Discontinued Operations

12 Months Ended

Dec. 31, 2013

Discontinued Operations [Abstract]

Discontinued Operations

(6) Discontinued Operations

Health and Beauty (HBS) Operations:

In September 2013, we committed to divest our HBS operations within our performance materials segment.  The results of these operations have been reclassified and recorded net of income tax within Income (loss) on discontinued operations within our Consolidated Statements of Operations.

The following table presents HBS’s summarized results of operations reported in discontinued operations for the years ended December 31, 2013, 2012 and 2011:

	Year Ended December 31,
HBS	2013			2012		2011
Net sales	$	14.2		$	18.2	$	17.5
Pre-tax income/(loss)		(6.3	)		0.3		-
Income tax expense/(benefit)		(2.1	)		-		-
Income (loss) on discontinued operations		(4.2	)		0.3		-

Assets and liabilities of HBS on our Consolidated Balance Sheets as of December 31, 2013 and 2012 include the following:

	December 31,
	2013*			2012
Current assets	$	4.6		$	7.0
Property, plant, and equipment, net		4.1			5.9
Goodwill		-			1.8
Intangible assets, net		3.6			5.1
Other non-current assets		1.8			-
Valuation allowance		(2.4	)		-
Total assets of HBS		11.7			19.8
Current liabilities		0.5			0.9
Other LT liabilities		-			0.5
Total liabilities of HBS		0.5			1.4

* Note that the assets and liabilities of HBS at December 31, 2013 are recorded with assets-held-for-sale and accrued liabilities within our Consolidated Balance Sheets.

In accordance with ASC Topic 360, Impairment and Disposal of Long Lived Assets, the assets of HBS met the held for sale criteria and we adjusted the carrying value of HBS’s net asset held-for-sale to their fair value less cost to sell, $12.0. This fair value adjustment resulted in impairment charges (discussed below) of $1.8, $1.1, and $1.3; related to HBS’s goodwill, intangible assets, and property, plant and equipment, respectively, and $2.4 charge related to establishing a valuation allowance against HBS’s net assets.  The total loss of $6.6, offset by a $2.4 income tax benefit, for the twelve months ended December 31, 2013 is recorded within Income (loss) on discontinued operations within our Consolidated Statements of Operations.

As required by ASC Topic 350 – Intangibles – Goodwill and Other, we completed an interim test for goodwill and intangible assets for HBS’s operations during the third quarter of 2013. In the first step of the goodwill impairment evaluation, we compared the fair value of HBS based on an observable Level 2 fair value input with its carrying amount, which suggested the goodwill was impaired.  In performing the second step of impairment test, we determined that the implied fair value of goodwill was lower than carrying amount, and recorded an impairment loss of $1.8.

The $1.1 impairment charge for intangible assets relates to trademarks and developed technology, and was assessed using the relief from royalty rate method (Level 3 fair value input). Critical assumptions used in conducting these tests included applicable market royalty rates and discount rates as well as the future performance of these assets.

The $1.3 impairment charge relating to HBS’s plant, property and equipment was assessed using cost method adjusted for age and deterioration (Level 3 fair value input).

CETCO Contracting Services Company:

In September 2011, our construction technologies segment sold CETCO Contracting Services Company, which comprised our domestic contracting services business.  The operations of this business, including the immaterial loss recorded on sale, have been reclassified and are recorded net of income tax within Income (loss) on discontinued operations within our Consolidated Statements of Operations.