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BUSINESS SEGMENTS AND RELATED INFORMATION | 3 Months Ended
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Aug. 27, 2017
Segment Reporting [Abstract] |
BUSINESS SEGMENTS AND RELATED INFORMATION | BUSINESS SEGMENTS AND RELATED INFORMATION We reflect our results of operations in five reporting segments: Grocery & Snacks, Refrigerated & Frozen, International, Foodservice, and Commercial. In the second quarter of fiscal 2017, we completed the Spinoff of Lamb Weston. The Lamb Weston business had previously been included in the Commercial segment. The results of operations of the Lamb Weston business have been classified as discontinued operations for all periods presented. The Grocery & Snacks reporting segment principally includes branded, shelf-stable food products sold in various retail channels in the United States. The Refrigerated & Frozen reporting segment includes branded, temperature controlled food products sold in various retail channels in the United States. The International reporting segment principally includes branded food products, in various temperature states, sold in various retail and foodservice channels outside of the United States. The Foodservice reporting segment includes branded and customized food products, including meals, entrees, sauces and a variety of custom-manufactured culinary products packaged for sale to restaurants and other foodservice establishments in the United States. The Commercial reporting segment included commercially branded and private label food and ingredients, which were sold primarily to commercial, restaurant, foodservice, food manufacturing, and industrial customers. The segment's primary food items included a variety of vegetable, spice, and frozen bakery goods, which were sold under brands such as Spicetec Flavors & Seasonings®. The Spicetec and JM Swank businesses were sold in the first quarter of fiscal 2017. 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
| August 27, 2017 |  | August 28, 2016
Net sales |  |  |
Grocery & Snacks | $ | 745.8 |  |  | $ | 757.2 |
Refrigerated & Frozen | 615.7 |  |  | 604.6 |
International | 190.9 |  |  | 194.7 |
Foodservice | 251.8 |  |  | 268.0 |
Commercial | — |  |  | 71.1 |
Total net sales | $ | 1,804.2 |  |  | $ | 1,895.6 |
Operating profit |  |  |
Grocery & Snacks | $ | 176.2 |  |  | $ | 180.5 |
Refrigerated & Frozen | 101.9 |  |  | 92.2 |
International | 18.9 |  |  | (149.2 | )
Foodservice | 23.2 |  |  | 21.7 |
Commercial | — |  |  | 203.3 |
Total operating profit | $ | 320.2 |  |  | $ | 348.5 |
Equity method investment earnings | 30.0 |  |  | 13.1 |
General corporate expense | 40.2 |  |  | 35.6 |
Interest expense, net | 36.4 |  |  | 58.2 |
Income tax expense | 120.0 |  |  | 169.2 |
Income from continuing operations | $ | 153.6 |  |  | $ | 98.6 |
Less: Net income attributable to noncontrolling interests of continuing operations | 0.8 |  |  | 0.2 |
Income from continuing operations attributable to Conagra Brands, Inc. | $ | 152.8 |  |  | $ | 98.4 |
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
| August 27, 2017 |  | August 28, 2016
Net derivative losses incurred | $ | (7.4 | ) |  | $ | (0.3 | )
Less: Net derivative losses allocated to reporting segments | (1.4 | ) |  | (1.0 | )
Net derivative gains (losses) recognized in general corporate expenses | $ | (6.0 | ) |  | $ | 0.7 |
Net derivative losses allocated to Grocery & Snacks | $ | (0.6 | ) |  | $ | (0.4 | )
Net derivative losses allocated to Refrigerated & Frozen | — |  |  | (0.2 | )
Net derivative losses allocated to International | (0.7 | ) |  | — |
Net derivative losses allocated to Foodservice | (0.1 | ) |  | (0.3 | )
Net derivative losses allocated to Commercial | — |  |  | (0.1 | )
Net derivative losses included in segment operating profit | $ | (1.4 | ) |  | $ | (1.0 | )
As of August 27, 2017, 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 $9.0 million. This amount reflected net losses of $6.8 million incurred during the thirteen weeks ended August 27, 2017, as well as net losses of $2.2 million incurred prior to fiscal 2018. Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results losses of $8.4 million in fiscal 2018 and losses of $0.6 million in fiscal 2019 and thereafter. Assets by Segment The majority of our manufacturing assets are shared across multiple reporting segments. Output from these facilities used by each reporting segment can change over time. Also, working capital balances are not tracked by reporting segment. Therefore, it is impracticable to allocate those assets to the reporting segments, as well as disclose total assets by segment. Total depreciation expense was $56.1 million and $58.8 million for the first quarter of fiscal 2018 and 2017, respectively. Other Information Our largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for approximately 24% and 23% of consolidated net sales in the first quarter of fiscal 2018 and 2017, respectively, primarily in the Grocery & Snacks and Refrigerated & Frozen segments. Wal-Mart Stores, Inc. and its affiliates accounted for approximately 24% and 26% of consolidated net receivables as of August 27, 2017 and May 28, 2017, respectively, primarily in the Grocery & Snacks and Refrigerated & Frozen segments. We offer certain suppliers access to a third-party service that allows them to view our scheduled payments online. The third party service also allows suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party. We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third-party, or any financial institutions concerning this service. All of our accounts payable remain as obligations to our suppliers as stated in our supplier agreements. As of August 27, 2017, $58.8 million of our total accounts payable is payable to suppliers who utilize this third-party service.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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