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DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE | 6 Months Ended
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Jun. 30, 2019
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE | DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE MOBILE CRANES On February 22, 2019, the Company entered into the ASPA with Tadano to sell its Demag® mobile cranes business for an enterprise value of $215 million (the “Transaction”). Consideration will be paid in cash and cash received will be net of indebtedness. The purchase price is subject to post-closing adjustments based upon the level of net working capital and cash and debt in the Demag® mobile cranes business at the closing date. Products to be divested are Demag® all terrain cranes and large lattice boom crawler cranes. The Company expects to complete the Transaction in the third quarter of 2019. In addition to selling its Demag® mobile cranes business, the Company will cease to manufacture mobile crane product lines in its Oklahoma City facility. As a result of the Transaction, the Company recognized a pre-tax credit of approximately $4 million ($4 million after-tax) and a charge of approximately $82 million ($82 million after-tax) in the three and six months ended June 30, 2019, respectively, to write-down the Demag® mobile cranes business to its fair value, less costs to sell. The charge for the six months ended June 30, 2019 includes approximately $27 million attributable to amounts previously recognized in accumulated other comprehensive income. The Company’s actions to sell the Demag® mobile cranes business and cease manufacturing mobile crane product lines in its Oklahoma City facility represent a significant strategic shift in its business away from mobile cranes as these businesses constituted a significant part of its operations and financial results. The Company believes these actions are necessary as it continues to execute its Focus, Simplify and Execute to Win strategy as further described in Part I, Item 1. “Business” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. On April 24, 2019, the Company sold its boom truck, truck crane and crossover product lines and related inventory previously manufactured in its Oklahoma City facility. The Company received notes and receivables totaling $27.7 million and recorded a gain, net of tax, of $12.8 million during the three and six months ended June 30, 2019. Income (loss) from discontinued operations The following amounts related to 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 June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Net sales | $ | 131.2 |  |  | $ | 149.5 |  |  | $ | 257.1 |  |  | $ | 293.8 |
Cost of sales | (122.6 | ) |  | (148.8 | ) |  | (262.9 | ) |  | (290.8 | )
Selling, general and administrative expenses | (30.6 | ) |  | (29.8 | ) |  | (61.6 | ) |  | (55.1 | )
Impairment of Mobile Cranes disposal group | 4.0 |  |  | — |  |  | (82.1 | ) |  | — |
Other income (expense) | (1.4 | ) |  | (0.8 | ) |  | (3.7 | ) |  | (1.7 | )
Income (loss) from discontinued operations before income taxes | (19.4 | ) |  | (29.9 | ) |  | (153.2 | ) |  | (53.8 | )
(Provision for) benefit from income taxes | 2.1 |  |  | 1.6 |  |  | 11.5 |  |  | 4.4 |
Income (loss) from discontinued operations – net of tax | (17.3 | ) |  | (28.3 | ) |  | (141.7 | ) |  | (49.4 | )
Assets and liabilities held for sale Assets and liabilities held for sale consist of assets and liabilities of the Company’s Demag® mobile cranes business, its mobile cranes product lines manufactured in Oklahoma City and its utility hot lines tools business located in South America, all previously contained in its former Cranes segment, which are expected to be sold within one year. 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):
