Gary M. Rodkin - Chief Executive Officer, President, Executive Director and Member of Executive Committee Chris Klinefelter - Vice President of Investor Relations John F. Gehring - Chief Financial Officer and Executive Vice President André J. Hawaux - President of Consumer Foods Paul T. Maass - President of Commercial-Foods Business

Andrew Lazar - Barclays Capital, Research Division Kenneth Goldman - JP Morgan Chase & Co, Research Division Robert Dickerson - Consumer Edge Research, LLC Jonathan P. Feeney - Janney Montgomery Scott LLC, Research Division Akshay S. Jagdale - KeyBanc Capital Markets Inc., Research Division David Driscoll - Citigroup Inc, Research Division Jason English - Goldman Sachs Group Inc., Research Division Thilo Wrede - Jefferies & Company, Inc., Research Division Ann H. Gurkin - Davenport & Company, LLC, Research Division Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division Eric R. Katzman - Deutsche Bank AG, Research Division Rachel Nabatian

Good morning, and welcome to today's ConAgra Foods First Quarter Earnings Conference Call. This program is being recorded. My name is Jessica Morgan, and I will be your conference facilitator. [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. Welcome to our first quarter earnings call. Thanks for joining us today. I'm Gary Rodkin, and I'm here with John Gehring, our CFO; and Chris Klinefelter, VP of Investor Relations. This morning, we'll talk about our strong fiscal 2013 first quarter performance and our upwardly revised outlook for the remainder of the year. And then, we'll open up the call for your questions. At that point, André Hawaux, President of Consumer Foods; and Paul Maass, President of Commercial Foods, will join us. Before we get started, Chris has a few opening remarks.

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 result 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 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 to the most directly comparable measures for Regulation G compliance can be found in either the earnings press release, the question-and-answer document, or on our website under the Financial Reports and Filings link and then choosing Non-GAAP Reconciliations. Now I'll turn it back over to Gary.

Thanks, Chris. I'm very excited about our strong start to the year. EPS on a comparable basis was $0.44 for the first quarter, a strong year-over-year improvement. The overall quality of the quarter was high. Specifically, I'm talking about the fact that both of our segments grew comparable operating profits, while we increased marketing investment at a double-digit rate. Given the strong start to the year, we have raised our full year expectations for comparable EPS to the range of $2.03 to $2.06, which is approximately 10% to 12% comparable growth. And that's including a significant increase in brand-building investment, which we view as good for the long-term health of our business. It's clear that our operating capabilities, strategic initiatives and the recent acquisitions are generating strong EPS benefit for our shareholders and allowing us to post high-quality performance in the midst of difficult marketplace conditions. Before I go on to the segment highlights, I'll also emphasize that we raised our dividend today to $0.25 per share, starting with the upcoming December payment. The annualized dividend is now $1 per share. We generate strong cash flows as a company, and we're confident that we can continue to provide a top-tier attractive dividend to shareholders while pursuing a balanced approach to capital allocation, including organic investments, M&A, share repurchase, and our commitment to a strong balance sheet and investment-grade credit rating. Now I'll move to the Consumer Foods segment. Sales were up 8%, driven by acquisitions. Operating profit increased 20% as reported and 14% on a comparable basis, including a double-digit increase in marketing investment. Overall, this segment posted a very good quarter. A few remarks on the sales performance. Acquisitions contributed 8 points of sales growth. You know from our comments over the past year or so that we've completed…

Thank you, Gary, and good morning, everyone. I'm going to touch on 4 topics this morning. I'll begin with our first quarter performance highlights. Next, I'll address comparability matters. Then onto cash flow, capital and balance sheet items. And finally, I will provide some comments on our outlook for the balance of fiscal 2013. Let's start with our first quarter performance highlights. For the quarter, we reported net sales of $3.3 billion, up 7%, driven by pricing and acquisitions in our Consumer Foods segment. And in our Commercial Foods segment, we had volume gains in both Lamb Weston and flour milling, as well as improved pricing and mix in our Lamb Weston business. Net sales also reflect the impact of lower year-over-year wheat prices in our flour milling operations. In this quarter, we reported fully diluted earnings per share from continuing operations of $0.61 versus $0.22 in the year-ago period. Adjusting for items impacting comparability, fully diluted earnings per share from continuing operations were $0.44 versus $0.31 in the prior-year quarter, a 42% increase. And while this is very strong performance, I would note that the year-ago first quarter was our softest quarter in fiscal 2012. While Gary addressed our segment results in some detail, I would like to touch on a few highlights, starting with our Consumer Foods segment, where net sales for the quarter were approximately $2 billion, up about 8% from the year-ago period. This reflects 8 points of growth from acquisitions. Organic net sales were essentially flat as favorable mix [ph] of about 5% was offset by a 4% base volume decline and foreign exchange had a negative 1% impact on net sales this quarter. Our Consumer Foods segment operating profit, adjusted for items impacting comparability, was $242 million or up about 14% from the year-ago…

[Operator Instructions] And it looks like our first question comes from Andrew Lazar with Barclays Capital.

