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DISCONTINUED OPERATIONS | 9 Months Ended
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Sep. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE | DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE MHPS On January 4, 2017, the Company completed the disposition of its MHPS business to Konecranes. See Note B - “Sale of MHPS Business and Investment Carried at Fair Value” for further information on the Disposition. The Disposition represented a significant strategic shift in the Company’s business away from universal, process, mobile harbor and ship-to-shore cranes that will have a major effect on the Company’s future operating results, primarily because the MHPS business represented the entirety of one of the Company’s five previous reportable operating segments and comprised two of the Company’s six previous reporting units, representing a significant portion of the Company’s revenues and assets, and is therefore accounted for as a discontinued operation for all periods presented. MHPS products include universal cranes, process cranes and components, such as rope hoists, chain hoists, light crane systems, travel units and electric motors, primarily for industrial applications, and mobile harbor cranes, ship-to-shore gantry cranes, rubber tired and rail mounted gantry cranes, straddle carriers, sprinter carriers, reach stackers, container handlers, general cargo lift trucks, automated stacking cranes, automated guided vehicles and software solutions for logistics terminals. Cash flows from discontinued operations are included in the Condensed Consolidated Statement of Cash Flows. Income (loss) from discontinued operations The following amounts related to the discontinued operations were derived from historical financial information and have been segregated from continuing operations and reported as discontinued operations in the Condensed Consolidated Statement of Comprehensive Income (Loss) (in millions):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2016 |  | 2016
Net sales | $ | 348.8 |  |  | $ | 983.5 |
Cost of sales | (261.2 | ) |  | (774.1 | )
Selling, general and administrative expenses | (63.7 | ) |  | (222.2 | )
Reversal of impairment of MHPS disposal group | 55.6 |  |  | — |
Net interest (expense) | (1.4 | ) |  | (2.0 | )
Other income (expense) | (2.3 | ) |  | (0.1 | )
Income (loss) from discontinued operations before income taxes | 75.8 |  |  | (14.9 | )
(Provision for) benefit from income taxes | (11.7 | ) |  | (18.5 | )
Income (loss) from discontinued operations – net of tax | 64.1 |  |  | (33.4 | )
Net loss (income) attributable to noncontrolling interest | (0.6 | ) |  | 0.1 |
Income (loss) from discontinued operations – net of tax attributable to Terex Corporation | $ | 63.5 |  |  | $ | (33.3 | )
As a result of the SAPA, the Company recognized a pre-tax charge of $55.6 million ($55.6 million after-tax) in the second quarter of 2016 to write-down the MHPS disposal group to fair value, less costs to sell. The Company estimated the amount of sale proceeds using the cash proceeds plus an average of closing stock prices in the month of June 2016 for Konecranes common shares as traded on the Nasdaq Helsinki stock exchange (under the symbol “KCR1V”) multiplied by 19.6 million Class B shares expected to be received. In the third quarter of 2016, the Company reversed the pre-tax charge of $55.6 million ($55.6 million after-tax) recognized in the second quarter of 2016 due primarily to improvement in Konecranes’ stock price in the three months ended September 30, 2016. The Company estimated the amount of sale proceeds as calculated above; however, it replaced the average of Konecranes closing stock prices with an average of closing stock prices in the month of September 2016. As a result of the SAPA, the Company determined that amounts invested in the MHPS business were no longer indefinitely reinvested. Accordingly, the Company recorded previously unrecognized U.S. and foreign deferred taxes associated with its investment in MHPS subsidiaries. Cranes As part of the transformation and improvement of its Cranes segment, the Company is actively seeking a buyer for its utility hot lines tools business located in South America and, accordingly, the assets and liabilities are reported as held for sale. In August 2017, the Company entered into an agreement to sell its cranes manufacturing facility in Jinan, China. The sale was completed during the third quarter of 2017 and the Company recorded a gain on sale of $5.7 million in its Corporate and Other category as a component of Selling, general and administrative expenses (“SG&A”) in the Condensed Consolidated Statement of Comprehensive Income (Loss). Construction In December 2016, the Company entered into an agreement to sell its Coventry, UK-based compact construction business. During the nine months ended September 30, 2017, the Company completed the sale of Coventry, UK-based compact construction business and remaining UK-based compact construction product lines and recognized a loss of $1.2 million within SG&A in the Condensed Consolidated Statement of Comprehensive Income (Loss) related to the sale. During the nine months ended September 30, 2017, the Company recognized a gain of $5.8 million within SG&A resulting from a post-closing adjustment related to the 2016 sale of its midi/mini excavators, wheeled excavators, and compact wheel loader business in Germany. In March 2017, the Company signed a sale agreement with a buyer to sell its Indian compact construction business. The Company completed the sale during the nine months ended September 