Gary Rodkin – CEO Chris Klinefelter – VP, IR John Gehring – EVP and CFO André Hawaux – President, Consumer Foods Rob Sharpe – EVP, Chief Administrative Officer and President, Commercial Foods

Bryan Spillane – Bank of America David Palmer – UBS David Driscoll – Citi Investment Research Jacqui Engeltis [ph] – Morgan Stanley Eric Katzman – Deutsche Bank Andrew Lazar – Barclays Capital Chris Growe – Stifel Nicolaus Robert Moskow – Credit Suisse Alexia Howard – Sanford Bernstein Eric Serotta – Consumer Edge Research

Good morning, and welcome to today's ConAgra Foods third quarter earnings conference call. This program is being recorded. My name is Jessica Morgan and I'll be your conference facilitator. All audience lines are currently in a listen-only mode. However, our speakers will address your questions at the end of the presentation during the formal question-and-answer session. 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.

Thank you. Good morning. This is Gary Rodkin. And I'm here with John Gehring, our CFO; and, Chris Klinefelter, VP of Investor Relations. Over the next few minutes, John and I will provide our views about the strategic operating and financial aspects of the quarter. But before we get started, Chris will say a few words about housekeeping matters.

Good morning. During today's remarks, we will make some forward-looking statements. And while we're making these 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. So 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 we filed with the SEC, which includes 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 in either the earnings press release or on our Web site, under the Financial Reports and Filings link, and then choosing Non-GAAP Reconciliations. In reference to Regulation G, I will note that our reported diluted EPS from continuing operations of $0.50 has $0.06 of benefit from items impacting comparability as detailed in the press release, resulting in earnings per share of $0.44 on a comparable basis for this quarter. On that same basis, the $0.43 of diluted EPS from continuing operations recorded in the prior year quarter contains of $0.03 of net benefit from items impacting comparability, resulting in EPS of $0.40 on a comparable basis. Now, I'll turn it back over to Gary.

