INVESTMENTS IN JOINT VENTURES

In the first quarter of fiscal 2015, the Company, Cargill, and CHS, completed the formation of 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 was 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 business results were previously reflected in the Commercial Foods segment. The operating results of our legacy milling business, including the disposition of three mills aforementioned, are included as discontinued operations within our Consolidated Statement 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 11 months of earnings from Ardent Mills in fiscal 2015. The carrying value of our Ardent Mills equity method investment at the end of fiscal 2016 and 2015 was $732.8 million and $708.4 million, respectively.

We also have potato joint ventures in our Commercial Foods segment and other equity method investments in our Consumer Foods segment. We recognized a gain of $17.7 million in fiscal 2016 related to the settlement of a pension plan of an international potato venture, classified within equity method investment earnings.

The total carrying value of our equity method investments at the end of fiscal 2016 and 2015 was $910.8 million and $853.0 million, respectively. These amounts are included in Other assets.

In fiscal 2016, we had sales to and purchases from our equity method investments of $16.6 million and $90.8 million, respectively. Total dividends received from equity method investments in fiscal 2016 were $78.3 million.

In fiscal 2015, we had sales to and purchases from our equity method investments of $9.5 million and $98.0 million, respectively. Total dividends received from equity method investments in fiscal 2015 were $91.3 million.

We entered into transition services agreements in connection with the Ardent Mills formation and recognized $9.7 million and $14.1 million of income for the performance of transition services during fiscal 2016 and 2015, respectively, classified within Selling, general and administrative expenses.

Summarized combined financial information for our equity method investments on a 100% basis is as follows:



	2016		2015
Net Sales:
Ardent Mills	$	3,395.3	$	3,299.2
Potato joint ventures	917.3		872.1
Others	167.2		167.3
Total net sales	$	4,479.8	$	4,338.6
Gross margin:
Ardent Mills	339.2		365.3
Potato joint ventures	167.0		171.7
Others	32.8		33.3
Total gross margin	539.0		570.3
Earnings after income taxes:
Ardent Mills	$	142.9	$	173.5
Potato joint ventures	101.3		99.8
Others	6.4		6.1
Total earnings after income taxes	$	250.6	$	279.4



	May 29, 2016		May 31, 2015
Ardent Mills:
Current assets	$	988.4	$	1,080.3
Noncurrent assets	1,695.3		1,692.5
Current liabilities	507.7		415.3
Noncurrent liabilities	545.0		649.5
Potato joint ventures:
Current assets	$	304.8	$	285.3
Noncurrent assets	294.8		193.0
Current liabilities	202.2		151.8
Noncurrent liabilities	81.7		47.1
Others:
Current assets	$	80.8	$	73.1
Noncurrent assets	10.5		10.8
Current liabilities	51.0		42.2
Noncurrent liabilities	—		—