Discontinued Operations

9 Months Ended

Sep. 29, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

In 2006, we sold our entire equity interest in our Brazilian unit, Cervejarias Kaiser Brasil S.A. ("Kaiser") to FEMSA Cerveza S.A. de C.V. ("FEMSA"). The terms of the sale agreement require us to indemnify FEMSA for exposures related to certain tax, civil and labor contingencies arising prior to FEMSA's purchase of Kaiser. In the third quarters of 2012 and 2011, we recognized gains of $1.2 million and $3.2 million, respectively, from discontinued operations associated with foreign exchange gains and losses related to indemnities we provided to FEMSA with regard to contingent tax and other liabilities. During the first three quarters of 2012 and 2011, we recognized gains of $3.6 million and $2.0 million, respectively. See further discussion in Note 16, "Commitments and Contingencies."

During the third quarter of 2012, we finalized the settlement related to a distributorship litigation for $6.8 million, which included the $6.3 million accrued at the end of the second quarter of 2012, as well as an additional loss of $0.5 million related to fees incurred on the settlement. We recognized losses on settlement of the litigation of $0.5 million and $2.0 million during the third quarter and first three quarters of 2012, respectively. During the third quarter and first three quarters of 2011, we recognized a loss of $0.5 million related to an adjustment in the legal reserve. As of September 29, 2012, there are no accruals for legal matters related to discontinued operations. As of December 31, 2011, current liabilities of discontinued operations included current legal reserves of $4.8 million. See further discussion in Note 16, "Commitments and Contingencies."