Gary Rodkin – Chief Executive Officer Andre Hawaux – Chief Financial Officer Rob Sharpe - Executive Vice President, Legal and Communications Greg Heckman – President, Commercial Operations Doug Knudsen – President, Sales Chris Klinefelter – Vice President, Investor Relations.

Ken Goldman - Bear Stearns Christine McCracken – Cleveland Research Eric Serotta - Merrill Lynch David Driscoll – Citi Investment Research Eric Katzman - Deutsche Bank Bill Leach - Neuberger Berman Chris Growe - Stifel Nicolaus Robert Moskow - Credit Suisse Bob Cummins - Shields & Company Ann Gurkin – Davenport Eric Miller - Lehman Brothers Tom Travio - Banc of America Securities

Good morning and welcome to today’s ConAgra Foods third quarter earnings conference call. (Operator Instructions) At this time I’d like to introduce your host for today’s program, Gary Rodkin, Chief Executive Officer of ConAgra Foods. Please go ahead Mr. Rodkin.

Good morning. This is Gary Rodkin and I’m here with several members of our management team including Andre Hawaux our CFO; Rob Sharpe, EVP of Legal and Communications; Greg Heckman, President of Commercial Operations; Doug Knudsen, President of Sales; and Chris Klinefelter, VP of Investor Relations. Given the recent news regarding our agreement to sell the trading and merchandising operations along with today’s third quarter earnings release, we have a lot to cover in today’s call. In the interest of time, Andre and I are going to start with a brief overview of the quarter’s results, hitting the highlights, and then I’ll spend some time on the deal we just announced. After that we’ll take your questions. Before we get started, Chris will say a few words about housekeeping.

Good morning. During today’s remarks, we will make some forward-looking statements and while we’re making those statements in good faith and are confident about our company’s direction, we do not have any guarantee about the results that we will achieve. If you’d like to learn more about the risks and factors that could influence and affect our business, I’ll refer you to the documents which we file with the SEC which include cautionary language. Also we’ll be discussing some non-GAAP financial measures during the call today and the reconciliations of those measures for regulation G compliance can be found on our website at investor.ConagraFoods.com under the financial reports and filings link and then choosing non-GAAP reconciliations. Now I’ll turn it back over to Gary.

