Discontinued Operations

9 Months Ended

Sep. 30, 2013

Notes to Condensed Consolidated Financial Statements [Abstract]

Discontinued Operations

Discontinued Operations

In 2012, the UTC Board of Directors approved plans for the divestiture of a number of non-core businesses, which were completed with the sale of Pratt & Whitney Rocketdyne (Rocketdyne) on June 14, 2013, as discussed below. Cash generated from these divestitures was used to repay debt incurred to finance the Goodrich acquisition.

The sale of substantially all operations of Rocketdyne to GenCorp Inc. generated a pre-tax loss of approximately $7 million ($3 million after tax) through September 30, 2013, which has been included in discontinued operations in the Condensed Consolidated Statement of Comprehensive Income. During the nine months ended September 30, 2012, we recorded pre-tax goodwill impairment charges of approximately $360 million ($220 million after tax) related to Rocketdyne.

On February 12, 2013, we completed the disposition of UTC Power to ClearEdge Power. The disposition resulted in payments by UTC totaling $48 million, which included capitalization of the business prior to the sale and interim funding of operations as the buyer took control of a loss generating business. We have no continuing involvement with the UTC Power business post disposition.

The legacy Hamilton Sundstrand Industrial businesses, as well as Clipper Windpower (Clipper), Rocketdyne and UTC Power all met the "held-for-sale" criteria in 2012. The results of operations, including the net realized gains and losses on disposition, and the related cash flows which resulted from these non-core businesses, have been reclassified to Discontinued Operations in our Condensed Consolidated Statements of Comprehensive Income and Cash Flows. The dispositions of Clipper and the legacy Hamilton Sundstrand Industrial businesses were completed in 2012.

The following summarized financial information for our discontinued operations businesses has been segregated from continuing operations and reported as Discontinued Operations:

	Quarter Ended September 30,					Nine Months Ended September 30,
(Dollars in millions)	2013		2012			2013			2012
Discontinued Operations:
Net sales	$	—	$	522		$	309		$	1,607
Income (loss) from operations	$	—	$	91		$	63		$	(1,017	)
Income tax expense	—		(30		)	(32		)	(38		)
Income (loss) from operations, net of income taxes	—		61			31			(1,055		)
Gain (loss) on disposal	10		(26		)	(30		)	(62		)
Income tax benefit	7		135			20			294
Net income (loss) on discontinued operations	$	17	$	170		$	21		$	(823	)

Income (loss) from operations of discontinued operations for the nine months ended September 30, 2012 includes pre-tax impairment charges of approximately $1,135 million. There were no impairment charges for the quarter ended September 30, 2012. These amounts were previously included in loss on disposal of discontinued operations and have been reclassified for consistency of presentation.