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Dispositions Dispositions
 12 Months Ended
Dec. 31, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
4. Performance Materials Divestiture:
On December 14, 2020, the Company completed the sale of its Performance Materials business to Potters Buyer, LLC (the “Purchaser”), an affiliate of The Jordan Company, L.P., for a purchase price of $650,000. The net cash proceeds to the Company from the sale were $624,256 after certain customary adjustments for indebtedness, working capital and cash at the closing of the transaction. The Company classified the proceeds within net cash provided by (used in) investing activities – continuing operations in the consolidated statements of cash flows and used the net proceeds from the sale as well as cash on hand to pay down debt and issue a special cash dividend of $1.80/share to stockholders.
In the fourth quarter of 2020, the Performance Materials business met the criteria set forth in Accounting Standards Codification 205-20, Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”), as the sale represents a strategic shift that will have a major effect on the Company’s operations and financial results. As a result, the Company’s consolidated financial statements for all periods presented reflect the Performance Materials business as a discontinued operation. The divested business was historically reported in the Performance Materials reportable segment, with the exception of certain Australian operations that were historically reported in the Performance Chemicals reportable segment.
The total transaction costs incurred in connection with the sale were approximately $13,161 for the year ended December 31, 2020. The Company recorded a pre-tax loss on sale of $70,878, which is included in (loss) income from discontinued operations, net of tax in the Company’s consolidated statements of income for the year ended December 31, 2020. The following is a reconciliation of the loss recorded on the sale:

Net proceeds received from the sale of Performance Materials$624,256 
Transaction costs(13,161)
Net assets derecognized(681,973)
Loss on sale of Performance Materials$(70,878)

In connection with the sale of Performance Materials and the related loss, as noted above, the Company has recognized a tax expense of $58,008 within discontinued operations.
The following table summarizes the results of discontinued operations for the periods presented:
Years ended
December 31,
202020192018
Sales$342,738 $373,686 $386,921 
Cost of goods sold251,917 281,566 308,679 
Selling, general and administrative expenses33,195 37,364 37,226 
Other operating expense, net18,289 14,462 13,023 
Operating income39,337 40,294 27,993 
Equity in net income from affiliated companies(37)(12)(42)
Interest expense, net (1)
16,210 24,453 22,965 
Other (income) expense, net(3,481)274 474 
Loss on sale of Performance Materials70,878 — — 
(Loss) Income from discontinued operations before income tax(44,233)15,579 4,596 
Provision (benefit) for income taxes58,008 1,022 (4,646)
(Loss) income from discontinued operations, net of tax$(102,241)$14,557 $9,242 

(1)    The closing of the transaction triggered the Company’s obligation to provide partial repayment under both its Amended and Restated Term Loan Credit Agreement, dated May 4, 2016, and its New Term Loan Credit Agreement, dated as of July 22, 2020. As such, interest expense has been allocated to discontinued operations on the basis of the Company’s mandatory repayment of $275,787 of the Senior Secured Term Loan Facility due February 2027 and its mandatory payment of $188,722 of the New Senior Secured Term Loan Facility due February 2027.

Net income attributable to the noncontrolling interest related to the Performance Materials business, net of tax was $265, $154, and $213 for the years ended December 31, 2020, 2019, and 2018, respectively.
The following table summarizes the assets and liabilities of discontinued operations at December 31, 2019:
December 31,
2019
ASSETS
Cash and cash equivalents$18,423 
Accounts receivables, net40,484 
Inventories, net143,323 
Prepaid and other current assets4,139 
Investments in affiliated companies115 
Property, plant and equipment, net175,614 
Goodwill286,227 
Other intangible assets, net121,113 
Right-of-use lease assets8,878 
Other long-term assets71,697 
Total assets held for sale$870,013 
LIABILITIES
Notes payable and current maturities of long-term debt$7,766 
Accounts payable30,267 
Operating lease liabilities—current3,326 
Accrued liabilities16,744 
Long-term debt, excluding current portion55,972 
Deferred income taxes8,612 
Operating lease liabilities—noncurrent5,248 
Other long-term liabilities17,366 
Total liabilities held for sale$145,301 

In connection with the transaction, the Company entered into a Transition Services Agreement with the Purchaser pursuant to which the Purchaser is receiving certain services to provide for the orderly transition of various functions and processes after the closing of the transaction. The services under the Transition Services Agreement include information technology, accounting, tax, financial services, human resources, facilities, and other administrative support services. These services are being provided at cost for a period of 9 months, with three 30-day extensions available.

