Annual report pursuant to Section 13 and 15(d)

Discontinued Operations

v2.4.1.9
Discontinued Operations
 12 Months Ended
Dec. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Note 2 – Discontinued Operations

On July 17, 2014, the Company entered into an agreement to sell its retail bowling business to AMF Bowling Centers, Inc. In connection with its decision to sell its bowling centers, the Company also announced its intention to divest its bowling products business. On December 31, 2012, the Board of Directors authorized the Company to exit its Hatteras and Cabo boat businesses. As a result of these actions, these businesses, which were previously recorded in the Company's former Bowling & Billiards segment and the Boat segment, respectively, are being reported as discontinued operations in the Consolidated Statements of Operations for all periods presented. The Company does not have or anticipate having any significant continuing involvement or continuing cash flows associated with these businesses. The assets and liabilities of these businesses met the accounting criteria to be classified as held for sale and have been aggregated and reported on separate lines of the Consolidated Balance Sheets for all periods presented.

On September 18, 2014, the Company completed the sale of its retail bowling business to AMF Bowling Centers, Inc. as well as, in separate transactions, completed the sale of two retail bowling centers in California. The sales resulted in net cash proceeds of $264.3 million and an after-tax gain of $52.6 million. In connection with the sale of its retail bowling business, the Company entered into a trademark licensing agreement allowing AMF Bowling Centers, Inc. to use the Company's bowling retail related trademarks and trade names over a five year period from the date of acquisition. As a result, the Company recorded deferred income of $20.7 million related to this agreement, which will be recognized as Other income in the Consolidated Statements of Operations over five years. In connection with the sale of its retail bowling business, the Company has retained certain liabilities and provided guarantees on certain leased bowling centers.
  
In August 2013, the Company completed the sale of its Hatteras and Cabo boat businesses resulting in an after-tax gain of $1.6 million.

The following table discloses the results of operations of the businesses reported as discontinued operations for the years ended December 31, 2014, 2013 and 2012, respectively:
(in millions)
2014
 
2013
 
2012
Net sales
$
236.0

 
$
310.8

 
$
357.0

 
 
 
 
 
 
Earnings (loss) from discontinued operations before income taxes
$
(3.8
)
 
$
13.7

 
$
(71.7
)
Income tax provision (benefit)
(2.0
)
 
2.9

 
2.9

Earnings (loss) from discontinued operations, net of tax (A)
(1.8
)
 
10.8

 
(74.6
)
Gain on disposal of discontinued operations, net of tax (B)
52.6

 
1.6

 
—

Net earnings (loss) from discontinued operations, net of tax
$
50.8

 
$
12.4

 
$
(74.6
)

(A) Earnings (loss) from discontinued operations for 2013 includes restructuring, exit and impairment charges, net of tax of $4.9 million. Earnings (loss) from discontinued operations for 2012 includes an asset impairment charge of $52.7 million, $53.2 million after-tax, and other restructuring and impairment charges, net of tax of $14.9 million.

(B) The Gain on disposal of discontinued operations for 2014 includes a pre-tax gain of $65.6 million and a net tax provision of $13.0 million. The Gain on disposal of discontinued operations for 2013 includes a pre-tax loss of $1.4 million and a net tax benefit of $3.0 million.
The following table reflects the summary of assets and liabilities held for sale for the bowling products business as of December 31, 2014 and for the retail bowling and bowling products businesses as of December 31, 2013:
(in millions)
December 31,
2014
 
December 31,
2013
Accounts and notes receivable, net
$
14.0

 
$
18.9

Net inventory
15.3

 
15.4

Prepaid expenses and other
0.7

 
2.5

Current assets held for sale
30.0

 
36.8

 
 
 
 
Net property
8.8

 
197.9

Other long-term assets
3.8

 
6.4

Long-term assets held for sale
12.6

 
204.3

Assets held for sale
$
42.6

 
$
241.1

 
 
 
 
Accounts payable
$
4.5

 
$
18.0

Accrued expenses
11.2

 
31.7

Current liabilities held for sale
15.7

 
49.7

 
 
 
 
Other liabilities
8.2

 
9.2

Long-term liabilities held for sale
8.2

 
9.2

Liabilities held for sale
$
23.9

 
$
58.9