Thanks, Chris. We just released EPS of $0.63 for the fiscal third quarter. $0.63 is a very, very strong number, more than $0.20 higher than planned. There were several pockets of strength in the quarter. Food and ingredients had a great top and bottom line performance and has been a very strong contributor to this year’s growth. Our consumer food sales started to show the effect of pricing actions we’ve been gradually taking. I said before that you’d see some price realization in the third quarter with more in the fourth quarter and that’s exactly the way it’s shaping up. Our trading and merchandising results were unprecedented just like the volatility and commodities right now. Our trading group did a great job capitalizing on some unique opportunities this quarter. Comparable consumer food sales were up 6%, a big improvement from earlier trends. Volume delivered 4 points of comparable growth and price mix delivered another 2, most of those 2 points being pricing. While our good top line wasn’t enough to offset severe inflation, our pricing realization represents an important first step in the right direction. Going forward, you should expect a very different story from us in terms of the net inflation gap versus pricing for this segment. I can’t over emphasize how dramatically we’ve adjusted our focus once we got past the effects our two recalls and our operational issues. We knew our pricing actions through Q3 were going to be limited and clearly not enough to offset commodity inflation. Once we were confident we had our customer service issues behind us, we executed much more appropriate pricing to compensate for the dramatic rise in our input costs. That action, which covered over 95% of our portfolio, went into effect this past Monday. We expect for you to see the impact in our Q4 results and even more in Q1 since it will have been in place for the full quarter. On a go-forward basis, we’ll be extremely diligent with senior management leadership of net pricing actions. We have several key brands posting big sales gains this quarter. Healthy Choice is up more than 20%, largely reflecting the fact that our Café Steamers demand is strong and we’re now off allocation. Hebrew National and Marie Callender’s continued their strong two-year momentum. Hunts sales are up about 7% overall and our dollar share in the canned tomato category is up 2 points. Our diced tomatoes in particular showed a strong gain of almost 4 points for the most recent quarter. Our new ad campaign and our introduction of fire-roasted are big contributors to this growth. Swiss Miss Cocoa sales grew by more than 15% on the strength of innovations like Pick Me Up hot chocolate, which has as much caffeine as a cup of coffee and Great Start hot chocolate, which is fortified with 15 vitamins and minerals. Market share jumped 6 points. Another success I want to mention is Peter Pan peanut butter. As most of you know, the brand was re-introduced earlier this fiscal year after last year’s recall. We gradually entered the market last fall with just our six core SKUs. As planned, we built our inventory and executed a major trial and retrial event to reintroduce the brand in a big way and rebuild our business. For the month-long promotion associated with the reintroduction, Peter Pan was purchased by 19 million households for a 30 share of volume. While the trial was margin dilutive it achieved our objectives. Most importantly, post event, our customer's reorders and our consumer repeat is strengthening, good signs of rebuilding our franchise. We had more innovation news this quarter, consistent with our health and wellness focus. We reintroduced two very promising new items; we just began a Wal-Mart roll-out of Orville Redenbacher Smart Cakes which are nutritious snacks made from popcorn, available in great flavors like cheddar cheese and sour cream and onion. The texture and taste is great and they have much better nutritionals than other salty snacks. This was a great example of our improved innovation process going from concept to shelf in three months. Another new item introduced late this quarter is Egg Beaters With Yolk with a dramatically better nutritional profile meaning much lower fat, calories and cholesterol than shell eggs and tastes just as good. Both of these items are off to a good start. Before I leave the topic of consumer brand performance this quarter, I want to say a couple of words about our frozen business. Frozen is one of our largest platforms; depending on the quarter, it's between 25% and 30% of consumer sales. Frozen sales were up almost 6% as a whole this quarter, and we're pleased with the market share, given the changes we've been making. The aggregated market share data isn't able to tell all the story; there are too many important and moving pieces that get lost in the aggregation. For example, we've been hard at work for several quarters bringing innovation with products like Healthy Choice Cafe Steamers and Paninis and those have intentionally replaced other slow moving Healthy Choice products. The results are a mix improvement. We've also phased out unprofitable promotions and have moved to a two for $5 as our standard feature on Healthy Choice and Marie Callender's. We strongly believe this will be the right balance for sustainable growth and profitability. We've also improved the positioning of Banquet in important categories like prepared chicken and we're getting much smarter about our pricing and promotional strategies with Banquet Value Meals, while phasing out slow moving items within the Banquet portfolio. Those actions improved mixed in profits, but can't always be detected from market share data. It goes without saying that we're pleased with how we've expanded Marie Callender's over the last two years. As a matter of fact, it's been one of our top performers in the company over the past two years. Finally, our sales in unmeasured channels are very strong as is the case with many of our products. The net effect is higher quality frozen sales and improved profitability and most importantly, a strong foundation for the future has been set. Our profits for consumer foods were down more than 25% on a comparable basis. essentially due to input costs. This was our toughest quarter yet, with input costs increasing about $130 million versus our cost advantage in Q3 of a year ago. The biggest increases were in cooking oils, eggs, beef, chicken, nuts and some dairy items. When we index the market price changes of 30 key consumer food inputs as a group, which would include many of the items I just mentioned, the year-over-year increase is more than 15%. That’s enormous. Even though we had about $70 million of cost savings this quarter, a headwind of 130 was far beyond what we had planned which is why our current and biggest round of pricing actions are so important going forward. As I’ve said before and I am repeating it now, we’ve taken more pricing, bigger and broader and we expect it to be apparent in the fourth quarter numbers and fully in Q1 of fiscal ’09. We’ve been strengthening our foundation over the past two years so that our consumer foods business would be in a position to develop real momentum. We hit some speed bumps with recalls and operational issues earlier this year, which kept us from making as much progress as we had hoped but we are past that now. Between our pricing, innovation, service levels and more effective marketing we’re entering a new era for consumer foods. The segment now reports directly to me; we’re revitalized commitment to a more focused, effective and efficient organization and most importantly, to delivering sustainable profitable growth through more effective marketing, truly incremental innovation, disciplined cost management and nimble responses to changing input costs. Moving on to food and ingredients, that segment posted very strong results with comparable profits up 33%. Lamb Weston continues to have good sales and profit growth. I’ve bragged about them before, describing them as a model of efficiency and customer service and they continually find ways to grow with important customers. Shortly after the end of the quarter, we purchased Watts Brothers, a top quality supplier of potatoes for Lamb Weston as well as frozen vegetables for our consumer foods operations. Watts Brothers will help expand the base and agricultural supply for Lamb Weston. The food and ingredients segment’s biggest sales and profit growth in the quarter came from our milling operations. Sales there reflect the fact that higher wheat costs are driving higher flour prices. We took some wheat positions during the quarter, mostly physical and some in futures and those positions increased in value substantially given the volatility in the wheat market. Our margin management team within the flour milling operations knows the wheat market very well and will look for opportunities to capitalize on marketplace volatility to help manage through a very difficult input cost environment. The results for this quarter reflect an exceptional job. It goes without saying that the trading and merchandising profits were remarkable. Operating profit of $199 million, was more than three times last year's $62 million. The biggest increase occurred in the agricultural commodities trading and merchandising, which capitalized on the wheat market volatility. As I'm sure everyone is aware the commodity markets have been extremely volatile. Wheat is an important commodity for us. We were properly positioned in both our milling operations and in our trading and merchandising operations to take full advantage of it. Fertilizer operations also performed well. That's mainly a function of the rising prices and strong global demand. Energy trading was modestly ahead of last year. As you've heard me say before, we plan conservatively for this business; something in the range of $200 million. We're already more than double that for the first three quarters. As we've discussed before, we didn't plan for this type of performance. We'd rather make conservative commitments and then deliver upside rather than the other way around. So until the transaction is completed we'll plan conservatively and offer EPS guidance reflecting those plans. Our international segment showed a comparable sales and profit increase. We were helped by a weaker dollar with some good results from Mexico, the Caribbean and Latin America. We decided to reduce our presence in some markets where we weren't getting a lot of traction and didn't have critical mass. Those were expensive markets to operate in. Mainly I'm talking about Europe and Japan. So we're narrowing our markets and focusing where we see the most potential: in after-markets, Latin America, India, China and a few others. In refocusing, we'll have SG&A savings that more than offset the foregone profit from reduced presence in certain markets. As you saw this quarter, there were some restructuring charges to make that happen and we identify those in the details. Before I finish my remarks on the quarter we obviously took our fiscal 2008 EPS estimates up due to the quarter's over delivery. It's turned out to be an outstanding year in terms of the aggregate EPS. We now expect $1.80 to $1.85 excluding items impacting comparability. The mix of earnings has turned out to be different from what we had planned, meaning less from brands and more from trading. But nevertheless the absolute EPS is very strong. I look forward to reporting more progress in Q4. For those of you who have been following our journey up to this point, you know it's been interesting, to say the least. It's had its share of ups and downs. I want you to know that I am very confident that our foundation is now stronger than it's ever been. We've weathered storms most companies in our industry have never experienced, especially in one year's time, and we're emerging as a much stronger company. When we take into account all the heavy lifting that's been done across major areas of the company -- culture, the team, the organization's structure, the innovation pipeline, incentive system, portfolio changes, and all the other areas you've heard me discuss over the last two-and-a-half years – we are convinced that the best is ahead of us. We're excited about the company's future and I look forward to proving that out as we approach fiscal 2009. At this point, I'll turn it over to Andre and just as a reminder, when Andre's finished with his remarks I'll make some comments about the deal that we just announced.

