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 Thilo Wrede - Jefferies LLC, Research Division Jason English - Goldman Sachs Group Inc., Research Division Akshay S. Jagdale - KeyBanc Capital Markets Inc., Research Division David Palmer - RBC Capital Markets, LLC, Research Division Eric R. Katzman - Deutsche Bank AG, 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 Anna A. Aldrich - Cambiar Investors, LLC

Good morning, and welcome to today's ConAgra Foods Second 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.

Good morning. Happy holidays, and welcome to our second 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 words.

Good morning. During today's remarks, we will make some forward-looking statements. And while we're making those statements in good faith and are confident about our company's direction, we do not have any guarantee about the results that we will achieve. If you'd like to learn more about the risks and factors that could influence and 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 measure for Regulation G compliance can be found in either the earnings press release, the question-and-answer document or on our website. Now I'll turn it back over to Gary.

Thanks, Chris. I'll start today with an overview of ConAgra Foods as a whole and then share more specifics on each of our new business segments. We're very pleased to be able to deliver year-over-year growth in EPS, up 9% on a comparable basis. To be clear, that's ahead of what we were expecting for the second quarter. Our stronger-than-planned EPS for the quarter reflects a better-than-expected profit performance from our Consumer Foods segment, which I'll say more about in a minute. After our first quarter performance, we needed to take some corrective actions to improve our performance, and we did that. But some of the quarter's EPS growth is timing, meaning a shift across quarters. In essence, we got some results in the second quarter that we originally planned to occur early in the third quarter. Given this timing shift and several short-term issues, we're appropriately cautious about our second half of the year and sticking with the prior fiscal 2014 EPS guidance despite the over-delivery in Q2. We believe that's the prudent approach in today's environment. This still represents good year-over-year EPS growth in the back half, and we're committed to delivering it. Keep in mind, our guidance represents 8% to 10% growth over last year. Now I'll go into some detail on our 3 business segments. As a reminder, the integration of the former Ralcorp business has led us to the decision to segment our financial reporting differently. The new segments represent how we think about and manage our business. This is the first quarter we're reporting results under these new segments. The details of that are in our earnings release, and John will address the changes, in his remarks, we'll be making today and on a go-forward basis about our new Consumer Foods, Commercial Foods and…

Thank you, Gary, and good morning, and happy holidays to everyone. I'm going to touch on a number of topics this morning: first, I'll provide a brief overview of our new reporting segment structure; then I'll discuss our fiscal second quarter performance; next, I'll address comparability matters; then onto cash flow, balance sheet and capital items, including some added color on our approach to integration and restructuring; I will also provide some comments on our outlook for the balance of fiscal 2014; and finally, I will address the California lead paint lawsuit that has been in the news this week. This quarter, we completed the transition to our new reporting segments. In connection with the acquisition and integration of Ralcorp, we have realigned all of our business units into 3 new operating segments: Consumer Foods, Commercial Foods and Private Brands. Let me quickly summarize the changes, which are also detailed on Page 7 of the release, starting with the new Consumer Foods segment. This segment includes substantially all of our consumer branded businesses. It also includes a small international business that was previously part of the Ralcorp Food Group segment. The new Commercial Foods segment includes the Lamb Weston, ConAgra Mills, Spicetec Flavors & Seasonings and J.M. Swank businesses and certain foodservice businesses previously included in the Consumer Foods and Ralcorp Frozen Bakery products segments. And the new Private Brands segment includes our consumer, private branded food previously included in the Ralcorp Food Group segment and the Ralcorp Frozen Bakery product segment, as well as the store brands business previously managed within the Consumer Foods segment. All prior periods presented have been reclassified to reflect the new segment structure. Next, I'd like to share some comments on our second quarter performance. As Gary noted, overall, the fiscal second quarter results…

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

Two questions, if I can. First, Gary, about how much did the pull-forward of volume in the fiscal second quarter impact Consumer Foods volume and EPS? And the reason I ask is both to judge what 3Q volume could look like, and also get a sense if there's anything we can take away from this quarter's Consumer volume that helps us get more rather than less comfortable with the back half. And then I've just got a follow-up on Private Brands.

