SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited financial information reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented. The adjustments are of a normal recurring nature, except as otherwise noted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the ConAgra Foods, Inc. (the "Company," "we," "us," or "our") Annual Report on Form 10-K for the fiscal year ended May 25, 2014.

The results of operations for any quarter or a partial fiscal year period are not necessarily indicative of the results to be expected for other periods or the full fiscal year.

Basis of Consolidation — The condensed consolidated financial statements include the accounts of ConAgra Foods, Inc. and all majority-owned subsidiaries. In addition, the accounts of all variable interest entities for which we have been determined to be the primary beneficiary are included in our condensed consolidated financial statements from the date such determination is made. All significant intercompany investments, accounts, and transactions have been eliminated.

Comprehensive Income — Comprehensive income includes net income, currency translation adjustments, certain derivative-related activity, changes in the value of available-for-sale investments, and changes in prior service cost and net actuarial gains (losses) from pension (for amounts not in excess of the 10% corridor) and post-retirement health care plans. We generally deem our foreign investments to be essentially permanent in nature and we do not provide for taxes on currency translation adjustments arising from converting the investment denominated in a foreign currency to U.S. dollars. When we determine that a foreign investment, as well as undistributed earnings, are no longer permanent in nature, estimated taxes are provided for the related deferred tax liability (asset), if any, resulting from currency translation adjustments.

The following details the income tax expense (benefit) on components of other comprehensive income (loss):



	Thirteen weeks ended						Twenty-six weeks ended
	November 23, 2014			November 24, 2013			November 23, 2014			November 24, 2013
Net derivative adjustment	$	—		$	(3.6	)	$	(0.2	)	$	23.3
Unrealized gains on available-for-sale securities	0.1			0.1			0.1			0.2
Pension and postretirement healthcare liabilities	(0.1		)	0.7			0.8			0.7
Income tax expense (benefit)	$	—		$	(2.8	)	$	0.7		$	24.2

The following tables summarize the reclassifications from accumulated other comprehensive loss into income:



	Thirteen weeks ended						Affected Line Item in the Condensed Consolidated Statement of Earnings
	November 23, 2014			November 24, 2013
Amortization of pension and postretirement healthcare liabilities:
Net prior service benefit	$	(1.0	)	$	(0.9	)	Selling, general and administrative expenses
Net actuarial losses	0.8			1.7			Selling, general and administrative expenses
	(0.2		)	0.8			Total before tax
	—			(0.3		)	Income tax expense (benefit)
	$	(0.2	)	$	0.5		Net of tax



	Twenty-six weeks ended						Affected Line Item in the Condensed Consolidated Statement of Earnings
	November 23, 2014			November 24, 2013
Net derivative adjustment:
Cash flow hedges	$	(0.5	)	$	0.1		Interest expense, net
	0.2			—			Income tax expense
	$	(0.3	)	$	0.1		Net of tax
Amortization of pension and postretirement healthcare liabilities:
Net prior service benefit	$	(2.1	)	$	(1.7	)	Selling, general and administrative expenses
Net actuarial losses	1.7			3.3			Selling, general and administrative expenses
	(0.4		)	1.6			Total before tax
	0.1			(0.6		)	Income tax expense (benefit)
	$	(0.3	)	$	1.0		Net of tax

Reclassifications and other changes — Certain prior year amounts have been reclassified to conform with current year presentation. In addition, the prior year condensed consolidated statement of cash flows reflects a correction to the twenty-six week period ended November 24, 2013 for non-cash additions to property, plant and equipment resulting in an increase to operating cash flows and an increase in cash used in investing cash flows by $27.0 million, of which $2.4 million is related to discontinued operations.

Use of Estimates — Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect reported amounts of assets, liabilities, revenues, and expenses as reflected in the condensed consolidated financial statements. Actual results could differ from these estimates.

Accounting Changes — In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, which states that entities should present the unrecognized tax benefit as a reduction of the deferred tax asset for a net operating loss ("NOL") or similar tax loss or tax credit carryforward rather than as a liability when the uncertain tax position would reduce the NOL or other carryforward under the tax law. No new disclosures are necessary. We adopted this ASU as of the beginning of fiscal 2015. This did not result in a material change to our financial statements.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Components of an Entity, which updates the definition of discontinued operations under U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). Going forward, only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity's operations and financial results will be reported as discontinued operations in the financial statements. Previously, a component of an entity that is a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. Additionally, the condition that the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction has been removed. The effective date for the revised standard is for applicable transactions that occur within annual periods beginning on or after December 15, 2014. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. We adopted this standard in the first quarter of fiscal 2015. This resulted in the presentation of historical results of our milling business, prior to the creation of the Ardent Mills joint venture ("Ardent Mills"), as discontinued operations.

Recently Issued Accounting Standards —In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP. The new standard is effective for the Company in our fiscal year 2018. Early adoption is not permitted. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The standard permits the use of either the retrospective or cumulative effect transition method.