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 Thomas M. McGough - President of Consumer Foods Group Paul T. Maass - President of Private Brands and Foodservice Businesses

Andrew Lazar - Barclays Capital, Research Division David Driscoll - Citigroup Inc, Research Division Bryan D. Spillane - BofA Merrill Lynch, Research Division Jonathan P. Feeney - Janney Montgomery Scott LLC, Research Division Jason English - Goldman Sachs Group Inc., Research Division Kenneth Goldman - JP Morgan Chase & Co, Research Division Eric R. Katzman - Deutsche Bank AG, Research Division Akshay S. Jagdale - KeyBanc Capital Markets Inc., Research Division Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division Robert Moskow - Crédit Suisse AG, Research Division Christopher R. Growe - Stifel, Nicolaus & Co., Inc., Research Division Gregory Hessler - BofA Merrill Lynch, Research Division

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'll 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.

Thank you. Good morning and 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. Before we get started, Chris has a few 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. So if you'd like to learn more about the risks and factors that could influence and impact our expected results, perhaps materially, 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 Q&A document or on our website. Now I'll turn it back over to Gary.

Thanks, Chris. As we announced a little more than a week ago, we got off to a slow start in fiscal '14. While that certainly isn't the way we wanted to begin our fiscal year, I can assure you we've been taking action and we're very focused on the actions required to drive improvement throughout the year. For reasons we'll discuss today, we're confident in our revised full-year EPS, as communicated last week, which results in 8% to 10% growth over last year's comparable full year diluted EPS of $2.16. For the quarter, we posted EPS of $0.37 on a comparable basis. As context, we originally expected to be in line with year-ago amounts, which means we were anticipating we would get close to a $0.44 quarter. When we first gave that guidance, the main reasons we expected to be only in line with year-ago amounts, as opposed to growing, were primarily because we planned for some significant incremental investment to support new product launches, and because the impact from a customer transition in our Commercial Foods business was expected to be the most pronounced in our fiscal first quarter. So with that reminder as background, we underperformed our prior EPS goal, mostly because of poor volume performance in the Consumer Foods segment. As we go forward in the fiscal year, we have plans to improve volume and we anticipate cost favorability, driven by lower-than-planned inflation, as well as better-than-planned SG&A cost savings, all of which suggest better quarterly trends. In a nutshell, we expect those positive factors to collectively offset a portion of the Q1 EPS softness and enable an 8% to 10% growth year, with the growth coming in the second half of the fiscal year. To be clear, we are reaffirming our expected comparable EPS growth rates…

Thank you, Gary, and good morning, everyone. I'm going to touch on 4 topics this morning. First, I'll discuss our fiscal first quarter performance. Next, I'll address comparability matters. Then onto cash flow, capital and balance sheet items. And finally, I will provide some comments on our updated outlook for fiscal 2014. Let's start with our first quarter performance. Overall, as we previously communicated, the fiscal first quarter results were below our original expectations and reflect the impact of several matters we planned for, such as marketing investments in our Consumer Foods segment and the loss of some contracted business with a significant foodservice customer in our Commercial Foods segment. However, as Gary noted, we also had a shortfall in our earnings relative to our plans for the first quarter, and that was driven principally by disappointing sales volumes in our Consumer Foods segment. Overall for the first quarter, we reported net sales of $4.2 billion, up 27%, driven by the addition of Ralcorp, partially offset by the softness in our Consumer Foods segment. For the quarter, we reported fully diluted earnings per share from continuing operations of $0.33 versus $0.61 in the year-ago period. Adjusting for items impacting comparability, fully diluted earnings per share from continuing operations were $0.37 versus $0.44 in the prior year quarter, a 16% decrease. While Gary has addressed our segment results, I would also like to touch on a few points, starting with our Consumer Foods segment, where net sales were approximately $2.0 billion, down about 2% from the year-ago period. This reflects about 2 points of growth from acquisitions, offset by a 3-point decline in base volumes and 1 point of negative price/mix. Our Consumer Foods segment operating profit adjusted for items impacting comparability was $189 million, or down about 22% from the…

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

Just had 2 questions for you to start off. I guess first thing, Gary, when you provided fiscal 2014 guidance, ConAgra was about a month into your first quarter. And at the time, you were quite bullish around volume momentum in consumer and the prospects for Consumer Foods at the time. So something -- it would seem very dramatic must have changed in kind of a month's time from then to sort of cause ConAgra to lower not only the first quarter but the full year EPS so significantly. And you mentioned on the call some category weakness and some customer weakness. But frankly, I'm still not sure kind of what that means and whether that was just overall industry issues because it seems to have hit ConAgra maybe more significantly. So I was hoping maybe you could run us through a little bit around specifically what categories were real differentiators versus what you had thought a month before. And then these customer issues, were these things that were, perhaps, more discrete to ConAgra in terms of the impact to you? And the reason I ask is because this all goes towards how achievable the new full year EPS guidance is. That's the first question.

