Discontinued Operations

12 Months Ended

Dec. 31, 2016

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

NOTE 19—DISCONTINUED OPERATIONS

The following table presents the assets and liabilities, as of December 31, 2016 and 2015, of the components of the Company designated as discontinued operations as of December 31, 2016:

	December 31,
(In millions)	2016		2015
Current assets	$	—	$	0.3
Current liabilities		—		0.1
Noncurrent liabilities		—		0.7

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, a strategic shift for the Company, 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 no repurchase reserve is appropriate as of December 31, 2016.

The Company did not settle or receive any repurchase claims during the years ended December 31, 2016 and 2015. The repurchase reserve liability was zero and $0.7 million as of December 31, 2016 and 2015, 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 $0.7 million and $4.8 million in the years ended December 31, 2016 and 2015, respectively. During the year ended December 31, 2014, the repurchase reserve was reduced by $1.0 million.

The following table presents the operating results, for the years ended December 31, 2016, 2015 and 2014, for the components of the Company designated as discontinued operations as of December 31, 2016:

	Year Ended December 31,
(In millions)		2016			2015			2014
Revenues	$	—		$	0.7		$	39.8
Cost of sales		—			0.4			25.3
Gross profit		—			0.3			14.5
Selling, general and administrative expenses		0.3			0.5			6.5
Other operating expense		—			—			1.1
Operating profit (loss)		(0.3	)		(0.2	)		6.9
Nonoperating income, net		1.2			44.7			2.3
Earnings before income taxes		0.9			44.5			9.2
Income tax expense		0.3			19.6			3.7
Earnings from discontinued operations, net of income taxes	$	0.6		$	24.9		$	5.5

The nonoperating income for the year ended December 31, 2016 is primarily related to the $0.7 million reduction of the repurchase reserve and is primarily related to the $39.7 million gain on sale of NABCO and the $4.8 million reduction of the repurchase reserve for the year ended December 31, 2015.