Thanks very much, Gary and good morning, everyone. I'll touch on what I consider to be some important highlights for the quarter in the area of operating trends, capital items, give you an update on SAP and I will close with an update on guidance for fiscal year 2008. With respect to operating trends, a $0.63 quarter is very strong. I congratulate our food and ingredients team and our trading and merchandising teams on their outstanding results. This quarter's performance for those businesses was excellent and provided us the ability to take our fiscal year guidance up to $1.80 to $1.85 excluding items impacting comparability. In our consumer foods segment, we saw sequential improvement in our price realization. And as you've heard from us before, our most recent price increases are now in place and were put in effect on March 24. We will see the benefit of that in the fourth quarter and also in fiscal year 2009. To further amplify Gary's comments on our share performance, it's important to note that our volume in unmeasured channels, channels such as club, Wal-Mart and food service to name a few, all grew significantly more than our measured channel volume this quarter. Despite the positive pricing, positive volume and significant cost savings this quarter, inflation was approximately $130 million in Q3 in the consumer space and simply too big to offset. As a result, our consumer profits were down for the quarter. With respect to capital items, our working capital position increased significantly over prior year. Our trading and merchandising operations require working capital to pursue opportunities and our milling business this quarter found itself with very good profits due to increases in the inventory values. But all of that has a cash flow impact because of the increase in working capital. We financed this increase in working capital by the use and issuance of commercial paper. We are confident that working capital levels will come down over time, reflecting our focus on return on invested capital. Today's announcements will also drive down our working capital in a significant way. Our interest expense was $62 million for the quarter, higher than last year because of the short-term debt used to finance all working capital requirements. CapEx was $72 million for the quarter, less than a year ago strictly due to timing. Consistent with our discussions at CAGNY, we believe we will be around $450 million to $475 million of CapEx for fiscal year 2008. Our dividends were $93 million, slightly above last year's amount due to increase in our dividends. Our current year tax rate projection is between 34% and 35%. It was a little lower than that this quarter, due to increased benefits recognized from domestic manufacturing deductions, various tax credits and lower foreign income tax rates in Canada which were effective January 1, 2008. We identified the impact of the lower rate in our items impacting comparability. We did not repurchase any shares this quarter. Let me give you and update on our SAP journey. On our last call I mentioned that we had successfully cleared two milestones in our SAP go-live conversion. One was a new general ledger; the next was the newest version of our order cash system. Today I am very proud to report that in December we had a successful implementation of recipe management which builds the foundation for the supply chain implementation. In February we had our first two plants go live with a total SAP suite, and it went very smoothly. Our next release is in June, where we'll add another six plants to the SAP line-up. Currently, we also have 18 plants successfully live on the warehouse module of SAP Supply Chain. The success of these roll-outs has been in large part driven by adherence to the ConAgra operating principles of simplicity, accountability and collaboration, where teamwork has been very strong between the business and IT. We are already starting to see the benefit from the visibility that SAP provides into the business, and we'll start to see even more benefits as more plants roll out. Now with respect to fiscal year 2008 guidance, based on our strong performance to-date, which amounts to EPS of $1.50 excluding items impacting comparability for the first three quarters of this fiscal year, we now expect our full-year fiscal 2008 EPS to be in the range of $1.80 to $1.85 on the same basis. That essentially means a fourth quarter in the range of $0.30 to $0.35, excluding items impacting comparability. Regarding 2009, as we stated in the release, we currently expect EPS excluding items impacting comparability of at least $1.55. It's still pretty early for us to offer anything firm, but we offer this directional commentary because we know a lot of you will wonder about it in light of the trading and merchandising deal. That number assumes EPS benefit from repurchasing shares and receiving interest income from the pick-notes we are providing and it assumes we are foregoing conservatively planned trading and merchandising profits of $200 million or so. It goes without saying that we expect our core food business to perform better in fiscal year 2009 than it did in fiscal year 2008. With that, I'll turn it back over to Gary.

Thanks, Andre. Turning to the ConAgra Trading Group deal that we announced last night, I believe that the transaction is an excellent one for ConAgra Foods. It has important strategic benefits for us, and also represents an attractive financial opportunity. For some time, investors and analysts have questioned the rationale for the trading and merchandising within the larger core food businesses of ConAgra. Although the business had started as a supportive adjunct for our core businesses, in recent years it had become a much larger part of our earnings and importantly a much larger commitment of capital for us. Although the business has performed very well in the last 18 months, investors largely discounted those earnings and ascribed significant risk to these operations. We know this is a very good business but we’ve concluded it will be optimized under different ownership. We’re exiting the business at a price and at a time that makes sense from where we sit, particularly given the momentum in our food and ingredients segment and the fact that our top line for consumer foods business is improving. We believe this transaction is the defining step in addressing investor concerns and focusing our business and our capital on our core food operations. It allows us to generate an earnings stream more highly valued by our investors and it will allow the trading and merchandising group be considered core among the operations of their new parent company. The value generated by the transaction is quite meaningful and represents a significant premium to book value, which is often the baseline for valuing trading operations. It’s about 6.5 times last year’s strong EBITDA performance and about 8.5 times trailing three-year average EBITDA and also allows us to participate in future upside through a warrant and with limited earn out for the balance of calendar 2008. Our purpose on this call is not to go into every detail about the trading and merchandising operations or the deal itself. We’ve provided some information in an 8-K and a summary sheet that hopefully will give you what you need in that regard. Andre is going to touch on some specific highlights in a minute, but I do want you to know that I think this is the right price and the right time to sell this business. The strategic benefits are clear. The deal removes significant volatility and risk from our earnings stream. Investors and analysts have pointed to this volatility as being inconsistent with the financial profile most desired by our owners. As the only company in the peer group with exposure to a significant trading operation, it was harder for our investors to value us. Although there was a directional benefit for trading income to offset consumer input inflation, there was very little direct benefit to consumer margins. To the extent trading provided actual cost input hedging for consumer, we will now do that directly by establishing needed expertise in our centralized procurement function. We are retaining a few key management members to manage our risk; that expertise won’t be leaving us. The transaction allows a complete management focus on our core food businesses, particularly Lamb Weston and our consumer foods, just as we see momentum building. Even though we didn’t spend an inordinate amount of time on the trading group, it did require comprehensive oversight. Importantly, it eliminates the unavoidable substantial growth and added capital necessary to optimize the business In just the past 24 months invested capital for the trading and merchandising operations has increased by about $700 million. During the past year, even though earnings have been great, it’s been a net user of cash driven by both the absolute cost of holding inventory and the continued need to expand its physical assets and expansion of the scope of trading activities. On a related topic, our ongoing working capital will be more predictable and manageable going forward. That in turn means better operating cash flows over the long term, which means more fuel for regular ongoing share repurchases outside of the concentrated activity related to deal proceeds. In other words, while our trading and merchandising profits have been great lately, the working capital growth associated with those operations has prevented us from buying back our own shares when we otherwise would and that will change with this deal. Most importantly, the transaction will not interfere with our core commitment to shareholders of growing our normalized EPS by 8% to 10% per year. As you know, we normalize our EPS base each year to reflect any over or under delivery from trading so we’ve not planned on growth and trading profits to achieve our algorithm. In the absence of taking more risk, which we were not prepared to do, or committing more capital, it simply wasn’t prudent to rely on trading profit to drive our bottom line. Regarding our EPS impact, it would be impossible to find a deal to replace all the trading income we’ve enjoyed recently. That’s unrealistic. It is very important to reiterate that the proceeds from this transaction basically replace the $200 million plus we’ve built into our annual plans for the next three years and beyond. We expect the performance of our core food operations to drive our 8% to 10% bottom line algorithm. Andre?

Thanks, Gary. I’d like to recap some of the deal terms and then put fiscal year 2009 EPS into some context. The overall price is about $2.1 billion, it’s about 6.5 times fiscal 2007 EBITDA and represents a $600 million premium over book value. Keep in mind that last year’s EBITDA was very strong, so a solid multiple on those unusually high earnings is a good outcome. Two years ago this business earned around $100 million of EBIT and the last six quarters have shown that its earnings are driven directly by the commodity cycle. Now subject to working capital changes, we are getting around $1.6 billion in pre-tax cash at closing and are taking back relatively short duration, fixed securities for $525 million. It is worth noting in this context that unlike virtually any pick you have seen, there will be no meaningful acquisition financing above us in the capital structure, and there will be well more than $1 billion of equity beneath us in the structure. In fact, just liquidating the working capital of the business would repay us more than two times. We view it as very good paper. Because the transaction has very low tax leverage of about $200 million, we expect to be able to apply in excess of $1.4 billion, mostly toward share repurchase and debt reduction, with a larger percentage of the proceeds used for share repurchase. As we look out over the next few years, there should be an incremental $500 million or so to deploy as the limited amount we are financing gets repaid to us. Obviously to the extent we see high return opportunities through different investments, we will pursue them. Now let me finish by providing some more context as it relates to our fiscal 2009 EPS outlook and the EPS growth commitments we have made. If we weren't doing this deal and we were projecting next year's EPS from this year's performance, we would adjust the $1.80 to $1.85 EPS excluding items impacting comparability this year by the amount of trading and merchandising over delivery. That would result in an EPS base of something in the range of $1.40 to $1.45 for fiscal year 2008. It depends on this year's mix of earnings and we won't know the firm number until the fourth quarter is finished. Many of you will recognize that's the same type of exercise we did in fiscal 2007 to determine the proper base on which to growth in fiscal 2008. While the components of the base on the income statement are obviously changing with the transaction, given that we are foregoing some operating profit and making up a portion of the EPS impact from share repurchases and interest income, the fact that we expect to earn at least $1.55 in fiscal 2009 shows our algorithm is still intact. While we can't get very specific right now regarding EPS for 2009 because it's so early, the 2009 EPS numbers should show strong growth in EPS above where we landed on a normalized basis for 2008. It will very likely put us at the end point resulting in two years of 8% to 10% annual growth from our 2007 normalized base that we talked about last year. Now I'll turn it back over to Gary.

