DISCONTINUED OPERATIONS

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, subject to working capital and other adjustments.

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. The assets and liabilities of the discontinued business have been reclassified as assets and liabilities held for sale within our Consolidated Balance Sheets for all periods presented prior to the divestiture.

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.

In connection with classifying the Private Brands operations as assets held for sale, we recognized, in fiscal 2016, a deferred tax asset of $1.54 billion on the capital loss of our investment in this business. A partial valuation allowance is recorded as we have not met the accounting requirements for recognition of a benefit at this time. In fiscal 2016, we recognized an income tax benefit of $20.7 million, resulting primarily from prior period capital gains. In addition, we released $147.3 million of the valuation allowance in the fourth quarter of fiscal 2016 due to the impending Spicetec and JM Swank dispositions.

In fiscal 2015, we recorded a $1.51 billion impairment of goodwill and $57.6 million of impairment charges to write-down various brands and fixed assets, which are reflected in discontinued operations. In fiscal 2014, we recorded a $593.2 million impairment of goodwill and $3.0 million of impairment charges to write-down a small brand, which are reflected in discontinued operations.

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



	2016			2015			2014
Net sales	$	2,490.6		$	3,895.4		$	4,005.4
Long-lived asset impairment charges	$	(1,923.0	)	$	(1,564.6	)	$	(596.2	)
Income from operations of discontinued operations before income taxes	168.0			68.8			186.5
Loss before income taxes and equity method investment earnings	(1,755.0		)	(1,495.8		)	(409.7		)
Income tax expense (benefit)	(593.1		)	(128.1		)	41.8
Loss from discontinued operations, net of tax	$	(1,161.9	)	$	(1,367.7	)	$	(451.5	)

The assets and liabilities classified as held for sale reflected in our Consolidated Balance Sheets related to the Private Brands business were as follows:



	May 31, 2015
Cash and cash equivalents	$	18.4
Receivables, less allowance for doubtful accounts of $0.5	199.3
Inventories	489.3
Prepaids and other current assets	37.3
Current assets held for sale	$	744.3
Property, plant and equipment, net	$	920.4
Goodwill	1,600.8
Brands, trademarks and other intangibles, net	1,716.6
Other assets	9.1
Noncurrent assets held for sale	$	4,246.9
Accounts payable	$	219.5
Accrued payroll	7.0
Other accrued liabilities	67.5
Current liabilities held for sale	$	294.0
Other noncurrent liabilities	$	711.0
Noncurrent liabilities held for sale	$	711.0

ConAgra Mills Operations

On May 29, 2014, the Company, Cargill, Incorporated ("Cargill"), and CHS, Inc. ("CHS") completed the formation of Ardent Mills. In connection with the formation, we contributed all of the assets of ConAgra Mills, our milling operations. For further details about the joint venture, see Note 7. We reflected the results of the ConAgra Mills 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 Consolidated Balance Sheet for the period presented prior to divestiture. Our equity in the earnings of Ardent Mills is reflected in our continuing operations.

The summary comparative financial results of the ConAgra Mills operations, included within discontinued operations, were as follows:



	2015			2014
Net sales	$	16.2		$	1,859.0
Income (loss) from operations of discontinued operations before income taxes	(9.2		)	124.8
Net gain on sale of businesses	627.3			90.3
Income before income taxes and equity method investment earnings	618.1			215.1
Income tax expense	251.1			78.0
Equity method investment earnings	—			0.3
Income from discontinued operations, net of tax	$	367.0		$	137.4

Medallion Foods

In fiscal 2014, we completed the sale of a small snack business, Medallion Foods, for $32.0 million in cash. The business results were previously reflected in the Private Brands segment. We reflected the results of these operations as discontinued operations for all periods presented. We recognized a pre-tax loss of $5.8 million ($3.5 million after-tax) on the sale of this business in fiscal 2014. In fiscal 2014, we recognized an impairment charge related to allocated amounts of goodwill and intangible assets, totaling $25.4 million ($15.2 million after-tax), in anticipation of this divestiture. Net sales, income from operations of discontinued operations before income taxes, and income tax benefit for fiscal 2014 related to Medallion Foods were $59.1 million, $5.9 million, and $10.2 million, respectively.

Lightlife^® Operations

In fiscal 2014, we completed the sale of the assets of the Lightlife^® business for $54.7 million in cash. This business produced and sold vegetarian-based burgers, hot dogs, and other meatless frozen and refrigerated items. The results of this business were previously reflected in the Consumer Foods segment. We reflected the results of these operations as discontinued operations for all periods presented. We recognized a pre-tax gain of $32.1 million ($19.8 million after-tax) on the sale of this business in fiscal 2014. Loss from operations of discontinued operations before income taxes and income tax benefit for fiscal 2015 related to the Lightlife^® business were $0.7 million and $0.3 million, respectively. Net sales, income from operations of discontinued operations before income taxes, and income tax expense for fiscal 2014 related to the Lightlife^® business were $11.2 million, $1.9 million, and $14.9 million, respectively.

Other Assets Held for Sale

During late fiscal 2016 and early fiscal 2017, we announced the agreements to sell Spicetec and JM Swank, parts of our Commercial segment. We expect to realize net proceeds from the sales in early fiscal 2017 of $316.5 million and $162.4 million, respectively. The assets and liabilities of these businesses have been reclassified as assets and liabilities held for sale within our Consolidated Balance Sheets for all periods presented.

The assets and liabilities classified as held for sale reflected in our Consolidated Balance Sheets related to the Spicetec and JM Swank businesses were as follows:



	May 29, 2016		May 31, 2015
Spicetec:
Current assets	$	43.3	$	38.0
Noncurrent assets (including goodwill of $102.4 million)	145.9		148.2
Current liabilities	10.3		14.7
Noncurrent liabilities	1.2		1.6
Swank:
Current assets	$	73.7	$	66.6
Noncurrent assets (including goodwill of $52.5 million)	73.0		74.3
Current liabilities	44.3		48.0
Noncurrent liabilities	0.4		0.4

In addition, we are actively marketing certain other long-lived assets. These assets have been reclassified as assets held for sale within our Consolidated Balance Sheets for all periods presented. These assets were held within our Corporate and Consumer Foods segments, respectively. The balance of these noncurrent assets classified as held for sale was $6.9 million and $16.7 million at May 29, 2016 and May 31, 2015, respectively.