DISCONTINUED OPERATIONS AND OTHER DIVESTITURES

Lamb Weston Spinoff

On November 9, 2016, we completed the Spinoff of our Lamb Weston business. As of such date, we did not beneficially own any equity interest in Lamb Weston and no longer consolidated Lamb Weston into our financial results. The business results were previously reported in the Commercial segment. We reflected the results of this business as discontinued operations for all periods presented.

The summary comparative financial results of the Lamb Weston business through the date of the Spinoff, included within discontinued operations, were as follows:



	2018			2017		2016
Net sales	$	—		$	1,407.9	$	2,975.0
Income (loss) from discontinued operations before income taxes and equity method investment earnings	$	(0.3	)	$	172.3	$	474.8
Income (loss) before income taxes and equity method investment earnings	(0.3		)	172.3		474.8
Income tax expense (benefit)	(14.6		)	87.5		178.9
Equity method investment earnings	—			15.9		71.7
Income from discontinued operations, net of tax	14.3			100.7		367.6
Less: Net income attributable to noncontrolling interests	—			6.8		9.2
Net income from discontinued operations attributable to Conagra Brands, Inc.	$	14.3		$	93.9	$	358.4

During fiscal 2017, we incurred $74.8 million of expenses in connection with the Spinoff primarily related to professional fees and contract services associated with preparation of regulatory filings and separation activities. These expenses are reflected in income from discontinued operations. During fiscal 2018, a $14.5 million income tax benefit was recorded due to an adjustment of the estimated deductibility of these costs.

In connection with the Spinoff, total assets of $2.28 billion and total liabilities of $2.98 billion (including debt of $2.46 billion) were transferred to Lamb Weston. As part of the consideration for the Spinoff, the Company received a cash payment from Lamb Weston in the amount of $823.5 million. See Note 4 for discussion of the debt-for-debt exchange related to the Spinoff.

We entered into a transition services agreement in connection with the Lamb Weston Spinoff and recognized $2.2 million and $4.2 million of income for the performance of services during fiscal 2018 and 2017, respectively, classified within SG&A expenses.

Private Brands Operations

On February 1, 2016, pursuant to the Stock Purchase Agreement, dated as of November 1, 2015, we completed the disposition of our Private Brands operations to TreeHouse Foods, Inc. ("Treehouse") for $2.6 billion in cash on a debt-free basis.

As a result of the disposition, we recognized a pre-tax charge of $1.92 billion ($1.44 billion after-tax) in fiscal 2016 to write-down the goodwill and long-lived assets to the final sales price, less costs to sell, and to recognize the final loss of the Private Brands business. We reflected the results of this business as discontinued operations for all periods presented.

In fiscal 2016, we repaid senior notes issued by Ralcorp in an aggregate principal amount of $33.9 million, consisting of 4.95% senior notes due August 15, 2020 in an aggregate principal amount of $17.2 million (with an effective interest rate of 2.83%) and 6.625% senior notes due August 15, 2039 in total an aggregate principal amount of $16.7 million (with an effective interest rate of 4.82%), in each case, prior to maturity, resulting in a loss $5.4 million as a cost of early retirement of debt, which is reflected in discontinued operations.

The summary comparative financial results of the Private Brands business, included within discontinued operations, were as follows:



	2018			2017			2016
Net sales	$	—		$	—		$	2,490.6
Loss on sale of business	$	—		$	(1.6	)	$	—
Long-lived asset impairment charges	—			—			(1,923.0		)
Income from operations of discontinued operations before income taxes	0.4			3.9			168.0
Income (loss) before income taxes and equity method investment earnings	0.4			2.3			(1,755.0		)
Income tax expense (benefit)	0.5			(0.3		)	(593.1		)
Income (loss) from discontinued operations, net of tax	$	(0.1	)	$	2.6		$	(1,161.9	)

We entered into a transition services agreement with TreeHouse and recognized $2.2 million, $16.9 million, and $8.3 million of income for the performance of services during fiscal 2018, 2017, and 2016, respectively, classified within SG&A expenses.

ConAgra Mills Operations

On May 29, 2014, the Company, Cargill, Incorporated ("Cargill"), and CHS, Inc. ("CHS") completed the formation of the Ardent Mills joint venture. In connection with the formation, we contributed to Ardent Mills all of the assets of ConAgra Mills, our milling operations. Our equity in the earnings of Ardent Mills is reflected in our continuing operations.

In fiscal 2017, we adjusted a multi-employer pension withdrawal liability related to our former milling operations by $2.0 million ($1.3 million after-tax). This expense was recognized within discontinued operations.

Other Divestitures

During the third quarter of fiscal 2018, we entered into an agreement to sell our Del Monte^® processed fruit and vegetable business in Canada, which is part of our International segment, to Bonduelle Group. The transaction was completed in the first quarter of fiscal 2019 and was valued at approximately $43.0 million Canadian dollars, which was approximately $34.0 million U.S. dollars at the exchange rate on the date of announcement. The assets of this business have been reclassified as assets held for sale within our Consolidated Balance Sheets for all periods presented.

The assets classified as held for sale reflected in our Consolidated Balance Sheets related to the Del Monte^® processed fruit and vegetable business in Canada were as follows:



	May 27, 2018		May 28, 2017
Current assets	$	6.1	$	6.3
Noncurrent assets (including goodwill of $5.8 million)	11.5		11.4

During the fourth quarter of fiscal 2017, we signed an agreement to sell our Wesson^® oil business, which is part of our Grocery & Snacks segment, to The J.M. Smucker Company ("Smucker"). During the fourth quarter of fiscal 2018, Conagra Brands and Smucker terminated the agreement. This outcome followed the decision of the Federal Trade Commission, announced on March 5, 2018, to challenge the pending sale. The Company is still actively marketing the Wesson^® oil business and expects to sell it within the next twelve months. The assets of this business have been reclassified as assets held for sale within our Consolidated Balance Sheets for all periods presented.

In connection with the initial pending sale of the Wesson^® oil business, we recognized an impairment charge of $27.6 million within SG&A expenses in fiscal 2017, as a production facility was not initially included in the assets to be sold, and we did not expect to recover the carrying value of this facility through future associated cash flows. Subsequent to the terminated agreement with Smucker, this production facility has been included in noncurrent assets held for sale.

The assets classified as held for sale reflected in our Consolidated Balance Sheets related to the Wesson^® oil business were as follows:



	May 27, 2018		May 28, 2017
Current assets	$	37.7	$	35.5
Noncurrent assets (including goodwill of $74.5 million)	101.0		102.8

During the first quarter of fiscal 2017, we completed the sales of our Spicetec Flavors & Seasonings business ("Spicetec") and our JM Swank business, each of which was part of our Commercial segment, for $329.7 million and $159.3 million, respectively, in cash, net of cash included in the dispositions. We recognized pre-tax gains from the sales of $144.8 million and $52.6 million, respectively. We entered into transition services agreements in connection with the sales of these businesses and recognized $0.2 million and $1.9 million of income during fiscal 2018 and fiscal 2017, respectively, classified within SG&A expenses.

In addition, we are actively marketing certain other assets. These assets have been reclassified as assets held for sale within our Consolidated Balance Sheets for all periods presented. The balance of these assets classified as held for sale was $10.4 million and $14.9 million in our Corporate and Grocery & Snacks segments, respectively, at May 27, 2018 and $11.6 million and $14.6 million in our Corporate and Grocery & Snacks segments, respectively, at May 28, 2017.