Discontinued Operations

6 Months Ended

Jun. 30, 2011

Discontinued Operations

Discontinued Operations

3. Discontinued Operations

On May 20, 2011, we announced a definitive agreement for the sale of the Acushnet Company golf business to a group led by Fila Korea Ltd. and Mirae Asset Private Equity for $1.225 billion. We closed the sale of the Acushnet Company golf business on July 29, 2011 and expect to record a gain. The purchase price and gain are subject to certain post-closing adjustments.

The following table summarizes the results of the Acushnet Company golf business for the six and three months ended June 30, 2011 and 2010.

(in millions)	Six Months Ended June 30,					Three Months Ended June 30,
	2011			2010		2011			2010
Net sales	$	768.9		$	742.9	$	398.8		$	389.3
Income from discontinued operations before income taxes	$	86.6		$	102.4	$	46.5		$	61.7
Income taxes		(170.5	)		23.5		(180.3	)		13.0
Net income from discontinued operations, net of taxes	$	257.1		$	78.9	$	226.8		$	48.7
Net income from discontinued operations attributable to Fortune Brands, net of taxes	$	254.3		$	75.2	$	225.7		$	46.9

In April 2010, we sold our Cobra golf product line to PUMA North America, Inc. for $88.9 million. The asset sale included the Cobra golf brand and related inventory, intellectual property and endorsement contracts. The sale resulted in a pre-tax gain of $11.3 million ($10.0 million after tax).

During the second quarter of 2011, the Acushnet Company golf business recorded a $215.3 million reduction of a valuation allowance that had previously been established with respect to a capital loss carryforward. The valuation allowance was reduced because we expect to utilize the capital loss carryforward to offset capital gains associated with the sale. Also, as a result of the intended sale of the Acushnet Company golf business, during the second quarter of 2011, we provided a deferred tax expense of $24.7 million related to the expected repatriation of undistributed foreign earnings and expected gains associated with the sale of foreign subsidiary stock that are deemed to be taxable U.S. dividends.