Sure. Andrew, I appreciate that. Those are fair -- that's a fair question. I think we all acknowledge that we're still in a relatively sluggish industry environment. But as the summer went on, we saw trade spending accelerate, and this is because customers, key customers were competing for traffic and manufacturers really heated up their competition for market share, that we've been on a path of shifting toward more pull via marketing and advertising. But with the increased merchandising intensity in some key customers and some key categories, we frankly lost some share of quality merchandising and, in turn, market share and, of course, volume. We're now in the process of course-correcting that, rebalancing and shifting some advertising dollars selectively into more competitive merchandising support, all within responsible financial constraints. We'll see the benefits starting late in Q2 but primarily in the second half of F '14. But to get more specifics on the categories, let me turn it over to Tom McGough.

Yes, this is Tom. Our volume decline was concentrated in a couple businesses, most notably in frozen and on Chef Boyardee as a result of the strong competitive activity that Gary highlighted. First, in frozen, there's 2 things that are driving this activity. First of all, frozen is a big category, but volume has been weak. And this is an important category for our customers. And as a result, it has become a share battle in frozen meals. As a result, we saw a big increase in competitive promotional activity at several key customers during Q1. Similar situation on Chef Boyardee. As you know, we lead in the canned pasta category, but we really compete in a broader, shelf-stable, convenient meal arena. And the reality in Q1 was that we saw a much stronger promotional activity, particularly at the back-to-school period in that broader category. In both instances, we're strengthening our promotional programs to be more competitive. We anticipate that activity will be comparable going forward, and we know that when we achieve our share of merchandising support, we can improve our volume trends.

Okay. I guess my second question would be back in 2009, I think when the industry went through a somewhat similar dynamic, where there was some deflation and most industry players had ramped up promotional spend to try and drive -- to drive volume, which was weak at the time, as I recall, it didn't end up really helping industry volume very much at all. And it seemed that none of the kind of players in the food industry really ended up benefiting relative to anybody else. It just ended up taking sort of a big chunk of profitability, I guess, out of these categories as a whole. So I don't know, maybe Gary, you could just address that. Do I have that sort of right? And so I'm trying to get a sense of why maybe, if everyone starts to -- has been and promotes more aggressively, the consumer sees certainly better value, but it doesn't seem like anyone gets a relative benefit or advantage.

Yes, Andrew, again, this is not our most desired way to see the industry operate. But we do, as responsible stewards, we do need to course-correct. And frankly, the customer in the competitive environment, along with this moderating inflation, means that we have to smartly rebalance our push and pull. Again, not black and white, not either/or, but we got to put the dollars against where we think we'll get the most effective returns. We need to bend the trends on our market share. It is a market share gain. It's category by category, customer by customer. We've got smarter analytics, and we've got to put them to better use. But we truly need to grow our share in this environment, and we need to do it by driving quality merchandising. We have found ways in our P&L to make certain that it is beneficial to us financially. But again, this is what the environment calls for, and we will stay within those guidelines.

David Driscoll with Citi Research has our next question.

So I'd just like to go back to the competitor promotional activity and maybe just try to get a bit more on this one. Because I would say, Gary, that when you cite this as a negative factor, I mean, it's always troubling to hear on the outside. And what I find is that no one knows how, on our side of the fence, how to dimensionalize how bad this thing is going to be. So maybe can you just give us, as best you can, just specifics on what happened? And I think the most important thing is, how rational is this pricing environment? I mean, when you have a quarter like this, it feels like the environment is completely irrational, I mean and I think Andrew was maybe even trying to get at the same point. If your forward view is based upon the return of rationality, I mean how strong is that at this point in time, and how much confidence can you really give us today?

