DISCONTINUED OPERATIONS

PPC

On November 16, 2017, Griffon announced it entered into a definitive agreement to sell PPC and on February 6, 2018, completed the sale to Berry for $475,000 in cash, subject to certain post-closing adjustments. 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 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. In connection with the sale of PPC, the Company recorded a gain of $117,625 ($86,357, net of tax) during the quarter ended March 31, 2018. The tax computed on the PPC gain is preliminary and is subject to finalization.

Summarized results of the Company’s discontinued operations are as follows:



	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2018			2017			2018			2017
Revenue	$	45,832		$	111,958		$	166,262		$	226,780
Cost of goods and services	36,157			95,277			132,100			190,715
Gross profit	9,675			16,681			34,162			36,065
Selling, general and administrative expenses	13,995			10,556			26,103			21,416
Income (loss) from discontinued operations	(4,320		)	6,125			8,059			14,649
Other income (expense)
Gain on sale of business	117,625			—			117,625
Interest expense, net	(95		)	82			(155		)	4
Other, net	166			(137		)	(687		)	(38		)
Total other income (expense)	117,696			(55		)	116,783			(34		)
Income from operations of discontinued operations	$	113,376		$	6,070		$	124,842		$	14,615

The Company has no assets or liabilities classified as held for sale as of March 31, 2018. 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 held for sale in the consolidated balance sheet at September 30, 2017:



	At September 30, 2017
ASSETS
Accounts receivable, net	$	51,768
Inventories, net	45,742
Prepaid and other current assets	11,000
PROPERTY, PLANT AND EQUIPMENT, net	185,940
GOODWILL	57,087
INTANGIBLE ASSETS, net	12,298
OTHER ASSETS	6,889
Total Assets Held for Sale	370,724
LIABILITIES
Notes payable and current portion of long-term debt	$	11,163
Accounts payable	36,619
Accrued liabilities	14,553
LONG-TERM DEBT, net	10,549
OTHER LIABILITIES	11,566
Total Liabilities Held for Sale	$	84,450

In connection with the sale transaction, the Company recorded liabilities of $46,968 as of March 31, 2018 primarily for income taxes payable, stay and transaction bonuses, and other remaining accrued liabilities.

On September 5, 2017, Griffon entered into an engagement letter with Goldman Sachs pursuant to which Goldman Sachs agreed to act as Griffon’s financial advisor in connection with the exploration of strategic alternatives for Clopay Plastics. On November 15, 2017, Griffon signed an agreement to sell Clopay Plastics for $475,000 to Berry Global Group, Inc. Griffon subsequently paid a customary financial advisory fee to Goldman Sachs under the terms of this engagement letter upon closing of the transaction.

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 and six months ended March 31, 2018 and 2017.

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 March 31, 2018		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	$	3,807	$	8,342
Other long-term liabilities	5,177		3,037
Total liabilities of discontinued operations not held for sale	$	8,984	$	11,379

There was no Installation Services revenue or income for the quarter ended March 31, 2018 or 2017.