DISCONTINUED OPERATIONS

International Business

On August 31, 2017, the Company completed the sale of the International Business for cash proceeds of $150.6 million at closing, which is net of seller financing provided by the Company in the form of a $29.7 million loan for seven years bearing interest at 5% for the first three years, with annual 2.5% increases thereafter. The transaction also included contingent consideration, a non-cash investing activity, with a maximum payout of $23.8 million and an initial fair value of $18.2 million, the payment of which will depend on the achievement of certain performance criteria by the International Business following the closing of the transaction through fiscal 2020. The seller financing loan and the contingent consideration receivable are recorded in the “Other assets” line in the Condensed Consolidated Balance Sheets. The cash proceeds from the sale were subject to post-closing adjustments and the Company originally accrued $27.8 million at September 30, 2017 in the “Other current liabilities” line in the Condensed Consolidated Balance Sheets related to the expected working capital adjustment obligation in respect of the actual closing date financial position of the International Business. The Company recorded a pre-tax gain on the sale of the International Business of $32.7 million, partially offset by the provision for income taxes of $12.0 million, during fiscal 2017. The fiscal 2017 pre-tax gain included a write-off of accumulated foreign currency translation loss adjustments of $18.5 million. During the three months ended March 31, 2018, the Company recorded a reduction to the gain of $3.7 million related to the resolution of the post-closing working capital adjustment obligation.

In connection with the transaction, the Company entered into certain ancillary agreements including a transition services agreement and a material supply agreement, which are not material, as well as a licensing agreement for the use of certain of the Company’s brand names with an initial fair value of $14.1 million.

During the three and six months ended March 31, 2018, the Company recognized $0.2 million and $1.6 million, respectively, as compared to $2.3 million and $3.9 million for the three and six months ended April 1, 2017, respectively, in transaction related costs associated with the sale of the International Business.

Scotts LawnService^®

On April 13, 2016, pursuant to the terms of the Contribution and Distribution Agreement (the “Contribution Agreement”) between the Company and TruGreen Holding Corporation (“TruGreen Holdings”), the Company completed the contribution of the Scotts LawnService^®business (the “SLS Business”) to a newly formed subsidiary of TruGreen Holdings (the “TruGreen Joint Venture”) in exchange for a minority equity interest of approximately 30% in the TruGreen Joint Venture. As a result, effective in its second quarter of fiscal 2016, the Company classified its results of operations for all periods presented to reflect the SLS Business as a discontinued operation and classified the assets and liabilities of the SLS Business as held for sale.

During the three and six months ended April 1, 2017, the Company recognized $0.1 million and $0.7 million, respectively, in transaction related costs associated with the divestiture of the SLS Business. In addition, during the six months ended April 1, 2017, the Company recorded a reduction to the gain on the contribution of the SLS Business of $0.3 million related to a post-closing working capital adjustment.

The following table summarizes the results of the International Business and SLS Business within discontinued operations for each of the periods presented:



	THREE MONTHS ENDED					SIX MONTHS ENDED
	MARCH 31, 2018			APRIL 1, 2017		MARCH 31, 2018			APRIL 1, 2017
	(In millions)
Net sales	$	—		$	118.9	$	—		$	158.2
Operating and exit costs	1.6			99.8		1.6			146.7
Impairment, restructuring and other	0.2			2.4		1.6			4.6
Other expense, net	—			0.2		—			0.1
Loss on sale / contribution of business	3.7			—		3.5			0.3
Interest expense	—			—		—			0.4
Income (loss) from discontinued operations before income taxes	(5.5		)	16.5		(6.7		)	6.1
Income tax expense (benefit) from discontinued operations	(1.8		)	5.4		(1.8		)	1.8
Income (loss) from discontinued operations, net of tax	$	(3.7	)	$	11.1	$	(4.9	)	$	4.3

The following table summarizes the major classes of assets and liabilities held for sale:



	APRIL 1, 2017
	(In millions)
Cash and cash equivalents	$	18.9
Accounts receivable, net	143.0
Inventories	62.0
Prepaid and other current assets	8.4
Property, plant and equipment, net	23.8
Goodwill and intangible assets, net	60.2
Other assets	15.2
Assets held for sale	$	331.5

Accounts payable	$	51.8
Other current liabilities	71.9
Long-term debt	12.2
Other liabilities	18.8
Liabilities held for sale	$	154.7

The Condensed Consolidated Statements of Cash Flows do not present the cash flows from discontinued operations separately from cash flows from continuing operations. Cash used in operating activities related to discontinued operations totaled zero and $65.9 million for the six months ended March 31, 2018 and April 1, 2017, respectively. Cash used in investing activities related to discontinued operations totaled $35.3 million and $3.1 million for the six months ended March 31, 2018 and April 1, 2017, respectively.