Yes, Andrew, I'm not sure -- in terms of exactly how much, I'm not sure we can really break it down that way. Clearly, there was some shift between Q3 and Q2, but I'm not sure we can cite a specific number. I would say that there is a portion that's a shift, and there is a portion that probably creates a little bit of tailwind to offset some of the issues later in the year.

And this is Chris. I'm sorry, I'll build and just say that, although we won't get into firm numbers, we were originally planning for Consumer Foods volumes to be down slightly, low single-digit rate, coming in flat, and that difference is attributable to all the things that Gary talked about in his remarks.

Andrew, also, I just want to let everybody know my voice sounds a bit like a frog, it's because I've got a cold. So I'm glad that you're not here for me to spread it to you. But it really was a little bit of a pull forward. All it was, was we got it at the very end of Q2, instead of the very beginning of Q3, so that's about the extent of it.

Okay. So we want to make sure, obviously, we -- I'm assuming we keep that in mind, obviously, when we think about Consumer Foods volume in the third quarter just because the takeaway that we all see in scanner and whatnot is obviously still not where I think any of us would want it to be.

Yes, I would tell you on that, we will start to see that improve, and we'll -- and we believe that we'll see the consumption and the shipments pretty much merge over the second half.

Okay, that's helpful. And then on Private Brands, assuming that the rest of the year plays out across the business as you expect, I still feel like the Private Brands piece is in a little bit of a black hole to investors, particularly given how the numbers have been reclassified this quarter. I guess, what are some of the specific benchmarks maybe we can look to or that you can provide for us maybe over the next 2 quarters on this business to provide the visibility that the cost synergies that you're looking for in fiscal '15 can actually flow through to give you the kind of 10% earnings growth you're looking for, maybe rather than needed -- being needed to shore up the business again? So I guess, basically, how will we know that fiscal '15 is not going to be another transition year for Ralcorp like '14 was?

Yes, let me try to take a shot at that, Andrew. I think the key is, certainly, as we get into FY '15 and we lay out the year and our plans for the year, I think, given the fact that, at that point, we'll have solid prior year reference points, we'll be able to lay out the various components of the earnings growth, I think by segment, as we put that plan together. Admittedly, it is a little challenging. It's even a little bit challenging internally without the prior year lapse over the next couple of quarters. So I think one of the things you'll have to rely on is some of our estimates on the synergies that are flowing through. And certainly, I think as we get to CAGNY, I think that will be another opportunity for us to provide a little more color on some of the drivers of the business and, certainly, how we're doing on the synergies and the sources of those.

And we'll move now to David Driscoll with Citi.

Gary, I think I got that same frog in the throat, so I apologize for my horrible voice. Just wanted to dive a little bit more into the retail environment and kind of the thought process here on what you're seeing. When you look at the brand segmentation, can you give us a little bit more color on kind of where you really expect to see the pickup in your plans as you change the pricing architecture? The portfolio is very large at this point, so I think it would be helpful for us to kind of be able to track -- going to Andrew's question, to track against the takeaway data that we see from Nielsen. Is it about frozen? Is it about center-of-the-store dry goods? How do you see the different components here moving as the year progresses?

