CONAGRA, INC.
ANNUAL REPORT 1995
TRUSTED BRANDS, STRONG GROWTH, STRATEGIC FOCUS:
FRONT COVER - collage of photos:
- a ConAgra "Feeding People Better" frozen foods carrier
traveling down a country road,
- a grain spout unloading grain,
- a plate of ConAgra roast pork, rice and garnish,
- ConAgra Frozen Foods' plant manager doing a "quality
check" on Healthy Choice Dinners,
- a grain ship,
- boy eating hot dog,
- global map,
- an array of ConAgra products (Wesson vegetable oil,
Banquet Fried Chicken, Healthy Choice Dinner, Orville
Redenbacher's Popcorn, Marie Callender's Pot Pie, Swift Premium
Brown'N Serve, Armour Premium Bacon, Hunt's Ketchup, Deli Thin
Sliced Turkey Breast, Country Pride Chicken, Van Camp's Pork and
Beans, Peter Pan peanut butter),
- a women on a production line at a Hunt's tomato plant.
INSIDE FRONT COVER
Photos of grocery products -- all brands
Contents
Page
Letter to Stockholders . . . . . . . . . . . . . . . . . . . 2
Objectives & Results . . . . . . . . . . . . . . . . . . . . 4
ConAgra At A Glance . . . . . . . . . . . . . . . . . . . . . 6
Business Review
Grocery/Diversified Products . . . . . . . . . . . . . . 8
Refrigerated Foods . . . . . . . . . . . . . . . . . . . 14
Food Inputs & Ingredients . . . . . . . . . . . . . . . 18
Corporate Citizenship . . . . . . . . . . . . . . . . . . . . 24
Sales & Operating Profit by Segment . . . . . . . . . . . . . 26
Eleven-Year Results . . . . . . . . . . . . . . . . . . . . . 27
Management's Discussion & Analysis . . . . . . . . . . . . . 28
Consolidated Financial Statements . . . . . . . . . . . . . . 33
Notes to Financial Statements . . . . . . . . . . . . . . . . 38
Independent Auditors' Report . . . . . . . . . . . . . . . . 48
Board of Directors . . . . . . . . . . . . . . . . . . . . . 49
Principal Officers . . . . . . . . . . . . . . . . . . . . . 50
Investor Information . . . . . . . . . . . . . . . . . . . . 52
FINANCIAL HIGHLIGHTS
(Dollars in millions except per share amounts)
Fiscal Year Ended May 28, 1995 May 29, 1994 Increase
------------ ------------ --------
Net sales $24,108.9 $23,512.2 2.5%
Income before
income taxes $825.9 $720.0 14.7%
Net income $495.6 $437.1 13.4%
Net income
per share $2.06 $1.81 13.8%
Common stock price
at year end $32.25 $28.50 13.2%
Common stock
dividend rate
at year end $ .83 $ .72 15.3%
Cash earnings
return on year-
beginning common
stockholders'
equity* 24.4% 23.7%
5-year average: 23.3%
Employees at
year end 90,871 87,309 4.1%
* As defined on page 4, Objectives and Results.
CONAGRA, INC.
ConAgra is a diversified international food company. Our
mission is to increase stockholders' wealth. Our job is to help
feed people better.
We operate across the food chain around the world. Our
products range from convenient prepared foods for today's busy
consumers to supplies farmers need to grow their crops.
Printed on recycled paper.
To Our Stockholders, Employees and Other Friends
(PHOTO OF PHIL FLETCHER)
Cutline: Phil Fletcher
Chairman & Chief Executive Officer
Fiscal 1995: A Year of Record Results . . .
Fiscal 1995 was a good year for our company and
shareholders.
* Earnings per share grew 14 percent following a 15-
percent increase the previous year.
* Our shareholders enjoyed a 15-percent common stock
dividend increase.
* We met ConAgra's return on equity objective -- our most
important financial goal -- for the 20th consecutive
year.
Even the good reported results tend to understate ConAgra's
earning power. We had sufficient earning power to meet ConAgra's
14-percent earnings growth objective while absorbing considerable
expense from business improvement initiatives that will pay off
in subsequent years. Furthermore, goodwill amortization, not a
true economic expense, penalized reported earnings per share 15
percent but generated substantial cash to fuel earning power.
. . . And Investing for Future Results
Fiscal 1995 also was a successful year for managing and
investing to drive premium results in the future.
* We invested $428 million to expand and improve plant,
equipment and business systems.
* We accelerated actions to divest non-core businesses
and redeploy capital to core holdings.
* We invested $379 million to acquire businesses that fit
tightly with core businesses and quickly add to
earnings.
Strong Growth
Fiscal 1995's results sustain ConAgra's record of strong,
consistent long-term growth -- a record equaled by few companies.
According to "America's Finest Companies," only one half of one
percent of all U.S. public companies have increased both earnings
per share and dividends per share for 10 or more consecutive
years.
ConAgra has increased earnings per share for 15 consecutive
years at a compound annual growth rate of 15.7 percent. During
the same period, ConAgra's common stock dividends per share grew
at a 15.5-percent average annual rate.
In fact, ConAgra has increased dividends per share 14
percent or more for 20 consecutive years. This record fulfills
our dividend growth objective and demonstrates management's
confidence in the stability and scale of ConAgra's trend line
earning power.
Trusted Brands and Earnings Balance
Fiscal 1995 also demonstrated our company's earnings
balance, historically a ConAgra strength. Our earnings gain was
driven by broadly based profit growth in businesses ranging from
branded grocery products to meat and potato products.
Among our branded product lines, Healthy Choice enjoyed
another eminently successful year. Unit volumes again grew at a
double-digit pace, and Healthy Choice was a notable contributor
to our company's earnings growth.
With annual retail sales well above $1 billion, Healthy
Choice leads ConAgra's family of $100 million brands. Our
acquisition of Marie Callender's frozen foods and Van Camp's bean
products raised to 21 ConAgra's array of trusted brands with
annual retail sales over $100 million.
Our branded products businesses account for roughly half of
ConAgra's operating profit. Half is generated by equally
important core businesses in other food chain sectors. ConAgra's
diversified business mix is a source of earnings balance, avenues
for growth and interlocking strengths.
These powerful interlocking strengths transcend business
borders. They run the gamut from market intelligence and
distribution systems to technology and business information
systems. Harnessing these strengths, without diluting the power
of ConAgra's entrepreneurial operating company structure,
continues high on our company's strategic agenda and my personal
"do list."
Strategic Focus
ConAgra's strategic agenda for growth begins, as it should,
with our company's structure -- leadership, organization and
business mix.
As I've said here in past years, we are structuring our
company for success. Structuring for success is a dynamic
process driven by constant renewal, my own top priority. The
process was evident in fiscal 1995.
We changed and strengthened the leadership at a number of
operating companies. We did not manage our chicken products
business well in fiscal 1995. To correct this, we changed the
management and moved the business into our Refrigerated Foods
Companies to benefit from their leadership and compatible product
mix, market channels and business systems.
As I noted earlier, we are streamlining our asset base to
improve our business structure. Half a dozen non-core businesses
were sold this past year. We also discontinued under-performing
businesses and closed less productive facilities.
These actions sharpen our strategic focus and help
concentrate capital and management effort on more promising
opportunities.
In fiscal 1996, we expect to invest about $550 million in
capital expenditures to boost efficiency and capacity for growth.
An investment theme shared across our businesses is value --
adding value to products and byproducts to spur sales growth and
enhance profit margins.
We will remain acquisitive. We typically are screening 80
to 100 acquisition candidates ranging from a gleam in the eye to
deals near completion. I believe we will continue to find
attractive acquisitions that strengthen core operations and
bolster earnings growth.
Fiscal 1996 Outlook: Record Earnings
I'm enthusiastic about our company's momentum and prospects
as we enter fiscal 1996. Most major businesses are performing
well. We plan to increase earnings in all three of ConAgra's
industry segments -- Grocery/Diversified Products, Refrigerated
Foods and Food Inputs & Ingredients -- as was the case in fiscal
1995.
We expect double-digit earnings per share growth in fiscal
1996 and ConAgra's 16th consecutive year of record earnings. At
this early juncture I won't predict the precise increase, but
anything under ConAgra's 14-percent objective would be
disappointing.
Rewarding Stockholders
In sum, we are following the road map I've drawn in previous
annual reports. We are managing aggressively and investing for
growth to accomplish our mission -- increasing stockholders'
wealth. Our mission and commitment to it are clear.
It's my pleasure to welcome to ConAgra's board of directors
our newest member, Jane Thompson, an accomplished business
executive. On behalf of all our directors, it's my privilege to
offer heartfelt thanks to ConAgra's employees for your commitment
and contributions to our company's mission and success.
Sincerely,
Philip B. Fletcher
Chairman and Chief Executive Officer
OBJECTIVES AND RESULTS
ConAgra is committed to major financial performance
objectives that drive how we manage our company and serve our
mission to increase stockholder wealth.
We incorporate in our financial objectives a concept called
"cash earnings" -- net earnings plus goodwill amortization.
Businesses run on cash. The principal source of internally
generated cash is net earnings before depreciation of fixed
assets and amortization of goodwill. Cash from depreciation is
generally needed for replenishment to help maintain a going
concern.
On the other hand, goodwill represents valuable non-
depreciating brands and distribution systems, primarily those we
acquired with Beatrice Company in fiscal year 1991. We invest
and incur expense throughout the year to maintain and enhance the
value of these brands and distribution systems.
Consequently, goodwill amortization is not a true economic
cash cost. It, along with net earnings, is a source of decision
cash - cash available to invest in ConAgra's growth and pay
dividends.
It is this decision cash that we call cash earnings. We
believe the cash earnings concept is an appropriate way to manage
and measure our businesses.
We use the cash earnings concept in our financial objectives
for return on common equity and dividend growth. We do not use
it in our earnings per share growth objective because companies
are not permitted to present earnings per share data in any
alternative form.
RETURN ON COMMON EQUITY
Objective
ConAgra's most important financial objective is to average
more than a 20-percent after-tax cash earnings return on year-
beginning common stockholders' equity, and to earn more than a
15-percent return in any given year.
In determining results as shown in the table below, year-
beginning common equity includes these adjustments: 1991 - an
increase of $348.1 million for a pro rata share of the common
equity associated with the acquisition of Beatrice Company and a
public offering of common stock; 1992 - an increase of $16.9
million for a pro rata share of the common equity associated with
the acquisition of Arrow Industries, Inc.; 1993 - a net decrease
of $337.2 million resulting from adopting Statement of Financial
Accounting Standards No. 106 (a decrease of $121.2 million), a
pro rata share of common stock purchased in the open market for
the Employee Equity Fund (a decrease of $247.9 million), and a
pro rata share of common equity associated with four acquisitions
(an increase of $31.9 million). In computing the 1993 results,
after-tax earnings exclude the one-time cumulative effect of SFAS
106.
Result
Return on Common Equity
1991 23.9%
------------------------------
1992 21.5%
------------------------------
1993 23.2%
------------------------------
1994 23.7%
------------------------------
1995 24.4%
5-Year Average: 23.3%
FINANCING
Objective
ConAgra's primary financing objective is to maintain a
conservative balance sheet.
Long-Term Debt
Senior long-term debt normally will not exceed 30 percent of
total long-term debt plus equity. Long-term subordinated debt is
treated as equity due to its preferred stock characteristics.
Short-Term Debt
Each ConAgra food business normally will eliminate at the
end of its natural fiscal year short-term debt, net of cash, used
to finance assets other than hedged commodity inventories.
Natural year end occurs when inventories and receivables are
at their annual low points -- for example, the end of February in
our crop protection chemical and fertilizer businesses, and the
end of May in many other ConAgra businesses.
Result
LONG- SHORT-
TERM TERM
DEBT DEBT
--------------------------------- ----------
Objective Result Result
maximum of: (as defined
(as defined above) above)
--------------------------------- ----------
91 30% 40%* 0
92 30% 36% 0
93 30% 30% 0
94 30% 30% 0
95 30% 30% 0
---------------------------------------------------
*1991 was 40% at year end and later restated to 41% for pooling
of interests with a company that merged with ConAgra in 1992.
EARNINGS AND DIVIDEND GROWTH
Earnings Growth Objective
ConAgra's objective is to increase trend line earnings per
share, on average, more than 14 percent per year.
Although earnings balance is a strength of ConAgra's
diversified food businesses, we may not always achieve quarter-
to-quarter, or sometimes year-to-year, increases in reported
earnings. However, ConAgra expects to increase trend line
earnings - what we would earn with average or normal industry
conditions - more than 14 percent per year.
Dividend Growth Objective
ConAgra's objective is to increase common stock dividends
consistent with growth in ConAgra's trend line earnings.
Over time, ConAgra expects common stock dividends to average
in the range of 30 to 35 percent of cash earnings.
Our earnings and dividend growth objectives are linked.
Reported earnings per share growth varies year to year and may be
higher or lower than trend line earnings per share. Over a long
period, reported earnings per share reflect trend line earnings
per share. Over a shorter period of time, dividends per share
growth is in effect a proxy for trend line earnings per share
growth. Dividend increases represent management's judgment of
ConAgra's trend line, or underlying, earning power independent of
reported earnings results.
Result
ConAgra has increased earnings per share for 15 consecutive
years at a compound annual growth rate of 15.7%. During the same
period, dividends per share increased annually at an average rate
of 15.5%.
During the past five years, the growth of reported earnings
per share slowed to a rate of 10.5% mainly due to single-digit
growth in 1992 and 1993. During the same period, dividends per
share increased at an average rate of 15.8%, including increases
of 16.9% in 1992 and 15.4% in 1993.
Compound Annual Growth:
5-year 10-year 15-year
------ ------- -------
Earnings per share 10.5% 13.3% 15.7%
Dividends per share 15.8% 15.7% 15.5%
Bar graph for Earnings per Share:
Year: 1991 1992 1993 1994 1995
$1.42 $1.50 $1.58 $1.81 $2.06
Increase: 13.6% 5.6% 5.3% 14.6% 13.8%
Results as actually reported. 1993 earnings per share exclude
the one-time cumulative effect of SFAS 106.
Bar graph for Dividends per Share:
Year: 1991 1992 1993 1994 1995
$.445 $.52 $.60 $.695 $.803
Increase: 15.6% 16.9% 15.4% 15.8% 15.5%
Over the last 5 years, dividends have averaged 30.8% of cash
earnings.
GATEFOLD
HEAD: ConAgra at a Glance
SUBHEAD: Businesses Across the Food Chain -- A Strategic Focus
COPY & (ILLUSTRATIONS):
Seed Distribution (seed)
Crop Protection Chemicals Distribution
(stalk of corn)
Fertilizer Distribution
(bag of fertilizer)
Animal Feeds & Feed Additives
(NutriBasics product)
Retail Stores principally in
agricultural areas (County General
Store, Northwest Fabrics & Crafts)
Flour, Oat & Dry Corn Milling;
Barley Processing (ConAgra flour mill)
Worldwide Commodity Distribution &
Trading (Grain ship, Japanese flag, U.K.
flag)
Feed Ingredient Merchandising
(man on phone with computer terminal)
Natural Spices, Seasonings, Flavors
& Spray-Dried Food Ingredients
(array of spices & seasonings)
Beef, Pork & Lamb Products
(Beef steak, pork chop, leg of lamb)
Branded Chicken & Turkey Products
(Butterball whole turkey, Country
Pride package)
Branded Processed Meats
(Armour bacon, Hebrew National franks,
Healthy Choice lunch meat)
Cheeses & Refrigerated Dessert Toppings
(County Line cheese package, Healthy
Choice shreds, Reddi Wip can)
Delicatessen & Foodservice Products
(menu, supermarket deli)
Seafood Products (Singleton package,
fish, shrimp)
French Fries & Other Potato
Products (potato, Inland Valley &
Act II packages)
Private Label Consumer Products
(package of paper plates, aluminum
foil, bag of charcoal)
Branded Shelf-Stable Foods (Product
array: Hunt's ketchup, Wesson oil,
Healthy Choice soup, Swiss Miss cocoa,
Orville Redenbacher's popcorn, Peter
Pan peanut butter, Snack Pack pudding,
Van Camp's pork & beans, Knott's jam,
Rosarita refried beans)
Branded frozen foods (Product array:
Healthy Choice dinner, Banquet fried
chicken, Kid Cuisine dinner, Marie
Callender's pot pie, Patio burrito,
La Choy egg rolls)
Copy relating to illustrative graphic:
ConAgra's diversification across the food chain expands
opportunities and balances results. About half of ConAgra's
earnings are from branded food products, and about half are
from foodservice, processing and distribution businesses.
ConAgra Quick Facts
* Fiscal 1995 sales: $24.1 billion
(more than 4 times fiscal 1985 sales of $5.5 billion)
* Fiscal 1995 operating profit: $1.3 billion
(more than 5 times fiscal 1985 operating profit of $222
million)
* 90,871 employees
* Operations in 27 countries
* 15 consecutive years of record earnings per share
* Dividends per share increased 14% or more for 20 consecutive
years
* 10-year average annual return to investors: 18.1%
Strong Growth
Graph titled: Record Earnings per Share* for 15 Years
Compound Annual Growth Rate - 15.7%
F80 $ .23 F88 $ .86
81 .33 89 1.09
82 .37 90 1.25
83 .41 91 1.42
84 .46 92 1.50
85 .59 93 1.58
86 .68 94 1.81
87 .82 95 2.06
* Operating results as actually reported. Excludes cumulative
effect of accounting change in 1993.
Graph titled: Common Stock Dividends per Share
Compound Annual Growth Rate - 15.5%
F80 $.093 F88 $.288
81 .108 89 .331
82 .123 90 .385
83 .143 91 .445
84 .164 92 .520
85 .187 93 .600
86 .215 94 .695
87 .249 95 .803
Of 15,000 public companies in the U.S., only 73, just one half of
one percent, have increased both earnings per share and dividends
per share for 10 or more consecutive years. (Source: America's
Finest Companies, 1994)
ConAgra is one of those companies...in fact, ConAgra has
increased earnings per share for 15 consecutive years and
dividends per share for 20 consecutive years.
Trusted Brands
ConAgra is a brand powerhouse -- with 21 food brands that each
chalk up annual retail sales exceeding $100 million.