Thanks, Chris. As you saw in our earnings report, this was another good quarter for us. Our momentum is continuing. And we're driving strong earnings per share growth. Within consumer foods, we delivered very high quality results on both the top and bottom line. Our sales volume margin and profit growth, along with our increased marketing investment, are positive signs of our ongoing progress. The stronger foundation you've heard us talk about on previous calls and in a fair amount of detail last month in our CAGNY presentation is really starting to show on our results. Third quarter diluted EPS from continuing operations of $0.44 was 10% ahead of $0.40 a year ago on a comparable basis. That's the type of growth we expected for the quarter. We're on track for diluted EPS from continuing operations to approach $1.73 for the full fiscal year on a comparable basis, which is the guidance you've heard from us before. Net-net, the overall year's EPS is on track. Consumer foods drove the quarter's EPS progress. Sales increased 2%. Unit volumes increased 3%. Most importantly, operating profit was up 19% on a comparable basis. Sales growth was burdened by two points due to sliding in couponing investments related to new products as well as passing through a lower cooking oil commodity costs in the form of lower prices for certain products. If you adjust for these two factors, there's no erosion in price mix. Our commercial business continues to navigate a top restaurant environment. But through mix inefficiencies, this segment posted a 6% profit increase. Now, I'll say a bit more about each segment. We continue to post strong sales, units, margin, and profit results in consumer foods as well as good dollar and unit market share performance in aggregate. Our top line success continues to reflect the benefits of much improved marketing, innovation, and shopper insights initiatives you've heard us discuss before, and of course, reflect the benefit from strong overall execution. To highlight frozen, all three of our big brands, Healthy Choice, Marie Callendar's, and Banquet have grown market share fiscal year-to-date. And it goes without saying that they are having a very good year overall. I've talked before about why we're succeeding in frozen. Our innovation and marketing continues to set us apart. At CAGNY, we told you about our new frozen items like Healthy Choice Mediterranean steamers and Banquet dessert pies. And I also said we'd have some new products in the marketplace this summer. I'll give you a sneak peak today of one we're really excited about. We've got a very strong equity at Marie Callendar's. This brand is a very strong business for us. And it's continued its momentum growing net sales, taking substantial share, and picking up significant distribution in the premium frozen segment, all while holding steady on the price. We're reaching new consumers with Marie Callendar every day. In fact, we brought over 4 million new households to the brand in calendar 2009. And innovation has been a key to that growth, specifically, the Pasta al Dente line. This year, we're going to build domestic sense with more innovations. And today, I want to tell you about our Marie Callendar's new signature bakes that will start shipping in a couple of months. Marie Callendar's signature bakes is a great new way to create a true oven-quality baked meal for two, made in your microwave in just 10 minutes. These are nothing short of fantastic and perfect for the Marie Callendar's equity, which is built on very high quality home-cooked flavors. The other great thing about these meals is that they give a very strong – give us a very strong play in the two-person frozen meals segment, where there's growing consumer interest. And we're able to put these meals in the freezer case at about $6 for the consumer, which is a very, very good competitive price point. I've had these meals like Vermont, like cheddar mac and cheese, and chicken alfredo with sun dried tomatoes. And they are great. Signature bakes are a great example of using our deep expertise in microwave cooking to develop what consumers are looking for, high quality taste, something that really tastes like you spend all day making it from scratch, but which can be cooked in less than 10 minutes. In our testing, consumers gave Marie Callendar's signature bakes top concept, liking, and value ratings that we're looking forward to bakes being another successful platform for us in frozen after they start hitting the freezer case later this spring. That's just one example in a very exciting new product lineup shipping in the coming months. We'll have more innovation this summer from Marie Callendar's as well as significant new products from Healthy Choice, Chef Boyardee, and on Snack Pack, to name a few. As you can tell, our innovation pipeline is very strong and robust. And we will continue to prioritize our innovation activities with the focus on ROI and a strong execution of our "Fewer, Bigger, Better" approach. Another category of growing importance to us and to retailers is microwaveable shelf stable meals. Hosting center of store sales is key, and our analysis shows that shoppers would be open to shelf stable convenient meal purchases as long as their quality and health needs were met. Of the recent addition of Healthy Choice fresh mixers and Marie Callendar's home style creation to the category, we've achieved a strong share position in a short time and are helping build our category at retail. Indeed, we're neck-and-neck with the market leader in terms of the top share ranking. Our shopper marketing teams used deep insights to help drive traffic to this set, which is good for center of the store overall. To say more about this concept of shopper marketing, we continue to leverage our confidence and consumer insights and in-store behavior to help retailers understand how to maximize category sales opportunities. Strong insight and execution in shopper marketing are why we recently won the Gold Ogilvy Award, the top award across the industry for excellence in shopper marketing. Given the competition to these awards, our goal in the shopper marketing is quite a recognition. And I want to publicly congratulate our team on their success. Shopper marketing insights are very important in triggering demand for consumer purchases. We’ve talked about this at CAGNY and in our other quarterly commentaries because we know this is making a difference. At the core, these insights help retailers determine how and when items within a category are promoted, their placement on the shelves, and product and category adjacencies that drive greater product visibility and usage. The proof, of course, is growing category sales. Some of the greatest benefits, though, are harder to quantify, but incredibly important in terms of our relationships with retailers and the opportunities that develop. Being able to bring our retail partners these kinds of business driving insights means a seat at the table for collaborative planning and deeper sharing of insights and strategies. Before I leave the topic of the strong consumer foods top line, I want to emphasize that we had quite a few other brands turning in good performance during the third quarter with sales gains from strong brands such as Chef Boyardee, Hunt's, and Pam. Our overall growth is coming from multiple channels, so the consumer foods business is healthy on several fronts. We've provided more brand details in the Q&A document associated with today's release. Key to our momentum is the success we're demonstrating in our supply chain. Our supply chain savings program continues to deliver, putting us on track for $300 million of consumer foods cost savings this fiscal year as we recently confirmed at CAGNY. This quarter was another strong one for cost savings in the consumer foods supply chain. And we're delivering cost savings considerably in excess of inflation. So the net savings have that much more of an impact in terms of allowing us to post earnings growth, while still increasing our investment in marketing and innovation. To that point, we increased consumer foods advertising and promotion by $12 million this quarter, and are on track for mid single-digit increase for the full fiscal year, indicating our desire and willingness to invest appropriately for future growth. This dynamic of utilizing productivity savings to drive the top line through marketing and innovation is the core of our model. Moving on to the commercial food segment, performance there was in line with our expectations, with more than 100% of sales decline coming from lower re-prices and the resulting pass-through impact on the top line at our flour milling operations. The underlying performance ConAgra mills continue to be very strong, just not quite as good as the remarkable quarter they had last year. Lamb Weston sales were up modestly, but the course was dampened by the continued challenges in the restaurant business. But due to focus on cost of mix, they grew profit. Commercial foods segment operating profit was up 6%, largely on increased manufacturing efficiencies in the mix. Flour milling profits remained strong. But as expected, were still down from last year's unusually strong amounts. As we look to the future, we know the commercial foods segment will navigate the environment as well or better than its competitors. And while this segment is not posting a high profit growth rate as it has done in recent years, its performance this fiscal year has been very good given the industry conditions. This is fundamentally a strong set of businesses. We continue to see the full year bottom line for the commercial foods segment to be about flat year-over-year. Although commercial foods posted profit growth in the first three quarters, we expect and to plan for a fourth quarter decline, the absence of the 53rd week and the negative impact of the cost allocation process change at Lamb Weston that we described earlier in the year by the bulk of this headwind. In summary, we're in a good position as a company. And you've heard me say before, this is a great time to be at ConAgra Foods. We expect our stronger foundation and our ongoing momentum will serve as well for the rest of the fiscal year and beyond. We're confident in our ability to meet our guidance. Thanks for joining us today. Now, I'll turn the call over to John for a more detailed financial perspective.