A quick question about the full year guidance and acquisitions. I think last quarter, you had talked about acquisitions collectively contributing about half of the earnings relative to your previous full year guidance. Do you have an update to that now, particularly because you just recently closed on the Bertolli piece as well, which should, I would think, add to that?

Yes, Andrew. First of all, we're very pleased with our integrations on all of the 6 acquisitions we've made in the last 12 months. I'd say that we would expect a little less than half of our Consumer Foods growth to come via acquisitions. We have a very disciplined process, a very clear strategy, and we're leveraging our capabilities to accelerate or improve the performance of the acquired businesses. So for example, as you mentioned, Bertolli and P.F. Chang will clearly benefit from our frozen infrastructure and scale in the section -- in the frozen section. And our best-in-class innovation capabilities will be directly applicable. But let me give it to John for a little more color.

Yes, Gary. Just, Andrew, just one clarification. I think as we entered the year, we said for the company, the acquisitions would contribute, we thought, maybe a little bit more than half. I think the full year, I would say that the acquisitions now for the total company will contribute slightly more than half. If we look at just at consumer, it might be a little bit more than half.

Got it. Okay, that's helpful, I appreciate it. And then, we've had a couple of food companies more recently start to see volume look a little bit less negative or start to gradually recover as the pricing component has started to wane. I realized at a corporate level for consumer, you still had quite a bit of pricing in the quarter, and hence, the volume elasticity. Are there any pieces of maybe the consumer business or particular brands that you can point to where the pricing on that brand has started to wane and you've seen volume trends that maybe make you feel somewhat comfortable that, again overall, as your pricing wanes, volume kind of comes back?

Yes, Andrew. You're accurate that we still had quite a bit of pricing to overlap in Q1, and that will change as the year goes on. But André can give us a bit more color. André J. Hawaux: Yes, Andrew. Let me just answer the -- both parts of your question. First, with the pricing, which you talked about very succinctly, I'd say the way our pricing overlaps occur over the course of the year -- let me give you some percentages. We lapped about 40% of the price we took last year in Q1, so it is by far our biggest overlap. In Q2, we lap about 30% of it, so again, not insignificant. We had taken a lot of pricing, as you know, last year, and we had sequentially done it. But we had taken a fair amount in Q2, so that's about 30%. And then Q3, Q4, it's about 20% in Q3 and about 10% in Q4. So clearly, the back half certainly supports where we'll see a lot more of those volume trends. But as Gary mentioned earlier, we do see sequential improvements starting to happen in Q2 and Q3 and Q4. With respect to the brands that we've seen and feel very good about as pricing has waned, I'd say that one of the franchises we do feel good about and we're it seeing in our shares and we're seeing it behind the support that our advertising has given us, is probably on the Hunt's tomato products, specifically our diced portfolio. So we see ourselves coming into what is traditionally tomato season, and we're hoping we get a much -- a less mild winter than we got last year. But we see that brand doing very well on a market share standpoint and continuing to win with customers and consumers. So that would be one example I would give you of brands, other than the ones that Gary mentioned, obviously Marie Callender and Slim Jim and Ro*Tel and those brands.

We'll move now to JPMorgan's Ken Goldman. Kenneth Goldman - JP Morgan Chase & Co, Research Division: Gary, I think you talked about the choice you made to favor of mix and margin over volume, at least to some extent for Banquet. And so far, that seems to be the right decision. I'm just curious how to think about maybe some of the risks that come along with this, though, because historically, Banquet's had the attractive price points, had a variety of SKUs such that it served sort of as a, I guess, quasi-private-label brand in the category. So what's the risk here that maybe your actions, though probably smart overall, maybe open up some parts of frozen to inroads from store brands where there aren't really any right now? And maybe you're willing to do that, right? And that's fine. I'm just curious how you think about that risk/reward trade-off.

