-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D6yPKnpd5CjOtNHs+oW0rXM8qlE3/PyOuVVwqPD9Zgg6RpycUeUEP8md6sdvc8iN wje/80+gV86NDk6E4Ho90g== 0001047469-99-014749.txt : 19990415 0001047469-99-014749.hdr.sgml : 19990415 ACCESSION NUMBER: 0001047469-99-014749 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990228 FILED AS OF DATE: 19990414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAGRA INC /DE/ CENTRAL INDEX KEY: 0000023217 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 470248710 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07275 FILM NUMBER: 99593221 BUSINESS ADDRESS: STREET 1: ONE CONAGRA DR CITY: OMAHA STATE: NE ZIP: 68102 BUSINESS PHONE: 4025954000 FORMER COMPANY: FORMER CONFORMED NAME: NEBRASKA CONSOLIDATED MILLS CO DATE OF NAME CHANGE: 19721201 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 1-7275 - ------------------------------------------------------------------------------- CONAGRA, INC. - ------------------------------------------------------------------------------- (Exact name of registrant, as specified in charter) Delaware 47-0248710 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One ConAgra Drive, Omaha, Nebraska 68102-5001 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code)
(402) 595-4000 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NA - ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Number of shares outstanding of issuer's common stock, as of March 28, 1999 was 488,212,411. PART I - FINANCIAL INFORMATION ITEM 1. CONDENSED FINANCIAL STATEMENTS CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (in millions except per share amounts) (unaudited)
- -------------------------------------------------------------------------------------------------------------- THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED FEBRUARY 28, FEBRUARY 22, FEBRUARY 28, FEBRUARY 22, 1999 1998 1999 1998 ------------ ------------ ------------ ------------ Net sales $ 5,693.3 $ 5,468.0 $ 18,581.1 $ 18,278.9 Costs and expenses Cost of goods sold 4,686.2 4,592.5 15,550.6 15,482.8 Selling, administrative and general expenses 640.4 581.9 1,962.6 1,810.0 Interest expense 88.0 76.2 255.4 225.3 ------- -------- -------- -------- 5,414.6 5,250.6 17,768.6 17,518.1 ------- -------- -------- -------- Income before income taxes 278.7 217.4 812.5 760.8 Income taxes 107.3 83.7 312.8 291.6 ------- -------- -------- -------- Income before cumulative effect of change in accounting 171.4 133.7 499.7 469.2 Cumulative effect of change in accounting -- (14.8) -- (14.8) ------- -------- -------- -------- Net income $ 171.4 $ 118.9 $ 499.7 $ 454.4 ------- ------- -------- -------- ------- ------- -------- -------- Income per share - basic Income before cumulative effect of change in accounting $ 0.36 $ 0.29 $ 1.06 $ 1.01 Cumulative effect of change in accounting -- (0.03) -- (0.03) ------- ------- -------- -------- Net income $ 0.36 $ 0.26 $ 1.06 $ 0.98 ------- ------- -------- -------- ------- ------- -------- -------- Income per share - diluted Income before cumulative effect of change in accounting $ 0.36 $ 0.28 $ 1.05 $ 0.99 Cumulative effect of change in accounting -- (0.03) -- (0.03) ------- ------- -------- -------- Net income $ 0.36 $ 0.25 $ 1.05 $ 0.96 ------- ------- -------- -------- ------- ------- -------- -------- - -------------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements. 2 CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) (unaudited)
- ------------------------------------------------------------------------------------------------------------- THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED FEBRUARY 28, FEBRUARY 22, FEBRUARY 28, FEBRUARY 22, 1999 1998 1999 1998 ----------- ----------- ------------ ------------ Net income $171.4 $118.9 $499.7 $454.4 Other comprehensive income/(loss): Currency translation adjustment (4.2) (11.6) 1.0 (28.1) ----- ----- ----- ----- Comprehensive income $167.2 $107.3 $500.7 $426.3 ----- ----- ----- ----- ----- ----- ----- ----- - -------------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements. 3 CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in millions except per share amount) (unaudited)