Thanks, Andre. Before we close, I also want to thank Greg Heckman not only for his leadership of the trading and merchandising business but for making a real difference in our food and ingredients businesses. Greg is an outstanding businessman and a great leader. We wish him and his team all the best. Fortunately we have a very strong bench in our food and ingredients businesses to help continue delivering great results. Now I'll turn it over to our operator for Q&A.

(Operator Instructions) It looks like our first question comes from Ken Goldman from the offices of…Bear Stearns? Mr. Goldman. Ken Goldman - Bear Stearns: You paused there. That's interesting. Question on the numbers that you've given for '08 ex-trading. You said $1.40 to $1.45, excluding the over-delivery of trading and merchandising, correct?

Good morning, Ken. This is Chris. That's the current call on it. The final piece of it will depend on the mix of earnings in the fourth quarter but we wanted to give you some insight on what we're thinking right now, so yes. Ken Goldman - Bear Stearns: Now, that includes $200 million, right? So it's not including the over-delivery but it's including the delivery of trading and merchandising, right? But, there won't be a $200 million in FY09 of the $1.55 you're forecasting?

That's correct. The $1.40 to $1.45 assumes you're removing the over-delivery. Ken Goldman - Bear Stearns: Just making sure that apples to apples, if I wanted to compare the $1.40 to $1.45 to the $1.55, I should remove about $200 million from that $1.40 to $1.45 range?

That's correct. Ken Goldman - Bear Stearns: Thank you. Second question is on the consumer foods business. How much of a buy in do you think you got this quarter? I mean, it was great to see volume up and pricing up at the same time, but it's always an issue whether retailers will buy in ahead of time. Can you quantify that in any way for us?

Yes. We clearly believe that is not the case. Pricing took effect at the end of the first month of Q4, so the volume doesn't transcend quarters, but we were very firm in monitoring the customer orders and in fact we turned back a significant number of orders that were beyond normal quantities and importantly, our orders post-advance had not dropped sharply. Ken Goldman - Bear Stearns: Two brands, ReddiWip and Chef Boyardee that have some innovation, have some new products out there, declined during the quarter. I'm curious what that says about your forthcoming R&D efforts. Can you talk a little bit about the sustainability of some of the new products that may be coming out in the next few months? I mean, more like Steamers, which is something truly new, or is it more like line extensions, like ReddiWip Chocolate, that may not be as sustainably advantageous to you?

Ken, first, I don't think we had any innovation on ReddiWip that I'm aware of. That brand clearly suffered from being off the air. We had no television advertising as we were working on a new campaign and we know that business is very responsive to it so that is the primary reason on ReddiWip. On Chef Boyardee, we had a reasonable month. That's a very, very big brand for us and we're very confident that that will continue to be a strong performer.

: Ken, I would add just one thing. I think as I mentioned in my comments also that what you're looking and what you have access to largely is syndicated data. One of the things you have to remember for both of those brands but specifically Chef, we have a strong presence in what I'd call non-syndicated or non-measured channels and our business was very strong in those areas.

From Cleveland Research, we have the line of Christine McCracken. Christine McCracken – Cleveland Research: Congratulations on the sale. Skipping then to food and ingredients, because you had kind of a similar surprise in commodity cost benefit there with the gains on wheat. Can you quantify at all how much of that was that wheat gain and if that would carry into the next quarter?

Good morning, Christine. This is Chris. I'm going to start. If I understood your question right let me tell you that the delivery in milling from items that you're mentioning is in the range of $40 million. We are comfortable with that being our base to compare next year. Some of that gain came from mark-to-market, some of it came from futures positions. Greg Heckman is with us and I'm going to see if he wants to expand on anything I've said.

Yes, definitely expect the volatility in the wheat markets to continue. The team did a great job of managing through that risk. We continue to see kind of a normal seasonality and I think as Chris said that will be in our base next year. It will be tough to predict exactly what quarter and what opportunity will fall but we're real pleased with the innovation in that business and how that team continues to execute in this environment. Christine McCracken – Cleveland Research: Just in terms of Lamb Weston there are you seeing any slowdown in their sales given the weakness in food service or is it that that business largely serves quick serve, which isn't maybe as weak and therefore doesn't have the same exposure?

: Christine, we're very comfortable Lamb Weston momentum continues and they just do a great job from a customer service and a quality standpoint so their momentum continues.

Christine I'd add to that they have a very broad portfolio. Not only do they service QSR. They are across the food chain on the food service area. They also have a very strong global footprint and a global business and we're seeing a lot of positive from that position where they are in the global marketplace as well.

We have a signal from Eric Serotta - Merrill Lynch. Eric Serotta - Merrill Lynch: Good morning. A quick question on the timing of the share repurchase with the proceeds from the sale of trading and merchandising. Would it be reasonable to expect you guys to do an accelerated share buy back as you did with a portion of proceeds from the refrigerated meats back a couple of years ago? Or should we expect to see the share repurchase more ratably over the year next year?

