Discontinued Operations

9 Months Ended

Sep. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

On February 1, 2022, the Company completed the sale of the C&I Lighting business to GE Current, a Daintree Company, for total net cash consideration of $332.8 million. The sale of this business represents a strategic shift that will have a major effect on our operations and financial results, and as a result, is reported as a discontinued operation in our Condensed Consolidated Financial Statements for all periods presented. The assets and liabilities of this business are also presented as held for sale in the Condensed Consolidated Balance Sheets, in the periods prior to the sale. The C&I Lighting business was previously included in the Electrical Solutions segment.

Under the terms of the transaction, Hubbell and the buyer entered into a transition services agreement ("TSA"), pursuant to which the Company provides certain administrative and operational services for a period of 12 months or less. Furthermore, we entered into a short-term supply agreement whereby the Company acts as a supplier of finished goods and component parts to the C&I Lighting business after the completion of the sale. Income from the TSA and supply agreement was $3.2 million and $10.8 million, respectively, for the three and nine months ended September 30, 2022 and was recorded in Other Income in the Condensed Consolidated Financial Statements.

The following table presents the summarized components of income from discontinued operations, net of income taxes, for the C&I Lighting business:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Net sales	$	—	$	130.3	$	29.1	$	389.9
Cost of goods sold	—		102.4		27.7		304.3
Gross profit	—		27.9		1.4		85.6
Selling & administrative expenses	3.0		19.9		18.2		61.8
Operating (loss) income	(3.0)		8.0		(16.8)		23.8
(Loss) Gain on disposal of business	(7.0)		—		73.7		—
Other expense	(0.2)		(0.6)		(1.4)		(2.0)
(Loss) income from discontinued operations before income taxes	(10.2)		7.4		55.5		21.8
Provision for income taxes	1.0		2.4		2.6		5.4
(Loss) income from discontinued operations, net of taxes	$	(11.2)	$	5.0	$	52.9	$	16.4

(Loss) income from discontinued operations, net of taxes for the three and nine months ended September 30, 2022 includes transaction and separation costs of $3.0 million and $9.7 million, respectively. The gain on disposal of business for the nine months ended September 30, 2022 includes a net working capital adjustment of $15.8 million that was cash settled in the third quarter of 2022.

The following table presents the major classes of assets and liabilities classified as held for sale in the Condensed Consolidated Balance Sheet for the year ended December 31, 2021:



(in millions)	December 31, 2021
Cash and cash equivalents	$	0.7
Accounts receivable	83.1
Inventories, net	89.8
Other current assets	5.9
Assets held for sale - current	$	179.5
Property, Plant, and Equipment, net	77.7
Goodwill	50.2
Other intangible assets, net	37.3
Other long-term assets	11.9
Assets held for sale - non-current	$	177.1
Accounts payable	50.2
Accrued salaries, wages and employee benefits	8.5
Accrued insurance	3.9
Other accrued liabilities	28.7
Liabilities held for sale - current	$	91.3
Other Non-Current Liabilities	18.8
Liabilities held for sale - non-current	$	18.8