Conagra Foods Inc. 2008 Annual Report Maha, Ne 68102-5001 Omaha

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Conagra Foods Inc. 2008 Annual Report Maha, Ne 68102-5001 Omaha CONAGRA FOODS IN FOCUS CONAGRA FOODS INC. • ONE CONAGRA DRIVE • OMAHA, NE 68102-5001 CONAGRA FOODS INC. 2008 ANNUAL REPORT ©ConAgra Foods Inc. All rights reserved. C . 2008 . A NNUAL R EPORT Food Safety Council Scientific Advisory Board 2008 CEO Award Winners Joseph Francis Borzelleca, Ph.D. Susan I. Barr, Ph.D., R.D.N. Our CEO Award winners are employees recognized for their Richmond, Va. Professor work on projects that saved millions of dollars, drove substantial Financial Highlights Dept. of Pharmacology and Toxicology, The University of British Columbia new growth, improved quality and exemplified our operating Medical College of Virginia principles of simplicity, collaboration and accountability. Regina M. Benjamin, M.D., MBA James W. Curran, M.D., MPH Founder and CEO Chuck Baddley, vice president, Research & Development Dollars in millions, except per-share amounts MAY 25, 2008 MAY 27, 2007 Atlanta, Ga. Bayou La Batre Rural Health Clinic Bruce Bethards, director, Customer Business Planning, Sales Dean and professor of Epidemiology, Net sales 1 $ 11,606 $ 10,532 Bob Biddlecombe, vice president, Sales Co-director, Emory Center for AIDS Research, Dennis M. Bier, M.D. Susan Bond, sr. director, Scientific & Regulatory Affairs, Gross profit 1,2 $ 2,716 $ 2,693 Rollins School of Public Health, Professor, Pediatrics Research & Development Emory University Director of Children’s Nutrition of the USDA Jason Buus, director, Project Management, 1,3 Operating profit $ 1,342 $ 1,347 Children’s Nutrition Research Center Information Technology Michael P. Doyle, Ph.D. Baylor College of Medicine Income from continuing operations before income taxes and Joe Bybel, vice president, Marketing Griffin, Ga. equity method investment earnings $ 696 $ 699 Damita Byrd, systems trainer, Finance Regents professor and director, Fergus M. Clydesdale, Ph.D. David Carlo, director, Sales Income from continuing operations $ 519 $ 482 University of Georgia Center for Food Safety Distinguished professor and director Alejandro Castro, sr. director, Finance of Food Science Policy Alliance John Cherry, sr. director, Operations Net income $ 931 $ 765 Craig Hedberg, Ph.D. University of Massachusetts Project Management, Manufacturing/Operations Minneapolis, Minn. Diluted earnings per share from continuing operations $ 1.06 $ 0.95 Lucy Dinwiddie, vice president, Organization Development Associate professor, Division of Environmental Johanna T. Dwyer, D.Sc., R.D. Darrell Dragoo, sr. manager, Brand Design, Marketing Diluted earnings per share from discontinued operations $ 0.84 $ 0.56 Health Sciences, School of Public Health, Director Earl Ehret, plant manager, Production University of Minnesota Frances Stern Nutrition Center Kathy Elkey, manager, Sales Diluted earnings per share $ 1.90 $ 1.51 New England Medical Center Mary Ferry, director, Finance Jean D. Kinsey, Ph.D. Gwenetta Flowers, food scientist, Research & Development Common stock price at year-end $ 23.38 $ 25.66 Gary D. Foster, Ph.D. St. Paul, Minn. Randy Garvert, plant manager, Production Professor of Medicine and Public Health, Annualized common stock dividend rate at year-end $ 0.76 $ 0.72 Professor, Applied Economics and Patti Giliberto, director, Marketing Director of the Center for Obesity Research Co-director, Food Industry Center, Joanne Grabow, supply planner, Supply Chain Management Employees at year-end 25,000 24,500 and Education University of Minnesota Jamie Halgerson, sr. food scientist, Research & Development Temple University Bart Hendryx, sr. manager, Marketing 1 David R. Lineback, Ph.D. Amounts exclude the impact of discontinued operations of the trading and merchandising business, the Knott’s Berry Farm business, and other divestitures. Continuing operations are John Hine, sr. director, Organization Development referred to in this annual report as our continuing “food business.” Southport, N.C. Ann Grandjean, Ed.D. 2 Dean Hoerning, director, Engineering Gross profit is defined as net sales less cost of goods sold. Director (Retired), Joint Institute for Food Safety President 3 Operating profit is defined as income from continuing operations before income taxes and equity method investment earnings, less interest expense, net and general corporate expense. Amanda Jackson, manager, Procurement and Applied Nutrition (JIFSAN), The Center for Human Nutrition Refer to Note 20 to the Consolidated Financial Statements for a reconciliation of operating profit to income from continuing operations. Doug Kooren, director, Finance University of Maryland Nancy Green, Ph.D. Pete Legris, sr. demand planner, Supply Chain Management Joselynne Little, assistant manager, Marketing Our Must Do’s Alan M. Rulis, Ph.D. Professor