Discontinued Operations and Divestitures

12 Months Ended

Dec. 31, 2015

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 were party to certain commercial agreements with WhiteWave, we have determined that the cash flows generated by these agreements, which ended in 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, 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, 2015 and December 31, 2014, 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 Foods ("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, 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 year ended December 31, 2013:

	Year Ended December 31, 2013
	WhiteWave				Morningstar			Total
	(In thousands)
Operations:
Net sales	$	940,431			$	5,919		$	946,350
Income (loss) before income taxes	57,126				(28		)	57,098
Income tax (expense) benefit	(54,306		)	(1)	11			(54,295		)
Net income (loss)	$	2,820			$	(17	)	$	2,803

(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 year ended December 31, 2013:

	Year Ended December 31, 2013
	(in thousands)
WhiteWave	$	12,464
Morningstar	437
Total	$	12,901

During the years ended December 31, 2015, 2014 and 2013, 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, 2015, we recognized net losses from discontinued operations of $1.1 million from the finalization of certain pre-separation tax items related to WhiteWave and net gains on the sale of discontinued operations, net of tax, of $0.7 million, primarily from favorable taxing authority settlements related to Morningstar.