We’re going through that analysis right now. I believe that your assumption on us being in the marketplace with an accelerated share repurchase is probably spot on. That would be something we would be looking to do when the windows and the opportunity opens up. Eric Serotta - Merrill Lynch: Both you and Gary alluded to the significant working capital benefit from not having the trading and merchandising business and the benefit that’s going to have to operating cash flow. Wondering if you can be a little bit more specific as to give us some sort of range of how much working capital has been tied in the business over the past 12 months?

As we talked about, I think earlier comments were made around the magnitude of year-over-year in the neighborhood of $700 million plus of more invested capital, which is largely in that space, largely working capital year on year. So we’re still finalizing our fiscal year 2009 plans obviously now without that business to take a look at what that will be. But as I said, we should see a significant reduction in the working capital of the new ConAgra Foods as we move forward, largely because that business does require a lot of working capital to deliver the EPS that it delivers.

We now welcome a question from Citi Investment Research and David Driscoll. David Driscoll – Citi Investment Research: Gary, I’d like to start off with a question on the consumer foods and then I do have a follow-up on trading and merchandising. But within consumer foods, obviously we saw fairly massive margin contraction year on year. When I do the numbers ex item, ex recall cost I’ve got consumer food op margins down about 560 basis points. When you look at the pricing that you have taken, what does it say for margins in the fourth quarter and for next year? Is it enough to keep those margins, get them back to where they were basically in ’07?

David, as I said before, we were going to be late in the pricing game because of our two recalls and our operational issues. Once we got past all that, I said that we would take major pricing actions and that round of pricing which covered over 95% of our consumer portfolio took place or took effect this past Monday. Our plan, to your question, is to deliver gross margin improvement versus a year ago in Q4 and to see gross margin dollars improvement in Q4 versus a year ago and to see the full effect hit in Q1. Importantly, from this point forward, it’s going to be a very different story. Much more pricing discipline, our operating leaders are laser focused on ensuring that our net pricing ongoing cost savings cover inflation in real time. Pricing is no longer an event, per sae, it’s more an ongoing strategy to ensure that we’re driving profitable growth. David Driscoll – Citi Investment Research: Second question on consumer foods, Gary, is when you came to the company I think there was fairly high hopes that your background would lend extremely to the marketing side of the firm. When you came in, you made very strong comments that necessarily the marketing wasn’t maybe as effective or as smart as it otherwise could be. A lot of the comments were qualitative. Can you update us on what’s been happening on the marketing side, what do you think of the marketing? Do the dollars need to go up again? What’s the status?

Yes, I think David, that I am seeing significant progress from an effectiveness standpoint and I can point to a number of brands. I think maybe the best example is a brand that probably hasn’t been marketed or advertised for several decades -- that’s Hunt’s -- and there when we went back on the air with a campaign that has scored exceedingly well we’ve really seen a major uptick in the business and it’s helped us to not only grow the business but to gain share and really build some momentum. That would be a really good example. I’ve talked a lot before about several other brands, like Hebrew National and Marie Callender, but I can tell you across the board, we have dramatically raised the bar on the effectiveness and the impact of the marketing, which is one of the reasons that we’re so confident that we can really drive this consumer foods business on a sustainable profitable growth basis.

Thank you. We transition to Eric Katzman - Deutsche Bank. Eric Katzman - Deutsche Bank: Congratulations and I really think it’s appropriate because most companies, the management tends to sell poorly operating businesses at the low as opposed to selling businesses that are at the high and fixing what isn’t working, so I think that needs to be said. Just to try to, Andre, pro forma a little bit more. I know this is a little bit tough right now because obviously the numbers are probably still coming together, but it looks like you’ll have roughly $11 billion to let’s say $12 billion in sales on the ongoing business and trying to make some adjustment for the corporate expense line, maybe a 10% EBIT margin. Are those reasonable assumptions and what kind of tax rate should we put on the ongoing company? And then I have a quick follow-up.

Well let me try to get the back half of that question. I think the tax rate we're looking at, because the mix of business will be slightly different, will perhaps be around, we're modeling some things around 36% as of late. So that's what I think you should take a look at, with respect to the tax rate. With respect to your previous question, I think we see our operating margins, I think you were talking about 10%, we seem them in the low teens. I think I missed your question relative to corporate expenses. Eric Katzman - Deutsche Bank: Obviously corporate expense is a big number and I just didn't know how much of that was tied into the trading business and maybe that's the difference between the 9 to 10 versus the 11 that you're talking about on EBIT percentage basis.

Yes, I think we're still working through right now the specifics of that, I think you're alluding to something akin to [inaudible] cost to determine how much of that corporate overhead was, in fact, managed against that business. So we're still going through that, but we do believe that some of the things we're working through relative to looking at the organization and simplifying some of our things I think we'll get to taking out the required amount of costs that we have up against that business. Eric Katzman - Deutsche Bank: Gary, now going forward that you've made this move, I mean in terms of things like return on invested capital, other profitability and growth measures, is there any reason why we shouldn't hold you and your senior management team to the typical package food names that people mention? I mean is that how you think we should judge you going forward?

Eric, on a go-forward basis we have continued to say we believe that over time -- and I can't give you and exact timeframe -- that we will reach the peer group average from a margin standpoint. When I say peer group I mean folks like General Mills, Campbell, Kraft et cetera. So I really do believe that. We still have a portfolio that's a little bit different but I really do believe that you're going to see us make progress on that journey.

We'll go to an open line from Bill Leach - Neuberger Berman. Bill Leach - Neuberger Berman: Off of David Driscoll's question about your consumer margins, they were about 12% this quarter. Is there any reason, given your business mix, they couldn't to say 15%, 16%?

