Discontinued Operations

9 Months Ended

Jun. 30, 2021

Discontinued Operations And Disposal Groups [Abstract]

3. Discontinued Operations

On February 10, 2021, the Company completed the sale of Interior Products to FBM pursuant to the Purchase Agreement for approximately $850 million in cash (subject to a working capital and certain other adjustments as set forth in the Purchase Agreement).

The Company completed this divestiture of net assets previously acquired as part of the Allied Acquisition in 2018 (see Note 5 for additional information) to reduce net leverage, strengthen its balance sheet, enhance leadership focus, and provide the financial flexibility to pursue strategic growth initiatives in its core exteriors business.

The following table reconciles major line items constituting pretax income (loss) from discontinued operations to net income (loss) from discontinued operations as presented in the condensed consolidated statements of operations (in millions):

	Three Months Ended June 30,						Nine Months Ended June 30,
	2021			2020			2021			2020
Net sales	$	—		$	243.2		$	357.9		$	764.4
Cost of products sold		—			(179.8	)		(264.2	)		(558.4	)
Selling, general and administrative		(0.2	)		(46.9	)		(78.1	)		(156.3	)
Depreciation and amortization		—			(16.8	)		(13.0	)		(54.4	)
Other income (loss)		(0.1	)		0.1			0.1			0.5
Loss on sale		(4.2	)		—			(362.0	)		—
Pretax income (loss) from discontinued operations		(4.5	)		(0.2	)		(359.3	)		(4.2	)
Provision for (benefit from) income taxes		(1.2	)		2.4			(92.3	)		(0.9	)
Net income (loss) from discontinued operations	$	(3.3	)	$	(2.6	)	$	(267.0	)	$	(3.3	)

The loss on sale of $362.0 million for the nine months ended June 30, 2021 was calculated by comparing the purchase price (as adjusted) to the carrying value of the net assets of Interior Products as of February 10, 2021, the closing date of the sale. As Interior Products represented a component of the Company’s single reporting unit, the carrying value of the net assets of Interior Products included an allocation of $730.9 million of the Company’s consolidated goodwill balance. The Company allocated consolidated goodwill based on the relative fair value of the component, which was determined using the purchase price (as adjusted) of Interior Products and the market capitalization of the Company as of February 10, 2021. The net result of this allocation attributed a higher amount of goodwill than that which was directly associated with the Interior Products portion of the Allied Acquisition, thereby having a significant influence on the loss on the Interior Products divestiture transaction. The loss on sale will be adjusted as ongoing changes to the net working capital and transaction costs related to the sale are finalized.

The following table reconciles the carrying amounts of major classes of assets and liabilities of discontinued operations to total assets and liabilities of discontinued operations that are classified as held for sale in the condensed consolidated balance sheets (in millions):

	September 30,		June 30,
	2020		2020
Carrying amounts of major classes of assets held for sale:
Accounts receivable, net	$	144.1	$	135.0
Inventories, net		73.2		77.3
Prepaid expenses and other current assets		26.5		19.2
Total current assets		243.8		231.5
Property and equipment, net		35.9		37.9
Goodwill		734.3		734.3
Intangibles, net		283.2		297.0
Operating lease assets		67.1		62.4
Total non-current assets		1,120.5		1,131.6
Total assets held for sale¹	$	1,364.3	$	1,363.1

Carrying amounts of major classes of liabilities held for sale:
Accounts payable	$	68.8	$	48.5
Accrued expenses		54.1		62.0
Current operating lease liabilities		16.5		15.9
Total current liabilities		139.4		126.4
Deferred income taxes, net		2.2		7.4
Non-current operating lease liabilities		49.9		45.5
Other long-term liabilities		1.3		1.3
Total non-current liabilities		53.4		54.2
Total liabilities held for sale¹	$	192.8	$	180.6

___________________________

There were no assets or liabilities held for sale as of June 30, 2021.