Additionally, in connection with the transaction, the Company entered into various supply agreements with the Purchaser. Cash flows associated with these transition services and supply agreements are not expected to be material to the Company’s results of operations.
8. Dispositions:
Magnesium Silicate Product Line Sale
On July 1, 2020, the Company completed the sale of its magnesium silicate product line within its Performance Chemicals segment for $18,000 and recorded a pre-tax gain on sale of $4,958. The transaction was recorded as an asset sale, with the gain on disposition included in the other operating expense, net line item in the Company’s condensed consolidated statement of income for the year ended December 31, 2020 (see Note 9 to these condensed consolidated financial statements for additional details). At the time of disposition, the carrying value of the Company’s inventory related to this non-core product line was $1,556. The Company allocated $11,486 of the consideration received to a contract liability for deferred revenue.
Concurrent with the product line sale, the Company entered into a tolling arrangement with the buyer in which the Company agreed to manufacture the product for the buyer through June 2025. The Company deferred $11,486 of the $18,000 consideration received as a liability, to be recognized as the Company executes its performance obligations over the term of the contractual agreement with the buyer.
Sulfate Salts Product Line Sale
On June 28, 2019, the Company completed the sale of a portion of its sulfate salts product line within its Performance Chemicals segment for $28,000, with net cash consideration of $27,658 and a pre-tax gain on sale of $11,518. The transaction was recorded as an asset sale, with the gain on disposition included in the other operating expense, net line item in the Company’s consolidated statement of income for the year ended December 31, 2019 (see Note 9 to these consolidated financial statements for additional details). At the time of disposition, the carrying value of the Company’s net working capital related to this non-core product line was $4,215. In addition to the net working capital sold as part of the transaction, the Company also derecognized $3,276 of property, plant and equipment related to the product line and allocated $9,000 of the consideration received to a liability for deferred revenue.
Concurrent with the product line sale, the Company entered into a tolling arrangement with the buyer in which the Company will use its existing manufacturing facilities for the product line to manufacture the product for the buyer, the majority of which runs until June 2021. The Company deferred $9,000 of the consideration received as a liability, to be recognized as the Company executes its performance obligations over the term of the contractual agreement with the buyer. Additionally, the Company concluded that an embedded lease arrangement exists as a result of the combination of the sale and tolling agreements. Given the ability of the buyer to control substantially all of the output of the facilities and the existence of bargain purchase options on the manufacturing assets, the Company determined that the buyer is effectively leasing the assets from the Company and derecognized the associated property, plant and equipment under a sales-type leasing arrangement. The gain on the sale of fixed assets is included as part of the Company’s overall gain on sale related to the transaction, with the Company’s net investment in the leased assets having been settled as part of the consideration received in the transaction with no additional future cash flows to be recognized on the lease.
Sale of Assets
On December 19, 2019, the Company completed the sale of real property for $19,100, with net cash consideration of $17,100 and a holdback receivable to be settled by December 2021 of $1,000, and recorded a pre-tax gain on sale of $7,150. On December 30, 2019, the Company entered into a leaseback arrangement with the buyer-lessor which expires in December 2021. The Company recorded the asset sale separately from the leaseback, with the gain on disposition included in the other operating expense, net line item in the Company’s consolidated statement of income for the year ended December 31, 2019 (see Note 9 to these consolidated financial statements for additional details).
At the time of disposition, the Company derecognized $10,735 of property, plant and equipment and accounted for the leased asset as an operating lease. A right-of-use lease asset of $3,588 and lease liability of $3,524 was recorded at December 31, 2020, based on the present value of the lease payments and future demolition costs associated with the lease.