Discontinued Operations

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

WhiteWave and Morningstar

We separated our WhiteWave business from the Company in a series of three transactions: an initial public offering for 13.3% of the WhiteWave common stock in the fourth quarter of 2012; a tax-free spin-off of 66.8% of the WhiteWave common stock in the second quarter of 2013; and a tax-free debt for equity exchange of 19.9% of the WhiteWave common stock in the third quarter of 2013. Refer to our 2013 Annual Report on Form  10-K for more information about the WhiteWave separation. While we are a party to a separation and distribution agreement and various other agreements relating to the separation, including a transitional services agreement, an amended and restated tax matters agreement, an employee matters agreement and certain other commercial agreements, we have determined that the continuing cash flows generated by these agreements (which are not expected to extend beyond December 2014) did not constitute significant continuing involvement in the operations of WhiteWave. Accordingly, the net assets, operating results and cash flows of WhiteWave, previously reported in the WhiteWave segment, were reclassified to discontinued operations beginning in the second quarter of 2013 and have accordingly been separately reflected as discontinued operations for the three months ended March 31, 2013. WhiteWave is a stand-alone public company which separately reports its financial results.

In January 2013, we completed the sale of our Morningstar division to a third party for net proceeds of approximately $1.45 billion. We recorded a gain of $871.3 million ($492.2 million, net of tax) on the sale of Morningstar in the first quarter of 2013. The operating results of our Morningstar division have been included in discontinued operations for the three months ended March 31, 2013.

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 three months ended March 31, 2013:

	WhiteWave			Morningstar			Total
	(In thousands)
Operations:
Net sales	$	586,346		$	5,919		$	592,265
Income before income taxes	37,150			609			37,759
Income tax	(12,875		)	(232		)	(13,107		)
Net income	$	24,275		$	377		$	24,652

Transaction expenses directly attributable to discontinued operations were $3.5 million related to WhiteWave and were included in discontinued operations for the three months ended March 31, 2013. There were no transaction expenses directly attributable to discontinued operations during the three months ended March 31, 2014. There were no transaction expenses during the periods presented related to Morningstar.

Other

During the three months ended March 31, 2014, we recognized a $0.8 million gain, net of tax, from a favorable taxing authority settlement related to prior discontinued operations.