10-Q

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 24, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to                             

Commission File Number 1-7275

CONAGRA FOODS, INC.
(Exact name of registrant, as specified in charter)

Delaware (State or other jurisdiction of incorporation or organization)	47-0248710 (I.R.S. Employer Identification No.)
One ConAgra Drive, Omaha, Nebraska (Address of Principal Executive Offices)	68102-5001 (Zip Code)

(402) 595-4000
(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report.)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

        Yes ý    No o

        Number of shares outstanding of issuer's common stock, as of March 24, 2002 was 537,216,639.

Part I—Financial Information

Item 1. Condensed Consolidated Financial Statements

ConAgra Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings

(in millions)

(unaudited)

		Thirteen weeks ended				Thirty-nine weeks ended
		February 24, 2002		February 25, 2001		February 24, 2002			February 25, 2001
Net sales		$	6,244.7	$	6,379.1	$	21,216.1		$	20,672.7
Costs and expenses
	Cost of goods sold		5,290.8		5,457.0		18,105.9			17,783.0
	Selling, general and administrative expenses		583.3		603.1		1,855.1			1,656.6
	Interest expense		94.1		130.9		298.0			323.2
			5,968.2		6,191.0		20,259.0			19,762.8
Income before income taxes and cumulative effect of changes in accounting			276.5		188.1		957.1			909.9
Income taxes			105.7		72.3		364.3			348.8
Income before cumulative effect of changes in accounting			170.8		115.8		592.8			561.1
Cumulative effect of changes in accounting			—		—		(2.0	)		(43.9	)
Net income		$	170.8	$	115.8	$	590.8		$	517.2
Income per share—basic
	Income before cumulative effect of changes in accounting	$	.31	$	.22	$	1.11		$	1.11
	Cumulative effect of changes in accounting		—		—		—			(.09	)
Net income		$	.31	$	.22	$	1.11		$	1.02
Income per share—diluted
	Income before cumulative effect of changes in accounting	$	.31	$	.22	$	1.11		$	1.10
	Cumulative effect of changes in accounting		—		—		—			(.09	)
Net income		$	.31	$	.22	$	1.11		$	1.01

See notes to the condensed consolidated financial statements.

2

ConAgra Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(in millions)

(unaudited)

		Thirteen weeks ended					Thirty-nine weeks ended
		February 24, 2002			February 25, 2001		February 24, 2002			February 25, 2001
Net income		$	170.8		$	115.8	$	590.8		$	517.2
Other comprehensive income (loss):
	Cumulative effect of change in accounting		—			—		(24.6	)		—
	Derivative adjustment, net		(3.6	)		—		(33.3	)		—
	Currency translation adjustment		(3.6	)		17.8		(16.2	)		(6.5	)
Comprehensive income		$	163.6		$	133.6	$	516.7		$	510.7

See notes to the condensed consolidated financial statements.

3

ConAgra Foods, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(dollars in millions except per share amounts)

(unaudited)

			February 24, 2002			May 27, 2001			February 25, 2001
ASSETS
Current assets
	Cash and cash equivalents		$	30.7		$	198.1		$	24.4
	Receivables, less allowance for doubtful accounts of $159.5, $100.5 and $132.0			2,043.7			1,605.4			1,986.2
	Inventories			4,811.0			5,071.4			5,149.0
	Prepaid expenses and other current assets			616.5			487.7			507.8
		Total current assets		7,501.9			7,362.6			7,667.4
Property, plant and equipment				7,030.3			6,851.1			7,143.7
	Less accumulated depreciation			(3,157.2	)		(2,966.4	)		(3,163.7	)
		Property, plant and equipment, net		3,873.1			3,884.7			3,980.0
Brands, trademarks and goodwill, net				4,768.0			4,840.2			4,770.2
Other assets				404.7			393.3			657.1
			$	16,547.7		$	16,480.8		$	17,074.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Notes payable		$	1,048.4		$	2,677.1		$	3,176.1
	Current installments of long-term debt			256.9			123.1			79.3
	Accounts payable			2,358.8			2,289.8			2,136.8
	Advances on sales			215.1			349.0			255.9
	Other accrued liabilities			1,700.6			1,496.6			1,577.5
		Total current liabilities		5,579.8			6,935.6			7,225.6
Senior long-term debt, excluding current installments				5,026.9			3,359.5			3,411.4
Other noncurrent liabilities				829.1			927.5			1,179.0
Subordinated debt				756.8			750.0			750.0
Preferred securities of subsidiary company				175.0			525.0			525.0
Commitments and contingencies (Note 6)
Common stockholders' equity
	Common stock of $5 par value, authorized 1,200,000,000 shares; issued 565,483,317, 565,337,949 and 565,289,796			2,827.3			2,826.7			2,826.4
	Additional paid-in capital			739.8			682.5			678.3
	Retained earnings			1,753.4			1,534.8			1,530.8
	Accumulated other comprehensive income (loss)			(194.8	)		(120.7	)		(109.6	)
	Less treasury stock, at cost, common shares 28,448,293, 28,270,610 and 28,421,384			(676.1	)		(672.9	)		(676.6	)
				4,449.6			4,250.4			4,249.3
	Less unearned restricted stock and value of 10,655,550, 12,787,862 and 13,075,636 common shares held in Employee Equity Fund			(269.5	)		(267.2	)		(265.6	)
		Total common stockholders' equity		4,180.1			3,983.2			3,983.7
			$	16,547.7		$	16,480.8		$	17,074.7

See notes to the condensed consolidated financial statements.

4

ConAgra Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)

				Thirty-nine weeks ended
				February 24, 2002			February 25, 2001
Cash flows from operating activities:
Net income				$	590.8		$	517.2
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation			352.0			350.7
		Goodwill and other amortization			111.2			91.0
		Cumulative effect of changes in accounting			2.0			43.9
		Other noncash items (includes nonpension postretirement benefits)			109.8			78.1
		Change in operating assets and liabilities before effects of business acquisitions			(365.0	)		(2,120.3	)
			Net cash flows from operating activities		800.8			(1,039.4	)
Cash flows from investing activities:
	Additions to property, plant and equipment				(371.6	)		(383.6	)
	Payments for business acquisitions				(110.0	)		(1,107.2	)
	Sale of businesses and property, plant and equipment				24.1			72.1
	Notes receivable and other items				(28.5	)		7.0
			Net cash flows from investing activities		(486.0	)		(1,411.7	)
Cash flows from financing activities:
	Net short-term borrowings (payments)				(1,628.7	)		1,920.5
	Proceeds from issuance of long-term debt				1,997.5			1,663.7
	Repayment of long-term debt				(247.7	)		(12.7	)
	Repayment of acquired company's debt				—			(1,114.3	)
	Redemption of preferred securities of subsidiary company				(350.0	)		—
	Cash dividends paid				(359.4	)		(311.5	)
	Other items				106.1			172.2
			Net cash flows from financing activities		(482.2	)		2,317.9
Net change in cash and cash equivalents					(167.4	)		(133.2	)
Cash and cash equivalents at beginning of period					198.1			157.6
Cash and cash equivalents at end of period				$	30.7		$	24.4

See notes to the condensed consolidated financial statements.

5

ConAgra Foods, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

For the Thirty-nine Weeks ended February 24, 2002

(columnar dollars in millions except per share amounts)

1.    Accounting Policies

        The unaudited financial information reflects normal adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the ConAgra Foods, Inc. (the "company") fiscal 2001 annual report on Form 10-K.

        The results of operations for any quarter or a partial fiscal year period are not necessarily indicative of the results to be expected for other periods or the full fiscal year. Certain prior year amounts have been reclassified in order to conform with current year classifications. In addition, during its current year second quarter, the company changed its reporting segments to reflect how the company now manages its operations. The company now reports its results in four segments.

Inventories—The company principally uses the lower of cost, determined using the first-in, first-out method, or market for valuing inventories not hedged. Grain, flour and major feed ingredient inventories are hedged to the extent practicable and are principally stated at market, including adjustment to market of open contracts for purchases and sales. Short-term interest expense incurred to finance hedged inventories is included in cost of goods sold in order to properly reflect gross profits on hedged transactions.

Derivative Instruments—The company uses derivatives (e.g., futures and options) for the purpose of hedging exposure to changes in commodity prices, interest rates, and foreign currency exchange rates. The fair value of each derivative is recognized in the balance sheet within current assets or current liabilities. Changes in the fair value of derivatives are recognized immediately in the income statement for derivatives that do not qualify for hedge accounting. For derivatives designated as a hedge and used to hedge an existing asset or liability (e.g., inventory), both the derivative and hedged item are recognized at fair value within the balance sheet with the changes in both of these fair values being recognized immediately in the income statement. For derivatives designated as a hedge and used to hedge an anticipated transaction (e.g., future purchase of inventory), changes in the fair value of the derivatives are deferred in the balance sheet within accumulated other comprehensive income to the extent the hedge is effective in mitigating the exposure to the related anticipated transaction. Any ineffectiveness associated with the hedge is recognized immediately in the income statement. Amounts deferred within accumulated other comprehensive income are recognized in the income statement upon the completion of the related hedged transaction.

Environmental Liabilities—Environmental liabilities are accrued when it is probable that obligations have been incurred and the associated amounts can be reasonably estimated. Such liabilities are adjusted as new information develops or circumstances change. The company does not discount its environmental liabilities as the timing of the anticipated cash payments is not fixed or readily determinable.

Marketing Costs—The company incurs various types of marketing costs in order to promote its products, including advertising, retailer incentives and consumer incentives. The company expenses each of these types of marketing costs in accordance with applicable authoritative accounting literature.

6

Accounting Changes—In fiscal 2001, the company changed its methods of accounting for revenue recognition relating to the shipping terms for certain of its product sales, recognition of sales incentives granted to retailers and recognition of consumer sales incentives, which resulted in a reduction of fiscal 2001 net income of $43.9 million.

        As of the beginning of the current fiscal year, the company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Financial Instruments and Hedging Activities, and its related amendment, SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities ("SFAS No. 133"). The adoption of SFAS No. 133 resulted in a cumulative effect of an accounting change that reduced net income by $2.0 million, and decreased accumulated other comprehensive income by $24.6 million, net of tax.

