Discontinued Operations
After receiving an unsolicited offer for its European simple meals business, the company re-evaluated the recent trends, the strategic priority and the long-term financial outlook for that business. The company then pursued discussions that led to finalizing the terms of a potential sale of the business to a third party in the fourth quarter. On August 12, 2013, the company announced that it is in final and exclusive negotiations for the potential sale of its simple meals business in Europe. The European business includes Erasco and Heisse Tasse soups in Germany; Liebig and Royco soups in France; Devos Lemmens mayonnaise and cold sauces and Royco soups in Belgium; and Blå Band and Isomitta soups and sauces in Sweden.
The company has reflected the results of the business as discontinued operations in the Consolidated Statements of Earnings for all years presented. The business was historically included in the International Simple Meals and Beverages segment.
Results of discontinued operations were as follows:
|
| | | | | | | | | | | |
| 2013 | | 2012 | | 2011 |
Net sales | $ | 532 |
| | $ | 532 |
| | $ | 576 |
|
| | | | | |
Earnings (loss) before taxes | $ | (331 | ) | | $ | 57 |
| | $ | 68 |
|
Taxes on earnings | 100 |
| | (17 | ) | | (15 | ) |
Earnings (loss) from discontinued operations | $ | (231 | ) | | $ | 40 |
| | $ | 53 |
|
In the fourth quarter of 2013, the company recorded an impairment charge on the intangible assets of this business of $396 ($263 after tax or $.83 per share). In addition, the company recorded $18 in tax expense ($.06 per share) representing taxes on the difference between the book value and tax basis of the business. See Note 6 for additional information on the impairment charge.
The assets and liabilities of the European business have been reflected in assets and liabilities held for sale in the Consolidated Balance Sheet as of July 28, 2013, and are comprised of the following:
|
| | | |
| 2013 |
Cash | $ | 68 |
|
Accounts receivable | 54 |
|
Inventories | 68 |
|
Prepaid Expenses | 3 |
|
Current assets | $ | 193 |
|
| |
Plant assets | $ | 98 |
|
Goodwill | 110 |
|
Intangible assets | 150 |
|
Other assets | 35 |
|
Non-current assets | $ | 393 |
|
| |
Accounts payable | $ | 60 |
|
Accrued liabilities | 54 |
|
Current Liabilities | $ | 114 |
|
| |
Non-current pension obligation | $ | 11 |
|
Other liabilities | 11 |
|
Non-current liabilities | $ | 22 |
|
