Discontinued Operations (Notes)
|3 Months Ended|
Mar. 31, 2018
|Discontinued Operations and Disposal Groups [Abstract]|
On December 5, 2017, the Board of Directors authorized the Company to exit its Sea Ray businesses, including the Meridian brand, as a result of, among other things, a change in strategic direction and a review of the expected future cash flows, market conditions and business trends. The Company considered both quantitative and qualitative factors in reaching its decision to report these businesses as discontinued operations, with key factors including: the exit is part of the Company's strategic shift to focus on outboard boat categories; represents a material portfolio shift and reduction in the boat segment revenues; and represents the exit from substantially all of its boat brands participating in the inboard/sterndrive boat category, particularly large and premium offerings. The Company has determined that exiting the Sea Ray businesses represents a material strategic shift, with commensurate impacts on Brunswick’s operations and financial results. The Company commenced its process to sell the Sea Ray businesses in December 2017 and is targeting completion of the sales process in the first half of 2018.
As a result, the Company reclassified the assets and liabilities of these businesses as held for sale on the Condensed Consolidated Balance Sheets for all periods presented. Additionally, these businesses, which were previously reported in the Company's Boat segment, are being reported as discontinued operations in the Condensed Consolidated Statements of Comprehensive Income for all periods presented. General allocations of corporate overhead and Boat segment shared services costs are not included in these results.
The following table discloses the results of operations of the businesses reported as discontinued operations for the three months ended March 31, 2018 and April 1, 2017, respectively:
(A) Loss from discontinued operations, net of tax includes restructuring, exit, integration and impairment charges, net of tax of $6.2 million for the three months ended April 1, 2017.
The following table reflects the summary of assets and liabilities held for sale as of March 31, 2018, December 31, 2017 and April 1, 2017 for the Sea Ray businesses included in discontinued operations:
(A) Net property held for sale at March 31, 2018 and December 31, 2017 reflects an impairment of $31.0 million recorded in Q4 2017.
(B) Includes a $5.0 million valuation allowance on the disposal group at March 31, 2018 and December 31, 2017.
(C) As of March 31, 2018, December 31, 2017 and April 1, 2017, the Company had $12.8 million, $12.7 million and $6.3 million, respectively, of net long-term assets classified as held for sale that were not related to businesses reported as discontinued operations.
Additionally, as of March 31, 2018 the Company recorded a $23.0 million indemnification receivable and an offsetting accrued settlement loss relating to the unfavorable settlement of an ongoing legal matter associated with Hatteras Yachts, which the Company sold in 2013. The offsetting balance sheet amounts are recorded within Accounts and notes receivable and Accrued expenses on the Condensed Consolidated Balance Sheets. There was no impact to the Company's Condensed Consolidated Statements of Comprehensive Income.
The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.
Reference 1: http://www.xbrl.org/2003/role/presentationRef