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Distribution from Unconsolidated Subsidiary
12 Months Ended
May 31, 2014
Distribution From Unconsolidated Subsidiary [Abstract]  
Distribution From Unconsolidated Subsidiary

19. Distribution from Unconsolidated Subsidiary

 

In April 2012 EB entered into a joint venture with LOL whereby EB contributed substantially all of its assets into a new limited liability company, EBLLC, in which LOL purchased a 50% ownership interest for approximately $126.1 million (the “Purchase Price”) and the license of the LOL trademarks to the EBLLC.  The this joint venture combines EB’s and LOL’s specialty shell egg businesses in order to market and sell both Egg-land’s Best®  branded specialty eggs and Land O’ Lakes® branded specialty eggs.  EB distributed the proceeds from the sale of the 50% interest to LOL to the EB members pursuant to EB’s articles of incorporation and bylaws on a patronage basis, subject to EB retaining funds to pay transaction costs. 

 

In the fourth fiscal quarter of 2012, Cal-Maine received $38.3 million in proceeds from the above described transaction and Specialty Eggs, LLC (50% equity method investee of Cal-Maine) received $8.9 million.  For cash flow statement purposes, we evaluated the specific distribution to Cal-Maine on a stand-alone basis to determine the appropriate classification of the proceeds.  Since the entire proceeds effectively represent the sale of a 50% interest in the assets and business of EB, the entire amount was reported as an investing cash flow for fiscal 2012.    

 

Since we account for our investment in EB under the cost method, the specific distribution to Cal-Maine was recorded as income in the fourth quarter of fiscal 2012.  In accordance with the equity method, we recorded 50% of the distribution to Specialty Egg, LLC as a component of equity in income of affiliates.