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Discontinued Operations | 3 Months Ended
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Mar. 31, 2017
Discontinued Operations And Disposal Groups [Abstract] |
Discontinued Operations | Note 3 Discontinued Operations On March 25, 2017, we entered into a definitive agreement to sell our Diversey Care division and the food hygiene and cleaning business within our Food Care division for gross proceeds of USD equivalent $3.2 billion, subject to customary closing conditions. The transaction is expected to be completed in the third quarter of 2017. The transaction is expected to generate approximately $2.5 billion in net cash, on an after tax basis. We intend to use the cash generated from this transaction to repay debt and maintain our credit profile, repurchase shares to minimize earnings dilution, and fund core growth initiatives, including potential complementary acquisitions to our Food Care and Product Care divisions. The sale of Diversey will allow us to enhance our strategic focus on the Food Care and Product Care divisions and simplify our operating structure. We have classified the operating results from this business, together with certain costs related to the divestiture transaction, as discontinued operations, net of tax, in the condensed consolidated statements of operations for the three months March 31, 2017 and 2016. Assets and liabilities of this business are classified as “held for sale” in the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016. Summary operating results of Diversey were as follows:
|  | Three Months Ended |
|  | March 31, |
(In millions) |  | 2017 |  |  | 2016 |
Net sales |  | $ | 581.7 |  |  | $ | 584.7 |
Cost of sales |  |  | 330.5 |  |  |  | 330.9 |
Gross profit |  |  | 251.2 |  |  |  | 253.8 |
Selling, general and administrative expenses |  |  | 198.9 |  |  |  | 211.4 |
Amortization expense of intangible assets acquired |  |  | 17.7 |  |  |  | 18.7 |
Operating profit |  |  | 34.6 |  |  |  | 23.7 |
Other expense, net |  |  | (2.9 | ) |  |  | (4.0 | )
Earnings from discontinued operations before income tax provision (benefit) |  |  | 31.7 |  |  |  | 19.7 |
Income tax provision (benefit) |  |  | 21.1 |  |  |  | (7.8 | )
Net earnings from discontinued operations |  | $ | 10.6 |  |  | $ | 27.5 |
For the three months ended March 31, 2017, net earnings from discontinued operations was negatively impacted by $19.5 million of tax expense related to a change in the repatriation strategy of foreign earnings. For the three months ended March 31, 2016, net earnings from discontinued operations was favorably impacted by $9.3 million primarily from a benefit related to repatriation strategy and the release of reserves. The carrying value of the major classes of assets and liabilities of Diversey were as follows:
|  | March 31, |  |  | December 31, |
(In millions) |  | 2017 |  |  | 2016 |
Assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 30.0 |  |  | $ | 30.0 |
Receivables, net |  |  | 436.2 |  |  |  | 438.2 |
Inventories |  |  | 227.9 |  |  |  | 203.2 |
Other receivables |  |  | 82.8 |  |  |  | 70.3 |
Prepaid expenses and other current assets |  |  | 87.8 |  |  |  | 80.6 |
Property and equipment, net |  |  | 172.6 |  |  |  | 170.6 |
Goodwill |  |  | 986.8 |  |  |  | 972.8 |
Intangible assets, net |  |  | 653.9 |  |  |  | 669.9 |
Non-current deferred tax assets |  |  | 43.0 |  |  |  | 50.7 |
Other non-current assets |  |  | 167.4 |  |  |  | 162.0 |
Total assets held for sale |  | $ | 2,888.4 |  |  | $ | 2,848.3 |
Liabilities: |  |  |  |  |  |  |  |
Short-term borrowings |  | $ | 20.6 |  |  | $ | 9.6 |
Current portion of long-term debt |  |  | 30.5 |  |  |  | 31.1 |
Accounts payable |  |  | 359.9 |  |  |  | 346.5 |
Other current liabilities |  |  | 260.0 |  |  |  | 296.1 |
Long term debt |  |  | 175.5 |  |  |  | 175.7 |
Deferred tax liabilities |  |  | 107.7 |  |  |  | 56.3 |
Other non-current liabilities |  |  | 261.2 |  |  |  | 269.0 |
Total liabilities held for sale |  | $ | 1,215.4 |  |  | $ | 1,184.3 |
The following table presents selected financial information regarding cash flows of Diversey that are included within discontinued operations in the consolidated statements of cash flows:
|  | Three Months Ended |
|  | March 31, |
(In millions) |  | 2017 |  |  | 2016 |
Non-cash items included in net earnings from discontinued operations: |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 23.4 |  |  | $ | 25.7 |
Share-based incentive compensation |  |  | 3.3 |  |  |  | 2.8 |
Profit sharing expense |  |  | 1.0 |  |  |  | 0.8 |
Provision for bad debt |  |  | 1.3 |  |  |  | 1.4 |
Capital expenditures |  |  | 3.4 |  |  |  | 7.8 |
The amounts disclosed in the tables above have been excluded from disclosures unless otherwise noted. Acquisitions On April 1, 2017 the Diversey Care division acquired the UVC disinfection portfolio of Daylight Medical, a manufacturer of innovative medical devices. The preliminary fair value of the consideration transferred was approximately $28.7 million which included $3.5 million of cash paid at closing as well as a preliminary fair value of $25.2 milllion related to noncontingent considerations which will be paid in the future and a preliminary fair value for liability-classified contingent consideration . The assets and liabilities acquired as part of the acquisition will be classified as held for sale on the Condensed Consolidated Balance Sheet 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=65878427&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=64827811&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=64827811&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=64862545&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=64827811&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=64862545&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=64827811&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=64827811&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=64827811&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=64827811&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=64827811&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=64827811&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=64827811&loc=SL51721683-107760 + Details
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