XML 26 R9.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Discontinued Operations | 12 Months Ended
--- | ---
Dec. 31, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations On October 31, 2017, we entered into a Purchase Agreement (“Purchase Agreement”) by and among us and certain of our affiliates and Owens & Minor, Inc., (“Buyer”). The Purchase Agreement provides for the sale to Buyer, subject to the terms and conditions of the Purchase Agreement, of substantially all of our S&IP business, as well as our name “Halyard Health” (and all variations of our name and related intellectual property rights) and our IT system (the “Divestiture”). The total purchase price payable by the Buyer for the Divestiture is $710 million in cash, subject to certain adjustments as provided in the Purchase Agreement based on cash, indebtedness and net working capital transferred to the Buyer and its affiliates at the closing. We expect the transaction to close in the second quarter of 2018. The Divestiture is intended to accelerate our transformation into a pure-play medical devices business. On or about the closing date, we will enter into certain commercial agreements, including a transition services agreement with the Buyer, pursuant to which we and the Buyer, and each company’s respective affiliates will provide to each other various transitional services, including an arrangement whereby we will remain a limited risk distributor for S&IP products on the Buyer’s behalf for sales outside of the United States and Canada. The services will generally commence on the closing date of the Divestiture and terminate no later than two years thereafter. As a result of the Divestiture, the results of operations from our S&IP business are reported in the accompanying consolidated income statements as “Income (Loss) from discontinued operations” for the years ended December 31, 2017, 2016 and 2015, and the related assets and liabilities are classified as held-for-sale as of December 31, 2017 and 2016 in the accompanying balance sheet. The remaining business is managed with one operating segment, the Medical Devices business. The following table summarizes the financial results of our discontinued operations for all periods presented herein (in millions):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Net Sales | $ | 1,012.7 |  |  | $ | 1,026.1 |  |  | $ | 1,065.4 |
Cost of products sold | 762.5 |  |  | 765.4 |  |  | 791.6 |
Research and development | 2.9 |  |  | 2.7 |  |  | 4.7 |
Selling, general and other expenses | 82.8 |  |  | 64.9 |  |  | 48.8 |
Goodwill impairment | — |  |  | — |  |  | 474.0 |
Other (income) expense, net | (1.6 | ) |  | (1.4 | ) |  | (11.7 | )
Income (Loss) from discontinued operations before income taxes | 166.1 |  |  | 194.5 |  |  | (242.0 | )
Tax (provision) benefit from discontinued operations | (54.7 | ) |  | (71.4 | ) |  | (83.1 | )
Income (Loss) from Discontinued Operations, net | $ | 111.4 |  |  | $ | 123.1 |  |  | $ | (325.1 | )
In accordance with accounting principles generally accepted in the United States (“GAAP”), only expenses specifically identifiable and related to a business to be disposed may be allocated to discontinued operations. Accordingly, certain expenses that were historically presented as a component of the S&IP were kept in continuing operations. These expenses, on a pre-tax basis, were $116 million in the year ended December 31, 2017, $114 million in 2016 and $133 million in 2015. Details on assets and liabilities classified as held for sale in the accompanying consolidated balance sheets are presented in the following table (in millions):
| As of December 31,
| 2017 |  | 2016
Assets held for sale - discontinued operations |  |  |
Accounts receivable, net of allowances | $ | 1.5 |  |  | $ | 1.6 |
Inventories | 198.3 |  |  | 191.8 |
Prepaid and other current assets | 2.3 |  |  | 0.6 |
Current assets held for sale - discontinued operations | 202.1 |  |  | 194.0 |
Property, plant and equipment, net | 150.8 |  |  | 151.5 |
Goodwill | 267.3 |  |  | 266.7 |
Other intangible assets, net | 0.9 |  |  | 1.6 |
Non-current deferred tax assets | 7.1 |  |  | 6.5 |
Other assets | 0.4 |  |  | 0.6 |
Total assets held for sale - discontinued operations | 628.6 |  |  | 620.9 |
Other assets classified as held for sale | 3.9 |  |  | — |
Total assets classified as held for sale | 632.5 |  |  | 620.9 |
Liabilities held for sale - discontinued operations |  |  |
Accounts payable | $ | 15.5 |  |  | $ | 12.5 |
Accrued expenses | 11.2 |  |  | 12.9 |
Current liabilities held for sale - discontinued operations | 26.7 |  |  | 25.4 |
Deferred tax liabilities | 0.3 |  |  | 0.4 |
Other long-term liabilities | 6.9 |  |  | 6.3 |
Total liabilities held for sale - discontinued operations | $ | 33.9 |  |  | $ | 32.1 |
Assets and liabilities held for sale as of December 31, 2017 are classified as current since we expect the Divestiture to be completed within one year. In the prior year, the assets and liabilities held for sale are classified separately as current or noncurrent because the noncurrent assets and liabilities do not meet the criteria for current classification as of December 31, 2016. Other assets and liabilities held for sale that are not related to discontinued operations relates primarily to our IT system. The following table provides operating and investing cash flow information for our discontinued operations (in millions):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Operating Activities: |  |  |  |  |
Depreciation and amortization | $ | 20.0 |  |  | $ | 23.9 |  |  | $ | 23.2 |
Stock-based compensation expense | 0.5 |  |  | 0.6 |  |  | 0.5 |
Investing Activities: |  |  |  |  |
Capital expenditures | 1.6 |  |  | 1.3 |  |  | 1.6 |

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 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 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration