DISCONTINUED OPERATIONS

9 Months Ended

Nov. 01, 2020

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 2 — DISCONTINUED OPERATIONS

On October 19, 2020, the Company completed the sale of its Construction & Industrial business and received cash proceeds of approximately $2.8 billion, net of transaction cost payments of approximately $34.9 million. In the three and nine months ended November 1, 2020, the Company recognized a gain on sale of the Construction & Industrial business of approximately $1.5 billion, net of tax of $257.1 million. The sale is subject to a post-closing working capital adjustment, which the Company expects to settle by early 2021.

Summary Financial Information

In accordance with Accounting Standards Codification (“ASC”) 205-20, “Discontinued Operations,” as amended, the results of the Construction & Industrial business are classified as discontinued operations. The presentation of discontinued operations includes revenues and expenses of the discontinued operations and gain/loss on the disposition of businesses, net of tax, as one line item on the Consolidated Statements of Operations and Comprehensive Income. All Consolidated Statements of Operations and Comprehensive Income presented have been revised to reflect this presentation. The assets and liabilities of discontinued operations are presented separately within their respective current and non-current sections of the Consolidated Balance Sheets. The Consolidated Balance Sheets as of February 2, 2020 have been revised to reflect this presentation.

The following table provides additional detail related to the results of operations of the discontinued operations, primarily the Construction & Industrial business (amounts in millions):

	Three Months Ended				Nine Months Ended
	November 1,		November 3,		November 1,		November 3,
	2020		2019		2020		2019
Net sales	$	687.9	$	818.0	$	2,193.9	$	2,334.5
Cost of sales		441.0		529.5		1,410.9		1,513.7
Gross Profit		246.9		288.5		783.0		820.8
Operating expenses:
Selling, general and administrative		153.2		195.3		517.9		566.5
Depreciation and amortization		1.0		11.0		21.6		31.8
Restructuring & separation Charges		8.4		2.1		14.6		2.1
Total operating expenses		162.6		208.4		554.1		600.4
Operating Income		84.3		80.1		228.9		220.4
Gain on disposal of discontinued operations		1,767.0		—		1,762.0		—
Income before provision for income taxes		1,851.3		80.1		1,990.9		220.4
Provision for income taxes		278.6		21.6		313.6		59.1
Income from discontinued operations, net of tax	$	1,572.7	$	58.5	$	1,677.3	$	161.3

At November 1, 2020 and February 2, 2020, the carrying amounts of major classes of assets and liabilities of the Construction & Industrial discontinued operations included in the Consolidated Balance Sheets were as follows (amounts in millions):

	November 1,		February 2,
	2020		2020
Current assets:
Receivables, less allowance for credit losses of $- and $11.7	$	—	$	392.5
Inventories		—		344.3
Other current assets		—		11.2
Total current assets		—		748.0
Property and equipment, net		—		119.6
Operating lease right-of-use assets				246.9
Goodwill		—		386.1
Intangible assets, net		—		106.1
Other non-current assets		—		2.8
Total non-current assets		—		861.5
Total assets of discontinued operations	$	—	$	1,609.5
Current Liabilities:
Accounts payable	$	—	$	195.2
Accrued compensation and benefits		—		33.0
Current lease liabilities		—		59.2
Other current liabilities		—		53.8
Total current liabilities		—		341.2
Long-term lease liabilities		—		190.8
Other non-current liabilities		—		13.0
Total non-current liabilities		—		203.8
Total liabilities of discontinued operations	$	—	$	545.0

The following table provides additional detail related to the net cash provided by operating and investing activities of the discontinued operations (amounts in millions):

	Nine Months Ended
	November 1,		November 3,
	2020		2019
Net cash flows provided by operating activities	$	266.5	$	251.5
Cash flows from investing activities:
Capital expenditures		(18.7)		(35.2)
Proceeds from sales of businesses, net		2,845.5		—
Payments for businesses acquired, net		—		2.8
Proceeds from sales of property and equipment, net		0.3		0.4
Net cash flows provided by investing activities	$	2,827.1	$	(32.0)