Discontinued Operations and Assets Held For Sale

6 Months Ended

Jul. 01, 2012

Discontinued Operations and Assets Held For Sale

Discontinued Operations and Assets Held For Sale

3. Discontinued Operations and Assets Held For Sale

In the first quarter of 2010, the Company recorded an estimated reserve of $5.3 million in discontinued operations in connection with its investigation of potential violations of the Foreign Corrupt Practices Act (FCPA) at Watts Valve (Changsha) Co., Ltd. (CWV), a former indirect wholly-owned subsidiary of the Company in China. On October 13, 2011, the Company entered into a settlement for $3.8 million with the Securities and Exchange Commission to resolve allegations concerning potential violations of the FCPA at CWV. During the quarter ended July 3, 2011, the Company revised the reserve to $3.8 million based on the pending settlement.  See Note 3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

	Second Quarter Ended				Six Months Ended
	July 1, 2012		July 3, 2011		July 1, 2012		July 3, 2011
	(in millions)
Reserve release - FCPA matter (CWV)	$	—	$	1.7	$	—	$	1.7
Gain on disposal — TEAM	—		0.3		—		0.3
Income (loss) before income taxes	—		2.0		—		2.0
Income tax expense	—		0.3		—		0.3
Income from discontinued operations, net of taxes	$	—	$	1.7	$	—	$	1.7

During the quarter ended July 1, 2012, the Company’s Board of Directors approved the disposal of an operation within the Company’s North America segment.  The Company evaluated the fair value less cost to sell the net assets and determined that the fair value exceeded the carrying value. The Company recorded the net assets of $10.9 million, representing gross assets of $14.0 million less liabilities of $3.1 million, as assets held for sale.  The revenues and results of operations are not material to the Company.  The Company will not have continuing involvement after a sale is completed.