XML 47 R9.htm IDEA: XBRL DOCUMENT v3.3.1.900
DISCONTINUED OPERATIONS
 12 Months Ended
Dec. 31, 2015
DISCONTINUED OPERATIONS  
DISCONTINUED OPERATIONS

B. DISCONTINUED OPERATIONS 

        The presentation of discontinued operations includes a component or group of components that we have or intend to dispose of, and represents a strategic shift that has (or will have) a major effect on our operations and financial results. For spin off transactions, discontinued operations treatment is appropriate following the completion of the spin off.

        On September 30, 2014, we announced a plan to spin off 100 percent of our Installation and Other Services businesses into an independent, publicly-traded company named TopBuild Corp. ("TopBuild") through a tax-free distribution of the stock of TopBuild to our stockholders. We initiated the spin off as TopBuild was no longer considered core to our long-term growth strategy in branded building products. On June 30, 2015, immediately prior to the effective time of the spin off, TopBuild paid a cash distribution to us of $200 million using the proceeds of its new debt financing arrangement. This transaction was reported as a financing activity in the consolidated statements of cash flows.

        We have accounted for the spin off of TopBuild as a discontinued operation. (Losses) gains from this discontinued operation were included in (loss) income from discontinued operations, net, in the consolidated statements of operations.

        In February 2013, we determined that Tvilum, our Danish ready-to-assemble cabinet business, was no longer core to our long-term growth strategy and, accordingly, we embarked on a plan for disposition. In December 2013, we completed the disposition of this business and a related Danish holding company for net proceeds of $17 million.

        We have accounted for Tvilum as a discontinued operation. Losses from this discontinued operation were included in (loss) income from discontinued operations, net, in the consolidated statements of operations.

        The major classes of line items constituting pre-tax (loss) profit of the discontinued operations, in millions:

                                                                                                                                                                                    

 

 

Year Ended December 31

 

 

 

2015

 

2014

 

2013

 

Net sales (1)

 

$
762

 

$
1,515

 

$
1,412

 

Cost of sales (1)

 

 
603

 

 
1,188

 

 
1,116

 

​

​

​  

​  

​

​  

​  

​

​  

​  

​

Gross profit (1)

 

 
159

 

 
327

 

 
296

 

Selling, general and administrative expenses (1)

 

 
148

 

 
259

 

 
232

 

​

​

​  

​  

​

​  

​  

​

​  

​  

​

Income from discontinued operations

 

$
11

 

$
68

 

$
64

 

Other discontinued operations results:

 

 


 

 

 


 

 

 


 

 

(Loss) gain on disposal of discontinued operations, net (2)

 

 
(1

)

 
(6

)

 
3

 

Operating loss from discontinued operations (3)

 

 

—

 

 

—

 

 
(7

)

Impairment of assets held for sale (4)

 

 

—

 

 

—

 

 
(10

)

​

​

​  

​  

​

​  

​  

​

​  

​  

​

Income before income tax

 

 
10

 

 
62

 

 
50

 

Income tax expense (5)

 

 
(12

)

 
(27

)

 
(21

)

​

​

​  

​  

​

​  

​  

​

​  

​  

​

(Loss) income from discontinued operations, net

 

$
(2

)

$
35

 

$
29

 

​

​

​  

​  

​

​  

​  

​

​  

​  

​

​

​

​  

​  

​

​  

​  

​

​  

​  

​

 

 

(1)          

Net sales, cost of sales, gross profit, and selling, general and administrative expenses reflect the results of TopBuild.

(2)          

Included in (loss) gain on disposal of discontinued operations, net in 2014 are additional costs and charges related to the 2013 sale of Tvilum.

(3)          

Operating loss from discontinued operations reflects the results of Tvilum, including net sales of $265 million in 2013.

(4)          

Included in impairment of assets held for sale in 2013 is the impairment of fixed assets. During 2013, we estimated the fair value of the Tvilum business held for sale, using unobservable inputs (Level 3). After considering the currency translation gains reported in accumulated other comprehensive income (loss), we recorded an impairment of $10 million in 2013.

(5)          

The unusual relationship between income tax expense and income before income tax for 2015 resulted primarily from certain non-deductible transaction costs related to the spin off of TopBuild.

 

        The carrying amount of major classes of assets and liabilities included as part of the TopBuild discontinued operations, in millions:

                                                                                                                                                                                    

 

 

At December 31,

 

 

 

2015

 

2014

 

Cash

 

$

—

 

$
4 

 

Receivables

 

 

—

 

 
220 

 

Inventories

 

 

—

 

 
107 

 

Prepaid expenses and other

 

 

—

 

 
4 

 

Property and equipment, net

 

 

—

 

 
93 

 

Goodwill

 

 

—

 

 
1,044 

 

Other intangible assets, net

 

 

—

 

 
3 

 

Other assets

 

 

—

 

 
1 

 

​

​

​  

​  

​

​  

​  

​

Total assets classified as held for sale

 

$

—

 

$
1,476 

 

​

​

​  

​  

​

​  

​  

​

​

​

​  

​  

​

​  

​  

​

Accounts payable

 

 

—

 

$
229 

 

Accrued liabilities

 

 

—

 

 
71 

 

Other liabilities

 

 

—

 

 
40 

 

Deferred income taxes

 

 

—

 

 
129 

 

​

​

​  

​  

​

​  

​  

​

Total liabilities classified as held for sale

 

$

—

 

$
469 

 

​

​

​  

​  

​

​  

​  

​

​

​

​  

​  

​

​  

​  

​

        Other selected financial information for TopBuild during the period owned by us, were as follows, in millions:

                                                                                                                                                                                    

 

 

Year Ended Dec. 31

 

 

 

2015

 

2014

 

2013

 

Depreciation and amortization

 

$
6 

 

$
26 

 

$
27 

 

Capital expenditures

 

$
7 

 

$
13 

 

$
14 

 

        In conjunction with the spin off, we have entered into a Transition Services Agreement with TopBuild to provide TopBuild administrative services subsequent to the separation. The fees for services rendered under the Transition Services Agreement are not expected to be material to our results of operations.