HELD FOR SALE AND DISCONTINUED OPERATIONS
During the fourth quarter of 2012, the Company committed to a plan to sell HemoCue. In February 2013, the Company entered into an agreement to sell HemoCue for approximately $300 million plus estimated cash on hand at closing and other customary working capital adjustments. The Company completed the sale of HemoCue in April 2013. The Company completed the sale of OralDNA in December 2012. As a result, the Company's 2012 results include charges in discontinued operations for the asset impairment associated with HemoCue and the loss on sale associated with OralDNA totaling $86 million. Discontinued operations also includes a $8 million income tax expense related to the re-valuation of deferred tax assets associated with HemoCue and a $4 million income tax benefit related to the remeasurement of deferred taxes associated with HemoCue as a result of an enacted income tax rate change in Sweden.
Income (loss) from discontinued operations, net of taxes for the year ended December 31, 2013 includes a gain of $14 million (including foreign currency translation adjustments, partially offset by income tax expense and transaction costs) associated with the sale of HemoCue. In addition, income (loss) from discontinued operations, net of taxes for the year ended December 31, 2013, includes discrete tax benefits of $20 million associated with favorable resolution of certain tax contingencies related to our NID business.
Results of operations for HemoCue and OralDNA have been reported as discontinued operations in the accompanying consolidated financial statements and related notes to consolidated financial statements for all periods presented. At December 31, 2012, the assets and liabilities of HemoCue have been reported as held for sale in the accompanying balance sheet.
Results of operations for NID have been reported as discontinued operations in the accompanying consolidated statements of operations and related disclosures for all periods presented. The Company began reporting NID as a discontinued operation in 2006 and will continue to report NID as a discontinued operation until uncertain tax benefits associated with NID are resolved.
On April 15, 2009, the Company finalized the resolution of the federal government investigation related to NID and entered into a final settlement agreement with the federal government. In the second quarter of 2009, the Company paid $268 million to settle the civil allegations. The Company also entered into a five-year corporate integrity agreement with the Office of Inspector General for the United States Department of Health and Human Services. In addition, NID pled guilty to a single count of felony misbranding and paid a $40 million fine. These payments totaling $308 million, which had been previously reserved, were funded out of cash on-hand and available credit facilities. During the third quarter of 2009, the Company finalized separate settlement agreements with certain states and paid approximately $6 million, which had been previously reserved for.
Summarized financial information for the discontinued operations is set forth below:
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| | | | | | | | | | | |
| 2013 | | 2012 | | 2011 |
| | | | | |
Net revenues | $ | 28 |
| | $ | 117 |
| | $ | 119 |
|
Income (loss) from discontinued operations before taxes | 25 |
| | (74 | ) | | 7 |
|
Income tax expense (benefit) | (10 | ) | | — |
| | (5 | ) |
| | | | | |
Income (loss) from discontinued operations, net of taxes | $ | 35 |
| | $ | (74 | ) | | $ | 12 |
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The following table summarizes the HemoCue assets and liabilities held for sale in the consolidated balance sheets at December 31, 2012:
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| | | |
| 2012 |
Assets held for sale: | |
Cash and cash equivalents | $ | 17 |
|
Accounts receivable, net | 15 |
|
Inventories | 5 |
|
Prepaid expenses and other current assets | 3 |
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| |
Total current assets held for sale | 40 |
|
| |
Property, plant and equipment, net | 24 |
|
Goodwill | 219 |
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Intangible assets, net | 111 |
|
| |
Total non-current assets held for sale | $ | 354 |
|
| |
Liabilities held for sale: | |
Accounts payable and accrued expenses | $ | 21 |
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Current portion of long-term debt | 1 |
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| |
Total current liabilities held for sale | 22 |
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| |
Long-term debt | 16 |
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Other liabilities | 44 |
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| |
Total non-current liabilities held for sale | $ | 60 |
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Continuing cash flows from discontinued operations were not material.
The remaining balance sheet information related to NID and OralDNA was not material at December 31, 2013 and 2012. The remaining balance sheet information related to HemoCue was not material at December 31, 2013.
