Discontinued Operations

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

The presentation of discontinued operations includes a component or group of components that we have or intend to dispose of, and represents a strategic shift that has (or will have) a major effect on our operations and financial results.  For spin off transactions, discontinued operations treatment is appropriate following the completion of the spin off.

On September 30, 2014, we announced a plan to spin off 100 percent of our Installation and Other Services businesses into an independent, publicly-traded company named TopBuild Corp. (“TopBuild”) through a tax-free distribution of the stock of TopBuild to our stockholders.  We initiated the spin off as TopBuild was no longer considered core to our long-term growth strategy in branded building products. We completed the spin off on June 30, 2015 at which time we accounted for it as a discontinued operation. Gains from this discontinued operation were included in income from discontinued operations, net, in the condensed consolidated statement of operations for the three months ended March 31, 2015.

The major classes of line items constituting income from discontinued operations, net, in millions:

	Three Months Ended March 31,
	2016		2015
Net sales	$	—	$	358
Cost of sales	—		285
Gross profit	—		73
Selling, general and administrative expenses	—		68
Income from discontinued operations	$	—	$	5
Income tax expense	—		(2		)
Income from discontinued operations, net	$	—	$	3

Other selected financial information for TopBuild during the period owned by us was as follows, in millions:

	Three Months Ended March 31,
	2016		2015
Depreciation and amortization	$	—	$	3
Capital expenditures	$	—	$	2

In conjunction with the spin off, we entered into a Transition Services Agreement with TopBuild to provide TopBuild administrative services subsequent to the separation.  The fees for services rendered under the Transition Services Agreement are not material to our results of operations.