ConAgra Foods on Track With Solid Second Quarter and First Half Earnings

SECOND QUARTER 2003

Highlights (versus a year ago):
- Net income = $236 million, in line with company expectations and up
from $232 million last year.

- Diluted EPS = $0.44, vs. $0.44 last year.
* As anticipated, the current quarter's earnings of $0.44 per diluted
share include nonrecurring deal expenses of approximately $0.03 per
diluted share related to the recently-completed sale of the fresh
beef and pork business.
* On September 19, 2002, the company sold the majority of its fresh
beef and pork business (Swift & Company) to a venture led by Hicks,
Muse, Tate & Furst of Dallas, Texas. The divestiture removed fresh
beef and pork operating profits from the company's earnings base.
Excluding deal fees, profits related to the fresh beef and pork
business were $0.07 per diluted share better in the second quarter of
fiscal 2002 compared to the second quarter of fiscal 2003.
* Required reduction of amortization per Statement of Financial
Accounting Standards (SFAS) 142 added approximately $0.06 to the
current quarter's diluted EPS.

- Sales = $6.0 billion, down as planned from $7.4 billion last year
primarily reflecting the divestiture of the fresh beef and pork
business during the second quarter. Overall Packaged Foods volumes
increased for the quarter.

Key Operating Results:
- Packaged Foods operating profit was up 10% to $456 million, driven by
lower product costs, volume gains, and improved mix.

- Food Ingredients operating profit declined due to higher input costs
and lower margins for certain products.

- Meat Processing operating profit declined as expected, due primarily to
a strategic reduction in segment size with the sale of the fresh beef
and pork business.

- Agricultural Products operating profit increased substantially because
of improved costs, better execution, and the favorable impact of a
longer planting season.

FIRST HALF 2003
Highlights (versus a year ago):
- Net income = $463 million, up 10% and in line with company
expectations.

- Diluted EPS = $0.87, on track with the company's annual earnings
expectations and up from $0.80 last year.

- Required reduction of amortization per SFAS 142 added approximately
$0.11 to first half EPS.

- Sales = $13.0 billion, down from $15.0 billion last year. The overall
sales decline primarily reflects the planned divestiture of the fresh
beef and pork business, as well as lower prices and volume declines for
some products. Packaged Foods volumes increased during the first half
of fiscal 2003.

Key Operating Results:
- Packaged Foods operating profit was up 11% to $809 million.
- Food Ingredients operating profit declined due to higher input costs
and lower margins for certain products.
- Meat Processing operating profit declined largely due to an intentional
reduction in segment size with the sale of the fresh beef and pork
business.
- Agricultural Products operating profit increased for the first half due
to improved costs and better execution.

OMAHA, Neb., Dec. 19 /PRNewswire-FirstCall/ -- Today ConAgra Foods, Inc. (NYSE: CAG), one of America's leading packaged food companies, reported diluted EPS of $0.44 for the second quarter ended November 24, 2002, in line with company expectations and equal to the same period last fiscal year. Bruce Rohde, chairman and chief executive officer, commented, "We're pleased that our team delivered another solid quarter of earnings. Our agenda to connect with consumers, improve overall execution with customers, and improve cash flow is producing the results we targeted. This includes success with many of our key brands and products in the first half of fiscal 2003. We're on track with our plans and continue to expect our reported EPS to show a high single-digit rate of growth, and to be in the range of $1.60 for our fiscal year which ends in May 2003."

Current quarter's earnings of $0.44 per diluted share notably include nonrecurring transaction expense of approximately $0.03 per diluted share related to the recently-completed sale of the fresh beef and pork business, which occurred on September 19, 2002. The divestiture accomplished this quarter removed fresh beef and pork operating profit from the company's earnings base. Profits related to the fresh beef and pork business were $0.07 per diluted share higher in the second quarter of the previous fiscal year compared to the second quarter of fiscal 2003. However, second quarter 2003 earnings benefited from reduced amortization by approximately $0.06 per diluted share related to the company's required adoption of SFAS 142. Sales were $6.0 billion, down as planned from $7.4 billion last year. Similarly, operating profit was $552 million for the second quarter, essentially equal to the same quarter last year.

Diluted EPS for the first half of fiscal 2003 was $0.87, in line with the company's expectations and representing a 9% increase over fiscal 2002. First half sales reached $13.0 billion, compared with $15.0 billion last year, and operating profit was $1.0 billion, compared to $1.1 billion last year when the earnings base included the recently divested business.

