BUSINESS SEGMENTS AND RELATED INFORMATION

9 Months Ended

Feb. 22, 2015

Segment Reporting [Abstract]

BUSINESS SEGMENTS AND RELATED INFORMATION

BUSINESS SEGMENTS AND RELATED INFORMATION

We report our operations in three reporting segments: Consumer Foods, Commercial Foods, and Private Brands.

The Consumer Foods reporting segment includes branded food sold in various retail channels primarily in North America. Our food products are sold in a variety of categories (meals, entrees, condiments, sides, snacks, and desserts) in various retail channels across frozen, refrigerated, and shelf-stable temperature classes.

The Commercial Foods reporting segment includes commercially branded and private branded food and ingredients, which are sold primarily to commercial, foodservice, food manufacturing, and industrial customers. The segment's primary food items include: frozen potato and sweet potato items and a variety of vegetable, spice, and frozen bakery goods which are sold under brands such as Lamb Weston^® and Spicetec Flavors & Seasonings^®.

The Private Brands reporting segment principally includes private brand and customized food products which are sold in various retail channels, primarily in North America. The products include a variety of categories including: bars, cereal, snacks, condiments, pasta, and retail bakery products.

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					Thirty-nine weeks ended
	February 22, 2015			February 23, 2014		February 22, 2015			February 23, 2014
Net sales
Consumer Foods	$	1,835.2		$	1,870.3	$	5,444.7		$	5,536.0
Commercial Foods	1,028.3			1,013.7		3,237.4			3,182.4
Private Brands	1,013.2			1,063.3		3,045.6			3,165.8
Total net sales	$	3,876.7		$	3,947.3	$	11,727.7		$	11,884.2
Operating profit (loss)
Consumer Foods	$	274.2		$	265.1	$	765.9		$	716.0
Commercial Foods	145.2			122.7		414.4			387.5
Private Brands	(1,271.6		)	44.7		(1,432.0		)	200.0
Total operating profit (loss)	$	(852.2	)	$	432.5	$	(251.7	)	$	1,303.5
Equity method investment earnings
Consumer Foods	$	1.3		$	1.2	$	2.4		$	2.1
Commercial Foods	31.7			9.9		90.2			18.3
Total equity method investment earnings	$	33.0		$	11.1	$	92.6		$	20.4
Operating profit (loss) plus equity method investment earnings
Consumer Foods	$	275.5		$	266.3	$	768.3		$	718.1
Commercial Foods	176.9			132.6		504.6			405.8
Private Brands	(1,271.6		)	44.7		(1,432.0		)	200.0
Total operating profit (loss) plus equity method investment earnings	$	(819.2	)	$	443.6	$	(159.1	)	$	1,323.9
General corporate expense	$	50.1		$	44.3	$	282.9		$	254.6
Interest expense, net	80.3			95.0		243.3			286.3
Income tax expense	2.5			78.2		129.0			213.1
Income (loss) from continuing operations	$	(952.1	)	$	226.1	$	(814.3	)	$	569.9
Less: Net income attributable to noncontrolling interests	1.4			2.6		9.5			9.2
Income (loss) from continuing operations attributable to ConAgra Foods, Inc.	$	(953.5	)	$	223.5	$	(823.8	)	$	560.7

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 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. In the event that management determines a particular derivative entered into as an economic hedge of a forecasted commodity purchase has ceased to function as an economic hedge, we cease recognizing further gains and losses on such derivatives in corporate expense and begin recognizing such gains and losses within segment operating results, immediately.

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						Thirty-nine weeks ended
	February 22, 2015			February 23, 2014			February 22, 2015			February 23, 2014
Net derivative gains (losses) incurred	$	(40.1	)	$	42.6		$	(101.3	)	$	13.1
Less: Net derivative losses allocated to reporting segments	(46.2		)	(9.8		)	(32.2		)	(9.4		)
Net derivative gains (losses) recognized in general corporate expenses	$	6.1		$	52.4		$	(69.1	)	$	22.5
Net derivative losses allocated to Consumer Foods	$	(30.9	)	$	(4.4	)	$	(26.7	)	$	(3.1	)
Net derivative gains (losses) allocated to Commercial Foods	(4.8		)	0.5			1.2			0.9
Net derivative losses allocated to Private Brands	(10.5		)	(5.9		)	(6.7		)	(7.2		)
Net derivative losses included in segment operating profit	$	(46.2	)	$	(9.8	)	$	(32.2	)	$	(9.4	)

As of February 22, 2015, the cumulative amount of net derivative losses from economic hedges that had been recognized in general corporate expenses and not yet allocated to reporting segments was $42.2 million. This amount reflected net losses of $101.3 million incurred during the thirty-nine weeks endedFebruary 22, 2015, as well as net gains of $59.1 million incurred prior to fiscal 2015. Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results losses of $25.5 million in fiscal 2015 and $16.7 million in fiscal 2016 and thereafter.

In the second quarter of fiscal 2015, management determined that certain derivatives that had been previously entered into as an economic hedge of forecasted commodity purchases had ceased to function as economic hedges. We recognized $20.9 million, $5.7 million, and $1.6 million of net derivative losses in the third quarter of fiscal 2015 within the operating results of the Consumer Foods, Private Brands, and Commercial Foods segments, respectively, in connection with these derivatives. In the first three quarters of fiscal 2015, we recognized $18.6 million, $5.1 million, and $1.4 million of net derivative losses within the operating results of the Consumer Foods, Private Brands, and Commercial Foods segments, respectively, in connection with these derivatives. Management effectively exited these derivative positions in the third quarter of fiscal 2015.

Other Information

Our largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for 19% of consolidated net sales in both the third quarter and first three quarters of fiscal 2015, and 18% in both the third quarter and first three quarters of fiscal 2014, primarily in the Consumer Foods and Private Brands segments.

Wal-Mart Stores, Inc. and its affiliates accounted for approximately 17% and 16% of consolidated net receivables as of February 22, 2015 and May 25, 2014, respectively, primarily in the Consumer Foods and Private Brands segments.