Thank you, Gary, and good morning, everyone. I'm going to touch on four topics this morning. I'll begin with our third quarter performance highlights. Next, I'll address comparability matters. Then, on to cash flow, capital, and balance sheet items. And finally, some brief comments on our outlook. So starting with our third quarter performance, as Gary noted, we posted another strong quarter. We reported fully diluted earnings per share from continuing operations of $0.50 versus $0.43 in the year ago period. Excluding items impacting comparability, fully diluted earnings per share from continuing operations were $0.44, an increase of 10% over the prior year. Segment operating margins for both consumer and commercial showed continued improvement. The operating margin improvement was led by another strong performance year-over-year in consumer foods. This consumer foods operating margin performance reflects a more favorable input cost environment and strong productivity savings, offset by additional investment behind our brands and our innovation initiatives. Let me touch on a few other operating highlights for the quarter. First, as we've noted, the consumer foods segment turned in a very good quarter. This represents the fifth consecutive quarter of year-over-year performance improvement. And as I commented last quarter and at CAGNY, we are executing well and consistently on each of our fundamentals, successful innovation, better marketing and merchandising, improved sales prophecies and performance resulting in stronger customer relationships and top-notch supply chain capabilities. As we continue to execute against these fundamentals, the benefit is showing up in our consistent delivery of good financial results. Inflation for our consumer foods business continues to trend favorably, slightly better than our expectations. Excluding materials related to the pass-through categories, such as cooking oil, are commodity costs were up slightly in the third quarter. For the full year, we still expect inflation to be in the low single digits as we still face some challenges with certain inputs, such as tomatoes, proteins, and steel. However, overall inflation trends are manageable. Our consumer foods supply chain cost reduction efforts continued to yield good results. Our team continued to execute against the long runway of cost reduction opportunities. And as Gary mentioned, we remain on track to deliver cost savings in the range of $300 million for the full year. While our strong cost savings performance has contributed to our earnings growth, it has also helped to fund investments in support of our new product introductions, offset surgical pricing adjustments, and also supported incremental marketing investments behind our brands. Based on the cost savings performance over the past several quarters and a significant pipeline of opportunities, we remain confident in the ability of our supply chain team to continue with consistent delivery of cost savings to the balance of fiscal 2010 and beyond. On marketing, consumer foods advertising and promotion expense for the quarter was up $12 million or 13%. As we continue our commitment to invest selectively and in an impactful way behind our key brands. And for this quarter, foreign exchange impacted consumer foods net sales favorably by 1%, while the impact on operating profit was immaterial. Turning now to our commercial foods segment, this business continues to execute well in a challenging food service environment, turning in a 6% increase on operating profit. The food service industry has been challenged over the past year-and-a-half. And we expect the recovery to be gradual given the broader economic challenges, including high unemployment. Nonetheless, we are confident in the ability of our commercial foods management teams to continue to navigate this environment well. On selling, general, administrative expenses for the total company, our core SG&A, which include the items such as advertising and promotion, incentives, commissions, and royalties, is tracking very close very close to our zero overhead growth or ZOG goal. We continue to challenge our team to control costs and to achieve high ROI on incremental G&A investments. Now, I'll move on to my second topic, items impacting comparability. The 6% or – I'm sorry. The $0.06 per diluted share of benefit to this quarter's EPS came from three items. First, based on favorable developments and regulatory requirements, the company in the third quarter reduced its estimated liability for environmental cleanup costs at a site acquired many years ago as part of our Beatrice acquisition. As a result, we recognized a pre-tax benefit of approximately $15 million or $0.02. In addition, the company recorded a pre-tax gain of approximately $14 million $0.02 per share in connection with the sale of its lux brands. Lastly, our income tax expense for the quarter reflects approximately $0.02 of benefits from or lower normal tax rate. These benefits relate to favorable audit settlements and other changes in estimates. On hedging, for the third quarter, the net hedging impact on corporate expense was immaterial. For the year ago period, the net hedging benefit reflected in corporate expanse was approximately $35 million. Overall, items impacting comparability in the prior year third quarter amounted to $0.03 of net benefits. Now, let me turn to cash flow, capital, and balance sheet items for the quarter. First on cash flow, as we've commented previously, we are focused on cash flow. And our performance continues to reflect this focus. In fact, year-to-date, our cash flow from operating activities is approximately $1.1 billion, versus approximately $430 million in the year ago period, a very significant improvement. And we close the quarter with over $780 million of cash on hand and no outstanding commercial paper borrowings. We continue to make good progress on a comprehensive set of working capital initiatives designed to drive an improvement over the next several years. We also remain confident that working capital improvements in the current year will generate in the range of $200 million of cash flow benefits. In addition, we continue to expect cash flows from operating activities to be in the range of $1.3 billion for the full year. Next, on capital expenditures, for the quarter, we had capital expenditures of $121 million versus 100 million in the prior year. We expect CapEx for fiscal 2010 to be in the range of $550 million, a bit lower than our previous estimate. This amount includes current year outlays related to our Slim Jim recovery, which we expect to be substantially funded by insurance proceeds; and approximately, $85 million relating our new sweet potato plant, which will be partially funded over time by tax incentives. Net interest expense was $49 million in the third quarter versus $42 million in the prior year. Interest income from the notes receivable associated with the sale of our trading and merchandising operations was approximately $21 million in the current quarter and $22 million in the year ago period. We remain very comfortable with the collectability of these notes. Dividends for the quarter increased to $89 million from $85 million in the prior year, principally due to the increase in our quarterly dividend from $0.19 to $0.20 per share, which took effect in the third quarter of this year. As we noted at CAGNY and in the release, our Board authorized a $500 million share repurchase program this quarter. We expect the program to span multiple years. To date, we have not acquired any shares under the program. And finally, a few comments on our fiscal 2010 outlook. We continue to expect our fiscal 2010 full year diluted earnings per share from continuing operations excluding items impacting comparability to approach $1.73. As we noted in the release, we have earned $1.34 on a comparable year-to-date. And based on our assessment of the fourth quarter, including marketing and other investments as well as product costs and the outlook for the food service sector, we remain comfortable with our full year guidance. As a reminder, the prior year fourth quarter included an extra week, which will impact certain comparisons. Overall, I think our outlook reflects the momentum in our business as well as our plans to continue to invest in and execute on the strategic drivers on a long term success, innovation, marketing, sales execution, and supply chain efficiency. That concludes our formal remarks. I want to thank you for your interest in ConAgra Foods. Gary and I along, with André Hawaux and Rob Sharpe, will be happy to take your questions. I will now turn over to the operator to begin with the Q&A portion of our session. Operator?

Thank you. Now we’d like to get you to an important part of today’s call, taking your questions. The question-and-answer session will be conducted via the telephone. (Operator Instructions) And it looks like our first question today comes from Bryan Spillane with Bank of America. Bryan Spillane – Bank of America: Hi. Good morning.

Good morning.

Good morning. Bryan Spillane – Bank of America: Just a couple of questions, one – first, Gary, I guess just looking at the level of couponing that you did in the quarter. I’m just looking at that negative spread between revenue growth and volume. First of all, do you expect that to continue into the fourth quarter? And then second, if you could talk more specifically about how much of that was in the frozen category. It seems, just based on your comments, it's – it appears that maybe you had lost some market share in Healthy Choice. And are you having to coupon or discount more in order to support that bread? André Hawaux: Bryan, this is André. Let me take that. So as Gary articulated, we have a very robust-type line of innovation that's – that we are going to be launching, including some of the items that he described. So our investment behind those in the fourth quarter and into next year, we’ll continue to invest behind launching those products. That said, in terms of what happened in this particular quarter, we invested significantly of our slotting and couponing investment that we made about 65% to 70% of it was behind our frozen business. And that was to launch new items specifically. That was not to prop up. Your other prior question was to say that we have lost some share, and we were couponing or discounting a Healthy Choice. That was not the case. We were putting coupons behind the new products around, the new Mediterranean steamers we launched, and the new natural line extensions that we launched specifically. The rest of the slotting really and the couponing fell behind our snacks portfolio. And as you recall, when we were at CAGNY, we talked about the new one-step cheese items that we were launching, and that was to (inaudible).

Yes. Bryan, the other piece of that gap between volume and sales is just our pass through pricing on Weston oil and spreads. Oil has come down dramatically versus a year ago. It's not a margin issue. It’s not a trade issue. It’s purely just a pass through. So those two things, when André talked about in terms of new product investment, slotting around, some coupon to launch products, and this pass through pricing that accounts for all of the – everything else is basically just fine. Bryan Spillane – Bank of America: Okay. Just André, on the slotting, did you – for the product that you put in, the new products you put in, was that – is that incremental? Is that extra or new shelf space? Or is it replacing – is your shelf set still the same? André Hawaux: The line share of it is new, so incremental. There were a couple of skews that were replacement for some poor performer. But I'd say 90%-plus of it was incremental. And we are getting a very positive receptivity from our retailers. Dough Knudsen and his team has been out lately talking to new costumers about the new items. And we’re getting very, very strong reception. So we're largely going to see most of that become incremental for us. Bryan Spillane – Bank of America: Okay. Great. Thank you.

We'll move now to UBS and David Palmer. David Palmer – UBS: Thanks. Hi, guys.

Good morning.

Good morning. David Palmer – UBS: The question comes to this quarter that we’re looking back at, the January and February reporters for the packaged food sector have been showing some, to many eyes, fairly unsatisfying volume performance, particularly given the easy comparison that this sector had over that same time period. What was it do you think for the industry perspective that seemed to dampen December, and even to greater degree, January numbers? Have you seen improvement in February and into March that makes you feel like the two-year trend on volume can improve because it seems that – that is a key issue for folks right now is getting the sense that – that volume can improve on a two-year basis such that that can carry the top line from here with little pricing. That’s my first question.

David, I can tell you that we’ve seen good momentum in our volume to continue and we expect to see that kind of momentum continue. And it’s really based on the fact that – that we’ve got good productivity to use as fuel. Our marketing fundamentals continue to getting better and better. Our relationships with our customers, our retailers are very strong. And maybe most importantly, we’ve got a very robust innovation pipeline. So we’re seeing our momentum on the volume continue. And we can see that go into next year as well. And let’s also remember we’ve got non-measured channels, too. David Palmer – UBS: One of the things that’s – that is troubling folks with regard to frozen entrée category in particular is the lack of momentum in the category period. So share gains get you something, perhaps something that doesn’t last forever. When is that category going to get going, and relieve that pressure and that feeling that this is will be one-and-done situation for you, where you call back some share, than the category goes to, perhaps, another – a painful process where retailers start to deemphasize that category, perhaps, at the expense of margins from manufacturers. Could you just address the health of the category?

Yes. I can see in measured channels there is a bit of softness in that category. Probably, at some point in the not too distant future start to flatten out as – as the economy starts to flatten-out. But in our case, we're seeing very strong repeat rates on our innovation. So we're seeing our combination of value orientation on Banquet and innovation; on health and wellness, on Healthy Choice; innovation on Marie Callendar's. Those fundamentals are working for us in keeping consumers coming back again and again. So the fundamental, the organic growth is good for us on frozen. André Hawaux: Yes, and David, I would just like to emphasize one thing. I mean I think in this quarter, in measured channels, every one of our brands in the single-serve meals, that would be Banquet, that would be Marie Callendar’s and Healthy Choice, gain share. And what we’re hearing from retailers as what they like from ConAgra and what we’re bringing is we’re bringing innovation and something that the category has lacked for a while. So I would say that the response we've gotten from costumers has been very, very positive. We have not heard them talking about deemphasizing this category at all. Quite the contrary, they’ve been very happy with the innovation that we've brought. And they're also looking at this bake idea that we’re bringing in with Marie Callendar's in the multi-serve as being innovation we’re bringing there as well. David Palmer – UBS: Thanks very much.

Our next question comes from David Driscoll with Citi Investor Research. David Driscoll – Citi Investment Research: Okay. Thanks a lot. Good morning, everyone.

Good morning. André Hawaux: Good morning. David Driscoll – Citi Investment Research: A couple of questions here, a number of detailed questions actually. So John, I wanted to go back to your comments on the zero overhead growth. Can you explain one more time the corporate expense line? I think it was up something like 28% year-over-year. And I know I’m getting lost here on the zero-overhead growth concept in that 28% increase. How do you reconcile these? And how should we think about the corporate expense line going forward? And then, a follow-up, if you will.

Okay. First of all, David, yes, where – we've probably got some apples in with the oranges here. But let me start with a – we talked about core SG&A, we're looking at SG&A across all of the company. So when you’re looking at the corporate expense, that’s just one slice of the SG&A. So you need to look at as the whole company P&L for the core SG&A, and that’s again where we can focus and drive discipline into the company across all SG&A. On the corporate expense, again, as you understand, corporate expense can be impacted by a number of factors including how you allocate core sales to the business as year-over-year. But the way we look at corporate expenses in a normal year, I think we’re probably looking at something in a 350 to 375. One of the reasons it’s up this year is we've got certain cost that reside in corporate that we're up. A portion of that is as we've addressed in the release, is incentives are up somewhat this year over the last year just given the performance year-over-year. So a lot of that deal gets trap in that corporate expense numbers. So that’s part of the key points I’ve raised at this point.

Yes, David, I would just add – you know we've got significant up-and-down leverage in that bonus, and last year was a pretty tough year for us, this year is pretty good year. So that clearly is a major factor. David Driscoll – Citi Investment Research: Would it be more fair to look at that corporate expense sign over a multi-year period?

Yes. I think that’s one way to look at it. Again, this year we're going to really end up in that 375 to 400 range for the year end again, because if some other things will get tract in corporate there's far more volatility to that. But again, that’s just one component of the total SG&A. David Driscoll – Citi Investment Research: Okay. Three other quick ones on the P&L, is it the tax rate? Is the fourth quarter really going to be a 41% tax rate to get the full year to 35%? And then the joint venture number, the earnings there were down a good bit versus what we we're looking for, and I believe on the year-over-year. And then last question, Gary is, what is the $12 million in marketing as a percent? Like high $12 million, sometimes it’s hard for folks on the outside to understand it on the absolute dollar basis, easier to know when you talk about it on a percentage basis?

Yes. Just to take the last one. That’s about 13% increase. So last year was around $100 million, so another 12%, 13%. David Driscoll – Citi Investment Research: Thank you.

And David, it’s Rob. Let me try to address the joint venture one. As we've said in the past, the venture on that venture line, the biggest piece of it is Lamb Weston Myer venture in Europe. And that business tends to make most of its money in six months out of the year, but picking which six months it’s going to be is always a challenge. Right now you continue to see plentiful low-priced potatoes in Europe and what you got is a very fragmented market there with a lot of small competitors that will sometimes just run for variable profit. Not that there is no core issue with that business, but you will see that line bounce around from quarter to quarter. Last year’s quarter happen to be one of the better quarters of the year, and this year, that wasn’t the case. David Driscoll – Citi Investment Research: And the comment on the tax rate?

Yes, David. We looked at our tax rate on a normalized basis to be in the range of 35% this year. We would expect that to be the case also in the fourth quarter. What’s happening in the map perhaps is that when you look at the year-to-date net-net we've had a number of favorable one-time items that we have called out that are reflected in our year-to-date tax rate, which probably puts it somewhat below 35%. But our normalize rate for the fourth quarter, we expect to be right there at that 35% range. David Driscoll – Citi Investment Research: Okay. Thanks a lot everyone.

Thank you.

Vincent Andrews with Morgan Stanley has our next question. Jacqui Engeltis – Morgan Stanley: Hi, this is Jacqui Engeltis [ph] standing in for Vincent. Is it healthy to talk a little bit about your outlook on the overall promotional environment given that one pre-large retailers who have been pre-vocal about stepping up its promotional activities, and how you view that, and then if you think that this is implication across the broader retailer landscape? André Hawaux: Okay, Jacqui, this is Andre. In terms of what we've seen, we've seen the environment actually has been barely steady and most of our categories, with the possible exception of those that we have had to pass through significant raw material declines around oil and spreads. So I think I understand your comment about some of the retailer comments but we've not seen that, so we continue to see fairly consistent levels of promotional activity at price point that right now we’re reasonably comfortable with in terms of what we've had in our business for the last three quarters. We haven't seen an abrupt change in that landscape. Jacqui Engeltis – Morgan Stanley: Okay, great. Thank you.