21 logos:
La Choy Wesson
Swiss Miss Banquet
Orville Redenbacher's County Line
Country Pride Hunt's
Healthy Choice Eckrich
Butterball Act II
Peter Pan Armour
Hunt's Snack Pack Decker
Hebrew National Swift Premium
Cook's Marie Callender's
Van Camp's
GROCERY/DIVERSIFIED PRODUCTS
Grocery/Diversified Products operating profit increased 20
percent, led by the consumer frozen foods business, notably
Healthy Choice products, and the potato products business, in
part due to an acquisition. The Hunt-Wesson companies, led by
Hunt Foods, and seafood also contributed to the earnings gain.
Unit volume growth and an acquisition drove the 12-percent
segment sales increase.
GROCERY/DIVERSIFIED PRODUCTS
2 Pie Charts:
1) Sales 19.9%
2) Operating Profit 48.7%
Copy:
Segment Sales (in millions)
1995 $4,799.6
1994 4,295.4
% Change + 11.7%
Segment Operating Profit (in millions)
1995 $ 629.9
1994 526.4
% Change + 19.7%
GROCERY/DIVERSIFIED PRODUCTS
GROCERY PRODUCTS
(PHOTO OF AL CROSSON)
Cutline: Al Crosson
President & Chief Operating Officer
ConAgra Grocery Products Companies
Strategic Focus
"Consumers and customers drive sales, and sales drive our
business. So we're concentrating on initiatives that improve
what we take to market and how we go to market. We'll continue
to respond to consumer demand with innovative new products.
We're expanding our grocery sales force and using our new Grocery
Products Service Center to serve our customers better. We're
also investing in sophisticated information systems to leverage
our strengths and make us more visible and responsive in the
marketplace."
- Al Crosson
GROCERY PRODUCTS
ConAgra Grocery Products Companies include our branded
consumer food companies that produce and market shelf-stable and
frozen foods.
Major shelf-stable brands and products are Hunt's and
Healthy Choice tomato-based products; Wesson cooking and salad
oils and sauces; Healthy Choice soups; Orville Redenbacher's and
ACT II popcorn; Peter Pan peanut butter; Van Camp's canned beans;
Manwich sauces; Snack Pack puddings; Swiss Miss puddings and
cocoa mixes; Knott's Berry Farm jams and jellies; Chun King and
La Choy Oriental products; Rosarita and Gebhardt Mexican
products; and Wolf Brand chili. These products are sold through
retail stores and to foodservice markets, mass merchandisers,
club stores and military markets.
Major frozen food brands are Healthy Choice, Banquet, Marie
Callender's, Kid Cuisine, Morton, Patio, Chun King and La Choy.
Our frozen food products include dinners and entrees, kids'
meals, fried chicken, boneless chicken products, pot pies, fruit
cobblers, hand-held snacks, french bread pizza and ice cream.
ConAgra Grocery Products Companies in total had an excellent
year, with robust earnings growth. Again in fiscal 1995, Healthy
Choice earnings led the pack with a dramatic increase.
The Hunt-Wesson businesses -- Hunt Foods Company, La
Choy/Rosarita Foods Company, Orville Redenbacher/Swiss Miss Foods
Company and Wesson/Peter Pan Foods Company -- had another record
year. Hunt-Wesson's earnings increase was impressive in view of
sales softness in their grocery categories. Hunt-Wesson unit
volumes increased modestly. Sales exceeded $2 billion.
New Hunt-Wesson products introduced during fiscal 1995
include Snack Pack Juicy Gels, Orville Redenbacher's
Reden*Budders Cheddar and Reden*Budders Light, Orville
Redenbacher's Popcorn Cakes, Wesson Chicken Sensations flavored
baking sauces, Healthy Choice chowders, Hunt's Choice Cut Diced
Tomatoes and Manwich Taco/Burrito Seasoning Sauces.
Three new acquisitions are excellent strategic fits and
expand our branded shelf-stable product offerings: Van Camp's
canned bean and Wolf Brand chili products, Chun King convenience
foods, and Knott's Berry Farm premium jams, jellies, preserves,
salad dressings, syrups and gift packs.
Hunt-Wesson's biggest business, Hunt's tomato products, had
a good year, helped by a strong foodservice performance and a
reduction in manufacturing costs. Strong volume increases were
achieved by both Healthy Choice and Hunt's spaghetti sauces.
Hunt's overall earnings were up substantially.
The Orville Redenbacher's popcorn business achieved a good
earnings increase. Volume growth slowed when a buy-one-get-one-
free promotion ended, but Reden*Budders Light made good gains. A
new popcorn plant in Indiana began production in fiscal 1995.
Swiss Miss and Snack Pack puddings had a good year with
strong volume and profit increases. The cocoa category and the
Swiss Miss cocoa business were hurt by an unusually warm winter.
Unit volumes and earnings declined, but Swiss Miss held its
market position. The La Choy and Rosarita/Gebhardt businesses
had increased earnings, helped by Rosarita's improved product mix
and the successful introduction of Rosarita No-Fat Refried Beans.
Healthy Choice soups had another excellent year with gains
in volumes, earnings and market position. Consumer response to
two new chowders, Chicken Corn Chowder and Clam Chowder, was
stronger than anticipated, and unit volumes were exceptional for
these new products.
Fiscal 1995 was a difficult year for the Wesson oils
business. Earnings declined, hurt by an erratic crude soybean
oil market driven by unexpectedly high foreign demand. Earnings
were down for the Peter Pan peanut butter business, but Peter
Pan's Smart Choice reduced-fat peanut butter gained good consumer
acceptance.
Hunt-Wesson's foodservice business had a good year, with
earnings well ahead of fiscal 1994's strong results. Two smaller
Hunt-Wesson businesses did exceptionally well: the international
business achieved an excellent increase, driven by the successful
introduction of Snack Pack puddings in Canada, and the topping
business grew strongly on volume increases and cost savings.
Golden Valley Microwave Foods is a leader in the development
of foods exclusively for preparation in microwave ovens.
Formerly part of ConAgra Diverified Products Companies, Golden
Valley became part of ConAgra Grocery Products Companies early in
fiscal 1996. The resulting closer association with the Orville
Redenbacher's business will allow us to take better advantage of
synergies between our two popcorn businesses.
Golden Valley's products include popcorn, french fries,
breakfast foods and sandwiches distributed through the vending
industry, mass merchandising outlets and grocery, drug and club
stores. The principal consumer brand is ACT II.
During fiscal 1995, Golden Valley earnings decreased
substantially. Unit volumes decreased slightly for both the
microwave popcorn category and our ACT II popcorn business. The
Golden Valley business is on track for better performance in
fiscal 1996.
Our frozen foods company, ConAgra Frozen Foods, is one of
the largest frozen food businesses in the United States. Sales
exceed $1 billion.
ConAgra Frozen Foods had another remarkable year, with
earnings up dramatically to a record level. Unit volumes were up
significantly.
The year was highlighted by another exceptional performance
by Healthy Choice, with substantial double-digit growth in unit
volumes and earnings. Consumers responded favorably to a
relaunched, better-tasting entree line with more convenient
packaging, and to product improvements and new flavors in the ice
cream line. Effective advertising, incorporating the "Eat What
You Like" theme, and strong promotions for all Healthy Choice
products contributed to the excellent performance by Healthy
Choice frozen products.
Fiscal 1995 was a good year for the Banquet product line,
with earnings well above the previous year. New Banquet Skinless
Fried Chicken was a hit with consumers, as were product
improvements in Pot Pies, Family Entrees and Boneless Chicken.
Earnings also increased for ConAgra Frozen Foods' specialty
brands group, which includes Kid Cuisine, Patio, Chun King and La
Choy frozen products.
New products introduced by ConAgra Frozen Foods include
Banquet Skinless Fried Chicken in Original and Honey Barbecue
flavors, Banquet Pasta Favorites, Healthy Choice "Special
Creations," indulgent flavors of low-fat ice cream in pints, and
three new Healthy Choice ethnic meals.
In the second quarter of fiscal 1995, ConAgra acquired MC
Retail Foods, and the Marie Callender's line of premium-quality
frozen foods became part of ConAgra Frozen Foods. Products
include a wide variety of frozen prepared meals, pot pies and
fruit cobblers. The Marie Callender's business made a good
earnings contribution in fiscal 1995 and is growing strongly.
Major organizational initiatives begun in fiscal 1995
position ConAgra Grocery Products Companies well for future
growth and continued industry leadership. A sales force
reorganization in progress as the year ended will eventually
double the company-employed direct sales force and enable ConAgra
Grocery Products to serve their retail customers much more
effectively. A new customer service center in Omaha, Nebraska,
is increasing efficiency by combining the "back room" support
services of the Hunt-Wesson companies and ConAgra Frozen Foods.
And, finally, ConAgra Grocery Products is making a substantial
investment in state-of-the-art information systems to support
their businesses.
We expect fiscal 1996 to be another good year for ConAgra
Grocery Products Companies. Innovative consumer products and
significant new investments in technology and improved data
systems will fuel continued success for these companies.
PRODUCT PHOTOS IN THIS SEGMENT: Reden*Budders White Cheddar,
Hunt's Snack Pack, Hunt's Ketchup, Healthy Choice Clam Chowder,
Act II Microwave Popcorn, Healthy Choice Ice Cream, Healthy
Choice Dinner, Banquet Skinless Fried Chicken, Marie Callender's
Pot Pie.
PHOTOS AND CUTLINES IN THIS SEGMENT:
Man in Grocery Store: ConAgra Grocery Products Companies is
dramatically increasing its in-store sales force to serve retail
customers more effectively and increase sales. Region sales
manager Ralph Bishop checks a product display in a Bellevue,
Washington grocery store.
Man in Laboratory: Golden Valley packaging technician Kevin
McFadden, at the Golden Valley research and development lab in
Eden Prairie, Minnesota, checks ACT II products for consistent
quality.
Man & Woman at Wesson plant: The Wesson refinery in Memphis,
Tennessee, has been recognized as a model of employer-employee
partnership by the Tennessee Department of Labor. Every employee
is part of a self-directed work team involved in managing the
business. In the photo, chief union steward Garland Payne talks
with team member Bettie Hobock.
DIVERSIFIED PRODUCTS
(PHOTO OF JIM WATKINS)
Cutline: Jim Watkins
President & Chief Operating Officer
ConAgra Diversified Products Companies
Strategic Focus
"A major strategic theme ties together our Diversified Products
businesses -- an international focus. Our people are skilled at
exporting products, building new business operations offshore and
growing with strong international customers. We plan to leverage
our international strengths and enter new markets in partnership
with customers."
- Jim Watkins
DIVERSIFIED PRODUCTS
ConAgra Diversified Products Companies include Lamb-Weston,
Arrow Industries, our seafood businesses, a pet products business
and a frozen microwave food business in the United Kingdom.
Lamb-Weston, Inc. is a leading processor of frozen potato
products, primarily french fries for foodservice markets. Lamb-
Weston supplies most of the leading restaurant chains and
foodservice distributors in the U.S. as well as in Europe and
Asia.
Early in fiscal 1995, ConAgra purchased from Universal Foods
Corporation a frozen potato products business with annual sales
of about $270 million. The business added needed production
capacity to help Lamb-Weston better serve customers. Lamb-Weston
is now a $1 billion sales business, including unconsolidated
joint ventures.
Lamb-Weston had an exceptional year, with earnings far above
plan and the previous year. Export demand was boosted by a
potato crop failure in Europe. An excellent U.S. potato crop
enabled Lamb-Weston to supply U.S. and international customers
with high-quality U.S. potato products. Volumes increased
dramatically as a result.
A European joint venture, formed early in the year by Lamb-
Weston to produce and distribute potato products throughout
Europe and the Middle East, made good progress. Responding to a
need identified by foodservice operators, Lamb-Weston
successfully introduced during the year a french fry with a
transparent coating that significantly enhances crispness and
holding quality.
For the second consecutive year, Lamb-Weston invested
millions of dollars in state-of-the-art wastewater treatment
technology at its potato processing plants. The Richland,
Washington plant became the first U.S. potato plant to install
the energy-efficient "carousel oxidation ditch" system that
returns the plant's potato processing wastewater to almost
drinking-water quality. Beginning in fiscal 1996, the water will
be returned to the Yakima River, benefiting the fish population
and the river flow. Lamb-Weston's technology is setting new
industry standards for wastewater treatment.
Arrow Industries, Inc. is a leading manufacturer and
national distributor of private label consumer products for the
grocery trade, principally supermarket retailers and wholesalers.
Products include dried beans, rice, popcorn, pepper and spices,
aluminum foil, plastic bags and wraps, flexible packaging, paper
plates and bags, vegetable oil, charcoal and lighter fluid.
Annual sales exceed $250 million.
A major increase in the price of resin, a vital raw material
for plastic products, made fiscal 1995 a challenging year for
Arrow. Earnings were well below plan and the previous year.
During the year, ConAgra company Klein-Berger's packaged
bean business was successfully combined with Arrow's bean
business, an investment that should pay off in fiscal 1996 and
subsequent years.
A charcoal joint venture in France was formed early in the
year, and initial results were promising. Arrow continued to
work with sister ConAgra companies to take advantage of packaging
and marketing synergies; for example, Arrow manufactured bags for
ConAgra Flour Milling Company during the year.
ConAgra's seafood businesses market a wide variety of
seafood products. They include ConAgra Shrimp Companies,
O'Donnell-Usen U.S.A., Usen Fisheries --- a Canadian joint
venture --- and the Gelazur seafood distribution business in
France. Early in fiscal 1996, ConAgra reduced its share in
Trident Seafood Corporation from 50 percent to 10 percent. Total
seafood sales, excluding the unconsolidated jointly owned
businesses Usen, Trident and Gelazur, are about $190 million.
Our seafood businesses had a good year in spite of a
volatile shrimp market and supply shortages of some varieties of
seafood. Overall earnings were up significantly.
Trident's earnings were well above plan and the previous
year. O'Donnell-Usen and Usen Fisheries' results were hurt by
resource shortages, but O'Donnell-Usen's improved results more
than offset Usen Fisheries' decline in earnings. O'Donnell-Usen
continued the transition of its branded products to a private
label seafood line, and results were promising. Gelazur also
improved results.
High shrimp prices hurt demand for shrimp products, but
ConAgra Shrimp Companies made good progress with their branded
Singleton business and several innovative new value-added
foodservice offerings. Earnings were slightly below the previous
year.
Earnings declined for our frozen food business in the U.K.
because of a capital investment in a new facility in Manchester,
England. The investment, however, gives us state-of-the-art
microwave technology in Europe and a European base for the
introduction of convenient new products.
Unit volumes in our pet products business were stable, but
earnings declined. The company made good progress by targeting
sales of their strongest products rather than full-line sales.
ConAgra Diversified Products Companies as a group increased
earnings substantially in fiscal 1995, led by Lamb-Weston's
strong performance. Fiscal 1996 should be a good year, but
earnings are likely to decline versus fiscal 1995 earnings
boosted by Europe's potato shortfall. These companies continue
to focus on international opportunities. During fiscal 1995, our
Diversified Products Companies achieved good volume growth in
Mexico, Canada, Europe and Russia.
PRODUCT PHOTOS CONTAINED IN THIS SEGMENT: Inland Valley Crinkle
Cut Fries, Arrow hardwood charcoal briquets, Singleton Breaded
Butterfly Shrimp, Aurelmar seafood product.
PHOTOS AND CUTLINES IN THIS SEGMENT:
French fry plant: Lamb-Weston's Hermiston, Oregon potato
processing plant produces one million pounds of potato products a
day.
REFRIGERATED FOODS
Refrigerated Foods' relatively modest 4.5-percent operating
profit increase masks excellent results in many segment
businesses including pork, beef, cheese and turkey. Operating
profit increased 20 percent excluding chicken products, a
business moved to the Refrigerated Foods Companies in fiscal
1995's second half. Segment sales decreased 2 percent primarily
because lower raw materials costs were passed through as lower
selling prices in meat products.
REFRIGERATED FOODS
2 Pie Charts:
1) Sales 56.0%
2) Operating Profit 32.2%
Copy:
Segment Sales (in millions)
1995 $13,509.5
1994 13,836.2
% Change - 2.4%
Segment Operating Profit (in millions)
1995 $ 416.4
1994 398.6
% Change + 4.5%
REFRIGERATED FOODS
(PHOTO OF LEE LOCHMANN)
Cutline: Lee Lochmann
President & Chief Operating Officer
ConAgra Refrigerated Foods Companies
Strategic Focus
"We have a huge opportunity to leverage our resources in
refrigerated foods. We are targeting the processes that make
significant differences in our businesses' results -- customer
service, transportation, support services and product
development. We also are increasing our focus on foodservice,
exports and byproducts. As we add value to our infrastructure,
we continue to add value to our products. Improved margins are
the payoff."
- Lee Lochmann
REFRIGERATED FOODS
ConAgra Refrigerated Foods Companies include our companies
that produce and market branded processed meats, deli meats, beef
and pork products, chicken and turkey products, lamb products and
cheese products. These companies share common distribution
characteristics and many synergistic opportunities among the
businesses and in the marketplace. We created "Refrigerated
Foods" in fiscal 1995, bringing together our red meat, processed
meat, poultry and cheese businesses to exploit these
opportunities.
Our processed meat brands include Armour, Swift Premium,
Eckrich, Butterball, Healthy Choice, Longmont, Cook's, Hebrew
National, Brown 'N Serve, Golden Star, Decker, Webber's, Falls
Poultry and National Deli. Products include hot dogs, bacon,
hams, sausages, cold cuts, turkey products and kosher products.
Processed meat sales, excluding turkey-based products are about
$1.7 billion annually.
New products introduced in fiscal 1995 include a 19-item
line of Butterball fat-free turkey-based processed meats
including lunch meats, smoked sausage and franks (the industry's
first complete line of fat-free turkey-based processed meats),
Healthy Choice Deli Thin Sliced Corned Beef and Deli Thin Sliced
Peppered Turkey Breast, Healthy Choice Deli Style Franks, Healthy
Choice Smoked Sausage, Healthy Choice Polska Kielbasa, Healthy
Choice Breakfast Sausage and Armour Premium Pork Loin and Pork
Roast products.
