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DISCONTINUED OPERATIONS AND THE FORMATION OF ARDENT MILLS | 3 Months Ended
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Aug. 30, 2015
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS AND THE FORMATION OF ARDENT MILLS | DISCONTINUED OPERATIONS AND THE FORMATION OF ARDENT MILLS Private Brands Operations On June 30, 2015, we announced that we are pursuing the divestiture of our Private Brands operations. On August 7, 2015, we determined that certain assets and liabilities related to the Private Brands segment were required to be classified as assets and liabilities held for sale. As a result of this determination and preliminary indications of interest from potential buyers, we concluded that the net assets held for sale were further impaired. We recognized a pre-tax impairment charge of $1.81 billion ($1.34 billion after-tax) in the first quarter of fiscal 2016 to write-down the goodwill and long-lived assets of the Private Brands business to the estimated sales price, less costs to sell. These amounts reflect management's preliminary estimates and subsequent negotiations and the closing on any sale of these assets could result in further adjustments to this impairment. We reflected the results of these operations as discontinued operations for all periods presented. The assets and liabilities of the discontinued business have been reclassified as assets and liabilities held for sale within our Condensed Consolidated Balance Sheets for all periods presented. ConAgra Mills Operations On May 29, 2014, the Company, Cargill, Incorporated, and CHS, Inc. completed the formation of the Ardent Mills joint venture ("Ardent Mills"). In connection with the formation, we contributed all of the assets of ConAgra Mills, our milling operations, including $49.0 million of cash, to Ardent Mills, we received a 44% ownership interest in Ardent Mills, and Ardent Mills distributed $391.4 million in cash to us as a return of capital. The contribution of the assets of ConAgra Mills in exchange for a non-controlling interest in the newly formed joint venture is required to be accounted for at fair value, and accordingly, we recognized a gain of $625.6 million ($379.6 million after-tax) in fiscal 2015 in income from discontinued operations to reflect the excess of the fair value of our interest over its carrying value at the time of the transfer. As part of the formation of Ardent Mills, in the fourth quarter of fiscal 2014, pursuant to an agreement with the U.S. Department of Justice, we sold three flour milling facilities to Miller Milling Company LLC for $163.0 million. We received the cash proceeds from the sale of these flour milling facilities in the first quarter of fiscal 2015. In the first quarter of fiscal 2015, we used the net cash proceeds from the Ardent Mills transaction to repay debt. The operating results of our legacy milling business, including the disposition of three mills aforementioned, are included as discontinued operations within our Condensed Consolidated Statements of Operations. We recognized the 44% ownership interest in Ardent Mills at fair value, as of the date of the formation of the joint venture. We now recognize our proportionate share of the earnings of Ardent Mills under the equity method of accounting within results of continuing operations. Due to differences in fiscal reporting periods, we recognized the equity method earnings on a lag of approximately one month; and as a result, we recognized only two months of earnings from Ardent Mills during the first quarter of fiscal 2015. At August 30, 2015, the carrying value of our equity method investment in Ardent Mills was $732.7 million, which is included in Other Assets. We entered into transition services agreements in connection with this contribution and recognized $2.9 million and $3.8 million of income for the performance of transition services during the first quarter of fiscal 2016 and 2015, respectively, classified within selling, general and administrative expenses. The summary comparative financial results of discontinued operations were as follows:
| Thirteen Weeks Ended
| August 30, 2015 |  | August 24, 2014
Net sales | $ | 894.2 |  |  | $ | 954.2 |
Net gain on sale of businesses | $ | — |  |  | $ | 626.5 |
Goodwill and long-lived asset impairment charges | (1,812.3 | ) |  | — |
Income from operations of discontinued operations before income taxes and equity method investment earnings | 20.7 |  |  | 1.4 |
Income (loss) before income taxes | (1,791.6 | ) |  | 627.9 |
Income tax expense (benefit) | (472.0 | ) |  | 239.6 |
Income (loss) from discontinued operations, net of tax | $ | (1,319.6 | ) |  | $ | 388.3 |
Assets and Liabilities Held for Sale The assets and liabilities classified as held for sale reflected in our Condensed Consolidated Balance Sheets were as follows:
|  | August 30, 2015 |  | May 31, 2015
Cash and cash equivalents |  | $ | 22.6 |  |  | $ | 18.4 |
Receivables, less allowance for doubtful accounts of $0.4 and $0.5 |  | 201.8 |  |  | 200.4 |
Inventories |  | 511.9 |  |  | 486.0 |
Prepaid expenses and other current assets |  | 3.8 |  |  | 34.2 |
Current assets held for sale |  | $ | 740.1 |  |  | $ | 739.0 |
Property, plant and equipment, net |  | $ | 898.2 |  |  | $ | 914.1 |
Goodwill |  | 991.5 |  |  | 1,600.8 |
Brands, trademarks and other intangibles, net |  | 525.1 |  |  | 1,716.6 |
Other assets |  | 3.0 |  |  | 2.6 |
Noncurrent assets held for sale |  | $ | 2,417.8 |  |  | $ | 4,234.1 |
Accounts payable |  | $ | 226.9 |  |  | $ | 219.5 |
Other accrued liabilities |  | 56.7 |  |  | 68.4 |
Current liabilities held for sale |  | $ | 283.6 |  |  | $ | 287.9 |
Senior long-term debt, excluding current installments |  | $ | 39.9 |  |  | $ | 40.0 |
Other noncurrent liabilities |  | 223.5 |  |  | 709.9 |
Noncurrent liabilities held for sale |  | $ | 263.4 |  |  | $ | 749.9 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721533-107759 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721665-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5C -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51719941&loc=SL51724579-110230 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721663-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51719941&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721673-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721659-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721671-107760 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5D -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721677-107760 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1474-107760 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721683-107760 + Details
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