2014 ANNUAL REPORT 2014 HIGHLIGHTS (in millions except per share) 2013 2014 Change Net Sales $2,464 $2,591 +5.2% North America Retail (1) $2,102 $2,247 +6.9% Gross Profit $664 $711 +7.1% % Net Sales 27.0% 27.5% +50 bps Operating Income (EBIT) $374 $423 +13.2% % Net Sales 15.2% 16.3% +110 bps Net Earnings $177 $203 +14.7% Diluted EPS $1.52 $1.74 +14.5% Diluted Shares Outstanding 116.6 116.9 Unleveraged Free Cash Flow $325 $452 +39.1% In our second year as a public company, we again delivered very strong results, demonstrating the power of both our business model and strategy, as well as that of our experienced team. Below are a few of the more significant highlights of the year. • Grew North America Retail net sales 7% • Delivered unleveraged free cash flow of versus 2013 $452 million, excluding a $150 million benefit • Outpaced the growth of our categories, driving from the terminated merger agreement with composite market share growth for the fourth The Hillshire Brands Company time in the last five years • Increased our dividend rate by 12% during • Expanded gross margin by 50 basis points, the third quarter and repurchased one million through strong productivity and improved shares of our common stock product mix • Made two strategic acquisitions: • Maintained SG&A overhead below 9% of net - Garden Protein International, the rapidly sales, among the lowest in our industry growing innovator in the plant-based protein • Meaningfully reduced debt and ongoing segment with the gardein™ brand annual interest expense - The largest Duncan Hines co-manufacturing • Delivered a 14.5% increase in adjusted operation, enhancing innovation capabilities diluted EPS and enabling productivity Note: Financial results, excluding unleveraged free cash flow, are presented on a pro forma basis, reflecting Adjusted Statement of Operations amounts, assuming the IPO and the 2013 Refinancing occurred on the first day of Fiscal 2013. See GAAP reconciliations at the end of this Report. (1) Represents Birds Eye Frozen Segment plus Duncan Hines Grocery Segment. Bob Gamgort Chief Executive Officer DEAR SHAREHOLDERS During what proved to be a challenging year LT ORGANIC GROWTH 2013 2014 for the industry and an unexpectedly eventful ALGORITHM ACTUAL ACTUAL one for Pinnacle, we remained focused on In Line with Outpaced Outpaced Net Sales delivering strong shareholder returns by Categories Categories Categories Operating Income 4 – 5% 10% 13% leveraging the unique elements of our EPS 7 – 8% 39% 14% business model. Performance in 2014 across Dividend Yield 3 – 4% 3% 3% the balanced measures of market share growth, gross margin expansion, double- 10 – 12% 42% 17% digit EPS growth and outstanding free FUTURE ACCRETIVE ACQUISITIONS WOULD ACCELERATE GROWTH cash flow generation demonstrates the value Note: Excludes items affecting comparability. See reconciliation of Reinvigorating Iconic Brands. to GAAP financial measures at the end of this Report. The industry environment has been INDUSTRY CHALLENGES characterized by elusive top-line growth, limited pricing power with declining promotion Industry Pricing Input efficiencies, and rising input costs. Our ability to Topline Power Costs grow market share in 9 of our 13 major product categories in 2014 helped to offset the difficult top-line industry environment, while our success PINNACLE RESPONSE in trading consumers up to higher-value offerings through innovation and improved Market Industry - Innovation product mix, particularly on our Leadership Share Leading & Mix Growth Productivity Brands, served as an offset to reduced promotional efficiencies across the industry. PINNACLE FOODS INC. 1 LEADERSHIP BRANDS FOUNDATION BRANDS Another important element of our ongoing much on track, with start-up production well success is our industry-leading productivity that underway at our St. Elmo, Illinois facility. more than offset the impact of what proved to be higher-than-expected input cost inflation in In November 2014, we acquired Canada-based 2014. At the same time, we continued to operate Garden Protein International, the rapidly- with one of the leanest overhead structures in growing manufacturer of the plant-based protein our industry, enabled by our team of talented brand gardein™. Gardein is an innovator in the and highly-experienced industry veterans. fast-growing plant-based protein segment, with a line of award-winning products that serve as This team was instrumental in helping the options for traditional animal-based protein broader organization remain focused on formats, such as chicken tenders, fish fillets delivering strong operational performance in what and ground beef. We believe that plant-based was a very eventful year—one marked by an protein is at the tipping point of becoming unsolicited, and ultimately terminated, merger mainstream, making Gardein an exciting new agreement with The Hillshire Brands Company growth platform for our Birds Eye brand— and our transition to a non-controlled company. already a billion dollar brand at retail. We also made two modest, but highly strategic, acquisitions during the year, and we successfully