Overall processed meat earnings were below fiscal 1994's
strong level, mainly due to depressed results in one business.
Manufacturing problems at the kosher products business caused a
severe drop in earnings, but most of the issues are now behind
us.
Healthy Choice packaged and deli meats had another
extraordinary year, with double-digit growth in unit volumes.
Healthy Choice Franks reached the number three spot in hot dog
sales (dollars). Healthy Choice also helped the deli products
business achieve a substantial earnings gain. Fiscal 1996 should
be a successful year for the processed meat companies. We expect
an earnings increase.
ConAgra's fresh meat businesses produce and market beef,
pork and lamb products for customers in domestic and
international markets.
Annual sales of ConAgra's U.S.-based fresh meat companies
exceed $7 billion. In fiscal 1995, these companies processed
about 5.9 million head of cattle and over 9.5 million hogs.
Annually, these companies produce more than four billion pounds
of beef products and about 1.9 billion pounds of pork products.
We also have cattle feeding operations that supply less than 15
percent of the needs for our U.S. beef plants.
In addition to the U.S.-based meat businesses, ConAgra owns
approximately 91 percent of Australia Meat Holdings Pty Ltd.
(AMH), a major Australian beef processor and exporter
headquartered in Brisbane. AMH's annual production is about 900
million pounds of beef products; annual sales exceed $1 billion.
Our beef businesses had a good year, with earnings
substantially better than in fiscal 1994. Good livestock
availability was a plus, but our beef businesses also made good
progress in plant efficiencies and customer responsiveness.
Cattle feeding earnings, which generally run counter to
processing results, were down in the first half of the year, but
improved in the second half.
AMH's profit contribution declined in fiscal 1995, largely
due to more expensive cattle as a result of drought in Australia.
AMH also absorbed expenses related to labor issues not yet
resolved. The fiscal 1996 outlook is good, but tempered somewhat
by labor issues and the natural hedge that occurs when U.S. beef
is more competitively priced than Australian beef.
The fresh pork business had an excellent year, primarily due
to raw material availability, improved marketing and a strong
management focus on value-based procurement and production
efficiencies. The pork business expanded distribution of its
line of case-ready Armour Premium branded pork products, growth
that will continue in fiscal 1996.
We are investing substantial capital in our fresh meat
businesses to be more efficient in our plants and more effective
in the marketplace. In fiscal 1996 we plan continued earnings
growth in beef and good results in pork, though below fiscal 1995
due to tighter raw material supplies.
Beatrice Cheese Company is a producer and marketer of cheese
products and dessert toppings. Annual sales exceed $900 million.
Branded products include Healthy Choice fat-free cheese, Treasure
Cave blue cheese, County Line natural cheeses, Pauly cheeses for
foodservice markets and Reddi-Wip dessert toppings.
Fiscal 1995 was an excellent year for Beatrice Cheese, with
dramatically improved earnings and sharper focus on the strengths
of the business. A noncompetitive plant was closed, a strategic
acquisition was accomplished, and product mix was improved as
Beatrice Cheese emphasized processed and value-added cheese
products. Beatrice Cheese acquired Dorman Roth Foods, Inc., a
producer of cheese products, principally processed cheese
products for foodservice markets.
Cheese consumption in fiscal 1995 was up slightly, but the
fat-free segment of the market showed robust growth. Healthy
Choice fat-free cheese products were strong performers in the
marketplace during fiscal 1995, and Beatrice Cheese overall
volumes were up significantly. We expect that Beatrice Cheese
earnings will increase again in fiscal 1996.
Our chicken and turkey businesses are leading producers and
marketers of chicken and turkey products for retail and
foodservice markets. Principal chicken brands are Butterball,
Country Pride, Country Skillet, To-Ricos, Water Valley Foods and
Blue Coach. Principal turkey brands are Butterball and Longmont.
Our chicken products company had fiscal 1995 sales of more
than $1.5 billion. Our turkey products company had sales of more
than $600 million. Our broiler chicken production volume for the
year was about 1.6 billion dressed pounds. More than 600 million
pounds of turkey products were sold.
During fiscal 1995, demand for poultry products continued
strong, driven by generally good export markets (with Mexico as
the obvious exception) and increasing fast-food demand linked to
new product introductions.
Fiscal 1995 was a dismal year for our chicken products
business. ConAgra Poultry Company suffered from sluggish sales,
organizational issues and some production inefficiencies. The
major issues have been identified and are being resolved, and the
business is being restructured. We intend to improve performance
in fiscal 1996.
Bright spots in fiscal 1995 included expanded distribution
of the premium Butterball Chicken line of boneless and bone-in
products, improved earnings in our Puerto Rico chicken business,
and a strengthened management team for ConAgra Poultry.
Butterball Turkey Company, which includes the Butterball and
Longmont businesses, improved earnings substantially in fiscal
1995. Butterball improved market positions for some of their
best-selling turkey products, whole turkeys and cold cuts.
Efficiencies in the Butterball business also contributed to the
improved results. New Butterball turkey products introduced in
fiscal 1995 include a fully cooked half breast of turkey, a
complete holiday dinner and a line of fat-free fresh turkey
products.
Longmont increased volumes, but because this business
exports a significant portion of their products to Mexico,
earnings were hurt some by the devaluation of the peso. We
expect that our turkey businesses will increase earnings in
fiscal 1996, even if the economy in Mexico does not improve.
Country Skillet Catfish Company, ConAgra's joint venture
catfish products company, increased its earnings to a record
level, due to plant improvements and better balance of fish
supply and demand.
To improve focus on our core businesses, two of our
refrigerated foods businesses were sold during fiscal 1995:
Berliner & Marx produces and markets Plume de Veau veal products,
and ConAgra Consumer Direct included the Pfaelzer Brothers and
Ace catalog businesses. Early in fiscal 1996, the Alum Rock
Foodservice business, which distributes cheese products on the
West Coast, was sold.
Our refrigerated foods businesses have in progress promising
initiatives to take advantage of their total resources to tap the
synergies among the businesses. Infrastructure enhancements in
customer service, transportation, business processes, technology,
product development and support services are being aggressively
pursued. These enhancements, along with an increased focus on
foodservice, export markets and byproducts, are geared to
contribute meaningfully to earnings in future years. The
Refrigerated Foods Companies also are strategically focused on
adding value to their products, thereby improving their margins.
We expect these overall strategies and the initiatives of
the individual operating companies to result in earnings growth
for ConAgra Refrigerated Foods in fiscal 1996.
PRODUCT PHOTOS CONTAINED THROUGHOUT THIS SEGMENT INCLUDE:
Eckrich Lunch Makers, Healthy Choice Deli Thin Sliced Honey Ham,
Armour Boneless Pork Roast, Healthy Choice Fat Free Cheese,
Country Pride Chicken Breasts, Butterball cold cuts and Hebrew
National Beef Franks.
PHOTOS AND CUTLINES CONTAINED IN THIS SEGMENT INCLUDE:
Woman at Butterball plant: Packaging manager Trudy Bennett,
at the ConAgra Poultry processing plant in Farmerville,
Louisiana, makes sure Butterball products look good to consumers.
Two photos at ham plant: Self-managing teams of workers are
responsible and accountable for results at Armour Swift-Eckrich's
new Jonesboro, Arkansas meat processing plant. In the large
photo, line worker Dorothy Brodie and group coordinator Jerry
McCormick are producing Healthy Choice deli turkey.
Participating in an employee work team meeting, left to right,
are Gregory Young, Joanne Iwan, Joe Griffin, Jason Sitz and
Jennifer Pittman.
Man at computer: Monfort's computerized order fulfillment
system, the state of the art in customer service and
responsiveness, is an example of Refrigerated Foods' increasing
focus on improving their business processes. Monfort's Deon
Rojas works with the system at the Greeley, Colorado plant.
FOOD INPUTS & INGREDIENTS
Many businesses contributed to Food Inputs & Ingredients'
14.5 percent operating profit growth. They include the major
inputs business -- United Agri Products -- as well as specialty
grain products, feed ingredient merchandising, Caribbean
processing operations and the international fertilizer business.
The segment's 8-percent sales gain was sparked by volume growth
in United Agri Products and international fertilizer.
FOOD INPUTS & INGREDIENTS
2 Pie Charts:
1) Sales 24.1%
2) Operating Profit 19.1%
Copy:
Segment Sales (in millions)
1995 $5,799.8
1994 5,380.5
% Change + 7.8%
Segment Operating Profit (in millions)
1995 $ 246.7
1994 215.5
% Change + 14.5%
INPUTS
(PHOTO OF FLOYD MCKINNERNEY)
Cutline: Floyd McKinnerney
President & Chief Operating Officer
ConAgra Agri-Products Companies
Strategic Focus
"We are building on two principal strengths: distribution and
technology. We are expanding and leveraging our crop input
distribution systems by entering new U.S. and international
markets and by adding to our product mix. We are exploiting our
strong technology base to help our distribution businesses grow
and to develop promising new businesses and products for
agricultural and industrial markets."
- Floyd McKinnerney
INPUTS
CROP PROTECTION CHEMICALS AND FERTILIZER PRODUCTS
ConAgra Agri-Products Companies' major businesses provide
inputs -- crop protection chemicals, fertilizers and seeds --
that farmers need to grow their crops. ConAgra Agri-Products
Companies also include our specialty retailing businesses and our
participation in a number of developmental businesses.
United Agri Products (UAP) is the leading distributor of
crop protection chemicals to North American markets and a major
marketer of fertilizers. UAP serves customers in most major
agricultural areas of the U.S. and Canada. UAP distributes a
broad line of pesticides and fertilizers manufactured by major
chemical and fertilizer companies, formulates and distributes its
own products under the Clean Crop label, operates Cropmate retail
outlets in the Midwest and Louisiana, and markets animal health
care products. Annual sales are about $2.3 billion.
During fiscal 1995, UAP continued to grow its crop input
business across the U.S. and Canada, expanded on both coasts of
Mexico and in the U.K., and formed a joint venture in Chile that
will serve as a base for growth in South America. UAP also
achieved good growth in its seed distribution and horticultural
supply businesses, but divested a substantial portion of its
animal health business. The animal health business was
unprofitable in fiscal 1995.
The international fertilizer business became part of
ConAgra's Trading & Processing Companies at the beginning of
fiscal 1995. Blue Ribbon Energy, a small business that traded
propane and other energy-related products, ceased operations
during the year.
UAP continued to focus on providing environmental education
services to dealers and their customers to promote safe and
responsible use of agricultural chemicals. UAP also continued
its national leadership efforts to increase chemical container
recycling.
Fiscal 1995 was a good year for the crop inputs sector.
Growing conditions were favorable in most U.S. regions,
illustrated by good increases in corn and cotton acres planted,
up eight and four percent respectively.
UAP benefited along with U.S. farmers. With significant
growth in pesticide and fertilizer sales and earnings, UAP
achieved its twelfth consecutive year of record sales and
earnings.
The fiscal 1996 outlook for the crop protection chemical and
fertilizer businesses is guardedly optimistic. A cool, wet, late
spring in 1995 delayed early spring sales in the midwestern U.S.,
but UAP expected to recoup some of the lost volume later in the
season. Conditions outside the Midwest were better, and UAP's
geographic balance should help this company achieve another year
of increased earnings.
JOINT VENTURES
ConAgra Agri-Products Companies' joint ventures with DuPont
draw on renewable resource technology to develop innovative and
environmentally friendly products and solutions for agricultural
and industrial markets.
The largest joint ventures with DuPont, NutriBasics Company
and DuCoa, manufacture and market nutrient additives for animal
feeds. DuCoa also sells products to food and nutraceutical
markets. Earnings for NutriBasics and DuCoa increased in fiscal
1995.
ConAgra and DuPont also have a number of smaller joint
venture developmental companies with good growth potential for
the future. Enpac, for example, manufactures and markets packing
materials, including the leading biodegradable packing product on
the market. Biologics is developing natural antibody products
for use in the animal feed industry. Biotechnical Resources is a
research company and a specialist in fermentation that develops
new products involving biotechnology.
Some joint ventures already are operating profitably.
Overall results improved in fiscal 1995, and we expect strong
demand for several innovative new products in development by
these companies.
SPECIALTY RETAILING
ConAgra's specialty retailing businesses include 123 Country
General stores (operating under the names Country General,
Wheelers, S & S, Sandvig's, Peavey Ranch and Home, and
Anfinson's) and 93 fabric and craft stores (operating as
Northwest Fabrics & Crafts and Rainbow Bay Crafts).
Country General Stores carry merchandise targeted for
country living, including clothing, boots and other footwear,
housewares, lawn and garden supplies, farm and ranch supplies,
hardware, animal care products and sporting goods. Seven new
stores were opened during fiscal 1995; no stores were closed.
Country General's sales were up moderately in fiscal 1995,
but operating profit declined substantially. A generally tough
retail environment was further stressed by the unusually cool,
wet spring in the midwestern U.S., the location of more than half
of Country General's stores. Sales were down in a number of
major categories (lawn and garden, agricultural supplies, etc.)
as a result. Sales and earnings are expected to return to
traditional levels in fiscal 1996.
Northwest Fabrics & Crafts stores are complete fabric and
craft stores, and Rainbow Bay Crafts sell a full line of craft
items. No new fabric and craft stores opened during the year,
and four under-performing stores were closed.
Fiscal 1995 operating profit for the fabric and craft stores
was dramatically better than fiscal 1994's disappointing results.
Sales were about even year-to-year. The year's improvement in
operating profit was driven by better inventory and expense
control, more effective advertising and across-the-board
operating efficiencies. In fiscal 1996, several stores will be
closed, and we expect continued earnings improvement.
For much of fiscal 1995, our specialty retailing businesses
were for sale. Late in the year, however, after determining that
we could not reach an agreement in the best interest of ConAgra
stockholders, the businesses were taken off the market
indefinitely. Dyno Merchandise, Inc., a marketer of home sewing
accessories, was sold during the year.
FOOD INGREDIENTS
(PHOTO OF TOM MANUEL)
Cutline: Tom Manuel
President & Chief Operating Officer
ConAgra Trading and Processing Companies
Strategic Focus
"We're well down the road on our strategy of expanding beyond
traditional commodity trading and processing to provide value-
added food products and ingredients to our customers. We will
continue to make strategic investments in our basic commodity
businesses, to streamline our businesses and to strengthen our
management teams. And we will continue to aggressively develop
value-added products and seek acquisitions that support our
value-added growth strategy."
- Tom Manuel
FOOD INGREDIENTS
GRAIN PROCESSING
The businesses in this segment are involved primarily in the
processing, distribution or trading of ingredients for food
products and meat and poultry production.
ConAgra's grain processing businesses include flour milling
in the U.S., Canada and Puerto Rico; oat milling in the U.S.,
Canada and the United Kingdom; dry corn milling in the U.S. and
Germany; tortilla manufacturing in the U.S.; barley malting in
Australia, China, Denmark and the U.K.; specialty food ingredient
manufacturing and marketing in the U.S.; feed ingredient
merchandising in the U.S., Canada and Mexico; and animal feed
production and marketing in the U.S., Puerto Rico, Spain and
Portugal.
ConAgra Flour Milling is a leader in the U.S. flour milling
industry with 27 mills in 14 states and seven jointly owned
mills, three in the U.S. and four in Canada. Annual flour
volume, including the jointly owned mills, is about nine billion
pounds. Daily milling capacity is about 34 million pounds.
Fiscal 1995 was another challenging year for the flour
milling industry, with overcapacity for durum and soft wheat
milling, poor-quality wheat and new competitors in the industry.
ConAgra Flour Milling's results were hurt primarily by the
overcapacity in durum wheat milling, a weak market for durum
semolina and a poor performance in Canada. Earnings were below
plan and fiscal 1994. During fiscal 1995, ConAgra Flour Milling
completed a major expansion at a Pennsylvania mill and
restructured its operation. The business is now organized
regionally to enhance customer service and responsiveness. We
expect stronger earnings in fiscal 1996.
ConAgra Specialty Grain Products Company includes the oat
milling, dry corn milling and barley malting businesses, and Casa
de Oro Foods, a manufacturer of wheat flour tortillas for retail
and foodservice customers. During fiscal 1995, ConAgra Specialty
Grain expanded the tortilla business and added further-processing
capacity in its major U.S. oat mill. ConAgra Specialty Grain's
joint venture in China purchased a malting plant in China, signed
long-term contracts with brewers and plans further expansion.
ConAgra Specialty Grain had a good year in fiscal 1995, with
earnings substantially above plan and the previous year. The
good results were led by the tortilla, oat products and dry corn
products businesses. The malting business operated well above
plan, but below the previous year's strong results.
We expect lower earnings in fiscal 1996 for the Specialty
Grain businesses, mainly because the malting business will be
adversely affected by a severe drought and the resulting barley
shortage in Australia. During fiscal 1996, ConAgra Specialty
Grain will begin operating its joint venture barley malting plant
now being constructed in Denmark. The joint venture partner,
Carlsberg, will buy a portion of the plant's output for use in
their brewing activities in Denmark.
Our feed ingredient merchandising business had an
outstanding year, with good volume and earnings growth, aided by
volatile markets. Earnings increased in our processing
businesses in Spain and Portugal, helped by a good performance in
the feed businesses.
In fiscal 1995, our grain processing business in Puerto Rico
was restructured, and progress was made in a labor dispute. We
plan to invest significant capital in fiscal 1996 to further
improve our milling operations in Puerto Rico.
United Specialty Food Ingredients Companies manufacture and
market a broad line of natural spices, blending seasonings,
natural flavors, spray-dried food ingredients, meat-flavored
sauces, gravies and soup bases, food oils, lard and processed
eggs. Fiscal 1995 was the first full year that Cal-Compack, a
food ingredient business formerly part of Hunt-Wesson, was part
of United Specialty Food Ingredients. Excluding Cal-Compack,
United Specialty Food Ingredients' earnings were at a record
level, led by good results in the specialty distribution and
spice businesses. Due to Cal-Compack's poor results, however,
earnings declined for United Specialty Food Ingredients.
Total grain processing earnings increased in fiscal 1995.
We expect another increase in fiscal 1996.