Yes, good question because we certainly do spend a lot of time working through that, and we think our analytics and our tools are far better than they've ever been. I would tell you, specifically on frozen, we're really not concerned too much about the store brand side of that because we've got such a strong frozen infrastructure, our scale and our productivity, what we've been able to do in terms of driving cost down in terms of the way we produce product. We believe it would be very difficult to significantly undercut a brand like Banquet, so we really don't believe that's a significant issue. It obviously is still a very tough environment, but we really do believe that once we get past this overlap, we'll start to see things moderate. We're not looking for heroics. We're talking about sequential improvement. André? André J. Hawaux: Yes, Ken, Gary is spot on about our frozen capabilities. I would also say, let's just remind ourselves, as the consumer looks at this, we still provide a high-quality protein, a starch and a vegetable, in many cases for a $1 in a meal, and that's unbelievable value. As you recall, a year ago, though, it was being sold for $0.88, and that was unsustainable from a margin perspective. So I think we -- I know we've made the right trade-offs. We haven't lost a lot of consumers in that franchise, and they will be back as we lap that pricing, as Gary said. So I think we feel very good about the decisions we've made on Banquet, and it continues to be a great value, a great traffic driver for our customers, a very good franchise we have. And we don't think private label comes in underneath that. Kenneth Goldman - JP Morgan Chase & Co, Research Division: And then one more, if I can. You've done a bunch of acquisitions lately. Can you give us some color on which ones have exceeded expectations, which ones maybe a little -- maybe need a little bit more attention, so to speak, and what that tells you maybe about where you're thinking about going for future acquisitions? I mean, you made some in packaged meats, for example, sort of all over the store, if you will. And I'm just curious, any learnings you have that can help us understand perhaps how you're thinking about further acquisitions going forward?

Yes. We -- it's certainly really early in the process, so I would say we don't have any red flags at this point. We're very pleased with the way the integrations are going. Things take time to meld into our organization, and we're going to stay very true and disciplined on our strategy. We've got those 3 planks that you see us acting on: core adjacencies, private label and international. And we're going to stick with that. We've got, again, a very, very disciplined process. We're looking for both top and bottom line growth, and we're clearly sticking with that and have very tight filters and a lot of discussion before we move on opportunities.

And we'll move now to Rob Dickerson with Consumer Edge Research.

Gary, I just had a question focused on the frozen entrée category. It looks like the last acquisition you did with Unilever, with Bertolli and P.F. Chang's, if you break out the brands of P.F. Chang's, what you're -- mainly, it seems like mainly snacking/Asian food based. The growth profile on those brands is just -- it's a lot better than kind of what we've seen in the frozen entrée category. So I'm just curious if you could add some color as to why you think there is such growth basically in Asian-food frozen entrée, one. And then two is, if there is growth in this subcategory, will you look to obviously expand that? And then by growing total dollar sales in the category, or would you look to potentially try to reduce your overall mix for some of your slower-growing SKUs?

Well, we're very excited about the acquisition, both the P.F. Chang's side and Bertolli, because we believe, first of all, most importantly, those are terrific brand equities. They take us into new occasions, which as you noted, there's a bit of snacking, snack meals on the P.F. Chang's side. But really, this multi-serve side of the business is a place that we're very excited about getting bigger in. But those equities are really great, and I think the most important thing is that we have capabilities that can be leveraged because we've got scale, expertise, infrastructure in frozen that I think are going to be brought to bear once we really get this integrated into the company. So we are very excited about the growth prospects of both of those brands. They really hit the mark with some new consumers for us.

Jonathan Feeney with Janney Capital Markets has our next question.

Excluding -- I know you made a comment about this in the script, but I just wanted to be clear. Excluding acquisitions, which clearly came with some marketing spending themselves, how much on an apples-to-apples basis was marketing or advertising, however you're disclosing your spending, up roughly in this quarter?

Yes, this is John. The -- on the base consumer business, our advertising and promotion was up about 20% year-over-year on the comparable quarter.

Gary referred to strong increases for the year as a whole. I mean, what sort of order of magnitude would you expect that marketing to be up against the consumer portfolio for the year, relevant -- relative to your current plan?

I'd say we're into the double digits.

