Discontinued Operations

12 Months Ended

Dec. 31, 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. We have concluded the divestiture 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 Consolidated Financial Statements for all periods presented. The assets and liabilities of this business are also presented as held for sale in the Consolidated Balance Sheets for the year ended December 31, 2021. 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 $13.3 million for the year ended December 31, 2022 and was recorded in Other Income in the Consolidated Financial Statements.

The following table presents the summarized components of income from discontinued operations, net of income taxes, for the Commercial and Industrial Lighting business:


	Year Ended December 31,
(in millions)	2022		2021		2020
Net sales	$	29.1	$	509.4	$	503.5
Cost of goods sold	27.8		403.4		385.6
Gross profit	1.3		106.0		117.9
Selling & administrative expenses	17.3		88.5		85.1
Operating (Loss) income	(16.0)		17.5		32.8
Gain on disposal of business	73.9		—		—
Other expense	(1.5)		(4.1)		(4.0)
Income from discontinued operations before income taxes	56.4		13.4		28.8
Provision (benefit) for income taxes	21.8		(21.1)		7.6
Income from discontinued operations, net of taxes	$	34.6	$	34.5	$	21.2

Income from discontinued operations, net of taxes for the year ended December 31, 2022 and December 31, 2021 includes pre-tax transaction and separation costs of $8.8 million and $7.0 million, respectively. The provision for income taxes on discontinued operations in 2022 includes a correction of $19 million of income tax expense recognized in the fourth quarter of 2022 that should have been recognized in the first quarter of 2022. The Company evaluated the materiality of the adjustment to prior-period financial statements and concluded the effect of the adjustment was immaterial. In addition, a one-time tax benefit of $25.1 million related to book-to-tax basis differences of the business was recorded in the year ended December 31, 2021.

The following table presents balance sheet information for assets and liabilities held for sale:


	At December 31,
(in millions)	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