Obviously, David, there's only so much that we can share for competitive and customer reasons. But within that, I can tell you in our largest category, in frozen, we've been winning market share, as you know, over a number of years within this large category. A lot of that's been driven by really strong innovation, marketing, et cetera. But we can tell you that the intensity of the merchandising really ramped up in some pieces of some segments of that frozen category. For example, in one large part of the segment, merchandising that was, on average, about 4 for $10 or $2.50 apiece went to about 5 for $10 or $2 apiece and in some cases, hotter than that. We have been trying to stay on the path of driving towards more pull. But frankly, given the fact that we've won a lot of market share in several of these segments, we've seen competitors really dial it up this summer. So we've got to do what we need to do to win back that market share, and it's really not a return and hoping for an immediate return to rationality. It's really, in the near term, a return to our fair share of merchandising. Tom, want to add anything to that?

What I would add is that we've seen the promotional activity focused primarily in the premium segment. This is a portion of the category that has grown. As you know, we're well positioned in that category with Marie Callender, with a very strong brand. We're investing in A&P innovation, but going forward, we need to ensure that we're getting our fair share of that merchandising support. As you know, we're investing in this premium segment. We've just launched Bertolli premium meals, and we're very pleased with those results. So we are having a balanced approach, making sure that we have a compelling message. But we've got to make sure that we have competitive merchandising to sustain our business momentum.

One follow-up for me. You made the comments that you expected inflation to come in better than expected. Can you dimensionalize that? What is your inflation expectation for the year and just some sense of -- I mean, it sounds pretty obvious that the pacing gets much better into the back half but, John, anything you can tell us there, I think, will be greatly helpful.

Yes, I think at this point, David, what I'd say is we're probably looking at inflation probably slightly under 2%. Net-net, we still do see inflation when we look at all of our components of cost, including conversion and T&W. What I would say is the material commodity piece of that has come down somewhat since the first part of the year. So that's where we're seeing the lift over the balance of the year. The other thing I would just add is we feel very good about how we're positioned with our commodities and our hedges, so we feel confident about the ability -- our ability to capture that benefit as the year progresses.

We'll move now to Bryan Spillane with Bank of America.

Just 2 questions. One, related to Ralcorp and the revenue, sort of current revenue trends, I just want to make sure I understood it right. As you currently -- and what you've experienced so far this year is that you've gone through this organization change and trying to fill some of the boxes or some of the open slots. Have you not had full sales coverage with every account? First of all, is that an accurate way to describe it?

Bryan, that clearly is not optimal yet. We've had limited coverage given the restructuring that Ralcorp did before the acquisition. What I can tell you is the integration is very much on target. The organizational leaders are now all in place. That's quite recent. The new team and the structure is getting settled, and it's working on getting the wiring right. There will be a big change in the way this business is run from the restructuring that we're doing. Ralcorp did a few months -- Ralcorp, a few months before our acquisition, clearly made some changes that have to be reversed, and it disrupted parts of the business. Our pricing, our customer facing and supply chain are going to markedly improve as we get some time in place, and we look forward to seeing the impact of that starting in the second half of '14. Importantly, cost synergies in F '14 and F '15 to '17 are all on track. And net-net, we expected some challenges here, but we're still on target for the $0.25 of accretion. So a little bit longer than we hoped it would be, but frankly, we're in this thing for the long haul. We're doing it the right way. We clearly see a light at the end of the tunnel.

And I guess the second question, just in terms of the environment being more difficult in general and understanding the comments about what's happened in shelf-stable meals and what's happened in frozen, but I just want to make sure, are your comments about the environment being more difficult really just focused on those categories, or does it spread across, really, the private label business as well? I'm just trying to understand is -- aside from some of those transition items with Ralcorp, you're also just seeing it's generally a more difficult environment in the private label world.

Yes. I would tell you that overall, I think we need to acknowledge that it's relatively sluggish in the industry. It certainly is more severe in particular categories. The net of the whole private label industry, not just us, but the net of the private label industry is still up. So we are addressing the specific issues customer by customer, category by category, and we will start to see this thing bend a little bit starting in Q2 but much more so in the second half of the year.

We'll move now to Jonathan Feeney with Janney Capital Markets.

Gary, just one follow-up. I'm curious about the integration of Ralcorp. I understand the business has always had its ups and downs. It's a private label business. You're always trading -- you're always making that decision volume versus pricing, and I guess that's how I interpret it. But when you -- just interpreted some of the volatility here, but when you're talking about -- what kind of changes were made at Ralcorp that need to be reversed at this point? And what gives you, I guess, such confidence that you're on the track to doing it the right way as far as serving customers and optimizing that equation?