- ------------------------------------------------------------------------------------------------------------- FEBRUARY 28, MAY 31, FEBRUARY 22, 1999 1998 1998 ----------- ----------- ----------- ASSETS Current assets Cash and cash equivalents $ 22.9 $ 108.4 $ 44.6 Receivables, less allowance for doubtful accounts of $85.1, $68.2 and $84.7 2,447.8 1,546.9 2,220.4 Inventories 4,008.5 3,540.8 3,955.3 Prepaid expenses 320.7 341.6 412.5 ----------- ----------- ----------- Total current assets 6,799.9 5,537.7 6,632.8 ----------- ----------- ----------- Property, plant and equipment 6,227.6 5,761.1 5,609.9 Less accumulated depreciation (2,579.9) (2,311.4) (2,286.0) ----------- ----------- ----------- Property, plant and equipment, net 3,647.7 3,449.7 3,323.9 ----------- ----------- ----------- Brands, trademarks and goodwill 2,627.3 2,391.7 2,388.2 Other assets 462.0 429.4 395.0 ----------- ----------- ----------- $ 13,536.9 $ 11,808.5 $ 12,739.9 ----------- ----------- ----------- ----------- ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable $ 2,653.7 $ 858.1 $ 2,405.0 Current installments of long-term debt 19.2 52.7 80.2 Accounts payable 2,225.4 1,971.0 2,068.2 Advances on sales 180.7 829.7 173.5 Other accrued liabilities 1,376.9 1,382.2 1,398.2 ----------- ----------- ----------- Total current liabilities 6,455.9 5,093.7 6,125.1 ----------- ----------- ----------- Senior long-term debt, excluding current installments 1,888.0 1,753.5 1,708.9 Other noncurrent liabilities 787.8 847.3 907.9 Subordinated debt 750.0 750.0 750.0 Preferred securities of subsidiary company 525.0 525.0 525.0 Common stockholders' equity Common stock of $5 par value, authorized 1,200,000,000 shares; issued 519,621,865, 519,424,034 and 519,174,540 2,598.1 2,597.1 2,595.9 Additional paid-in capital 298.9 320.0 312.1 Retained earnings 1,595.2 1,337.7 1,237.3 Foreign currency translation adjustment (66.6) (67.6) (59.8) Less treasury stock, at cost, common shares 30,991,229, 30,011,958 and 29,871,431 (735.5) (705.2) (700.7) ----------- ----------- ----------- 3,690.1 3,482.0 3,384.8 Less unearned restricted stock and value of 18,089,367, 21,376,632 and 22,601,229 common shares held in Employee Equity Fund (559.9) (643.0) (661.8) ----------- ----------- ----------- Total common stockholders' equity 3,130.2 2,839.0 2,723.0 ----------- ----------- ----------- $ 13,536.9 $ 11,808.5 $ 12,739.9 ----------- ----------- ----------- ----------- ----------- ----------- - ------------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements. 4 CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited)
- ------------------------------------------------------------------------------------------------------------- THIRTY-NINE WEEKS ENDED FEBRUARY 28, FEBRUARY 22, 1999 1998 ---------- ---------- Cash flows from operating activities Net income $ 499.7 $ 454.4 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and other amortization 321.1 291.7 Goodwill amortization 51.7 52.4 Cumulative effect of change in accounting -- 24.0 Other noncash items (includes nonpension postretirement benefits) 66.1 67.1 Change in assets and liabilities before effects from business acquisitions (1,737.7) (2,081.1) ---------- ---------- Net cash flows from operating activities (799.1) (1,191.5) ---------- ---------- Cash flows from investing activities Additions to property, plant and equipment (439.9) (326.4) Payment for business acquisitions (401.4) -- Sale of businesses and property, plant and equipment 13.3 141.6 Notes receivable and other items 4.4 (24.4) ---------- ---------- Net cash flows from investing activities (823.6) (209.2) ---------- ---------- Cash flows from financing activities Net short-term borrowings 1,793.1 1,864.0 Proceeds from issuance of long-term debt 595.2 311.8 Repayment of long-term debt (495.9) (507.0) Cash dividends paid (307.2) (192.5) Cash distributions of pooled companies (1.2) (3.3) Treasury stock purchases (18.9) (153.1) Employee Equity Fund stock transactions 7.0 38.5 Other items (34.9) (20.0) ---------- ---------- Net cash flows from financing activities 1,537.2 1,338.4 ---------- ---------- Net change in cash and cash equivalents (85.5) (62.3) Cash and cash equivalents at beginning of period 108.4 106.9 ---------- ---------- Cash and cash equivalents at end of period $ 22.9 $ 44.6 ---------- ---------- ---------- ---------- - -------------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements. 