Note: Although SFAS 142 favorably impacted the quarter's EPS, this had no significant impact on segment operating profit, as historical operating profit excludes goodwill amortization.

Change in Reporting of Equity Method Investment Earnings

For the purpose of clarity, the company changed the way that it classifies earnings from joint ventures (equity method investments) during this quarter. This change alters historical segment operating profits and is discussed later in this release.

Food Business - Summary

The company's food business is comprised of the Packaged Foods, Food Ingredients, and Meat Processing financial reporting segments. Sales for the company's food business were $4.8 billion for the second quarter and $10.6 billion for the first half of fiscal 2003, down as planned from $6.3 billion and $12.3 billion, respectively, last fiscal year. Food business operating profit was $503 million for the second quarter and $951 million for the first half of fiscal 2003, compared with $550 million and $986 million, respectively, last fiscal year when the earnings base included the recently divested business.

Packaged Foods (77% of Year-to-Date Total Company Operating Profit)

For the second quarter of fiscal 2003, Packaged Foods segment sales were $3.3 billion, essentially equal to last year. Overall unit volume increased, and many major consumer brands posted sales growth, including ACT II, Butterball, Healthy Choice, Hebrew National, Marie Callender's, Orville Redenbacher's, Peter Pan, Reddi-wip, Slim Jim, Wesson and others. Also contributing to the sales growth of major brands was the success of the company's Holiday selling programs, for which products were bundled around holiday themes for retail customers and consumers. The company believes that it faced difficult comparisons in the current quarter in its overall retail food business, which experienced very strong shipments in the same quarter last year as consumers favored at-home eating occasions following the events of September 11, 2001. Most major foodservice products posted sales growth, as this season's consumer trends shifted back toward more conventional eating patterns versus a year ago, but lower sales for foodservice meats kept overall foodservice sales flat for the quarter.

Overall, sales were equal to last year partially due to some lower selling prices and volumes for cheese, and lower selling prices for branded meat products. The lower selling prices were primarily a reflection of lower input costs.

Overall operating profit increased 10% to $456 million for the quarter, largely due to better-managed product costs, effective cost controls, volume growth, and improved mix. Advertising and promotion increased for the quarter as part of the company's brand-strengthening initiatives. The company will continue to accelerate existing brand-building and productivity initiatives as part of its ongoing plan to expand the Packaged Foods segment operating margins while growing segment sales, improving product mix, and better utilizing the segment's asset base.

For the first half of fiscal 2003, sales and operating profit for the Packaged Foods reporting segment reached $6.1 billion and $809 million, respectively, compared with $6.2 billion and $732 million, respectively, last fiscal year.

Food Ingredients (6% of Year-to-Date Total Company Operating Profit)

During the quarter, sales for the Food Ingredients segment increased to $480 million from $440 million last fiscal year, reflecting better prices and volumes for the grain processing operations. Operating profit declined to $30 million from $43 million last year, mostly reflecting increased input costs and lower margins for certain seasonings and flavorings products. The decline in operating profit was partially offset by better prices and profits in the segment's flour milling operations. For the first half, sales for the Food Ingredients segment totaled $902 million, up 5% compared with last fiscal year. Operating profits for the first half were $59 million, down from $82 million last fiscal year.

Meat Processing (8% of Year-to-Date Total Company Operating Profit)

Sales were $1.1 billion and operating profits were $17 million, which were substantially lower compared to last year due to the intentional reduction in segment size by the strategic decision to sell the fresh beef and pork business. Future segment results will reflect only the company's chicken processing operations. Even though the company has continued to make operating improvements to its chicken business and to grow its value-added product volumes, sales and operating profit for the chicken operations declined from last year, largely reflecting weaker markets for fresh chicken products.

On September 19, 2002, the company sold the majority of its fresh beef and pork business to a venture led by Hicks, Muse, Tate & Furst of Dallas, Texas. The divestiture removed fresh beef and pork operating profits from the segment's earnings base.

For the second quarter of fiscal 2003, the Meat Processing segment included $507 million of sales and zero operating profit from the fresh beef and pork operations, which were part of the segment prior to completing the divestiture of these businesses on September 19, 2002. In the same quarter last year, fresh beef and pork sales were $2.0 billion and operating profit for these businesses was $68 million, a significant part of the segment's overall results.