In March 2014, we acquired the Duncan Hines integrated the Wish-Bone business acquired co-manufacturing operation in Centralia, Illinois. in 2013. At the time of the Wish-Bone The purchase of this business, which was the acquisition, we laid out an ambitious plan to largest co-packing operation for Duncan Hines, fully integrate the business, including building is expected to enhance our innovation capabilities internal manufacturing capacity and starting up and enable productivity savings over time. in-house production in the second quarter of 2015. As I write this letter, I am pleased to Pursuing and seamlessly integrating value- report that our plans for Wish-Bone are very enhancing acquisitions is a hallmark of Pinnacle, 2 2014 ANNUAL REPORT representing a key tenet of our value creation strategy. Over the past 18 months, the three acquisitions we made, while diverse on the surface, share the common objective of Reinvigorating Iconic Brands– either by adding a new iconic brand, such as Wish-Bone, investing in manufacturing capabilities for our iconic Duncan Hines brand, or purchasing a growing and on-trend business, such as Gardein, that perfectly complements our iconic Birds Eye brand. During the past year, we deployed more than $625 million of cash against strategic priorities, including acquisitions, debt reduction, quarterly dividends, base business and acquisition-related capital projects and the repurchase of one million shares. We believe our industry-leading cash flow performance, with an impressive 90% Adjusted EBITDA conversion rate and a free cash flow yield of approximately 9%, provides us with optionality in driving total shareholder return. Adjusted EBITDA Conversion 90% 81% 72% UNLEVERAGED $452 FREE CASH FLOW $345 $325 ($ in millions) 2012 2013 2014 Note: See reconciliation to GAAP financial measures at the end of this Report. We pride ourselves on understanding the needs of our consumers and customers and translating that insight into action that addresses their needs. The following pages highlight the growing consumer trends of plant-based nutrition, protein-rich offerings and restaurant-inspired cuisine against which our portfolio and investments in innovation and marketing are focused. In closing, I would like to thank The Blackstone Group for their strong partnership with Pinnacle over the past eight years. Their strategic vision and willingness to invest for the long-term have enabled us to build Pinnacle into the company it is today. Further, the measured approach in which they managed down their ownership position over the past two years demonstrates their respect for our Company and public shareholders. Finally, I want to acknowledge and thank the 4,500 employees of Pinnacle Foods for their tireless dedication and commitment to our Company. The shareholder value that we have created since our IPO would not have been possible without them. Robert J. Gamgort Chief Executive Officer PINNACLE FOODS INC. 3 PLANT-BASED NUTRITION At Pinnacle, we are committed to plant-based associated with better health and nutrition. nutrition and closing the vegetable consumption We couldn’t agree more! gap that exists today among Americans. Our portfolio offers consumers nutritious, great-tasting, The opportunity for Pinnacle is significant, given vegetable-rich products that support a healthy that only one in 10 Americans—and even less lifestyle. For decades, experts have agreed than that for children—currently eat the daily on the role of vegetables and fruit in a healthy recommended amount of vegetables and fruit. diet and, as recently as February 2015, the Earlier this year, we embarked on our most Dietary Guidelines Advisory Committee to the ambitious innovation agenda yet for Birds Eye, USDA published findings indicating that diets including two new great-tasting vegetable rich in vegetables and fruit are consistently platforms in the first half of 2015, and another 4 2014 ANNUAL REPORT two Birds Eye platforms planned for later this year. fillets and ground beef. We believe we have just We pioneered marketing vegetables directly scratched the surface of this brand’s potential. to kids back in 2012 and have since developed breakthrough campaigns to engage and Our Wish-Bone salad dressings are the perfect encourage kids to eat more vegetables. We have accompaniment to salads—one of the leading exciting plans underway to further expand these side dishes in the country that is becoming efforts in 2015! increasingly popular as a main dish. Likewise, Vlasic pickles, with zero calories and no fat, are A new area of growth for us on the vegetable front a healthy snack when consumed alone and can is Gardein, one of the fastest-growing health and add a refreshing crunch as an accompaniment wellness brands in the U.S., with a line of award- to a meal! In 2012, we expanded Vlasic with winning, plant-based products that delivers the the introduction of Vlasic Farmer’s Garden, an taste and texture of America’s favorite traditional upscale, farmer’s market-inspired line of pickles animal-based foods, such as chicken strips, fish made with natural ingredients.