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Discontinued Operations
9 Months Ended
Sep. 30, 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     Nine Months Ended  
     September 30,
2011
     October 1,
2010
    September 30,
2011
    October 1,
2010
 

Net sales

   $ —         $ 97.3      $ 110.6      $ 275.2   

Operating expenses

     —           (77.8     (99.5     (227.8

Allocated interest expense

     —           (0.6     (0.6     (1.8
  

 

 

    

 

 

   

 

 

   

 

 

 

Income before taxes

     —           18.9        10.5        45.6   

Income tax expense

     —           (6.3     (4.0     (15.1
  

 

 

    

 

 

   

 

 

   

 

 

 

Income from discontinued operations

     —           12.6        6.5        30.5   

Gain on sale, net of $126 million of related income taxes

     —           —          201.7        —     
  

 

 

    

 

 

   

 

 

   

 

 

 

Earnings from discontinued operations, net of income taxes

   $ —         $ 12.6      $ 208.2      $ 30.5   
  

 

 

    

 

 

   

 

 

   

 

 

 

 

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