5 CONAGRA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTY-NINE WEEKS ENDED FEBRUARY 28, 1999 (COLUMNAR DATA IN MILLIONS) 1. ACCOUNTING POLICIES The unaudited interim financial information included herein reflects the adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented. Such interim information should be read in conjunction with the financial statements and notes thereto included in the Company's report on Form 8-K dated September 29, 1998. The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year. ACCOUNTING CHANGES In the first quarter of fiscal 1999, ConAgra adopted Statement of Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME (SFAS No. 130), which establishes standards for reporting comprehensive income in financial statements. Comprehensive income includes all changes in equity during a period except those resulting from investments by or distributions to stockholders. The adoption of this statement had no impact on net income or shareholders' equity. Comprehensive income for all periods presented consists of net income and foreign currency translation adjustments. Amounts in prior year financial statements have been reclassified to conform to SFAS No. 130 requirements. ConAgra deems its foreign investments to be permanent in nature and does not provide for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S. dollars. There are no reclassification adjustments to be reported in periods presented. 2. BUSINESS COMBINATIONS On July 31, 1998, GoodMark Foods, Inc. (GoodMark) merged with ConAgra through an exchange of shares. ConAgra issued approximately 7.8 million shares of common stock for all outstanding shares of GoodMark. On July 31, 1998, Fernando's Foods Corporation (Fernando's) merged with ConAgra through an exchange of shares. ConAgra issued approximately 1.3 million shares of common stock for all outstanding shares of Fernando's. During fiscal 1998, ConAgra completed mergers with Hester Industries, Inc. (Hester) and A.M. Gilardi & Sons, Inc. (Gilardi), exchanging 3.7 million and 3.8 million shares of ConAgra stock, respectively, for all outstanding shares of Hester and Gilardi. The above business combinations have been accounted for as poolings of interest. The historical financial statements of the Company have been restated to give effect to all of the above acquisitions as though the companies had operated together from the beginning of the earliest period presented. 6 CONAGRA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTY-NINE WEEKS ENDED FEBRUARY 28, 1999 (COLUMNAR DATA IN MILLIONS) Results of operations of the acquired businesses prior to acquisition date were as follows:
THIRTEEN THIRTY-NINE WEEKS ENDED WEEKS ENDED FEBRUARY 22, FEBRUARY 22, 1998 1998 ----------- ------------ Net sales $ 83.0 $ 319.9 Net income (loss) $ (4.9) $ 9.9
3. 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. 28, FEB. 22, FEB. 28, FEB. 22, 1999 1998 1999 1998 ------- ------- ------- ------- INCOME PER SHARE - BASIC Income before cumulative effect of change in accounting $ 171.4 $ 133.7 $ 499.7 $ 469.2 Cumulative effect of change in accounting -- (14.8) -- (14.8) ------- ------- ------- ------- Net income $ 171.4 $ 118.9 $ 499.7 $ 454.4 ------- ------- ------- ------- ------- ------- ------- ------- Weighted average shares outstanding - basic 470.8 465.5 469.8 464.9 ------- ------- ------- ------- ------- ------- ------- ------- INCOME PER SHARE - DILUTED Income before cumulative effect of change in accounting $ 171.4 $ 133.7 $ 499.7 $ 469.2 Cumulative effect of change in accounting -- (14.8) -- (14.8) ------- ------- ------- ------- Net income $ 171.4 $ 118.9 $ 499.7 $ 454.4 ------- ------- ------- ------- ------- ------- ------- ------- Weighted average shares outstanding - basic 470.8 465.5 469.8 464.9 Add shares contingently issuable upon exercise of stock options 7.8 9.7 7.2 10.3 ------- ------- ------- ------- Weighted average shares outstanding - diluted 478.6 475.2 477.0 475.2 ------- ------- ------- ------- ------- ------- ------- -------
7 CONAGRA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTY-NINE WEEKS ENDED FEBRUARY 28, 1999 (COLUMNAR DATA IN MILLIONS) 4. INVENTORIES The major classes of inventories are as follows:
FEB. 28, MAY 31, FEB. 22, 1999 1998 1998 ---------- ---------- ---------- Hedged commodities $ 1,308.5 $ 1,199.3 $ 1,346.6 Food products and livestock 1,269.6 1,263.3 1,393.2 Agricultural chemicals, fertilizer and feed 682.1 581.4 596.4 Other, principally ingredients and supplies 748.3 496.8 619.1 ---------- ---------- ---------- $ 4,008.5 $ 3,540.8 $ 3,955.3 ---------- ---------- ---------- ---------- ---------- ----------
5. CONTINGENCIES In fiscal 1991, ConAgra acquired Beatrice Company ("Beatrice"). As a result of the acquisition and the significant pre-acquisition tax and other contingencies of the Beatrice businesses and its former subsidiaries, the consolidated post-acquisition financial statements of ConAgra reflected significant liabilities and valuation allowances associated with the estimated resolution of these contingencies. The material pre-acquisition tax contingencies were resolved in fiscal 1995. Beatrice is also engaged in various litigation and environmental proceedings related to businesses divested by Beatrice prior to its acquisition by ConAgra. The environmental proceedings include litigation and administrative proceedings involving Beatrice's status as a potentially responsible party at 44 Superfund, proposed Superfund or state-equivalent sites. Beatrice has paid or is in the process of paying its liability share at 40 of these sites. Substantial reserves for these matters have been established based on the Company's best estimate of its undiscounted remediation liabilities, which estimates include evaluation of investigatory studies, extent of required cleanup, the known volumetric contribution of Beatrice and other potentially responsible parties and its experience in remediating sites. ConAgra is a party to a number of other lawsuits and claims arising out of the operation of its businesses. After taking into account liabilities recorded for all of the foregoing matters, management believes the ultimate resolution of such matters should not have a material adverse effect on ConAgra's financial condition, results of operations or liquidity. 6. ACQUISITIONS On August 17, 1998, ConAgra acquired the Egg Beaters and Tablespreads businesses from Nabisco, Inc. for $400 million. The Tablespreads business manufactures and markets margarine under Parkay, Blue Bonnet, Fleischmann's, Touch of Butter, Chiffon and Move Over Butter brand names. Egg Beaters is an egg alternative product. Annual sales of the combined businesses are approximately $480 million. The acquisition was accounted for as a purchase. 8 CONAGRA, INC. AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Following is management's discussion and analysis of certain significant factors which have affected the Company's financial condition and operating results for the periods included in the accompanying condensed consolidated financial statements. Results for the thirteen and thirty-nine week periods ended February 28, 1999 are not necessarily indicative of results that may be attained in the future. This report contains forward-looking statements. The statements reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. The statements are based on many assumptions and factors including availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital and actions of governments. Any changes in such assumptions or factors could produce significantly different results. All prior period results have been restated to give effect to mergers accounted for as poolings of interest. See Note 2 to consolidated financial statements. FINANCIAL CONDITION ConAgra's earnings are generated principally from its capital investment, which consists of working capital (current assets less current liabilities) plus all noncurrent assets. Capital investment is financed with stockholders' equity, long-term debt and other noncurrent liabilities. Capital investment increased $366.2 million, or 5.5%, compared to May 31, 1998. Working capital decreased $100.0 million, and noncurrent assets increased $466.2 million. The decrease in working capital was primarily caused by increases in short-term debt used to fund normal seasonal increases in accounts receivable and inventory, as well as acquisitions. The increase in noncurrent assets was primarily caused by the Egg Beaters and Tablespreads acquisitions. ConAgra invested $439.9 million in property, plant and equipment and $401.4 million for business acquisitions in the thirty-nine week period in fiscal 1999 compared to $326.4 million in additions to property, plant and equipment in the same period in fiscal 1998. Sales of property and businesses totaled $13.3 million in the thirty-nine week period in fiscal 1999 versus $141.6 million in same period in fiscal 1998. Depreciation and amortization totaled $372.8 million in the thirty-nine week period compared to $344.1 million in the same period last year. In the second quarter of fiscal 1999, ConAgra issued $400 million of 7.0% senior notes, due October 1, 2028 and $200 million of 5.5 % senior notes, due October 15, 2002. In the thirty-nine weeks ending February 28, 1999, ConAgra repaid $61.1 million of senior long-term debt and reduced the amount of short-term borrowings backed by long-term credit agreements and classified as long-term by $434.8 million. In the thirty-nine weeks ending February 22, 1998, ConAgra repaid $331.3 million of senior long-term debt and reduced the amount of short-term borrowings backed by long-term credit agreements and classified as long-term by $175.7 million. During the thirty-nine weeks of fiscal 1998, ConAgra issued $312 million of senior long-term notes, with $300 million issued at 6.70%. The Company's objective is that senior long-term debt normally will not exceed 30 percent of total long-term debt plus equity. This objective was met for all periods presented. 