Discontinued Operations, Divestitures and Acquisitions (Tables)

9 Months Ended

Sep. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

Summary of Discontinued Operations

The following table presents selected financial information regarding cash flows of Diversey that are included within discontinued operations in the Condensed Consolidated Statements of Cash Flows:

	Nine Months Ended September 30,
(In millions)	2017		2016
Non-cash items included in net earnings from discontinued operations:
Depreciation and amortization	$	29.3	$	85.5
Share-based incentive compensation	10.2		9.2
Profit sharing expense	3.0		3.5
Provision for bad debt	2.3		4.0
Capital expenditures	11.9		14.7

The carrying value of the major classes of assets and liabilities of Diversey were as follows:

(In millions)	September 30, 2017		December 31, 2016
Assets:
Cash and cash equivalents	$	—	$	30.0
Trade receivables, net	3.1		438.2
Inventories	0.5		203.2
Other receivables	11.5		70.3
Prepaid expenses and other current assets	—		80.6
Property and equipment, net	—		170.6
Goodwill	—		972.8
Intangible assets, net	—		669.9
Deferred taxes	0.1		50.7
Other non-current assets	—		162.0
Total assets held for sale	$	15.2	$	2,848.3
Liabilities:
Short-term borrowings	$	—	$	9.6
Current portion of long-term debt	—		31.1
Accounts payable	—		346.5
Other current liabilities	—		296.1
Long-term debt	—		175.7
Deferred taxes	—		56.3
Other non-current liabilities	—		269.0
Total liabilities held for sale	$	—	$	1,184.3

Summary operating results of Diversey were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2017			2016			2017			2016
Net sales	$	434.6		$	651.5		$	1,667.5		$	1,924.4
Cost of sales	249.1			368.2			949.5			1,075.6
Gross profit	185.5			283.3			718.0			848.8
Selling, general and administrative expenses(1)	131.0			206.2			537.8			635.1
Amortization expense of intangible assets acquired(1)	7.7			19.3			23.9			62.0
Operating profit	46.8			57.8			156.3			151.7
Other expense, net	(9.0		)	(2.8		)	(17.0		)	(9.4		)
Earnings from discontinued operations before income tax (benefit) provision(1)(2)	37.8			55.0			139.3			142.3
Income tax (benefit) provision from discontinued operations	12.1			(44.5		)	28.0			(31.9		)
Net earnings from discontinued operations	$	25.7		$	99.5		$	111.3		$	174.2

⁽¹⁾  For the nine months ended September 30, 2017, there was a revision to net earnings from discontinued operations, net of tax, on the Condensed Consolidated Statement of Operations related to depreciation and amortization on Diversey assets held for sale. As a result, selling, general and administrative expenses decreased $6.1 million, amortization expenses of intangible assets acquired decreased $16.5 million and income tax provision from discontinued operations increased $6.2 million.

⁽²⁾  For the three months and nine months ended September 30, 2017, net earnings from discontinued operations was impacted by a tax expense of $12.1 million and $28.0 million, respectively, driven by a change in the repatriation strategy of foreign earnings offset by a favorable earnings mix in jurisdictions with lower rates. For the three and nine months ended September 30, 2016, net earnings from discontinued operations were impacted by tax benefits of $44.5 million and $31.9 million, respectively, primarily related to the release of reserves, and earnings mix in jurisdictions with lower tax rates.