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Discontinued Operations | 6 Months Ended
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Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 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 of $3.2 billion, subject to customary closing conditions. The transaction is expected to be completed in the third quarter of 2017 and 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 and six months June 30, 2017 and 2016. Assets and liabilities of this business are classified as “held for sale” in the Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016. Summary operating results of Diversey were as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
(In millions) |  | 2017 |  | 2016 |  | 2017 |  | 2016
Net sales |  | $ | 651.2 |  |  | $ | 688.1 |  |  | $ | 1,232.9 |  |  | $ | 1,272.8 |
Cost of sales |  | 369.9 |  |  | 376.4 |  |  | 700.4 |  |  | 707.3 |
Gross profit |  | 281.3 |  |  | 311.7 |  |  | 532.5 |  |  | 565.5 |
Selling, general and administrative expenses |  | 206.9 |  |  | 216.7 |  |  | 405.8 |  |  | 428.1 |
Amortization expense of intangible assets acquired |  | 21.1 |  |  | 24.0 |  |  | 38.8 |  |  | 42.7 |
Operating profit |  | 53.3 |  |  | 71.0 |  |  | 87.9 |  |  | 94.7 |
Other expense, net |  | (5.1 | ) |  | (2.5 | ) |  | (8.0 | ) |  | (6.5 | )
Earnings from discontinued operations before income tax (benefit) provision |  | 48.2 |  |  | 68.5 |  |  | 79.9 |  |  | 88.2 |
Income tax (benefit) provision from discontinued operations |  | (11.1 | ) |  | 20.5 |  |  | 10.0 |  |  | 12.7 |
Net earnings from discontinued operations |  | $ | 59.3 |  |  | $ | 48.0 |  |  | $ | 69.9 |  |  | $ | 75.5 |
Net sales decreased $36.9 million and $39.9 million for the three and six months ended June 30, 2017, respectively, primarily due to the expiration of the SC Johnson & Son (“SCJ”) licensing agreement as discussed below in the "Recent Events and Trends," section of Management's Discussion and Analysis. Additionally, for the three months and six months ended June 30, 2017, net earnings from discontinued operations was impacted by a $11.1 million benefit and $10.0 million expense, respectively, driven by expense related to a change in the repatriation strategy of foreign earnings offset by a favorable earnings mix in jurisdictions with lower rates. For the three and six months ended June 30, 2016, net earnings from discontinued operations were impacted by expense of $20.5 million and $12.7 million, respectively, primarily from a benefit related to a change in the repatriation strategy of foreign earnings, the release of reserves, and earnings mix in jurisdictions with lower tax rates. The carrying value of the major classes of assets and liabilities of Diversey were as follows:
(In millions) |  | June 30, 2017 |  | December 31, 2016
Assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 30.0 |  |  | $ | 30.0 |
Trade receivables, net |  | 488.1 |  |  | 438.2 |
Inventories |  | 236.6 |  |  | 203.2 |
Other receivables |  | 78.4 |  |  | 70.3 |
Prepaid expenses and other current assets |  | 88.1 |  |  | 80.6 |
Property and equipment, net |  | 178.8 |  |  | 170.6 |
Goodwill |  | 1,022.0 |  |  | 972.8 |
Intangible assets, net |  | 667.3 |  |  | 669.9 |
Deferred taxes |  | 48.0 |  |  | 50.7 |
Other non-current assets |  | 178.4 |  |  | 162.0 |
Total assets held for sale |  | $ | 3,015.7 |  |  | $ | 2,848.3 |
Liabilities: |  |  |  |
Short-term borrowings |  | $ | 22.5 |  |  | $ | 9.6 |
Current portion of long-term debt |  | 30.6 |  |  | 31.1 |
Accounts payable |  | 398.2 |  |  | 346.5 |
Other current liabilities |  | 262.3 |  |  | 296.1 |
Long-term debt |  | 178.9 |  |  | 175.7 |
Deferred taxes |  | 96.0 |  |  | 56.3 |
Other non-current liabilities |  | 305.1 |  |  | 269.0 |
Total liabilities held for sale |  | $ | 1,293.6 |  |  | $ | 1,184.3 |
The following table presents selected financial information regarding cash flows of Diversey that are included within discontinued operations in the Condensed Consolidated Statements of Cash Flows:
|  | Six Months Ended June 30,
(In millions) |  | 2017 |  | 2016
Non-cash items included in net earnings from discontinued operations: |  |  |  |  |  |
Depreciation and amortization |  | $ | 50.3 |  |  | $ | 58.4 |
Share-based incentive compensation |  | 6.0 |  |  | 5.8 |
Profit sharing expense |  | 1.5 |  |  | 2.0 |
Provision for bad debt |  | 1.7 |  |  | 2.4 |
Capital expenditures |  | 9.7 |  |  | 11.8 |
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 $25.2 million which included $3.5 million of cash paid at closing as well as a preliminary fair value of $21.7 million related to $14.4 million of noncontingent consideration which will be paid in the future and a $7.3 million of preliminary fair value for liability-classified contingent consideration. The assets and liabilities acquired as part of the acquisition are classified as held for sale on the Condensed Consolidated Balance Sheets.

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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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