Discontinued Operations

6 Months Ended

Jun. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

A business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the sale is probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and certain other criteria are met. A business classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. When the carrying amount of the business exceeds its estimated fair value less cost to sell, a loss is recognized and updated each reporting period as appropriate.

Executing on our strategy to focus our growth investments on our three remaining segments, on May 16, 2021, we entered into an agreement to sell our Engineered Materials segment to Grupo Verzatec S.A. de C.V. for $360 million on a cash-free and debt-free basis. The sale is subject to customary closing conditions and regulatory approvals. In the second quarter of 2021, the assets and liabilities of the segment were classified as held for sale, and the segment’s results are presented as discontinued operations. This change was applied on a retrospective basis. We reasonably expect to close on this transaction within one year from the date of our entry into the agreement, and therefore have presented the assets and liabilities as current as of June 30, 2021.

Financial results from discontinued operations:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2021		2020		2021		2020
Net sales	$	59.1	$	33.6	$	113.0	$	84.6
Cost of sales	46.7		26.9		89.7		65.9
Selling, general and administrative	4.7		4.2		9.2		9.4
Restructuring charges	—		0.6		—		0.6

Income from discontinued operations	7.7		1.9		14.1		8.7
Income tax (benefit) provision1	(19.9)		0.5		(18.5)		2.2
Income from discontinued operations, net of tax	$	27.6	$	1.4	$	32.6	$	6.5
1 Includes $21.5 million of deferred tax benefit in 2021 associated with the pending disposition of the Engineered Materials segment.

Major classes of assets and liabilities to be transferred in the transaction:


(in millions)	June 30, 2021		December 31, 2020
Assets:
Accounts receivable, net	$	17.1	$	8.8
Inventories, net	9.4		8.5
Other current assets	0.5		0.1
Property, plant and equipment, net	26.1		26.8
Other assets	0.3		0.6
Intangible assets, net	1.2		1.2
Goodwill	171.3		171.3
Assets held for sale	$	225.9	$	217.3

Liabilities:
Accounts payable	$	25.1	$	19.5
Accrued liabilities	8.1		7.9
Long-term deferred tax liability	4.7		26.1
Other liabilities	—		0.1
Liabilities held for sale	$	37.9	$	53.6