: Well again, really in this pricing environment we need to talk more about absolute dollars because obviously the numerator and the denominator change so it's important, but we really do believe that we will continue to close the gap, grow the margins and a significant part of that, you will start to see a bit of that in Q4. As the full effect of the pricing takes place, you'll see it in Q1 and throughout next year. Bill Leach - Neuberger Berman: Can you tell us how large the pricing is that you have taken?

For the quarter we just posted, Bill, it was... Bill Leach - Neuberger Berman: Would you have the fourth quarter, the new pricing?

What we have coming and the increment that we're looking in the mid-single digits range. Bill Leach - Neuberger Berman: 5%?

I'd say slightly north of 5%. Bill Leach - Neuberger Berman: And you said it's on 95% of your products?

Yes. Bill Leach - Neuberger Berman: The other question I had, on fiscal '09 guidance, I know it's tough but can you provide any sort of guidance for interest expense and shares outstanding.

Yes. We're working through some of those things. I think shares will depend on what we repurchase shares at. But we're working with some models right now that give us a significant amount of our shares bought back. We're looking at shares in the 460 million shares outstanding range. But again, this is very preliminary, will depend on where we buy back shares, et cetera; depends on how we allocate the proceeds between shares and debt buy down.

Turning now to Chris Growe - Stifel Nicolaus. Chris Growe - Stifel Nicolaus: I had some questions for you, first one would be that we've heard about some price points going into place that are going in place now where there will be a lot of protection of those promotions into fiscal '09. Is that something that you can talk about or something you intend to do to try and stimulate sales growth in the short run and then ease into the price increase?

No Chris, that is absolute not the case for us. We are not protecting price points. All of our go-forward this quarter and into next year are all at the new price. There is no protection of deals. Chris Growe - Stifel Nicolaus: I just wanted to confirm on a separate topic, will we have trading profits in the fourth quarter?

We will still see trading profits until we close the transaction. Chris Growe - Stifel Nicolaus: My last question just is relative to the sales gap between what you've reported and what we read through IRI and we fully understand the non-measured channels that would indicate huge growth in non-measured channels. That gap though was quite wide this quarter. You seem to indicate there was no real buy-in in the quarter so is it simply the data we cannot see, the non-measured channels?

It really is. We're growing extraordinarily well in those channels and also I think it's important to know that we're fixing the mix in some of our categories as I spoke earlier on frozen.

From Credit Suisse we go to Robert Moskow. Robert Moskow - Credit Suisse: I was looking at the Nielsen data and I know it doesn't measure all the channels again. But I thought that ConAgra had been losing a lot of market share to private label in several categories and in 2007 this kind of continued, but it included egg substitutes, peanut butter, whipped cream, meat, snacks, popcorn, cooking oil and they seem to stand out among other packaged food companies where I thought the private label share gains were more muted. Now you're taking another round of pricing in the fourth quarter. Can you tell me if private label in those categories has also taken pricing? Is that part of what gives you confidence that you could take the pricing too?

Yes obviously it varies by category but clearly we are starting to see private label take more pricing and clearly their cost of goods is, as a portion of their total pricing, is bigger than branded items. In other cases like I think you said meat snacks there is a place where our business is extremely skewed toward unmeasured channels like convenience stores and that's why you see some different stories.

: Robert I'd also just add one thing. As we look at, and again, you may be looking at slightly different reports than we do but we kind of evaluate there's a lot of categories we play in. But of the top 15 categories we play in with the exception of popcorn right now all the private label shares that we're dealing with are slightly down. So again we'll probably have to go offline to reconcile between what you're looking at and what we're looking at but we do not see the same trends that you're seeing in our top 15 categories.

We also make private label but we've seen some categories where we're watching very carefully like eggs and toppings where we expect our competitors to make some moves and they haven't. So we're watching those very carefully. But for the most part, we have not seen significant trends like you're talking about on private label.

Your next question comes from Bob Cummins - Shields & Company. Bob Cummins - Shields & Company: I just wanted to ask you a little about the accounting for the divestiture. It seems to me when the deal closes it's a pretty clean break, it's a freestanding business within the company; you've always reported the numbers separately, and would this qualify as a discontinued operation?

Bob, I'm sorry, we're having difficulty hearing you. Bob Cummins - Shields & Company: I'm sorry, I'm just wondering if you'll account for this as a discontinued operation going forward so people will be able to have a comparable prior year figure to relate to.

Bob, yes this is Andre, yes we will, effective in the fourth quarter we'll start treating this as a discontinued operation.

We're joined by Ann Gurkin - Davenport. Ann Gurkin - Davenport: I wanted to ask in relation to your '09 outlook, what are you including in there for inflation costs?

Mid to high single digits I believe is what we currently have in the plan. Ann Gurkin - Davenport: Off of an ’08 base?

Correct. Ann Gurkin - Davenport: Okay, and we saw a nice pick up in volume for your priority brands, can you talk about what's driving that? Is it marketing, is it innovation, and what's your target for volume growth for those brands in '08?

The priority brands clearly are driven by both: more effective marketing as I talked about brands like Hunts, Marie Callender and others, and innovation brands like Healthy Choice, Orville Redenbacher. So we do believe that we've got very strong marketing, very strong innovation for our priority brands next year. Our algorithm of 4 to 5 on the top line and 8 to 10 on the bottom line is dependent on those priority brands growing while we really drive the base and no longer chase the cases.