Sure. This is Paul. I'll field that. I would use one word that really will make a big difference, and that is focus. And Gary hit on the organizational changes that were executed prior to the acquisition, but it really consolidated a big part of the portfolio under one general manager. And our diversity of products and categories, as well as the customer diversity, just really translates into a different org design that will enable far deeper focus. As Gary said, customer by customer, category by category, it's not a one-size-fits-all and breaking the business down into those business units to enable the focus, from our perspective, will have a significant impact and really help us in the customer execution. And we'd lost some of that. And I believe that the execution, not only from the customer facing but also the total operations, will improve as we get things set up and rolling forward.

Yes, I would just add, Jonathan, that we're really making a shift into a true operating company. Ralcorp did a great job, primarily focused on acquisitions. That was their focus. They acknowledge that. What we need to do is really turn this into an operating company. And all the steps that Paul talked about, particularly on the front-facing parts of the business, the general managers who run the P&Ls and the customer-facing sales force, those are going to be dramatic changes.

What gives me confidence is the feedback we get from the customers. So we've had a -- executed a lot of customer meetings, very positive feedback. We have great capabilities, great products. As we intensify the focus, we'll see improved results.

We have a question now from Thilo Wrede with Jefferies.

This is Scott Barber [ph] asking a question for Thilo. Just a question around the Lightlife transaction. Why did you decide to sell that business?

Lightlife, frankly, we did not have enough focus on that particular segment. It was our only real entry into that part of the store, and we just couldn't provide the kind of focus on it. It's a nice business, a good equity, but better focus from a different company will help that business.

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

First question, Consumer Foods, your expectation to get to flat volume for the year requires a resumption of growth later this year. That's probably going to be met with some degree of skepticism by a lot of investors. So with that in context, do you have the flexibility to still deliver against your earnings number if that volume performance comes in light?

Jason, this is John. What I would tell you is as we look at the full year, certainly, as I mentioned, job one is strengthening the volume performance there. But to your specific question, I would tell you that given the fact that a lot of the profit growth in the second half, in particular, is not tied directly to that volume getting all the way back to par, if you will, I think we do have some flexibility to still land within our guidance, even if we were to fall a little bit short of that. So again, I think getting back to what I said, we don't need -- we certainly needed to improve it, but we're not basing our guidance on a heroic return of really significant growth.

We'll move now to Ken Goldman from JPMorgan. Kenneth Goldman - JP Morgan Chase & Co, Research Division: Gary, Nielsen data, it's not always accurate, but it seems to suggest some of your frozen SKUs have seen their distribution points drop by fairly meaningful amounts lately. I'm just curious if you can talk a bit about what's happening there, whether it's your products, in particular, that may be getting deemphasized, maybe frozen entrées as a whole, or maybe the data just really aren't reflective of what's happening out there. I'm just curious for your take on shelf space loss, and if that's happening, whether maybe further cuts are at risk. Just any color there would be helpful.

Sure. I'll really start with Healthy Choice. We've made a decision, a strategic decision to build our line around our Café Steamers segment. And we're going through a process now of proactively rationalizing some of our lower-velocity, lower-margin SKUs in our other entrée segments, in particular. As a result, we are seeing declines in Healthy Choice. As we go through the year, we're going to have a stronger product range with higher margins and velocity, albeit on lower distribution. At the same time, we are building our distribution in the premium segment with our introduction of Bertolli. We're very pleased with the end market results that we've gotten today on our single-serve meals, our multi-serve meals and our desserts as well.

We'll move now to Eric Katzman with Deutsche Bank.

I have 2 questions. I guess the first, we haven't really touched on it much, but on the commercial side, can you maybe be a bit more specific as to which customers, is it domestic or international, are you seeing maybe better QSR traffic to help out Lamb Weston as the year progresses and whether lower potato cost is going to help out that business? And then second, it seems like Post -- maybe this is difficult for you to answer, Gary, but it seems like Post is now making a push once again into private label with their cold cereal business. They made a pasta acquisition. I don't know if you can comment, but I would have assumed that maybe there would have been a non-compete agreement or something along those lines.

Yes, this is Paul. I'll answer the question on Lamb Weston Commercial Foods. So the shift was really in foodservice distribution, and we're in the process of shifting business from that particular customer to other customers along relationships. So it's a process that we have to get through. I'm really pleased with the traction that we're getting with new partners in distribution. We will not rely just on that channel for achieving the volume growth back. We'll also get that from international growth, as well as growth with QSRs and other chain partners and customers.

Yes, Eric, we really can't comment on what others are doing. What I can tell you is that we have confidence that we can leverage our capabilities, and we will as we get more time on our belt on cereal and pasta. So we're confident there. But unfortunately, can't comment on what the other guys are doing.

