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, restaurants, foodservice, food manufacturing, and industrial customers. The segment's primary food items include: frozen potato and sweet potato items, as well as a variety of vegetable, spice, bakery, and grain products 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. In the first quarter of fiscal 2015, we revised the manner in which we allocate corporate expenses to our reporting segments. As a result, operating profit and general corporate expenses have been reclassified to reflect this change.



	2015			2014			2013
Net sales
Consumer Foods	$	7,304.4		$	7,315.7		$	7,551.4
Commercial Foods	4,463.2			4,332.2			4,109.7
Private Brands	4,064.8			4,195.7			1,808.2
Total net sales	$	15,832.4		$	15,843.6		$	13,469.3
Operating profit (loss)
Consumer Foods	$	1,069.7		$	892.0		$	984.4
Commercial Foods	568.5			537.7			585.5
Private Brands	(1,456.7		)	(373.4		)	125.4
Total operating profit	$	181.5		$	1,056.3		$	1,695.3
Equity method investment earnings
Consumer Foods	$	3.0		$	2.8		$	1.8
Commercial Foods	119.1			29.7			35.7
Total equity method investment earnings	$	122.1		$	32.5		$	37.5
Operating profit (loss) plus equity method investment earnings
Consumer Foods	$	1,072.7		$	894.8		$	986.2
Commercial Foods	687.6			567.4			621.2
Private Brands	(1,456.7		)	(373.4		)	125.4
Total operating profit plus equity method investment earnings	$	303.6		$	1,088.8		$	1,732.8
General corporate expenses	$	345.1		$	315.6		$	396.3
Interest expense, net	331.9			379.4			276.2
Income tax expense	234.0			220.1			361.9
Income (loss) from continuing operations	$	(607.4	)	$	173.7		$	698.4
Less: Net income attributable to noncontrolling interests	11.8			12.0			12.2
Income (loss) from continuing operations attributable to ConAgra Foods, Inc.	$	(619.2	)	$	161.7		$	686.2
Identifiable assets
Consumer Foods	$	7,568.5		$	7,666.1		$	7,845.5
Commercial Foods	3,991.1			3,127.4			2,972.4
Private Brands	5,144.7			6,912.4			7,676.5
Corporate	837.9			783.0			956.7
Held for Sale	—			830.6			898.7
Total identifiable assets	$	17,542.2		$	19,319.5		$	20,349.8
Additions to property, plant and equipment
Consumer Foods	$	133.7		$	183.5		$	187.9
Commercial Foods	117.8			206.4			117.7
Private Brands	101.6			125.2			57.0
Corporate	118.8			77.2			60.0
Total additions to property, plant and equipment	$	471.9		$	592.3		$	422.6
Depreciation and amortization
Consumer Foods	$	200.9		$	182.2		$	183.1
Commercial Foods	113.5			100.1			84.4
Private Brands	202.1			214.8			79.9
Corporate	75.8			80.2			71.2
Total depreciation and amortization	$	592.3		$	577.3		$	418.6

Net sales by product type within each segment were:



	2015		2014		2013
Net sales
Consumer Foods:
Grocery	$	3,911.1	$	3,897.0	$	4,093.4
Frozen	2,261.9		2,241.9		2,295.5
International	1,026.1		1,061.4		1,073.7
Other Brands	105.3		115.4		88.8
Total Consumer Foods	$	7,304.4	$	7,315.7	$	7,551.4
Commercial Foods:
Specialty Potatoes	$	2,892.4	$	2,792.7	$	2,753.1
Foodservice	1,570.8		1,539.5		1,356.6
Total Commercial Foods	$	4,463.2	$	4,332.2	$	4,109.7
Private Brands:
Snacks	$	1,340.3	$	1,373.2	$	542.0
Retail Bakery	719.4		772.5		234.6
Bars and Coordinated	724.9		679.5		535.2
Pasta	532.6		564.3		192.9
Cereal	475.2		496.7		191.6
Condiments	272.4		309.5		111.9
Total Private Brands	$	4,064.8	$	4,195.7	$	1,808.2
Total net sales	$	15,832.4	$	15,843.6	$	13,469.3

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:



	2015			2014			2013
Net derivative gains (losses) incurred	$	(108.5	)	$	24.4		$	73.1
Less: Net derivative gains (losses) allocated to reporting segments	(58.3		)	(12.4		)	24.1
Net derivative gains (losses) recognized in general corporate expenses	$	(50.2	)	$	36.8		$	49.0
Net derivative gains (losses) allocated to Consumer Foods	$	(41.9	)	$	(5.9	)	$	26.7
Net derivative gains (losses) allocated to Commercial Foods	(4.7		)	4.3			(3.6		)
Net derivative gains (losses) allocated to Private Brands	(11.7		)	(10.8		)	1.0
Net derivative gains (losses) included in segment operating profit	$	(58.3	)	$	(12.4	)	$	24.1

As of May 31, 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 $23.3 million. This amount reflected net losses of $23.7 million incurred during the fiscal year ended May 31, 2015, as well as net gains of $0.4 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 $23.5 million in fiscal 2016 and gains of $0.2 million in fiscal 2017 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 $18.9 million, $5.2 million, and $1.4 million of net derivative losses during fiscal 2015 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

At May 31, 2015, ConAgra Foods and its subsidiaries had approximately 32,900 employees, primarily in the United States. Approximately 32% of our employees are parties to collective bargaining agreements. Of the employees subject to collective bargaining agreements, approximately 25% are parties to collective bargaining agreements scheduled to expire during fiscal 2016.

Our operations are principally in the United States. With respect to operations outside of the United States, no single foreign country or geographic region was significant with respect to consolidated operations for fiscal 2015, 2014, and 2013. Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately $1.9 billion, $2.0 billion, and $1.7 billion in fiscal 2015, 2014, and 2013, respectively. Our long-lived assets located outside of the United States are not significant.

Our largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for approximately 18%, 19%, and 20% of consolidated net sales for fiscal 2015, 2014, and 2013, respectively, significantly impacting the Consumer Foods and Private Brands segments.

Wal-Mart Stores, Inc. and its affiliates accounted for approximately 16% of consolidated net receivables as of both May 31, 2015 and May 25, 2014, significantly impacting the Consumer Foods and Private Brands segments.