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Divestitures and Held for Sale | 6 Months Ended
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Jun. 30, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Divestitures and Held for Sale | Footnote 4 — Divestitures and Held for Sale Discontinued Operations As part of the Company’s Accelerated Transformation Plan, during 2018, the Company announced it is exploring strategic options for its industrial and commercial product assets, including Process Solutions, Rubbermaid Commercial Products and Mapa businesses, as well as non-coreconsumer businesses, including Goody, Jostens, Pure Fishing, Rubbermaid Outdoor, Closet, Refuse and Garage, and U.S. Playing Cards businesses. These businesses are classified as discontinued operations at June 30, 2018. Prior periods have been reclassified to conform with the current presentation. During the second quarter of 2018, the Company sold the Rawlings Sporting Goods Company, Inc. (“Rawlings”) and Waddington Group, Inc. (“Waddington”) as part of the Accelerated Transformation Plan. Rawlings and Waddington are also classified as discontinued operations as of June 30, 2018. The Company expects to complete the remaining divestitures by the end of the second quarter of 2019. The following table provides a summary of amounts included in discontinued operations for the periods indicated (in millions):
|  | Three months ended June 30, |  |  | Six months ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Net sales (2) |  | $ | 1,525.7 |  |  | $ | 1,527.2 |  |  | $ | 2,730.3 |  |  | $ | 2,702.9 |
Cost of products sold (2) |  |  | 933.3 |  |  |  | 929.1 |  |  |  | 1,738.1 |  |  |  | 1,695.8 |
Selling, general and administrative expenses |  |  | 260.0 |  |  |  | 261.7 |  |  |  | 514.1 |  |  |  | 524.2 |
Restructuring costs, net |  |  | 2.5 |  |  |  | 6.9 |  |  |  | 5.0 |  |  |  | 10.9 |
Impairment of goodwill, intangibles and other assets |  |  | 454.0 |  |  |  | 0.7 |  |  |  | 454.0 |  |  |  | 0.7 |
Operating income (loss) |  |  | (124.1 | ) |  |  | 328.8 |  |  |  | 19.1 |  |  |  | 471.3 |
Non-operating expense (income) (1) |  |  | (461.4 | ) |  |  | 3.3 |  |  |  | (461.0 | ) |  |  | 4.1 |
Income before income taxes |  |  | 337.3 |  |  |  | 325.5 |  |  |  | 480.1 |  |  |  | 467.2 |
Income tax expense |  |  | 129.5 |  |  |  | 119.1 |  |  |  | 164.6 |  |  |  | 167.7 |
Net income |  | $ | 207.8 |  |  | $ | 206.4 |  |  | $ | 315.5 |  |  | $ | 299.5 |
(1) | The three and six months ended June 30, 2018, include a $462 million gain on sale of discontinued operations.
(2) | The three and six months ended June 30, 2018, includes a reclassification from cost of sales to net sales of $14.0 million and $23.3 million, respectively, related to the adoption of Topic 606. See Footnotes 1 and 2 for additional information regarding the Company’s adoption of Topic 606.
Held for Sale The following table presents information related to the major classes of assets and liabilities that were classified as assets and liabilities held for sale in the condensed consolidated balance sheets as of the dates indicated (in millions):
|  | June 30, 2018 |  |  | December 31, 2017 |
Accounts receivable, net |  | $ | 750.5 |  |  | $ | 794.7 |
Inventories, net |  |  | 633.2 |  |  |  | 836.4 |
Prepaid expenses and other |  |  | 77.1 |  |  |  | 87.9 |
Property, plant and equipment, net (1) (2) |  |  | 607.1 |  |  |  | 310.1 |
Goodwill (1) |  |  | 2,370.7 |  |  |  | 2,189.6 |
Other intangible assets, net (1) |  |  | 2,915.5 |  |  |  | 2,652.1 |
Other assets (1) |  |  | 14.2 |  |  |  | 23.8 |
Current assets held-for-sale |  | $ | 7,368.3 |  |  | $ | 6,894.6 |
Property, plant and equipment, net |  |  | — |  |  |  | 429.0 |
Goodwill |  |  | — |  |  |  | 1,497.5 |
Other intangible assets, net |  |  | — |  |  |  | 1,384.3 |
Other assets |  |  | — |  |  |  | 1.8 |
Noncurrent assets held-for-sale |  | $ | — |  |  | $ | 3,312.6 |
Accounts payable |  | $ | 444.0 |  |  | $ | 534.8 |
Accrued compensation |  |  | 76.8 |  |  |  | 101.6 |
Other accrued liabilities |  |  | 307.7 |  |  |  | 438.8 |
Deferred income taxes (1) |  |  | 3.3 |  |  |  | 197.9 |
Other liabilities (1) |  |  | 70.6 |  |  |  | 66.3 |
Current liabilities held-for-sale |  | $ | 902.4 |  |  | $ | 1,339.4 |
Deferred income taxes |  |  | — |  |  |  | — |
Other liabilities |  |  | — |  |  |  | 12.8 |
Noncurrent liabilities held-for-sale |  | $ | — |  |  | $ | 12.8 |
(1) | Classification as current or long-term based on management’s best estimate as to the timing of the disposal of the underlying asset or liability as of the respective dates indicated.
(2) | Balance at December 31, 2017, includes a $4.0 million building held for sale that is not included in discontinued operations. This building was sold during the second quarter of 2018.
Divestitures 2018 Activity On June 29, 2018, the Company sold Rawlings, its Team Sports business, to a fund managed by Seidler Equity Partners with a co-investment of Major League Baseball for approximately $395 million, subject to customary working capital and transaction adjustments. As a result, during the three and six months ended June 30, 2018, the Company recorded a pretax loss of $136 million, which is included in the income (loss) from discontinued operations. On June 29, 2018, the Company sold Waddington to Novolex Holdings LLC for approximately $2.3 billion, subject to customary adjustments for working capital and other items. As a result, during the three and six months ended June 30, 2018, the Company recorded a pretax gain of $598 million, which is included in the income (loss) from discontinued operations. During the three and six months ended June 30, 2018, the Company recorded a goodwill impairment charge totaling $454 million, which is included in the income (loss) from discontinued operations, related to the write-down of the carrying value of the net assets of the Process Solutions business to its estimated fair market value. 2017 Activity On July 14, 2017, the Company sold its Winter Sports business for a selling price of approximately $240 million, subject to working capital adjustments. For the three and six months ended June 30, 2017, net sales from the Winter Sports business were not material. During the three and six months ended June 30, 2017, the Company recorded an impairment charge of $59.1 million related to the writedown of the carrying value of the net assets of the Winter Sports business to their estimated fair market value. During 2017, the Company sold its Rubbermaid® consumer storage totes business, its stroller business under the Teutonia® brand, its Lehigh business, its firebuilding business and its triathlon apparel business under the Zoot® and Squadra® brands. The selling prices for these businesses were not significant. During the three and six months ended June 30, 2017 the Company recorded impairment charges of $14.9 million related to the write down of the carrying value of the net assets of the firebuilding and Teutonia ® stroller businesses to their estimated fair market value. Martin E. Franklin and Ian G.H. Ashken are affiliates of Royal Oak, the purchaser of the fire building assets, and were company directors at the time of the transaction. In March 2017, the Company sold its Tools business, including the Irwin®, Lenox® and Hilmor® brands. The selling price was $1.95 billion, subject to customary working capital adjustments. As a result, during the six months ended June 30, 2017, the Company recorded a pretax gain of $784 million, which is included in other (income) expense, net. For the six months ended June 30, 2017, the Tools business generated 1.5% of the Company’s consolidated net sales.

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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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