        Also in the first quarter of fiscal 2002, the company adopted Emerging Issues Task Force (EITF) Issue No. 00-25, Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor's Products. As a result, the company now classifies the costs associated with sales incentives provided to retailers as a reduction in net sales; these costs were previously included in selling, general and administrative expenses. All periods presented reflect this reclassification. This reclassification had an immaterial impact on net sales and no impact on income before income taxes and cumulative effect of changes in accounting, net income, or income per share amounts.

        In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, which establish accounting and reporting requirements for business combinations. SFAS No. 141 requires all business combinations entered into subsequent to June 30, 2001 to be accounted for using the purchase method of accounting. SFAS No. 142 provides that goodwill and other intangible assets with indefinite lives will not be amortized, but will be tested for impairment of value on an annual basis. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. The company will adopt SFAS No. 142 at the beginning of its fiscal 2003. The company has not yet completed its assessment of the anticipated adoption impact of SFAS No. 142.

        In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. This statement requires the company to recognize the fair value of a liability associated with the cost the company would be obligated to incur in order to retire an asset at some point in the future. The liability would be recognized in the period in which it is incurred and can be reasonably estimated. The standard is effective for fiscal years beginning after June 15, 2002. The company expects to adopt this standard at the beginning of its fiscal 2004. The company has not yet completed its assessment of the anticipated adoption impact, if any, of SFAS No. 143.

        Additionally, in October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 develops an accounting model, based upon the framework established in SFAS No. 121, for long-lived assets to be disposed of by sales. The accounting model applies to all long-lived assets, including discontinued operations, and it replaces the provisions of APB Opinion No. 30, Reporting Results of Operations—Reporting the Effects of Disposal of a Segment of a Business and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for disposal of segments of a business. SFAS No. 144 requires long-lived assets to be measured at the lower of carrying amount or fair value less costs to sell, whether reported in continuing operations or in discontinued operations. The statement is effective for fiscal years beginning after December 15, 2001. The company intends to adopt this standard at the beginning of its fiscal 2003. The company has not yet completed its assessment of the anticipated adoption impact, if any, of SFAS No. 144.

2.    Acquisitions

        On August 24, 2000, the company acquired all of the outstanding shares of common stock and stock options of International Home Foods ("IHF") in a transaction accounted for as a purchase

7

business combination. The company allocated the excess of the purchase price over the net assets acquired to brands, trademarks and goodwill. Costs assigned to intangible assets arising from the transaction are amortized on a straight-line basis over a period not exceeding 40 years.

        The following table summarizes the final fair value of the assets acquired and liabilities assumed in connection with the company's acquisition of IHF:

Current assets				$	627.4
Non-current assets (primarily brands and goodwill)					2,605.0
	Total assets acquired			$	3,232.4
Current liabilities					368.0
Long-term debt					1,104.4
Other non-current liabilities					36.8
	Total liabilities assumed			$	1,509.2
Cash paid		$	875.0
Equity issued			848.2
	Total net assets acquired			$	1,723.2

        The cash portion of the consideration paid was funded through borrowings under the company's short-term credit facilities.

        The company's unaudited pro forma results of operations for the thirty-nine weeks ended February 25, 2001, assuming the acquisition of IHF occurred as of the beginning of the period presented are as follows:

	Thirty-nine weeks ended February 25, 2001
Net sales	$	21,110.8
Net income		527.9
Income per share—diluted		1.01

        The pro forma results above are not necessarily indicative of the operating results that would have actually occurred if the acquisition had been in effect on the dates indicated, nor is it necessarily indicative of future operating results of the combined companies.

3.    Financial Instruments

        The company is exposed to market risk, such as changes in commodity prices, foreign currency exchange rates and interest rates. To manage volatility associated with these exposures, the company may enter into various derivative transactions pursuant to established company policies.

Commodity Price Management—The company is subject to raw material price fluctuations caused by supply conditions, weather, economic conditions and other factors. Generally, the company utilizes commodity futures and options contracts to reduce the volatility of commodity input prices on items such as grains, vegetable oils, livestock and energy.

        Futures and options contracts qualifying for hedge accounting and used to hedge anticipated transactions are designated as cash flow hedges with gains and losses deferred in accumulated other comprehensive income, to the extent the hedge is effective. These amounts are recognized within cost of goods sold in the period during which the hedged transaction affects earnings. Any hedge gain or loss deemed ineffective, as well as gains or losses on contracts for which the company does not qualify,

8

or elects not to qualify, for hedge accounting, are immediately recognized within sales or cost of goods sold.

Foreign Currency Management—In order to reduce exposures related to changes in foreign currency exchange rates, the company may enter into forward exchange or option contracts for transactions denominated in a currency other than the applicable functional currency. This includes, but is not limited to, hedging against foreign currency risk in purchasing inventory and capital equipment, sales of finished goods, and future settlement of foreign denominated assets and liabilities.

        Hedges of anticipated foreign denominated transactions are designated as cash flow hedges. The gains and losses associated with these hedges are deferred in accumulated other comprehensive income until the forecasted transaction impacts earnings. Forward exchange and option contracts are also used to hedge firm commitment transactions denominated in a currency other than the applicable functional currency. The firm commitments and foreign currency hedges are both recognized at fair value within prepaid expenses and other current assets. Gains and losses associated with firm commitment and foreign currency hedges are recognized within net sales. Foreign currency derivatives for which the company has elected not to account for under hedge accounting are recorded immediately in earnings within sales, cost of goods sold or selling, general and administrative expenses, depending on the nature of the transaction.

Interest Rate Management—In order to reduce exposures related to changes in interest rates, the company may use derivative instruments, including interest rate swaps. As of February 24, 2002, the company had interest rate swap agreements outstanding, effectively converting $2 billion of the company's fixed rate debt into floating rate debt. The interest rate swaps are accounted for as fair value hedges and result in no ineffectiveness being recognized in the income statement as the interest rate swaps' provisions match the applicable provisions of the hedged debt.

Additional Derivative Information—The fair value of derivative assets is recognized within prepaid expenses and other current assets, while the fair value of derivative liabilities is recognized within other accrued liabilities. As of February 24, 2002, the fair value of derivatives recognized within prepaid expenses and other current assets was $101.7 million and the amount recognized within other accrued liabilities was $65.9 million.

        For the thirteen and thirty-nine week periods ended February 24, 2002, the ineffectiveness associated with derivatives designated as both cash flow and fair value hedges was a loss of $6.2 million and a loss of $8.1 million, respectively. Hedge ineffectiveness is recognized within net sales or cost of goods sold, depending on the nature of the hedge. The company does not exclude any components of the hedging instrument's gain or loss when assessing effectiveness.

        Generally, the company hedges a portion of its anticipated consumption of commodity inputs for periods up to 12 months. The company may enter into longer term hedges on particular commodities if deemed appropriate. As of February 24, 2002, the company had hedged certain portions of its anticipated consumption of commodity inputs through March 2005.

        As of February 24, 2002, the net deferred loss recognized in accumulated other comprehensive income was $57.9 million, net of tax, which includes the impact of the cumulative effect of change in accounting principle. Of this amount, $36.8 million, net of tax, will be recognized within earnings over the next 12 months. For the thirteen and thirty-nine weeks ended February 24, 2002, a net of tax $19.2 million loss and $21.5 million loss, respectively, were recognized from accumulated other comprehensive income into earnings. No cash flow hedges or firm commitments were discontinued during the thirteen and thirty-nine week periods ended February 24, 2002.

9

4.    Income per share

        The following table reconciles the income and average share amounts used to compute both basic and diluted income per share:

		Thirteen weeks ended					Thirty-nine weeks ended
		Feb. 24, 2002			Feb. 25, 2001		Feb. 24, 2002			Feb. 25, 2001
Net income		$	170.8		$	115.8	$	590.8		$	517.2
	Redemption of subsidiary preferred securities, net of tax		(6.7	)		—		(6.7	)		—
Net income available to common shareholders		$	164.1		$	115.8	$	584.1		$	517.2
Income per share—basic
	Weighted average shares outstanding—basic		526.2			523.3		525.5			507.5
Income per share—diluted
	Weighted average shares outstanding—basic		526.2			523.3		525.5			507.5
	Add shares contingently issuable upon exercise of stock options		2.3			4.0		2.1			3.1
	Weighted average shares outstanding—diluted		528.5			527.3		527.6			510.6

5.    Inventories

        The major classes of inventories are as follows:

	Feb. 24, 2002		May 27, 2001		Feb. 25, 2001
Hedged commodities	$	1,511.4	$	1,499.0	$	1,535.0
Food products and livestock		1,667.8		1,919.5		1,790.6
Agricultural chemicals, fertilizer and feed		956.1		1,108.8		1,092.0
Other, principally ingredients and supplies		675.7		544.1		731.4
	$	4,811.0	$	5,071.4	$	5,149.0

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6.    Contingencies

        In fiscal 1991, the company acquired Beatrice Company ("Beatrice"). As a result of the acquisition and the significant pre-acquisition contingencies of the Beatrice businesses and its former subsidiaries, the consolidated post-acquisition financial statements of the company reflect significant liabilities associated with the estimated resolution of these contingencies. These include various litigation and environmental proceedings related to businesses divested by Beatrice prior to its acquisition by the company. The environmental proceedings include litigation and administrative proceedings involving Beatrice's status as a potentially responsible party at 35 Superfund, proposed Superfund or state-equivalent sites; these sites involve locations previously owned or operated by predecessors of Beatrice which used or produced pesticides, fertilizers, dyes, inks, solvents, PCB's, acids, lead, sulfur, and / or tannery wastes. Beatrice has paid or is in the process of paying its liability share at 30 of these sites. Adequate reserves for these matters have been established based on the company's best estimate of its undiscounted remediation liabilities, which estimates include evaluation of investigatory studies, extent of required cleanup, the known volumetric contribution of Beatrice and other potentially responsible parties and its experience in remediating sites. The reserves for Beatrice environmental matters totaled $123.0 million at May 27, 2001, a majority of which relates to the Superfund and state equivalent sites referenced above. Expenditures for these matters are expected to occur over a period of 5 to 20 years.

        The company is a party to a number of other lawsuits and claims arising out of the operation of its businesses. After taking into account liabilities recorded for all of the foregoing matters, management believes the ultimate resolution of such matters should not have a material adverse effect on the company's financial condition, results of operations or liquidity.

