NOTE 3—DISCONTINUED OPERATIONS

In August 2017, the Company completed the sale of its Waterworks business and received cash proceeds of approximately $2.4 billion, net of transaction cost payments of approximately $38 million. Including the final working capital settlement of approximately $29 million in January 2018, the Company recognized a gain on the sale of the Waterworks business of approximately $732 million, net of tax of $197 million.

In October 2017, the Company recognized a $3 million gain due to the expiration of indemnification for tax positions related to the Canadian operations of the Power Solutions business whose sale was completed by the Company in October 2015.

In May 2016, the Company completed the sale of its Interior Solutions business. Including the final working capital settlement in September 2016, the Company received cash proceeds of approximately $26 million, net of $2 million of transaction costs. As a result of the sale, the Company recorded a $10 million pre-tax loss.

Summary Financial Information

In accordance with ASC 205-20, Discontinued Operations, and ASU 2014-08, Reporting discontinued operations and disclosure of disposals of components of an entity, the results of Waterworks, Interior Solutions, and Power Solutions operations and the gains/losses on sales of the businesses 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 following table provides additional detail related to the results of operations of the discontinued operations (amounts in millions):


	Fiscal Year Ended
	February 3,		January 28,		January 29,
	2019		2018		2017
Net sales	$	—	$	1,413	$	2,706
Cost of sales		—		1,100		2,078
Gross Profit		—		313		628
Operating expenses:
Selling, general and administrative		(2)		197		391
Depreciation and amortization		—		6		12
Restructuring		—		—		2
Total operating expenses		(2)		203		405
Operating Income		2		110		223
(Gain) loss on disposal of discontinued operations		—		(934)		6
Other (income) expense, net		—		1		—
Income before provision for income taxes		2		1,043		217
Provision (benefit) for income taxes		(1)		240		87
Income from discontinued operations, net of tax	$	3	$	803	$	130

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


	Fiscal Year Ended
	February 3,		January 28,		January 29,
	2019		2018		2017
Net cash flows provided by (used in) operating activities	$	—	$	27	$	217
Cash flows from investing activities:
Capital expenditures		—		(5)		(10)
Proceeds from sales of businesses, net		—		2,421		28
Proceeds from sales of property and equipment, net		—		2		2
Net cash flows provided by (used in) investing activities	$	—	$	2,418	$	20