Dispositions

On July 28, 2014, we closed on the sale of 705 Red Lobster restaurants, however, as of August 24, 2014, 37 of the properties remain subject to landlord consents and satisfaction of other contractual requirements, which are expected to be satisfied within the next 12 months. Therefore, the assets of these remaining restaurants continue to be classified as held for sale and recognition of the gain on the related proceeds was deferred. The proceeds of approximately $80.7 million associated with landlord consents are classified as other current liabilities on our consolidated balance sheet as of August 24, 2014. As the landlord consents and remaining contractual requirements are satisfied, we will derecognize the related assets and record the commensurate gain on the transaction. In conjunction with the sale of Red Lobster, there were 19 locations where Red Lobster shared a land parcel with another Darden brand. The land and related buildings for these 19 Darden locations were included in the sale transaction and simultaneously leased back to Darden. The proceeds associated with the sale of these properties are classified as a financing lease obligation on our consolidated balance sheet as a component of other liabilities and the associated lease payments will amortize the obligation over the life of the properties. Additionally, in the fourth quarter of fiscal 2014, in connection with the expected sale of Red Lobster, we closed two of the six restaurants that housed both a Red Lobster and an Olive Garden in the same building (synergy restaurants). In the first quarter of fiscal 2015, we completed the conversion of the four remaining synergy restaurants to stand-alone Olive Garden restaurants.

As of August 24, 2014, we have received $2.08 billion in cash proceeds, net of transaction-related costs of approximately $29.3 million. For the quarter ended August 24, 2014, we recognized a gain on the sale of Red Lobster of $817.2 million, which is included in earnings from discontinued operations in our consolidated statement of earnings.

For the quarters ended August 24, 2014 and August 25, 2013, all gains on disposition, impairment charges and disposal costs, along with the sales, costs and expenses and income taxes attributable to these restaurants, have been aggregated in a single caption entitled “Earnings from discontinued operations, net of tax expense” in our consolidated statements of earnings for all periods presented. No amounts for shared general and administrative operating support expense or interest expense were allocated to discontinued operations. Assets associated with those restaurants not yet disposed of, that are considered held for sale, have been segregated from continuing operations and presented as assets held for sale on our accompanying consolidated balance sheets. Earnings from discontinued operations, net of taxes in our accompanying consolidated statements of earnings are comprised of the following:



	Three Months Ended
(in millions)	August 24, 2014		August 25, 2013
Sales	$	400.4	$	627.0

Earnings before income taxes	843.2		38.7
Income tax expense	320.7		10.7
Earnings from discontinued operations, net of tax	$	522.5	$	28.0

The following table presents the carrying amounts of the major classes of assets and liabilities associated with the restaurants reported as discontinued operations and classified as held for sale on our accompanying consolidated balance sheets:



(in millions)	August 24, 2014		May 25, 2014
Current assets	$	—	$	241.0
Land, buildings and equipment, net	54.3		1,084.8
Other assets	—		64.5
Total assets	$	54.3	$	1,390.3

Current liabilities	$	—	$	130.6
Other liabilities	—		84.9
Total liabilities	$	—	$	215.5