Divestiture Activities |
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| Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations |
Note 5. Divestiture Activities
At August 31, 2018, the Cortland Fibron business (Engineered Components & Systems segment) met the criteria for assets held for sale treatment. The Cortland Fibron business provides customized umbilical and tether solutions to the global oil & gas market. Since the Cortland Fibron business was classified as held for sale, the related assets and liabilities of the business to be sold are classified as assets/liabilities held for sale in the consolidated balance sheet as of August 31, 2018 and approximated the estimated fair value, less cost to sell. As a result, the Company recognized impairment and divestiture charges in fiscal 2018 of $46.3 million, comprised of a: (i) $10.5 million charge representing the excess of the net book value of assets held for sale to the anticipated proceeds; (ii) non-cash impairment charge of $35.3 million related to the recognition in earnings of the cumulative effect of foreign currency rate changes since acquisition and (iii) $0.5 million of other divestiture charges. These charges generated an income tax benefit of $1.4 million in fiscal 2018.
During fiscal 2017, the Company committed on a plan to sell the Viking business (Engineered Components & Systems segment) resulting in the Company's exit from the offshore mooring market. As a result, the Company recognized impairment and divestiture charges in fiscal 2017 of $117.0 million, comprised of a: (i) $16.1 million charge representing the excess of the net book value of assets held for sale to the anticipated proceeds; (ii) non-cash impairment charge of $69.0 million related to the recognition in earnings of the cumulative effect of foreign currency rate changes since acquisition; (iii) $28.6 million cash charge related to the operating lease buyout of certain rental assets and (iv) $3.3 million of other divestiture charges. The write down of net assets generated an income tax benefit of $8.1 million in fiscal 2017. On December 1, 2017, the Company completed the sale of the Viking business for net cash proceeds of $8.8 million, which resulted in an after-tax impairment and divestiture charge of $12.4 million in fiscal 2018, comprised of real estate lease exit charges of $3.0 million related to retained facilities that became vacant as a result of the Viking divestiture and approximately $9.4 million of associated discrete income tax expense.
The following is a summary of the assets and liabilities held for sale (in thousands):
The historic results of the Cortland Fibron and Viking businesses are not material to the consolidated financial results of the Company and are included in continuing operations. These two businesses had net sales of $23.9 million, $34.4 million and $58.0 million for the year-ended August 31, 2018, 2017 and 2016, respectively. The Company's anticipated sale of Cortland Fibron and the Viking divestiture will substantially reduce our exposure to upstream oil & gas.
On August 25, 2016, the Company completed the divestiture of its Sanlo business (Engineered Components & Systems segment) for $9.7 million in cash, net of transaction costs. This divestiture resulted in a $5.1 million pre-tax loss, but a $1.6 million gain, net of tax. The results of the Sanlo business (which had net sales of $10.8 million in fiscal 2016) are not material to the consolidated financial results and are included in continuing operations.
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