XML 20 R11.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Discontinued Operations, Divestitures and Acquisitions | 9 Months Ended
--- | ---
Sep. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations, Divestitures and Acquisitions | Discontinued Operations, Divestitures and Acquisitions 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 was completed on September 6, 2017. We recorded a net gain on the sale of Diversey of $699.3 million, net of taxes. 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 nine months ended September 30, 2017 and 2016. Assets and liabilities of this business are classified as “held for sale” in the Condensed Consolidated Balance Sheets as of December 31, 2016. Summary operating results of Diversey were as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In millions) |  | 2017 |  | 2016 |  | 2017 |  | 2016
Net sales |  | $ | 434.6 |  |  | $ | 651.5 |  |  | $ | 1,667.5 |  |  | $ | 1,924.4 |
Cost of sales |  | 249.1 |  |  | 368.2 |  |  | 949.5 |  |  | 1,075.6 |
Gross profit |  | 185.5 |  |  | 283.3 |  |  | 718.0 |  |  | 848.8 |
Selling, general and administrative expenses(1) |  | 131.0 |  |  | 206.2 |  |  | 537.8 |  |  | 635.1 |
Amortization expense of intangible assets acquired(1) |  | 7.7 |  |  | 19.3 |  |  | 23.9 |  |  | 62.0 |
Operating profit |  | 46.8 |  |  | 57.8 |  |  | 156.3 |  |  | 151.7 |
Other expense, net |  | (9.0 | ) |  | (2.8 | ) |  | (17.0 | ) |  | (9.4 | )
Earnings from discontinued operations before income tax (benefit) provision(1)(2) |  | 37.8 |  |  | 55.0 |  |  | 139.3 |  |  | 142.3 |
Income tax (benefit) provision from discontinued operations |  | 12.1 |  |  | (44.5 | ) |  | 28.0 |  |  | (31.9 | )
Net earnings from discontinued operations |  | $ | 25.7 |  |  | $ | 99.5 |  |  | $ | 111.3 |  |  | $ | 174.2 |
(1) | For the nine months ended September 30, 2017, there was a revision to net earnings from discontinued operations, net of tax, on the Condensed Consolidated Statement of Operations related to depreciation and amortization on Diversey assets held for sale. As a result, selling, general and administrative expenses decreased $6.1 million, amortization expenses of intangible assets acquired decreased $16.5 million and income tax provision from discontinued operations increased $6.2 million.
(2) | For the three months and nine months ended September 30, 2017, net earnings from discontinued operations was impacted by a tax expense of $12.1 million and $28.0 million, respectively, driven by a change in the repatriation strategy of foreign earnings offset by a favorable earnings mix in jurisdictions with lower rates. For the three and nine months ended September 30, 2016, net earnings from discontinued operations were impacted by tax benefits of $44.5 million and $31.9 million, respectively, primarily related to 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) |  | September 30, 2017 |  | December 31, 2016
Assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | — |  |  | $ | 30.0 |
Trade receivables, net |  | 3.1 |  |  | 438.2 |
Inventories |  | 0.5 |  |  | 203.2 |
Other receivables |  | 11.5 |  |  | 70.3 |
Prepaid expenses and other current assets |  | — |  |  | 80.6 |
Property and equipment, net |  | — |  |  | 170.6 |
Goodwill |  | — |  |  | 972.8 |
Intangible assets, net |  | — |  |  | 669.9 |
Deferred taxes |  | 0.1 |  |  | 50.7 |
Other non-current assets |  | — |  |  | 162.0 |
Total assets held for sale |  | $ | 15.2 |  |  | $ | 2,848.3 |
Liabilities: |  |  |  |
Short-term borrowings |  | $ | — |  |  | $ | 9.6 |
Current portion of long-term debt |  | — |  |  | 31.1 |
Accounts payable |  | — |  |  | 346.5 |
Other current liabilities |  | — |  |  | 296.1 |
Long-term debt |  | — |  |  | 175.7 |
Deferred taxes |  | — |  |  | 56.3 |
Other non-current liabilities |  | — |  |  | 269.0 |
Total liabilities held for sale |  | $ | — |  |  | $ | 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:
|  | Nine Months Ended September 30,
(In millions) |  | 2017 |  | 2016
Non-cash items included in net earnings from discontinued operations: |  |  |  |  |  |
Depreciation and amortization |  | $ | 29.3 |  |  | $ | 85.5 |
Share-based incentive compensation |  | 10.2 |  |  | 9.2 |
Profit sharing expense |  | 3.0 |  |  | 3.5 |
Provision for bad debt |  | 2.3 |  |  | 4.0 |
Capital expenditures |  | 11.9 |  |  | 14.7 |
The amounts disclosed in the tables above have been excluded from disclosures unless otherwise noted. 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 transferred with the sale of Diversey. Divestitures On August 1, 2017, we entered into an agreement to sell our polystyrene food tray business in Guarulhos, Brazil for a gross purchase price of R$24.0 million (or $7.5 million as of September 30, 2017). The closing of the transaction is expected to occur in the fourth quarter of 2017 after certain conditions are met. The purchase price is subject to working capital, cash and debt adjustments. As of September 30, 2017, there was $4.9 million of assets held for sale and $1.8 million of liabilities held for sale on the Condensed Consolidated Balance Sheet. Acquisitions On August 2, 2017, the Food Care division acquired Deltaplam Embalagens Indústria e Comércio Ltda ("Deltaplam"), a family owned and operated Brazilian flexible packaging manufacturer. The preliminary fair value of the consideration transferred was approximately $25.8 million. We recorded the fair value of the assets acquired and liabilities assumed on the acquisition date, which included $8.1 million of goodwill and $7.4 million of intangible assets.

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration