44 24.63 .17850
Third 5,693.3 1,007.1 171.4 .36 .36 34.38 29.25 .17850
Fourth 6,013.2 1,007.6 (141.3)(6) (.30)(6) (.30)(6) 31.25 23.13 .17850
- -----------------------------------------------------------------------------------------------------------------------------
YEAR $24,594.3 $4,038.1 $ 358.4 (6) $ .76 (6) $ .75 (6) $ 34.38 $ 22.56 $ .69175
=============================================================================================================================
</TABLE>
(1) Includes after-tax restructuring and related charges of $29.2 million, or
$.06 for both basic and diluted earnings per share (Note 3).
(2) Includes after-tax restructuring and related charges of $64.7 million, or
$.14 for both basic and diluted earnings per share (Note 3).
(3) Includes after-tax restructuring and related charges of $52.5 million, or
$.11 for both basic and diluted earnings per share (Note 3).
(4) Includes after-tax restructuring and related charges of $238.9 million, or
$.50 for both basic and diluted earnings per share (Note 3).
(5) Includes after-tax restructuring and related charges of $385.3 million, or
$.81 for both basic and diluted earnings per share (Note 3).
(6) Includes after-tax restructuring charges of $337.9 million, or $.72 and $.71
for basic and diluted earnings per share, respectively (Note 3).
55 ConAgra, Inc. 2000 Annual Report
72
<PAGE>
RESPNSIBILITIES
INDEPENDENT AUDITORS' REPORT
THE STOCKHOLDERS AND BOARD OF DIRECTORS
CONAGRA, INC.
We have audited the accompanying consolidated balance sheets of ConAgra, Inc.
and subsidiaries as of May 28, 2000, and May 30, 1999, and the related
consolidated statements of earnings, comprehensive income, common stockholders'
equity and cash flows for each of the three years in the period ended May 28,
2000. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of ConAgra, Inc. and subsidiaries as
of May 28, 2000, and May 30, 1999, and the results of their operations and their
cash flows for each of the three years in the period ended May 28, 2000, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
July 14, 2000
Omaha, Nebraska
THE CONDUCT OF OUR AFFAIRS
The major objectives of the company are expressed in terms of return on
stockholders' equity and growth in trend line earning power. As we conduct
ourselves in the pursuit of our existing businesses and in the growth of our
businesses in an ethical and moral way, we must also fulfill our commitments to
our government, to our society, and to ourselves as individuals. In one sense,
ethics involves the point of view that suggests we live in a glass bowl, and we
should feel comfortable with any actions we take, if they were shared publicly.
Further, we will conduct our affairs within the law.
Should there be evidence of possible malfeasance on the part of any officer or
member of management, each employee must feel the responsibility to communicate
that to the appropriate party. This is a commitment that each of us must
undertake and not feel that it is a high-risk communication, but that it is
expected and, indeed, an obligation.
PRINCIPAL OFFICERS
The principal officers of the company include, among others, those listed on
pages 58 and 59 of this report. The principal officers are responsible for
maintaining throughout the company a system of internal controls, which protect
the assets of the company on a reasonable and economic basis. They also are
responsible for maintaining records, which permit the preparation of financial
statements that fairly present the financial condition and results of operations
of the company in accordance with generally accepted accounting principles.
AUDIT COMMITTEE OF THE BOARD
The Audit Committee of ConAgra's Board of Directors is composed entirely of
outside directors and recommends the appointment of the company's independent
public accountants. The Audit Committee meets regularly, and when appropriate
separately, with the independent public accountants, the internal auditors, and
financial management. Both the independent public accountants and the internal
auditors have unrestricted access to the Audit Committee.
56 ConAgra, Inc. 2000 Annual Report
73
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>8
<FILENAME>ex-21.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF CONAGRA
ConAgra, Inc. is the parent corporation owning 100% (unless otherwise noted) of
the voting securities of the following subsidiaries as of May 28, 2000:
<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation
- ---------- ---------------
<S> <C>
A.M. Gilardi & Sons, Inc. Ohio
Alabama Processors, Inc. (owns 100% of the voting securities of one
domestic corporation) Alabama
Armour Food Co. - Iowa Iowa
Banquet Foods (Canada) Corporation Canada
BCF, Inc. Texas
CAG 31, Inc. Delaware
CAGRE, Inc. Nebraska
CG REIT, Inc. Nebraska
Choice One Foods, Inc. California
ConAgra Brands, Inc. Nebraska
ConAgra Capital L.C. (indirectly controlled) Iowa
ConAgra Caribbean Distributors, Inc. Puerto Rico
ConAgra Energy Services, Inc. Delaware
ConAgra Feeding People Better Foundation Nebraska
ConAgra Fertilizer Company Nebraska
ConAgra Finance Company Australia
ConAgra Foreign Sales Corporation, Inc. Guam
ConAgra Foundation Nebraska
ConAgra Functional Foods, Inc. Nebraska
ConAgra Grocery Products Company (owns 100% of the voting securities of 11
domestic corporations, 70% of one domestic corporation, 50% of two domestic
corporations and 100% of two foreign corporations, all engaged principally in
the production and marketing of retail, foodservice and industrial food products) Delaware
ConAgra International (Far East) Limited (owns 100% of the voting securities of
four foreign corporations and 50% of one foreign corporation engaged principally
in the worldwide commodities trading business) Hong Kong
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation
- ---------- ---------------
<S> <C>
ConAgra International Fertilizer Company Delaware
ConAgra International, Inc. (owns 100% of the voting securities of 24 foreign
corporations, 99% of four foreign corporations, 98% of one foreign corporation,
85% of one foreign corporation, 50% of two foreign corporations and 30% of one
foreign corporation, and 100% of one domestic corporation all engaged
principally in the worldwide commodities trading business and the processing of
beef and malt) Delaware
ConAgra International, S.A. Spain
ConAgra Lonergan Corporation Nebraska
ConAgra Poultry Company (owns 100% of three domestic corporations
engaged principally in poultry operations) Delaware
ConAgra Relocation Services, Inc. Delaware
ConAgra Shared Purchasing, Inc. Delaware
ConAgra Trade Group, Inc. (owns 100% of the voting securities of
one domestic corporation) Delaware
ConAgra Transportation, Inc. Delaware
E-ConAgra.com, Inc. Delaware
Fernando's Foods Corporation California
Golden Valley Microwave Foods, Ltd. United Kingdom
GoodMark Foods, Inc. (owns 100% of the voting securities of
two domestic corporations) North Carolina
Hester Industries, Inc. West Virginia
Holly Ridge Foods, Inc. North Carolina
Investment Resource Services, Inc. Delaware
J.R.R.W. Transport, Inc. Iowa
Lamb Weston, Inc. (owns 100% of the voting securities
of three domestic corporations engaged in the potato products business) Delaware
Meridian Seafood Products, Inc. (owns 100% of the voting
securities of one domestic corporation) Delaware
</TABLE>
75
<PAGE>
<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation
- ---------- ---------------
<S> <C>
MHC, Inc. Oregon
Miller Bros. Company, Inc. Utah
Molinos de Puerto Rico, Inc. Nebraska
Monfort, Inc. (owns 100% of the voting securities of four domestic corporations,
50% of one domestic corporation, and 100% of one foreign corporation, all
engaged principally in the livestock feeding and processing business) Delaware
Northern Colorado Resources, Inc. Colorado
Oat Ventures, Inc. Delaware
Rygmyr Foods, Inc. Minnesota
Sergeant's Pet Products, Inc. Delaware
Swift & Company Delaware
To-Ricos, Inc. Nebraska
Tansquip Resources, Inc. Oklahoma
United Agri Products, Inc. (owns 100% of the voting securities
of 28 domestic corporations, all engaged principally
in the agricultural chemicals business) Delaware
USFI-Gilroy, Inc. Delaware
Weld Insurance Company, Inc. Colorado
Zoll Foods Corporation Illinois
The corporations listed above and on the previous page are included in the
consolidated financial statements, which are a part of this report.
