The rating reflects ConAgra Foods' diverse portfolio of well-known packaged-food brands, its good geographic coverage in the U.S., and its solid liquidity position. These factors are partially offset by the company's moderate debt leverage, recent operating difficulties, and Standard&Poor's expectation that the company will be acquisitive over the intermediate term. We expect ConAgra Foods' operating margins to improve now that it has divested its lower-margin commodity protein and agricultural businesses. These divestitures allow the new management team to focus on the higher-margin packaged-foods segment, as well as on restructuring the organization--improving the company's business processes, manufacturing and marketing capabilities, and continued SKU rationalization. This should result in a more centric-focused organization from a decentralized one. Execution risk is
