Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

NOTE 20—DISCONTINUED OPERATIONS

The following table presents the assets and liabilities, as of December 31, 2015 and 2014, of the components of the Company designated as discontinued operations as of December 31, 2015:

	December 31,
(In millions)	2015		2014
Current assets:
Cash and cash equivalents	$	0.1	$	1.0
Trade accounts receivable, net		—		4.5
Inventories		—		11.4
Prepaid expenses, supplies, and other current assets		0.2		1.2
Total current assets of discontinued operations	$	0.3	$	18.1
Noncurrent assets:
Property, plant and equipment, net	$	—	$	0.3
Intangible assets, net		—		1.6
Goodwill		—		17.8
Other noncurrent assets		—		0.3
Total noncurrent assets of discontinued operations	$	—	$	20.0
Current liabilities:
Trade payables	$	—	$	2.9
Accrued liabilities		0.1		0.3
Line of credit		—		1.0
Long-term debt due within one year		—		3.9
Total current liabilities of discontinued operations	$	0.1	$	8.1
Noncurrent liabilities:
Long-term debt	$	—	$	9.7
Repurchase reserve		0.7		5.5
Total noncurrent liabilities of discontinued operations	$	0.7	$	15.2

On January 9, 2015, we sold all of our interests in NABCO (previously reported as the Industrial Supply segment) for $77.9 million, including a final working capital adjustment of $0.1 million. As a result of the sale, the gain on sale of NABCO, along with the assets, liabilities and results of operations of NABCO are included in discontinued operations for all periods presented.

Repurchase reserve

Through the first quarter of 2015, SGGH maintained a repurchase reserve that represented estimated losses from repurchase claims, both known and unknown, based on claimed breaches of certain representations and warranties provided by FIL to counterparties that purchased residential real estate loans, predominantly from 2002 through 2007. Management estimated the likely range of the loan repurchase liability based on a number of factors, including, but not limited to, the timing of such claims relative to the loan origination date, the quality of the documentation supporting such claims, the number and involvement of cross-defendants, if any, related to such claims, and a time and expense estimate if a claim were to result in litigation. The estimate was based on then-currently available information and was subject to known and unknown uncertainties using multiple assumptions requiring significant judgment.

In June 2015, the New York State Court of Appeals affirmed the decision of the New York State Supreme Court, Appellate Division in ACE Securities Corp v. DB Structured Products, Inc. (the “ACE Securities Case”), whereby the New York state six-year statute of limitations on loan repurchase demands begins to run as of the closing date on which the representations were made, which, in the ACE Securities Case, was the date of the mortgage loan purchase agreements. Based on the final decision in the ACE Securities Case, management has reassessed its exposure to losses from repurchase demands and believes a repurchase reserve of $0.7 million is adequate as of December 31, 2015.

The Company did not settle or receive any repurchase claims during the years ended December 31, 2015 and 2014. The repurchase reserve liability was $0.7 million and $5.5 million as of December 31, 2015 and 2014, respectively. As a result of the decision in the ACE Securities Case, we reassessed the estimates for losses associated with repurchase claims and, consequently, reduced the allowance for repurchase reserves by $4.3 million in the quarter ended June 30, 2015. During the years ended December 31, 2015, 2014 and 2013, the repurchase reserve was reduced by $4.8 million, $1.0 million and $1.0 million, respectively. As a result of the change in estimate as a result of the ACE Securities Case, the reduction in the repurchase reserve in excess of our previous estimate increased earnings from discontinued operations, net of income tax by $2.1 million or $0.08 per share for the year ended December 31, 2015.

The following table presents the operating results, for the years ended December 31, 2015, 2014 and 2013, for the components of the Company designated as discontinued operations as of December 31, 2015:

	Year Ended December 31,
(In millions)		2015			2014		2013
Revenues	$	0.7		$	39.8	$	37.8
Cost of sales		0.4			25.3		23.4
Gross profit		0.3			14.5		14.4
Selling, general and administrative expenses		0.5			6.5		6.9
Amortization of intangibles		—			1.1		1.6
Operating profit (loss)		(0.2	)		6.9		5.9
Nonoperating income		44.7			2.3		0.8
Earnings before income taxes		44.5			9.2		6.7
Income tax expense		19.6			3.7		2.5
Earnings from discontinued operations, net of income taxes	$	24.9		$	5.5	$	4.2

The nonoperating income for the year ended December 31, 2015 is primarily related to the $39.7 million gain on sale of NABCO and the $4.8 million reduction of the repurchase reserve.