DISTRIBUTION AND TRADING
ConAgra's distribution and trading businesses, which
primarily move food and feed ingredients from areas of surplus to
areas of need, include offices in 14 nations and extensive
merchandising facilities and transportation assets in the United
States.
Major businesses and their primary products are Peavey Grain
Company (grain) and Klein-Berger Company (pulses -- dry edible
beans, peas and lentils). The International Group's businesses
include international fertilizer trading, the Australian wool
business, a soybean crushing business in Argentina and European
commodity trading.
We are streamlining the distribution and trading businesses
to concentrate on core businesses with promising growth
prospects. During fiscal 1995, we sold Geldermann, Inc., a
financial services business, and a wood trading business, and
exited the dried fruit and nut trading business. Early in fiscal
1996, we sold Petrosul International Ltd., a Canadian sulfur
business.
ConAgra's distribution and trading companies in total
increased earnings significantly in fiscal 1995. Decreases in
grain merchandising and the pulse business were more than offset
by gains in the International Group.
The largest business, Peavey Grain Company, operated below
plan and the previous year. Grain trading results were
unsatisfactory, hurt in part by a slow export market in the first
half of fiscal 1995. The poor grain trading results were
somewhat offset by good results in Peavey's barge business,
thanks to strong demand and fewer industry barges. Peavey
management has been strengthened, the business has been
restructured, and we expect better results in fiscal 1996.
Klein-Berger's earnings decreased, hurt by an oversupply of
U.S. edible beans and, late in the year, by wet weather in
Michigan where the company has a farm supply business.
The International Group had an outstanding year, despite
losses associated with closing the dried fruit and nut trading
business. The strongest results were turned in by the
international fertilizer trading business, which benefited from
increases in planted acres in the Western Hemisphere and very
strong Asian demand. Earnings increased for the sulfur business,
the Australian wool business and the soybean crushing business.
We expect another earnings increase for our distribution and
trading businesses in fiscal 1996. And we are optimistic about
the long-term prospects for these businesses as global demand
surges and trade barriers come down.
PRODUCT PHOTOS CONTAINED THROUGHOUT THIS SEGMENT INCLUDE:
dyna-gro Cottonseed, April 1995 CPM Magazine cover, Country
General logo, Northwest Fabrics & Crafts logo, ConAgra Buccaneer
Bakers Flour, Amapola Corn Meal and Jack Rabbit medium grain
rice.
PHOTOS AND CUTLINES CONTAINED IN THIS SEGMENT INCLUDE:
Satellite disk and barn: United Agri Products' "AgraLink"
program links UAP, growers and dealers by phone, satellite and
direct mail. AgraLink offers growers services from agronomic
consulting to financial management -- and provides UAP and
dealers with vital customer information. UAP's CPM magazine,
which focuses on the safe, effective use of crop protection
chemicals, is the nation's first satellite-delivered ag magazine.
Farmer in corn field: UAP California's Chuck Repking checks
the corn crop in Imperial Valley, California, for insect damage.
Lady at tortilla plant: Packaging line employee Lan Nguyen,
in Casa de Oro Foods' pilot plant in Omaha, Nebraska, makes sure
tortillas meet customer specifications.
Two photos of the Kalama elevator: On a typical day, 1.4
million bushels of corn are exported from ConAgra Grain's export
elevator at Kalama, Washington. In the larger photo, a ship is
being loaded with corn at the Kalama elevator.
CORPORATE CITIZENSHIP
ConAgra is strongly committed to good corporate citizenship
in the communities where our employees work and live. We aim to
have a lasting, positive impact on the quality of life in these
communities and, as our focus on sustainable development
illustrates, on the broader "global" community we all share.
1995 CONAGRA FOUNDATION COMMUNITY SERVICE AWARDS
ConAgra independent operating companies nominate
organizations for these awards, which this year ranged from
$10,000 to $25,000. Winners are selected for their outstanding
achievements and leadership in their communities. In 1995, 16
organizations in 12 ConAgra communities shared $250,000 as
winners of annual ConAgra Foundation Community Service Awards.
We feature three of the winners on this page.
Photo cutlines:
The ConAgra Foundation Community Service Award given to A
Woman's Place in Greeley, Colorado, is being used to provide
parenting assistance for mothers who are the victims of
domestic violence. ConAgran Paul Gentle, cash finance
manager for United Agri Products Companies in Greeley, is
treasurer of the board of directors for A Woman's Place.
Vietnamese Social Services of Minnesota is using the award
money to help fund programs for the Vietnamese Community in
Minnesota. ConAgran Joel Krueger, employee relations
supervisor at Golden Valley Microwave Foods in Edina,
Minnesota, helps place Vietnamese refugees in jobs at Golden
Valley. He also works with them on job application and
interview skills.
The award to the Anaheim Family YMCA in Anaheim, California,
is providing child care subsidies for low-income families
and partially funding a therapeutic aquatics program for
low-income seniors. ConAgran Kay Carpenter, manager of
corporate communications at Hunt-Wesson, serves on the board
of the Anaheim Family YMCA and is one of the many Hunt-
Wesson volunteers for this organization.
SUSTAINABLE DEVELOPMENT
ConAgra is committed to an environmental policy known as
sustainable development. Sustainable development is defined as
"development that meets the needs of today without compromising
the ability of future generations to meet their own needs." We
illustrate here two examples of ConAgra's sustainable development
commitment, one a charitable program and one an initiative of a
ConAgra independent operating company.
Photo cutlines:
A $262,500 ConAgra Foundation grant to The Nature
Conservancy is funding a five-year demonstration project
designed to show how crop production, wildlife habitat and
clean water can coexist. The project site is a 174-acre
farm along the Platte River in central Nebraska, an area
that is a major roost site for sandhill cranes. The
Nebraska Environmental Trust is a co-funder of the project,
which is a joint effort of the Conservancy and the
University of Nebraska.
ConAgra company Lamb-Weston is setting industry standards
for wastewater treatment. Lamb-Weston's Richland,
Washington plant turns potato processing wastewater into
clean water for crop irrigation. A new system at the plant
will allow water to be cleaned then returned to the Yakima
River, benefiting the fish population and the river flow.
Bryan Taylor, Lamb-Weston product manager, is shown in the
photo.
SALES & OPERATING PROFIT BY SEGMENT
Dollars in millions
-------------------------------------------------------------------------------
Fiscal Year 1995 1994 1993 1992 1991
-------------------------------------------------------------------------------
GROCERY/DIVERSIFIED PRODUCTS
Sales $ 4,799.6 $ 4,295.4 $ 4,103.6 $ 4,140.0 $ 3,732.4
Percent of
total 19.9% 18.3% 19.1% 19.5% 18.5%
Operating profit 629.9 526.4 477.5 412.5 440.5
Percent of
total 48.7% 46.1% 45.4% 39.3% 44.7%
-------------------------------------------------------------------------------
REFRIGERATED FOODS
Sales $13,509.5 $13,836.2 $12,408.6 $12,098.1 $12,055.7
Percent of
total 56.0% 58.8% 57.6% 57.0% 59.7%
Operating profit 416.4 398.6 354.1 402.8 343.0
Percent of
total 32.2% 35.0% 33.7% 38.3% 34.8%
-------------------------------------------------------------------------------
FOOD INPUTS & INGREDIENTS
Sales $ 5,799.8 $ 5,380.6 $ 5,006.9 $ 4,980.9 $ 4,389.3
Percent of
total 24.1% 22.9% 23.3% 23.5% 21.8%
Operating profit 246.7 215.5 219.4 235.1 202.5
Percent of
total 19.1% 18.9% 20.9% 22.4% 20.5%
-------------------------------------------------------------------------------
TOTAL
Sales $24,108.9 $23,512.2 $21,519.1 $21,219.0 $20,177.4
Operating profit* 1,293.0 1,140.5 1,051.0 1,050.4 986.0
Interest expense 258.1 239.6 246.4 302.0 290.2
General corporate
expense** 137.6 107.5 101.5 89.3 83.1
Goodwill
amortization 71.4 73.4 71.7 71.4 56.0
________ _________ __________ ________ _________
Income before
income taxes $ 825.9 $ 720.0 $ 631.4 $ 587.7 $ 556.7
-------------------------------------------------------------------------------
New Segments in Fiscal 1995: Beginning with our reporting of fiscal 1995
results, we have revised our industry segments to portray better ConAgra's
business mix and balance. The "Grocery/Diversified Products" and "Refrigerated
Foods" segments were in past years combined as the "Prepared Foods" segment.
The new "Food Inputs & Ingredients" segment combines two past segments: "Agri-
Products" and "Trading & Processing."
* Operating profit is profit before interest expense (except financial
businesses), goodwill amortization, general corporate expense and income taxes.
** The increase in fiscal 1995 general corporate expense reflects the
distributions on a subsidiary's preferred securities issued in April and June
1994 and February 1995.
ELEVEN-YEAR RESULTS
Five-year results, shown first, include restatements in prior years.* Eleven-
year results are shown as actually reported in all years.
Dollars in millions except per share amounts
_______________________________________________________________________________
Fiscal Year 1995 1994 1993 1992 1991
______________________________________________________________________________
FOR THE YEAR (Restated)
Net sales $24,108.9 $23,512.2 $21,519.1 $21,219.0 $20,177.4
Income from
continuing
operations (1) 495.6 437.1 391.5 372.4 332.0
Earnings per
common and common
equivalent share -
continuing
operations (1) $2.06 $1.81 $1.58 $1.50 $1.42
Cash dividends
declared per
share of common
stock $.803 $.695 $.600 $.520 $.445
AT YEAR END (Restated)
Total assets $10,801.0 $10,721.8 $ 9,988.7 $ 9,758.7 $9,852.4
Senior long-term
debt (noncurrent) 1,770.0 1,440.8 1,393.2 1,694.4 1,886.8
Subordinated long-
term debt
(noncurrent) 750.0 766.0 766.0 430.0 430.0
Preferred securities of
subsidiary company 525.0 100.0 -- -- --
Redeemable
preferred stock 354.9 355.6 355.9 356.0 356.1
(1) 1993 amounts are before a one-time cumulative effect of change in
accounting for nonpension postretirement benefits.
ELEVEN-YEAR RESULTS
-------------------------------------------------------------------------------
Fiscal Year 1995 1994 1993 1992 1991
-------------------------------------------------------------------------------
FOR THE YEAR (As actually reported)
Net sales $24,108.9 $23,512.2 $21,519.1 $21,219.0 $19,504.7
Equity in earnings of
affiliates 3.4 5.2 25.4 17.5 23.6
Income from continuing
operations before
income taxes and
cumulative effect of
change in accounting
principle 825.9 720.0 631.4 587.7 515.2
After-tax income from
continuing operations and
before cumulative effect
of change in accounting
principle 495.6 437.1 391.5 372.4 311.2
Net income 495.6 437.1 270.3 372.4 311.2
Earnings per common and
common equivalent share
Continuing operations and
before cumulative effect
of change in accounting
principle $2.06 $1.81 $1.58 $1.50 $1.42
Net income $2.06 $1.81 $1.06 $1.50 $1.42
Cash dividends declared
per share of common stock $.803 $.695 $.600 $.520 $.445
Market price per share
of common stock
High $34.50 $29.38 $34.25 $36.25 $32.50
Low $28.25 $23.00 $22.75 $24.50 $19.67
Last $32.25 $28.50 $25.13 $25.88 $30.33
Weighted average number
of common and common
equivalent shares out-
standing (in millions) 229.0 228.5 233.0 231.9 205.3
Additions to property,
plant and equipment,
including acquisitions $557.2 $498.6 $392.7 $378.9 $1,159.9
Depreciation and
amortization 375.8 368.4 348.7 319.3 250.8
-------------------------------------------------------------------------------
Fiscal Year 1995 1994 1993 1992 1991
-------------------------------------------------------------------------------
AT YEAR END (As actually reported)
Total assets $10,801.0 $10,721.8 $ 9,988.7 $9,758.7 $9,420.3
Current assets 5,140.2 5,143.3 4,486.7 4,371.2 4,342.9
Current liabilities 3,964.9 4,752.8 4,272.6 4,081.3 4,087.4
Working capital 1,175.3 390.5 214.1 289.9 255.5
Property, plant and
equipment, net 2,796.0 2,586.3 2,388.2 2,276.8 1,941.5
Capital investment 6,836.1 5,969.0 5,716.1 5,677.4 5,332.9
Senior long-term debt
(noncurrent) 1,770.0 1,440.8 1,393.2 1,694.4 1,663.0
Subordinated long-term
debt (noncurrent) 750.0 766.0 766.0 430.0 430.0
Preferred securities of
subsidiary company 525.0 100.0 -- -- --
Redeemable preferred
stock 354.9 355.6 355.9 356.0 356.1
Common stockholders'
equity 2,495.4 2,226.9 2,054.5 2,232.3 1,817.4
Stockholders' equity
(all classes) 2,850.3 2,582.5 2,410.4 2,588.3 2,173.5
Common stockholders'
equity per share $11.03 $9.86 $9.02 $9.62 $8.67
ELEVEN-YEAR RESULTS (CONT.)
-------------------------------------------------------------------------------
Fiscal Year 1990 1989 1988 1987 1986 1985
-------------------------------------------------------------------------------
FOR THE YEAR (As actually reported)
Net sales $15,501.2 $11,340.4 $9,475.0 $ 9,001.6 $ 5,911.0 $ 5,498.2
Equity in earnings
of affiliates 18.1 -- 10.5 2.8 3.1 1.9
Income from continuing
operations before
income taxes and
cumulative effect of
change in accounting
principle 356.9 312.2 240.1 271.5 180.3 151.6
After-tax income from
continuing operations
and before cumulative
effect of change in
accounting principle 231.7 197.9 154.7 148.7 105.3 91.7
Net income 231.7 197.9 154.7 148.7 105.3 91.7
Earnings per common and
common equivalent share
Continuing operations and
before cumulative effect
of change in accounting
principle $1.25 $1.09 $.86 $.82 $.68 $.59
Net income $1.25 $1.09 $.86 $.82 $.68 $.59
Cash dividends declared
per share of common
stock $.385 $.331 $.288 $.249 $.215 $.187
Market price per share
of common stock
High $21.25 $15.89 $16.89 $15.11 $12.47 $7.64
Low $14.11 $12.00 $9.28 $11.03 $7.55 $5.04
Last $20.50 $15.22 $12.33 $11.89 $12.39 $7.55
Weighted average
number of common and
common equivalent
shares outstanding
(in millions) 184.8 180.8 178.2 179.0 152.7 151.9
Additions to property,
plant and equipment,
including
acquisitions $349.3 $241.1 $196.3 $178.3 $112.4 $97.5
Depreciation and
amortization 129.7 101.7 89.5 77.4 53.6 45.9
-------------------------------------------------------------------------------
Fiscal Year 1990 1989 1988 1987 1986 1985
-------------------------------------------------------------------------------
AT YEAR END (As actually reported)
Total assets $4,804.2 $4,278.2 $3,042.9 $2,482.5 $1,819.7 $1,547.1
Current assets 3,347.7 3,160.4 2,076.2 1,707.1 1,283.5 1,062.9
Current
liabilities 2,967.5 2,651.5 1,636.1 1,236.6 926.2 755.3
Working capital 380.2 508.9 440.1 470.5 357.3 307.6
Property, plant and
equipment, net 1,034.7 825.5 696.1 601.9 427.1 373.8
Capital investment 1,836.7 1,626.7 1,406.8 1,245.9 893.5 791.9
Senior long-term
debt (noncurrent) 605.4 530.1 489.9 428.7 309.0 261.9
Subordinated long-term
debt (noncurrent) 30.0 30.0 -- -- -- --
Preferred securities of
subsidiary company -- -- -- -- -- --
Redeemable preferred
stock 2.2 8.7 9.6 13.3 14.2 23.6
Common stockholders'
equity 1,095.8 949.5 814.4 722.5 510.5 458.3
Stockholders' equity
(all classes) 1,098.0 958.2 824.0 735.8 524.8 481.8
Common stockholders'
equity per share $5.95 $5.25 $4.64 $4.12 $3.43 $3.07
*In the five-year table: Fiscal year 1991 was restated in fiscal 1992 to
reflect the merger with Golden Valley Microwave Foods, Inc. which was accounted
for as a pooling of interests.
Per share results reflect the following common stock splits: three-for-two in
1979, two-for-one in 1980, three-for-two in 1984, two-for-one in 1986, three-
for-two in 1989 and three-for-two in 1991 (calendar years).
MANAGEMENT'S DISCUSSION & ANALYSIS
INTRODUCTION
Our objective here is to help stockholders understand
management's views on ConAgra's financial condition and results
of operations. This discussion should be read in conjunction
with the financial statements and the notes to the financial
statements. Unless otherwise indicated, years (1994, 1995, etc.)
in this discussion refer to ConAgra's May-ending fiscal years.
FINANCIAL CONDITION
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.
Capital Investment
Dollars in millions
1995 1994 % Change
-------- -------- --------
Working capital $1,175.3 $ 390.5 201%
-------- --------
Property, plant & equipment, net 2,796.0 2,586.3 8
Intangible assets 2,420.1 2,626.4 (8)
Other noncurrent assets 444.7 365.8 22
------------------------------------------------------
Total noncurrent assets 5,660.8 5,578.5 1
------------------------------------------------------
Capital investment $6,836.1 $5,969.0 15
===============================================================
During 1995, capital investment increased 15% as increases
in working capital, property, plant and equipment and other
noncurrent assets more than offset a decrease in intangible
assets.
Working capital increased $785 million. This increase will
be used for, among other things, financing of the company's stock
repurchasing program, which will fund the anticipated call and
conversion of its Class E preferred stock in 1996, as more fully
explained in the following sections.
ConAgra invested $428 million in property, plant and
equipment in 1995 and $395 million in 1994. In addition, ConAgra
invested $379 million to acquire businesses in 1995 versus $61
million in 1994. Property, plant and equipment including
acquisitions and divestitures, net of depreciation expense,
increased $210 million in 1995. In 1996, ConAgra expects to
invest about $550 million in additions to property, plant and
equipment of present businesses. The additions accomplished in
1995 and planned for 1996 are broadly based investments in
modernization, efficiency and capacity expansion; no single
project accounts for a major share of the total additions.
Intangible assets include approximately $1.9 billion of
goodwill associated with ConAgra's acquisition of Beatrice
Company in 1991. The net decrease of $206 million in intangible
assets during 1995 resulted mainly from a reduction of Beatrice-
related goodwill (see Financial Statements Note 13).
This goodwill represents valuable assets such as respected
brands with significant marketplace acceptance. Over time, the
assets are amortized and decline from an accounting standpoint.
However, we invest on an expense-as-you-go basis to maintain and
enhance the value of these assets. Consequently, the non-cash
provision for goodwill amortization is a source of cash that can
be used for any corporate purpose such as internal investment,
acquisitions and dividends.
In that respect, goodwill amortization is similar to net
income -- it provides "decision cash." It amounted to $71
million in 1995 and $74 million in 1994, equal to 14% and 17% of
net income. Goodwill amortization decreased in 1995 due to the
reduction of Beatrice-related goodwill.
On the other hand, depreciation of fixed assets is primarily
a source of "replenishment cash" -- cash generally needed to
repair and replace assets and maintain a going concern.
Depreciation expense was $289 million in 1995 and $276 million in
1994.
Cash from net income plus goodwill amortization -- what we
call "cash earnings" -- is the primary funding source for growing
ConAgra's capital investment and earning power over the long
term. That is why we focus on cash earnings in our internal
return on equity objective shown on page 4 of this report. In
1995, cash earnings totaled $567 million, up 11% from $511
million in 1994.
We do not intend that cash earnings replace net income as
reported in our financial statements, and cash earnings may not
be a reliable measure of liquidity or cash generated by
operations. Furthermore, there is no broadly accepted definition
of cash earnings, and ConAgra's definition may not be comparable
to similarly titled measures used by other companies.
ConAgra financed its capital investment as shown in the
"Capitalization" table.
Capitalization
Dollars in millions
1995 1994 % Change
-------- -------- --------
Senior long-term debt $1,770.0 $1,440.8 23%
Other noncurrent liabilities 940.8 1,079.7 (13)
Subordinated long-term debt 750.0 766.0 (2)
Subsidiary's preferred securities 525.0 100.0 425
Preferred stockholders' equity 354.9 355.6 --
Common stockholders' equity 2,495.4 2,226.9 12
-------- --------
Total capitalization $6,836.1 $5,969.0 15
======== ========
In 1995, senior long-term debt increased $329 million
because short-term borrowings backed by long-term credit
agreements and classified as long-term increased $385 million
while other senior debt decreased.
In 1995, subsidiary's preferred securities increased $425
million because ConAgra Capital, L.C., an indirectly controlled
subsidiary of ConAgra, Inc., issued $425 million of preferred
securities. The proceeds were loaned to ConAgra and used for
general corporate purposes.
Other noncurrent liabilities consist of estimated
postretirement health care and pension benefits and reserves for
estimated income tax, legal and environmental liabilities
Beatrice Company incurred before its acquisition by ConAgra.
Other noncurrent liabilities decreased $139 million mainly
because certain disputed tax liabilities were resolved with the
Internal Revenue Service (see Financial Statements Note 13). It
will require many 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.
Preferred stockholders' equity consists almost entirely of
ConAgra's Class E $25 cumulative convertible preferred stock.
The Class E preferred stock is initially callable on August 14,
1995 at $25.48 per share. ConAgra has indicated it intends to
call some or all of the Class E preferred stock during calendar
year 1995, subject to market conditions and approval by ConAgra's
board of directors.
If the conversion value exceeds $25.48, as currently is the
case, ConAgra expects that calling the preferred stock will cause
its holders to convert the preferred stock to ConAgra common
stock. The 14.2 million shares of preferred stock are
convertible to 14.4 million shares of common stock.
In February 1995, ConAgra's board of directors authorized
management to purchase up to 25 million shares of ConAgra common
stock over time on the open market. Subsequently during fiscal
1995, ConAgra purchased and placed in treasury stock 3.6 million
common shares at a cost of $118 million. In total during
calendar 1995, ConAgra intends to purchase at least enough common
shares to cover the anticipated conversion of the Class E
preferred stock. ConAgra expects that purchasing these common
shares and converting the Class E preferred stock will not
materially affect fiscal 1996 earnings per share.
Common stockholders' equity increased $269 million in 1995
mainly because net income exceeded cash dividends declared ($206
million) and the cost of shares purchased on the open market.
Financing Objectives
ConAgra's primary financing objective is to maintain a
conservative balance sheet. We define this 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 conducts its financing through its corporate
treasury department. Previously, ConAgra's food businesses and
financial businesses were financed separately. However, as a
result of the sale of Geldermann, Inc. in 1995 and cost
considerations, the corporate treasury department now handles
financing for all of ConAgra's businesses.
ConAgra's long-term and short-term debt objectives and
results are shown, as usual, with ConAgra's other financial
objectives and results on pages 4 and 5 of our annual report.
ConAgra met its long-term debt objective every year from 1976
through 1995, except 1991 and 1992 when we temporarily exceeded
our self-imposed long-term debt limitation due to the Beatrice
acquisition. ConAgra has met its short-term debt objective for
the past 20 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 1995, ConAgra's senior debt
ratings were BBB+ (Duff & Phelps), Baa1 (Moody's) and BBB
(Standard & Poor's), all investment grade ratings.
Sale of commercial paper and bank financing provide short-
term credit. Commercial paper borrowings are backed by multiyear
bank credit facilities. During 1995, short-term borrowing
continued at interest rates significantly below the prime rate.
Short-term debt averaged $2.31 billion in 1995 compared to $2.49
billion in 1994.
ConAgra's use of operating leases in its financing
activities emphasizes cancelable leases, particularly for
transportation equipment. In 1995, cancelable lease expense
increased $17 million to $119 million, and noncancelable lease
expense decreased $15 million to $115 million.
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 plants 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 the company's leverage.
Asset Liquidity and Commodity Risk Management
ConAgra operates across the food chain, 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.
Commodities are subject to price fluctuations which 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 the company's ability to participate in gains from
commodity price fluctuations, it also tends to reduce the risk of
loss from changes in commodity prices.
Commodity price risk can be hedged by selling the end
product at acceptable fixed prices to credit-worthy customers, or
by buying or selling offsetting futures or options contracts on
established commodity exchanges. The particular hedging methods
employed by ConAgra depend on a number of factors, including
availability of appropriate derivative contracts. At the end of
1995, 29% of ConAgra's total inventory was classified as "hedged
commodity inventory."
ConAgra's board of directors has established policies which
limit the amount of unhedged commodity inventory permissible for
ConAgra's independent operating companies. Processing company
limits are expressed in terms of weeks of commodity usage.
Trading businesses are generally limited to a dollar risk
exposure stated in relation to equity capital.
ConAgra monitors its commodity positions on a daily basis
through the use of a companywide computer system. This system
compares commodity positions with unhedged commodity limits
established for its independent operating companies. The senior
vice president and risk officer monitors these positions and
reports compliance to the board of directors. ConAgra's total
unhedged positions were well below established corporate limits
for 1993 through 1995.
Many of ConAgra's businesses are current asset intensive.
Inventory and accounts receivable were 1.7 times property, plant
and equipment at the end of 1994 and 1995. The seasonal nature
and liquidity of ConAgra's current asset investments explain the
company's significant use of short-term debt and emphasis on
repaying short-term debt at year end.
ConAgra's reported net sales understate the degree to which
current assets turn over during the year. For 1995, total sales
invoiced to customers were approximately $29.0 billion versus
$24.1 billion reported net sales. This is because grain and feed
ingredient merchandising transactions include only gross margins
in reported sales.
ConAgra's current ratio (current assets divided by current
liabilities) was 1.30 to 1 at the end of 1995 and 1.08 to 1 at
the end of 1994. The higher-than-normal current ratio at the end
of 1995 reflects expected cash needs to repurchase common stock
in anticipation of conversion of the Class E preferred stock
during 1996.
ConAgra's consolidated current ratio is a composite of
various current ratios appropriate for our individual businesses.
We focus more on appropriate use of short-term debt and trade
credit financing than on the absolute level of our current ratio.
Many of ConAgra's businesses are able to generate substantial
trade credit which does not result in financing costs.
OPERATING RESULTS
Operating results for ConAgra's industry segments and
individual businesses were discussed extensively in the Business
Review on pages 8 to 23 in this report. See pages 4 and 5 for a
review of ConAgra's financial objectives and results. The
discussion in this section addresses ConAgra's consolidated
operating results shown in the Consolidated Statements of
Earnings.
Net sales increased 2.5% in 1995 to $24.1 billion and 9.3%
in 1994 to $23.5 billion.
Businesses contributing to the 1995 sales increase included
crop protection chemicals and fertilizer, potato products, frozen
foods, cheese products, shelf-stable foods and grain processing.
The net effect of businesses acquired in 1995 and businesses
divested or discontinued in 1995 was additive to sales by more
than $150 million. Sales decreased in meat and poultry
businesses as lower selling prices, mainly due to passing through
lower raw material costs, reduced sales by approximately $400
million.
As of the beginning of 1994, ConAgra increased its
investment in Australia Meat Holdings Pty Ltd. (AMH) from 50% to
approximately 91% and accounted for AMH as a consolidated holding
in 1994 versus an investment in affiliate in 1993. Consolidating
AMH's results accounted for more than half of ConAgra's sales
increase in 1994. Other businesses contributing to the 1994
sales increase included U.S. beef products, crop protection
chemicals and fertilizer, potato products, grain processing,
frozen foods, chicken products, shelf-stable foods and processed
meats, in part due to an acquisition during 1993. Sales decreases
in 1994 included pork products, affected by a plant closing, and
grain merchandising.
In 1995, gross margin (net sales minus cost of goods sold)
increased $270 million or 8.8%. Gross margin as a percent of net
sales increased to 13.8% in 1995 from 13.0% in 1994 due to margin
improvement in a number of businesses including frozen foods,
shelf-stable foods, potato products, beef and pork products and
crop protection chemicals and fertilizer. In 1994, gross margin
increased $181.3 million or 6.3%. Gross margin as a percent of
net sales decreased to 13.0% in 1994 from 13.4% in 1993 primarily
due to AMH's lower relative gross margin. Excluding AMH, the
ratio was virtually unchanged.
Selling, administrative and general expenses increased $139
million or 6.6% in 1995 and $77 million or 3.8% in 1994.
Selling, administrative and general expenses as a percent of net
sales was 9.2% in 1995, 8.9% in 1994 and 9.4% in 1993. The
higher ratio in 1995 reflects higher relative spending by a
variety of businesses, distributions on ConAgra Capital's
preferred securities and the effect of lower meat and poultry
selling prices, partially offset by the divestiture of a
financial business, which has a characteristically high ratio,
and lower spending by some businesses. The lower ratio in 1994
compared to 1993 was due mainly to lower relative spending by
AMH.
Interest expense increased 9.4% in 1995 to $278 million,
mainly due to higher short-term interest rates. Interest expense
decreased 1.6% in 1994 to $254 million.
Pretax earnings increased 14.7% to $826 million in 1995 and
14.0% to $720 million in 1994 before the cumulative effect of
adopting SFAS 106 (see Financial Statements Note 14).
Businesses contributing to the pretax earnings increase in
1995 included crop protection chemicals and fertilizer, specialty
grain processing, feed ingredient merchandising, pork and beef
products, turkey products, cheese products, frozen foods, shelf-
stable foods, seafood and potato products. Businesses with lower
pretax earnings included chicken products, packaged meats,
specialty microwave products, private label products, and dried
fruit and nuts, which was discontinued in 1995. Economic
problems in Mexico had a negative effect on the earnings of
several ConAgra businesses in 1995.
Businesses contributing to the pretax earnings increase in
1994 included frozen foods, fresh red meat, potato products,
chicken products, processed meats, seafood, crop protection
chemicals and AMH. Businesses with lower pretax earnings
included turkey products, cheese products, specialty retailing,
and dried fruit and nuts.
Net income increased 13.4% to $496 million in 1995 and 11.6%
to $437 million in 1994 from $391.5 million in 1993 before the
cumulative effect of SFAS 106 in 1993.
Net income had lower percentage gains than pretax earnings
due to rising income tax rates. The effective income tax rate
increased from 38.0% in 1993 to 39.3% in 1994 and 40.0% in 1995.
The increase from 1993 to 1994 is mainly due to lower equity in
earnings of affiliates -- decreasing from $25 million in 1993 to
$5 million in 1994. Most taxes on these earnings are provided
for before they are included in ConAgra's pretax earnings. AMH's
move from affiliate status in 1993 to consolidated status in 1994
was the largest factor in the decline of equity in earnings of
affiliates.
Earnings per share increased 13.8% to $2.06 in 1995 and
14.6% to $1.81 in 1994 from $1.58 in 1993 before the cumulative
effect of SFAS 106 in 1993. The cumulative effect of SFAS 106
was a noncash after-tax charge of $121 million or 52 cents per
share, reducing 1993 net income to $270 million and earnings per
share to $1.06.
ConAgra is in the process of divesting certain non-core
businesses. During 1995, ConAgra divested Consumer Direct
(direct mail marketing), Dyno Merchandise, Inc. (home sewing
accessories), Geldermann, Inc. (financial services), and Berliner
& Marx, Inc. (meat products). In July 1995, ConAgra also
completed the sale of Petrosul International (sulfur processing
and marketing) and Alum Rock Foodservice (cheese distribution).
Sales and earnings of the businesses divested and identified for
divestiture are not material to ConAgra's results of operations.
The company expects that the ultimate gain or loss on the
divestiture program will not be significant to ConAgra's results
of operations.
ConAgra is required to adopt SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," no later than fiscal 1997. ConAgra has not yet
quantified the effect, if any, of implementation on the financial
statements.
3 bar graphs:
1991 1992 1993 1994 1995
----------------------------------------------------------------
Net Sales
in billions $20.2 $21.2 $21.5 $23.5 $24.1
Net Income
in millions $332.0 $372.4 $391.5* $437.1 $495.6
Cash Earnings*
in millions $388.0 $443.8 $463.2 $510.7 $567.0
* Cash earnings are net income plus goodwill amortization. In
1993, net income is before the cumulative effect of adopting
SFAS 106.
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 28, 1995 AND MAY 29, 1994
Dollars in millions except per share amount
ASSETS 1995 1994
Current assets:
Cash and cash equivalents $ 60.0 $ 166.4
Receivables, less allowance for doubtful
accounts of $63.9 and $55.9 (Note 2) 1,540.0 1,586.6
Margin deposits and segregated funds - 286.0
Inventories (Note 3):
Hedged commodities 925.4 723.4
Other 2,241.9 2,161.0
-------- --------
Total inventories 3,167.3 2,884.4
Prepaid expenses 372.9 216.9
-------- --------
Total current assets 5,140.2 5,143.3
-------- --------
Property, plant and equipment:
Land 141.2 140.7
Buildings, machinery and equipment 3,953.7 3,633.7
Less accumulated depreciation
Other fixed assets 227.2 219.9
Construction in progress 215.7 156.1
-------- --------
4,537.8 4,150.4
Less accumulated depreciation (1,741.8) (1,564.1)
-------- --------
Property, plant and equipment, net 2,796.0 2,586.3
Brands, trademarks and goodwill, at cost
less accumulated amortization of $420.9 2,420.1 2,626.4
and $363.1
Other assets 444.7 365.8
-------- --------
$10,801.0 $10,721.8
========= =========
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (Continued)
MAY 28, 1995 AND MAY 29, 1994
Dollars in millions except per share amount
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
Current liabilities:
Notes payable - financial businesses - $ 419.0
Current installments of long-term debt 47.9 120.7
Accounts payable 1,574.8 1,610.5
Advances on sales 856.6 914.9
Payable to customers, clearing - 326.5
associations etc.
Accrued payroll 273.2 262.4
Other accrued liabilities 1,212.4 1,098.8
-------- --------
Total current liabilities 3,964.9 4,752.8
-------- --------
Senior long-term debt, excluding 1,770.0 1,440.8
current installments (Note 5)
Other noncurrent liabilities (Note 6) 940.8 1,079.7
Subordinated debt (Note 5) 750.0 766.0
Preferred securities of subsidiary company 525.0 100.0
(Note 7)
Preferred shares subject to mandatory 354.9 355.6
redemption (Notes 8 and 9)
Commitments and contingencies (Notes 12 and 13)
Common stockholders' equity (Notes 9 and 10)
Common stock of $5 par value, authorized 1,200,000,000
shares; issued 252,869,958 and 252,726,783 1,264.3 1,263.6
Additional paid-in capital 409.9 338.0
Retained earnings 1,712.5 1,422.7
Foreign currency translation adjustment (44.9) (33.1)
Less treasury stock, at cost,
common shares 7,172,312 and 4,531,676 (206.9) (117.2)
--------- --------
3,134.9 2,874.0
Less unearned restricted stock and value
of 19,423,916 and 22,286,481 common shares held
in Employee Equity Fund (639.5) (647.1)
-------- --------
Total common stockholders' equity 2,495.4 2,226.9
$10,801.0 $10,721.8
========= =========
The accompanying notes are an integral part of the
of the consolidated financial statements.
