DISCONTINUED OPERATIONS

PPC

On September 5, 2017, Griffon announced it would explore strategic alternatives for PPC and on November 16, 2017, announced it entered into a definitive agreement to sell PPC to Berry for $475 million in cash. The transaction is subject to regulatory approval and customary closing conditions, and is expected to close in the first quarter of calendar 2018. As a result, Griffon classified the results of operations of the PPC business as discontinued operations in the Consolidated Statements of Operations for all periods presented and classified the related assets and liabilities associated with the discontinued operations as held for sale in the consolidated balance sheets. All results and information presented exclude PPC unless otherwise noted. PPC is a global leader in the development and production of embossed, laminated and printed specialty plastic films for hygienic, health-care and industrial products and sells to some of the world's largest consumer products companies.

The following amounts related to the PPC segment have been segregated from Griffon's continuing operations and are reported as discontinued operations:



	For the Three Months Ended December 31,
	2017		2016
Revenue	$	120,430	$	114,823
Cost of goods and services	95,944		95,438
Gross profit	24,486		19,385
Selling, general and administrative expenses	12,108		10,861
Income from discontinued operations	12,378		8,524
Other income (expense)
Interest expense, net	60		78
Other, net	852		(99		)
Total other income (expense)	912		(21		)
Income from operations of discontinued operations	$	11,466	$	8,545

The above table excludes depreciation and amortization from the current year results since PPC is classified as a discontinued operations and accordingly, the Company ceased depreciation and amortization in accordance with discontinued operations accounting guidelines. Depreciation and amortization would have been approximately $7,400 in the quarter ended December 31, 2017.

The following amounts related to the PPC segment have been segregated from Griffon's continuing operations and are reported as assets and liabilities of discontinued operations in the consolidated balance sheets:



	At December 31, 2017		At September 30, 2017
ASSETS
Accounts receivable, net	$	52,004	$	51,768
Inventories, net	46,552		45,742
Prepaid and other current assets	10,904		11,000
PROPERTY, PLANT AND EQUIPMENT, net	191,793		185,940
GOODWILL	56,865		57,087
INTANGIBLE ASSETS, net	12,228		12,298
OTHER ASSETS	6,929		6,889
Total Assets Held for Sale	$	377,275	370,724
LIABILITIES
Notes payable and current portion of long-term debt	$	11,929	$	11,163
Accounts payable	29,705		36,619
Accrued liabilities	14,407		14,553
LONG-TERM DEBT, net	10,348		10,549
OTHER LIABILITIES	19,348		11,566
Total Liabilities Held for Sale	$	85,737	$	84,450

Installation Services and Other Discontinued Activities

In 2008, as a result of the downturn in the residential housing market, Griffon exited substantially all operating activities of its Installation Services segment which sold, installed and serviced garage doors and openers, fireplaces, floor coverings, cabinetry

and a range of related building products, primarily for the new residential housing market. In 2008, Griffon sold eleven units, closed one unit and merged two units into CBP. Griffon substantially concluded its remaining disposal activities in 2009.

Installation Services operating results have been reported as discontinued operations in the Consolidated Statements of Operations and Comprehensive Income (Loss) for all periods presented; Installation Services is excluded from segment reporting. There was no reported revenue in the quarters ended December 31, 2017 and 2016.

During the year ended September 30, 2017, Griffon recorded $5,700 of reserves in discontinued operations related to historical environmental remediation efforts and to increase the reserve for homeowner association claims (HOA) related to the Clopay Services Corporation discontinued operations in 2008.

The following amounts related to the Installation Services segment, discontinued in 2008, and other businesses discontinued several years ago, which have been segregated from Griffon’s continuing operations, and are reported as assets and liabilities of discontinued operations not held for sale in the Condensed Consolidated Balance Sheets:



	At December 31, 2017		At September 30, 2017
Assets of discontinued operations not held for sale:
Prepaid and other current assets	$	328	$	329
Other long-term assets	2,952		2,960
Total assets of discontinued operations not held for sale	$	3,280	$	3,289

Liabilities of discontinued operations not held for sale:
Accrued liabilities, current	$	3,924	$	8,342
Other long-term liabilities	5,225		3,037
Total liabilities of discontinued operations not held for sale	$	9,149	$	11,379

There was no Installation Services revenue or income for the quarter ended December 31, 2017 or 2016.