David, this is Tom McGough, and let me answer that in 2 parts. First, generally about our entire portfolio. During Q2, our consumption performance improved as the quarter progressed. We had a very good Thanksgiving period, and our consumption grew over the last month. What we're really pleased about is that we executed our merchandising programs that we talked about in Q1 in a very disciplined way. Our price/mix was flat, and we held our gross margin for the quarter. As you noted, given the breadth of our portfolio, we look at our performance in a couple different segments. Businesses like Hunt's and Ro*Tel Tomatoes, Reddi-wip, portions of the Marie Callender and Banquet business, particularly in our pot pies, and Slim Jim, these are businesses that continue to grow and continue to build share. We're investing to grow on these businesses. Our consumer and customer programs are delivering very good results, and we would anticipate that we would sustain that level of performance going forward. The brands like Banquet, Hebrew National, Wesson, Peter Pan, we've tactically adjusted our merchandising programs based on the category and customer -- or competitive dynamics. We're holding and, in some instance, building share there, and we're very pleased with the performance. But there are some brands and categories that are particularly challenging. We've talked about Chef Boyardee, Healthy Choice, microwave popcorn. We're making progress on getting the fundamentals right on those businesses, but it's going to take time to see the impact. And we anticipate continued weaknesses in those areas. But as I started, overall, we're pleased with the disciplined approach that we've taken to pricing and merchandising, and we're pleased with the performance where we're investing the most resources.

Terrific answer. Just one follow-up on that. Do you think that the competitive environment on pricing and promotions, does it remain disciplined and rational as you might hope?

Yes, it is. We are making tactical adjustments. We believe we're striking the right balance, as indicated by our price/mix.

Yes, we don't see dramatic change.

And we'll take a question now from Bank of America's Bryan Spillane.

Just a question on the Private Brands segment. In the context that the volume growth or volumes are pacing a little bit behind plan, Gary, can you talk a little bit about how much of that is a function of -- you've gone through a period where there was a gap in service levels, so just the function of just simply no one there to take an order? And also, can you talk a bit about where you stand today in terms of the progress you've made talking to retailers about the value add that you bring, particularly in terms of the types of products that you can now produce on this new platform?

Yes, absolutely. Let me start, and then I'll turn it over to Paul Maass for a little bit more color. Again, Bryan, we remain very confident in the strategy. Value is here to stay, and Private Brands will most certainly be a long-term growth factor in the industry. We can -- we really continue to see good traction on cost synergies. And as you mentioned, innovation initiatives with some major customers, that will take some time to cycle in, but real good progress there. And I'd also say our new Private Brands organization is really just getting grounded. Now you do know, as you referenced, there were some issues from Ralcorp's own restructuring that are taking a bit longer to get fixed. I'd say 2 key buckets to mention: customer service levels and pricing. Several of the Ralcorp plant consolidation projects that were underway prior to our ownership had some, I'd say, planning and execution gaps, and they've taken longer to get on track than expected but we're now making progress. And on the pricing architecture, that cost us -- cost the business some bps before our ownership and during the early transition months. But fortunately, most of these issues are now finally behind us. It does take some time, as I said, to affect performance change in a market. But net-net, we're probably about 6 months behind where we had hoped to be but just as positive and enthusiastic.

Yes, what I would add is just it is -- it requires intense focus. That's why we organized the way we have. The execution is unique customer-by-customer, category-by-category, really, SKU-by-SKU, in getting the pricing right at the shelf and getting our execution, the service levels right, and it's why we've organize the way we have to really intensify our focus. And I agree with what Gary said on the timing.

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

Gary, I wanted to follow up on the answer to the previous question. On the structural changes we talked about on the last call with Ralcorp, I mean, it seems like you maybe had to undo or redo some of the changes they made as far as the holding company, supervisory and maybe some personnel changes. Like where are you in that actual sort of personnel level and implementation process with Ralcorp? And I just have one other detail question after that.

Yes, Jonathan, I'd say we are now feeling pretty good. We have the sales organization, the sales teams in place. We now have 6 distinct business units for more focus, and they each have general managers from old -- or I should say from legacy ConAgra, from Ralcorp and several from the outside. So that structure has now been in place for several months. Leadership is really important here. We've got that in place, and it's just going to take a little bit of time to start to affect the change in the marketplace. As Paul referenced, this business is very granular customer-by-customer, category-by-category, but we're in a much better place than we were a few months ago.

