PENSION AND POSTRETIREMENT BENEFITS

We have defined benefit retirement plans ("plans") for eligible salaried and hourly employees. Benefits are based on years of credited service and average compensation or stated amounts for each year of service. We also sponsor postretirement plans which provide certain medical and dental benefits ("other postretirement benefits") to qualifying U.S. employees. Effective August 1, 2013, our defined benefit pension plan for eligible salaried employees was closed to new hire salaried employees. New hire salaried employees will generally be eligible to participate in our defined contribution plan.

We recognize the funded status of our plans and other benefits in the Consolidated Balance Sheets. For our plans, we also recognize as a component of accumulated other comprehensive loss, the net of tax results of the actuarial gains or losses within the corridor and prior service costs or credits that arise during the period but are not recognized in net periodic benefit cost. For our other benefits, we also recognize as a component of accumulated other comprehensive income (loss), the net of tax results of the gains or losses and prior service costs or credits that arise during the period but are not recognized in net periodic benefit cost. These amounts will be adjusted out of accumulated other comprehensive income (loss) as they are subsequently recognized as components of net periodic benefit cost. For our pension plans, we have elected to immediately recognize actuarial gains and losses in our operating results in the year in which they occur, to the extent they exceed the corridor, eliminating amortization. Amounts are included in the components of pension benefit and other postretirement benefit costs, below, as recognized net actuarial loss.

The changes in benefit obligations and plan assets at May 31, 2015 and May 25, 2014 are presented in the following table.



	Pension Benefits						Other Benefits
	2015			2014			2015			2014
Change in Benefit Obligation
Benefit obligation at beginning of year	$	3,979.0		$	3,817.5		$	283.5		$	302.8
Service cost	88.5			89.0			0.6			0.7
Interest cost	161.3			151.1			9.9			9.7
Plan participants’ contributions	—			—			5.9			6.1
Amendments	0.7			2.2			(3.3		)	(5.7		)
Actuarial loss (gain)	35.7			79.5			(35.9		)	(4.6		)
Special termination benefits	6.9			0.4			—			—
Benefits paid	(176.7		)	(159.5		)	(24.3		)	(25.1		)
Currency	(3.2		)	(1.2		)	(1.0		)	(0.4		)
Benefit obligation at end of year	$	4,092.2		$	3,979.0		$	235.4		$	283.5
Change in Plan Assets
Fair value of plan assets at beginning of year	$	3,546.0		$	3,343.3		$	0.3		$	0.1
Actual return on plan assets	178.6			358.8			(0.3		)	0.2
Employer contributions	13.5			18.3			18.5			19.0
Plan participants’ contributions	—			—			5.9			6.1
Investment and administrative expenses	(18.8		)	(13.8		)	—			—
Benefits paid	(176.7		)	(159.5		)	(24.3		)	(25.1		)
Currency	(3.6		)	(1.1		)	—			—
Fair value of plan assets at end of year	$	3,539.0		$	3,546.0		$	0.1		$	0.3

The funded status and amounts recognized in our Consolidated Balance Sheets at May 31, 2015 and May 25, 2014 were:



	Pension Benefits						Other Benefits
	2015			2014			2015			2014
Funded Status	$	(553.2	)	$	(433.0	)	$	(235.3	)	$	(283.2	)
Amounts Recognized in Consolidated Balance Sheets
Other assets	$	20.5		$	18.8		$	—		$	—
Other accrued liabilities	(10.7		)	(10.0		)	(23.3		)	(25.0		)
Other noncurrent liabilities	(563.0		)	(441.8		)	(212.0		)	(258.2		)
Net Amount Recognized	$	(553.2	)	$	(433.0	)	$	(235.3	)	$	(283.2	)
Amounts Recognized in Accumulated Other Comprehensive (Income) Loss (Pre-tax)
Actuarial net loss	$	339.6		$	202.8		$	16.1		$	55.3
Net prior service cost (benefit)	14.2			18.7			(25.0		)	(29.6		)
Total	$	353.8		$	221.5		$	(8.9	)	$	25.7
Weighted-Average Actuarial Assumptions Used to Determine Benefit Obligations at May 31, 2015 and May 25, 2014
Discount rate	4.10		%	4.15		%	3.50		%	3.65		%
Long-term rate of compensation increase	3.70		%	4.25		%	N/A			N/A

The accumulated benefit obligation for all defined benefit pension plans was $3.9 billion at May 31, 2015 and May 25, 2014.

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets at May 31, 2015 and May 25, 2014 were:



	2015		2014
Projected benefit obligation	$	3,805.8	$	3,390.9
Accumulated benefit obligation	3,658.3		3,289.3
Fair value of plan assets	3,232.1		2,942.5

Components of pension benefit and other postretirement benefit costs included:



	Pension Benefits									Other Benefits
	2015			2014			2013			2015			2014			2013
Service cost	$	88.5		$	89.0		$	81.8		$	0.6		$	0.7		$	0.6
Interest cost	161.3			151.1			150.1			9.9			9.7			10.5
Expected return on plan assets	(267.9		)	(252.9		)	(216.4		)	—			—			—
Amortization of prior service cost (benefit)	3.7			3.8			3.6			(7.9		)	(7.2		)	(8.2		)
Special termination benefits	6.9			0.4			—			—			—			—
Recognized net actuarial loss	6.9			2.7			3.6			3.5			6.7			5.9
Curtailment loss	1.5			—			0.8			—			—			—
Benefit cost — Company plans	0.9			(5.9		)	23.5			6.1			9.9			8.8
Pension benefit cost — multi-employer plans	12.4			12.6			23.6			—			—			—
Total benefit cost	$	13.3		$	6.7		$	47.1		$	6.1		$	9.9		$	8.8

Special termination benefits granted in connection with the formation of Ardent Mills resulted in the recognition of $6.9 million of expense during fiscal 2015. This expense was included in results of discontinued operations.

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) were:



	Pension Benefits						Other Benefits
	2015			2014			2015			2014
Net actuarial gain (loss)	$	(143.8	)	$	12.7		$	35.8		$	4.9
Amendments	(0.6		)	(2.2		)	3.3			5.7
Amortization of prior service cost (benefit)	5.2			3.8			(7.9		)	(7.2		)
Recognized net actuarial loss	6.9			2.7			3.5			6.7
Net amount recognized	$	(132.3	)	$	17.0		$	34.7		$	10.1

Weighted-Average Actuarial Assumptions Used to Determine Net Expense



	Pension Benefits						Other Benefits
	2015		2014		2013		2015		2014		2013
Discount rate	4.15	%	4.05	%	4.50	%	3.65	%	3.35	%	3.90	%
Long-term rate of return on plan assets	7.75	%	7.75	%	7.75	%	N/A		N/A		N/A
Long-term rate of compensation increase	4.25	%	4.25	%	4.25	%	N/A		N/A		N/A

We amortize prior service cost for our pension plans and postretirement plans, as well as amortizable gains and losses for our postretirement plans, in equal annual amounts over the average expected future period of vested service. For plans with no active participants, average life expectancy is used instead of average expected useful service.

The amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net expense during the next year are as follows:



	Pension Benefits		Other Benefits
Prior service cost (benefit)	$	2.7	$	(8.1	)
Net actuarial loss	NA		NA

Plan Assets

The fair value of plan assets, summarized by level within the fair value hierarchy described in Note 20, as of May 31, 2015, were as follows:



	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	2.4	$	80.3	$	—	$	82.7
Equity securities:
U.S. equity securities	542.2		90.9		—		633.1
International equity securities	362.9		448.8		—		811.7
Fixed income securities:
Government bonds	43.9		290.5		—		334.4
Corporate bonds	49.6		394.9		—		444.5
Mortgage-backed bonds	49.5		24.0		—		73.5
Real estate funds	—		6.6		344.9		351.5
Multi-strategy hedge funds	—		—		484.5		484.5
Private equity funds	—		—		93.0		93.0
Master limited partnerships	191.4		—		—		191.4
Private natural resources funds	—		11.9		19.9		31.8
Net receivables for unsettled transactions	6.9		—		—		6.9
Total assets	$	1,248.8	$	1,347.9	$	942.3	$	3,539.0

The fair value of plan assets, summarized by level within the fair value hierarchy described in Note 20, as of May 25, 2014, were as follows:



	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	2.4	$	150.2	$	—	$	152.6
Equity securities:
U.S. equity securities	535.4		93.2		—		628.6
International equity securities	589.7		232.3		—		822.0
Fixed income securities:
Government bonds	114.0		266.3		—		380.3
Corporate bonds	63.8		344.6		—		408.4
Mortgage-backed bonds	50.2		77.7		—		127.9
Real estate funds	2.8		24.0		170.6		197.4
Multi-strategy hedge funds	—		—		462.3		462.3
Private equity funds	—		—		81.3		81.3
Master limited partnerships	263.3		—		—		263.3
Private natural resources funds	—		—		16.6		16.6
Net receivables for unsettled transactions	5.3		—		—		5.3
Total assets	$	1,626.9	$	1,188.3	$	730.8	$	3,546.0