For the first half, sales and operating profits for the Meat Processing segment totaled $3.6 billion and $83 million, respectively, compared with $5.3 billion and $172 million, respectively, last fiscal year.

Agricultural Products (9% of Year-to-Date Total Company Operating Profit)

During the second quarter, sales for the company's Agricultural Products segment were $1.2 billion, up 6% compared with last year, and operating profit improved to $49 million from $3 million. Profit improvement was largely due to lower administrative and operating costs for United Agri Products (UAP). UAP is the company's agricultural products distribution business that markets seed, crop protection chemicals, and fertilizer to the grower community. Second quarter sales and operating profit also benefited from a longer planting season for UAP. The longer planting season shifted business normally expected to be reported in the company's first quarter into the company's second quarter. Profits for the segment's merchandising operations were slightly higher than last year. For the first half of fiscal 2003, sales for the Agricultural Products segment totaled $2.4 billion, down 8% from $2.6 billion last fiscal year. Year-to-date sales results partly reflect a planned change in customer mix at UAP to improve future collections of accounts receivable. Operating profits for the first half were $98 million, up from $79 million last fiscal year.

Capital Resource Management

During the second quarter, capital expenditures for property, plant, and equipment were $95 million compared with $124 million last year. Depreciation and amortization expense was approximately $114 million for the quarter versus $154 million a year ago. Dividends paid totaled $124 million. Net interest expense for the quarter was $70 million compared with $100 million last year.

For the first half of the fiscal year, capital expenditures for property, plant, and equipment were $192 million compared with $227 million last year. Depreciation and amortization expense amounted to $238 million versus $308 million last year. Dividends paid totaled $248 million. Net interest expense was $154 million compared with $204 million last fiscal year.

As part of the recently completed divestiture of the fresh beef and pork business, the company received net cash proceeds of approximately $600 million that were used to pay down debt. The company's interest-bearing debt and subsidiary preferred securities totaled $6.6 billion at quarter end, down from $8.0 billion a year ago. The lower debt and subsidiary preferred securities balances reflect cash proceeds from the fresh beef and pork divestiture, as well as progress with the company's agenda to improve its working capital position.

Fiscal 2003 Earnings Expectations

As previously announced, the company continues to expect diluted EPS in the range of $1.60 for fiscal 2003. This earnings estimate reflects the expectation of annual operating profit growth in the Packaged Foods and Agricultural Products reporting segments, with likely annual operating profit declines for the Food Ingredients due to market conditions, as well as Meat Processing profit reductions due to a lower earnings base following the fresh beef and pork divestiture.

Rohde concluded, "We are gaining momentum with key components of our agenda of improving margins and returns by continuing to concentrate on four main areas -- (1) strategic portfolio adjustments, (2) focused sales and marketing initiatives, (3) improved customer interface capabilities, and (4) disciplined capital allocation policies. Strength in execution is key to reaching our fiscal 2003 performance goals, and our team is on track with its fiscal 2003 performance objectives. I look forward to reporting on our future progress in building America's favorite food company."

Change in Reporting of Equity Method Investment Earnings

As previously reported, on September 19, 2002, the company sold the majority of its fresh beef and pork assets to a venture led by Hicks, Muse, Tate and Furst of Dallas, Texas. This transaction exemplifies the company's strategic direction of concentrating its capital in branded and value-added food products. As a result of the transaction, the company owns 45% of the new venture, called Swift & Company. ConAgra Foods now reports its portion of the earnings from all of its joint ventures, including Swift & Company, as equity method investment earnings, net of tax. The company's earnings from those activities were previously reported in the operating profits of the applicable reporting segments. Reclassifying these earnings from operating profit to equity method investment earnings, net of tax, has resulted in adjustments to historical reporting segment operating profit numbers. Reclassified historical segment operating profit numbers are available in the question-and-answer document relating to this release on the company's Web site at www.conagrafoods.com under the section for Investors.