And just one of the benefits of being part of a large ConAgra Foods organization, we're leveraging our supply chain expertise to get that service back on track where it belongs. And we focused on that. We're -- we've made huge steps on that. So we're leveraging the entire organization to really advance things.

Great. And I apologize if I missed a comment about this in the opening remarks. But the -- for -- when the Ardent Mills transaction eventually closes, have you talked about what you're going to do with the proceeds?

Yes, Jonathan, this is John Gehring. Our plan at this point is we will use those proceeds to accelerate our debt repayment.

And we have a question now from Thilo Wrede with Jefferies.

First question I have for you was, one of your competitors yesterday pointed out the shift in Thanksgiving, how it impacted their business, have you seen any impact from that?

We planned for Thanksgiving, when Thanksgiving was going to land. Thilo, as we said, we got some of the merchandising for the holidays a bit earlier than we had expected, and that's why we had a bit of a shift from early Q3 into Q2. But I would say that's about the extent of it.

Okay. And then when I look at your scanner data and I look at how you've increased promotions, that you don't seem to get as much of a lift from the promotions as I would have expected. I think you've called out a brand, like Chef Boyardee, that hasn't really reacted to it yet. What does it say about a brand like Chef Boyardee? It didn't seem to react to marketing, it doesn't seem to react to promotions. What does it say about the long-term viability for that brand?

Sure. This is Tom. In Chef Boyardee, we lead in the canned pasta, but we really compete in a much broader competitive set with many other quick, easy-to-prepare meals. The reality is, when you look at that broader competitive set, we see much stronger competitive activity across the board. As you mentioned, this is a brand that's been very successful with multiple price -- multiple purchase promotions. From a consumer standpoint, there are fewer of those traditional stock-up trips as consumers are shopping more toward their immediate consumption. And as a result, the sell-through on our promotions had been less than what we've seen historically. And I think that's generally happening in many categories, not just Chef Boyardee. Without disclosing too much information from a competitive standpoint, we are retooling our go-to-market approach, both in terms of our marketing and merchandising. We're making very good progress on that. But it will take time to have market impact. It will have time to take market impact on that business.

And Jason English with Goldman Sachs has our next question.

So I want to ask about this restructuring program that you hinted at. Are you looking at this as an opportunity to sort of keep your productivity pipeline full, so this roughly $240 million or so of annualized COGS productivity. Is this just more fuel to keep that going? Or is this over and above what you usually target?

I'd say a little bit of both, Jason. I think, certainly, some of the restructuring, as we look at network and distribution, the network optimization, I do think some of that is going to support our ability to continue to deliver good results there. Certainly, we're always looking, as part of that, to see if we can add some extra fuel to that fire, if you will. But I think the other element that we're taking a real hard look at and working on as we speak is, given the size of the organization, what can we do, from an administrative cost efficiency and effectiveness standpoint, to further leverage the size of the organization and the scale of the organization to be more efficient on that end of things too. So I'd say it's both manufacturing and distribution network optimization, some of which is needed to sustain the pipeline and, perhaps, improve it. The other piece would be the administrative effectiveness.

Great. I'm here to hear more. And then more tactically, specifically, just this last quarter, within Consumer Foods, you mentioned that gross margins were comparable to prior year. Can you enlighten us in terms of the productivity that you realized this quarter within Consumer Foods and so the pacing for the year, as well as inflation?

Yes. So, Jason, we've talked about $50 million of cost savings in the Consumer segment this year, and we...

This quarter.

I'm sorry, this quarter, $50 million this quarter. We expect $200 million of cost savings to fall into the Consumer Foods -- the new Consumer Foods segment this whole year. And as I mentioned, there will be about $30 million of additional cost savings that will be reflected in the other segments because of the moves of some of the businesses where those benefits fall.

We'll move now to Akshay Jagdale with KeyBanc Capital Markets.

