Discontinued Operations (Notes)

6 Months Ended

Mar. 31, 2017

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations – The Company previously announced strategic actions to streamline its portfolio, drive growth and accelerate value creation for shareholders. On November 30, 2016, the Company completed the sale of its network power systems business for $4 billion in cash, subject to certain post-closing adjustments, and retained a subordinated interest in distributions, contingent upon the equity holders first receiving a threshold return on their initial investment. This business comprised the former Network Power segment. Additionally, on January 31, 2017, the Company completed the sale of its power generation, motors and drives business for approximately $1.2 billion, subject to post-closing adjustments. This business was previously reported in the former Industrial Automation segment. The results of operations for these businesses were reclassified into discontinued operations, and the assets and liabilities were reflected as held-for-sale.

The financial results of the network power systems and power generation, motors and drives businesses reported as discontinued operations for the three and six months ended March 31, 2017 and 2016 were as follows:

	Three Months Ended March 31,
	Network Power Systems				Power Generation, Motors and Drives				Total
	2016		2017		2016		2017		2016	2017
Net sales	$	1,015	—		341		97		1,356	97
Cost of sales	639		—		263		75		902	75
SG&A	270		—		71		21		341	21
Other (income) deductions, net	44		—		11		4		55	4
Earnings (Loss) before income taxes	62		—		(4	)	(3	)	58	(3	)
Income taxes	56		(14	)	—		95		56	81
Earnings (Loss), net of tax	$	6	14		(4	)	(98	)	2	(84	)

In the second quarter of 2017, the loss of $(84) million consists of income tax expense of $134 million recognized on completion of the sale of the power generation, motors and drives business, an income tax benefit of $41 million for planned repatriation of sales proceeds and cash from the business, an additional after-tax gain of $14 million related to the divestiture of the network power systems business, lower expense of $3 million due to ceasing depreciation and amortization for the discontinued business held-for-sale, and a loss from operations of $8 million. In 2016, earnings of $2 million included net earnings from operations of $58 million, $28 million of income tax expense for repatriation of cash, and $28 million after-tax for professional fees and other costs.

Discontinued operations for the remainder of fiscal 2017 will reflect the impact of any post-closing adjustments, and professional fees and other costs.

	Six Months Ended March 31,
	Network Power Systems				Power Generation, Motors and Drives				Total
	2016		2017		2016		2017		2016	2017
Net sales	$	2,063	630		679		407		2,742	1,037
Cost of sales	1,289		394		524		307		1,813	701
SG&A	549		180		137		83		686	263
Other (income) deductions, net	92		(461	)	23		44		115	(417	)
Earnings (Loss) before income taxes	133		517		(5	)	(27	)	128	490
Income taxes	80		540		—		89		80	629
Earnings (Loss), net of tax	$	53	(23	)	(5	)	(116	)	48	(139	)

In 2017, the loss of $(139) million consists of an after-tax loss of $172 million ($38 million pretax loss) on the divestiture of the power generation, motors and drives business, an after-tax gain on the divestiture of the network power systems business of $100 million ($465 million pretax), income tax expense of $103 million for repatriation of sales proceeds and cash from the businesses, lower expense of $30 million due to ceasing depreciation and amortization for the discontinued businesses held-for-sale, and net earnings from operations of $6 million. In 2016, earnings of $48 million included net earnings from operations of $126 million, $28 million of income tax expense for repatriation of cash, and $50 million after-tax for professional fees and other costs.

The aggregate carrying amounts of the major classes of assets and liabilities classified as held-for-sale as of September 30, 2016 are summarized as follows:

	Network Power Systems			Power Generation, Motors and Drives		Total
	Sept 30, 2016			Sept 30, 2016		Sept 30, 2016
Assets
Receivables		$	1,202		290		1,492
Inventories		381			197		578
Other current assets		108			22		130
Property plant & equipment, net		352			259		611
Goodwill		2,111			580		2,691
Other noncurrent assets		473			55		528
Total assets held-for-sale		$	4,627		1,403		6,030
Liabilities
Accounts payable		$	664		176		840
Other current liabilities		620			141		761
Deferred taxes and other noncurrent liabilities		227			99		326
Total liabilities held-for-sale		$	1,511		416		1,927

Net cash from operating and investing activities for the network power systems and power generation, motors and drives businesses for the six months ended March 31, 2017 and 2016 were as follows:    

	Network Power Systems					Power Generation, Motors and Drives				Total
	Mar 31, 2016			Mar 31, 2017		Mar 31, 2016		Mar 31, 2017		Mar 31, 2016		Mar 31, 2017
Cash from operating activities	$	163		(572	)	27		(29	)	190		(601	)
Cash from investing activities	$	(15	)	5,063		(23	)	(12	)	(38	)	5,051

Cash used for operating activities was $601 million for the six months ended March 31, 2017, which primarily includes payments for income taxes on completion of the divestitures and repatriation of cash, and professional fees and other costs. Cash from operations for the six months ended March 31, 2016 of $190 million included operating cash flow of the divested businesses, net of income taxes, and professional fees and other costs paid related to the transactions of $57 million.

The Company expects total discontinued operations cash used for operating activities in fiscal 2017 to be approximately $750 million, which primarily consists of income tax payments related to the divestitures.