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE FISCAL YEARS ENDED MAY
Millions except per share amounts
1995 1994 1993
Net sales $24,108.9 $23,512.2 $21,519.1
Costs and expenses:
Cost of goods sold 20,778.4 20,452.2 18,640.4
Selling, administrative and general 2,229.9 2,091.0 2,014.3
expenses
Interest expense (Note 5) 278.1 254.2 258.4
--------- --------- ---------
23,286.4 22,797.4 20,913.1
--------- --------- ---------
Income before equity in earnings of
affiliates, income taxes and cumulative
effect of change in accounting principle 822.5 714.8 606.0
Equity in earnings of affiliates 3.4 5.2 25.4
--------- --------- ---------
Income before income taxes and cumulative
effect of change in accounting 825.9 720.0 631.4
principle
Income taxes (Note 11) 330.3 282.9 239.9
--------- --------- ---------
Net income before cumulative effect
of change in accounting principle 495.6 437.1 391.5
Cumulative effect of change in accounting
for nonpension postretirement benefits
(net of income taxes of $74.2) - - (121.2)
--------- --------- ---------
Net income 495.6 437.1 270.3
Less preferred dividends 24.0 24.0 24.0
--------- --------- ---------
Net income available for common $ 471.6 $ 413.1 $ 246.3
stock
========= ========= =========
Earnings per common and common equivalent share:
Before cumulative effect of change in
accounting principle $ 2.06 $ 1.81 $ 1.58
Cumulative effect of change in accounting
for nonpension postretirement - - (0.52)
benefits
--------- --------- ----------
Net income $ 2.06 $ 1.81 $ 1.06
======== ========== ==========
Weighted average number of common and
common equivalent shares
outstanding 229.0 228.5 233.0
======== ========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
FOR FISCAL YEARS ENDED MAY
Columnar amounts in millions
Thousands Foreign EEF*
of Additional Currency Stock
Common Common Paid-in Retained Translation Treasury and
Shares Stock Capital Earnings Adjustment Stock Other Total
Balance at May 31, 1992 232.3 $1,160.9 $ 37.8 $1,048.5 $ (1.9) $ (5.2) $ (7.8) $2,232.3
Shares issued:
Stock option and incentive plans 2.0 11.5 24.9 (.1) (7.5) (5.6) 23.2
EEF* stock option, incentive and
employee benefit plans 12.6 62.7 191.0 (600.2) (346.5)
Acquisitions 5.2 26.1 13.4 10.8 50.3
Conversion of preferred stock .2 .1 .1
Foreign currency translation adjustment (12.7) (12.7)
Dividends declared:
Preferred stock (24.0) (24.0)
Common stock, $.60 per share (138.5) (138.5)
Net income 270.3 270.3
----------------------------------------------------------------------------------------------------------------------------------
Balance at May 30, 1993 252.3 1,261.3 267.1 1,167.0 (14.6) (12.7) (613.6) 2,054.5
Shares issued:
Stock option and incentive plans .3 1.7 5.2 1.4 8.3
EEF* stock option, incentive and other
employee benefit plans (16.3) 46.7 30.4
Fair market valuation of EEF shares 81.6 (81.6) -
Acquisitions .2 .5 5.7 6.4
Conversion of preferred stock .1 .4 (.1) .3
Shares acquired:
Incentive plans (4.8) (4.8)
Treasury shares purchased (105.4) (105.4)
Foreign currency translation adjustment (18.5) (18.5)
Dividends declared:
Preferred stock (24.0) (24.0)
Common stock, $.70 per share (157.4) (157.4)
Net income 437.1 437.1
----------------------------------------------------------------------------------------------------------------------------------
Balance at May 29, 1994 252.7 1,263.6 338.0 1,422.7 (33.1) (117.2) (647.1) 2,226.9
Shares issued:
Stock option and incentive plans .2 .5 1.6 (1.8) .3
EEF* stock option, incentive and
employee benefit plans (9.5) 82.7 73.2
Fair market valuation of EEF shares 74.6 (74.6) -
Acquisitions .1 5.1 41.2 46.4
Conversion of preferred stock .1 .1 .5 .7
Shares acquired:
Incentive plans (13.6) 1.3 (12.3)
Treasury shares purchased (117.8) (117.8)
Foreign currency translation adjustment (11.8) (11.8)
Dividends declared:
Preferred stock (24.0) (24.0)
Common stock, $.80 per share (181.8) (181.8)
Net income 495.6 495.6
----------------------------------------------------------------------------------------------------------------------------------
Balance at May 28, 1995 252.9 $1,264.3 $409.9 $1,712.5 $(44.9) $(206.9) $(639.5) $2,495.4
===== ======== ====== ======== ======= ======== ======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
*Employee Equity Fund
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED MAY
Dollars in millions
Increase (Decrease) in cash and cash equivalents 1995 1994 1993
Cash flows from operating activities:
Net income $495.6 $437.1 $270.3
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and other amortization 304.4 294.8 277.0
Goodwill amortization 71.4 73.6 71.7
Other noncash items (includes nonpension postretirement 107.3 38.8 220.6
benefits)
Change in assets and liabilities before effects from business acquisitions
Receivables (150.1) (250.4) 55.1
Inventories and prepaid expenses (235.1) (379.6) 37.2
Accounts payable and accrued liabilities 41.6 476.7 (109.8)
------- ------- -------
Net cash flows from operating activities 635.1 691.0 822.1
------- ------- -------
Cash flows from investing activities:
Additions to property, plant and equipment (427.8) (395.0) (341.0)
Payment for business acquisitions (378.8) (61.2) (16.4)
Sale of businesses and property, plant and equipmen 118.0 40.3 12.6
(Increase) decrease in notes receivable - Monfort Finance 70.7 19.2 (142.0)
Company
Other items (77.3) (22.7) (63.6)
------- ------- -------
Net cash flows from investing activities (695.2) (419.4) (550.4)
------- ------- -------
Cash flows from financing activities:
Net short-term borrowings (419.0) (153.8) 196.1
Proceeds from issuance of long-term debt 384.7 172.1 360.7
Repayment of long-term debt (147.3) (206.3) (291.3)
Issuance of preferred securities of subsidiary company 425.0 100.0 -
Cash dividends paid (199.6) (176.0) (158.6)
Treasury stock purchases (117.7) (105.4) -
Employee Equity Fund stock transactions 32.9 8.9 (346.5)
Other items, primarily payments on other noncurrent (5.3) (1.7) (129.9)
liabilities in 1993
------- ------- -------
Net cash flows from financing activities (46.3) (362.2) (369.5)
------- ------- -------
Net decrease in cash and cash equivalents (106.4) (90.6) (97.8)
Cash and cash equivalents at beginning of year 166.4 257.0 354.8
-------- ------ ------
Cash and cash equivalents at end of year 60.0 166.4 257.0
======= ====== =====-
The accompanying notes are an integral part of the consolidated financial
statements.
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MAY 28, 1995, MAY 29, 1994 AND MAY 30, 1993
Columnar amounts in millions except share and per share amounts
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fiscal Year - ConAgra's (or the Company's) fiscal year ends the
last Sunday in May. The fiscal years for the consolidated
financial statements presented all consist of 52 week periods.
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, except certain foreign companies that are not
material to the Company. All significant intercompany
investments, accounts and transactions have been eliminated.
The investments in and the operating results of 50%-or-less-owned
companies and the foreign companies referred to above are included
in the financial statements on the basis of the equity method of
accounting.
The Company's financial businesses, Geldermann, Inc. (a commodity
brokerage business sold in fiscal 1995) and Monfort Finance
Company (a finance company), are included in the consolidated
financial statements.
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 sales in order
to reflect properly gross margins on hedged transactions. Except
for certain food products and livestock inventories which are
stated at the lower of last-in, first-out (LIFO) cost or market,
inventories not hedged are priced at the lower of average cost 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 assets 5 - 15 years
Brands, Trademarks and Goodwill - Brands and goodwill arising from
the excess of cost of investment over equity in net assets at date
of acquisition and trademarks are being amortized using the
straight-line method, principally over a period of 40 years. The
carrying value of such brands, trademarks and goodwill is
periodically evaluated on the basis of management's estimates of
future undiscounted operating income associated with the acquired
businesses.
Net Sales - Gross margins earned from grain and feed ingredients
merchandised are included in net sales.
Income Taxes - In fiscal 1993, the Company adopted the provisions
of Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes, which did not have a material effect on the
Company's consolidated financial statements.
Other Postretirement Benefits - In fiscal 1993, the Company
adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions. The Company elected to reflect this
change in accounting on the immediate recognition basis.
Earnings per Share - Earnings per common and common equivalent
share are calculated on the basis of weighted average outstanding
common shares and, when applicable, those outstanding options that
are dilutive and after giving effect to preferred stock dividend
requirements. Fully diluted earnings per share did not differ
significantly from primary earnings per share in any period
presented.
Fair Values of Financial Instruments - Unless otherwise specified,
the Company believes the book value of financial instruments
approximates their fair value.
2. RECEIVABLES
In September 1990, the Company entered into agreements to sell,
for a period of up to five years, undivided participation
interests in designated pools of receivables, with limited
recourse, in an amount not to exceed $400 million at any one time.
In April 1994, the agreement was temporarily increased to $500
million for a period of up to six months, at which time it
automatically reduced to the original $400 million. In March
1995, the Company renegotiated the agreements to sell, for a
period of three years, interests in pools of receivables, with
limited recourse, in an amount not to exceed $500 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 which is
included in Selling, Administrative and General Expenses in the
Consolidated Statements of Earnings. Gross proceeds from the
sales were approximately $500 million at fiscal year-end 1995,
1994 and 1993.
In connection with the September 1990 transaction, the Company
entered into interest rate swap agreements with two money center
bank counterparties which effectively fix the discount rate on
$400 million of such participation interests at 9.4% for five
years expiring in August 1995. The net cost (benefit) of these
swaps is charged (credited) to interest expense. The estimated
fair value based on quoted market prices of the interest rate swap
agreements was an obligation of $5.7 million as of May 28, 1995.
3. INVENTORIES
The major classes of inventories are as follows:
1995 1994
Hedged commodities $ 925.4 $ 723.4
Food products and livestock 1,232.2 1,260.7
Agricultural chemicals, fertilizer 323.1 322.6
and feed
Retail merchandise 196.4 176.0
Other, principally ingredients 490.2 401.7
and supplies
------- -------
$3,167.3 $2,884.4
======= =======
The cost of certain food products and livestock inventories stated
under the last-in, first-out (LIFO) method is $225.1 million and
$211.0 million at May 28, 1995 and May 29, 1994, respectively.
Had these inventories been stated at lower of principally first-
in, first-out (FIFO) cost or market, they would have been $14.4
million and $41.0 million greater than reported at May 28, 1995
and May 29, 1994, respectively.
4. SHORT-TERM CREDIT FACILITIES AND BORROWINGS
The Company has credit lines from banks which totaled
approximately $5.0 billion, including: $1.5 billion of long-term
revolving credit facilities maturing in September 1999; $1.5
billion short-term revolving credit facilities maturing in
September 1995; and uncompensated bankers' acceptance and money
market loan facilities approximating $2.0 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 1995 fiscal year were $2,309.9 million. This
excludes an average of $521.7 million of short-term borrowings
which were classified as long-term throughout the fiscal year (see
Note 5). The highest period-end short-term indebtedness during
fiscal 1995 was $3,192.1 million. Short-term borrowings were at
rates below prime. The weighted average interest rate was 5.47%
and 3.46%, respectively, for fiscal 1995 and 1994.
5. SENIOR LONG-TERM DEBT, SUBORDINATED DEBT AND LOAN AGREEMENTS
1995 1994
Senior Debt
Commercial paper backed by long-term revolving
credit agreements $ 874.3 $ 489.6
9.75% senior debt due in 1998 300.0 300.0
9.875% senior debt due in 2006 100.0 100.0
7.22% to 9.8% publicly-issued unsecured
medium-term notes due in various
amounts through 2005 263.5 288.5
9% unsecured note due in 1997 50.0 50.0
9.87% to 9.95% unsecured senior notes due in various
amounts in 1997 through 2010 97.8 108.7
Industrial Development Revenue Bonds (collateralized by
plant and equipment) due various dates through 2015 at
an average rate of 7.15% 38.6 44.8
Miscellaneous unsecured 45.8 59.2
------- -------
Total senior debt 1,770.0 1,440.8
------- -------
Subordinated Debt
9.75% subordinated debt due in 2021 400.0 400.0
7.375% to 7.4% subordinated debt due in 2005 350.0 350.0
Geldermann, Inc. - 16.0
------- -------
Total subordinated debt 750.0 766.0
------- -------
Total long-term debt, excluding current
installments $2,520.0 $2,206.8
======= =======
The aggregate minimum principal maturities of the long-term debt
for each of the five fiscal years following May 28, 1995, are as
follows:
1996 $47.9
1997 142.2
1998 352.5
1999 53.1
2000 893.8
Under the long-term credit facility indicated in Note 4, at May
28, 1995, the Company may borrow up to $1.5 billion through
September 1999.
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:
1995 1994 1993
Long-term debt $215.0 $209.8 $221.6
Short-term debt 94.0 77.3 58.6
Finance expense 2.1 2.3 2.4
Interest income (28.1) (33.5) (21.9)
Interest capitalized (4.9) (1.7) (2.3)
------ ------ ------
$278.1 $254.2 $258.4
===== ===== =====
Net interest paid was $279.9 million, $242.1 million, and $239.3
million in fiscal 1995, 1994, and 1993, respectively.
Short-term debt interest expense of $17.5 million, $12.7 million,
and $14.6 million in fiscal 1995, 1994, and 1993, 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 $2,567.9 million and $2,327.5 million as of
May 28, 1995 and May 29, 1994, respectively. Based on current
market rates primarily provided by outside investment bankers, the
fair value of this debt at May 28, 1995 was estimated at $2,760.2
million. The Company's long-term debt is generally not callable
until maturity.
6. OTHER NONCURRENT LIABILITIES
Other noncurrent liabilities consist of estimated liabilities of
Beatrice Company (acquired in fiscal 1991) and estimated
postretirement health care and pension benefits as follows:
1995 1994
Income tax, legal and environmental liabilities
associated with the Company's acquisition of
Beatrice Company $ 612.6 $ 786.1
Estimated postretirement health care and pensions 523.4 468.6
------- ------
1,136.0 1,254.7
Less estimated current portion 195.2 175.0
------- -------
$ 940.8 $1,079.7
======= =======
7. PREFERRED SECURITIES OF SUBSIDIARY COMPANY
In April 1994, ConAgra Capital, L.C., an indirectly controlled
subsidiary of ConAgra, Inc., issued 4.0 million 9% Series A
Cumulative Preferred Securities (Class A Securities) at a price of
$25 per security. In June 1994, ConAgra Capital, L.C. issued 7.0
million Series B Adjustable Rate Cumulative Preferred Securities
(Class B Securities) at a price of $25 per security. In February
1995, ConAgra Capital, L.C. issued 10.0 million 9.35% Series C
Cumulative Preferred Securities (Class C Securities) at a price of
$25 per security. For financial statement purposes, these
Securities are considered to represent minority interests in
ConAgra Capital, L.C. ConAgra Capital, L.C. loaned these net
proceeds to ConAgra to be used for general corporate purposes.
Distributions on the Class A Securities (9% per annum) are payable
monthly. Distributions on the Class B Securities 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 ranged from 7.06% to 7.695% in fiscal 1995. Distributions on
the Class C Securities (9.35% per annum) are payable monthly.
These distributions are included in Selling, Administrative and
General Expenses in the Consolidated Statements of Earnings.
In connection with the issuance of the Class B Securities in
fiscal 1995, the Company entered into a swap with a money center
bank which effectively changes the distribution rate to a function
of the three month LIBOR on $175.0 million until May 31, 1998.
The net cost of this swap in fiscal 1995 was insignificant. The
estimated fair value of this swap agreement was an obligation of
$2.4 million as of May 28, 1995.
The above 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, on or after May 31, 1999 with respect to Class A
Securities, June 30, 1999 with respect to Class B Securities, and
February 29, 2000 with respect to Class C Securities, at $25 per
security plus accumulated and unpaid distributions to the date
fixed for redemption.
8. PREFERRED SHARES SUBJECT TO MANDATORY REDEMPTION
1995 1994
Shares Amount Shares Amount
Outstanding - Class D
$2.50 cumulative convertible 26,865 $ .7 27,974 $ .7
Outstanding - Class E, Series 1
$25 cumulative convertible 14,168,810 354.2 14,195,495 354.9
The Class E preferred stock has a dividend rate of $1.6875 per
share, is convertible into common stock at the rate of 1.017728
shares of common stock for each share of preferred, is entitled to
.17 votes per share voting as a single class with common stock, is
initially callable on August 14, 1995 at $25.48 per share, and is
subject to mandatory redemption on August 14, 2002.
At May 28, 1995, 186,288 and 14,420,003 shares of common stock
were reserved for conversion of Class D and Class E preferred
stock, respectively.
9. CAPITAL STOCK
The Company has authorized shares of preferred stock, all of which
are cumulative and nonparticipating, 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
Each class of preferred stock is prohibited from having a priority
over all previously issued classes of preferred stock as
designated by alphabetical class.
There are no shares issued or outstanding of Class B and Class C
preferred stock.
Employee Equity Fund
On August 6, 1992, the Company established a $700 million Employee
Equity Fund (EEF), a newly formed 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 which use ConAgra common stock and does not change
those plans or the amounts of stock expected to be issued for
those plans.
ConAgra funded the EEF with $700 million (at cost) of ConAgra
common stock sold to the EEF. Half of this stock ($350 million
for 12,533,572 shares) was newly issued by ConAgra. ConAgra
purchased the other half ($350 million for 11,517,397 shares) in
the open market with the proceeds from a $350 million subordinated
debt offering.
The EEF has delivered a promissory note to ConAgra. The principal
amount of the note is the amount of the purchase price of the
shares of ConAgra Common Stock sold to the EEF. Amounts owed by
the EEF to ConAgra will be repaid by cash received by the EEF or
will be forgiven by ConAgra, which will result in the EEF
releasing shares to satisfy ConAgra obligations for stock
compensation.
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:
1995 1994
Shares held 19,423,916 22,286,481
Cost - per share $ 29.105 $ 29.105
Cost - total 565.3 648.6
Fair market value - per share $ 32.250 $ 28.500
Fair market value - total 626.4 635.2
10.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 or at reduced cost to the employee. During fiscal
1995, 1994 and 1993, 20,000 shares, 20,000 shares and 155,000
shares of restricted stock were issued, respectively. The value
of the restricted and bonus stock, equal to fair market value at
the time of grant, is being amortized as compensation expense or
will be paid by a reduction in current and future incentive
compensation liabilities to the employee. This compensation
expense was not significant for fiscal 1995, 1994 and 1993. For
the most part, options granted are exercisable in five equal
annual installments and expire ten years after the date of grant.
For participants under the long-term senior management incentive
plan, options are exercisable under various vesting schedules.