I just wanted to ask about your longer-term or medium-term EPS growth outlook of 10%. Can you help us in -- with that guidance in the context of this new segment reporting, there's a lot of moving parts. But at the operating profit level, I'm assuming you're going to have similar type growth, maybe high-single digits. Can you give us a sense as to which segments will perform above or below that in your projections over the next couple of years?

Yes, Akshay, I don't think we're positioned today to talk about earnings growth by segments. What I would -- as we certainly get into next year, we'll provide more discussion about that, and we'll talk about our algorithm more at CAGNY. What I would offer, if you just stand back, we've got a lot of confidence that our base business, as it exists today, can deliver reasonable operating profit growth, call it, in the mid-single digits. And then when you look at the opportunity we have from the synergy opportunities ahead of us, that's really what's going to take you from what would be a normalized maybe mid-single digits up into that 10% range. And again, unfortunately, at this time, we're not prepared to talk segment-by-segment.

All right. This is Chris. I'll build on John's remarks and just say that keep in mind, as John indicated in his prepared remarks, that these synergies aren't necessarily going to fall to just one segment. So that's another reason that's complicating it right now. So we'll be getting back to you with more details later.

And we have a question now from David Palmer from RBC Capital Markets.

Two questions. You mentioned how you adjusted promotions in -- to be more competitive in a few categories. We have Thanksgiving noise in our Nielsen numbers, so it's difficult to see the progress that you described earlier. You seem to think that consumer trends, the consumption had improved through the quarter. And what I'm looking at, it's down 5% for the last 12 weeks. And the comparisons seem to be getting tougher through May. So I'm -- I just wanted to probe a little bit, what exactly are you seeing, perhaps, some adjusted consumption numbers, that are making you feel more hopeful? And how should we think about the tougher comparisons and your ability to lap those over the next couple quarters?

Sure, David. This is Tom McGough. What I was referencing is our consumption -- our most recent consumption performance over the last 4 to 6 weeks. We certainly have a view of the entire holiday season, including the shift in Thanksgiving. Our consumption grew over that period of time. That was indicative of very strong holiday promotions on businesses like Reddi-wip, Marie Callender pies, but also incremental merchandising programs that we've secured at key customers in key categories. The Banquet frozen meals, for example, is growing very nicely. We're seeing the same on Marie Callender. We anticipate that many of the merchandising changes that we made began to have their most impact beginning in November, and we continue to see -- we anticipate we're going to continue to see the results of that in the upcoming quarter.

Yes. And, David, I think you'll see a little gap between pricing and volume. And that's really because of some of the very commodity-oriented products, like Wesson oil or Peter Pan Peanut Butter, where the commodities have come down and the pricing has come down. And you've seen that from some other companies. So there may be a little bit of a gap there, but Tom is really referencing the volume.

Yes, so that's a very good point. And I'll just close by saying we're taking a very disciplined, surgical approach. We see that in our price/mix, our margin performance. We believe we're striking the right balance in that equation.

And we'll take a question now from Deutsche Bank's Eric Katzman.

Okay. I guess, 2 or 3 questions. First, maybe I'm just missing this, but your annual guidance on an operating adjusted basis, that included the dilution from the mills -- the milling divestiture. And so does the timing slippage on that, does that now include some earnings that wouldn't have been otherwise in your guidance?

Yes, Eric, let me take that. This is John. I think there are a number of variables in the dilution calculations, the Ardent Mills transaction. Timing is one of them. We continue to monitor those various variables. I'd say that the shift in timing has had a minor impact. But at this point, I would say that $0.03 of dilution is still the best estimate of what the impact is going to be this year.

Okay. And I guess that's within the range, so that's -- that doesn't really have much of an impact for the full year, for the fiscal year?

Yes, that's correct. Yes, the shift in timing, it really has an impact in our overall estimates.

