Discontinued Operations

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Engineered Wood Products (EWP)

In March 2022, the Company sold its 50% equity interest in two joint ventures that produce I-joists to Resolute Forest Products Inc. for $59 million, resulting in a pre-tax gain associated with the sale of $39 million recorded in the year ended December 31, 2022 within Income from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Income.

On August 1, 2022, the Company completed the sale of the assets related to the EWP segment to the Purchaser. As a result of the sale, the Company received $217 million in gross cash proceeds after taking into account working capital adjustments. The Company paid $12 million in direct transaction costs, resulting in net proceeds of $205 million. During the year ended December 31, 2022, the Company recorded a pre-tax gain of approximately $118 million within Income from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Income.

Upon closing, the Company entered into the transition services agreement (TSA) with the Purchaser, pursuant to which the Company agreed to support the various activities of the EWP segment for a period not to exceed eight months, which concluded during the three months ended March 31, 2023. During the three months ended March 31, 2023, the Company collected $11 million on the Purchaser's behalf pursuant to the TSA. As of March 31, 2023, the

Company had no amounts due to or due from the Purchaser.

The Company has classified the results of its EWP segment as discontinued operations in its Condensed Consolidated Statements of Income for the prior period presented. The following table presents the financial results of the EWP segment for the three months ended March 31, 2022 (dollar amounts in millions):


	Three Months Ended March 31, 2022
Net sales	$	170
Cost of sales	(129)
Gross profit	41
Selling, general, and administrative expenses	(3)


Income from operations of discontinued operations	38
Other non-operating items	—
Gain on disposal before income taxes	39
Income from discontinued operations before income taxes	77
Provision for income taxes	(15)
Income from discontinued operations, net of income taxes	$	62

The following summarizes the total cash provided by operations and total cash provided by investing activities related to the EWP segment and included in the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 (dollar amounts in millions):


Net cash provided by discontinued operating activities	$	13
Net cash provided by discontinued investing activities	$	59

Net cash provided by discontinued investing activities for the three months ended March 31, 2022, includes $59 million of proceeds from the sale of our 50% equity interest in two joint ventures that produce I-joists.