And just finally, when you mentioned Hunt's, you commented to the tomato season as potentially responsive to a little bit more advertising spending. Is it your sense that ad spending has become less effective over the last couple of years? Because you've heard a lot of folks in the industry seem to indicate that maybe cutting ad spending is a little bit more rational given some of the consumer pressures out there. And what's your perspective on that? Has it become more or less effective? Any clear trend over the past couple of years? André J. Hawaux: Well, I think a lot of things have happened, Jonathan, over the course of the last couple of years with respect to how you access consumers from a variety of sources. The major -- the old 3-network programs that you did before don't work as well. But I think our teams have done a really nice job getting into the digital space, as Gary mentioned, with Slim Jim and some other things like that. I think you have to have a balance. And we were historically at ConAgra weighted to more push and trade-driven and less pull, and I think what we're doing, consistent with our strategy, has been to better balance that. But I do believe in this environment you need both. You need strong pull recognition, going for high ROI programs. And you also have to have merchandising and trade programs that bring consumers in and that support what the retailers are trying to do. So I think you have to have a balance. And I do believe the programs are still effective. Otherwise, if they weren't, if they had low ROIs, to Gary's point earlier, we would take them out.

We have a question now from KeyBanc Capital Markets, Akshay Jagdale.

I wanted to just clarify on the fiscal '13 guidance. So if I just take what you've said, I'm getting to -- base business growth guidance has increased from roughly, I would say, $0.06 in EPS growth year-over-year to about $0.09. I mean, first of all, I know -- if you don't want to be specific, at least, can you just say you have increased your base business guidance? Is that accurate?

Yes, that is accurate. I'd say we have increased our base business and the M&A piece has probably gone up a little bit, although I would caution that very recent acquisitions, we don't expect that those are going to be up and running at full run rates for some period of time. So the contribution of those to the current year is fairly minimal.

And the base business increase for the year, is that just a flow-through from this quarter? It seems as though it is. So in other words, you're not baking into your guidance a further increase in base business growth yet. Is that fair?

I think that's an accurate portrayal. We've essentially passed through the upside from this quarter, and then we've evaluated the rest of the year and feel like we're in the right spot.

We have a question now from David Driscoll with Citi.

First thing I'd like to do is just talk a little bit about the margins in Consumer Foods. You made the comment that the commodity cost, the raw material inflation came in slightly below the expectations. I suppose what I'm really trying to get is just an understanding. Three months ago, I feel like you guys had a very -- more cautious outlook. This is a tremendous report this morning. The margins are up enormously. Year-on-year growth are enormous numbers. Something happened within the 3-month window from the last call to this call. To me, it feels like it was the commodity side of it more than other pieces of it, specifically in Consumer Foods. But what's your take?

Yes, David. First of all, again, let me reiterate how pleased I am with the quality of this Q1 performance, because both our Consumer and Commercial Foods operations significantly improved their operating profits. So very, very pleased with that. Now certainly, we benefited from less-than-expected inflation. Remember, we have to put our plans in place several months ahead, so that certainly contributed. But very importantly, our total margin management efforts across the company have really gotten traction, including our very proactive and effective cost management on top of lower-than-expected inflation. Our plants are also running very well across the company. Our productivity efforts continued to be robust, and our net pricing architecture tools and our analytics have really improved. And finally, our Lamb Weston international business was really strong. So all of the above, on top of just the lower inflation, added up to an excellent quarter.

So, Gary, the only follow-on I'd make to this one is that the pricing looks like it was a lot of carryover pricing and in line with our expectations. And on a full year basis, your productivity savings is roughly where you had thought it was before. So unless there's a pacing issue within the quarters, again, I'm only trying to understand 3 months ago versus today, and it's obvious this is a positive question, but it feels like the big delta was on the commodity side. I mean, am I just too -- am I wrong on this? Am I just being too strong on the commodity piece?

David, this is John. I think you're being slightly too strong on the commodity piece. I talked about mid-single digits last quarter. And I think I specified kind of 4% to 6%. When I say slightly better this quarter, probably talking about something in the 3% range. So while it was certainly helpful, there's a lot more to the story than just commodities here. So I think the things Gary mentioned, I think we're -- a lot of our capabilities were working very well. The other thing I'd add is that we expected the quarter to be a fair amount stronger than the prior year ourselves as we entered the year. So I think there is a lot of credit to pass around here in terms of number of capabilities.

We have a question now from Jason English with Goldman Sachs.