9 CONAGRA, INC. AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATING RESULTS A summary of the period to period increases (decreases) in the principal components of operations is shown below (dollars in millions, except per share amounts).
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED FEB. 28, 1999 AND FEB. 22, 1998 FEB. 28, 1999 AND FEB. 22, 1998 ------------------------------- ------------------------------- DOLLAR PERCENT DOLLAR PERCENT CHANGE CHANGE CHANGE CHANGE ---------- ------- ---------- ------- Net sales $ 225.3 4.1% $ 302.2 1.7% Costs and expenses Cost of goods sold 93.7 2.0 67.8 0.4 Selling, administrative and general expenses 58.5 10.1 152.6 8.4 Interest expense 11.8 15.5 30.1 13.4 ---------- ----- ---------- ----- 164.0 3.1 250.5 1.4 ---------- ----- ---------- ----- Income before income taxes 61.3 28.2 51.7 6.8 Income taxes 23.6 28.2 21.2 7.3 ---------- ----- ---------- ----- Income before cumulative effect of change in accounting 37.7 28.2 30.5 6.5 Cumulative effect of change in accounting 14.8 100.0 14.8 100.0 ---------- ----- ---------- ----- Net income $ 52.5 44.2% $ 45.3 10.0% ---------- ----- ---------- ----- ---------- ----- ---------- ----- Income per share - basic Income before cumulative effect of change in accounting $ 0.07 24.1% $ 0.05 5.0% Cumulative effect of change in accounting 0.03 100.0 0.03 100.0 ---------- ----- ---------- ----- Net income $ 0.10 38.5% $ 0.08 8.2% ---------- ----- ---------- ----- ---------- ----- ---------- ----- Income per share - diluted Income before cumulative effect of change in accounting $ 0.08 28.6% $ 0.06 6.1% Cumulative effect of change in accounting 0.03 100.0 0.03 100.0 ---------- ----- ---------- ----- Net income $ 0.11 44.0% $ 0.09 9.4% ---------- ----- ---------- ----- ---------- ----- ---------- -----
In ConAgra's Refrigerated Foods business segment, fiscal 1999 third quarter operating profit was up 1,700 percent, versus results in fiscal 1998's third quarter. Fiscal 1999 nine month segment operating profit increased 56 percent versus fiscal 1998's first nine months. Segment sales increased 8 percent in the third quarter and 4 percent through nine months despite the negative effect of lower pork and beef raw materials prices passed through as lower selling prices. The Refrigerated Foods segment's five businesses all increased fiscal 1999 third quarter and nine month operating profit versus the same periods in fiscal 1998. Unit volume growth supported branded packaged meats' operating profit growth. An acquisition contributed to operating profit growth in the cheese and tablespreads business. The beef, pork and poultry businesses rebounded from last year's results, which were depressed by excess industry production and reduced Asian export demand. In ConAgra's Grocery & Diversified Products business segment, operating profit was up 3 percent in the third quarter and 4 percent in the first nine months of fiscal 1999 versus the same periods in fiscal 1998. Segment sales increased 1 percent in both periods. ConAgra frozen prepared foods boosted unit volumes 10 CONAGRA, INC. AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS and increased third quarter and nine month operating profit significantly, led by the Gilardi Foods and Pierce Foods businesses. The Lamb-Weston potato products business nearly equaled last year's third quarter operating profit and was ahead through nine months. In shelf-stable foods, operating profit decreased slightly in both periods. In ConAgra's Food Inputs & Ingredients business segment, operating profit was down 9 percent in the third quarter and 5 percent in the first nine months of fiscal 1999 versus the same periods in fiscal 1998. Segment sales decreased 4 percent in the third quarter and 2 percent through nine months. Business dispositions and lower commodity selling prices reduced segment