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, 1995 are summarized below:
Shares Option Price
(in millions) Per Share-Range
Balance at May 31, 1992 9.6 $ 1.37 - $32.00
Granted 2.3 25.25 - 32.63
Exercised (1.7) 1.37 - 30.83
Canceled (.1) 13.78 - 30.83
----
Balance at May 30, 1993 10.1 2.94 - 32.63
Granted 2.7 25.25 - 26.50
Exercised (1.0) 2.94 - 25.38
Canceled (.1) 17.33 - 30.83
----
Balance at May 29, 1994 11.7 5.56 - 32.63
Granted 2.8 30.75 - 33.13
Exercised (1.3) 5.56 - 31.50
Canceled (.2) 13.78 - 31.50
----
Balance at May 28, 1995 13.0 6.56 - 33.13
====
Exercisable at May 28, 1995 6.3
====
At May 28, 1995, 276,357 shares were reserved for granting
additional options and restricted or bonus stock awards.
Each share of common stock carries with it a Right which entitles
the holder thereof until the earlier of July 24, 1996, or the
redemption of the Rights, to buy one share of common stock at an
exercise price of $44.45. The Rights will be represented by the
common stock certificates and will not be exercisable or
transferable apart from the common stock until the earlier of ten
days after announcement that a person or group (Acquiring Person)
has acquired beneficial ownership of 20 percent or more of the
Company's common stock or ten days after a person commences, or
announces an intention to commence, an offer for 30 percent or
more of the Company's common stock. In the event that (i) any
person or group becomes an Acquiring Person, or (ii) the Company
is acquired in a merger or other business combination transaction
or 50% or more of the Company's assets or earning power is sold,
each holder of a Right (other than the Acquiring Person) will
thereafter have the right to receive, upon exercise, 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 Company may redeem the Rights at $.0111 per Right
at any time before a person becomes an Acquiring Person. At May
28, 1995, 245,697,646 shares of common stock were reserved for
exercise of the Rights.
11. INCOME TAXES
The provision for income taxes includes the following:
1995 1994 1993
Current
Federal $243.9 $222.3 $123.4
State 49.2 43.9 27.4
Foreign 14.7 16.2 10.1
----- ----- -----
307.8 282.4 160.9
----- ----- -----
Deferred
Federal 20.3 0.4 4.3
State 2.2 0.1 0.5
----- ----- -----
22.5 0.5 4.8
----- ----- -----
$330.3 $282.9 $165.7
===== ===== =====
In fiscal 1993, the provision for income taxes includes an income
tax benefit from adoption of SFAS No. 106 of $74.2 million.
Income taxes computed by applying statutory rates to income before
income taxes and cumulative effect of accounting change are
reconciled to the provision for income taxes set forth in the
Consolidated Statements of Earnings as follows:
1995 1994 1993
Computed U.S. Federal income taxes $289.1 $252.0 $148.2
State income taxes, net of U.S.
Federal tax benefit 33.4 28.5 18.0
Nondeductible amortization of goodwill
and other intangibles 24.4 26.1 25.3
Export and jobs tax credits (8.6) (14.1) (10.9)
Other (8.0) (9.6) (14.9)
----- ----- -----
$330.3 $282.9 $165.7
===== ===== =====
Income taxes paid were $326.4 million, $203.9 million and $194.3
million in fiscal 1995, 1994, and 1993, respectively. Except for
certain matters related to the Company's fiscal 1991 acquisition
of Beatrice Company (see Note 13), the Internal Revenue Service
has examined the Company's tax returns through fiscal 1989. The
IRS has proposed certain adjustments, some of which are being
contested by the Company. The Company believes that it has made
adequate provisions for possible 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:
1995 1994
Assets Liabilities Assets Liabilities
Depreciation and amortization $ - $293.2 $ - $291.9
Nonpension postretirement benefits 170.2 - 166.1 -
Other noncurrent liabilities which
will give rise to future tax
deductions 312.6 - 292.1 -
Deferred state taxes 36.6 45.3 -
Accrued expenses 50.2 40.5 -
Others 65.0 119.5 81.8 88.6
----- ----- ----- -----
Valuation allowance - - (230.5) -
$634.6 $412.7 $395.3 $380.5
===== ===== ===== =====
12.COMMITMENTS
The Company leases certain facilities and transportation equipment
under agreements which 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.
A summary of rent expense charged to operations follows:
1995 1994 1993
Cancelable $119.0 $101.8 $103.7
Noncancelable 115.1 130.0 128.7
----- ----- -----
$234.1 $231.8 $232.4
===== ===== =====
A summary of noncancelable operating lease commitments for fiscal
years following May 28, 1995 is as follows:
Type of Property
Real and Other Transportation
Property Equipment
1996 $84.5 $37.3
1997 75.0 24.8
1998 60.2 20.9
1999 46.9 17.8
2000 35.6 14.0
Later years 112.5 8.6
----- -----
$414.7 $123.4
===== =====
In connection with its trading activities, the Company had letters
of credit and performance bonds outstanding at May 28, 1995
aggregating approximately $386.9 million.
13.CONTINGENCIES
On August 14, 1990, ConAgra acquired Beatrice Company (Beatrice).
As a result of the acquisition and the significant pre-acquisition
tax and other contingencies of the Beatrice businesses and its
former subsidiaries, the consolidated post-acquisition financial
statements of ConAgra have reflected significant liabilities and
valuation allowances associated with the estimated resolution of
these contingencies.
Subsequent to the acquisition of Beatrice by ConAgra, the Internal
Revenue Service completed its audit of the federal income tax
returns of Beatrice and its predecessors for the fiscal years
ended in 1985 through 1987 and issued an examining agent's report.
The findings contained in the report were protested by Beatrice.
Agreement has been reached with the Internal Revenue Service
regarding these matters, subject to acceptance by the
Congressional Joint Committee of Taxation. This settlement, if
approved, would resolve all deficiencies proposed by the Internal
Revenue Service for 1987 and prior years, including deficiencies
relating to previously-filed carry-back claims. On this basis,
ConAgra was able to better estimate the amounts of Beatrice state
tax liabilities that will ultimately be paid to various state tax
authorities, and the amounts of state tax and interest that will
be deductible for federal income tax purposes. Prior to the
settlement, ConAgra had recorded a valuation allowance against
deferred tax assets of approximately $230.0 million due to
uncertainties as to the ultimate realization of these assets.
As a result of the settlement, ConAgra has released the $230.0
million valuation allowance and has reduced non-current
liabilities by $135.0 million, with a resulting reduction of
goodwill associated with the Beatrice acquisition of $365.0
million. Federal income tax returns of Beatrice for fiscal years
ended 1988, 1989 and 1990 and various state tax returns remain
open. However, after taking into account the foregoing
adjustments, management believes that the ultimate resolution of
all remaining pre-acquisition Beatrice tax contingencies should
not exceed the reserves established for such matters.
Beatrice is also engaged in various litigation and environmental
proceedings related to businesses divested by Beatrice prior to
its acquisition by ConAgra. The environmental proceedings include
litigation and administrative proceedings involving Beatrice's
status as a potentially responsible party at 42 Superfund,
proposed Superfund or state-equivalent sites. Beatrice has paid
or is in the process of paying its liability share at 33 of these
sites. Beatrice's known volumetric contribution exceeds 4% at
seven of the sites. Beatrice has established substantial reserves
for these matters. The environmental reserves are based on
Beatrice'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 Beatrice's prior experience in remediating sites. Management
believes the ultimate resolution of such Beatrice legal and
environmental contingencies should not exceed the reserves
established for such matters.
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 operation or liquidity.
14.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.
Consolidated pension costs consist of the following:
1995 1994 1993
Plan Accumulated Plan Accumulated Plan Accumulated
Assets Benefits Assets Benefits Assets Benefits
Exceed Exceed Exceed Exceed Exceed Exceed
Accumulated Plan Accumulated Plan Accumulated Plan
Benefits Assets Benefits Assets Benefits Assets
Service cost $30.2 $ 5.2 $26.2 $ 4.0 $29.0 $1.9
Interest cost 58.6 12.7 58.0 12.5 56.5 8.4
Actual return
on plan assets (36.3) (4.3) (79.3) (14.5) (66.5) (4.7)
Net amortization
and deferral (30.0) (1.9) 14.7 5.2 0.4 (0.6)
---- ---- ---- ---- ---- ----
Net pension costs $22.5 $11.7 $19.6 $ 7.2 $19.4 $5.0
==== ==== ==== ==== ==== ===
Pension costs were determined using a 7.5% discount rate (8.5% in
fiscal 1994 and 1993), a long term rate of return of 9.0% in
fiscal 1995 and 1994 (8.5% to 9.5% in fiscal 1993) and a long term
rate of compensation increases of 5.5% in fiscal 1995 and 1994
(5.5% to 6.0% in fiscal 1993). The funded status of the plans at
February 28, 1995 and February 28, 1994 (dates of the most recent
actuarial report) was as follows:
1995 1994
Plan Accumulated Plan Accumulated
Assets Benefits Assets Benefits
Exceed Exceed Exceed Exceed
Accumulated Plan Accumulated Plan
Benefits Assets Benefits Assets
Plan assets at fair value $785.6 $128.2 $791.9 $136.9
----- ----- ----- -----
Projected benefit
obligation:
Actuarial present value
of vested benefits 668.0 155.8 648.4 166.6
Actuarial present value
of nonvested benefits 34.8 9.5 40.1 7.5
----- ----- ----- -----
702.8 165.3 688.5 174.1
Additional obligation of
projected
compensation
increases 100.5 13.7 106.1 8.3
----- ----- ----- -----
803.3 179.0 794.6 182.4
----- ----- ----- -----
Plan assets less than
projected benefit
obligations $(17.7) $(50.8) $ (2.7) $(45.5)
===== ===== ==== =====
Consisting of:
Unrecognized
transition asset $ 18.3 $2.2 $ 20.7 $ 2.5
Unrecognized prior
service cost (1.8) (25.2) (1.0) (19.9)
Unrecognized net
gain (loss) 43.9 (14.3) 34.0 (13.5)
Adjustment to recognize
minimum liability - 23.9 - 23.9
Accrued pension cost
on consolidated
balance sheet (78.1) (37.4) (56.4) (38.5)
----- ----- ----- -----
$(17.7) $(50.8) $ (2.7) $(45.5)
===== ===== ===== =====
Plan assets are primarily invested in equity securities, corporate
and government debt securities and common trust funds. Included
in plan assets are 2,540,171 shares of the Company's common stock
at a fair market value of $83.2 million at February 28, 1995.
The actuarial projected benefit obligation was determined using an
assumed discount rate of 8.5% (7.5% in fiscal 1994 and 8.5% in
fiscal 1993) and long-term rate of compensation increases of 5.5%
for all years presented (6.0% with respect to certain Beatrice
plans in fiscal 1993). Pension obligations were determined using
a long-term rate of return of 9.0% for all years presented (9.5%
with respect to certain Beatrice plans in fiscal 1993).
The Company has adopted a policy of funding accrued pension costs
to the extent deductible for income tax purposes.
The Company and its subsidiaries are also participants in multi-
employer pension plans covering certain hourly employees. Costs
associated with these plans for fiscal 1995, 1994 and 1993 were
$8.2 million, $7.5 million, and $7.2 million, respectively.
Certain employees of the Company are covered under defined
contribution plans. The expense related to these plans was $23.7
million, $17.9 million and $16.6 million in fiscal 1995, 1994 and
1993, respectively.
Postretirement Benefits
The Company's postretirement plans provide certain medical and
dental benefits to qualifying U.S. employees. In fiscal 1993, the
Company adopted the provisions of Statement of Financial
Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions.
Upon adoption, the Company recorded the discounted value of
expected future benefits attributed to employees' service rendered
prior to fiscal 1993 as a cumulative effect of an accounting
change. This one-time, non-cash accounting change was net of
accruals previously established and resulted in a charge to
earnings of $195.4 million before taxes ($121.2 million after
taxes) or $.52 per share
Net postretirement benefit cost includes the following components:
1995 1994 1993
Service cost $ 5.1 $ 4.5 $ 4.0
Interest cost on accumulated
postretirement
benefit obligation 29.8 30.4 30.4
Other (1.0) (1.1) (.9)
---- ---- ----
$33.9 $33.8 $33.5
==== ==== ====
Benefit costs were generally estimated assuming retiree health
care costs would initially increase at an 11.0% annual rate for
all participants. The rates are assumed to decrease each year to
a 6.5% annual growth rate in the year 2001 and remain at a 6.5%
annual growth rate thereafter. A 1% increase in these annual trend
rates would have increased the accumulated postretirement benefit
obligation at May 28, 1995 by $42.4 million with a corresponding
effect on fiscal 1995 postretirement benefit expense of $4.1
million. The discount rate used to estimate the accumulated
postretirement benefit obligation was 8.5% (7.0% in fiscal 1994,
8.0% in fiscal 1993). Plan assets of $6.1 million consist of
guaranteed investment contracts earning a 13.7% annual rate of
return. The Company generally intends to fund claims as
reported.
The funded status of the Company's plans at February 28, 1995
and 1994 was as follows:
Acccumulated postretirement 1995 1994
benefit obligations
Retirees and dependents $353.0 $358.7
Fully eligible active
plan participants 31.1 35.4
Other active plan participants 35.8 53.5
----- -----
Total accumulated postretirement
benefit obligation 419.9 447.6
Plan assets at fair value (6.1) (6.3)
Unrecognized prior service cost 1.8 2.5
Unrecognized net gain (loss) 6.6 (50.8)
----- -----
Accrued postretirement benefit
obligation on Consolidated
Balance Sheets $422.2 $393.0
===== =====
15.BUSINESS SEGMENTS
Beginning with 1995, ConAgra has revised its industry segments to
portray better its business mix and balance. The
"Grocery/Diversified Products" and "Refrigerated Foods" segments
were in past years combined as the "Prepared Foods" segment. The
new "Food Inputs & Ingredients" segment combines two past
segments: "Agri-Products" and "Trading & Processing."
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, interest
expense (except financial businesses), and income taxes have been
excluded from segment operations. Goodwill amortization has been
excluded from operating results of business segments in the
following table. All assets other than cash and those assets
related to the corporate office have been identified with the
segments to which they relate. Substantially all of the Company's
activities occur in the United States.
1995 1994 1993
Sales to unaffiliated customers
Food Inputs & Ingredients $ 5,799.8 $ 5,380.6 $ 5,006.9
Refrigerated Foods 13,509.5 13,836.2 12,408.6
Grocery/Diversified Products 4,799.6 4,295.4 4,103.6
-------- -------- --------
Total $24,108.9 $23,512.2 $21,519.1
======== ======== ========
Intersegment sales
Food Inputs & Ingredients $182.4 $125.8 $137.2
Refrigerated Foods 50.0 18.3 18.2
Grocery/Diversified Products 10.6 4.0 2.8
----- ----- -----
243.0 148.1 158.2
Intersegment elimination (243.0) (148.1) (158.2)
----- ----- -----
Total $ - $ - $ -
===== ===== =====
Net sales
Food Inputs & Ingredients $ 5,982.2 $ 5,506.4 $ 5,144.1
Refrigerated Foods 13,559.5 13,854.5 12,426.8
Grocery/Diversified Products 4,810.2 4,299.4 4,106.4
Intersegment elimination (243.0) (148.1) (158.2)
-------- -------- --------
Total $24,108.9 $23,512.2 $21,519.1
======== ======== ========
1995 1994 1993
Operating profit
Food Inputs & Ingredients $246.7 $215.5 $219.4
Refrigerated Foods 416.4 398.6 354.1
Grocery/Diversified Products 629.9 526.4 477.5
----- ----- -----
Total operating profit 1,293.0 1,140.5 1,051.0
General corporate expenses 137.6 107.5 101.5
Goodwill amortization 71.4 73.4 71.7
Interest expense - excluding financial
businesses 258.1 239.6 246.4
----- ----- -----
Total $825.9 $720.0 $631.4
===== ===== =====
Identifiable assets
Food Inputs & Ingredients $ 2,655.0 $ 2,906.3 $2,611.2
Refrigerated Foods 4,006.8 4,198.0 3,724.0
Grocery/Diversified Products 3,722.4 3,328.4 3,312.2
Corporate 416.8 289.1 341.3
-------- -------- -------
Total $10,801.0 $10,721.8 $9,988.7
======== ======== =======
Additions to property, plant, and
equipment - including businesses
acquired
Food Inputs & Ingredients $78.2 $92.1 $102.1
Refrigerated Foods 199.6 287.6 141.5
Grocery/Diversified Products 278.5 118.0 148.4
Corporate .9 6.4 .7
----- ----- -----
Total $557.2 $504.1 $392.7
===== ===== =====
Depreciation and amortization
Food Inputs & Ingredients $57.7 $58.4 $52.1
Refrigerated Foods 149.7 152.6 150.3
Grocery/Diversified Products 162.3 150.5 142.2
Corporate 6.1 6.9 4.1
----- ----- -----
Total $375.8 $368.4 $348.7
===== ===== =====
16. QUARTERLY RESULTS (Unaudited)
Stock Market Dividends
Net Gross Net Income Price Declared
Sales Profit Amount Per High Low Per Share
Share
1995
First $ 6,245.9 $ 739.1 $ 76.8 $ .31 $33.00 $28.25 $.1800
Second 6,288.6 896.3 149.9 .63 33.13 29.75 .2075
Third 5,757.6 839.5 118.5 .49 33.50 29.75 .2075
Fourth 5,816.8 855.6 150.4 .63 34.50 30.88 .2075
-------- ------- ----- ---- ----- ----- -----
Year $24,108.9 $3,330.5 $495.6 $2.06 $34.50 $28.25 $.8025
======== ======= ===== ==== ===== ===== =====
1994
First $ 5,687.4 $657.7 $ 67.6 $ .27 $26.63 $23.00 $.1550
Second 6,355.1 829.3 134.0 .56 28.25 23.88 .1800
Third 5,581.3 755.9 103.7 .43 28.13 24.75 .1800
Fourth 5,888.4 817.1 131.8 .55 29.38 26.25 .1800
-------- ------ ----- ---- ----- ----- -----
Year $23,512.2 $3,060.0 $437.1 $1.81 $29.38 $23.00 $.6950
======== ======= ===== ==== ===== ===== =====
RESPONSIBILITIES
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, 1995 and May 29,
1994, and the related consolidated statements of earnings, common
stockholders' equity and cash flows for each of the three years
(fifty-two weeks) in the period ended May 28, 1995. 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 generally
accepted auditing standards. 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, 1995 and May 29,
1994, and the results of their operations and their cash flows
for each of the three years (fifty-two weeks) in the period ended
May 28, 1995 in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
July 28, 1995
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.
