Discontinued Operations

9 Months Ended

Sep. 30, 2011

Discontinued Operations

Discontinued Operations

3. Discontinued Operations

On December 31, 2008, the company completed the sale of its Marine segment to Fincantieri Marine Group Holdings Inc., a subsidiary of Fincantieri — Cantieri Navali Italiani SpA.  The sale price in the all-cash deal was approximately $120 million.    The results of the Marine segment have been classified as a discontinued operation.

Administrative costs related to the former Marine segment resulted in pre-tax losses from discontinued operations of $0.2 million and $0.2 million for the three-month periods ended September 30, 2011 and September 30, 2010, respectively.  Tax benefits of $0.1 million and $0.1 million were recognized in the three-month periods ended September 30, 2011 and September 30, 2010, respectively.  Administrative costs related to the former Marine segment resulted in pre-tax losses from discontinued operations of $1.0 million and $0.8 million for the nine month periods ended September 30, 2011 and September 30, 2010, respectively.  Tax benefits of $0.4 million and $0.3 million were recognized in the nine month periods ended September 30, 2011 and September 30, 2010, respectively.

In addition to the former Marine segment, the company has classified the Enodis ice and related businesses acquired in connection with the company’s acquisition of Enodis plc (Enodis) in October of 2008, as discontinued in compliance with ASC Topic 360-10, “Property, Plant, and Equipment.”  In order to secure clearance for the acquisition of Enodis from various regulatory authorities including the European Commission and the United States Department of Justice, the company agreed to sell substantially all of Enodis’ global ice machine operations following completion of the acquisition of Enodis.  On May 15, 2009, the company completed the sale of the Enodis global ice machine operations to Braveheart Acquisition, Inc., an affiliate of Warburg Pincus Private Equity X, L.P., for $160 million.   The businesses sold were operated under the Scotsman, Ice-O-Matic, Simag, Barline, Icematic, and Oref brand names.  The company also agreed to sell certain non-ice businesses of Enodis located in Italy that are operated under the Tecnomac and Icematic brand names.  Prior to disposal, the antitrust clearances required that the ice businesses be treated and operated as standalone operations, in competition with the company.  The results of these operations have been classified as discontinued operations.

Administrative costs related to the Enodis ice machine businesses resulted in no pre-tax gains or losses from discontinued operations in the three-months ended September 30, 2011 and $0.2 million of earnings for the three-month period ended September 30, 2010.  The company did not recognize a tax benefit or expense related to the Enodis ice machine businesses during both the three-months ended September 30, 2011 and September 30, 2010.

Administrative costs related to the Enodis ice machine businesses resulted in no pre-tax gains or losses from discontinued operations in the nine-months ended September 30, 2011 and $0.2 million losses for the nine-month period ended September 30, 2010.  The company recognized no tax benefit or expense related to the Enodis ice machine businesses during the nine-months ended September 30, 2011 and a tax benefit of $0.1 million during the nine-months ended September 30, 2010.

On December 15, 2010, the company announced that a definitive agreement had been reached to divest its Kysor/Warren and Kysor/Warren de Mexico (collectively “Kysor/Warren”) businesses, which manufacture frozen, medium temperature and heated display merchandisers, mechanical refrigeration systems and remote mechanical and electrical houses to Lennox International for approximately $145 million, including a preliminary working capital adjustment.  The transaction subsequently closed on January 14, 2011 and the net proceeds were used to pay down outstanding debt.  On July 1, 2011, the company made a payment to Lennox International of $2.4 million as the final working capital adjustment under the sale agreement.  The results of these operations have been classified as discontinued operations.

The following selected financial data of Kysor/Warren for the three and nine-months ended September 30, 2011 and 2010, is presented for informational purposes only and does not necessarily reflect what the results of operations would have been had the business operated as a stand-alone entity.  There were no general corporate expenses or interest expense allocated to discontinued operations for this business during the periods presented.

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in millions)	2011			2010		2011			2010
Net sales	$	—		$	80.8	$	3.3		$	175.6
Pretax earnings (loss) from discontinued operations	$	(0.1	)	$	2.6	$	(4.2	)	$	4.8
Provision (benefit) for taxes on income	(0.1		)	0.8		(1.7		)	1.8
Earnings (loss) from discontinued operations, net of income taxes	$	—		$	1.8	$	(2.5	)	$	3.0