sales over 3 percent in both periods. ConAgra's major crop inputs business, United Agri Products, increased operating profit in fiscal 1999's third quarter and first nine months. In the ingredients sector, third quarter and nine month operating profit growth in international operations was more than offset by a decline in commodity trading and grain processing operating profit in both periods. For ConAgra in total, before the accounting change last year, fiscal 1999 third quarter net income increased 28 percent to $171.4 from $133.7 million, and nine month net income increased 6.5 percent to $499.7 million from $469.2 million. Including a provision of $14.8 million after tax for the accounting change for business systems reengineering costs, fiscal 1998 third quarter net income was $118.9 million, and nine month net income was $454.4 million. Fiscal 1999 third quarter net sales were $5.69 billion, up 4 percent from $5.47 billion in fiscal 1998's third quarter. Fiscal 1999 nine month net sales were $18.58 billion, up 2 percent from $18.28 billion in fiscal 1998's first nine months. Adjusted for business dispositions, acquisitions and lower commodity selling prices, fiscal 1999 nine month sales increased 4 percent versus fiscal 1998's nine month sales. Comparable adjustments had less effect on third quarter sales comparisons. YEAR 2000 The Year 2000 ("Y2K") computer software compliance issues affect ConAgra and most companies in the world. Historically, certain computer programs were written using two digits rather than four to define the applicable year. As a result, software may recognize a date using the two digits "00" as 1900 rather than the year 2000. Computer programs that do not recognize the proper date could generate erroneous data or cause systems to fail. ConAgra has established a Y2K project office and has retained an independent consulting group to provide assistance with regard to ConAgra's Y2K compliance. ConAgra's Y2K project covers both traditional computer systems and infrastructure ("IT systems") and computer-based manufacturing, logistical and related systems ("non-IT systems"). The Y2K project has six phases: systems inventory, assessment, renovation, validation, implementation, and contingency planning. ConAgra operates on a decentralized independent operating company ("IOC") structure. Consequently, the Y2K project efforts may vary by IOC. For IT systems, the status of the project generally ranges from renovation to contingency planning. For non-IT systems, the status of the project generally ranges from assessment to contingency planning. Based on its assessment of its major information technology systems, ConAgra expects that necessary modifications and/or replacements will be completed in a timely manner to insure that each IOC's systems are Y2K compliant. ConAgra's Y2K project also considers the readiness of significant customers and suppliers. ConAgra does not have any suppliers or customers that are material to its operations as a whole. Each IOC is verifying the readiness of suppliers and customers that may be significant for such IOC. 11 CONAGRA, INC. AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Due to the decentralized IOC structure, there are few IT systems and non-IT systems, the failure of which would have a material effect on ConAgra as a whole. Such material systems include general ledger, payroll, fixed assets and cash management systems. ConAgra's Y2K project includes contingency plans for these systems that involve, among other things, manual workarounds and extra staffing. ConAgra's Y2K project includes the development of a full contingency plan for each IOC and ConAgra presently expects to have such contingency arrangements completed by August 1999. ConAgra has incurred approximately $32 million of Y2K project expenses to date. Future expenses are expected to include $32 to $42 million of additional costs, plus approximately $6 million of systems initiatives that have been accelerated in connection with the Y2K project. Such cost estimates are based upon presently available information and may change as ConAgra continues with its Y2K project. 12 CONAGRA, INC. AND SUBSIDIARIES PART I - FINANCIAL INFORMATION ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the Company's market risk during the thirty-nine weeks ended February 28, 1999. For additional information, refer to pages 6-8 of the Company's report on Form 8-K, dated September 29, 1998. 13 CONAGRA, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits 3(ii) - ConAgra Bylaws as amended to date 12 - Statement regarding computation of ratio of earnings to fixed charges. (B) Reports on Form 8-K None CONAGRA, INC. By: /s/ James P. O'Donnell -------------------------- James P. O'Donnell Executive Vice President, Chief Financial Officer and Corporate Secretary By: /s/ Jay D. Bolding ---------------------- Jay D. Bolding Vice President, Controller Dated this 14th day of April, 1999. 14 CONAGRA, INC. AND SUBSIDIARIES EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE 3(ii) Amendment of by-laws 16 12 Statement regarding computation of ratio of 35 earnings to fixed charges