And we'll take a question now from Akshay Jagdale with KeyBanc Capital Markets.

I just wanted to ask about the consumer environment. I know you've talked about it a little bit here. But what do you think is going on with the consumer? I mean, do you think it's overall, they're spending less on food, or are they trading down? If you can just help understand how you're seeing that dynamic. Because there's some conflicting evidence from some of the results that are being reported. Would love to get your thoughts on that.

Sure. I think we believe, clearly, that there's a real bifurcation in the marketplace. And you can see that with the big majority of folks, call it the 80-20 rule, they're still really squeezing very hard on the basics. I've talked about this before, how that isn't just food, but all basics. You can see them in the food industry really trying to manage their yield by using all their leftovers and by their just-in-time inventory not stocking up a lot. And those behaviors are continuing. It's really all about price value in this environment. We believe we have a portfolio that works well there. But we certainly have to take some actions to enable us to continue to drive that price value, and that means that we need to do some things in our cost structure to take it to a place where we can deliver that kind of value. And one of the things we talked about in the near term is shifting some of that advertising into more promotion and merchandising, again, within financial constraints. So I would say we are acknowledging that there's not a lot of tailwinds from the consumer. On the other hand, this is a very, very large industry, and we're going to try and get some share back.

We'll move now to Sanford Bernstein's Alexia Howard. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: Just coming back to the frozen segment, I get the point that getting your fair share of merchandising should help out in the near term. But the underlying structural issue is really the consumer demand for frozen having been quite weak for a number of years now, and it's obviously exacerbated by the moderation in commodity pressures leading to this step-up in merchandising activity. How much do you know about where the consumer is going out of frozen? Are they cooking from scratch? Are they moving to chilled prepared meals? Are they maybe just focusing on premium frozen? And what it's going to take to bring them back?

The frozen single-serve meal category is one in which volume's been relatively weak. It's been focused primarily in the better-for-you segment. There's a couple dynamics going on there. Certainly, over the last several years, that segment is driven by that carried-lunch occasion. And with the relatively weak labor environment, there's been an erosion of usage as a result of that. We also see that there's a migration to those things that are perceived to be fresher. And frozen food is an incredibly, from a product standpoint, fresh product, with the perception around the perimeter of the store and maybe outside the store, there are fresher alternatives. So that's an area that we're tackling on our businesses and one that we have to better position in order for the category to -- for that segment to grow.

Alexia, just to amplify that last point, it's incumbent upon us in the frozen industry to convince folks of the value of the frozen meal. As Tom said, if you went into one of our plants, you'd see that it's just a giant kitchen and the food is really good quality, good nutrition, very good value. We need this to take some of the stigma away from the process side of this, and that's work that we're -- is ongoing.

And we have a question now from Robert Moskow with Crédit Suisse. Robert Moskow - Crédit Suisse AG, Research Division: If I look at your stock's valuation multiple, it would seem to me that the market's not giving you much credit, Gary, for the $300 million of synergies that you think the Ralcorp business can deliver. And you've said that you're on track and you've got the leadership lined up the way you want, but I'm just wondering if you could just give us some more specifics about the cadence of how quickly those synergies can be realized and what comes first. Is it in the supply chain? Is it procurement? Is it overhead reductions? Maybe just a little more color would help people get more confident that it'll start coming quickly.

Yes, Robert, this is John. So I think I'll try to tackle a couple of pieces of that. First of all, I think the first savings we're seeing, and this will be very logical, would be just around some of the SG&A, and we've made great progress on the duplications and streamlining those common functions. So we're seeing that already, and that would make sense that that'd be the first thing we see. The biggest chunk of the savings is clearly going to be on the supply chain side. And I'm speaking strictly cost savings here when we talk about the $300 million. What I would tell you is clearly, we feel like we've got a really good pipeline of ideas and projects that we're working there. And there are things that we are actually implementing as I speak. The one thing I just -- the one thing that's important to remember on cost of goods sold synergies is that you have to identify the project, you have to implement the project, the cost savings then show up in inventory and eventually, they show up in the P&L when they sell through. So that's why a number of -- a good part of the COGS synergies we've identified for this year will show up in the back half. As we get into future years, we really expect a significant ramp-up in the cost of goods sold. And really, it's going to come, first and foremost, from procurement because we have significant overlap in terms of the commodities that both of our businesses buy, and the scale that we're able to bring to the marketplace will be very impactful there. So that's probably the biggest chunk. After that, we also think -- and these will take a little bit more time, but in order -- we also think there's great opportunities around transportation and warehousing that will not only be a cost advantage, but we also think it'll be an advantage with our customers when we can ship products together. Now that, obviously, will take more time because there's some infrastructure investments required there. And then lastly, along the same lines in terms of timeline, would be what we would just classify as network optimization. And I talk -- there, I'm talking about our manufacturing footprint. And so we've got 2 very large manufacturing footprints between our 2 companies, and we think there's a lot of opportunity, over time, to streamline that footprint, which will certainly take fixed costs out of the equation but will also help us in some of our variable costs. So there's a number of components there, but the summary I'd give you is the SG&A is already showing up. We'll see it. We're starting to see some of the early cost of goods sold, principally procurement matters. And the ramp-up in the back years is really going to be driven because we'll have all 3 of those levers in the supply chain working at once.

