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Divestitures and Held for Sale | 12 Months Ended
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Dec. 31, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Divestitures and Held for Sale | DIVESTITURES AND HELD FOR SALE Embraco Sale Transaction On April 23, 2018, our Board of Directors approved the sale of Embraco and we subsequently entered into an agreement to sell the compressor business for a cash purchase price of $1.08 billion, subject to customary adjustments including for indebtedness, cash and working capital at closing. On July 1, 2019, we completed the sale of Embraco and received cash proceeds of $1.1 billion inclusive of anticipated cash on hand at the time of closing. With the proceeds from this transaction, we repaid the outstanding term loan amount of approximately $1 billion as required under the April 23, 2018 Term Loan Agreement with Citibank, N.A., as Administrative Agent. In connection with the sale, we recorded a pre-tax gain, net of transaction and other costs, of $511 million ($350 million net of taxes) during the twelve months ended December 31, 2019. The gain calculation is subject to change based on finalization of the amounts for working capital and other customary post-closing adjustments. Embraco was reported within our Latin America reportable segment and met the criteria for held for sale accounting through the closing date. The operations of Embraco did not meet the criteria to be presented as discontinued operations. The assets and liabilities of Embraco were de-consolidated as of the closing date and there are no remaining carrying amounts in the Consolidated Balance Sheets at December 31, 2019. The carrying amounts of the major classes of Embraco's assets and liabilities at December 31, 2018 include the following:
Millions of dollars |
Accounts receivable, net of allowance of $8 | $ | 198 |
Inventories | 165 |
Prepaid and other current assets | 42 |
Property, net of accumulated depreciation of $616 | 364 |
Other noncurrent assets | 49 |
Total assets | $ | 818 |
Accounts payable | $ | 361 |
Accrued expenses | 27 |
Accrued advertising and promotion | 12 |
Other current liabilities | 55 |
Other noncurrent liabilities | 34 |
Total liabilities | $ | 489 |
The following table summarizes Embraco's earnings before income taxes for the twelve months ended December 31, 2019, 2018 and 2017:
Millions of dollars | 2019 |  | 2018 |  | 2017
Earnings before income taxes | $ | 47 |  |  | $ | 53 |  |  | $ | 90 |
South Africa Business Disposal On June 28, 2019, we entered into an agreement to sell our South Africa operations for a cash purchase price of $5 million, subject to customary adjustments at closing. On September 5, 2019, we completed the sale of our South Africa operations. In connection with the sale, we finalized the loss on disposal of $63 million which is recorded in the year ended December 31, 2019. The loss includes a charge of $29 million for the write-down of the assets of the disposal group to fair value and $34 million of cumulative foreign currency translation adjustments included in the carrying amount of the disposal group to calculate the impairment. The South Africa business was reported within our EMEA reportable segment and met the criteria for held for sale accounting through the closing date. The operations of South Africa did not meet the criteria to be presented as discontinued operations. See Note 11 to the Consolidated Financial Statements for additional information. Divestiture of Turkey Domestic Sales Operations For the year ended December 31, 2019, we incurred approximately $11 million of divestiture related costs, primarily inventory liquidation costs, related to the exit from our domestic sales operations in Turkey. See Note 14 to the Consolidated Financial Statements for additional information.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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