In June 2015, the Company announced plans to spin off its network power systems business through a tax-free distribution to shareholders and to explore strategic alternatives, including potential sale, for its power generation and motors, drives, and residential storage businesses. These businesses together accounted for approximately $6.4 billion, $400 million and $500 million of consolidated 2015 sales, pretax earnings and cash flow, respectively. The Company currently estimates it will incur separation costs throughout 2016 to effect the portfolio repositioning as follows: approximately $250 to $300 million of expense for income taxes related to reorganizing the ownership structures of these businesses, investment banking, legal, consulting and other costs; and approximately $50 million in capitalized costs, including debt issuance costs and the separation of information technology systems. In the second quarter of 2016, the Company incurred separation costs of $56 million, or $0.09 per share, which is comprised of income tax expense of $28 million and other costs of $31 million ($28 million after-tax). Year-to-date the Company incurred costs of $78 million, or $0.12 per share, which is comprised of income tax expense of $28 million and other costs of $55 million ($50 million after-tax). In addition, the Company continues to discuss the potential sale of the network power systems business with interested parties. There can be no assurance that the Company will not recognize a goodwill impairment charge or incur a loss on sale in connection with the separation of these businesses. With regard to the evaluation of strategic alternatives for the power generation and motors, drives, and residential storage businesses, it is uncertain whether the review process will result in any transaction. See the Company's 2015 Annual Report on Form 10-K for further information.

In the second quarter of 2015, the Company sold its power transmission solutions business to Regal Beloit Corporation for $1.4 billion and recognized a pretax gain of $932 million ($528 million after-tax, $0.77 per share).