We’ll hear now from Eric Katzman with Deutsche Bank. Eric Katzman – Deutsche Bank: Hi, good morning everybody.

Good morning, Eric. Eric Katzman – Deutsche Bank: I want to follow up a little bit – I think it was on Dave Driscoll’s question regarding the marketing spending. I realize that you’re spending, I think, the number is about 5% of your consumer sales, which is pretty competitive. But it just seems in terms of change, I’m sure you've noticed this, Gary, that other companies are boosting that number 20%, 30% levels. So do you think that your level is competitive or is it just the nature of the industry now? Maybe this is going into promotion and it’s going more into advertising but how do you think about that?

Eric, I think that we – we're basing our stand on where we think we can strike that right balance of effectiveness and efficiency. So I think the impact at the current level is a very good one. So we will – we’ll continue to evaluate on a bottom line mindset. It’s a bit more art and science, but it's the mindset of ROI on our market stand. And I’d say we're in the right ball park and we’ll continue to stay there and we probably will continue to see increase in our marketing spending but I don't see that jumping to a huge degree. Yes. I think we're in the right zone. Eric Katzman – Deutsche Bank: Okay. And then–

And then one thing I would add, I’m sorry, is – I think if you look at our numbers and you’re 5% number is correct in the aggregate, I think it’s a little bit misleading because – I think the way to look at it – the way I look at it internally along with Gary is that ROI mindset. But more importantly, I think you have to look in and strip a part where we're spending the money in our pillars, because then it starts to look significantly more. So for instance, in our specialty business as an example, our Wesson oil business and our spread – some of our lower tier brand, we don't spend any dollars yet we generate a lot of sales, if you will. So I think you have to take a look at it against the brands that we're spending in. Then you start to get into numbers that are meaningfully more than 5% and I think that’s probably the right way to start looking at it. Looking at ConAgra and aggregate, yet it is not the way to look at it, because if you look at some of Rob’s was, you see we don't spend any A&T there. So I think for us in the consumer space, we get down at the brand level and the pillar level and I think that’s the right way to look at it. Eric Katzman – Deutsche Bank: All right, that’s a fair comment, and if I could just follow up on the commercial side, McCormick earlier this morning talked about trying to see somewhat better growth out of food service distributors, signs of life there. General Mills yesterday also commented the same. So given your exposure to that area, is – you said – you seemed to me that you are still a bit cautious. How do I think about that? Is it because the QSR exposure that you have? Or why shouldn't we look at the demand there getting better with the other companies commenting that things are starting to show signs of life?

Eric, I’ll echo what they have said in that we are seeing signs of life that would lead me to conclude we're off the bottom. When we're being a little conservative and cautious here because if you look at the core food service industry, and I’ll exclude quick service restaurant from this, there’re a lot of restaurants that are still barely hanging on. So I see signs of life, we see signs of life, it certainly makes us more optimistic than we were a quarter ago, but I just don't think we're quite ready to call a trend yet and build that into a nearing forecast. Eric Katzman – Deutsche Bank: Okay. If I could just ask one last quick one, just on the tax rate and the outlook. Is there – is the change in the environmental liability – is that – does that have any impact on 2011? Is that an ongoing thing in – is that – does that mean 35% is a good rate to hold in for next year also?

Yes. I think there's two pieces there, so first of all on the environmental issue. That’s a – we've – we inherited a basket of environmental liabilities 18 years ago. We just had a development on one of those properties, and so which we do that clearly as a one-time item. And then on the tax rate, again, I would reiterate what I said before, I think 35% is the reasonably good estimate for a normalized tax rate.

And just to echo John’s point, that the 35% we're talking about would exclude unusual items like environmental liability, so they're different issues. Eric Katzman – Deutsche Bank: Yes, got it. Okay. Thank you.

We’ll listen next to Andrew Lazar with Barclays Capital. Andrew Lazar – Barclays Capital: Good morning every one.

Good morning. Andrew Lazar – Barclays Capital: Gary, I know that for a while there you were breaking out consumer food sales from enable versus priority brands’ standpoint. And what I’m curious is – now it’s more on a more consolidated basis. Is your business in a different place where it really doesn't make sense anymore to look at in on that basis? I’m trying to get a sense of the shift and what that says about where you’re at from your business fundamental standpoint?

In our strategic planning a year ago, went to strategic pillars and rather than (inaudible) into priority and enable brands, we now have them broken into pillars-like convenient meals, potatoes, et cetera snacks. So that’s the way that we look at the business now, and that has helped us in terms of the way we focus our resources. So it isn’t anything more than that. Andrew Lazar – Barclays Capital: Okay. And then you've been benefiting – you’re quite a bit as you talk about from more value cost to consumer and some of the brands that really worked, resonate with that kind of consumer and that sort of a retailer. What type of data do you have that helps you to get a sense of what the performance of some of those brands do when the economies start to turn around? Does the increase trial and value orientation of these brands tend to stick pretty well, or can you move people typically within your people up with in your brand franchise just to one that are somewhat more premium. Just trying to get sense because obviously that’s been an incredible help to your business of late?

