Divestitures and Discontinued Operations

Information Management

On May 16, 2012, the Company completed the sale of its Information Management line of business to NEC Corporation for $449.0 in cash. The Company recorded a gain of $99.8 pretax and $16.2 after tax in 2012. The sale of Information Management was a taxable transaction that resulted in $83.6 being recorded for the combined federal, state and foreign income tax obligation. The high effective tax rate is primarily due to a lower basis in net assets, including goodwill, for tax purposes compared to their book basis. The gain on sale included the elimination of $201.7 of goodwill and intangible assets.

The results of Information Management have been classified as discontinued operations for all periods presented. Certain costs previously allocated to the Information Management segment that do not qualify for discontinued operations accounting treatment are now reported as costs from continuing operations. Through the close of this transaction, these costs were $8.8, $23.6 and $28.4 for December 31, 2012, 2011 and 2010, respectively. The Company is taking actions to reduce these costs and expects transition services revenue from services provided to the buyer subsequent to completion of the sale to offset a significant portion of these costs. During 2012, we earned $13.8 in revenue under these transition services agreements. While the transition services agreements vary in duration up to 24 months depending on the type of service provided, our expectation is that we will substantially eliminate the underlying costs as the transition services are completed.

Summarized operating results of the Information Management business are as follows:



	Year Ended December 31,
	2012		2011		2010
Revenue	$	128.8	$	328.8	$	340.1
Income before tax - Information Management operations ⁽¹⁾	23.7		58.2		59.3
Gain on disposition ⁽²⁾	99.8		—		—
Income before income taxes	123.5		58.2		59.3
Income tax expense:
Expense related to Information Management operations	7.9		12.4		24.2
Expense related to gain on disposition	83.6		—		—
Income from discontinued operations, net of tax	$	32.0	$	45.8	$	35.1

⁽¹⁾Excludes costs previously allocated to Information Management that did not meet the criteria for presentation within discontinued operations of $8.8, $23.6 and $28.4 for December 31, 2012, 2011 and 2010, respectively.

⁽²⁾Includes $22.8 of transaction costs related to the sale for December 31, 2012.

The major classes of assets and liabilities that were included as part of the Information Management business and presented during these periods as held for sale were as follows:



	December 31,
	2012		2011
Assets:
Current assets	$	—	$	87.3
Property and equipment, net	—		21.5
Other assets	—		298.2
Total assets	$	—	$	407.0
Liabilities:
Current liabilities	—		68.3
Other liabilities	—		51.7
Total liabilities	$	—	$	120.0

Cash flows generated from discontinued operations are presented separately in the Company's Consolidated Statements of Cash Flows.

Finance and Accounting outsourcing line of business (F&A)

In January 2011, the Company completed the sale of F&A for approximately $10.0. The gain on the sale amounted to $7.0 before tax, recorded within Other income (expense), net in the Consolidated Statements of Income, and $4.3 after tax in 2011. The gain on the sale included the elimination of $2.6 of goodwill and other intangible assets. The results of operations of F&A and the sale of F&A are not material to the Company's results of operations or financial condition and, therefore, are not reflected as discontinued operations for the periods presented.

HR Management

In June 2010, the Company substantially completed the sale of the HR Management line of business to NorthgateArinso, the Human Resource division of Northgate Information Solutions Limited, for approximately $93.0, net of working capital adjustments. The consideration received at closing consisted of approximately $78.0 in cash and a zero coupon note issued by NorthgateArinso in the principal amount of $15.0. The note is payable in increments of $5.0 on the second anniversary of closing, which the Company received during 2012, and $10.0 on the third anniversary of closing. In connection with and at the time of the completion of the sale in June 2010, the Company made cash payments of $28.2 for certain obligations of the HR Management business, the impact of which is included in cash flows from operating activities of discontinued operations.

The gain on the sale of HR Management recorded in 2010 was $35.2 pretax and $5.6 after tax. The sale of HR Management was a taxable transaction that resulted in $29.6 being recorded for the combined federal, state and foreign income taxes. Subsequently, in 2011, a $6.5 reduction to the tax on the gain on this transaction was recorded and has been reflected in discontinued operations. Also included in discontinued operations are tax benefits associated with changes in reserves for uncertain tax positions related to previously divested businesses. The gain on the sale included the elimination of $67.1 of goodwill and intangible assets.

As a result of the sale of the HR Management business, the operating results related to HR Management have been reflected as discontinued operations. For periods prior to June 2010, certain costs previously allocated to the HR Management segment are now included in continuing operations. These costs were $9.1 for December 31, 2010. Beginning June 1, 2010 the Company began earning transition services revenues for services provided to the buyer under agreements lasting from three to eighteen months. During 2011 and 2010, the Company earned $14.4 and $24.0, respectively, in revenue under these transition services agreements subsequent to the close of the sale. These revenues largely offset the related costs described above incurred subsequent to June 1, 2010.

Summarized operating results of the HR Management business are as follows:



	Year Ended December 31,
	2012			2011			2010
Revenue	$	—		$	—		$	107.2
Income before tax	—			—			25.3
Gain on disposition	—			—			35.2
Income before income taxes	—			—			60.5
Income tax (benefit) expense:
(Benefit) expense related to operations and previously divested businesses	(40.4		)	—			9.4
Expense (benefit) related to gain (loss) on disposition	—			(6.5		)	29.6
Income from discontinued operations, net of tax	$	40.4		$	6.5		$	21.5