Some questions on the competitive dynamics out there in the industry. The frozen entrées, the frozen case has been sluggish in terms of growth, and in a couple of your core categories we're now seeing some price investment by your key competitors. I think Nestlé's prices turned negative in frozen entrées. Heinz has as well. And then in frozen potatoes, Heinz has been not so quiet about trying to get -- to win back market share with price investment and get retailers to concede some price as well on those brands. So can you talk a little bit about the level of aggression, how you see that playing out as we look forward? André J. Hawaux: Sure, I think we'll -- Jason, we'll tag team this, myself and Paul. Paul can speak to the potato piece, and I will speak to the category of single-serve meals, which I think you addressed with our competitor set there. We on occasion see that. I think that for the most part, people have been pretty disciplined, including ourselves, on pricing. But certainly, there are promotions out there that we see a little deeper than we'd like. But I'd say, on the whole, the key for us is to really bring consumers back and customers back to that category because that's what we've been -- what's been the most sluggish has been the offtake there. And again, a lot of that, and we've talked about this in the past, has a lot to do with the economy and some things like that. So I think we see that coming back. Right now, I don't see competitive prices sort of out of control, but on occasion, we do see promotions driven at a place where we would not rather not play.

And you know Jason, clearly, we're not going to stick our head in the sand. We choose to try and drive the business much more with marketing and innovation, but if we need to surgically course correct here and there from a merchandising standpoint, we will certainly do that. That's not our priority, but certainly, we're going to be realistic about it. And on potatoes, Paul?

Yes. I'd just reiterate what Gary mentioned in the formal remarks. There's nothing I'm seeing that would change our strategy and our commitment to this strategy with attracting the high-end consumers with Alexia and our all-natural innovative products with Alexia, as well as the licensed brands -- those are doing well -- and our long-term commitment with private label. And quarter-to-quarter, things may look a little bit different, but long term, everything that we see tells us to stick with our strategy.

One follow-up, if I can, on private label. There's been some chatter in this industry of retailers getting more aggressive on trying to put categories back out to bid to try to get some price concessions. Are you seeing that in the categories you compete in?

Jason, for the most part, where we have the priority on private label is in more on the value-add side. But we're not looking to place most of our bets in categories where it's just purely about the lowest-price bid. That certainly will happen now and then and we have to deal with it, but our strategy is really to go on the value-add side.

Thilo Wrede with Jefferies has our next question. Thilo Wrede - Jefferies & Company, Inc., Research Division: Gary, a quick question for you. Last year, obviously, you made an attempt to buy a large private label maker. And since then, you've done several acquisitions, which in my view are -- were much more geared towards the branded side of the business. Is that a shift in focus? Is that a matter of availability? Can you just give us a little bit of color there?

Yes, I would tell you that we're really doing all the above in terms of our 3 pillars. So you've seen us on the branded side, on things like most recently the Bertolli and PF Chang's. You see us in the private label space certainly with National Pretzel. And you've seen us on international with Del Monte Canada and with our increased position in our joint venture in India. So we really do have 3 pillars. It's not an either/or. And we're going to continue down that path. Thilo Wrede - Jefferies & Company, Inc., Research Division: The private label -- the importance of private label to you hasn't changed at all.

No, it hasn't. It is still a priority for us. It's really an important business. Again, we're interested in the value-added side of private label. Retailers clearly, you see, are interested in developing and improving their own store brands. And we've got a well-developed infrastructure on private label. And we're leveraging those capabilities that we have across the company on the branded side, like innovation and food safety and category management and just our overall talent. So we're going to continue to be a big branded player, but we see good growth opportunities in private label.

That's helpful. And then the other question I have was just a housekeeping question. Of your new EPS guidance for fiscal '13, how much of that will be contributed by the non-consolidated business, the equity investment business?

Thilo, this is Chris. We don't usually single that out as a percentage of EPS. I think if you look at the current trends and the run rate, and assume that, that is something reasonable to prorate over the rest of the year.

Ann Gurkin with Davenport has our next question. Ann H. Gurkin - Davenport & Company, LLC, Research Division: I wanted just to circle back into frozen category and on meals. And in terms of the competitive landscape, are you seeing a step-up in the pace of innovation and the resulting attempt to drive pricing and margins and value through innovation? Any change in the strategy for both you and, I guess, competitors, sorry? André J. Hawaux: Ann, this is André. Certainly for us, as Gary has mentioned, we believe we -- in frozen, we have an innovation machine. And not only with the recent properties we just acquired, we feel very good about the capabilities to innovate off of those 2 brands unbelievably well in multi-serve but also in other areas. But we've now sort of capture the frozen case, if you will, from -- I like to say from sunrise to sunset in the sense that we have it now at the breakfast occasion all the way through the dessert occasion. And we're looking at innovation across that entire lineup. We think we'll bring out some things for breakfast that will get consumers interested. And a lot of other things we continue to focus, as you know, on -- we showed some of those products at CAGNY on dessert. We know we have opportunities in single-serve and multi-serve meals, so we, for one, believe that we'll be driving the categories with our innovation machine that we have.