Level 1 assets are valued based on quoted prices in active markets for identical securities. The majority of the Level 1 assets listed above include the common stock of both U.S. and international companies, mutual funds, master limited partnership units, and real estate investment trusts, all of which are actively traded and priced in the market. Level 2 assets are valued based on other significant observable inputs including quoted prices for similar securities, yield curves, indices, etc. The Level 2 assets listed above consist primarily of commingled equity investments where values are based on the net asset value of the underlying investments held, individual fixed income securities where values are based on quoted prices of similar securities and observable market data, and commingled fixed income investments where values are based on the net asset value of the underlying investments held. Level 3 assets are those where the fair value is determined based on unobservable inputs. The Level 3 assets listed above consist of alternative investments where active market pricing is not readily available and, as such, we use net asset values as an estimate of fair value as a practical expedient. For real estate funds, the value is based on the net asset value provided by the investment manager who uses market data and independent third party appraisals to determine fair market value. For the multi-strategy hedge funds, the value is based on the net asset values provided by a third party administrator. For private equity and private energy funds, the investment manager provides the valuation using, among other things, comparable transactions, comparable public company data, discounted cash flow analysis, and market conditions.

Level 3 investments are generally considered long-term in nature with varying redemption availability. Certain of our Level 3 investments, with a fair value of approximately $832.7 million as of May 31, 2015, have the ability to impose customary redemption gates which may further restrict or limit the redemption of invested funds therein. As of May 31, 2015, Level 3 investments with a fair value of $1.5 million have imposed such gates.

As of May 31, 2015, we have unfunded commitments for additional investments of $96.1 million in private equity funds, $47.6 million in natural resources funds, and $29.1 million in real estate funds. We expect unfunded commitments to be funded from plan assets rather than the general assets of the Company.

To develop the expected long-term rate of return on plan assets assumption for the pension plans, we consider the current asset allocation strategy, the historical investment performance, and the expectations for future returns of each asset class.

Our pension plan weighted-average asset allocations and our target asset allocations, by asset category were as follows:



	May 31, 2015		May 25, 2014		Target Allocation
Equity securities	41	%	41	%	25% - 45%
Debt securities	24	%	26	%	14% - 24%
Real estate funds	10	%	6	%	1% - 19%
Multi-strategy hedge funds	14	%	13	%	5% - 25%
Private equity	2	%	2	%	3% - 13%
Other	9	%	12	%	3% - 30%
Total	100	%	100	%

The Company’s investment strategy reflects the expectation that equity securities and multi-strategy hedge funds will outperform debt securities over the long term. Assets are invested in a prudent manner to maintain the security of funds while maximizing returns within the Company’s Investment Policy guidelines. The strategy is implemented utilizing indexed and actively managed assets from the categories listed.

The investment goals are to provide a total return that, over the long term, increases the ratio of plan assets to liabilities subject to an acceptable level of risk. This is accomplished through diversification of assets in accordance with the Investment Policy guidelines. Investment risk is mitigated by periodic rebalancing between asset classes as necessitated by changes in market conditions within the Investment Policy guidelines.

Other investments are primarily made up of cash and master limited partnerships.

Level 3 Gains and Losses

The change in the fair value of the plan’s Level 3 assets is summarized as follows:



	Fair Value May 25, 2014		Realized Gains (Losses)		Unrealized Gains (Losses)			Net Purchases and Sales			Fair Value May 31, 2015
Real estate funds	$	170.6	$	0.5	$	21.0		$	152.8		$	344.9
Multi-strategy hedge funds	462.3		0.3		22.8			(0.9		)	484.5
Private equity	81.3		2.7		(3.3		)	12.3			93.0
Private natural resources	16.6		—		0.5			2.8			19.9
Total	$	730.8	$	3.5	$	41.0		$	167.0		$	942.3



	Fair Value May 26, 2013		Realized Gains (Losses)		Unrealized Gains (Losses)		Net Purchases and Sales			Fair Value May 25, 2014
Real estate funds	$	91.5	$	0.4	$	11.8	$	66.9		$	170.6
Multi-strategy hedge funds	413.9		0.2		21.2		27.0			462.3
Private equity	79.1		3.2		8.0		(9.0		)	81.3
Private natural resources	7.8		—		1.5		7.3			16.6
Total	$	592.3	$	3.8	$	42.5	$	92.2		$	730.8

Assumed health care cost trend rates have a significant effect on the benefit obligation of the postretirement plans.



Assumed Health Care Cost Trend Rates at:	May 31, 2015		May 25, 2014
Initial health care cost trend rate	9.0	%	10.0	%
Ultimate health care cost trend rate	4.5	%	5.0	%
Year that the rate reaches the ultimate trend rate	2023		2022

A one percentage point change in assumed health care cost rates would have the following effect:



	One Percent Increase		One Percent Decrease
Effect on total service and interest cost	$	0.6	$	(0.5	)
Effect on postretirement benefit obligation	14.0		(12.5		)

We currently anticipate making contributions of approximately $13.0 million to our pension plans in fiscal 2016. We anticipate making contributions of $23.7 million to our other postretirement plans in fiscal 2016. These estimates are based on current tax laws, plan asset performance, and liability assumptions, which are subject to change.

