XML 22 R12.htm IDEA: XBRL DOCUMENT v3.22.2
Divestitures and Discontinued Operations
 6 Months Ended
Jun. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]  
Divestitures and Discontinued Operations Divestitures and Discontinued Operations
2021 Divestitures.
In an effort to more strategically allocate the Company’s resources, the Company sold its Global Electric Motorcar (“GEM”) and Taylor-Dunn businesses on December 31, 2021. The sale resulted in a loss of $36.8 million. The 2021 financial results of these businesses are reflected in the Corporate segment.
2022 Divestitures.
In June 2022, the Company entered into a definitive agreement to sell Transamerican Auto Parts (“TAP”), an aftermarket parts business. TAP is a vertically integrated manufacturer, distributor, retailer, and installer of off-road Jeep and truck parts and accessories. The transaction includes TAP’s full portfolio of operations, including all brands, product lines, manufacturing operations, distribution facilities, more than 100 4 Wheel Parts retail locations, and more than 1,700 TAP employees.
The results of TAP have been presented as discontinued operations and the related assets and liabilities have been classified as held for sale for all periods presented. As a result, an impairment of $187.8 million was recorded to adjust TAP’s assets and liabilities to fair value less costs to sell. The impairment resulted in a $45.6 million income tax benefit (deferred tax asset). As of June 30, 2022, the fair value of the assets and liabilities held for sale were measured based on a purchase offer, which is considered a Level 3 input in the fair value hierarchy.
TAP was historically included within the Company’s Aftermarket segment; however, as a result of the planned divestiture the Company began management of its portfolio of businesses under a new basis as of June 30, 2022. The Aftermarket segment was eliminated and the results of the Company’s remaining aftermarket businesses historically included within the Aftermarket segment were reclassified to the Off-Road and On-Road segments. The comparative 2021 segment results were reclassified for comparability.
The sale was completed on July 1, 2022 for a sales price of $50.0 million, subject to customary post-closing purchase price adjustments.
Results of discontinued operations were as follows (in millions):
Three months ended June 30,Six months ended June 30,
2022202120222021
Sales $173.9 $206.2 $349.3 $399.4 
Cost of sales 131.0 152.2 262.9 296.7 
Other costs and expenses48.5 49.9 97.5 97.4 
Income (loss) from discontinued operations before income taxes (5.6)4.1 (11.1)5.3 
Income tax expense (benefit)(1.4)0.8 (2.7)0.9 
Income (loss) from discontinued operations, net of tax(4.2)3.3 (8.4)4.4 
Impairment of discontinued operations187.8 — 187.8 — 
Provision for income taxes(45.6)— (45.6)— 
Impairment of discontinued operations, net of tax142.2 — 142.2 — 
Net income (loss) from discontinued operations$(146.4)$3.3 $(150.6)$4.4 
The carrying amounts of major classes of assets and liabilities of discontinued operations were as follows (in millions):
June 30, 2022December 31, 2021
Cash$9.5 $6.9 
Trade receivables7.8 12.6 
Inventories, net141.5 134.1 
Other current assets9.4 9.6 
Current assets held for sale$168.2 $163.2 
Property and equipment, net$47.1 $47.7 
Intangible assets, net98.5 102.3 
Operating lease assets77.8 74.8 
Other long-term assets1.7 1.2 
Valuation allowance on disposal group classified as discontinued operations$(187.8)$— 
Long-term assets held for sale$37.3 $226.0 
Accounts payable$16.4 $21.5 
Accrued expenses and other current liabilities57.2 66.5 
Current operating lease liabilities20.7 19.8 
Current liabilities held for sale$94.3 $107.8 
Long-term operating lease liabilities$59.3 $57.2 
Other long-term liabilities8.9 8.9 
Long-term liabilities held for sale$68.2 $66.1