Quarterly report pursuant to Section 13 or 15(d)

Discontinued Operations (Tables)

v3.19.3
Discontinued Operations (Tables)
 9 Months Ended
Sep. 28, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations [Table Text Block]

The following table discloses the results of operations of the business reported as discontinued operations for the three months and nine months ended September 28, 2019 and September 29, 2018, respectively:
 
Three Months Ended
 
Nine Months Ended
(in millions)
Sep 28,
2019
 
Sep 29,
2018
 
Sep 28,
2019
 
Sep 29,
2018
Net sales
$
—

 
$
254.0

 
$
448.3

 
$
750.6

Cost of sales
—

 
187.4

 
334.6

 
548.6

Selling, general and administrative expense (C)
3.2

 
58.3

 
112.3

 
153.0

 
 
 
 
 
 
 
 
Earnings (loss) from discontinued operations before income taxes (B) (C)
$
(3.2
)
 
$
(7.0
)
 
$
(149.2
)
 
$
17.5

Income tax provision (benefit)
(0.3
)
 
(1.8
)
 
(40.7
)
 
2.7

Earnings (loss) from discontinued operations, net of tax (B) (C)
(2.9
)
 
(5.2
)
 
(108.5
)
 
14.8

Loss on disposal of discontinued operations, net of tax (A)
(3.5
)
 
—

 
(45.0
)
 
—

Net earnings (loss) from discontinued operations, net of tax
$
(6.4
)
 
$
(5.2
)
 
$
(153.5
)
 
$
14.8


(A) The Loss on disposal of discontinued operations for the three months ended September 28, 2019 includes a pre-tax loss of $4.7 million and a tax benefit of $1.2 million. The Loss on disposal of discontinued operations for the nine months ended September 28, 2019 includes a pre-tax loss of $52.4 million and a net tax benefit of $7.4 million.
(B) In the first quarter of 2019, the Company re-evaluated the fair value of the Fitness reporting unit and determined the fair value of the business was less than its carrying value. As a result, Earnings (loss) from discontinued operations, net of tax, includes a $137.2 million ($103.0 million after tax) goodwill impairment charge for the nine months ended September 29, 2019.
(C) The Company recorded $2.5 million and $8.7 million, for the three months ended September 28, 2019 and September 29, 2018, respectively, and recorded $13.4 million and $12.9 million for the nine months ended September 28, 2019 and September 29, 2018, respectively, of net costs incurred in connection with the Fitness business separation.

There were no assets and liabilities held for sale related to discontinued operations as of September 28, 2019. The following table reflects the summary of assets and liabilities held for sale as of December 31, 2018 and September 29, 2018 primarily related to the Fitness business included in discontinued operations:

(in millions)
December 31,
2018
 
September 29,
2018
Accounts and notes receivable, net
$
198.9

 
$
185.3

Net inventory
169.7

 
174.2

Prepaid expenses and other
8.6

 
10.5

Current assets held for sale
377.2

 
370.0

 
 
 
 
Net property (A)
110.9

 
114.7

Goodwill
389.8

 
390.8

Other intangibles, net
60.6

 
76.2

Other long-term assets
49.0

 
41.3

Long-term assets held for sale 
610.3

 
623.0

Assets held for sale
$
987.5

 
$
993.0

 
 
 
 
Accounts payable
$
69.7

 
$
62.0

Accrued expenses
185.3

 
183.1

Current liabilities held for sale
255.0

 
245.1

 
 
 
 
Other liabilities
99.6

 
96.1

Long-term liabilities held for sale
99.6

 
96.1

Liabilities held for sale
$
354.6

 
$
341.2


(A) As of December 31, 2018 and September 29, 2018, the Company had $8.9 million and $9.1 million, respectively, of net long-term assets classified as held for sale that were not related to the business reported as discontinued operations.