And we have a question now from Chris Growe with Stifel, Nicholas. Christopher R. Growe - Stifel, Nicolaus & Co., Inc., Research Division: I had 2 questions for you. The first one would be in terms of the Consumer Foods division, I guess I'm still confused on the second quarter performance for that business, which is implied to be down again in the quarter. And I guess, Gary, in your prepared remarks, you talked about the costs associated with the new products and how those were a drag in the quarter, which I understand. I guess what happens then in Q2? Is it just the residual weakness in volume? And I guess related to that, is it the promotional spending that's picking up where you're not expecting an immediate movement in volume on that spending?

Yes, Chris, fair question. I would tell you that it takes some time to implement these things we're talking about, and we will start to see some stabilization in the volume as we get later into the quarter, the latter part of the quarter. But I want to assure everybody that we're not burning the furniture for better optics, that we're trying and admitting that it takes a bit of time to do it right, and that's why we really don't see the real significant improvement until the second half.

Our last question comes from Greg Hessler with Bank of America Merrill Lynch.

So I wanted to ask on -- just given the first quarter results and a little bit -- or the small reduction in guidance, is liability management something that you guys would consider with regards to your capital structure? You have some high coupon debt out there, and with the move in treasuries, it maybe makes it a little bit more palatable to take some of this debt out. Is that something that you guys would consider in order to lower your interest expense?

Yes, Greg, this is John. Certainly, we have -- we are continuously looking at our debt repayment strategy as we -- especially as we plan for things like the additional proceeds from Ardent Mills. What I would tell you is we are certainly watching the interest rate environment very carefully. We are -- we will be evaluating a number of options in terms of how we want to repay that debt. But we also -- to Gary's point, we don't want to burn the furniture from the standpoint of we don't want to just run and take out a whole bunch of our -- what we think is very low-cost, long-term debt. So we're going to have a very balanced approach. But I will also tell you we're not counting on that as an opportunity to save the back half of the year by really getting overly aggressive on an overly heavily weighted repayment strategy.

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

Yes, thank you. Well, before we wrap up the call, Gary would like to offer a few thoughts.

Thanks. First, I want to thank everybody for your questions. I think every one of them was fair. I am the first to admit and take accountability for the fact that we had a bad quarter. We're not just hoping things are going to get better. We're taking actions. I want to assure you, as I just said, that we're not burning the furniture. We're going to do it right, and that's why we're going to see most of the impact in the second half. We're in it for the long haul, and we believe very deeply in our strategy. But as we talked about, as responsible stewards of the business, we need to course-correct when the marketplace environment is clearly telling us to. We know that job one is stabilizing our Consumer Foods business by rebuilding the volume. Price value is more important than ever before, and we need to get back our share of quality merchandising and our market share. This environment's requiring us to be more cost-conscious across the whole company so that we can deliver that value. This includes raising the bar and being more selective on where we spend our resources, including our marketing dollars. Number two, we're very confident in our private brand strategy. It's a growth business. We're working hard to get ourselves in position to really drive that growth by leveraging our new operating organization, scale and our CPG capabilities. It's taking some time to rebuild and rewire this organization, but it's coming together well, and we can, as I said before, see a light at end of the tunnel. In the near term, we are delivering on our cost synergies, as you just heard from John. And number three, we've got a strong commercial business led by Lamb Weston. Yes, we did have and do have a short-term bump with a key customer, but this is a big-scale, high-market share, global footprint business that will continue to grow and deliver us strong returns. So net-net, we have our sights on the long-term algorithm and on delivering the committed second half EPS growth for all the reasons that John and I talked about. Thanks for your attention.

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

This concludes today's ConAgra Foods First Quarter Conference Call. Thank you again for attending, and have a good day.