We'll go to Lehman Brothers and Eric Miller. Eric Miller - Lehman Brothers: Could you give us any more color? In the different press releases that went out today, the word primarily keeps coming up around this $1.4 billion of after-tax proceeds and in some spots, it's slipped in there that there could be some toward debt reduction and internal investment opportunities. Then we look at fiscal of '09 guidance, in the outlook section of the press release it talks about some of the EPS benefits is from largely using that cash for share repurchases. Is there any kind of range you can give us you can give us with that reduction? Are we talking about $100 million here or is this upwards of $500 million and what kind of debt are you looking to pay down? Is it short term debt or possibly tendering some high coupon debt? Any color on that would be very helpful.

Let me try to get the first part of your question. I think the reason we're saying primarily is that the function of what the proceeds will be at closing will depend on the working capital in that business. As we've said it's book value of that business plus $600 million so that will fluctuate a little bit. We haven't yet come down to exact numbers that we will be allocating towards share repurchase and public debt reduction. It can go anywhere in the 65 to 35 range, 70/30, 75/25. We haven't come through exactly with what that's going to be. So you can apply those percentages against the $1.4 billion. Obviously we are going to look at potentially looking at public debt paydown and we'll obviously go after the high coupon rate stuff we can actually get effectively so we can continue to reduce our interest expense going forward. So we're still working through those pieces. Eric Miller - Lehman Brothers: Can you tell us, is there any kind of debt to EBITDA goal that you're working towards? Your credit ratings are mid to high BBB, but is there a firm rating goal, debt to EBITDA goal, some sort of metric you're looking to, to manage your business to post the sale of this business?

I don’t know that we have. We want to be obviously solid investment grade. We believe we have that kind of rating today. So we don't, particularly to your first question, I don't know that we have a goal in mind but we want to maintain a solid investment grade credit rating.

A follow-up from Merrill Lynch and Eric Serotta. Eric Serotta – Merrill Lynch: I just wanted to circle back on the fourth quarter consumer foods expectations. Last year you had a sharp sequential decline third quarter to fourth quarter. If I remember correctly, that was driven by a lot of slotting fees and pre-launch or trade expense related to the full plate of new products you were launching. Is it fair to think that this year we may see a very different trend given the incremental pricing that you're taking and the absence of those negatives from last year?

I'm going to start and say that while there was some concentrated marketing investment in last year's fourth quarter, we haven't decided on all the variables about this year's fourth quarter. But I want to anchor our previous comments about our expectations really more at the gross profit line. Our expectation is that the pricing and the top line performance would put us in a positive gross margin dollar comparisons versus last year. So when you're talking about the lower profits last year that was largely an A&P issue. We have not decided on all of that for this year's fourth quarter. But due to the pricing that we're talking about we're expecting positive gross margin dollars.

We’re back with David Driscoll - Citi Investment Research. David Driscoll - Citi Investment Research: Great, thanks a lot. Two questions, the first question is on joint venture earnings. Correct me if I’m wrong, but that number was up just enormously year-on-year and I think in that business there’s a grain trading operation, is that operation part of the sale?

So, yes, our equity joint venture earnings were very, very solid. They were really focused in two areas, David you’ll probably discuss [Calarna] which is in fact part of the sale. The other strong growth we had was in our European potato operation with Lamb Weston Mayer which is also very, very strong year-on-year. David Driscoll - Citi Investment Research: Can you give us some guidance then, what would be the joint venture earnings excluding the operation that’s going to be sold?

The guidance going forward, I’d rather you let us put our fiscal year 2009 plans together and when we share with you how we’ve put those together in the fourth quarter, we’ll share that with you. I don’t want to provide guidance right now as to what our JVs are going to look like going forward yet.

But David, I think it’s important to note that we have built that in to our algorithm, the JV, the [Calarna] earnings as part of what we talk about when we have built the base numbers in for trading.

Banc of America Securities and Tom Travio. Tom Travio - Banc of America Securities: I appreciate your comments about wanting to maintain your solid investment grade rating and was hoping you could just talk for a minute about why that’s important and the benefits that you gain from that?

: Well honestly, the benefits that we gain from it is when we access the capital markets to do things in the marketplace, our investment grade rating, solid investment grade ratings, allows us access to funds and it reduces our, ultimately, cost of debt. So I think that probably goes without saying why that’s very important for us as an organization. Tom Travio - Banc of America Securities: As a company, do you guys access the commercial paper market often?

Well versus some of our peers, we’re not probably as a big a player as some, but we do use it and as I mentioned in my remarks, we were pretty actively in the third quarter in order to support the working capital needs that we had as an organization. So we’re in to the markets periodically, we weren’t there much in fiscal year 2007 but the last couple of quarters we have been a much more active participant in the commercial paper markets.

You have a question from Chris Growe - Stifel Nicolaus. Chris Growe - Stifel Nicolaus: Did you say how much marketing was up for consumer foods in the quarter? Related to that, can you talk about trade promotion? Was that up? Do you expect it to be down in ’09?

Company wide A&P was down less than $10 million. Trade promotion was up, but keep in mind Gary's remarks about our peanut butter re-introduction and our trial and that had a fair amount to do with it.

Yes, as we look into next year, it will actually be going down.

There are no further questions at this time. Mr. Klinefelter, I'll hand the conference back to you for final remarks or closing comments.

This concludes today's call and as a reminder, this call is being recorded and archived on the web as detailed in our news release. We are available for discussions and we thank you very much for your interest in our company.