Yes. We believe very strongly that value is here to stay. That there’s a large portion of the population that is going to continue to look very hard at value even as the economy starts to flatten and turn a little bit. So we believe the value proposition has fundamentally changed. On the other side of the coin, we're going to have to work hard as an industry to get growth from the more premium products in the way that we actually do our innovation. We've got certainly the potential to capture folks as they look to move up given the innovation in a more valued brands. But I think really choose to look at it on both sides, or well position in both places. Eric Katzman – Deutsche Bank: Okay. Thanks every one.

Thank you.

Thank you.

We’ll take a question now from Chris Growe with Stifel Nicolaus. Chris Growe – Stifel Nicolaus: Hi. Good morning.

Good morning. Chris Growe – Stifel Nicolaus: I have one follow up for you in one of the question, and that is, if you look at Healthy Choice in the quarter, excluding – and maybe a better question be frozen (inaudible) overall, excluding some of the couponing and the slowing could you see growth in frozen sales? I saw that Healthy Choice sales were down as one that you called out. Would that have been up without some of the spending in the quarter? André Hawaux: Yes. The reason that you saw Healthy Choice down – this is André, Chris. Chris Growe – Stifel Nicolaus: Yes. André Hawaux: the reason you saw Healthy Choice down in the quarter was the lion share of the slowing and couponing were for new items on the Healthy Choice line. So that Mediterranean steamer line is a Healthy Choice product as are the introduction of the added skew into the natural line up. So without that, you would have seen positive growth as we saw with Marie and for Banquet frozen. Chris Growe – Stifel Nicolaus: Okay. And then I had another one just related to Q4. It sounds like you got pretty heavy new products that are coming through. So we expect – shall we expect any improvement in shipments in the fourth quarter around some of these new products. Is that going to be like a one-time benefit coming through or you just start to ship these products? André Hawaux: Yes. I think the noise you’re going to see though in the fourth quarter is we've got these items shipping. But as John articulated, we're going to be dealing with the 53rd week in the last fourth quarter, so there’ll be some puts and takes. And again, as John said, it’ll be hard to judge all those things but, yes. Chris Growe – Stifel Nicolaus: Okay. And the last question I have for you just relative to the consumer foods operating margin. You made some very good progress through this year. You have a lot of cost savings coming up. Have you gone out and said that it's where you foresee that margin going? I think you've made some general comments about that. But we're getting in a much better sense of the strength of the cost savings, which would seem to help that March. It could even move higher as long as you don't have any material incremental marketing spin. (inaudible) you said you did not, so.

Why don't I start? This is Chris. We have not offered a firm number on the target for consumer foods operating margins. We certainly have a lot of upside, and continually we’ll narrow the gap at our peer set. We're at the mid-teens now. There’s no reason that can't keep going or– Chris Growe – Stifel Nicolaus: Okay. Thank you.

Credit Suisse's Robert Moskow has our next question. Robert Moskow – Credit Suisse: Hi. I just have a different kind of question. I understand there’s some legislation hanging out there out of California, by the congressman out at California that would require a lot of incremental spending on food safety. I want to know if you would look at it; it probably won't pass in its current form. But as you look at your CapEx budget, which is unusually high this year, the way I think that maybe we have one more year that’s high, and then we can normalize at a lower level, which I think would be great for your cash flow. But do you see any incremental spending that will have to be done to ramp up food safety issues? Or do you feel like you’re doing what you need to be doing right now?

Yes, Robert, over the last few years we have spent a significant amount of money. I think we've even talked about it being about $400 million on infrastructure, really focused against product quality and food safety. So we are in very, very good shape from that perspective. I’d say, looking more as a leader rather than a lager as we might have a few years ago. So we're in pretty good shape overall from an infrastructure standpoint. Robert Moskow – Credit Suisse: Okay. And for the follow-up?

And in effect that means – that means that the capital that you see as deploying a go-forward basis is going to shift more into growth and cost savings versus just having to spend the bulk of it on infrastructure. Robert Moskow – Credit Suisse: Right. And just in terms of fourth quarter, I guess I got a little ahead of myself here on numbers, but I’m trying to figure out why operating income would be down in fourth quarter, which seems to be what’s implied by the guidance. You mentioned Lamb Weston. You mentioned the 53rd week. But really, your margins are structurally higher. You have a better foundation, and the inflation is not hurting you. So is there something – another investment that’s going on in fourth quarter? Is it higher incentive accrual? Is that going to hit fourth quarter too?

Robert, Clearly that will be factor in Q4. I think the biggest pieces are the fact we didn't have a 53rd week. But maybe most importantly, we're going against the really tough commercial overlap. So that’s going to be a tough one, but importantly, we still expect to see consumer up. So the fundamentals of the business still look very good. We still feel very good about the full year and the momentum continuing. It’s just a bit of optics. Robert Moskow – Credit Suisse: Thank you very much.

Thank you.

We’ll take your question now from Alexia Howard with Sanford Bernstein. Alexia Howard – Sanford Bernstein: Good morning, everyone.

