Note 3 - Discontinued Operations

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3. DISCONTINUED OPERATIONS 

SaLE of tEXTILE eFFECTS bUSINESS 

On February 28, 2023, we completed the sale of our Textile Effects Business to Archroma, a portfolio company of SK Capital Partners (“Archroma”), for a purchase price of $593 million, which includes estimated adjustments to the purchase price for working capital plus the assumption of underfunded pension liabilities. The final purchase price is subject to customary post-closing adjustments. Upon the completion of the sale, we received net proceeds of $530 million, determined as the preliminary purchase price less $5 million for certain costs paid by Archroma on our behalf, $30 million of estimated net working capital adjustments and $28 million of cash that will be reimbursed to us as part of the final post-closing adjustments anticipated in 2023. In connection with the sale, we recognized a pre-tax gain of $153 million in the first quarter of 2023. Through the second quarter of 2023, we have paid cash taxes of approximately $21 million, and we expect to pay additional cash taxes of approximately $20 million. Certain amounts for prior periods have been recast to present the results of operations of our Textile Effects Business as discontinued operations.

The following table reconciles the carrying amounts of major classes of assets and liabilities of discontinued operations to total assets and liabilities of discontinued operations that are classified as held for sale in our condensed consolidated balance sheets (dollars in millions):

	December 31,
	2022
Carrying amounts of major classes of assets held for sale:
Accounts receivable	$	133
Inventories		151
Other current assets		11
Property, plant and equipment, net		134
Deferred income taxes		13
Operating lease right-of-use assets		15
Other noncurrent assets		15
Total current assets held for sale(1)	$	472
Carrying amounts of major classes of liabilities held for sale:
Accounts payable	$	63
Accrued liabilities		47
Current operating lease liabilities		2
Noncurrent operating lease liabilities		17
Other noncurrent liabilities		65
Total current liabilities held for sale(1)	$	194

(1) Total assets and liabilities held for sale as of December 31, 2022 are classified as current because we completed the sale of our Textile Effects Business on February 28, 2023.

The following table reconciles major line items constituting pretax (loss) income of discontinued operations to after-tax income of discontinued operations, primarily related to our Textile Effects Business, as presented in our condensed consolidated statements of operations (dollars in millions): 

	Three months						Six months
	ended						ended
	June 30,						June 30,
	2023			2022			2023			2022
Major line items constituting pretax income of discontinued operations:
Trade sales, services and fees, net	$	—		$	192		$	88		$	389
Cost of goods sold		—			146			69			293
Gain on sale of our Textile Effects Business		—			—			153			—
Other expense items, net		1			31			36			58
(Loss) income from discontinued operations before income taxes		(1	)		15			136			38
Income tax expense		(1	)		(2	)		(16	)		(7	)
Net (loss) income attributable to discontinued operations	$	(2	)	$	13		$	120		$	31