7.    Business Segments

        The company's operations are aggregated into four reportable segments based upon similar economic characteristics, nature of products and services offered, nature of production processes, the type or class of customer and distribution methods. Packaged Foods includes operations that produce shelf-stable, frozen foods and refrigerated foods. Meat Processing includes operations that process beef, pork, and poultry. Both the Packaged Foods and Meat Processing reporting segments market food products in retail and foodservice channels. Food Ingredients consists of operations which supply ingredient products to foodservice and industrial customers. Agricultural Products includes operations involved in the distribution of agricultural crop inputs as well as processing, trading and distribution of agricultural commodities.

        Intersegment sales have been recorded at amounts approximating market. Operating profit for each segment is based on net sales less all identifiable operating expenses and includes the related equity in earnings of companies included on the basis of the equity method of accounting. General corporate expense, goodwill amortization, interest expense and income taxes have been excluded from segment operations.

        The company has reclassified the segment information for the period ending February 25, 2001, to conform to the current quarter presentation.

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		Thirteen weeks ended
		February 24, 2002			February 25, 2001
Sales to unaffiliated customers
	Packaged Foods	$	3,032.4		$	2,953.9
	Food Ingredients		411.5			428.3
	Meat Processing		2,277.2			2,506.2
	Agricultural Products		523.6			490.7
	Total	$	6,244.7		$	6,379.1
Intersegment sales
	Packaged Foods	$	6.7		$	10.5
	Food Ingredients		63.0			54.3
	Meat Processing		187.8			172.6
	Agricultural Products		12.6			13.0
			270.1			250.4
	Intersegment elimination		(270.1	)		(250.4	)
	Total	$	—		$	—
Net sales
	Packaged Foods	$	3,039.1		$	2,964.4
	Food Ingredients		474.5			482.6
	Meat Processing		2,465.0			2,678.8
	Agricultural Products		536.2			503.7
	Intersegment elimination		(270.1	)		(250.4	)
	Total	$	6,244.7		$	6,379.1
Operating profit
	Packaged Foods	$	426.3		$	345.7
	Food Ingredients		41.1			33.2
	Meat Processing		33.4			11.1
	Agricultural Products		(37.9	)		(34.3	)
	Total operating profit		462.9			355.7
	Interest expense		94.1			130.9
	General corporate expenses		65.7			19.2
	Goodwill amortization		26.6			17.5
Income before income taxes and cumulative effect of changes in accounting		$	276.5		$	188.1

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		Thirty-nine weeks ended
		February 24, 2002			February 25, 2001
Sales to unaffiliated customers
	Packaged Foods	$	9,243.3		$	8,416.1
	Food Ingredients		1,273.4			1,249.0
	Meat Processing		7,550.1			7,855.3
	Agricultural Products		3,149.3			3,152.3
	Total	$	21,216.1		$	20,672.7
Intersegment sales
	Packaged Foods	$	21.9		$	30.9
	Food Ingredients		192.8			192.9
	Meat Processing		591.0			543.1
	Agricultural Products		20.6			31.6
			826.3			798.5
	Intersegment elimination		(826.3	)		(798.5	)
	Total	$	—		$	—
Net sales
	Packaged Foods	$	9,265.2		$	8,447.0
	Food Ingredients		1,466.2			1,441.9
	Meat Processing		8,141.1			8,398.4
	Agricultural Products		3,169.9			3,183.9
	Intersegment elimination		(826.3	)		(798.5	)
	Total	$	21,216.1		$	20,672.7
Operating profit
	Packaged Foods	$	1,167.4		$	1,082.9
	Food Ingredients		133.5			123.7
	Meat Processing		204.6			121.2
	Agricultural Products		39.7			125.3
	Total operating profit		1,545.2			1,453.1
	Interest expense		298.0			323.2
	General corporate expenses		208.1			155.9
	Goodwill amortization		82.0			64.1
Income before income taxes and cumulative effect of changes in accounting		$	957.1		$	909.9

8.    Debt

        During the second quarter of its current fiscal year, the company issued $500 million of floating rate senior notes due 2003, $500 million of 6% senior notes due 2006 and $1 billion of 6.75% senior notes due 2011. The interest rate associated with the floating rate senior notes is equal to three-month LIBOR plus 70 basis points, or approximately 2.6% as of February 24, 2002. The net proceeds were used to reduce outstanding commercial paper borrowings carrying an interest rate of 3.8%.

        As of February 24, 2002, the company had interest rate swaps outstanding that convert $2 billion of the company's fixed rate debt into floating rate debt.

        During the thirteen weeks ended February 24, 2002, the company's finance subsidiary, ConAgra Capital, L.C., redeemed all 4,000,000 shares of its 9% Series A Cumulative Preferred Securities and all 10,000,000 shares of its 9.35% Series C Cumulative Preferred Securities. The company used

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approximately $350 million of short-term debt to fund the redemption of the preferred securities. The redemption resulted in an income per share charge of approximately $.01 in the third quarter of fiscal 2002.

9.    Operation Overdrive

        During the fourth quarter of fiscal 2000, the company completed a restructuring plan in connection with its previously announced initiative, "Operation Overdrive." The restructuring plan was aimed at eliminating overcapacity, streamlining operations and improving future profitability through margin improvement and expense reductions. As part of this restructuring plan, the company reduced the estimated useful lives of certain assets, resulting in $139.1 million ($86.0 million net of tax) of accelerated depreciation in fiscal 2000. The impact of such accelerated depreciation on both basic and diluted income per share was $.17 for fiscal 2000.

        Approximately 8,450 employees received notification of their termination as a result of the restructuring plan, primarily in manufacturing and operating facilities. In addition, other exit costs (consisting of lease termination and other contractual termination costs) occurred as a result of the restructuring plan. Activity during the thirty-nine weeks ended February 24, 2002, with respect to severance and other exit costs reserves is as follows:

	Severance
						Other Exit Costs
	Amount			Headcount
Balance, May 27, 2001	$	21.5		400		$	8.6
Fiscal 2002 activity:
Utilized		(6.1	)	(185	)		(4.3	)
Balance, February 24, 2002	$	15.4		215		$	4.3

        Included in the February 24, 2002, severance reserve are amounts owed to individuals who have been severed but are receiving their severance payments over a period of time rather than in the form of a lump-sum.

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ConAgra Foods, Inc. and Subsidiaries

Part I—Financial Information

Item 2. Management's Discussion and Analysis

FORWARD-LOOKING STATEMENTS

        Management's discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Future economic circumstances, industry conditions, company performance and financial results, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital, actions of governments and regulatory factors affecting the company's businesses are examples of factors, among others, that could cause results to differ materially from those described in the forward-looking statements.

        Following is management's discussion and analysis of the company's operating results as well as liquidity and capital resources. Results for the thirteen week and thirty-nine week periods ended February 24, 2002, are not necessarily indicative of results that may be attained in the future.

Operating Results

Consolidated Results

        The company's fiscal 2002 third quarter diluted income per share was $.31, as compared to $.22 for the same period in fiscal 2001. The current year third quarter diluted income per share includes a $.01 charge resulting from the company's redemption of preferred securities of a subsidiary. Operating profit for the quarter was $463 million, as compared to $356 million in fiscal 2001; and net income was $171 million, as compared to $116 million in fiscal 2001. For year to date fiscal 2002, diluted income per share was $1.11 as compared to $1.01 for the same period in fiscal 2001. The year to date diluted income per share for fiscal 2001 reflects a reduction in income of $.09 per share related to the cumulative effect of changes in accounting. Year to date operating profit for fiscal 2002 was $1,545 million, up from $1,453 million for fiscal 2001, while year to date net income for fiscal 2002 was $591 million, up from $517 million for fiscal 2001.

Packaged Foods Segment Results

        Third quarter sales of $3,032 million were up $79 million, or 3%, from the prior year while operating profit increased $81 million, or 23%, to $426 million. The operating profit increase over the prior year reflects volume gains, product mix improvement, and effective cost controls. Operating profits for all of the segment's major retail product-lines including shelf-stable meals, grocery items, snacks, dairy products, processed meats, and frozen foods increased by double-digit percentages as compared to the same period in the prior year. Several of the segment's foodservice-oriented product lines, including french fries and seafood, posted profit gains as well. However, the segment's overall foodservice-oriented operations reflected lower operating profits as compared to the same period in the prior year due, in part, to costs associated with the closure of two facilities.

        For the first nine months of fiscal 2002, sales reached $9,243 million, up from $8,416 million last fiscal year, and operating profit totaled $1,167 million, up from $1,083 million last fiscal year. The company completed the acquisition of several large brands late in the first quarter of fiscal 2001, which impacted the growth rate of sales and operating profit for the first nine months of fiscal 2002.

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Food Ingredients Segment Results

        Third quarter sales decreased $17 million, or 4%, versus a year ago to $412 million. The decline in sales resulted from the planned closure of a flour milling facility and steps taken to improve product and customer mix. Operating profit increased $8 million, or 24%, to $41 million as the company's seasonings, blends, and flavorings operations experienced more favorable input costs and improved product mix. Operating profit also improved for the company's grain processing business due to improved industry conditions.

        For the first nine months of fiscal 2002, sales increased $24 million, or 2%, to $1,273 million and operating profits increased $10 million, or 8%, to $134 million. Year to date sales and operating profit growth are attributed primarily to the inclusion of nine month results of an ingredient business acquired in the second quarter of fiscal 2001. Fiscal 2002 year to date results reflect this acquisition for the entire nine-month period.

Meat Processing Segment Results

        Third quarter sales were $2,277 million, down $229 million, or 9%, from $2,506 million in sales for the same period in fiscal 2001. This decline reflects lower volumes due in part to the loss of production resulting from a beef processing plant fire in the third quarter of fiscal 2001 as well as intentional volume changes as part of management's efforts to improve product and customer mix. Despite the sales decline, operating profit increased $22 million, or 201%, to $33 million for the third quarter as compared to last year. This improvement resulted primarily from more efficient operations and the benefit of more favorable U.S. fresh beef, poultry and pork market conditions.

        Year to date sales totaled $7,550 million, down $305 million, or 4%, versus the same period last year. Lower sales resulted primarily from the volume lost due to the prior year beef processing plant fire and the effort to improve product and customer mix. Operating profit for the first nine months of fiscal 2002 totaled $205 million, an increase of $83 million, or 69%, over the same period in fiscal 2001. This increase reflects a significant improvement in poultry and pork market conditions as well as an improvement in product mix and operational efficiency.

Agricultural Products Segment Results

        Third quarter sales of $524 million were up $33 million, or 7%, from $491 million in sales for the same period last year. This increase resulted primarily from the higher chemical and fertilizer prices as well as increased grain volumes. The segment posted an operating loss of $38 million for the quarter reflecting declining profits at United Agri Products, Inc. (UAP), the company's crop input distribution business. UAP's profit declines were due to higher bad debt expense and cost of goods sold, as well as continued poor market conditions. The segment reported an operating loss of $34 million for the same period last year.

        For the first nine months of fiscal 2002, sales of $3,149 million changed only slightly from the prior year total of $3,152 million for the same period. Operating profit, however, declined $85 million, or 68%, from $125 million to $40 million largely the result of the difficult agriculture conditions and higher bad debt expense.

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General Corporate and Interest Expense

        For the third quarter of fiscal 2002, general corporate expenses totaled $66 million as compared to $19 million for the same period in fiscal 2001. On a year to date basis, these expenses totaled $208 million versus $156 million in the prior year. Last year, corporate expenses were positively impacted by the company's reduction of certain reserves by a total of $35 million as a result of the resolution of certain litigation and the reevaluation of reserves for other corporate matters. Additionally, in the current year there were incremental expenses associated with enterprise-wide strategic initiatives that are intended to improve overall productivity and efficiency.

        Interest expense for the third quarter of fiscal 2002 decreased $37 million, or 28%, as compared to the same period in fiscal 2001 due to lower interest rates, favorable results associated with interest rate swaps and a decrease in total interest-bearing debt. Interest expense for the first nine months of fiscal 2002 totaled $298 million, down $25 million, or 8%, from last year's year to date total of $323 million.

Other

        On June 22, 2001, the company filed an amended annual report on Form 10-K for the fiscal year ended May 28, 2000. The filing included restated financial information for fiscal years 1997, 1998, 1999 and 2000. The restatement, due to accounting and conduct matters at its United Agri Products, Inc. subsidiary, was based upon an investigation undertaken by the company and the Audit Committee of its Board of Directors. The restatement was principally related to revenue recognition for deferred delivery sales and vendor rebates, advance vendor rebates, and bad debt reserves. See also Part II, Item 1 of this report.

        In December 2001, the Securities and Exchange Commission ("SEC") issued Financial Reporting Release ("FRR") No. 60, concerning "critical" accounting policies. FRR No. 60 defines a critical accounting policy as a policy that is both important to the portrayal of a company's financial condition and results and requires significant or complex judgment on the part of management. In addition, in January 2002 the SEC issued FRR No. 61 which provides registrants with interpretive guidance regarding additional disclosures in the areas of obligations and commitments, off-balance sheet financings, trading activities, and related party transactions. The company has included applicable information within its management discussion and analysis with respect to the topics addressed in both FRR No.'s 60 and 61.

Liquidity and Capital Resources

Sources of Liquidity and Capital

        The company's primary financing objective is to maintain a conservative balance sheet that provides the flexibility to pursue its growth objectives. The company uses a combination of equity and long-term debt to finance non-current assets and working capital needs.

        To finance its working capital, the company utilizes cash flows generated from operations and also borrows short-term (usually 30-60 days maturity) commercial paper. The company maintains back-up bank lines of credit at least equal to outstanding commercial paper borrowings. The company has in place a short-term revolving credit facility of $350 million (expiring in August 2002) and a longer-term $1.75 billion revolving credit line (expiring in September 2003) with major domestic and international banks. The company has never needed to use these back-up lines of credit. The company is in compliance with the credit agreement's financial covenants. Management believes the company will

17

maintain its current debt credit rating for the foreseeable future, thus allowing the company's continued issuance of commercial paper. If the company was unable to access the short-term commercial paper market, the company would use its bank revolving credit facilities to provide liquidity. The interest rates for the revolving credit facilities are generally .05 to .10 percentage points higher than the interest rates for commercial paper.

        At February 24, 2002, the company had short-term notes payable totaling $1,048 million as compared to $3,176 million at the end of the same period last year. Short-term notes payable decreased due to the company's current year issuance of $2 billion of long-term debt, and the payment of short-term borrowings with cash generated from operating activities.

        The company also funds its short-term financing needs through agreements to sell interests in pools of trade accounts receivable. The existing program can fund up to $875 million of receivables at any one time. The accounts receivable are sold at a discount and this cost is included in selling, general and administrative expenses in the consolidated statement of earnings. Because these accounts receivable are sold without recourse to unrelated third parties, accounts receivable balances sold are excluded from the companies consolidated financial statements. As of the end of the thirteen weeks ended February 24, 2002, accounts receivable sold totaled $812 million. The ability to sell accounts receivable is, in part, dependent upon the credit quality of the underlying accounts receivable. Although not anticipated by the company's management, deterioration of the credit quality of accounts receivable could impact the company's ability to sell receivables under this program. If the company was unable to obtain funds through its receivables program, the company would source its liquidity needs through additional borrowings under its commercial paper program. The interest rates for commercial paper are generally less than .10 percentage points, higher than the implicit rate for the accounts receivable sales program.

        Debt reduction has been a primary focus of the company during fiscal 2002. The company's overall level of interest-bearing debt totaled $7,089 million at February 24, 2002, compared to $7,417 million as of February 25, 2001. This 4.4% reduction was primarily a result of the company's efforts in reducing short-term debt.

        During the thirteen weeks ended February 24, 2002, the company's finance subsidiary, ConAgra Capital, L.C., redeemed $350 million of its 9% and 9.35% preferred securities, using lower-rate short-term debt to fund the redemption. The rates associated with the short-term debt used to fund the redemption are approximately 6 percentage points lower than the interest rates associated with the redeemed securities. As a result, all 4,000,000 shares of its 9% Series A Cumulative Preferred Securities and all 10,000,000 shares of its 9.35% Series C Cumulative Preferred Securities have been redeemed. The redemption resulted in an income per share charge of approximately $.01 in the third quarter of fiscal 2002. The company expects the income per share charge to be offset by reduced interest expense throughout the remainder fiscal 2002.

        As part of the company's program to refinance short-term debt into long-term debt, during the second quarter of the current year, the company issued $500 million of floating rate senior notes due September 2003, $500 million of 6% senior notes due September 2006, and $1 billion of 6.75% senior notes due September 2011. The interest rate associated with the floating rate senior notes is equal to three-month LIBOR plus 70 basis points, or 2.6% as of February 24, 2002. The net proceeds were used to reduce outstanding commercial paper borrowings carrying an average interest rate of 3.8%. The company replaced short-term debt with long-term debt to protect against potential unfavorable

18

developments in the short-term credit market, and to take advantage of attractive long-term interest rates.

        The company has generally utilized senior long-term debt at a rate not exceeding 30% of total capital. ConAgra Foods' has temporarily exceeded the self-imposed 30% limit for a major strategic purpose that is intended to create value for shareholders. The company also considers it appropriate to exceed the 30% limit in the case of refinancing short-term debt into long-term debt, provided that long-term rates are such that it is advantageous for the company to structure its financing in that manner.

        As of February 24, 2002, the company had interest rate swaps outstanding, converting $2 billion of its fixed rate debt into floating rate debt. The company entered into such interest rate swaps to take advantage of historically low short-term rates, while continuing to maintain long-term financing.

Cash Flows

        Cash used by the company during the thirty-nine weeks ending February 24, 2002, was $167 million, reflecting the net impact of cash flows from operating, investing, and financing activities. For the same period in the prior year, the company used $133 million.

        Cash generated from operating activities totaled $801 million for the thirty-nine weeks ended February 24, 2002, as compared to $1,039 million used for the same period last year. The increased cash flow was primarily due to increased net income coupled with a lower increase in working capital for the thirty-nine week period versus last year. The company continues to focus on effectively managing accounts receivable, inventory and trade payables. Cash flow from operating activities is one of the company's major sources of liquidity.

        Cash used in investing activities totaled $486 million for thirty-nine weeks ended February 24, 2002, down from $1,412 million used in the same period last year. Investing activities consist primarily of additions to property, plant and equipment under the company's normal capital expenditure plan and payments for business acquisitions. Payments for business acquisitions were significantly higher last year due primarily to the acquisition of IHF in the first quarter of fiscal year 2001.

        Cash used in financing activities totaled $482 million for the thirty-nine weeks ended February 24, 2002, versus cash generated of $2,318 million for the same period a year ago. During the thirty-nine weeks ended February 24, 2002, the company issued approximately $2 billion in long-term debt used to reduce short-term borrowings. Additionally, the company redeemed $350 million of preferred securities of a subsidiary with fixed dividend rates ranging from 9% to 9.35%. The company issued short-term borrowings to fund the redemption of these subsidiary preferred securities. In the prior year, cash generated from financing activities related primarily to the acquisition of IHF. Dividends paid during the thirty-nine weeks ended February 24, 2002, totaled $359 million, as compared to $312 million for the same period last year.

Off-Balance Sheet Arrangements

        The company has entered into operating lease arrangements in which the lessors are characterized as "special purpose entities" (SPEs). The SPEs are used to facilitate financing for leased assets. Accordingly, the assets held by the SPEs are the assets leased by the company and the liabilities of the SPEs are the debt used to finance the leased assets (with the assets serving as collateral for the debt). These SPEs are not consolidated by the company as their equity is provided by parties independent of

19

the company in amounts that are sufficient under applicable accounting principles (i.e., equity of at least 3% of total capital) to establish the SPEs as having independent economic substance apart from the company. In these leasing arrangements, the funding obligations of the company are limited solely to the amounts the company has committed to pay, including any residual value guarantees. Such obligations are included in the "Contractual Obligations" table below.

        The Financial Accounting Standards Board (FASB) is currently considering modifying the authoritative accounting literature with respect to SPE leasing arrangements, in particular SPEs which have equity of less than 10% of total capital. Depending on the outcome of the FASB's deliberations in this area, the company may be required in the future to include in its financial statements (i.e., consolidate the leased assets and related debt financing) SPEs which have equity of less than 10% of total capital. As of February 24, 2002, the leased assets associated with such SPE leasing arrangements approximated $75 million.