The following table presents estimated future gross benefit payments for our plans:



	Pension Benefits		Health Care and Life Insurance Benefits
2016	$	186.9	$	23.7
2017	190.3		22.5
2018	197.5		21.5
2019	204.3		20.5
2020	211.2		19.4
Succeeding 5 years	1,150.2		80.9

Multiemployer Pension Plans

The Company contributes to several multiemployer defined benefit pension plans under collective bargaining agreements that cover certain of its union-represented employees. The risks of participating in such plans are different from the risks of single-employer plans, in the following respects:


a.	Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.


b.	If a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

If the Company ceases to have an obligation to contribute to a multiemployer plan in which it had been a contributing employer, it may be required to pay to the plan an amount based on the underfunded status of the plan and on the history of the Company’s participation in the plan prior to the cessation of its obligation to contribute. The amount that an employer that has ceased to have an obligation to contribute to a multiemployer plan is required to pay to the plan is referred to as a withdrawal liability.

The Company’s participation in multiemployer plans for the fiscal year ended May 31, 2015 is outlined in the table below. For each plan that is individually significant to the Company the following information is provided:


•	The “EIN / PN” column provides the Employer Identification Number and the three-digit plan number assigned to a plan by the Internal Revenue Service.

•

The most recent Pension Protection Act Zone Status available for 2014 and 2013 is for plan years that ended in calendar years 2014 and 2013, respectively. The zone status is based on information provided to the Company by each plan. A plan in the “red” zone has been determined to be in “critical status”, based on criteria established under the Internal Revenue Code (“Code”), and is generally less than 65% funded. A plan in the “yellow” zone has been determined to be in “endangered status”, based on criteria established under the Code, and is generally less than 80% funded. A plan in the “green” zone has been determined to be neither in “critical status” nor in “endangered status”, and is generally at least 80% funded.


•	The “FIP/RP Status Pending/Implemented” column indicates whether a Funding Improvement Plan, as required under the Code to be adopted by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” zone, is pending or has been implemented by the plan as of the end of the plan year that ended in calendar year 2014.


•	Contributions by the Company are the amounts contributed in the Company’s fiscal periods ending in the specified year.


•	The “Surcharge Imposed” column indicates whether the Company contribution rate for its fiscal year that ended on May 31, 2015 included an amount in addition to the contribution rate specified in the applicable collective bargaining agreement, as imposed by a plan in “critical status”, in accordance with the requirements of the Code.


•	The last column lists the expiration dates of the collective bargaining agreements pursuant to which the Company contributes to the plans.

For plans that are not individually significant to ConAgra Foods the total amount of contributions is presented in the aggregate.



		Pension Protection Act Zone Status		FIP / RP Status Pending / Implemented	Contributions by the Company (millions)					Expiration Dates of Collective Bargaining Agreements
Pension Fund	EIN / PN	2014	2013	FIP / RP Status Pending / Implemented	FY15		FY14	FY13	Surcharge Imposed	Expiration Dates of Collective Bargaining Agreements
Bakery and Confectionary Union and Industry International Pension Plan	52-6118572 / 001	Red	Red	RP Implemented	$	3.7	$3.5	$2.1	No	2/29/2016 to 5/18/2018
Central States, Southeast and Southwest Areas Pension Fund	36-6044243 / 001	Red	Red	RP Implemented	2.0		2.1	1.2	No	6/30/2015 to 6/04/2017
National Conference of Fireman & Oilers National Pension Fund	52-6085445 / 003	Yellow	Yellow	FIP Implemented	0.6		0.7	0.3	No	11/19/2015
Western Conference of Teamsters Pension Plan	91-6145047 / 001	Green	Green	N/A	4.9		4.9	4.9	No	06/30/2015 to 03/31/2018
Other Plans					0.8		1.2	0.9
Total Contributions					$	12.0	$12.4	$9.4

The Company will be listed in its plans' Forms 5500 as providing more than 5% of the plan's total contributions for the National Conference of Firemen & Oilers National Pension Fund for the plan year ending in calendar year 2014.

The Company was not listed in the Forms 5500 filed by any of the other plans or for any of the other years as providing more than 5% of the plan’s total contributions. At the date our financial statements were issued, Forms 5500 were not available for plan years ending in calendar year 2014.

In addition to the contributions listed in the table above, we recorded an additional expense of $0.4 million, $0.2 million, and $14.2 million in fiscal 2015, 2014, and 2013, respectively, related to our expected incurrence of certain withdrawal costs.

Certain of our employees are covered under defined contribution plans. The expense related to these plans was $40.6 million, $40.2 million, and $30.7 million in fiscal 2015, 2014, and 2013, respectively.