Discontinued Operations

6 Months Ended

Jul. 01, 2011

Discontinued Operations

Discontinued Operations

NOTE 3. DISCONTINUED OPERATIONS

In April 2011, the Company completed the divestiture of its Pacific Scientific Aerospace business for a sale price of $680 million in cash. This business, which was part of the Industrial Technologies segment and supplies safety, security and electric power components to commercial and military aerospace markets globally, had annual revenues of $377 million in 2010. Upon closing of the transaction, the Company recorded an after-tax gain on the sale of approximately $202 million or $0.29 per diluted share. The Company has reported the Pacific Scientific Aerospace business as a discontinued operation in this Form 10-Q. Accordingly, the results of operations for all periods presented have been reclassified to reflect the business as a discontinued operation and the assets and liabilities of the business have been reclassified as held for sale for all periods presented. The Company allocated a portion of the consolidated interest expense to discontinued operations based on the ratio of the Pacific Scientific Aerospace net assets to the Company's consolidated net assets.

The key components of income from discontinued operations related to the Pacific Scientific Aerospace business were as follows ($ in millions):

	Three Months Ended						Six Months Ended
	July 1, 2011			July 2, 2010			July 1, 2011			July 2, 2010
Net sales	$	13.0		$	93.5		$	110.6		$	177.9
Operating expenses		(16.8	)		(77.4	)		(99.5	)		(150.0	)
Allocated interest expense		—			(0.6	)		(0.6	)		(1.2	)
Income (loss) before taxes		(3.8	)		15.5			10.5			26.7
Income tax (expense) benefit		1.2			(5.1	)		(4.0	)		(8.9	)
Income (loss) from discontinued operations		(2.6	)		10.4			6.5			17.8
Gain on sale, net of $126 million related income taxes		201.7			—			201.7			—
Earnings from discontinued operations, net of income taxes	$	199.1		$	10.4		$	208.2		$	17.8

As of December 31, 2010, the components of assets and liabilities classified as discontinued operations and included in other current assets and other current liabilities related to the Pacific Scientific Aerospace businesses consisted of the following ($ in millions):

Accounts receivable, net	$	59.5
Inventories		45.0
Prepaid expenses and other		14.0
Property, plant & equipment, net		31.4
Goodwill and other intangibles, net		277.3
Total assets	$	427.2
Accounts payable	$	46.6
Accrued expenses and other		46.2
Total liabilities	$	92.8