Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations

v3.19.1
Discontinued Operations
3 Months Ended
Mar. 31, 2019
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS
On July 20, 2018, the Company agreed to sell to UPL 100% of the issued and outstanding shares of common stock of Arysta and its subsidiaries pursuant to the terms and conditions of the Arysta Sale Agreement. The Arysta Sale was completed on January 31, 2019 for an aggregate purchase price of approximately $4.20 billion in cash, subject to certain post-closing adjustments relating to, among other things, cash, indebtedness and working capital as of the closing date.
The Company's former Agricultural Solutions business was previously its own reportable segment and has been presented for all periods as discontinued operations in this Quarterly Report as the Arysta Sale represented a significant strategic shift and was determined to have a major effect on the Company's operations and financial results. Corporate costs previously allocated to the Agricultural Solutions segment were reallocated to the remaining segments for all periods presented as these costs were not clearly identifiable as costs of the former Agricultural Solutions segment.
In the first quarter of 2019, the Company recorded a gain of $21.3 million on the Arysta Sale, for a total loss of $429 million, primarily due to the reclassification of foreign currency translation adjustments from "Accumulated other comprehensive loss" within Stockholders’ Equity into earnings within the Condensed Consolidated Statement of Operations.
In connection with the Arysta Sale, the Company agreed to retain certain liabilities associated with legal and tax proceedings, primarily related to an Arysta subsidiary in Brazil. The Company does not expect to incur any material losses as a result of these proceedings. However, the resolutions of these matters may take several years and, to the extent not covered by insurance, may
adversely impact our financial position or results of operations. The Company may record an additional gain or loss in the future as it settles certain post-closing adjustments and tax assets and liabilities associated with the Arysta Sale.
The following table details the components comprising net (loss) income from the Company's discontinued operations attributable to common stockholders:
 
Three Months Ended March 31,
 (dollars in millions)
2019 (1)
 
2018
Net sales
$
65.3

 
$
471.6

Cost of sales
(45.5
)
 
(278.0
)
Selling, technical, general and administrative
(36.6
)
 
(136.2
)
Research and development
(4.6
)
 
(12.1
)
Gain on Arysta Sale
21.3

 

Operating (loss) profit
(0.1
)
 
45.3

Other, net
9.3

 
56.7

Income from discontinued operations, before income taxes
9.2

 
102.0

Income tax benefit (expense)
18.2

 
(55.1
)
Income from discontinued operations, net of tax
27.4

 
46.9

Net (income) loss from discontinued operations attributable to the non-controlling interests
(0.1
)
 
0.6

Net income from discontinued operations attributable to common stockholders
$
27.3

 
$
47.5

(1) 
Includes activity through January 31, 2019, when the Arysta Sale was completed.
The carrying value of major classes of assets and liabilities related to the Company's discontinued operations were as follows:
 
March 31,
 
December 31,
 
 (dollars in millions)
2019
 
2018
 
Assets
 
 
 
 
Cash and cash equivalents
$

 
$
177.8

 
Accounts receivable, net

 
919.4

 
Inventories

 
369.1

 
Other current assets
115.1

(1) 
155.0

 
Current assets of discontinued operations
$
115.1

 
$
1,621.3

 
Property, plant and equipment, net
$

 
$
172.0

 
Goodwill

 
1,816.9

 
Intangible assets, net

 
1,797.7

 
Other assets
6.7

 
(374.2
)
(2) 
Non-current assets of discontinued operations
$
6.7

 
$
3,412.4

 
Liabilities
 
 
 
 
Accounts payable
$

 
$
365.7

 
Current installments of revolving credit facilities

 
52.5

 
Accrued expenses and other current liabilities
80.1

 
408.6

 
Current liabilities of discontinued operations
$
80.1

 
$
826.8

 
Deferred income taxes
$

 
$
369.9

 
Other liabilities

 
46.3

 
Non-current liabilities of discontinued operations
$

 
$
416.2

 
(1) 
Primarily comprised of a receivable from UPL associated with certain post-closing adjustments.
(2) 
Includes the impairment loss of $450 million on discontinued operations at December 31, 2018.