Discontinued Operations and Divestitures

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Divestitures

DISCONTINUED OPERATIONS AND DIVESTITURES

WhiteWave and Morningstar

WhiteWave Spin-Off — As discussed in Note 2, on May 23, 2013, we completed the WhiteWave spin-off through a tax-free distribution to our stockholders. Following the WhiteWave spin-off, we retained 34.4 million shares of WhiteWave’s Class A common stock, or approximately 19.9% of WhiteWave’s economic interest. While we are a party to certain commercial agreements with WhiteWave, we have determined that the continuing cash flows generated by these agreements (which are not expected to extend beyond June 2015) and the retention and subsequent monetization of our investment in WhiteWave common stock in July 2013 as discussed in Note 2 and below, did not constitute significant continuing involvement in the operations of WhiteWave. Accordingly, the net assets, operating results and cash flows of WhiteWave have been reclassified to discontinued operations for all periods presented herein.

From January 1, 2013 through May 23, 2013 (the date of the WhiteWave spin-off), our net sales to WhiteWave totaled $10.3 million and our purchases from WhiteWave totaled $33.2 million. These transactions, which were previously eliminated in consolidation prior to the spin-off, are now reflected as third-party transactions in our Consolidated Statements of Operations. At December 31, 2014 and December 31, 2013, accounts receivable from, and accounts payable to, WhiteWave are presented as third-party balances in our Consolidated Balance Sheets.

Morningstar Divestiture — The sale of Morningstar closed on January 3, 2013 and we received net proceeds of approximately $1.45 billion. We recorded a gain of $868.8 million ($491.9 million, net of tax) on the sale of Morningstar during the year ended December 31, 2013, which excludes $22.9 million of transaction costs recognized in discontinued operations during the year ended December 31, 2012. Accordingly, the net assets, operating results and cash flows of Morningstar have been reclassified to discontinued operations for all periods presented herein.

The following is a summary of operating results and certain other directly attributable expenses, including interest expense, which are included in discontinued operations for the years ended December 31, 2013 and 2012:

	Year Ended December 31,
	2013										2012
	WhiteWave				Morningstar			Total			WhiteWave			Morningstar			Total
	(In thousands)
Operations:
Net sales	$	940,431			$	5,919		$	946,350		$	2,187,615		$	1,438,371		$	3,625,986
Income (loss) before income taxes	57,126				(28		)	57,098			152,164			69,513			221,677
Income tax (expense) benefit	(54,306		)	(1)	11			(54,295		)	(58,566		)	(23,832		)	(82,398		)
Net income (loss)	$	2,820			$	(17	)	$	2,803		$	93,598		$	45,681		$	139,279

(1) The income tax expense attributable to WhiteWave during the year ended December 31, 2013 includes approximately $31.1 million related to certain deferred intercompany transactions which were recognized upon the completion of the WhiteWave spin-off. Because these liabilities arose as a direct result of the spin-off of WhiteWave, we have reflected the income statement impact of such liabilities as a component of discontinued operations.

The following is a summary of directly attributable transaction expenses which are included in discontinued operations for the years ended December 31, 2013 and 2012:

	Year Ended December 31,
	(in thousands)
	2013		2012
WhiteWave	$	12,464	$	18,835
Morningstar	437		22,875
Total	$	12,901	$	41,710

During the years ended December 31, 2014, 2013 and 2012 we incurred an immaterial amount of expense related to other transactional activities, which is recorded in general and administrative expenses in our Consolidated Statements of Operations.

During the year ended December 31, 2014, we recognized net losses from discontinued operations of $0.7 million from the finalization of certain pre-separation tax items related to WhiteWave.

During the year ended December 31, 2014, we recognized net gains on the sale of discontinued operations, net of tax, of $0.5 million, from favorable taxing authority settlements related to Morningstar and other prior discontinued operations.

Other Activity in Discontinued Operations

In July 2012, pursuant to a settlement reached with respect to certain contingent obligations that we retained in connection with the 2006 sale of our Iberian operations, we paid a total of €5.7 million ($7.2 million), which was inclusive of accrued interest and related fees and expenses, and incurred charges of $2.5 million, net of tax, which were in addition to amounts we had previously accrued in connection with these contingent obligations. The additional charges recorded during 2012 were included in gain (loss) on sale of discontinued operations, net of tax in our Consolidated Statements of Operations.