Selected Product and Market News Headlines: Fiscal Year-to-Date
-- Louis Kemp's holiday programs! (November 19, 2002)
-- ConAgra Foods and Butterball donate turkeys to provide 27,000 hungry
children with a nutritious holiday meal. (November 18, 2002)
-- ConAgra Foods' Feeding Children Better Program teams up with the Food
Bank of Eastern Michigan to feed children in need. (October 29, 2002)
-- Baton Rouge's first Kids Cafe site to hold grand opening.
(October 24, 2002)
-- Slim Jim 'snaps' into neighborhoods nationwide. Number one meat snack
doubles as popular costume and Halloween treat. (October 17, 2002)
-- Healthy Choice Mixed Grills introduces great grilled flavor ... without
the grill. (October 7, 2002)
-- ConAgra Foods launches Web site www.whatweeat.tv (October 3, 2002)
-- ConAgra Foods begins 28th consecutive year of dividend increases.
(September 26, 2002)
-- ConAgra Foods' Feeding Children Better Program teams up with Harvesters
to feed children in need. (September 24, 2002)
-- ConAgra Foods completes the sale of fresh beef and pork business.
(September 19, 2002)
-- ConAgra Foods opens 93rd Kids Cafe in Philadelphia. (September 19,
2002)
-- DC Comics and ConAgra Foods' Swiss Miss brand team up for Justice
League hot cocoa mix with marshmallow swirls. (September 17, 2002)
-- ConAgra Foods' 92nd Kids Cafe After-School Meals program opens for
hungry children in the Bronx. (September 17, 2002)
-- Healthy Choice introduces new premium low-fat ice cream pints.
(August 27, 2002)
-- ConAgra Foods becomes the title sponsor for golf's Skins Game, Senior
Skins Game and LPGA Skins Game. (August 21, 2002)
-- Slim Jim renews sponsorship of Freestyle BMX Champion Dave Mirra for
the fifth consecutive year. (August 19, 2002)
-- New Squeez 'n Go portable pudding is the first 'fridge-free' pudding in
a tube introduced this fall. (August 1, 2002)
-- ConAgra Foods Feeding Children Better program, a multi-year,
multi-million dollar commitment to attack childhood hunger, continues
to open Kids Cafes. (July 11, 2002)
-- The famed Parkay "Talking Tub" icon spreads news about the brand from
supermarket shelves using latest point-of-purchase audio technology.
(July 8, 2002)
-- ConAgra Foods is named title sponsor for the new Hawaii Bowl played
Christmas Day in Aloha Stadium in Honolulu. (July 8, 2002)
-- Reddi-wip 'Wips' up spontaneous fun with a national summer tour and
contest asking people to share memories and spontaneous fun moments
created with Reddi-wip. (June 14, 2002)
-- Healthy Choice improves 29 selections from its frozen product line with
new Healthy Choice Mixed Grills. (June 7, 2002)

ConAgra Foods, Inc. (NYSE: CAG), is one of North America's largest packaged food companies, serving consumer grocery as well as restaurant and foodservice establishments. Popular ConAgra Foods consumer brands include: Hunt's, Healthy Choice, Banquet, Armour, Bumble Bee, Louis Kemp, La Choy, Lunch Makers, Knott's Berry Farm, Wesson, Country Pride, Blue Bonnet, Kid Cuisine, Parkay, Reddi-wip, Marie Callender's, Cook's, Butterball, ACT II, Slim Jim, Eckrich, Chef Boyardee, Orville Redenbacher's, PAM, Snack Pack, Van Camp's, Peter Pan, Hebrew National, Gulden's, Pemmican, Brown 'N Serve, Swiss Miss, and many others. For more information, please visit us at www.conagrafoods.com .

Discussion of Results

A discussion of ConAgra Foods' second quarter results will be available today at 8 a.m. EST. To access the discussion, call toll-free at 1-877-447-8217. International callers should dial 1-706-679-0415. On the Internet you may access the discussion at http://www.conagrafoods.com/investors and http://www.firstcallevents.com/service/ajwz367699627gf12.html . No passcode or call identification number is needed for the call at 8 a.m. EST. A digital replay of the discussion will be available after 9 a.m. EST at 1-800-642-1687 and at 1-706-645-9291 for international callers. The conference identification number for the digital replay for domestic callers and international callers is 5210924. The company has posted a question-and-answer supplement relating to this release and an audio archive of management's discussion at http://www.conagrafoods.com/investors . See ConAgra Foods' Web site for recent news at http://www.conagrafoods.com .

Note on Forward-Looking Statements:

This news release contains "forward-looking" statements within the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. Future economic circumstances, industry conditions, company performance and financial results, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital, actions of governments and regulatory factors affecting the company's businesses are examples of factors, among others, that could cause actual results to differ materially from those described in the company's reports filed with the Securities and Exchange Commission. The company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

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