-from ConAgra's Philosophy, page 6
(originally published in 1976)
PRINCIPAL OFFICERS
The principal officers of the company include, among others,
those listed on pages 50 and 51 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.
BOARD OF DIRECTORS
Board Committees
Executive Committee
Charles M. Harper, Chairman
Philip B. Fletcher
Walter Scott, Jr.
William G. Stocks
Audit Committee
Thomas R. Williams, Chairman
Robert A. Krane
Jane J. Thompson
Frederick B. Wells
Human Resources Committee
Gerald Rauenhorst, Chairman
Carl E. Reichardt
Walter Scott, Jr.
International Committee
William G. Stocks, Chairman
Dr. Ronald W. Roskens
Marjorie M. Scardino
Dr. Clayton K. Yeutter
Philip B. Fletcher, 62
Omaha, Nebraska. Chairman of ConAgra board of directors since
May 1993 and chief executive officer of ConAgra since September
1992. Director since 1989.
Charles M. Harper, 67
Omaha, Nebraska. Chairman and chief executive officer of RJR
Nabisco Holdings Corp. ConAgra chief executive officer 1976-
September 1992. Chairman of ConAgra board 1981-May 1993.
Director since 1975.
Robert A. Krane, 61
Denver, Colorado. Consultant, KRA, Inc. Former president and
chief executive officer of Central Bancorporation (financial
services). Director since 1982.
Gerald Rauenhorst, 67
Minneapolis, Minnesota. Chairman of the board and chief
executive officer of Opus Corporation (real estate, construction
and development). Director since 1982.
Carl E. Reichardt, 64
San Francisco, California. Former chairman and chief executive
officer of Wells Fargo & Company and Wells Fargo Bank. Director
since 1993.
Dr. Ronald W. Roskens, 62
Omaha, Nebraska. President of Action International (global
issues support organization composed of former heads of state).
Former president of the University of Nebraska System. Director
since 1992.
Marjorie M. Scardino, 48
London, England. Chief executive of The Economist Newspaper Ltd.
(publishing). Director since June 1994.
Walter Scott, Jr., 64
Omaha, Nebraska. President and chairman of the board of Peter
Kiewit Sons', Inc. (construction, mining and telecommunications).
Director since 1986.
William G. Stocks, 68
Phoenix, Arizona. Former chairman of the board and chief
executive officer of Peavey Company. Director since 1982.
Jane J. Thompson, 44
Hoffman Estates, Illinois. Executive vice president, credit,
Sears, Roebuck and Co. (retailing). Director since January 1995.
Frederick B. Wells, 67
Minneapolis, Minnesota. President of Asian Fine Arts (fine arts
retailing). Director since 1982.
Thomas R. Williams, 66
Atlanta, Georgia. President and director of Wales Group, Inc.
(investment management and counseling). Director since 1978.
Dr. Clayton K. Yeutter, 64
McLean, Virginia. Of counsel with Washington, D.C. law firm
Hogan & Hartson. Former U.S. Trade Representative and Secretary
of Agriculture. Director 1980-1985 and since 1992.
Photo: left to right: Jane Thompson, Bill Stocks, Gerry
Rauenhorst, Dr. Clayton Yeutter, Carl Reichardt, Walter Scott,
Bob Krane, Phil Fletcher, Marjorie Scardino, Tom Williams, Mike
Harper, Fred Wells, Dr. Ron Roskens.
PRINCIPAL OFFICERS
Philip B. Fletcher, 62
Chairman and Chief Executive Officer
Chief executive officer since September 16, 1992; chairman since
May 31, 1993. Named president and chief operating officer of
ConAgra in 1989. Joined ConAgra in 1982 as president of Banquet
Foods Company. Thirty-seven years of food industry experience;
formerly associated with Heublein Company, H.J. Heinz, U.S.A. and
Campbell Soup Company.
OFFICE OF THE PRESIDENT
Albert J. Crosson, 64
President and Chief Operating Officer
ConAgra Grocery Products Companies
Named to current position in January 1993. Named to the Office
of the President in November 1990. President and chief operating
officer of Hunt-Wesson, Inc. 1990-1993. Joined ConAgra in August
1990 when ConAgra acquired Beatrice Company. President of
Beatrice/Hunt-Wesson, Inc. 1986-1990. Forty-two years of food
industry experience in sales, marketing and general management.
Leroy O. Lochmann, 60
President and Chief Operating Officer
ConAgra Refrigerated Foods Companies
Named to current position in January 1995. Named to the Office
of the President in 1990. President and chief operating officer
of Armour Swift-Eckrich 1990-1993. President and chief operating
officer of ConAgra Meat Products Companies 1993-1995. Joined
ConAgra in August 1990 when ConAgra acquired Beatrice Company.
President of Swift-Eckrich 1984-1990. Forty-two years of meat
industry experience in operations and management.
Thomas L. Manuel, 48
President and Chief Operating Officer
ConAgra Trading and Processing Companies
Named to current position in February 1994. President of
ConAgra Grain Processing Companies 1988-1994. Joined ConAgra in
1977 as general manager of ConAgra Feed Ingredient Merchandising
Company. President of ConAgra Flour Milling Company 1987-1994.
Twenty-five years of experience in the grain processing and
commodity trading industries.
Floyd McKinnerney, 58
President and Chief Operating Officer
ConAgra Agri-Products Companies
Named to current position in 1987. Joined ConAgra in 1978 as
president of Mid Valley Chemicals. Thirty-four years of
experience in the agricultural chemical industry; formerly co-
owner of Dennison's Chemical Company, Weslaco, Texas.
James D. Watkins, 47
President and Chief Operating Officer
ConAgra Diversified Products Companies
Named to current position in June 1993. Named to the Office of
the President in August 1991 after Golden Valley Microwave Foods
merged with ConAgra. President and chief operating officer of
Golden Valley, Lamb-Weston and Arrow Industries 1991-1993.
Twenty-four years of food industry experience in the development
and marketing of microwave food products and general management.
Founder of Golden Valley Microwave Foods in 1978; formerly
associated with The Pillsbury Company.
CORPORATE
MANAGEMENT EXECUTIVE COMMITTEE
Philip B. Fletcher
Chairman and Chief Executive Officer
Office of the President
(The five executives listed on this page.)
Dwight J. Goslee
Senior Vice President, Business Systems and Development, and
Chief Information Officer
T. Truxtun Morrison
Chairman, ConAgra International
James P. O'Donnell
Senior Vice President and
Chief Financial Officer
L.B. Thomas
Senior Vice President
Corporate Secretary and Risk Officer
Gerald B. Vernon
Senior Vice President, Human Resources
David R. Willensky
Senior Vice President
Corporate Planning and Development
CORPORATE STAFF
Walter H. Casey
Vice President, Corporate Communications
Kenneth W. DiFonzo
Vice President and Controller
John J. Dill
Vice President, Taxes
P. David Eppenauer
Vice President
Assistant Corporate Controller
Richard L. Gady
Vice President, Public Affairs
and Chief Economist
C. Wayne Gano, Jr.
Vice President, Insurance and Loss Control
Francis A. Giitter
Vice President, Internal Audit
Raymond V. Hartman
Vice President,
Tax and Administration, Beatrice Co.
Reeder P. Jones
Vice President,
Assistant Corporate Controller
Paul A. Korody
Vice President, Government Affairs
David G. Pederson
Vice President, Compensation and Benefits
Joseph V. Petty
Vice President
Management Information Systems
Lynn L. Phares
Vice President
Public Relations and Community Affairs
Janet M. Richardson
Vice President
Corporate Facilities and Services
Donald J. Stone
Vice President, Transportation
Michael J. Trautschold
Vice President
Corporate Marketing Services
LEGAL COUNSEL
McGrath, North, Mullin & Kratz, P.C.
Omaha, Nebraska
General Counsel: Bruce C. Rohde
Assistant General Counsel: David L. Hefflinger
INDEPENDENT OPERATING COMPANIES
ConAgra Agri-Products Companies
Floyd McKinnerney
President and Chief Operating Officer
Philip J. James, Executive Vice President
United Agri Products Companies
J. Charles Blue, President
ConAgra Retail Companies
Anthony J. Seitz, President
Country General Stores
Anthony J. Seitz, President
Northwest Fabrics & Crafts
David B. Spohn, President
ConAgra Diversified Products Companies
James D. Watkins
President and Chief Operating Officer
Arrow Industries
Steven P. Rosenberg, President
ConAgra Pet Products Company
Thurmond Jones, President
ConAgra Shrimp Companies
Singleton Seafood Company
Jesse Gonzalez, President
Gelazur S.A. (50-percent owned)
Monique Kourcia, President
O'Donnell-Usen U.S.A.
Thomas J. Lavan, Executive Vice President, General Manager
Lamb-Weston, Inc.
Richard A. Porter, President
ConAgra Grocery Products Companies
Albert J. Crosson
President and Chief Operating Officer
ConAgra Frozen Foods
James T. Smith, President
ConAgra Grocery Products Companies International
Taketo Murata, President
Golden Valley Microwave Foods, Inc.
John S. McKeon, President
Hunt-Wesson Foodservice Company
Marshall Ransom, President
Hunt-Wesson Grocery Products Cos.
David J. Gustin, President
Hunt Foods Company
Edward A. Snell, President
Hunt-Wesson Grocery Products Sales Company
Douglas A. Knudsen, President
Orville Redenbacher/Swiss Miss Foods Company
La Choy/Rosarita Foods Company
David J. Gustin, President
Wesson/Peter Pan Foods Company
Glen A. Smith, President
Knott's Berry Farm Foods
Ronald G. Bennett, President
ConAgra Refrigerated Foods Companies
Leroy O. Lochmann
President and Chief Operating Officer
Armour Swift-Eckrich Processed Meats Company
Arnold S. Mikelberg, President
Decker Food Company
L. Richard Belsito, President
National Foods Inc.
Skip Pines, Chairman
Harvey Potkin, President
Australia Meat Holdings Pty Ltd.
Keith A. Lawson, Executive Chairman
Beatrice Cheese Company
Robert H. Burns, President
Butterball Turkey Company
Timothy M. Harris, President
ConAgra Europe
Raymond R. Destin, Managing Director
ConAgra Fresh Meats Company
Alan E. Glueck, President
ConAgra Poultry Companies
Thomas A. Slamecka, President
ConAgra Asia-Pacific
Kenneth C. Davis, Managing Director
ConAgra Retail Broiler Company
Thomas W. Orr, President
Professional Food Systems
J. Rolan Brevard, President
Cook Family Foods, Ltd.
Eugene J. Dembkowski, Chief Operating Officer
Thomas J. McDonough, President
E.A. Miller Inc.
Ted A. Miller, President
Monfort Beef and Lamb Company
Kevin D. LaFleur, President
Monfort Lamb Division
Harry D. Siegelman, President
Monfort International Sales Corporation
Charles K. Monfort, President
Monfort Pork Company
A. Donald Slotkin, President
ConAgra Trading and Processing Companies
Thomas L. Manuel, President and Chief Operating Officer
ConAgra Flour Milling Company
Gary P. White, President
ConAgra Commodity Services Company
Gregory A. Heckman, Vice President and General Manager
ConAgra Feed Company
George W. Thames, Vice President and General Manager
ConAgra Grain Companies
Fred E. Page, President
ConAgra Specialty Grain Products Company
Michael D. Walter, President
International Trading
Russell J. Bragg, President
Klein-Berger Company
Robert J. Corkern, President
Molinos de Puerto Rico
Manuel O. Herrera, President
United Specialty Food Ingredients Cos.
Bob J. Powdrill, President
INVESTOR INFORMATION
CONAGRA STOCK
ConAgra's common stock is listed on the New York Stock
Exchange. Ticker symbol: CAG.
At the end of fiscal 1995, 245.7 million shares of common
stock were outstanding, including 19.4 million shares held in the
company's Employee Equity Fund. There were 31,000 stockholders
of record and an estimated 87,000 "street-name" beneficial
holders whose shares are held in names other than their own -- in
brokerage accounts, for example. During fiscal 1995, 113 million
shares were traded, a daily average of about 447,000 shares.
ConAgra's $25 Class E preferred stock and the Series A, Series
B and Series C preferred securities of ConAgra Capital, L.C. also
are listed on the New York Stock Exchange. Ticker symbols: CAG
PrE, CAG PrA, CAG PrB, CAG PrC. For the current dividend rate of
ConAgra Capital's variable rate preferred securities, call (800)
840-3404.
COMMON STOCK DIVIDENDS
ConAgra normally pays quarterly common stock dividends on
March 1, June 1, September 1 and December 1. The current annual
dividend rate is 83 cents per share. The company's dividend
objective and results are on page 5 of this report.
ConAgra has paid 78 consecutive quarterly common stock
dividends. The dividend was increased 15 percent beginning with
the December 1, 1994 payment. ConAgra has increased common stock
dividends per share 14 percent or more for 20 consecutive years.
ANNUAL MEETING OF STOCKHOLDERS
ConAgra's annual stockholders meeting will be held on
Thursday, September 28, 1995 at 1:30 p.m. at the Witherspoon
Concert Hall of the Joslyn Art Museum, 2200 Dodge Street, Omaha,
Nebraska. Please note the new location and format. Like many
companies, ConAgra is streamlining the format to focus on the
business of the meeting. This year there will be a brief
business meeting (no pre-meeting reception), approximately 15
minutes. It will be followed by a question period. See the
proxy statement for additional information.
NEWS AND PUBLICATIONS
ConAgra has added services that help make current company
information readily available to all stockholders.
Call ConAgra Investor Information at (800) CAG-0244 to hear
current company news, including quarterly earnings and common
stock dividends, or to request printed materials such as the
mid-year report or the Form 10-K, an annual filing with the
Securities and Exchange Commission.
Call Company News On-Call at (800) 758-5804, extension 200825
to receive, at no charge, ConAgra news releases via facsimile
transmission.
ConAgra mails mid-year reports to stockholders of record.
Street-name holders who would like to receive these reports may
call (800) CAG-0244 and ask to be placed on our mailing list to
receive mid-year reports.
SHAREHOLDER SERVICES
Stockholders of record who have questions about or need help
with their account may contact ConAgra Shareholder Services,
(800) 840-3404.
ConAgra has expanded shareholder services to provide more
convenient and economical services to stockholders of record and
to make holding shares in record name a more convenient
alternative for street-name beneficial holders. Through
ConAgra's new Shareholder Service Plan, stockholders of record
may:
* Have stock certificates held by ConAgra Shareholder Services
for safekeeping and to facilitate sale or purchase of
shares.
* Automatically reinvest some or all common and/or preferred
dividends in ConAgra common stock. Nearly 40 percent of
ConAgra's stockholders of record participate.
* Purchase additional shares of ConAgra common stock through
voluntary cash investments of $50 to $50,000 per calendar
year.
For more information, call ConAgra Shareholder Services, (800)
840-3404. An additional service to stockholders of record,
Electronic Funds Transfer (EFT), will be introduced this fall and
will provide automatic deposit of dividends beginning December 1,
1995.
CORPORATE HEADQUARTERS
ConAgra, Inc.
One ConAgra Drive
Omaha, NE 68102-5001
(402) 595-4000
Corporate Secretary (402) 595-4005
Corporate Communications (402) 595-4157
Analyst/Investor Inquiries (402) 595-4154
TRANSFER AGENT AND REGISTRAR
Chemical Bank
J.A.F. Building
P.O. Box 3068
New York, NY 10116-3068
(800) 840-3404
INSIDE BACK COVER:
A Sample of Awards & Recognition in Fiscal 1994/1995
1994 Processor of the Year (ConAgra, Inc.), Prepared Foods
magazine
1995 Processor of the Year (ConAgra Frozen Foods), Refrigerated &
Frozen Foods magazine
Conservation Leadership Award for achievement in sustainable
development (ConAgra, Inc.), The Nature Conservancy and
Fontenelle Forest Association
Gold EFFIE Award for marketing effectiveness (Healthy Choice),
American Marketing Association
Edison Awards for best new products of 1994, American Marketing
Association:
Manwich Taco and Burrito Seasoning Sauces
Marie Callender's Chicken Pot Pie
1994 Employer-Employee Partnership Award (Wesson refinery -
Memphis, Tenn.), Tennessee Department of Labor
Safety awards earned by more than 30 ConAgra processing plants --
from the American Meat Institute, National Safety Council,
Arkansas Department of Labor, Minnesota Safety Council, Safety
Council of Greater St. Louis, Safety & Health Council of Greater
Omaha.
Top Supplier/Supplier of the Year Awards:
Armour Swift-Eckrich -- Wal-Mart, Super Valu, Roundy's
Casa de Oro Foods -- Taco Bell
Decker Foods -- Affiliated Food Southwest
Golden Valley Microwave Foods -- Wal-Mart
Klein-Berger Co. -- Hormel Foods
Lamb-Weston -- Named Supplier of the Year by International
Foodservice Distributors Association, All Kitchens of America,
Belca, Ben E. Keith, Grand Forks Grocery, Nugget Foods,
Pocahontas Foods, Ritz Foods, Rykoff Sexton, Sysco (L.A.
branch), Valley Foods, Valley Island Produce; three excellence
awards from Kraft Foodservice.
Top New Products:
Armour Premium Boneless Pork products, Meat, Marketing &
Technology magazine
Best Loaf, Healthy Choice Ice Cream, Healthy Choice Special
Creations, Food Business magazine
Steak Express, U.K.-based Leatherhead Foods' new products
competition
Wisconsin Governor's Award for Excellence in Waste Reduction
(HACCO, Inc., a United Agri Products company)
1995 Business Resource Recovery Alliance Award for Practical
Solutions to Waste Disposal Problems (ConAgra Frozen Foods --
Crozet, Va.)
Excellence in Manufacturing awards (United Agri Products' Platte
Chemical Co. -- Fremont, Neb., Greenville, Miss.), Ciba
Corporation, Solaris Group