30, 2017 and a loss of $1.6 million was recognized within SG&A related to the sale. The operating results for these construction product lines are reported in continuing operations, within the Corporate and Other category in our segment disclosures. Assets and liabilities held for sale Assets and liabilities held for sale consist of the Company’s former MHPS segment, portions of its Cranes segment and portions of its former Construction Segment. Such assets and liabilities are classified as held for sale upon meeting the requirements of ASC 360 - “Property, Plant and Equipment”, and are recorded at lower of carrying amounts or fair value less costs to sell. Assets are no longer depreciated once classified as held for sale. The following table provides the amounts of assets and liabilities held for sale in the Condensed Consolidated Balance Sheet (in millions):
| September 30, 2017 |  | December 31, 2016
| Cranes |  | MHPS | Cranes | Construction | Total
Assets |  |  |  |  |  |
Cash and cash equivalents | $ | 3.0 |  |  | $ | 71.0 |  | $ | 1.2 |  | $ | 1.2 |  | $ | 73.4 |
Trade receivables – net | 2.8 |  |  | 243.5 |  | 3.1 |  | 24.4 |  | 271.0 |
Inventories | 2.1 |  |  | 309.4 |  | 1.7 |  | 23.9 |  | 335.0 |
Prepaid and other current assets | 0.4 |  |  | 49.9 |  | 0.5 |  | 3.1 |  | 53.5 |
Impairment reserve | (2.6 | ) |  | — |  | — |  | — |  | — |
Current assets held for sale | $ | 5.7 |  |  | $ | 673.8 |  | $ | 6.5 |  | $ | 52.6 |  | $ | 732.9 |
Property, plant and equipment – net | $ | 0.6 |  |  | $ | 294.2 |  | $ | 0.8 |  | $ | 3.2 |  | $ | 298.2 |
Goodwill | — |  |  | 573.7 |  | — |  | — |  | 573.7 |
Intangible assets | 3.0 |  |  | 212.6 |  | 2.9 |  | — |  | 215.5 |
Impairment reserve | (3.6 | ) |  | — |  | (1.7 | ) | (3.5 | ) | (5.2 | )
Other assets | — |  |  | 86.4 |  | 1.1 |  | 1.6 |  | 89.1 |
Non-current assets held for sale | $ | — |  |  | $ | 1,166.9 |  | $ | 3.1 |  | $ | 1.3 |  | $ | 1,171.3 |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Notes payable and current portion of long-term debt | $ | — |  |  | $ | 13.1 |  | $ | — |  | $ | 1.3 |  | $ | 14.4 |
Trade accounts payable | 0.6 |  |  | 132.6 |  | 0.7 |  | 23.8 |  | 157.1 |
Accruals and other current liabilities | 1.6 |  |  | 267.0 |  | 6.2 |  | 9.1 |  | 282.3 |
Current liabilities held for sale | $ | 2.2 |  |  | $ | 412.7 |  | $ | 6.9 |  | $ | 34.2 |  | $ | 453.8 |
Long-term debt, less current portion | $ | — |  |  | $ | 2.4 |  | $ | — |  | $ | — |  | $ | 2.4 |
Retirement plans and other non-current liabilities | 0.8 |  |  | 235.3 |  | 0.7 |  | 0.9 |  | 236.9 |
Other non-current liabilities | — |  |  | 71.7 |  | 0.4 |  | 0.7 |  | 72.8 |
Non-current liabilities held for sale | $ | 0.8 |  |  | $ | 309.4 |  | $ | 1.1 |  | $ | 1.6 |  | $ | 312.1 |
The following table provides amounts of cash and cash equivalents presented in the Condensed Consolidated Statement of Cash Flows (in millions):
| September 30, 2017 |  | December 31, 2016
Cash and cash equivalents: |  |  |
Cash and cash equivalents - continuing operations | $ | 592.7 |  |  | $ | 428.5 |
Cash and cash equivalents - held for sale | 3.0 |  |  | 73.4 |
Total cash and cash equivalents: | $ | 595.7 |  |  | $ | 501.9 |
Cash and cash equivalents held for sale at September 30, 2017 includes no amounts which were not immediately available for use. Cash and cash equivalents held for sale at December 31, 2016 includes $14.0 million which were not immediately available for use. These consist primarily of cash balances held in escrow to secure various obligations of the Company. The following table provides supplemental cash flow information related to discontinued operations (in millions):
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2016 |  | 2016
Non-cash operating items: |  |  |
Depreciation and amortization | $ | — |  |  | $ | 22.4 |
Reversal of impairment of MHPS disposal group | $ | (55.6 | ) |  | $ | — |
Deferred taxes | $ | 4.5 |  |  | $ | 8.8 |
Investing activities: |  |  |
Capital expenditures | $ | 2.6 |  |  | $ | 11.1 |
Gain (loss) on disposition of discontinued operations - net of tax
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
| MHPS | Atlas | Total |  | Total |  | MHPS | Atlas | Total |  | Total
Gain (loss) on disposition of discontinued operations | $ | 2.8 |  | $ | — |  | $ | 2.8 |  |  | $ | — |  |  | $ | 82.3 |  | $ | 3.5 |  | $ | 85.8 |  |  | $ | 4.6 |
(Provision for) benefit from income taxes | (0.2 | ) | — |  | (0.2 | ) |  | — |  |  | (21.6 | ) | (0.5 | ) | (22.1 | ) |  | (1.1 | )
Gain (loss) on disposition of discontinued operations – net of tax | $ | 2.6 |  | $ | — |  | $ | 2.6 |  |  | $ | — |  |  | $ | 60.7 |  | $ | 3.0 |  | $ | 63.7 |  |  | $ | 3.5 |
During the three and nine months ended September 30, 2017, the Company recognized a gain on disposition of discontinued operations - net of tax of $2.6 million and $63.7 million, respectively, $2.6 million and $60.7 million of which is due to the sale of the MHPS business. During the nine months ended September 30, 2017, the Company recorded contractual earnout payments of $3.0 million related to the sale of its Atlas heavy construction equipment and knuckle-boom cranes businesses (“Atlas”). During the nine months ended September 30, 2016 the Company recognized a gain on disposition of discontinued operations - net of tax of $3.5 million due primarily to a gain of $3.0 million related to the sale of Atlas based on contractual earnout payments and a $0.5 million gain related to sale of its truck business.

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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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