        A number of facilities are currently being constructed for use within the company's packaged foods distribution network. The company is financing up to 89.9% of the cost of construction of these facilities. Upon completion of each facility, the company intends to lease these facilities from SPEs that are anticipated to have equity in excess of 10% of total capital. The SPEs are expected to obtain permanent financing and repay the construction financing with interest. As of February 24, 2002, the company had advanced approximately $25 million for construction of these facilities which is included in the accompanying financial statements.

Obligations and Commitments

        As part of its ongoing operations, the company enters into arrangements which obligate the company to make future payments under contracts, such as lease or debt agreements. A summary of the company's obligations as of February 24, 2002, is as follows:

	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		2-3 Years		4-5 Years		After 5 Years
	(in millions)
Long-Term Debt	$	6,002.5	$	256.9	$	879.8	$	1,209.9	$	3,655.9
Lease Obligations		784.8		140.0		197.5		118.1		329.2
Unconditional Purchase Obligations		364.4		77.5		147.2		58.1		81.6
Other Long-Term Obligations		.2		.1		.1		—		—
Total Cash Obligations	$	7,151.9	$	474.5	$	1,224.6	$	1,386.1	$	4,066.7

        The company has excluded from the above table amounts associated with operating leases having remaining noncancelable lease terms of one year or less.

        As part of its ongoing operations, the company also enters into arrangements which obligate the company to make future payments under contingent commitments, such as debt guarantees. A

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summary of the company's commitments, including commitments associated with equity method investments, as of February 24, 2002, is as follows:

	Amount of Commitment Expiration Per Period
Other Commercial Commitments	Total		Less than 1 Year		2-3 Years		4-5 Years		After 5 Years
	(in millions)
Guarantees	$	16.9	$	5.3	$	2.4	$	9.2	$	—
Other Commercial Commitments		84.7		14.8		21.7		12.2		36.0
Total Commercial Commitments	$	101.6	$	20.1	$	24.1	$	21.4	$	36.0

Trading Activities

        The company accounts for certain contracts (e.g., "physical" commodity purchase/sale contracts and derivative contracts) at fair value. The company considers such contracts that do not qualify for hedge accounting under SFAS No. 133 as "trading" activities. The table below summarizes the changes in trading assets and liabilities for the third quarter of the current fiscal year:

	(in millions)
Net asset (liability) outstanding as of November 25, 2001, at fair value	$	40.8
Contracts settled during the period (1)		(24.6	)
Changes in fair value of contracts outstanding as of February 24, 2002 (2)		4.0
Changes attributable to changes in valuation techniques and assumptions		—
Net asset (liability) outstanding as of February 24, 2002, at fair value	$	20.2

(1)

Includes contracts outstanding at November 25, 2001 and contracts entered into and settled during the period.

(2)

Includes option premiums paid and received.

        The following table represents the fair value and scheduled maturity dates of such contracts outstanding as of February 24, 2002:

	Fair Value of Contracts as of February 24, 2002 net asset/(liability)
Source of Fair Value	Maturity less than 1 year			Maturity 1-3 years		Total Fair Value
	(in millions)
Prices actively quoted	$	(6.6	)	$	.3	$	(6.3	)
Prices provided by other     external sources		25.3			1.2		26.5
Prices based on models and other valuation methods		—			—		—
Total Fair Value	$	18.7		$	1.5	$	20.2

        In order to minimize the risk of loss associated with non-exchange-traded transactions with counterparties, the company utilizes established credit limits and performs ongoing counterparty credit evaluations.

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        The above tables exclude commodity-based contracts entered into in the normal course of business, including "physical" contracts to buy or sell commodities at agreed-upon fixed prices, as well as derivative contracts (e.g., futures and options) used primarily to hedge an existing asset or liability (e.g., inventory) or an anticipated transaction (e.g., purchase of inventory). The use of such contracts is not considered by the company to be "trading" activities as these contracts are considered either normal purchase and sale contracts or hedging contracts.

Critical Accounting Policies

        The process of preparing financial statements requires the use of estimates on the part of management. The estimates used by management are based on the company's historical experiences combined with management's understanding of current facts and circumstances. Certain of the company's accounting policies are considered critical as they are both important to the portrayal of the company's financial condition and results and require significant or complex judgment on the part of management. The following is a summary of certain accounting policies considered critical by management of the company.

Allowance for Doubtful Accounts—The company's allowance for doubtful accounts reflects reserves for customer receivables to reduce receivables to amounts expected to be collected. Management uses significant judgment in estimating uncollectible amounts. In estimating uncollectible amounts, management considers factors such as current overall economic conditions, industry-specific economic conditions, historical customer performance, and anticipated customer performance. While management believes the company's processes effectively address its exposure for doubtful accounts, changes in the economy, industry, or specific customer conditions may require adjustment to the allowance for doubtful accounts recorded by the company.

Marketing Costs—The company incurs certain costs to promote its products through marketing programs which include advertising, retailer incentives and consumer incentives. The company expenses each of these types of marketing costs in accordance with applicable authoritative accounting literature. The judgment required in determining when marketing costs are incurred can be significant. For volume-based incentives provided to retailers, management must continually assess the likelihood of the retailer achieving the specified targets. Similarly, for consumer coupons, management must estimate the level at which coupons will be redeemed by consumers in the future. Estimates made by management in accounting for marketing costs are based primarily on the company's historical experience with marketing programs with consideration given to current circumstances and industry trends. As these factors change, management's estimates could change and the company could recognize different amounts of marketing costs over different periods of time.

Inventory Valuation—Management reviews its inventory balances to determine if inventories can be sold at amounts equal to or greater than their carrying amounts. The review includes identification of slow moving inventories, obsolete inventories, and discontinued products or lines of products. The identification process includes historical performance of the inventory, current operational plans for the inventory, as well as industry and customer specific trends. If the company's actual results differ from management expectations with respect to the selling of its inventories at amounts equal to or greater than their carrying amounts, the company would be required to adjust its inventory balances accordingly.

Environmental Liabilities—Environmental liabilities are accrued when it is probable that obligations have been incurred and the associated amounts can be reasonably estimated. Management works with

22

independent third-party specialists in order to effectively assess the company's environmental liabilities. Management estimates the company's environmental liabilities based on evaluation of investigatory studies, extent of required cleanup, the known volumetric contribution of the company and other potentially responsible parties, and its experience in remediating sites. Environmental liability estimates may be affected by changing governmental or other external determinations of what constitutes an environmental liability or an acceptable level of cleanup. Management's estimate as to its potential liability is independent of any potential recovery of insurance proceeds or indemnification arrangements. Insurance companies and other indemnitors are notified of any potential claims, and periodically updated as to the general status of known claims. The company does not discount its environmental liabilities as the timing of the anticipated cash payments is not fixed or readily determinable. To the extent that there are changes in the evaluation factors identified above, management's estimate of environmental liabilities may also change.

Employment Related Benefits—The company incurs certain employment-related expenses associated with pensions, postretirement health care benefits, and workers' compensation. In order to measure the expense associated with these employment-related benefits, management must make a variety of estimates including discount rates used to present value certain liabilities, assumed rates of return on assets set aside to fund these expenses, compensation increases, employee turnover rates, anticipated mortality rates, anticipated healthcare costs, and employee accidents incurred but not yet reported to the company. The estimates used by management are based on the company's historical experience as well as current facts and circumstances. The company uses third-party specialists to assist management in appropriately measuring the expense associated with these employment-related benefits. Different estimates used by management could result in the company recognizing different amounts of expense over different periods of time.

Recently Issued Accounting Standards

        In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, which establish accounting and reporting requirements for business combinations. SFAS No. 141 requires all business combinations entered into subsequent to June 30, 2001 to be accounted for using the purchase method of accounting. SFAS No. 142 provides that goodwill and other intangible assets with indefinite lives will not be amortized, but will be tested for impairment on an annual basis. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. The company will adopt SFAS No. 142 at the beginning of its fiscal 2003. The company has not yet completed its assessment of the anticipated adoption impact of SFAS No. 142.

        In August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. This statement requires the company to recognize the fair value of a liability associated with the cost the company would be obligated to incur in order to retire an asset at some point in the future. The liability would be recognized in the period in which it is incurred and can be reasonably estimated. The standard is effective for fiscal years beginning after June 15, 2002. The company expects to adopt this standard at the beginning of its fiscal 2004. The company has not yet completed its assessment of the anticipated adoption impact, if any, of SFAS No. 143.

        Additionally, in October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 develops an accounting model, based upon the framework established in SFAS No. 121, for long-lived assets to be disposed of by sales. The accounting model

23

applies to all long-lived assets, including discontinued operations, and it replaces the provisions of APB Opinion No. 30, Reporting Results of Operations—Reporting the Effects of Disposal of a Segment of a Business and Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for disposal of segments of a business. SFAS No. 144 requires long-lived assets to be measured at the lower of carrying amount or fair value less costs to sell, whether reported in continuing operations or in discontinued operations. The statement is effective for fiscal years beginning after December 15, 2001. The company will adopt this standard at the beginning of its fiscal 2003. The company has not yet completed its assessment of the anticipated adoption impact, if any, of SFAS No. 144.

Related Party Transactions

        The company has entered into various lease agreements with Opus Corporation or its affiliates. Mr. Mark Rauenhorst, a member of the company's board of directors, is a beneficial owner and director of Opus Corporation. The agreements relate to the leasing of land, buildings and equipment for the company in various parts of the United States. The company occupies the buildings pursuant to long-term leases with Opus Corporation and other investors (all of whom are independent of the company), which leases contain various termination rights and purchase options. Leases currently effective require annual lease payments by the company of approximately $15 million.

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ConAgra Foods, Inc. and Subsidiaries

Part I—Financial Information

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Interest Rate Risk

        The company uses interest rate swaps to manage the effect of interest rate changes on a portion of its debt. During the thirty-nine weeks ended February 24, 2002, the company entered into interest rate swap agreements effectively changing the interest rate on $2.0 billion of its debt from a fixed rate to a floating rate. The fair value of the interest rate swap agreements recognized in prepaid expenses and other current assets was $55.4 million. A one percentage point increase/decrease in interest rates would have decreased/increased the fair value of the interest rate swap agreements by approximately $90 million as of February 24, 2002.

