Divestitures

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

The Company routinely reviews its portfolio of businesses relative to its business portfolio criteria and evaluates if further portfolio refinements may be needed. The Company previously communicated its intent to explore options, including potential divestitures, for certain businesses with annual revenues totaling up to $1 billion. As such, the Company may commit to a plan to exit or dispose of certain businesses and present them as held for sale in periods prior to the sale of the business.

In the second quarter of 2019, the Company approved plans to divest six businesses, including two businesses in the Test & Measurement and Electronics segment, one business in the Automotive OEM segment, one business in the Welding segment, and two businesses in the Specialty Products segment. These six businesses were classified as held for sale beginning in the second quarter of 2019.

In the fourth quarter of 2019, the Company divested three of the held for sale businesses which included one business in the Test & Measurement and Electronics segment, one business in the Welding segment, and one business in the Specialty Products segment. For the twelve months ended December 31, 2019, the Company recorded net pre-tax gains on disposal of businesses of $44 million ($30 million after-tax, or $0.09 per diluted share) which was primarily due to the three divestitures of held for sale businesses discussed above. The net pre-tax gain was included in Other income (expense) in the Statement of Income.

Operating revenue related to businesses divested in 2019 that was included in the Company's results of operations for the three months ended June 30, 2019 was $37 million, which included $16 million in the Welding segment, $17 million in the Test & Measurement and Electronics segment, and $4 million in the Specialty Products segment. Operating revenue related to businesses divested in 2019 for the six months ended June 30, 2019 was $73 million, which included $31 million in the Welding segment, $33 million in the Test & Measurement and Electronics segment, and $9 million in the Specialty Products segment.

As of December 31, 2019, three of the businesses discussed above continued to be held for sale, including one business in the Test & Measurement and Electronics segment, one business in the Automotive OEM segment, and one business in the Specialty Products segment. In the first quarter of 2020, the Company concluded that the sales of the one business in the Automotive OEM segment and the one business in the Specialty Products segment previously held for sale were no longer probable of being completed within one year, primarily due to the disruptions and economic uncertainty resulting from the COVID-19 pandemic. Accordingly, these businesses were no longer presented as held for sale in the Statement of Financial Position beginning in the first quarter of 2020. As of June 30, 2020, only the one business in the Test & Measurement and Electronics segment continued to be presented as held for sale, and it is expected to be sold within one year.

The assets and liabilities related to the held for sale businesses that were included in assets and liabilities held for sale in the Statement of Financial Position as of June 30, 2020 and December 31, 2019, were as follows:


In millions	June 30, 2020		December 31, 2019
Trade receivables	$	34	$	81
Inventories	24		28
Net plant and equipment	16		48
Goodwill and intangible assets	142		166
Other	5		28
Total assets held for sale	$	221	$	351

Accounts payable	$	9	$	21
Accrued expenses	10		17
Other	21		33
Total liabilities held for sale	$	40	$	71

Operating revenue related to the one business held for sale as of June 30, 2020 that was included in the Company's results of operations for the three and six months ended June 30, 2020 and 2019, was as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
In millions	2020		2019		2020		2019
Operating revenue	$	40	$	51	$	90	$	102