DISCONTINUED OPERATIONS AND OTHER DIVESTITURES

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND OTHER DIVESTITURES

DISCONTINUED OPERATIONS AND OTHER DIVESTITURES

The following table displays summarized activity in our consolidated statements of income for discontinued operations during the three months ended March 31, 2014 and 2013, related to our former Coating Resins (“Coatings”) segment and other divestitures.

	Three Months Ended March 31,
	2014								2013
	Coatings			Pre- Acquisition Umeco		Total			Coatings			Total
Net sales	$	—		$	—	$	—		$	360.8		$	360.8
Earnings from operations of discontinued businesses before income taxes	$	—		$	—	$	—		$	48.1		$	48.1
Income tax expense on operations	—			—		—			(16.5		)	(16.5		)
Gain (loss) on sale of discontinued operations	(4.1		)	3.6		(0.5		)	(4.6		)	(4.6		)
Income tax (expense) benefit on gain (loss) on sale	0.5			—		0.5			0.3			0.3
Earnings from discontinued operations, net of tax	$	(3.6	)	$	3.6	$	—		$	27.3		$	27.3

Discontinued operations

Coating Resins

On April 3, 2013, we completed the divestiture of our remaining Coatings business to Advent International (“Advent”), a global private equity firm, for a total value of $1,133.0, including assumed liabilities of $118.0, resulting in a cumulative after-tax loss on sale of $16.9 in 2013. In the first quarter of 2013, the loss consisted of an after-tax charge of $4.3 to adjust our carrying value of the disposal group to its fair value less cost to sell, based on the terms of the agreement. After-tax earnings from operations of the discontinued business for the first quarter of 2013 were $31.6.

In connection with the sale of the business to Advent, we agreed to retain certain liabilities, including liabilities for U.S. pension and other postretirement benefits and certain tax liabilities related to taxable periods (or portions thereof) ending on or before April 3, 2013. During the three months ended March 31, 2014, we recorded after-tax charges of $1.8 related to certain of these tax liabilities. Additionally, in the first quarter of 2014, we recorded after-tax charges of approximately $1.8 for final purchase price and working capital adjustments related to the divestiture, which we expect to be settled in cash in the second quarter of 2014.

The after-tax losses and the adjustment to carrying value are included in Net gain (loss) on sale of discontinued operations, net of tax in the consolidated statements of income. The results of operations and gain (loss) on sale of the former Coating Resins segment have been reported as discontinued operations, and are therefore excluded from both continuing operations and segment results for all periods presented. All previously reported financial information has been revised to conform to the current presentation.

Other divestitures

Industrial Materials distribution product line

On July 12, 2013, we sold the Industrial Materials distribution product line, which we acquired from Umeco in July 2012, to Cathay Investments for $8.6, subject to final working capital and other customary adjustments. In the second quarter of 2013, we recorded an after-tax charge of $12.5 to adjust our carrying value of the disposal group to its fair value less cost to sell, based on the terms of the agreement. The charge is included in Net gain (loss) on sale of discontinued operations, net of tax in the consolidated statements of income in the second quarter of 2013.

The results of operations of the Industrial Materials distribution product line prior to its divestiture remained in continuing operations for all periods presented, as the results of operations for the business and assets and liabilities sold were not material to disclose as discontinued operations or assets held for sale.

As part of our acquisition accounting for Umeco in 2012, we established reserves related to income tax and value added tax liabilities of an entity that had been divested by Umeco in 2011, for periods that were under audit prior to it its divestiture. We continued to accrue interest through the end of 2013. In the first quarter of 2014, we agreed to a settlement for audit periods through March 31, 2009, which resulted in a benefit of approximately $3.6. The benefit is included in Net gain (loss) on sale of discontinued operations, net of tax in the consolidated statements of income.