Emeritus, Nutrition Kevin Little, vice president, Sales Washington, D.C. Florida State University Brian Lovell, manager, Plant Quality, Quality 1 Proactively manage net pricing to combat inflation Senior managing scientist, Vice president, Health and Wellness Joey Lusby, sr. principal scientist, Research & Development Center for Chemical Regulation and Food Safety, Policy (Retired), PepsiCo 2 Rewire our processes and systems to unleash a better way Mike Maley, manager, Finance Exponent, Inc. Sue Murray, sr. manager, Brand Design, Marketing 3 Attack cost structure and enhance margins to fund growth Robert P. Heaney, M.D. Steve L. Taylor, Ph.D. John A. Creighton university professor Lonny Ng, sr. systems analyst, Information Technology 4 Consistently delight our customers and consumers with superior service and quality Lincoln, Neb. and professor of Medicine Joseph O’Malley, sr. manager, Marketing 5 Deliver bigger and better innovations faster to drive sustainable growth Professor and director, Creighton University Brian Perry, director, Quality Food Allergy Research & Resource Program, Andy Potter, research technician, Research & Development 6 Nourish our people to build an inclusive and winning culture Dept. of Food Science & Technology, David A. McCarron, M.D. Don Powers, regulatory affairs specialist, 7 Accelerate demand with insights-driven, higher-impact marketing and selling University of Nebraska Adjunct professor Research & Development Department of Nutrition Robbie Rettmer, sr. director, Organization Development Martin Philbert, Ph.D. University of California at Davis Richard Schumacher, director, Process Engineering, Northville, Mich. Research & Development Professor of Toxicology and Senior Associate Sylvia Rowe Glenn Seymour, vice president, Supply Planning, Supply Chain Dean for Research, President Eric Sinz, director, Packaging, Research & Development company growing by nourishing University of Michigan SR Strategy Angie Smith, sr. food scientist, Research & Development Scott Steeves, sr. director, Supply Planning, lives and finding a better way today... Mark A. Uebersax, Ph.D. Supply Chain Management Professor Emeritus of Food Science one bite at a time! Curtis Stowe, manager, Packaging, Research & Development and Human Nutrition Mark Sumner, director, Customer Business Planning, Sales Michigan State University Judi Thallas, manager, Finance Mary Westerhaus, director, In-Store Marketing, Marketing The paper, paperThe mills paper, and paper the printers mills and for the this printers publication for this are publication all certified are by all the certified Rainforest by theAlliance’s Rainforest Smartwood Alliance’s program Smartwood Cert no. SGS-COC-2420for meeting theprogram strict standards for meeting of the the Forest strict standardsStewardship of Councilthe Forest (FSC), Stewardship which promotes Council environmentally(FSC), which promotes appropriate, environmentally Cert no. SGS-COC-2420 socially beneficialappropriate, and economically socially beneficial viable management and economically of the viableworld’s forests.management of the world’s forests. We gained a lot in fiscal 2008. A lot of knowledge. A lot of perspective. And a lot of focus. During fiscal ’08, we focused our business on food, and food only. We sold our commodity trading and merchandising operations, at the right time and for the right price. That’s enabling us to devote our energy to our food business and to redeploy the capital we had invested in trading and merchandising to repurchase shares and reduce debt. In fiscal ’08, our food business grew more than 10 percent in net sales. Most years, we’d be pretty happy with that number. But due to high inflation, our input costs grew even more. Lessons learned in this tough economic climate made us more agile and sharpened our perspective on what it takes to drive sustainable, profitable growth at ConAgra Foods. In our fourth quarter, we began to see the payoff of better realized pricing for our Consumer Foods products. This progress is coupled with a strong year of cost-saving initiatives and excellent in-market traction on key product innovations. As a result, the momentum we gained in our fourth quarter is continuing. And throughout the year, there were many noteworthy accomplishments. We made important investments in our people, products and infrastructure. We bought four businesses that align closely with our growth platforms. Those strategic investments were made with the common goal of growing and sustaining profits. In fiscal ’07, we told you we expected an annual earnings growth rate of 8 to 10 percent for the fiscal 2008 to 2010 time frame, excluding items impacting comparability. Although we fell short of that objective for fiscal ’08, we are confident that our progress in fiscal 2009 will put us back on track. Let me tell you
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