        As of February 24, 2002, the fair value of the company's fixed rate debt was estimated at $5.89 billion, based on current market rates primarily provided by outside investment advisors. As of February 24, 2002, a one percentage point increase in interest rates would decrease the fair value of the company's fixed rate debt by approximately $395 million, while a one percentage point decrease in interest rates would increase the fair value of the company's fixed rate debt by approximately $450 million. With respect to the company's floating rate debt, a one percentage point change in interest rates would have impacted net interest expense by approximately $14 million for the thirty-nine weeks ended February 24, 2002.

        Other than the changes noted above, there have been no material changes in the company's market risk during the thirty-nine weeks ended February 24, 2002. For additional information, refer to the subsection "Market Risk" in "Management's Discussion & Analysis" in Item 7 of the company's Form 10-K for the fiscal year ended May 27, 2001.

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ConAgra Foods, Inc. and Subsidiaries

Part II—Other Information

Item 1. Legal Proceedings

        In its Form 10-Q's for the quarters ended August 26, 2001 and November 25, 2001, the company reported a shareholder derivative action filed in a Delaware chancery court on September 26, 2001, a purported class action lawsuit filed in a Nebraska federal court on August 10, 2001, and a second shareholder derivative action filed in Nebraska federal court on October 9, 2001. Each action contains allegations based on the events resulting in the company's restatement of its financial statements filed on an amended Form 10-K on June 22, 2001. The defendants in the actions intend to vigorously defend the allegations and believe the actions are without merit.

Item 6. Exhibits and Reports on Form 8-K

(A)

Exhibits

3.1—ConAgra Foods, Inc. By-laws, as amended

12—Statement regarding computation of ratio of earnings to fixed charges

(B)

Reports on Form 8-K

The company filed a report on Form 8-K dated December 20, 2001 relating to its change in reporting segments.

	CONAGRA FOODS, INC.
	By:
	/s/  JAMES P. O'DONNELL James P. O'Donnell Executive Vice President, Chief Financial Officer and Corporate Secretary
	By:
	/s/  DWIGHT J. GOSLEE Dwight J. Goslee Executive Vice President, Operations Control and Development
	By:
	/s/  JAY D. BOLDING Jay D. Bolding Senior Vice President, Controller
Dated this 10th day of April, 2002.

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ConAgra Foods, Inc. and Subsidiaries

Exhibit Index

EXHIBIT	DESCRIPTION	PAGE
3.1	ConAgra Foods, Inc. By-laws, as amended	28
12	Statement regarding computation of ratio of earnings to fixed charges	41

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QuickLinks

Part I—Financial Information Item 1. Condensed Consolidated Financial Statements
ConAgra Foods, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings (in millions) (unaudited)
ConAgra Foods, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (in millions) (unaudited)
ConAgra Foods, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (dollars in millions except per share amounts) (unaudited)
ConAgra Foods, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in millions) (unaudited)
ConAgra Foods, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements For the Thirty-nine Weeks ended February 24, 2002 (columnar dollars in millions except per share amounts)
ConAgra Foods, Inc. and Subsidiaries Part I—Financial Information Item 2. Management's Discussion and Analysis
ConAgra Foods, Inc. and Subsidiaries Part I—Financial Information Item 3. Quantitative and Qualitative Disclosure About Market Risk
ConAgra Foods, Inc. and Subsidiaries Part II—Other Information

Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K

ConAgra Foods, Inc. and Subsidiaries Exhibit Index

EX-3.1

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Exhibit 3.1

ConAgra Foods, Inc. and Subsidiaries

By-Laws, As Amended

BY-LAWS

OF

CONAGRA FOODS, INC.

ARTICLE I

OFFICES

        Section 1. Principal Executive Office. The principal executive office of ConAgra Foods, Inc. (ConAgra) shall be located in the City of Omaha, County of Douglas, State of Nebraska. ConAgra may have such other offices as the Board of Directors may designate or as the business of ConAgra may require from time to time.

        Section 2. Principal Place of Business. The principal place of business may be, but need not be, identical with the location of the principal executive office. The resident agent of ConAgra shall be as designated from time to time by resolution of the Board of Directors.

ARTICLE II

STOCKHOLDERS

        Section 1. Annual Meetings. The annual meeting of the stockholders shall be held on a date and at an hour determined by the Board of Directors for the purpose of electing officers and for the transaction of such other business as may properly come before the meeting.

        Section 2. Special Meetings. Special meetings of the stockholders, for any purpose or purposes, may be called at any time by the Chairman of the Board or the Chief Executive Officer of ConAgra or by a majority of the full Board of Directors of ConAgra.

        Section 3. Place of Meeting. The Board of Directors may designate Omaha, Douglas County, Nebraska, or such other place, either within or without the State of Nebraska, as the place of meeting for any annual meeting or any special meeting called by the Board of Directors.

        Section 4. Notice of Meeting. Notice of a meeting of stockholders stating the place, day, and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the day of the meeting by or at the direction of the Chairman of the Board, Chairman of the Executive Committee, or the Chief Executive Officer, or the Secretary, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at the address listed on the stock transfer books of ConAgra with postage prepaid. ConAgra need not send notices to stockholders for whom ConAgra has no current address, and action taken without notice to such persons has the same force and effect as if notice had been given to them. ConAgra shall be deemed to have no current shareholder address when two consecutive annual meeting notices have been returned undeliverable, or when at least two payments of dividends or interest sent by first class mail during a twelve-month period have been returned undeliverable. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the notice of meeting. Any previously scheduled meeting of the stockholders may be postponed, and (unless the Certificate of Incorporation otherwise provides) any special meeting

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of the stockholders may be cancelled, by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting of stockholders.

        Section 5. Record Date. For the purpose of determining stockholders entitled to notice of or to vote at any annual or special meeting of stockholders or any adjournment thereof, the record date shall be determined by the Board of Directors and shall be not less than ten days nor more than sixty days before the meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

        Section 6. Voting Lists. The officer or agent having charge of the stock transfer ledger for shares of ConAgra shall prepare and make, at least ten days before every meeting of stockholders, a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be opened to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The original or duplicate stock ledger shall be the only evidence detailing stockholders who are entitled to examine such list or to vote in person or by proxy at such election.

        Section 7. Quorum. A majority of the outstanding shares of ConAgra entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, the Chairman or a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

        Section 8. Proxies; Voting. At all meetings of stockholders, a stockholder may vote by proxy. Such proxy shall be filed with the Secretary of ConAgra at or prior to the time of such meeting. Unless otherwise provided in the proxy, it shall be valid from the date of its execution until three years after its date of execution. At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect the directors. All other elections and questions shall, unless otherwise provided by the Certificate of Incorporation, these By-Laws, the rules or regulations of any stock exchange applicable to ConAgra, as otherwise provided by law or pursuant to any regulation applicable to ConAgra or its securities, be decided by the affirmative vote of the holders of a majority of the shares of stock of ConAgra which are present in person or by proxy and entitled to vote thereon.

        Section 9. Voting of Shares by Certain Holders. Shares standing in the name of another corporation may be voted by such officer, agent, or proxy as the By-Laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine.

        Shares held by an administrator, executor, guardian, conservator, or other fiduciary may be voted by such person, either in person or by proxy, without a transfer of such shares into the name of such person. Shares standing in the name of a trustee may be voted by such trustee, either in person or by

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proxy, but no trustee shall be entitled to vote such shares held without a transfer of such shares into his name, as trustee.

        Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so is contained in an appropriate order of the court.

        Persons whose stock is pledged shall be entitled to vote, unless the pledgor has effected the transfer on the books of ConAgra and has expressly empowered the pledgee to vote thereon, in which case only the pledgee or his proxy, may represent such stock and vote thereon.

        Shares of its own stock belonging to ConAgra shall not be voted, directly or indirectly, at any meeting, and shall not be counted in determining the total number of outstanding shares at any given time. Nothing herein shall be construed as limiting the right of ConAgra to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

        Section 10. Notice of Stockholder Business. At an annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (a) by or at the direction of the Board of Directors or (b) by any stockholder of ConAgra who was a stockholder of record at the time of giving of notice provided for in Section 4, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 10. For business to be properly brought before an annual meeting by a stockholder, a stockholder must have given timely notice thereof in writing to the Secretary of ConAgra and such business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of ConAgra, not less than 90 nor more than 120 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from such anniversary date, notice by the stockholder to be timely must be so delivered or mailed and received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the date on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the By-Laws of ConAgra, the language of the proposed amendment), and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on ConAgra's books, of the stockholder proposing such business, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (c) the class and number of shares of ConAgra which are owned of record and beneficially by the stockholder and beneficial owner, if any, (d) any material interest of the stockholder and beneficial owner, if any, in such business, (e) a representation that the stockholder is a holder of record of stock of ConAgra entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business and (f) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of ConAgra's outstanding capital stock required to approve or adopt the proposal and/or (ii) otherwise solicit proxies from stockholders in support of such proposal. Notwithstanding anything in the By-Laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 10. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 10, and if such

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person should so determine, such person shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

        Section 11. Notice of Stockholder Nominees at an Annual Meeting. Only persons who are nominated in accordance with the procedures set forth in these By-Laws shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of ConAgra may be made at an annual meeting of stockholders (a) by or at the direction of the Board of Directors or (b) by any stockholder of ConAgra who was a stockholder of record at the time of giving of notice provided for in Section 4, who is entitled to vote at the annual meeting and entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 11. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of ConAgra. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of ConAgra not less than 90 nor more than 120 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from such anniversary date, notice by the stockholder to be timely must be so delivered or mailed and received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the date on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclose in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to be named as a nominee and to serving as the director if elected); and (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, (i) the name and address, as they appear on ConAgra's books, of such stockholder and the name and address of the beneficial owner, if any, (ii) the class and number of shares of ConAgra which are owned of record and beneficially by such stockholder and beneficial owner, if any, (iii) a representation that the stockholder is a holder of record of stock of ConAgra entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination, and (iv) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group which intends to (a) deliver a proxy statement and/or form of proxy to holders of at least the percentage of ConAgra's outstanding capital stock required to elect the nominee and/or (b) otherwise solicit proxies from stockholders in support of such nomination. At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of ConAgra that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of ConAgra unless nominated in accordance with the procedures set forth in the By-Laws. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the By-Laws, and if such person should so determine, such person shall so declare to the meeting and the defective nomination shall be disregarded.

        Section 12. Notice of Stockholder Nominees at a Special Meeting. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to ConAgra's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to ConAgra's notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of ConAgra who is a stockholder of record at the time of giving of notice provided for in Section 4, who

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shall be entitled to vote at the special meeting and who complies with the notice procedures set forth in Section 11. In the event ConAgra calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in ConAgra's notice of meeting, if the stockholder's notice required by Section 11 shall be delivered to the Secretary at the principal executive offices of ConAgra not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above.

        Section 13. Inspectors of Elections. The Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve ConAgra in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders, the Chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by law.

        Section 14. Conduct of Meetings. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts, as in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

ARTICLE III

BOARD OF DIRECTORS

        Section 1. General Powers. The business and affairs of ConAgra shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities by these By-Laws expressly conferred upon them, the Board of Directors may exercise all such powers of ConAgra and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws required to be exercised or done by the stockholders.

        Section 2. Number, Tenure and Qualifications. The number of directors of ConAgra, not less than nine nor more than sixteen, shall be fixed by resolution of the Board of Directors and may be altered from time to time by a resolution of the Board of Directors. Directors need not be residents of the State of Delaware or stockholders of ConAgra. The directors shall be divided into three classes: Class I, Class II and Class III, each such class, as nearly as possible, to have the same number of directors. At each annual election of directors by the stockholders of ConAgra, the directors chosen to succeed those whose terms are then expired shall be identified as being of the same class as the directors they succeed and shall be elected by the stockholders of ConAgra for a term expiring at the third succeeding annual election of directors, or thereafter when their respective successors in each case

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are elected by the stockholders and qualify. It shall be a qualification for initial election of a person to the board that such person shall have executed an insider trading agreement with the company, such agreement to become effective upon such person's election to the board. It shall be a qualification for reelection of any director to the board that such director, while a director, shall have at all times after April 10, 2002 been a signatory to and have been in full compliance with an insider trading agreement with the company. As used in the two preceding sentences, "insider trading agreement' shall mean an agreement, in such form as shall be approved from time to time by the board, relating to the purchase or other acquisition, and the sale or other disposition, of securities of the company by directors of the company.

        Section 3. Regular Meetings. A regular meeting of the Board of Directors shall be held on the same date as the annual meeting of stockholders. Three or more other regular meetings of the Board of Directors shall be held during the year with such meetings on dates approved by a majority of the Board of Directors. The Chairman of the Board or the Chief Executive Officer or the Secretary shall designate the time and place of such meeting by notice to each director at least ten days before the meeting. In the event meeting dates are not approved by a majority of the Board of Directors, regular meetings shall be held on the third Thursday of January, May, July and September. Meetings of the Board of Directors may be held either within or without the State of Delaware. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Delaware, for the holding of the regular meetings or additional regular meetings without other notice than such resolution.

        Section 4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chairman of the Board, Chairman of the Executive Committee, Chief Executive Officer, or a majority of the Board of Directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Delaware, as the place for holding any special meeting of the Board of Directors called by them.

        Section 5. Notice. Notice shall be given three days in advance of any special meeting of the Board of Directors, or in emergency situations designated by the Chairman of the Board, Chairman of the Executive Committee, or the Chief Executive Officer, 12 hours' notice of a special meeting of the Board of Directors may be given, by telegram, telephone, personal delivery, telecopier or other means of electronic transmission. Notices of other meetings of the Board of Directors may be given by mail or may (and, if three or fewer days notice is given, shall) be given by telegram, telephone, personal delivery, telecopier or other means of electronic transmission. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid. If notice is given by telegram, such notice shall be deemed to be delivered when transmitted. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

        Section 6. Quorum. A majority of the number of directors fixed in accordance with Section 2 of this Article III shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice.

        Section 7. Manner of Acting. Except as otherwise required by applicable law, the act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if a written consent thereto is signed by all members of the board and such written consent is filed with the minutes of the proceedings of the Board. A consent in

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lieu of meeting may be made either by one consent signed by all the directors or by individual consents signed by each director. The directors may also meet by means of conference telephone or similar communications equipment as provided by Delaware law.

        Section 8. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors shall be filled by a majority of the directors then in office, although less than a quorum. Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires and until such director's successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the full Board of Directors shall shorten the term of any incumbent director.

        Section 9. Compensation. By resolution of the Board of Directors, the directors may be paid expenses, if any, for attendance at each meeting of the Board of Directors. In addition, by resolution of the Board of Directors, each director may be paid an annual retainer fee and committee fees for services as director and may also receive a fee for attendance at regular or special meetings of the Board of Directors. No such payment shall preclude any director from serving ConAgra in any other capacity and receiving compensation therefor.

        Section 10. Directors' Executive Committee. An Executive Committee of three or more directors may be designated by resolution passed by a majority of the Board. The Board shall designate one director as chairman of the committee, and may designate one or more directors as alternate members of the committee who may replace any absent or disqualified member at any meeting of the committee. During the intervals between meetings of the Board, the committee shall advise and aid the officers of ConAgra in all matters concerning its interests and the management of its business, and generally perform such duties as may be directed by the Board from time to time. The committee shall possess and may exercise all the powers of the Board while the Board is not in session, but specifically shall not have the authority of the Board of Directors in reference to:

        1.    Amending the Certificate of Incorporation.

        2.    Adopting a plan of merger or consolidation.

        3.    Recommending to the stockholders the sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all the property and assets of ConAgra otherwise than in the usual and regular course of its business.

        4.    Recommending to the stockholders a voluntary dissolution of ConAgra or a revocation thereof.

        5.    Amending the By-Laws of ConAgra.

        6.    Any power which has been delegated to other committees in accordance with these By-Laws.

        7.    Electing any director or electing or removing any member of the Executive Committee or any principal officer, or

        8.    Declaring any dividend or authorizing any distribution on any shares of capital stock of ConAgra.

        Section 11. Human Resources Committee. A Human Resources Committee shall be designated by a resolution passed by a majority of the Board of Directors. The Board shall appoint one of the Committee members to serve as Chairman.

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        Section 12. Audit Committee. An Audit Committee shall be designated by a resolution passed by a majority of the Board of Directors. The Board shall appoint one of the Committee members to serve as Chairman.

        Section 13. Other Committees. One or more other Board of Directors' committee members and chairman thereof may be designated by resolution passed by a majority of the Board.

ARTICLE IV

OFFICERS

        Section 1. Number and Status. The Board of Directors will elect a chairman of the Board, may elect a vice-chairman of the Board, and may elect such honorary (non-voting) directors as deemed advisable. The elected officers of ConAgra shall consist of the Chief Executive Officer (CEO) who shall also carry the legal title of president; one or more members of the Office of the President (the number thereof to be designated by the CEO); one or more elected corporate Vice Presidents (the number thereof to be determined by the CEO); a Secretary; and may include a President and Chief Operating Officer. The CEO shall be nominated and elected by the Board of Directors. Other elected officers shall be nominated by the CEO and elected by a majority of the Board of Directors. Other corporate officers, including a Treasurer, and assistant corporate officers as may be deemed necessary by the CEO, may be appointed by the CEO and shall be confirmed by the Board of Directors. The CEO may also designate as many Independent Operating Companies' (IOC) officers as the CEO deems necessary to manage operating units of ConAgra. Authority of IOC officers shall relate only to businesses for which they have been assigned responsibility. No authority granted to IOC officers shall conflict with authorities granted by these By-Laws or by resolutions of the Board of Directors.

        Section 2. Election and Term of Office. The officers of ConAgra to be elected or confirmed by a majority of the Board of Directors shall be elected and confirmed annually at the meeting of the Board of Directors on the same date as the annual meeting of stockholders. If the election and appointment of officers shall not be held at such meeting, then they shall be held as soon thereafter as conveniently possible. Each officer shall hold office until the officer's death, or resignation, or removal in the manner hereinafter provided.

        Section 3. Removal. Officers elected by the Board of Directors may be removed at any time by a majority vote of the Board of Directors, or by the CEO with such action to be affirmed by a majority vote of the Board of Directors. Appointed corporate and IOC officers may be removed from office by the CEO or any officer designated by the CEO to have such authority. The acceptance of office by an officer shall constitute acceptance of this provision.

        Section 4. Vacancies. A vacancy in any elected office because of death, resignation, removal, disqualification or otherwise, shall be filled by a majority vote of the Board of Directors for the unexpired portion of the term. The CEO may fill vacancies of appointed corporate and IOC officers.

        Section 5. Chairman of the Board of Directors. The chairman of the Board of Directors shall preside at all meetings of stockholders and the Board of Directors, and shall have such other duties as may be assigned by resolution of the Board of Directors.

        Section 6. Vice Chairman of the Board of Directors. The vice chairman of the Board of Directors may preside at meetings of the Board of Directors in the absence of the chairman of the Board of Directors and the CEO, and shall have such other duties as may be assigned by resolution of the Board of Directors.

        Section 7. Chief Executive Officer (CEO). Subject to the authority of the Board of Directors, the Chief Executive Officer shall be the highest ranking management officer of ConAgra, lead its business affairs and perform all duties incident to the office of chief executive. The CEO shall preside at all

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meetings of the stockholders and of the Board of Directors in the absence of the chairman of the Board of Directors. The CEO may sign with the Secretary or any other elected officer, certificates for shares of ConAgra; and may sign (or authorize a designee to sign) deeds, mortgages, bonds, contracts, or other instruments within authority granted by the Board of Directors (except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other officer or agent of ConAgra). The CEO shall assign job duties, responsibilities, and authorities to other officers of ConAgra, or designate others to do so. In the event of the CEO's inability to serve, CEO duties shall be temporarily fulfilled, pending action by the Board of Directors, first by the Chairman of the Board, or next in line by the Chairman of the Executive Committee, or next by the Chairman of the Audit Committee, or next by the Chairman of the Compensation Committee.