Okay. And then, Gary, the shift to -- or the segmentation, as part of the Ralcorp changes, to 6 segments, do those 6 product lines, I assume those represent the vast bulk of the Ralcorp business. And so -- but if not, is there a certain, let's say, tail there that you just don't feel is worth keeping? And would that -- is that something that we should think about as a lag or a pressure on reported Ralcorp sales going forward?

Yes, Eric, I'd say that it's basically just the way that we've divvied up the portfolio between the Ralcorp businesses and the legacy ConAgra Foods businesses, just to make sure that we have enough focus on each category. So for instance, there's a cereal category and there's a category for condiments, and there's 6 like that. So there's nothing else to take from that other than that we wanted to make sure we had enough focus on each one of those categories because it's a broad portfolio.

And just a mechanical clarification, just so everybody's clear, to recall, as we move the segments around, there's a portion of the Ralcorp Frozen Bakery products legacy segment that is in our Commercial segment because it's a foodservice business. And then there are some international sales that are now sitting in our new Consumer Foods segment. So you've got -- the sum of the pieces have moved around across all the segments. But in terms of the focus on the 6 within Private Brands, that's -- Gary's answer covers that.

Okay. And then last one, if I could. The -- so you touched on this before, but -- so you've got the -- like the kind of the annualized goal of $250 million or so of synergy -- or productivity, sorry, from the Consumer division historically. And that's now going to be distributed a little bit slightly differently because of the change in the segments. And then on top of that, you've got the Ralcorp synergies, and those are also now going to be distributed across the organization, but I would assume that -- is it reasonable to assume that the bulk of those are still going to be in the Private Brands segment?

Yes, I think that's a pretty fair characterization. Most of them will be there. And to your earlier point, we talked about -- at the outset of this year, within the legacy Consumer Foods segment, we talked about $230 million of cost savings. We feel like we're tracking on that number, but about $200 million will show up in the new Consumer Foods segment, and the other $30 million will follow the businesses that went into Private Brands or to our Commercial business.

And we'll hear a question now from Alexia Howard with Sanford Bernstein. Alexia Howard - Sanford C. Bernstein & Co., LLC., Research Division: Can I ask a question about category growth? If you look at categories like canned pasta, we seem to have seen some fairly steady declines in the volume growth over the past several years. I just wanted to ask whether that -- in your view, is that driven by consumers changing attitude towards packaged foods -- certain packaged food segments, maybe shifting away from more heavily processed foods into healthier, fresher and simpler products? Or is there something else going on? And if there is a shift in consumer attitude, how do you respond to that? That's the first question. And a quick follow-up. On the trans fat ban, how burdensome would this be for you to eliminate?

Yes, I'll take the second one first, Alexia. On trans fats, we've eliminated most of that from our portfolio over the last, I don't know, 5 or 6 years. There, clearly, are still some products that have some level of trans fats. It's really going to come down to exactly what the regulations dictate, but we're continuing to work on that. And I would say it is not a material issue for us. And then -- and we, obviously, also have to do that on Private Brands as well. The question on categories, clearly, we've got a big, broad portfolio. Some are more challenged than others. You hit on one that is more challenged, and I would say we're not expecting big growth from canned pasta. That's just not realistic. But there are other categories, many other categories, that we plan where we will deploy resources in a bigger way. Clearly, there's tailwinds in a category like snacks, where we're quite big, particularly now with Ralcorp, with cookies, crackers, nuts, et cetera. So we've got somewhat of a mixed bag across our big, broad portfolio, and that's how we're going to allocate our resources.

And we'll move now to Robert Moskow with Crédit Suisse. Robert Moskow - Crédit Suisse AG, Research Division: I think one of the concerns I hear from investors is that merchandising effectiveness has gotten tougher and tougher because it's like pushing against a string. The consumer isn't responding, especially low-income consumers, to the value offerings that are being put in front of them. But your comments today are very much different from that. I just want to know, like are you more hopeful for next year that you figured out the right tactics, the right formulas, price points for merchandising price points and promotional price points?

