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DISCONTINUED OPERATIONS
 12 Months Ended
Dec. 31, 2016
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS
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 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
 
2016
 
2015
 
2014
Net sales (1)
$
—

 
$
762

 
$
1,515

Cost of sales (1)
—

 
603

 
1,188

Gross profit (1)
—

 
159

 
327

Selling, general and administrative expenses (1)
—

 
148

 
259

Income from discontinued operations
$
—

 
$
11

 
$
68

Other discontinued operations results:
 

 
 

 
 

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

 
(1
)
 
(6
)
Income before income tax
—

 
10

 
62

Income tax expense (3)
—

 
(12
)
 
(27
)
(Loss) income from discontinued operations, net
$
—

 
$
(2
)
 
$
35

                                                         
(1)
Net sales, cost of sales, gross profit, and selling, general and administrative expenses reflect the results of TopBuild.
(2)
Included in loss on disposal of discontinued operations, net in 2014 are additional costs and charges related to the 2013 sale of Tvilum, our Danish ready-to-assemble cabinet business.
(3)
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.
Other selected financial information for TopBuild during the period owned by us, was as follows, in millions:
 
Year Ended December 31
 
2016
 
2015
 
2014
Depreciation and amortization
$
—

 
$
6

 
$
26

Capital expenditures
$
—

 
$
7

 
$
13

We did not have any assets or liabilities related to discontinued operations at either December 31, 2016 or 2015.
In conjunction with the spin off, we entered into a Transition Services Agreement with TopBuild under which we provided administrative services to TopBuild subsequent to the separation. This agreement terminated on June 30, 2016. The fees for services rendered under the Transition Services Agreement are not material to our results of operations.