Discontinued Operations

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Note 3 — DISCONTINUED OPERATIONS

On October 25, 2019, Avient divested PP&S to SK Echo Group S.à.r.l. We received total proceeds from the divestiture of $768.9 million, which were net of cash transaction costs and included a working capital adjustment of $7.1 million received in the first quarter of 2020. Upon completion of the transaction, we recognized an after-tax gain of $457.7 million during 2019, which is included in the Income (loss) from discontinued operations, net of income taxes line of the Condensed Consolidated Statements of Income.

Avient has continuing involvement with the former PP&S business following the close of the transaction. The Company entered into a four-year distribution agreement with the former PP&S business to be the exclusive distributor for certain products, under terms that were similar prior to the disposal transaction. Avient and the former PP&S business have also entered into contract manufacturing and supply agreements for certain products for a two-year period. For the nine months ended September 30, 2020, our net cash outflow related to the agreements was approximately $45.4 million.

The following table summarizes the major line items constituting pre-tax income of discontinued operations for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Sales	$	—	$	143.1	$	—	$	448.0
Cost of sales	—		(114.0)		—		(358.4)
Selling and administrative expense	—		(8.2)		(0.5)		(21.7)
Income (loss) of discontinued operations before income taxes	—		20.9		(0.5)		67.9
Income tax expense	—		(1.4)		—		(13.7)
Income (loss) from discontinued operations, net of income taxes	$	—	$	19.5	$	(0.5)	$	54.2

The following table presents the depreciation, amortization, and capital expenditures of our discontinued operations for the three and nine months ended September 30, 2019. No such amounts were recorded for the three and nine months ended September 30, 2020.


(In millions)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Depreciation and amortization	$	1.8	$	9.4
Capital Expenditures	4.0		11.2