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Discontinued Operations | 9 Months Ended
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Sep. 30, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations The Company concluded that both the 2021 Divestitures and the sale of the Industrial Businesses each represented a strategic shift that will have a major effect on the Company’s operations and financial results. These transactions will greatly reduce the cyclicality and asset intensity of the Company. In addition, the Company will have an improved recurring revenue and higher margin profile. Accordingly, the financial results related to the 2021 Divestitures and Industrial Businesses are presented in the Condensed Consolidated Financial Statements as discontinued operations for all periods presented. Current and non-current assets and liabilities of the 2021 Divestitures and Industrial Businesses are presented in the Condensed Consolidated Balance Sheets as assets and liabilities of discontinued operations classified as held for sale for both periods presented, as applicable. 2021 Divestitures - During 2021, the Company signed definitive agreements to divest our TransCore, Zetec and CIVCO Radiotherapy businesses as described below. •On March 17, 2022, Roper closed on the divestiture of our TransCore business to an affiliate of Singapore Technologies Engineering Ltd., for approximately $2,680.0 in cash. The sale resulted in a pretax gain of $2,073.7 and income tax expense of $550.5, which are reported within “Gain/(loss) on disposition of discontinued operations, net of tax” in the Condensed Consolidated Statements of Earnings. TransCore was previously included in the historical Network Software & Systems reportable segment. •On January 5, 2022, Roper closed on the divestiture of our Zetec business to Eddyfi NDT Inc. for approximately $350.0 in cash. The sale resulted in a pretax gain of $255.3 and income tax expense of $60.9, which are reported within “Gain/(loss) on disposition of discontinued operations, net of tax” in the Condensed Consolidated Statements of Earnings. Zetec was previously included in the historical Process Technologies reportable segment. •On November 1, 2021, Roper closed the divestiture of our CIVCO Radiotherapy business to an affiliate of Blue Wolf Capital Partners LLC. CIVCO Radiotherapy business was previously included in the historical Measurement & Analytical Solutions reportable segment. The following table summarizes the major classes of assets and liabilities related to the discontinued operations of the TransCore, Zetec and CIVCO Radiotherapy businesses, as reported in the Condensed Consolidated Balance Sheets at December 31, 2021:
| December 31, 2021
Accounts receivable, net | $ | 74.7 |
Inventories, net | 47.8 |
Unbilled receivables | 158.2 |
Goodwill | 405.5 |
Other intangible assets, net | 31.0 |
Other current assets | 71.4 |
Current assets held for sale | $ | 788.6 |
Accounts payable | $ | 40.3 |
Accrued compensation | 27.0 |
Deferred taxes | 29.5 |
Other current liabilities | 62.3 |
Current liabilities held for sale | $ | 159.1 |
The following table summarizes the major classes of revenue and expenses constituting net income from discontinued operations attributable to the TransCore, Zetec and CIVCO Radiotherapy businesses:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net revenues | $ | — |  |  | $ | 158.6 |  |  | $ | 100.4 |  |  | $ | 472.1 |
Cost of sales | — |  |  | 91.3 |  |  | 71.2 |  |  | 280.2 |
Gross profit | — |  |  | 67.3 |  |  | 29.2 |  |  | 191.9 |
Selling, general and administrative expenses (1) | — |  |  | 25.6 |  |  | 19.9 |  |  | 87.8 |
Income from operations | — |  |  | 41.7 |  |  | 9.3 |  |  | 104.1 |
Other income (expense), net | — |  |  | 0.2 |  |  | 0.1 |  |  | 1.4 |
Earnings before income taxes (2) | — |  |  | 41.9 |  |  | 9.4 |  |  | 105.5 |
Income taxes | — |  |  | 12.2 |  |  | (6.2) |  |  | 23.4 |
Earnings from discontinued operations, net of tax | — |  |  | 29.7 |  |  | 15.6 |  |  | 82.1 |
Gain on disposition of discontinued operations, net of tax | 1.1 |  |  | — |  |  | 1,707.7 |  |  | — |
Net earnings from discontinued operations | $ | 1.1 |  |  | $ | 29.7 |  |  | $ | 1,723.3 |  |  | $ | 82.1 |
(1) Includes stock-based compensation expense of $1.4 for the three months ended September 30, 2021, and $0.9 and $3.2 for the nine months ended September 30, 2022 and 2021, respectively. Stock-based compensation for discontinued operations was previously reported as a component of unallocated corporate general and administrative expenses. In connection with the sale of TransCore and Zetec, we recognized expense of $4.5 associated with accelerated vesting of share-based awards for the nine months ended September 30, 2022. The charges associated with accelerated vesting were recorded as a component of “Gain on disposition of discontinued operations, net of tax” within the Condensed Consolidated Statements of Earnings. (2) During the three and nine months ended September 