Sure, Robert. When you talk about our portfolio, it is a broad portfolio, and we like to assess the performance based on -- we like to segment the performance. We see very good sales growth, share growth in many of our categories where we continue to invest. Hunt's and Ro*Tel Tomatoes is one that I highlighted, Reddi-wip. This is where we've got a great consumer message. We're investing in A&P. We're getting great retailer support. That's converting into organic share and volume growth. But the challenge that you highlighted around the value consumer is indicative of the change in that stock-up trip, we're looking at different ways to satisfy that consumer. And one, in particular, is pot pies. It's a tremendous value, and we're seeing very, very strong merchandising support, customer engagement in that category in growth. So in general, it's a tough economic environment for consumers. But clearly, there are areas that we are growing.

Yes. And again, Robert, I would just say it is really the value of our total portfolio. And we have to shift the resources to where we can drive business. Tom alluded to the pot pie, that's a great example. We have to fish where the fish are, and we're going to continue to adjust in that fashion.

And we have a question now from Chris Growe with Stifel. Christopher R. Growe - Stifel, Nicolaus & Co., Inc., Research Division: I just had 2 questions, if I could. I think -- my first one is in relation to Consumer Foods, the Consumer Foods division. And I think, from Tom's response, we can infer this, but I want to be clear, that you've been very tactical with your promotional spending. And should we expect, therefore, that it gets even more -- do you get any more promotional in Q3 and Q4, the second half of the year? Would that promotional line even accelerate a bit sequentially as you get these programs in place? And the second question was related to the historical Ralcorp business. And you have been talking about $4 billion in sales, and I was curious if that was still an appropriate number if some of the recent -- just the weakness you've had in private label overall, if that's challenged that figure at all as it comes through the second half -- in the second half and for the full year.

Sure, let me start -- this is Tom. Let me start with the first question. Our execution in Q2 is what we would expect in Q3 and Q4 in terms of maintaining a strong discipline, in terms of our spending, we want to be very surgical and tactical and execute in a very disciplined way. I don't see a material change in our approach for the balance of the year. I would anticipate something very similar to what we just achieved.

And on Ralcorp, I would tell you that I wish that I saw more immediate impact on the top line performance. But I have to tell you, I'm trying to be more patient because we've only had our new general managers and sales teams in place for a few months. They are digging out of a hole. They are building new relationships with customers. And I can see them making progress every day. And you know a big transformation like this is really hard work. The important thing is to see that progress every day. So I am very confident we're going to start to turn the corner in the next 4 to 6 months because the strategy is sound and the execution is catching up.

Yes. And, Chris, on that point of your question, specifically, certainly as we revised the number down to $4 billion a couple of months ago, it's because we're starting to see some of these -- some of the timing issues, and the challenge to turn this around. But as we sit here today and we look across all 3 of our segments, where the Ralcorp -- legacy Ralcorp sales will fall, we think $4 billion is still a pretty good estimate of the total sales of the legacy business. So I think we're still on track there.

And our final question today will come from Ania Aldrich with Cambiar Investors.

It's Anna Aldrich. I wanted to ask you if you guys could comment how you think the ongoing reduction in food stamps is impacting your sales.

Yes. The economy is still very tough for the vast majority of Americans, this whole Wall Street, Main Street gap. And any reduction in SNAP is going to make it tougher for a lot of families that are struggling. And we have been very proactive in working with retailers to help them adjust to their -- to these new shopping patterns, given the SNAP issue. And we believe, importantly, that our portfolio delivers the best overall value in the industry. So yes, it is clearly an issue. We think we're being very proactive to tackle it.

But there is no particular number you can put on it?

No. I couldn't really quantify that.

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

Thank you. 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. Happy holidays, and thank you for your interest in ConAgra Foods.

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