Good morning, Alexia. Alexia Howard – Sanford Bernstein: Could I ask about the commodities situation and how you’re feeling about that right now, particularly in consumer? It seems to me that meat prices are beginning to trend up again. We've been seeing that for a while. But all those things that are coming in, sugar, and so on. How do you see the outlook over the next few quarters? Is it benign? Is it looking a little bit more challenging? And will you be able to take pricing if the commodity situation is getting a little bit more tricky?

I’d say with price, we're seeing something a little more than benign. But, yes, so some of the things you mentioned certainly are going to put some pressure on us. But we also, given our portfolio, there're also some places where we see the trends going the other way. So in some of the crop-based businesses we have where some of those crops were up this year, we expect those to come down. So across the whole portfolio, I think we're looking at still fairly modest inflation, probably in the 3% range. So we think, given our cost savings opportunities, we think – we think we still have a really good place in terms of managing our costs and continuing the momentum in the business. So I think that’s – I think I'm feeling good about it. Alexia Howard – Sanford Bernstein: Great. So you wouldn’t anticipate needing to take any pricing? The productivity in part will cover the commodity situation. André Hawaux: We're not planning on taking pricing. Obviously, if things go significantly differently than what we planned, we are very much on top of it. But it’s not in our plan. Alexia Howard – Sanford Bernstein: That’s great. Thanks very much. I'll pass it on.

We're here now from Consumer Edge Research and Eric Serotta. Eric Serotta – Consumer Edge Research: Good morning. Last quarter, you guys referred to a reference that your growth in non-measured channels was actually slower than your growth in the measured or tracked channel. You attributed it largely to the Slim Jim situation. And secondarily, you did highlight the timing of some promotional activity with some large EDLP customers – I'm sorry, with some large customers. Could you explain what happened this quarter in terms of your growth in tracked versus non-tracked channels? It seemed like Slim Jim was a major impact. André Hawaux: Yes, Eric. This is André. I'd say we got better balance. The things that you eluded for the last quarter were in fact in play. I think this quarter, we happen to get much more balance across our non-measured and our measured channels. Again, a lot of that's going to – every quarter is going to be different. They're going to be timing issues related to one versus the other. So I think we felt very good about where our Q3 performance came in was actually very balanced.

And we'll have a follow-up question now from David Driscoll. David Driscoll – Citi Investment Research: Great. Thanks for taking the follow-up. Two points, Gary, the first one is just on the overall price environment. You made a number of comments about what happened to you in the quarter. But maybe could you just give – ConAgra's in a lot of different aisles in the grocery store. I think you probably have one of the best perspectives at what is happening. Do you see the retailers really putting the pressure on the manufacturers to reduce price? We get this question tremendously. And then the second question will just be on the private label. What’s the update on the trends in private label versus your product?

I can tell you, David, that pricing is all about both manufacturer and retailer, about getting the right price of the value, I think we’ve been very good in terms of our insights on our products, and our discussions with our customers, our retail partners on what are those price thresholds are. That’s a very important term. So it’s not always about taking the price down lower, lower, and lower. Sometimes, the analyst will tell you that actually a higher price will sell more volume. And we have some pretty good examples of that. So certainly there’s plenty of pressure for value, there’s no question about that but it’s really about getting the right price points. We feel pretty good that we’re in pretty good shape from that perspective. And then on the – what was the second question there? David Driscoll – Citi Investment Research: The second question is just on private label. I feel like a year ago, every conference call was a question about, "How was private label negatively affecting different company' businesses. I don’t hear the question much anymore but you guys sell some private label on your – as part of your portfolio. And of course, private label competes against you in a number of key areas, like PAM and Reddi-Wip, can you just give us an update as to how the trends are?

Yes, I would tell you that your observation is correct. It’s pretty flat right now. I think, that gap has closed as a lot of many manufacturers have figured out that pricing architecture that I referred to before. So right now, we’re seeing across the board pretty flat performance from private label. There are some places. We certainly have a business where the private label business continues to be very good. But net-net, as an overall industry, it’s pretty stable. David Driscoll – Citi Investment Research: Great. Thanks for the comment.

Thank you.

We have a follow-up question now from Eric Katzman. Eric Katzman – Deutsche Bank: Hi. Thanks for taking the follow-up. And for somebody who followed the company for a long time, I just – I want to compliment you on the – taking all the questions on the conference call. It's so different from the way the company used to be. It really is appreciated. Okay. Just John, maybe you could just – just so I'm clear because there're items in and out. And I know the corporate expense line is pretty volatile. But what do you have for the fourth quarter or year-ago corporate line, just so I know if you were talking about 400 million or less for this year, that it just – based on what I have, it seems like that that might actually be flat to down versus a year ago based on what you've booked the first three quarters.

I do not have that in front me. The other thing that that's – we have to look at is that there tend to be gains from sales of assets and business that could flow into that also. So I just don't have the number. Eric Katzman – Deutsche Bank: Chris, you could get back to me after the call.

We'll be happy to follow-up, apologize. Eric Katzman – Deutsche Bank: Okay. Thank you.

Thank you.

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

This concludes our conference call. And just as a reminder, this conference is being recorded and will be archived on the Web as detailed in our news release. And as always, we're available for discussions. Thank you very much for your interest in ConAgra Foods.

This concludes today's ConAgra Foods third quarter earnings conference call. Thank you again for attending, and have a good day.