Dispositions and Special Charges

The Company’s discontinued operations include the results of the France business sold in August 2018, the SARL Businesses sold in March 2017 and the NATG business sold in December 2015 (See Note 1).

In the third quarter and for the nine months ended September 30, 2018, the Company recorded a pre-tax book gain on the sale of the France business, which was reported within the discontinued operations of the Company's ETG segment, of approximately $178.2 million. The pre-tax book gain included proceeds from the sale of approximately $267.3 million offset by the $82.5 million of net assets sold and by expenses related to the sale of approximately $6.6 million. These expenses included $5.1 million of deal transaction costs and $1.5 million for accelerated amortization expense of restricted stock units and stock options. Of the expenses mentioned, $5.1 million of deal transaction costs required or will require the use of cash.

In the third quarter of 2018, there were a de minimis amount of legal and professional fees incurred related to the wind down of the SARL Businesses. For the nine months ended September 30, 2018, the Company recorded approximately $0.2 million in recoveries of escrow funds, $0.1 million of accelerated depreciation charges and $0.1 million for legal and professional fees related to the wind down of the SARL Businesses, within discontinued operations. The impact of the previously mentioned charges and recoveries related to the wind down of the SARL Businesses for the nine months ended September 30, 2018, net to zero. Of the previously mentioned charges, legal and professional fees required the use of cash. The Company expects that total additional charges related to the wind down of the SARL businesses will be less than $1.0 million.

In the third quarter of 2018, the Company's NATG discontinued operations received $0.3 million in restitution receipts from a former executive of NATG, recorded approximately $0.1 million in favorable accrual adjustments related to the ongoing restitution proceedings and recorded $1.8 million in lease reserve adjustments related to their leased facilities, within discontinued operations. For the nine months ended September 30, 2018, the Company's NATG discontinued operations received $1.0 million in restitution receipts from a former executive of NATG, recorded lease reserves adjustments of approximately $1.7 million related to their leased facilities, received $0.1 million in vendor settlements and recorded legal and professional fees, related to the ongoing restitution proceedings, of $0.1 million. The impact of the previously mentioned charges and recoveries related to the NATG discontinued operations totaled $0.7 million for the nine months ended September 30, 2018. The Company expects that total additional charges related to the sale of the NATG business after this quarter will be less than $1.0 million and that these charges will be presented in discontinued operations. Additional costs may be incurred in NATG for outstanding leased facilities if current sublease assumptions do not materialize (see Note 1). Most of these anticipated costs will require the use of cash. Amounts that are unpaid at September 30, 2018 are recorded in Accrued expenses and other current liabilities and Other liabilities (long term) in the accompanying Condensed Consolidated Balance Sheets.

In the third quarter and for the nine months ended September 30, 2018, the Company's NATG continuing operations recorded approximately $0.8 million of special charges for updating our future lease cash flows expectations related to previously exited retail stores and a warehouse.

In the third quarter and for the nine months ended September 30, 2018, the Company's German continuing operations recorded approximately $0.1 million of special charges for updating future lease cash flows expectations related to a previously exited lease obligation.

Below is a summary of the impact on net sales, net income (loss) and net income (loss) per share from discontinued operations for the three and nine month periods ended September 30, 2018 and 2017. A reconciliation of pretax income (loss) of Discontinued operations to the Net Income (loss) of discontinued operations is as follows (in millions):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Net sales	$	77.1		$	114.9	$	352.0		$	454.5
Cost of sales	66.2			96.5		295.8			385.4
Gross profit	10.9			18.4		56.2			69.1
Selling, distribution & administrative expenses	6.7			15.3		36.0			59.8
Pre-tax book gain on sale of France business	(178.2		)	0.0		(178.2		)	0.0
Special charges	1.4			0.3		0.7			28.6
Operating income (loss) from discontinued operations	181.0			2.8		197.7			(19.3		)
Interest and other (income) expenses, net	0.1			0.4		(0.2		)	1.0
Income (loss) from discontinued operations before income taxes	180.9			2.4		197.9			(20.3		)
Provision for income taxes	17.2			2.4		23.5			6.0
Net income (loss) from discontinued operations	$	163.7		$	0.0	$	174.4		$	(26.3	)
Net income (loss) per share – basic	$	4.40		$	0.00	$	4.69		$	(0.71	)
Net income (loss) per share – diluted	$	4.32		$	0.00	$	4.59		$	(0.70	)

Total special charges incurred, within discontinued operations, in the third quarter of 2017 totaled approximately $0.3 million, of which $0.2 million related to the discontinued operations of the SARL business related to a transitional services agreement and, within NATG discontinued operations, approximately $0.1 million of professional costs were incurred related to the ongoing restitution proceedings against certain former NATG executives.

Total special charges incurred, within discontinued operations, for the nine months ended September 30, 2017 totaled approximately $28.6 million. The combined loss on the sale of the SARL Businesses totaled $24.4 million, which included an $8.2 million loss on the sale of net assets, $14.4 million of translation adjustments, and $1.0 million of legal, professional and other costs, $0.3 million of severance and other personnel costs and $0.3 million of accelerated depreciation charges and $0.2 million related to a transitional services agreement. In addition, NATG discontinued operations incurred special charges of $4.2 million, which included approximately $3.5 million primarily related to updating our future lease cash flows and $0.7 million related to the ongoing restitution proceedings against certain former NATG executives.

Total special charges incurred, within continuing operations, in the third quarter of 2017 and nine months ended September 30, 2017 totaled $0.1 million and $0.3 million, respectively. These charges related to updating our future lease cash flows expectations related to our previously exited retail stores.

The following table details liabilities related to the sold NATG segment’s leases and other costs and liabilities that remain from the sold Misco Germany business (Corporate) as of September 30, 2018 (in millions):



	Corporate – Lease liabilities and other costs		NATG – Lease liabilities and other exit costs			Total
Balance January 1, 2018	$	1.2	$	19.0		$	20.2
Charged to expense (income)	0.1		2.5			2.6
Paid or otherwise settled	(0.2)		(14.8		)	(15.0		)
Balance September 30, 2018	$	1.1	$	6.7		$	7.8