| June 30, 2019 |  | December 31, 2018
| Cranes |  | Cranes
Assets |  |  |
Cash and cash equivalents | $ | 27.1 |  |  | $ | 32.6 |
Trade receivables – net | 74.7 |  |  | 126.9 |
Inventories | 306.4 |  |  | 295.5 |
Prepaid and other current assets | 10.6 |  |  | 9.4 |
Impairment reserve | (16.8 | ) |  | (4.9 | )
Current assets held for sale | $ | 402.0 |  |  | $ | 459.5 |
Property, plant and equipment – net | $ | 29.3 |  |  | $ | 28.8 |
Intangible assets | 4.4 |  |  | 4.3 |
Impairment reserve | (73.1 | ) |  | (2.9 | )
Other assets | 45.3 |  |  | 38.2 |
Non-current assets held for sale | $ | 5.9 |  |  | $ | 68.4 |
Liabilities |  |  |  |  |
Notes payable and current portion of long-term debt | $ | 0.5 |  |  | $ | 0.6 |
Trade accounts payable | 61.6 |  |  | 101.6 |
Accruals and other current liabilities | 69.2 |  |  | 77.3 |
Current liabilities held for sale | $ | 131.3 |  |  | $ | 179.5 |
Long-term debt, less current portion | $ | 3.7 |  |  | $ | 4.1 |
Retirement plans and other non-current liabilities | 69.5 |  |  | 71.8 |
Non-current liabilities | 15.3 |  |  | 10.6 |
Non-current liabilities held for sale | $ | 88.5 |  |  | $ | 86.5 |
The following table provides amounts of cash and cash equivalents presented in the Condensed Consolidated Statement of Cash Flows (in millions):
| June 30, 2019 |  | December 31, 2018
Cash and cash equivalents: |  |  |
Cash and cash equivalents - continuing operations | $ | 367.5 |  |  | $ | 339.5 |
Cash and cash equivalents - held for sale | 27.1 |  |  | 32.6 |
Total cash and cash equivalents | $ | 394.6 |  |  | $ | 372.1 |
The following table provides supplemental cash flow information related to discontinued operations (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Non-cash operating items: |  |  |  |  |  |  |
Depreciation and amortization | $ | 1.0 |  |  | $ | 3.9 |  |  | $ | 3.2 |  |  | $ | 7.8 |
Impairments | $ | (4.0 | ) |  | $ | 0.7 |  |  | $ | 82.1 |  |  | $ | 0.9 |
Deferred taxes | $ | 5.4 |  |  | $ | 0.4 |  |  | $ | 2.1 |  |  | $ | 0.2 |
Investing activities: |  |  |  |  |  |  |
Capital expenditures | $ | (1.1 | ) |  | $ | (4.2 | ) |  | $ | (2.7 | ) |  | $ | (7.4 | )
Gain (loss) on disposition of discontinued operations - net of tax (in millions):
| Three Months Ended
| June 30,
| 2019 |  | 2018
| Cranes | Material Handling and Port Solutions | Total |  | Material Handling and Port Solutions | Trucks | Atlas | Total
Gain (loss) on disposition of discontinued operations | $ | 13.7 |  | $ | — |  | $ | 13.7 |  |  | $ | (0.6 | ) | $ | — |  | $ | — |  | $ | (0.6 | )
(Provision for) benefit from income taxes | (0.9 | ) | (2.0 | ) | (2.9 | ) |  | 0.1 |  | 2.4 |  | — |  | 2.5 |
Gain (loss) on disposition of discontinued operations – net of tax | $ | 12.8 |  | $ | (2.0 | ) | $ | 10.8 |  |  | $ | (0.5 | ) | $ | 2.4 |  | $ | — |  | $ | 1.9 |
| Six Months Ended
| June 30,
| 2019 |  | 2018
| Cranes | Material Handling and Port Solutions | Total |  | Material Handling and Port Solutions | Trucks | Atlas | Total
Gain (loss) on disposition of discontinued operations | $ | 13.7 |  | $ | (1.3 | ) | $ | 12.4 |  |  | $ | (0.6 | ) | $ | — |  | $ | 3.2 |  | $ | 2.6 |
(Provision for) benefit from income taxes | (0.9 | ) | (0.1 | ) | (1.0 | ) |  | 0.1 |  | 2.4 |  | (0.5 | ) | 2.0 |
Gain (loss) on disposition of discontinued operations – net of tax | $ | 12.8 |  | $ | (1.4 | ) | $ | 11.4 |  |  | $ | (0.5 | ) | $ | 2.4 |  | $ | 2.7 |  | $ | 4.6 |

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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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