15 EX-3.(II) 2 EXHIBIT 3(II) Exhibit 3(ii) BY-LAWS OF CONAGRA, INC. ARTICLE I OFFICES Section 1. Principal Executive Office. The principal executive office of ConAgra, 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, 16 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 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 17 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 proxy, but no trustee shall be entitled to vote such shares held without a transfer of such shares into his name, as trustee. 18 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 19 includes a prposal 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 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 20 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 21 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 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 22 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 are elected by the stockholders and qualify. 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. 23 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 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. 24 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. 25 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. 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. 26 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 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 27 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. 28 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. 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 29 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. 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, 30 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, 31 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 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 32 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. 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. 33 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, 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. 2/12/99 34 EX-12 3 EXHIBIT 12 EXHIBIT 12 CONAGRA INC. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (dollars in millions)
THIRTY-NINE WEEKS ENDED FEBRUARY 28, 1999 ----------- Fixed Charges Interest expense $ 290.0 Capitalized interest 4.9 Interest in cost of goods sold 14.0 One-third of noncancelable lease rent 25.5 ---------- Total fixed charges (A) $ 334.4 ---------- ---------- Earnings Pretax income $ 812.5 Adjustment for unconsolidated subsidiaries (0.8) Add fixed charges 334.4 Less capitalized interest (4.9) ---------- Earnings and fixed charges (B) $ 1,141.2 ---------- ---------- Ratio of earnings to fixed charges (B/A) 3.4
For the purpose of computing the above ratio of earnings to fixed charges, earnings consist of income before taxes and fixed charges. Fixed charges, for the purpose of computing earnings, are adjusted to exclude interest capitalized. Fixed charges include interest on both long and short-term debt (whether said interest is expensed or capitalized and including interest charged to cost of goods sold), and a portion of noncancelable rental expense representative of the interest factor. The ratio is computed using the amounts for ConAgra as a whole, including its majority-owned subsidiaries, whether or not consolidated, and its proportionate share of any 50% owned subsidiaries, whether or not ConAgra guarantees obligations of these subsidiaries. 35 EX-27 4 EXHIBIT 27
5 1,000 9-MOS MAY-30-1999 JUN-01-1998 FEB-28-1999 22,900 0 2,532,900 85,100 4,008,500 6,799,900 6,227,600 2,579,900 13,536,900 6,455,900 2,638,000 0 525,000 2,598,100 532,100 13,536,900 18,581,100 18,581,100 15,550,600 15,550,600 1,962,600 0 255,400 812,500 312,800 499,700 0 0 0 499,700 1.06 1.05
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