Discontinued Operations (Notes)

9 Months Ended

Jun. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

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 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 nine months ended June 30, 2017 and 2016 were as follows:

	Three Months Ended June 30,
	Network Power Systems			Power Generation, Motors and Drives			Total
	2016			2016			2016
Net sales		$	1,108		351			1,459
Cost of sales		693			268			961
SG&A		280			71			351
Other (income) deductions, net		49			13			62
Earnings (Loss) before income taxes		86			(1	)		85
Income taxes		45			2			47
Earnings (Loss), net of tax		$	41		(3	)		38

Discontinued operations for the third quarter of 2017 included net earnings of $6 million, primarily reflecting post-closing adjustments. In 2016, earnings of $38 million included net earnings from operations of $75 million, $13 million of income tax expense for repatriation of cash, and $24 million after-tax for professional fees and other costs.

	Nine Months Ended June 30,
	Network Power Systems				Power Generation, Motors and Drives				Total
	2016		2017		2016		2017		2016	2017
Net sales	$	3,171	630		1,030		407		4,201	1,037
Cost of sales	1,982		394		792		307		2,774	701
SG&A	829		180		208		83		1,037	263
Other (income) deductions, net	141		(482	)	36		53		177	(429	)
Earnings (Loss) before income taxes	219		538		(6	)	(36	)	213	502
Income taxes	125		547		2		88		127	635
Earnings (Loss), net of tax	$	94	(9	)	(8	)	(124	)	86	(133	)

In 2017, the net loss of $(133) million consisted of a $180 million after-tax loss ($47 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 $114 million ($486 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, net earnings of $86 million included after-tax earnings from operations of $201 million, $41 million of income tax expense for repatriation of cash, and $74 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 nine months ended June 30, 2017 and 2016 were as follows:    

	Network Power Systems					Power Generation, Motors and Drives				Total
	June 30, 2016			June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016		June 30, 2017
Cash from operating activities	$	245		(572	)	35		(155	)	280		(727	)
Cash from investing activities	$	(23	)	3,927		(32	)	1,095		(55	)	5,022

Cash used for operating activities was $727 million for the nine months ended June 30, 2017, which primarily included payments for income taxes on completion of the divestitures and repatriation of cash, and professional fees and other costs. Cash from operations for the nine months ended June 30, 2016 of $280 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 $113 million.