DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

3 Months Ended

Mar. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

DISCONTINUED OPERATIONS, ASSETS AND LIABILITIES HELD FOR SALE AND DIVESTITURES

Discontinued Operations

On December 17, 2015, the Company entered into definitive agreements with affiliates controlled by Cerberus Capital Management, L.P. ("Cerberus"). The agreements include an investment agreement providing for a $435.0 investment by Cleveland Apple Investor L.P. ("Cerberus Investor") (an affiliate of Cerberus) in the Company through the purchase of perpetual convertible preferred stock (see Note 6, Related Party Transactions) and a separation and investment agreement providing for the separation of the Company's North America business, which represented the Company's operations in the United States, Canada and Puerto Rico, from the Company into New Avon LLC ("New Avon"), a privately-held company that is majority-owned and managed by Cerberus NA Investor LLC (an affiliate of Cerberus). These transactions closed on March 1, 2016.

The Company incurred costs during the three months ended March 31, 2019 following the resolution of certain contingent liabilities related to its ownership and operation of the North America business prior to its separation into New Avon. These costs are reported as discontinued operations related to New Avon.

The major classes of financial statement components comprising the loss on discontinued operations, net of tax for New Avon are shown below:

	Three Months Ended March 31, 2019
Selling, general and administrative expenses	9.5
Operating loss	(9.5	)
Loss from discontinued operations, net of tax	(9.5	)

There were no amounts recorded in discontinued operations for the three months ended March 31, 2018. See Note 21, Subsequent Events, for additional information relating to New Avon.

Assets and Liabilities Held for Sale

The major classes of assets and liabilities comprising Held for sale assets and Held for sale liabilities on the Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 are shown in the following table.

	March 31, 2019
	Rye Office		Malaysia Maximin		Total
Current Held for sale assets
Property, Plant & Equipment (net)	$	12.5	$	3.1	$	15.6
Other assets	—		.1		.1
	$	12.5	$	3.2	$	15.7
Current Held for sale liabilities
Other liabilities	$	—	$	.1	$	.1
	$	—	$	.1	$	.1

	December 31, 2018
	Avon Manufacturing (Guangzhou)		Rye Office		Malaysia Maximin		Total
Current held for sale assets
Inventories	$	8.7	$	—	$	—	$	8.7
Property, Plant & Equipment (net)	36.7		12.3		3.0		52.0
Cash and cash equivalents	3.7		—		—		3.7
Other assets	1.1		—		.1		1.2
	$	50.2	$	12.3	$	3.1	$	65.6
Current held for sale liabilities
Accounts payable	8.6		—		—		8.6
Other liabilities	2.6		—		.2		2.8
	$	11.2	$	—	$	.2	$	11.4

Refer to Divestitures section below for sale of Avon Manufacturing (Guangzhou).

Rye Office

In February 2019, we signed an agreement to sell the Rye office. As negotiations progressed, we refined the calculation for the held for sale assets which gave rise to an additional $0.2 in assets.

The due diligence process has been ongoing during the first quarter of 2019 and we expect this transaction to close during the second quarter of 2019.

Malaysia Maximin

In February 2019, we signed an agreement to sell Malaysia Maximin. The Company is finalizing certain due diligence items and expects this transaction to close during the second quarter of 2019.

Divestitures - China manufacturing

On February 15, 2019, we completed the sale to TheFaceShop Co., Ltd., an affiliate of LG Household & Health Care Ltd., of all of the equity interests in Avon Manufacturing (Guangzhou), Ltd. for a total purchase price of $71.0, less expenses of approximately $1.1; the purchase price included $23.5 relating to outstanding intercompany loans payable to Avon Manufacturing (Guangzhou), Ltd. from other Avon subsidiaries. As of March 31, 2019, the Company had received the gross cash proceeds of $71.0 (which included $24.6 of restricted cash, refer to Note 4, Restricted Cash) but had not yet settled the loans of $23.5. The net cash proceeds of $46.4, net of loan amounts, are presented as investing activities in the Consolidated Statement of Cash Flows. The proceeds to cover settlement of the loans are presented within debt, net as financing activities in the Consolidated Statement of Cash Flows. The loans were subsequently settled in April 2019. Further, $15.8 of the restricted cash balance of $24.6 was transferred from escrow into the Company's bank account in April 2019.

In the first quarter of 2019, we recorded a gain on sale of $10.3 before tax, which is reported separately in the Consolidated Statements of Operations, and $8.2 after tax, representing the difference between the proceeds, including the settlement of the intercompany loans, and the carrying value of Avon Manufacturing (Guangzhou), Ltd. on the date of sale.

Refer to Note 4, Restricted Cash, for the reporting of the proceeds related to this sale.