        Section 8. President and Chief Operating Officer. There may be one President and Chief Operating Officer of ConAgra. This individual will report directly to the CEO and shall have such duties, responsibilities and authority as, from time to time, are assigned by the CEO or the Board of Directors.

        Section 9. Office of the President. ConAgra shall have an Office of the President, the members of which shall be nominated by the CEO and elected by the Board of Directors. Each member shall serve as the head of one or more of ConAgra's major business units. Each member shall carry the title of "President and Chief Operating Officer" of such business units. Each member will report to ConAgra's CEO, or the President and Chief Operating Officer of ConAgra, as may be specified by the CEO, and shall have such duties, responsibilities and authority as, from time to time, are assigned by the CEO, President and Chief Operating Officer of ConAgra, or the Board of Directors.

        Section 10. Corporate Vice Presidents. Any elected Vice President may sign, with the Secretary or Assistant Secretary, certificates for shares of ConAgra. Each ConAgra vice president shall perform such duties and have such responsibility and authority as from time to time may be assigned by the CEO, an officer so authorized by the CEO, or the Board of Directors.

        Section 11. The Secretary. The Secretary shall: (a) keep the minutes of the stockholders' meetings and of the Board of Directors' meetings; (b) see that all notices are fully given in accordance with the provisions of these By-Laws or required by law; (c) be custodian of ConAgra minutes and of the seal of ConAgra; (d) sign certificates for shares of ConAgra, the issuance of which shall have been authorized by resolution of the Board of Directors; (e) supervise activities of transfer agents and registrars; and (f) in general perform duties incident to the office of the Secretary as from time to time may be assigned by the CEO or the Board of Directors.

        Section 12. The Treasurer. The Treasurer shall perform duties incident to the office of the Treasurer in accordance with these By-Laws, and shall perform such other duties as, from time to time, may be assigned by the CEO, Board of Directors, or officer to whom the Treasurer reports.

        Section 13. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or Treasurer, respectively, by the CEO or by the Board of Directors.

        Section 14. Salaries. The salaries of the elected and confirmed officers shall be fixed from time to time by the Board of Directors or by those so authorized by the Board of Directors. No officer shall be prevented from receiving a salary by reason of the fact that such person is also a director of ConAgra.

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ARTICLE V

CONTRACTS, LOANS, CHECKS, AND DEPOSITS

        Section 1. Contracts. The Board of Directors may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of ConAgra, and such authority may be general or confined to specific instances.

        Section 2. Loans. No loans shall be contracted on behalf of ConAgra and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances.

        Section 3. Checks, Drafts, etc. All checks, drafts, other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of ConAgra shall be executed on behalf of ConAgra only by those who are authorized by the Board of Directors or by those whom the Board may designate to give such authorization. Such authorization may be general or confined to specific instances.

        Section 4. Deposits. All funds of ConAgra not otherwise employed shall be deposited to the credit of ConAgra in banks, trust companies, or other depositaries, approved in accordance with resolutions of the Board of Directors.

ARTICLE VI

CERTIFICATES FOR SHARES AND THEIR TRANSFER

        Section 1. Certificates for Shares. Certificates representing shares of ConAgra shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the Chairman, Chief Executive Officer, Chief Operating Officer, or a Corporate Vice President and by the Secretary or an Assistant Secretary, except that the signatures of any such Chairman, Chief Executive Officer, Chief Operating Officer, Corporate Vice President, Secretary or Assistant Secretary may be facsimiles, engraved or printed. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of ConAgra. All certificates surrendered to ConAgra, or its agent, for transfer shall be canceled and a new certificate shall be issued only after the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed, or mutilated certificate a new one may be issued therefor upon such terms and indemnity to ConAgra as the Board of Directors may prescribe.

        Section 2. Transfer of Shares. Transfer of shares of ConAgra shall be made only on the stock transfer books of ConAgra by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney authorized by power of attorney duly executed and filed with the transfer agent of ConAgra, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of ConAgra shall be deemed by ConAgra to be the owner thereof for all purposes.

        Section 3. Fractional Shares. No fractional shares of stock of ConAgra shall be transferred, issued, or reissued.

        Section 4. Charge for Certificates. ConAgra may invoke a charge approximately equal to the cost of issuing a stock certificate for each certificate of stock to be issued or reissued in excess of the minimum number of certificates required, if the number of certificates requested by a stockholder is deemed by the Secretary to be unreasonable.

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ARTICLE VII

INDEMNIFICATION

        Section 1. Actions by Others. ConAgra shall indemnify any person who was or is a party to or is threatened to be made a party to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of ConAgra) by reason of the fact that such person is or was a director, officer, employee or agent of ConAgra, or is or was serving at the request of ConAgra as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of ConAgra, and, with respect to any criminal action or proceedings, had no reasonable cause to believe the conduct was criminal. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interest of ConAgra, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the conduct was criminal.

        Section 2. Actions by or in the Right of ConAgra. ConAgra shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of ConAgra to procure a judgment in its favor by reason of the fact that such person is or was a director, officer, employee or agent of ConAgra, or is or was serving at the request of ConAgra, as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of ConAgra and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to ConAgra unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

        Section 3. Successful Defense. To the extent that a director, officer, employee or agent of ConAgra has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith.

        Section 4. Specific Authorization. Any indemnification under Section 1 and 2 of this Article (unless ordered by a court) shall be made by ConAgra only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in said Sections 1 and 2. Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders.

        Section 5. Advance of Expenses. Expenses incurred by an elected officer or director in defending a civil or criminal action, suit or proceeding shall be paid by ConAgra in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or

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elected officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by ConAgra as authorized in this Article. Such expenses incurred by other officers, employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate.

        Section 6. Right of Indemnity Not Exclusive. The indemnification and advancement of expenses provided by or granted pursuant to the Certificate of Incorporation or these By-Laws shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

        Section 7. Insurance. ConAgra may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of ConAgra, or is or was serving at the request of ConAgra as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not ConAgra would have the power to indemnify such person against such liability under the provisions of this Article, Section 145 of the General Corporation Law of the State of Delaware, or otherwise.

        Section 8. Employee Benefit Plans. For purposes of this Article, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of ConAgra" shall include any service as a director, officer, employee or agent of ConAgra which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of ConAgra" as referred to in this Article.

        Section 9. Invalidity of any Provisions of this Article. The invalidity or unenforceability of any provisions of this Article shall not affect the validity or enforceability of the remaining provisions of this Article.

        Section 10. Continuation of Indemnification. The indemnification and advancement of expenses, to the extent provided by or granted pursuant to this Article, these By-Laws, or the Certificate of Incorporation shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such person. All rights to indemnification provided by or granted pursuant to this Article, these By-Laws, or the Certificate of Incorporation shall be deemed to be a contract between ConAgra and each director, officer, employee, or agent of ConAgra who serves or served in such capacity at any time while this Article VII is in effect. Any repeal or modification of this Article VII shall not in any way diminish any rights to indemnification of such directors, officer, employee or agent, or the obligations of ConAgra arising hereunder.

        Section 11. Certain Claims. Notwithstanding Section 1 and Section 2 of this Article VII, ConAgra shall be required to indemnify a person described in the first sentence of Section 1 or Section 2 of this Article VII in connection with an action, suit or proceeding (or part thereof) commenced by such a person only if the commencement of such proceeding (or part thereof) by such person was authorized by the Board of Directors.

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ARTICLE VIII

FISCAL YEAR

        The fiscal year of ConAgra shall end on the last Sunday in May.

ARTICLE IX

DIVIDENDS

        The Board of Directors may from time to time declare, and ConAgra may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Certificate of Incorporation.

ARTICLE X

SEAL

        The Board of Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of ConAgra Foods, Inc. on the outer edge, and the words, "Corporate Seal," in the center.

ARTICLE XI

WAIVER OF NOTICE

        Whenever any notice is required to be given to any stockholder or director of ConAgra under the provisions of these By-Laws or under the provisions of the Certificate of Incorporation or under the provisions of the laws of Delaware, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

ARTICLE XII

AMENDMENTS

        These By-Laws may be altered, amended, or repealed and new By-Laws may be adopted by the Board of Directors at any regular or special meeting of the Board of Directors.

4/07/02

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Exhibit 3.1

ConAgra Foods, Inc. and Subsidiaries By-Laws, As Amended
ARTICLE II STOCKHOLDERS
ARTICLE III BOARD OF DIRECTORS
ARTICLE IV OFFICERS
ARTICLE V CONTRACTS, LOANS, CHECKS, AND DEPOSITS
ARTICLE VI CERTIFICATES FOR SHARES AND THEIR TRANSFER
ARTICLE VII INDEMNIFICATION
ARTICLE VIII FISCAL YEAR
ARTICLE IX DIVIDENDS
ARTICLE X SEAL
ARTICLE XI WAIVER OF NOTICE
ARTICLE XII AMENDMENTS

EX-12

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EXHIBIT 12

ConAgra Foods, Inc. and Subsidiaries

Computation of Ratio of Earnings to Fixed Charges

(in millions)

			Thirty-nine weeks ended February 24, 2002
Fixed charges as defined:
	Interest expense		$	326.9
	Capitalized interest			3.7
	Interest in cost of goods sold			16.9
	Preferred distributions of subsidiary			22.8
	One-third of noncancelable lease rent			35.1
		Total fixed charges (A)	$	405.4
Earnings as defined:
	Pretax income after elimination of undistributed earnings of equity method investees		$	950.6
	Add fixed charges			405.4
	Less capitalized interest			(3.7	)
		Earnings and fixed charges (B)	$	1,352.3
Ratio of earnings to fixed charges (B/A)				3.3

        For the purposes of computing the above ratio of earnings to fixed charges, earnings consist of income before taxes and fixed charges. Fixed charges, for the purpose of computing earnings, are adjusted to exclude interest capitalized. Fixed charges include interest on both long and short-term debt (whether said interest is expensed or capitalized and including interest charged to cost of goods sold), and a portion of noncancelable rental expense representative of the interest factor. The ratio is computed using the amounts for ConAgra Foods as a whole, including its majority-owned subsidiaries and its proportionate share of any 50% owned subsidiaries, whether or not ConAgra Foods guarantees obligations of these subsidiaries.

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EXHIBIT 12

ConAgra Foods, Inc. and Subsidiaries Computation of Ratio of Earnings to Fixed Charges (in millions)