XML 73 R23.htm IDEA: XBRL DOCUMENT
v3.20.1

BUSINESS SEGMENTS AND RELATED INFORMATION | 9 Months Ended
--- | ---
Feb. 23, 2020
Segment Reporting [Abstract] |
BUSINESS SEGMENTS AND RELATED INFORMATION | 17. BUSINESS SEGMENTS AND RELATED INFORMATION In the first quarter of fiscal 2020, we reorganized our reporting segments to incorporate the Pinnacle business into our legacy reporting segments in order to better reflect how the business is now being managed. We now reflect our results of operations in four reporting segments: Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice. Prior periods have been reclassified to conform to the revised segment presentation. 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 primarily in the United States. We do not aggregate operating segments when determining our reporting segments. 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 23, 2020 |  |  | February 24, 2019 |  |  | February 23, 2020 |  |  | February 24, 2019 |
Net sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grocery & Snacks |  | $ | 1,022.9 |  |  | $ | 1,129.8 |  |  | $ | 3,143.0 |  |  | $ | 2,901.0 |
Refrigerated & Frozen |  |  | 1,076.8 |  |  |  | 1,094.3 |  |  |  | 3,204.2 |  |  |  | 2,636.2 |
International |  |  | 220.9 |  |  |  | 228.3 |  |  |  | 659.6 |  |  |  | 640.4 |
Foodservice |  |  | 234.4 |  |  |  | 254.7 |  |  |  | 759.7 |  |  |  | 747.6 |
Total net sales |  | $ | 2,555.0 |  |  | $ | 2,707.1 |  |  | $ | 7,766.5 |  |  | $ | 6,925.2 |
Operating profit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Grocery & Snacks |  | $ | 199.4 |  |  | $ | 225.0 |  |  | $ | 614.8 |  |  | $ | 623.2 |
Refrigerated & Frozen |  |  | 190.7 |  |  |  | 189.1 |  |  |  | 533.7 |  |  |  | 441.4 |
International |  |  | 22.3 |  |  |  | 29.9 |  |  |  | 73.5 |  |  |  | 89.7 |
Foodservice |  |  | 27.2 |  |  |  | 36.8 |  |  |  | 96.6 |  |  |  | 98.8 |
Total operating profit |  | $ | 439.6 |  |  | $ | 480.8 |  |  | $ | 1,318.6 |  |  | $ | 1,253.1 |
Equity method investment earnings |  |  | 10.4 |  |  |  | 12.7 |  |  |  | 50.3 |  |  |  | 66.6 |
General corporate expense |  |  | 75.1 |  |  |  | 62.6 |  |  |  | 262.3 |  |  |  | 386.8 |
Pension and postretirement non-service income |  |  | (16.4 | ) |  |  | (9.8 | ) |  |  | (37.2 | ) |  |  | (29.7 | )
Interest expense, net |  |  | 117.7 |  |  |  | 130.9 |  |  |  | 361.8 |  |  |  | 260.5 |
Income tax expense |  |  | 68.9 |  |  |  | 67.2 |  |  |  | 141.5 |  |  |  | 147.0 |
Income from continuing operations |  | $ | 204.7 |  |  | $ | 242.6 |  |  | $ | 640.5 |  |  | $ | 555.1 |
Less: Net income attributable to noncontrolling interests |  |  | 0.3 |  |  |  | 0.6 |  |  |  | 1.8 |  |  |  | 1.4 |
Income from continuing operations attributable to Conagra Brands, Inc. |  | $ | 204.4 |  |  | $ | 242.0 |  |  | $ | 638.7 |  |  | $ | 553.7 |
The following table presents further disaggregation of our net sales:
|  | Thirteen weeks ended |  |  | Thirty-nine weeks ended |
|  | February 23, 2020 |  |  | February 24, 2019 |  |  | February 23, 2020 |  |  | February 24, 2019 |
Frozen |  |  | 910.3 |  |  |  | 899.0 |  |  |  | 2,600.6 |  |  |  | 2,053.4 |
Other shelf-stable |  |  | 639.1 |  |  |  | 723.5 |  |  |  | 1,921.0 |  |  |  | 1,810.6 |
Snacks |  |  | 383.8 |  |  |  | 406.3 |  |  |  | 1,222.0 |  |  |  | 1,090.4 |
Foodservice |  |  | 234.4 |  |  |  | 254.7 |  |  |  | 759.7 |  |  |  | 747.6 |
