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Discontinued Operations | 12 Months Ended
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Dec. 31, 2015
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | DISCONTINUED OPERATIONS The Company recorded a net loss from discontinued operations and disposal of $2.3 million in the year ended December 31, 2015. The net loss was primarily driven by tax expense associated with recording a net deferred tax liability of $6.3 million, partially offset by net income generated by the Fire Rescue Group, which was discontinued in 2015, and the receipt of funds from the escrow associated with the 2012 sale of the Company’s former Federal Signal Technologies Group (“FSTech”). In each of the years ended December 31, 2014 and 2013, the Company recorded net gains from discontinued operations and disposal of $4.0 million and $7.5 million, respectively. The net gains in each period were primarily driven by net income generated by the Fire Rescue Group, as well as adjustments of estimated product liability obligations of previously discontinued businesses, resulting from updated actuarial valuations. The activity of the Company’s discontinued operations in each of the years ended December 31, 2015, 2014 and 2013 is described further below: FSTech In connection with the sale of FSTech, $22.0 million was placed into escrow as security for indemnification obligations provided by the Company pursuant to the sale agreement. A significant portion of the escrow identified for general indemnification obligations was held for a period of 18 months following the sale date with the remaining general escrow funds to be held for 36 months following the sale date. In 2014, the Company received $7.4 million from the escrow identified for general indemnification obligations. In the third quarter of 2015, the Company received the remaining general escrow funds of $4.0 million and recorded this income as a component of (Loss) gain from discontinued operations and disposal, net of tax expense of $1.5 million within its Consolidated Statement of Operations for the year ended December 31, 2015. There are no amounts remaining in escrow as of December 31, 2015. Fire Rescue Group On December 11, 2015, the Company announced that it has signed a definitive agreement to sell Bronto to Morita for €80.0 million in cash (approximately $87 million), subject to certain post-closing working capital and net debt adjustments. Prior to sale, Bronto was the only remaining operation in the Company’s Fire Rescue Group, which was previously identified as an operating segment of the Company as defined under ASC 280. Upon completion of the transaction, the Company will no longer operate the Fire Rescue Group, which the Company considers a significant strategic shift in the Company’s operations. In accordance with ASC Topic 360, Impairment and Disposal of Long-Lived Assets, the Company met the held for sale criteria as of December 31, 2015 and the Fire Rescue Group is being presented as a discontinued operation in the Company’s consolidated financial statements. On January 29, 2016, the Company completed the sale, initially receiving proceeds of €76 million in cash (approximately $83 million), with the remaining purchase price expected to be paid, in connection with the payment of the working capital and net debt adjustments, by the end of the second quarter of 2016. Under the terms of the sale, the Company and Morita agreed that the Company will remain in control of negotiations and proceedings relating to the appeal of the ruling issued in the Latvian commercial dispute, discussed further in Note 9 – Legal Proceedings, and also fund the legal costs associated therewith. The Company also agreed to compensate Morita for half of any liability resulting from a final and non-appealable decision of a court of competent jurisdiction, less half of legal fees incurred by the Company between the date or sale and the date of receiving such decision. On December 16, 2015, the Company entered into a foreign currency forward contract to mitigate its foreign exchange exposure related to the receipt of the euro-denominated sales proceeds. The derivative is being marked-to-market on a quarterly basis, with related gains or losses reported in the Company’s Consolidated Statement of Operations. The forward contract had a notional contract value of €76.0 million and a fair value of $0.6 million at December 31, 2015. An asset of $0.6 million has been included as a component of Prepaid expenses and other current assets on the Consolidated Balance Sheet as of December 31, 2015, with a corresponding gain recorded as a component of Other expense, net in the Consolidated Statement of Operations for the year ended December 31, 2015. The fair value of the forward contract was determined using readily available pricing sources for comparable instruments (Level 2 within the fair value hierarchy described within Note 1 – Summary of Significant Accounting Policies). In accordance with ASC 740, a tax liability should be recognized for the excess of the financial reporting basis over the tax basis (or the tax benefit when the tax basis exceeds the financial reporting basis) of an investment in a subsidiary (outside basis difference) when it is apparent that the temporary differences will reverse in the foreseeable future. In connection with presenting the Fire Rescue Group as a discontinued operation as of December 31, 2015, the Company was required to re-evaluate its position related to the recognition of a deferred tax asset or liability for the outside basis differences of the Bronto entities being sold to Morita. In prior years, deferred taxes for such outside basis differences had not been recognized, either because of the Company’s assertion of permanent reinvestment, or because recognition was not required applying one of the exceptions provided for in ASC 740. Due to the pending sale, these exceptions no longer applied at December 31, 2015, as the outside basis differences were expected to reverse in the foreseeable future. As a result, a net deferred tax liability of $6.3 million was recorded as a component of long-term liabilities of discontinued operations as of December 31, 2015. After recognition of the accumulated foreign currency translation loss attributable to the Fire Rescue Group, as described in Note 12 – Stockholders’ Equity, the actuarial losses described in Note 7 – Pensions, as well as applicable income tax expense, the Company anticipates recognizing a modest net gain on disposal of the Fire Rescue Group upon closing the transaction in the first quarter of 2016. The following table presents the operating results of the Company’s discontinued Fire Rescue Group for each of the three years in the period ended December 31, 2015:
(in millions) | 2015 |  | 2014 |  | 2013
Net sales | $ | 100.0 |  |  | $ | 139.4 |  |  | $ | 138.4 |
Cost of sales | 80.8 |  |  | 114.8 |  |  | 109.3 |
Gross profit | 19.2 |  |  | 24.6 |  |  | 29.1 |
Selling, engineering, general and administrative expenses | 17.1 |  |  | 20.7 |  |  | 20.1 |
Restructuring | 0.8 |  |  | — |  |  | — |
Operating income | 1.3 |  |  | 3.9 |  |  | 9.0 |
Interest expense (income), net | — |  |  | 0.2 |  |  | (0.1 | )
Other expense (income), net | (0.2 | ) |  | (0.2 | ) |  | — |
Income before income taxes | 1.5 |  |  | 3.9 |  |  | 9.1 |
Income tax expense | 0.3 |  |  | 0.6 |  |  | 1.4 |
Net income from operations | $ | 1.2 |  |  | $ | 3.3 |  |  | $ | 7.7 |
Assets and liabilities of discontinued operations The following table presents the assets and liabilities of the Company’s discontinued operations, which include the Fire Rescue Group, as well as other operations discontinued in prior periods, as of December 31, 2015 and 2014:
| 2015 |  | 2014
(in millions) | Fire Rescue |  | Other |  | Total |  | Fire Rescue |  | Other |  | Total
Cash and cash equivalents | $ | 5.0 |  |  | $ | — |  |  | $ | 5.0 |  |  | $ | 6.3 |  |  | $ | — |  |  | $ | 6.3 |
Accounts receivable, net | 15.5 |  |  | — |  |  | 15.5 |  |  | 34.0 |  |  | — |  |  | 34.0 |
Inventories | 40.4 |  |  | — |  |  | 40.4 |  |  | 33.4 |  |  | — |  |  | 33.4 |
Prepaid expenses | 2.7 |  |  | — |  |  | 2.7 |  |  | 2.4 |  |  | — |  |  | 2.4 |
Other current assets | 0.2 |  |  | — |  |  | 0.2 |  |  | — |  |  | 0.1 |  |  | 0.1 |
Current assets of discontinued operations | $ | 63.8 |  |  | $ | — |  |  | $ | 63.8 |  |  | $ | 76.1 |  |  | $ | 0.1 |  |  | $ | 76.2 |
Properties and equipment, net | $ | 13.4 |  |  | $ | — |  |  | $ | 13.4 |  |  | $ | 16.8 |  |  | $ | — |  |  | $ | 16.8 |
Goodwill | 28.3 |  |  | — |  |  | 28.3 |  |  | 31.1 |  |  | — |  |  | 31.1 |
Deferred tax assets | — |  |  | 1.6 |  |  | 1.6 |  |  | — |  |  | 3.1 |  |  | 3.1 |
Long-term assets of discontinued operations | $ | 41.7 |  |  | $ | 1.6 |  |  | $ | 43.3 |  |  | $ | 47.9 |  |  | $ | 3.1 |  |  | $ | 51.0 |
Accounts payable | $ | 7.3 |  |  | $ | — |  |  | $ | 7.3 |  |  | $ | 9.0 |  |  | $ | — |  |  | $ | 9.0 |
Customer deposits | 10.6 |  |  | — |  |  | 10.6 |  |  | 7.1 |  |  | — |  |  | 7.1 |
Accrued liabilities: |  |  |  |  |  |  |  |  |  |  |
Compensation and withholding taxes | 4.3 |  |  | — |  |  | 4.3 |  |  | 5.6 |  |  | — |  |  | 5.6 |
Other current liabilities | 4.0 |  |  | 2.4 |  |  | 6.4 |  |  | 9.5 |  |  | 1.7 |  |  | 11.2 |
Current liabilities of discontinued operations | $ | 26.2 |  |  | $ | 2.4 |  |  | $ | 28.6 |  |  | $ | 31.2 |  |  | $ | 1.7 |  |  | $ | 32.9 |
Long-term pension and other post-retirement benefit liabilities | $ | 0.7 |  |  | $ | — |  |  | $ | 0.7 |  |  | $ | 0.9 |  |  | $ | — |  |  | $ | 0.9 |
Other long-term liabilities | 5.5 |  |  | 9.1 |  |  | 14.6 |  |  | 4.9 |  |  | 5.0 |  |  | 9.9 |
Long-term liabilities of discontinued operations | $ | 6.2 |  |  | $ | 9.1 |  |  | $ | 15.3 |  |  | $ | 5.8 |  |  | $ | 5.0 |  |  | $ | 10.8 |
The Company retains certain liabilities for other operations discontinued in prior periods, primarily for environmental remediation and product liability. Included in liabilities of discontinued operations at December 31, 2015 and 2014 is $0.9 million and $1.3 million, respectively, related to environmental remediation at the Pearland, Texas facility, and $2.3 million and $3.0 million, respectively, relating to estimated product liability obligations of the discontinued North American refuse truck body business. Long-term assets of discontinued operations at December 31, 2015 and 2014 include gross deferred tax assets of $3.5 million and $4.2 million, respectively, offset by a full valuation allowance. These assets primarily relate to Canadian net operating loss carryforwards that were largely generated by the discontinued North American refuse truck body business. These net operating loss carryforwards begin to expire in 2026. As it is currently not considered more likely than not that such deferred tax assets will be realized, a full valuation allowance has been recorded, such that the net deferred tax assets included assets of discontinued operations is zero at December 31, 2015 and 2014. However, tax planning strategies or acquisitions may result in these assets being realized as part of the Company’s continuing operations in future periods.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721533-107759 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721665-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5C -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51719941&loc=SL51724579-110230 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721663-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51719941&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721673-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721659-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721671-107760 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5D -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721677-107760 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1474-107760 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721683-107760 + Details
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