BUSINESS SEGMENTS AND RELATED INFORMATION

6 Months Ended

Nov. 24, 2013

Segment Reporting [Abstract]

BUSINESS SEGMENTS AND RELATED INFORMATION

BUSINESS SEGMENTS AND RELATED INFORMATION

As a result of the Ralcorp acquisition, we implemented organizational changes during the second quarter of fiscal 2014 that resulted in new reporting segments. We now report our operations in three reporting segments: Consumer Foods, Commercial Foods, and Private Brands. We believe that this new operating structure will enhance our focus on profitability, coordinated business execution, and resource allocation across our products. Prior periods have been reclassified to conform to the new segment presentation. Prior to this change in organizational structure, we had four operating and reportable segments.

The Consumer Foods reporting segment includes branded food products, which are sold in various retail channels, principally in North America. The products include a variety of categories (meals, entrees, condiments, sides, snacks, and desserts) across frozen, refrigerated, and shelf-stable temperature classes. The Consumer Foods reporting segment no longer includes results for store brands (store brands are now part of the recently created Private Brands segment) or foodservice (the foodservice business is now part of the Commercial Foods segment). The Consumer Foods reporting segment now includes international sales which were previously part of the Ralcorp Food Group segment.

The Commercial Foods reporting segment principally includes commercially branded and private brand foods and ingredients, which are sold primarily to foodservice, food manufacturing, and industrial customers. The segment's primary products include: specialty potato products, milled grain ingredients, and a variety of vegetable products, seasonings, blends, and flavors, which are sold under brands such as ConAgra Mills^®, Lamb Weston^®, and Spicetec Flavors & Seasonings^®, as well as frozen bakery and ingredient products. The Commercial Foods reporting segment now includes foodservice results which were previously part of the Consumer Foods segment and frozen bakery foodservice results which were previously part of the Ralcorp Frozen Bakery Products segment.

The Private Brands reporting segment principally includes private brand and customized food products that are sold in various retail channels, primarily in North America. The products include a variety of categories including: cereal products; snacks, sauces, and spreads; pasta; and frozen bakery products. The Private Brands reporting segment is newly created and includes a significant portion of the results of the former Ralcorp businesses and the store brands results which were previously part of the Consumer Foods segment.

We do not aggregate operating segments when determining our reporting segments.

Intersegment sales have been recorded at amounts approximating market. Operating profit for each of the segments is based on net sales less all identifiable operating expenses. General corporate expense, net interest expense, and income taxes have been excluded from segment operations.

	Thirteen weeks ended				Twenty-six weeks ended
	November 24, 2013		November 25, 2012		November 24, 2013		November 25, 2012
Net sales
Consumer Foods	$	2,016.1	$	2,023.5	$	3,665.5	$	3,690.3
Commercial Foods	1,574.0		1,526.3		3,107.9		2,988.9
Private Brands	1,123.8		177.4		2,138.0		350.3
Total net sales	$	4,713.9	$	3,727.2	$	8,911.4	$	7,029.5
Operating profit
Consumer Foods	$	288.9	$	256.7	$	456.0	$	465.4
Commercial Foods	169.2		194.7		330.3		355.7
Private Brands	89.4		7.0		156.4		13.9
Total operating profit	$	547.5	$	458.4	$	942.7	$	835.0
Equity method investment earnings
Consumer Foods	$	0.5	$	0.5	$	0.9	$	0.6
Commercial Foods	4.8		12.3		8.5		19.8
Total equity method investment earnings	$	5.3	$	12.8	$	9.4	$	20.4
Operating profit plus equity method investment earnings
Consumer Foods	$	289.4	$	257.2	$	456.9	$	466.0
Commercial Foods	174.0		207.0		338.8		375.5
Private Brands	89.4		$	7.0	156.4		13.9
Total operating profit plus equity method investment earnings	$	552.8	$	471.2	$	952.1	$	855.4
General corporate expense	$	105.5	$	90.6	$	229.2	$	49.1
Interest expense, net	95.4		53.4		191.0		102.7
Income tax expense	117.9		109.7		151.8		233.5
Income from continuing operations	$	234.0	$	217.5	$	380.1	$	470.1
Less: Net income attributable to noncontrolling interests	3.7		4.9		6.6		7.0
Income from continuing operations attributable to ConAgra Foods, Inc.	$	230.3	$	212.6	$	373.5	$	463.1

Presentation of Derivative Gains (Losses) for Economic Hedges of Forecasted Cash Flows in Segment Results

Derivatives used to manage commodity price risk and foreign currency risk are not designated for hedge accounting treatment. We believe these derivatives provide economic hedges of certain forecasted transactions. As such, these derivatives (except those related to our milling operations, see Note 8) are recognized at fair market value with realized and unrealized gains and losses recognized in general corporate expenses. The gains and losses are subsequently recognized in the operating results of the reporting segments in the period in which the underlying transaction being economically hedged is included in earnings.

The following table presents the net derivative gains (losses) from economic hedges of forecasted commodity consumption and the foreign currency risk of certain forecasted transactions, under this methodology:

	Thirteen weeks ended						Twenty-six weeks ended
	November 24, 2013			November 25, 2012			November 24, 2013			November 25, 2012
Net derivative gains (losses) incurred	$	(11.1	)	$	(12.0	)	$	(28.6	)	$	108.2
Less: Net derivative gains (losses) allocated to reporting segments	(2.0		)	4.1			1.2			(5.9		)
Net derivative gains (losses) recognized in general corporate expenses	$	(9.1	)	$	(16.1	)	$	(29.8	)	$	114.1
Net derivative gains (losses) allocated to Consumer Foods	$	(0.6	)	$	6.1		$	1.3		$	2.9
Net derivative gains (losses) allocated to Commercial Foods	(0.8		)	(2.1		)	1.2			(8.2		)
Net derivative gains (losses) allocated to Private Brands	(0.6		)	0.1			(1.3		)	(0.6		)
Net derivative gains (losses) included in segment operating profit	$	(2.0	)	$	4.1		$	1.2		$	(5.9	)

As of November 24, 2013, the cumulative amount of net derivative losses from economic hedges that had been recognized in Corporate and not yet allocated to reporting segments was $38.9 million. This amount reflected net losses of $29.8 million incurred during the twenty-six weeks endedNovember 24, 2013, as well as net losses of $9.1 million incurred prior to fiscal 2014. Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify losses of $22.4 million and $16.5 million to segment operating results in fiscal 2014 and 2015 and thereafter, respectively.

Other Information

Our largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for 18% and 17% of consolidated net sales in the second quarter and first half of fiscal 2014, respectively, and 18% in both the second quarter and first half of 2013, primarily in the Consumer Foods and Private Brands segments.

Wal-Mart Stores, Inc. and its affiliates accounted for approximately 15% of consolidated net receivables as of both November 24, 2013 and May 26, 2013, primarily in the Consumer Foods and Private Brands segments.