International |  |  | 220.9 |  |  |  | 228.3 |  |  |  | 659.6 |  |  |  | 640.4 |
Refrigerated |  |  | 166.5 |  |  |  | 195.3 |  |  |  | 603.6 |  |  |  | 582.8 |
Total net sales |  | $ | 2,555.0 |  |  | $ | 2,707.1 |  |  | $ | 7,766.5 |  |  | $ | 6,925.2 |
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 23, 2020 |  |  | February 24, 2019 |  |  | February 23, 2020 |  |  | February 24, 2019 |
Gross derivative gains (losses) incurred |  | $ | (5.7 | ) |  | $ | 0.8 |  |  | $ | (12.5 | ) |  | $ | (3.4 | )
Less: Net derivative gains (losses) allocated to reporting segments |  |  | (1.9 | ) |  |  | 1.0 |  |  |  | (3.3 | ) |  |  | 0.4 |
Net derivative losses recognized in general corporate expenses |  | $ | (3.8 | ) |  | $ | (0.2 | ) |  | $ | (9.2 | ) |  | $ | (3.8 | )
Net derivative losses allocated to Grocery & Snacks |  | $ | (0.9 | ) |  | $ | — |  |  | $ | (1.5 | ) |  | $ | (1.0 | )
Net derivative losses allocated to Refrigerated & Frozen |  |  | — |  |  |  | (0.2 | ) |  |  | (0.7 | ) |  |  | (0.7 | )
Net derivative gains (losses) allocated to International |  |  | (0.8 | ) |  |  | 1.3 |  |  |  | (1.1 | ) |  |  | 2.4 |
Net derivative losses allocated to Foodservice |  |  | (0.2 | ) |  |  | (0.1 | ) |  |  | — |  |  |  | (0.3 | )
Net derivative gains (losses) included in segment operating profit |  | $ | (1.9 | ) |  | $ | 1.0 |  |  | $ | (3.3 | ) |  | $ | 0.4 |
As of February 23, 2020, 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 $7.8 million. This amount reflected net losses of $8.0 million incurred during the thirty-nine weeks ended February 23, 2020 and net gains of $0.2 million incurred prior to fiscal 2020. Based on our forecasts of the timing of recognition of the underlying hedged items, we expect to reclassify to segment operating results losses of $3.9 million in fiscal 2020 and losses of $3.9 million in fiscal 2021 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 $84.2 million and $247.6 million for the third quarter and first three quarters of fiscal 2020, respectively, and $77.4 million and $198.6 million for the third quarter and first three quarters of fiscal and 2019, respectively. Other Information 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 the third quarter and first three quarters of fiscal 2020 and 2019. Foreign net sales, including sales by domestic segments to customers located outside of the United States, were approximately $228.0 million and $237.5 million in the third quarter of fiscal 2020 and 2019, respectively. O u r foreign net sales during the first three quarters of fiscal 2020 and 2019 were approximately $675.9 million and $683.1 million, respectively. Our long-lived assets located outside of the United States are not significant. Our largest customer, Walmart, Inc. and its affiliates, accounted for approximately 27% of consolidated net sales in the third quarter of both fiscal 2020 and 2019 and approximately 26% in the first three quarters of both fiscal 2020 and 2019, primarily in the Grocery & Snacks and Refrigerated & Frozen segments. Walmart, Inc. and its affiliates accounted for approximately 33% of consolidated net receivables as of February 23, 2020 and approximately 30% as of May 26, 2019. 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 February 23, 2020, $223.9 million of our total accounts payable is payable to suppliers who utilize this third-party service.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration