Disposed and Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposed and Discontinued Operations

4. Disposed and Discontinued Operations

Management evaluates Dover's businesses periodically for their strategic fit within its operations. Accordingly, in 2014, the Company announced its intention to divest Datamax O'Neil and Sargent Aerospace, two businesses with the Engineered Systems segment. The assets, liabilities, and results of operations of these businesses were reclassified to discontinued operations in the fourth quarter of 2014.

Also included in discontinued operations are the assets, liabilities, and results of operations of DEK International and Everett Charles Technologies (including the Multitest business, collectively "ECT"), until their respective sale dates of July 2, 2014 and November 30, 2013. Additionally, the results of discontinued operations include Knowles Corporation until the distribution on February 28, 2014, as well as costs incurred by Dover to complete the spin-off of Knowles. These costs totaled $27,055 and $30,093 for the years ended December 31, 2014 and 2013, respectively. See also Note 2 Spin-off of Knowles Corporation.

Summarized results of the Company’s discontinued operations are as follows:

	Years Ended December 31,
	2014			2013			2012
Revenue	$	568,991		$	1,970,965		$	1,918,035
Loss on sale, including impairments, net of tax	$	(3,691	)	$	(35,473	)	$	(50,818	)
Earnings from operations before taxes	13,611			209,293			241,023
(Provision) benefit for income taxes	(12,825		)	31,782			(29,210		)
Earnings from operations, net of tax	786			$	241,075		$	211,813
(Loss) earnings from discontinued operations, net of tax	$	(2,905	)	$	205,602		$	160,995

2014 - The Company completed the sale of DEK International in the third quarter of 2014. Sale proceeds totaled $170,616, which resulted in an after-tax loss on sale of $6,895. The Company also recognized a gain on sale of $3,204 in 2014 in connection with a working capital adjustment of $4,482 for ECT, which was sold in the fourth quarter of 2013.

The net earnings from operations for 2014 of $786 includes after-tax earnings of $32,289 for those businesses classified as discontinued operations. Also reflected in this amount are the aforementioned spin-off costs of $27,055 and a pension settlement charge of $4,448, net of tax, attributable to lump sum payments made to Knowles participants in Dover's qualified defined benefit pension plan.

2013 - In 2013, in connection with a change in goodwill reporting units within discontinued operations resulting from the Company's expected manner of disposing of its electronic test and assembly businesses, the Company was required to allocate goodwill to these individual reporting units based upon relative current fair values. This process resulted in a benefit of $25,520 in the discontinued operations deferred income tax provision for 2013 as a result of the elimination of certain deferred tax liabilities. The Company recorded a goodwill impairment charge of $54,532 ($44,188 after tax) at ECT in 2013 in connection with the anticipated sale of this business. This charge was a write-down of the carrying value to fair value, based on the current estimated sales price.

The Company also recognized an impairment loss of $14,001 in the fourth quarter of 2013, in connection with the impending sale of DEK. This loss included goodwill impairment of the related reporting unit of $9,251, of which none was deductible for tax purposes.

The Company completed the sale of ECT in the fourth quarter of 2013 for total proceeds of $92,694, which resulted in an after-tax loss on sale of $2,804. Included in the sale proceeds was a note receivable from the buyer of $16,250, net of $3,750 of contingencies. The Company has since collected this note receivable.

The net earnings from operations of $241,075 reflects the after-tax earnings of all business classified as discontinued operations, as well as $54,827 of discrete tax benefits principally related to the conclusion of certain federal, state and international tax audits, $18,279 of interest on tax obligations in foreign jurisdictions, and the aforementioned spin-off costs of $30,093.

2012 - The net earnings from operations of $211,813 reflects after-tax earnings from operations generated by all business classified as discontinued operations as well as various expense and accrual adjustments relating to other discontinued operations. In addition, the Company recognized a goodwill impairment charge of $63,819 ($51,854 after tax) for ECT, representing a write-down of the reporting unit's carrying value of goodwill to its fair value.

Assets and liabilities of discontinued operations are summarized below:

	December 31, 2014		December 31, 2013
Assets of Discontinued Operations
Accounts receivable (1)	$	46,691	$	403,539
Inventories, net	58,401		229,465
Prepaid and other current assets	8,571		84,814
Total current assets	113,663		717,818
Property, plant and equipment, net	31,573		401,600
Goodwill and intangible assets, net	181,798		1,633,587
Other assets and deferred charges	137		26,058
Total assets	$	327,171	$	2,779,063
Liabilities of Discontinued Operations
Accounts payable (1)	$	21,199	$	278,607
Other current liabilities	17,675		153,788
Total current liabilities	38,874		432,395
Deferred income taxes	8,752		60,361
Other liabilities	3,092		42,865
Total liabilities	$	50,718	$	535,621

At December 31, 2014, the assets and liabilities of discontinued operations primarily relate to Datamax O'Neil and Sargent Aerospace, which were held for sale on that date. At December 31, 2013, the assets and liabilities of discontinued operations relate to those businesses mentioned above, as well as DEK International, which was sold on July 2, 2014 and Knowles, which was spun off on February 28, 2014.

(1) Amounts at December 31, 2013 include estimated credits and liabilities associated with tax obligations in foreign jurisdictions resulting from value-added tax for the Multitest business within ECT. Accounts receivable includes $93,598 of credits. Accounts payable includes $76,443 of liabilities and $18,279 of interest. These balances were settled in 2014.