30, 2022, there was no depreciation of property, plant and equipment or amortization of intangible assets given the asset classification as held for sale during the period. During the three and nine months ended September 30, 2021 depreciation and amortization was $1.7 and $5.2, respectively. Industrial Businesses - On May 29, 2022, Roper entered into a definitive agreement to sell a 51% majority stake in the Industrial Businesses to affiliates of Clayton, Dubilier & Rice, LLC (“CD&R”). Roper will receive total upfront, pre-tax cash proceeds of approximately $2,600 while retaining a 49% minority equity interest in a new standalone entity, RIPIC Equity LLC (“RIPIC TopCo”). Roper will receive a distribution of $1,775 from RIPIC TopCo, which will be funded by third-party indebtedness of $1,950 on RIPIC TopCo, and $829 of purchase price proceeds related to the 51% majority stake obtained by CD&R in RIPIC TopCo. In addition, Roper shall be entitled to an earnout payment from CD&R of up to $51 million if RIPIC TopCo exceeds a threshold level of earnings before interest, taxes, depreciation and amortization for the year ended December 31, 2022. Roper will also be required to make quarterly payments, directly or indirectly to CD&R, either (i) in cash, with total payments initially equaling approximately $29 million per year on a pre-tax basis, or (ii) in kind through the transfer of Roper’s equity interests in RIPIC TopCo to CD&R, initially representing approximately a 1.7% ownership interest of RIPIC TopCo on an annual basis. The transaction, which is expected to close in the fourth quarter of 2022, is subject to customary closing conditions, including regulatory approvals. The following table summarizes the major classes of assets and liabilities related to the discontinued operations of the Industrial Businesses, as reported in the Condensed Consolidated Balance Sheets:
| September 30, 2022 (1) |  | December 31, 2021
Accounts receivable, net | $ | 163.0 |  |  | $ | 151.8 |
Inventories, net | 146.2 |  |  | 106.9 |
Deferred taxes | 45.3 |  |  | — |
Goodwill | 569.0 |  |  | — |
Other intangible assets, net | 69.3 |  |  | — |
Other current assets | 101.9 |  |  | 30.7 |
Current assets held for sale | $ | 1,094.7 |  |  | $ | 289.4 |
Goodwill | — |  |  | 618.2 |
Other intangible assets, net | — |  |  | 79.4 |
Deferred taxes | — |  |  | 51.1 |
Other assets | — |  |  | 56.2 |
Assets held for sale | $ | — |  |  | $ | 804.9 |
Accounts payable | $ | 64.7 |  |  | $ | 52.5 |
Accrued compensation | 39.0 |  |  | 47.9 |
Deferred revenue | 19.7 |  |  | 23.9 |
Deferred taxes | 12.7 |  |  | — |
Income taxes payable | 10.1 |  |  | 14.7 |
Operating lease liabilities | 34.4 |  |  | — |
Other current liabilities | 39.8 |  |  | 42.0 |
Current liabilities held for sale | $ | 220.4 |  |  | $ | 181.0 |
Deferred taxes | $ | — |  |  | $ | 13.3 |
Noncurrent operating lease liabilities | — |  |  | 24.1 |
Other liabilities | — |  |  | 12.0 |
Liabilities held for sale | $ | — |  |  | $ | 49.4 |
(1) All assets and liabilities held for sale were classified as current as it is probable the sale of the Industrial Businesses will be completed within one year. The following table summarizes the major classes of revenue and expenses constituting net income from discontinued operations attributable to the Industrial Businesses:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Net revenues | $ | 269.0 |  |  | $ | 230.7 |  |  | $ | 770.9 |  |  | $ | 688.3 |
Cost of sales | 126.3 |  |  | 106.3 |  |  | 361.6 |  |  | 316.1 |
Gross profit | 142.7 |  |  | 124.4 |  |  | 409.3 |  |  | 372.2 |
Selling, general and administrative expenses (1) | 78.9 |  |  | 67.8 |  |  | 213.4 |  |  | 193.3 |
Income from operations | 63.8 |  |  | 56.6 |  |  | 195.9 |  |  | 178.9 |
Other income (expense), net | 2.5 |  |  | 0.4 |  |  | 3.6 |  |  | (0.1) |
Earnings before income taxes (2) | 66.3 |  |  | 57.0 |  |  | 199.5 |  |  | 178.8 |
Income taxes | 17.3 |  |  | 8.0 |  |  | 44.8 |  |  | 34.3 |
Earnings from discontinued operations, net of tax | $ | 49.0 |  |  | $ | 49.0 |  |  | $ | 154.7 |  |  | $ | 144.5 |
(1) Certain costs previously reported as a component of unallocated corporate general and administrative expenses have been reclassified to discontinued operations. These costs primarily include stock-based compensation expense of $2.6 and $3.4 for the three months ended September 30, 2022 and 2021, respectively, and $8.1 and $9.4 for the nine months ended September 30, 2022 and 2021, respectively. (2) During the three months ended September 30, 2022, there was no depreciation of property, plant and equipment or amortization of intangible assets given the asset classification as held for sale during the period. There was depreciation and amortization expense of $4.4 for the three months ended September 30, 2021 and $6.4 and $14.2 for the nine months ended September 30, 2022 and 2021, respectively.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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