And, Ann, I would echo André's comment. The feedback we get consistently from our customers is that we are, by far, the best innovator, and we are doing things that are platform oriented, not really one-off. So if you think about our steaming, you think about our MicroRite trays that allow the consumer to get the same quality much more quickly out of a microwave versus an oven, those kinds of things are platforms that we'll continue to leverage. Ann H. Gurkin - Davenport & Company, LLC, Research Division: Okay. And then if I could also ask about potential expansion or acquisitions. You highlighted you want to increase your international presence. Can you help me better understand? Would it be in adjacent categories? Would you enter a new space? Any geographies you're targeting? Any other details you can give me?

Yes, Ann. I would say what we're not going to do is just plant a lot of flags. We're going to build out from the infrastructure in places that we already have pretty good scale. It could be places like India with our JV, places like Mexico, and we can grow not just in those companies but from that geography. And certainly, on the Lamb Weston side, where we already have a very significant global footprint, we're going to continue to grow as our customers continue with their aggressive plans to expand in emerging markets.

We'll move now to Alexia Howard with Sanford Bernstein. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: Actually, just following up on the -- we've moved into Lamb Weston here. You mentioned very strong Lamb Weston growth in international markets, and I think you just alluded to emerging markets. Can you tell us any more about which countries are particularly strong here, what kinds of outlets are working very well? And will the operating efficiencies that you mentioned this quarter continue to play out through the rest of the year?

Sure. So I'll -- this is Paul, and I'll just kind of give you a broader perspective. So the way we look at it is there is pretty dynamic growth from emerging markets in general. The highest quality, lowest-cost potatoes in the world are in North America and Europe, which is exactly aligned with our footprint. And so we're well positioned to really align with customers and be key strategic partners that enable them to grow and build out their growth plans in these emerging markets. I would probably generalize as far as Southeast Asia as a real exciting growth market. But in general, we see a pretty exciting growth on frozen potato products in not only Asia, but also the Middle East and South America as well. And we're positioned well to enable those customers to grow there. And then on the operational efficiencies, I kind of hit on the quality of the potatoes and the low cost, but our manufacturing footprint can serve those customers very efficiently from where we're at. And we're very focused on that. It's a big part of what drives our success, and we're committed to that going forward.

We'll hear a question now from Eric Katzman with Deutsche Bank.

I guess just one specific question and then one broad-based one. John, you -- I guess you guys restated sales. Can you just go through that, the reasoning, what exactly that entailed? I realize it didn't impact profits. And then just, Gary, kind of stepping back, not to blindside you, but we -- you put a report out about this Prop 37 and the GMO labeling issue in California. You're pretty broad-based in the industry, and maybe you could shed some perspective on how you think the industry handles that and ConAgra specifically, if the vote goes against you.

Yes, Eric, let me handle the question on restating sales. We had a small portion of transactions in our milling business that just historically we've always reported on a net basis. And as we looked at the accounting rules and just looked to get the -- took another look at that, we decided it would be preferable, given how we report the rest of that business, just to report those sales gross. I believe it was about $30 million in the milling business in this quarter. So not material, but we just kind of cleaned it up.

Eric, this is Chris. In regard to your question about Prop 37, that's not the scope of our remarks today. So what I want to say is that we're working with our trade group and with other food companies to get the word out on it. And we think that when consumers understand the nature of the proposal, they'll vote against it, so...

And our last question will come from Rob Moskow with Credit Suisse.

This is Rachel Nabatian in for Rob Moskow. So with a lower inflation outlook, what's your game plan for pricing? And given the better environment, do you expect to maybe even roll back prices in certain categories? André J. Hawaux: Rachel, this is André. I -- we don't see a need for that because, again, I just want to remind the listeners that it's still inflation that we're dealing with. It's certainly more moderate than it was a year ago, but it's still inflation. But as Gary pointed out earlier, I mean, we will watch where the categories go and where the competitive landscape takes us. But we don't see right now a need in our organization to be rolling back prices. We have a strategy across the full year, so but again, we'll be looking at it. We'll be looking at the commodity markets as we do day in and day out and determining what our posture is. But right now, our plans are not to see ourselves effectively roll back a lot of pricing.

And this concludes our question-and-answer session. Mr. Klinefelter, I'll hand the conference back to you for final remarks or closing comments.

Thank you. 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 are available for discussions. Thank you very much for your interest in ConAgra Foods.

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