5. DISCONTINUED OPERATIONS AND OTHER DIVESTITURES

Discontinued operations

Coating Resins

In the second quarter of 2012, we committed to a plan to sell the assets and liabilities of our Coating Resins business. In conjunction with the plan, on May 11, 2012, we announced our agreement to sell our pressure sensitive adhesives (“PSA”) product line of the Coating Resins segment to Henkel AG & Co. (“Henkel”) for approximately $105.0, including working capital of approximately $15.0. As of June 30, 2012, we have met all the criteria for discontinued operations, and as a result, the results of operations of the former Coating Resins segment, including PSA, are now reported as discontinued operations. The total assets and liabilities that are held for sale are approximately $1,603.7 and $447.3, respectively, as of June 30, 2012, and are included as held-for sale in our consolidated balance sheets as of June 30, 2012 and December 31, 2011. The results of operations of the former Coating Resins segment are 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. On July 31, 2012, we completed the sale of the PSA product line to Henkel under the terms noted above, subject to post-closing working capital adjustments.

Building Block Chemicals

On February 28, 2011, we completed the sale of substantially all of the assets and certain liabilities of our former Building Block Chemicals segment (the “Business”) to Cornerstone Chemical Company, an affiliate of HIG Capital, LLC (the “Purchaser”), pursuant to an Asset Purchase Agreement (“the Agreement”) dated January 28, 2011, between the Company and the Purchaser. The total consideration received initially from the sale was $175.7, including cash consideration of $160.7 that we received at closing and a promissory note for $15.0, due in six years and bearing interest at 7.0% annually. A cash payment of $6.6 was made to the Purchaser in July 2011 as final settlement of the agreed working capital transferred, resulting in net realized consideration of $169.1. The assets sold include our Fortier plant located in Westwego, Louisiana, personal property, inventory, accounts receivable, contract rights and certain other assets that are used in or relate to the Business, all as further specified in the Agreement. Liabilities assumed by the Purchaser include accounts payable, contract liabilities, and certain environmental and product liabilities, and certain other liabilities that relate to the Business and are as specified in the Agreement. Certain liabilities relating to the Business were retained by us, including certain environmental, pension and post-retirement healthcare liabilities. For the three and six months ended June 30, 2011, we recorded an after-tax (loss) gain on the sale of $(2.2) and $34.6, respectively, which are included in Gain (loss) on sale of discontinued operations, net of tax in the consolidated statements of income. The results of operations of the former Building Block Chemicals segment are reported as discontinued operations, and are therefore excluded from both continuing operations and segment results for all periods presented.

The following table displays summarized activity in our consolidated statements of income for discontinued operations during the three and six months ended June 30, 2012 and 2011, related to our former Coatings Resins (“Coatings”) and Building Block Chemicals (“BBC”) segments.


	Three months ended June 30, 2012								Three months ended June 30, 2011
	Coatings			BBC		Total			Coatings			BBC			Total
Net sales	$	393.7		$	0.0	$	393.7		$	450.6		$	0.0		$	450.6

Earnings of discontinued business before income taxes ⁽¹⁾	$	50.6		$	0.0	$	50.6		$	34.9		$	0.0		$	34.9
Income tax (expense) benefit ⁽¹⁾		(23.1	)		0.0		(23.1	)		(11.9	)		1.1			(10.8	)
Loss on sale of discontinued operations		0.0			0.0		0.0			0.0			(3.5	)		(3.5	)
Income tax benefit on loss on sale		0.0			0.0		0.0			0.0			1.3			1.3

Earnings (loss) from discontinued operations, net of tax	$	27.5		$	0.0	$	27.5		$	23.0		($	1.1	)	$	21.9


	Six months ended June 30, 2012								Six months ended June 30, 2011
	Coatings			BBC		Total			Coatings			BBC			Total
Net sales	$	799.0		$	0.0	$	799.0		$	880.9		$	96.2		$	977.1

Earnings of discontinued business before income taxes ⁽¹⁾	$	85.9		$	0.0	$	85.9		$	72.6		$	10.0		$	82.6
Income tax expense ⁽¹⁾		(35.0	)		0.0		(35.0	)		(23.8	)		(2.1	)		(25.9	)
Gain on sale of discontinued operations		0.0			0.0		0.0			0.0			55.3			55.3
Income tax expense on gain on sale		0.0			0.0		0.0			0.0			(20.7	)		(20.7	)

Earnings from discontinued operations, net of tax	$	50.9		$	0.0	$	50.9		$	48.8		$	42.5		$	91.3

(1)	Included in earnings of discontinued operations and income tax expenses for the three and six months ending June 30, 2012 and 2011 were the following items:


	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Costs for Coating Resins sale process	$	8.9		$	—		$	15.1		$	—
Net restructuring charges (credits)		(3.7	)		12.2			(0.2	)		11.4
Environmental liability increase		1.7			—			1.7			—

Total charges before taxes	$	6.9		$	12.2		$	16.6		$	11.4

Net tax benefit on above charges		(2.3	)		(3.4	)		(5.6	)		(3.2	)
Tax expense on estimated un-repatirated earnings from anticipated sale of Coating Resins		7.0			—			7.0			—

Total tax		4.7			(3.4	)		1.4			(3.2	)

Total expense impact on discontinued operations, net of tax	$	11.6		$	8.8		$	18.0		$	8.2

The assets and liabilities of the former Coating Resins segment, including the PSA product line, are reported as assets and liabilities held for sale in the applicable periods presented. The following table displays a summary of the assets and liabilities held for sale as of June 30, 2012 and December 31, 2011.


	June 30, 2012		December 31, 2011
Assets
Trade accounts receivable, net	$	258.7	$	212.4
Inventories, net		217.2		187.8
Other current assets		27.1		24.5
Plants, equipment and facilities, net		424.2		389.8
Acquisition intangibles, net		270.1		291.2
Goodwill, net		355.4		361.2
Other assets		51.0		51.9

	$	1,603.7	$	1,518.8

Liabilities
Accounts payable	$	198.8	$	162.7
Accrued liabilities ⁽¹⁾		85.7		88.1
Pension and other postretirement benefits		59.1		60.4
Deferred income taxes		39.6		37.1
Other liabilities ⁽¹⁾		64.1		62.8

	$	447.3	$	411.1



Net assets held for sale	$	1,156.4	$	1,107.7

(1)	As of June 30, 2012 and December 31, 2011, the aggregate environmental related accruals included in liabilities held for sale were $35.1 and $32.9, respectively, of which $3.1 is included in accrued liabilities in the table above, with the remainder included in other liabilities.

Other divestitures

Bogota, Colombia manufacturing plant

During the first quarter of 2011, we sold a former manufacturing plant in Bogota, Colombia for which we recorded a net gain of $3.3, which is recorded in Gain on sale of assets in the accompanying statements of income.