Conagra Foods 2009 Annual Report
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CONAGRA FOODS, INC., 2011 ANNUAL REPORT ANNUAL 2011 INC., FOODS, CONAGRA CONAGRA FOODS 2009 ANNUAL REPORT 117276_CVRS 1 7/25/11 3:38 PM FOOD SAFETY COUNCIL SCIENTIFIC ADVISORY BOARD David W. K. Acheson, Ph.D. Susan I. Barr, Ph.D., R.D. Nancy Green, Ph.D. Glenelg, Md. Professor of Nutrition Retired professor, Nutrition Managing director, The University of British Columbia Florida State University our operating Food and Import Safety Vice president, Health and Wellness Leavitt Partners LLC Dennis M. Bier, M.D. Policy (Retired), PepsiCo principles Professor of Pediatrics Robert E. Brackett, Ph.D. Director, USDA/ARS Children’s Janet C. King, Ph.D. Bedford Park, Ill. Nutrition Research Center Senior scientist, simplicity Vice president and director, Baylor College of Medicine Children’s Hospital accountability Institute for Food Safety and Health, Oakland Research Institute, Illinois Institute of Technology, Fergus M. Clydesdale, Ph.D. and professor, University of collaboration Moffett Campus Distinguished professor and director California, Berkeley & Davis of Food Science Policy Alliance imagination Robert L. Buchanan, Ph.D. University of Massachusetts, Amherst David A. McCarron, M.D. College Park, Md. Adjunct professor Director and professor, Johanna T. Dwyer, D.Sc., R.D. Department of Nutrition Center for Food Safety and Director, Frances Stern Nutrition University of California, Davis Security Systems Center, Tufts Medical Center, University of Maryland Professor, School of Medicine Sylvia Rowe and Friedman School of Nutrition President Michael P. Doyle, Ph.D. Tufts University, Boston SR Strategy Griffin, Ga. Regents professor and director, Gary D. Foster, Ph.D. Mark A. Uebersax, Ph.D. University of Georgia Center for Professor of Medicine and Public Professor emeritus of Food Science Food Safety Health, director of the Center for and Human Nutrition Obesity Research and Education Michigan State University Craig Hedberg, Ph.D. Temple University Minneapolis, Minn. Financial Highlights Professor, Division of Environmental Dollars in millions, except per-share amounts MAY 29, 2011 MAY 30, 2010 Health Sciences, School of Public Health Net sales 1 $ 12,303 $ 12,015 University of Minnesota Gross profit1,2 $ 2,913 $ 3,061 Jean D. Kinsey, Ph.D. This is a greener annual report. Operating profit1,3 $ 1,649 $ 1,648 St. Paul, Minn. Income from continuing operations before income taxes and ConAgra Foods is committed to reducing its impact on the environment. By producing our Professor emeritus, Department printed report using 169,675 pounds of paper made from 10 percent post-consumer recycled equity method investment earnings $ 1,225 $ 1,081 of Applied Economics, and fiber as opposed to 100 percent virgin wood fiber, and printing with 100 percent renewable Income from continuing operations $ 830 $ 743 Director emeritus, wind energy (RECs) we lessened the impact on the environment in the following ways: Income attributable to ConAgra Foods, Inc., common stockholders $ 817 $ 726 The Food Industry Center University of Minnesota Diluted earnings per share from continuing operations 521 trees preserved for the future 50,821 pounds of greenhouse gas reduced attributable to ConAgra Foods, Inc., common stockholders $ 1.90 $ 1.66 David R. Lineback, Ph.D. 204 million BTUs of energy conserved 229,170 gallons of water waste eliminated Diluted earnings per share from discontinued operations Southport, N.C. 9,900 kWh of electricity offset 14,516 pounds of solid waste eliminated attributable to ConAgra Foods, Inc., common stockholders $ (0.02) $ (0.04) Senior fellow, Joint Institute for Food Safety and Diluted earnings per share $ 1.88 $ 1.62 Applied Nutrition (JIFSAN) Sources: Above estimates were made using the Environmental Paper Network Paper Calculator Common stock price at year-end $ 25.04 $ 24.18 University of Maryland v3.0 and the U.S. EPA’s Power Profiler. Annualized common stock dividend rate at year-end $ 0.92 $ 0.80 Martin Philbert, Ph.D. Employees at year-end 23,200 24,400 Northville, Mich. Dean of the School of Public Health 1 Amounts exclude the impact of discontinued operations of the frozen handhelds operations, the trading and merchandising operations, and professor of Toxicology ® the Gilroy Foods & Flavors™ operations and the Fernando’s® operations. The paper, paper mills and the printers for this publication are all FSC 2 Gross profit is defined as net sales less cost of goods sold. University of Michigan, Ann Arbor certified and meet the strict standards of the Forest Stewardship Council,TM 3 Operating profit is defined as income from continuing operations before general corporate expense, interest expense (net), income tax which promotes environmentally appropriate, socially beneficial and expense, and equity method investment earnings. Refer to Note 22 to the Consolidated Financial Statements for a reconciliation Steve L. Taylor, Ph.D. economically viable management of the world’s forests. of operating profit to income from continuing operations. Lincoln, Neb. Professor and director, Food Allergy Research & Resource Program, Dept. of Food Science & Technology University of Nebraska 117276_CVRS 2 7/27/11 10:08 AM CONAGRA FOODS 2011 ANNUAL REPORT 1 We are aligning our resources to accelerate growth Fellow shareholders, There’s no question: these are challenging times. But even in a high-inflation environment we grew EPS in fiscal 2011. We also: • Generated more than $1.3 billion in cash flows from operations, ending our fourth quarter with $972 million of cash on hand and no outstanding commercial paper borrowings. • Realized $280 million of cost savings in our Consumer Foods supply chain, in addition to what we saved in selling, general and administrative expenses. • Raised our annualized dividend 15 percent and returned an additional $825 million to our shareholders through share repurchases. • Opened our new state-of-the-art sweet potato processing facility in Delhi, La. — the first frozen food manufacturing plant in the world to earn LEED® Platinum certification from 1 the U.S. Green Building Council. Gary M. Rodkin • Continued realizing the benefits of our strong innovation pipeline Chief executive officer by introducing difference-makers like Orville Redenbacher’s® Pop Up Bowl® popcorn and Marie Callender’s® Bakes. Over the last several years, we’ve built a strong foundation and an integrated operating platform. Now we’re aligning our resources to accelerate growth with renewed purpose and ambition. 1 U.S. Green Building Council. usgbc.org. USGBC In the News. Jan. 26, 2011. “LEED” stands for “Leadership in Energy and Environmental Design.” LEED Platinum certification is the nationally accepted benchmark for the design, construction and operation of high-performance green buildings. 117276_TXT.indd 1 7/25/11 11:34 PM 2 CONAGRA FOODS 2011 ANNUAL REPORT , Marie Callenders® desserts posted double -digit top-line growth in their first year under our control. 117276_TXT.indd 2 7/25/11 11:34 PM CONAGRA FOODS 2011 ANNUAL REPORT 3 Focusing on the fundamentals Our fundamentals are sound. We’re focused on generating strong earnings and cash flows, maintaining a healthy balance sheet with strong liquidity and investing our resources where they’ll do the most good. The work we’ve done to build our capabilities and tailor our portfolio is paying off. We’re positioned not only for long-term organic growth but also for v smart acquisitions that align with our strategic priorities. Consider how seamlessly we’ve integrated three strategic acquisitions into our operations over the last few years. Our ® l All Natural Alexia line of fries, potatoes, sweet potatoes and 2.5x sides is about two-and-a-half times the size it was when we Alexia is two- bought it four years ago. In their first year under our control, Marie Callender’s® desserts posted double-digit top-line growth and-a-half times due to expanded national distribution and investments in advertising and promotion. The pies and cobblers promote the size it was when well with Marie Callender’s meals, which are served in 25 million households.2 And Elan Nutrition® snack bars, which we bought it four joined our portfolio late in fiscal 2010, have added even more years ago. power to our leading private label snack bar business. Stronger fundamentals apply across our businesses. As we’ve developed into an integrated operating company, we’ve centralized resources to create efficiencies and transfer knowledge across the enterprise. This year, we wrapped up 2 IRI consumer panel, Nov. 23, 2010 117276_TXT.indd 3 7/26/11 2:43 PM 4 CONAGRA FOODS 2011 ANNUAL REPORT The unique Slim Jim® 16- stick our SAP implementation in the Consumer Foods segment and are using the new systems to optimize processes and gable top carton extract value. Implementation is now under way and on replaced a schedule in the Commercial Foods segment. 16-count canister, The performance of our supply chain remains one of the best reducing packaging tools in our arsenal to combat cost inflation. In just five years, Consumer Foods supply chain productivity improvements have materials by generated about $1.4 billion in savings, which we’ve used to 325,600 pounds fuel growth. There are plenty of savings to come, too, as we continue to develop a demand-driven supply chain, reduce per year. complexity and achieve plant and network optimization. In no small measure, our supply chain successes can be traced to our ability to spread technology and best practices across geographies and lines of business. Last year alone, for example, our Sustainable Development program decreased our carbon footprint by 30,000 metric tonnes, reduced landfill waste by 51,000 tons, conserved 137 million gallons of water and generated $18 million of cost savings. Harnessing the power of our people across several manufacturing platforms is making a big difference in driving productivity. Back in March, the nearly 2,500 employees in 15 plants across our Consumer Foods segment’s Snacks platform worked nine straight weeks — nearly a million hours — without a single recordable injury.