</TABLE>
76
<PAGE>
ConAgra and its subsidiaries account for the following investments using the
equity method of accounting:
<TABLE>
<CAPTION>
Jurisdiction of
Subsidiary Incorporation
- ---------- ---------------
<S> <C>
Barrett Burston Malting Co. Pty. Ltd. (50% owned) Australia
Agri-Pacific Co., Ltd. (50% owned) Taiwan
Canada Malting Company Limited (50% owned) Canada
Concampo S.A. de C.V. (50% owned) Mexico
Lamb Weston / RDO (50% owned) Minnesota
Lamb Weston / Meijer (50% owned) Holland
Great Western Malting Co. (50% owned) Delaware
Malt Real Property Pty. Ltd. (50% owned) Australia
Pecom-Agra, S.A. (50% owned) Argentina
Productos Verde Valle S.A. de C.V. (50% owned) Mexico
Ulgrave Limited (50% owned) United Kingdom
Vriezo (50% owned) Holland
</TABLE>
77
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>9
<FILENAME>ex-23.txt
<DESCRIPTION>EXHIBIT 23
<TEXT>
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements Nos.
333-42420, 333-87937, 333-68715, 333-64617, and 333-47037 on Form S-3 and Nos.
333-44426, 333-78063, 333-64633, 33-50113, 33-48295, 33-28079, 2-81244, 2-96891,
33-15815, 333-17573, 33-52330, 333-17549, 33-63061, and 33-37293 on Form S-8 of
ConAgra, Inc. and subsidiaries of our reports dated July 14, 2000, appearing in
and incorporated by reference in this Annual Report on Form 10-K of ConAgra,
Inc. and subsidiaries for the year ended May 28, 2000.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
August 25, 2000
78
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>10
<FILENAME>ex-24.txt
<DESCRIPTION>EXHIBIT 24
<TEXT>
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Mogens C. Bay
-----------------------------
Mogens Bay
79
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ C. M. Harper
------------------------------
C. M. Harper
80
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Robert A. Krane
-----------------------------
Robert A. Krane
81
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Carl E. Reichardt
------------------------------
Carl E. Reichardt
82
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Ronald W. Roskens
------------------------------
Ronald W. Roskens
83
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Marjorie M. Scardino
-------------------------------
Marjorie M. Scardino
84
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Walter Scott, Jr.
------------------------------
Walter Scott, Jr
85
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Kenneth E. Stinson
------------------------------
Kenneth E. Stinson
86
<PAGE>
EXHIBIT 24 (Continued)
POWER OF ATTORNEY
The undersigned Director of ConAgra, Inc., a Delaware corporation, hereby
constitutes and appoints Bruce C. Rohde as Attorney-in-Fact in his name, place
and stead to execute ConAgra's Annual Report on Form 10-K for the fiscal year
ended May 28, 2000, together with any and all subsequent amendments thereof, in
his capacity as a Director and hereby ratifies all that said Attorney-in-Fact
may do by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this
14th day of July, 2000.
/s/ Clayton K. Yeutter
-----------------------------
Clayton K. Yeutter
87
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>11
<FILENAME>ex-27.txt
<DESCRIPTION>EXHIBIT 27
<TEXT>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-28-2000
<PERIOD-START> MAY-31-1999
<PERIOD-END> MAY-28-2000
<CASH> 157,600
<SECURITIES> 0
<RECEIVABLES> 1,669,600
<ALLOWANCES> 62,800
<INVENTORY> 3,787,300
<CURRENT-ASSETS> 5,966,500
<PP&E> 6,441,800
<DEPRECIATION> 2,857,800
<TOTAL-ASSETS> 12,295,800
<CURRENT-LIABILITIES> 5,489,200
<BONDS> 3,091,800
<PREFERRED-MANDATORY> 0
<PREFERRED> 0
<COMMON> 2,620,700
<OTHER-SE> 343,400
<TOTAL-LIABILITY-AND-EQUITY> 12,295,800
<SALES> 25,385,800
<TOTAL-REVENUES> 25,385,800
<CGS> 21,205,900
<TOTAL-COSTS> 21,205,900
<OTHER-EXPENSES> 3,210,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 303,400
<INCOME-PRETAX> 666,100
<INCOME-TAX> 253,100
<INCOME-CONTINUING> 413,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 413,000
<EPS-BASIC> 0.87
<EPS-DILUTED> 0.86
</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----