Divestiture-related activities

12 Months Ended

Dec. 31, 2012

Divestiture-related activities

Note 19 — Divestiture-related activities

Continuing Operations

As dispositions occur in the normal course of business, gains or losses on the sale of such businesses are recognized in the income statement line item Net (gain) loss on sales of businesses and assets.

Net (gain) loss on sales of businesses and assets consists of the following for the years ended December 31:

	2012			2011		2010
	(Dollars in thousands)
Net (gain) loss on sales of businesses and assets	$	(332	)	$	582	$	(341	)

During 2012, the Company sold a building, with a net book value of zero, that had been classified as an asset held for sale and realized a gain of approximately $0.3 million.

During 2011, the Company sold a building that had been classified as held for sale. The company recognized net proceeds of $3.6 million and a loss on the sale of approximately $0.6 million.

During 2010, the Company recognized the following:

• $0.2 million gain on the sale of its interest in an affiliate in India.

• $0.4 million gain on the disposal of an asset held for sale.

• $0.3 million loss on the sale of its interest in an affiliate in Japan.

Assets Held for Sale

The table below provides information regarding assets held for sale at December 31, 2012 and 2011. At December 31, 2012, these assets consisted of three buildings which the Company is actively marketing.

	2012		2011
	(Dollars in thousands)
Assets held for sale:
Property, plant and equipment	$	7,963	$	7,902
Total assets held for sale	$	7,963	$	7,902

Discontinued Operations

The Company has recorded $2.7 million and $17.1 million of expense during 2012 and 2011, respectively, associated with retained liabilities related to businesses that have been divested. Of the $17.1 million recorded in 2011, $7.5 million was associated with recall costs related to defective products, which was a subject of pending litigation related to the Company’s former Commercial Segment. During the third quarter of 2011, the Company settled the litigation as it related to the recall costs and, as part of the settlement, paid $7.6 million in September 2011.

On August 26, 2012, the Company completed the sale of the orthopedic business of its OEM Segment to Tecomet for $45.2 million in cash and realized a loss of $39 thousand, net of tax, from the sale of the business.

On December 2, 2011, the Company completed the sale of its business units that design, engineer and manufacture air cargo systems and air cargo containers and pallets to a subsidiary of AAR CORP. for $280.0 million in cash and realized a gain of $126.8 million, net of tax, from the sale. In 2012, the Company received an additional $16.8 million in proceeds as a working capital adjustment pursuant to the terms of the agreement related to the sale of the business, which resulted in recognition of an additional gain on sale of $2.2 million, net of tax. These business units represented the sole remaining businesses in the Company’s former Aerospace Segment.

On March 22, 2011, the Company completed the sale of its marine business to an affiliate of H.I.G. Capital, LLC for consideration of $123.1 million (consisting of $103.1 million in cash, plus a subordinated promissory note in the amount of $4.5 million and the assumption by the buyer of approximately $15.5 million in liabilities related to the marine business). Net assets transferred to the buyer in the sale included $1.5 million of cash, resulting in net cash proceeds to the Company of $101.6 million. The Company realized a gain of $57.3 million, net of tax benefits, from the sale of the business. As a result of the disposition, the Company realized accumulated losses from pension and postretirement obligations of approximately $8.4 million and cumulative translation gains of approximately $33.4 million as part of the gain on sale, resulting in a net change of approximately $25.0 million in accumulated other comprehensive income. In 2012, the $4.5 million subordinated promissory note plus related accrued interest of $0.7 million was paid by the buyer. The marine business consisted of the Company’s businesses that were engaged in the design, manufacture and distribution of steering and throttle controls and engine and drive assemblies for the recreational marine market, heaters for commercial vehicles and burner units for military field feeding appliances. The marine business represented the sole remaining business in the Company’s former Commercial Segment.

On December 31, 2010, the Company completed the sale of the actuation business of its subsidiary Telair International Incorporated to TransDigm Group, Incorporated for approximately $94 million and realized a gain of $51.0 million, net of tax, from the sale of the business.

On June 25, 2010, the Company completed the sale of its rigging products and services business (“Heavy Lift”), a reporting unit within its Commercial Segment, to Houston Wire & Cable Company for $50 million and realized a gain of $17.0 million, net of tax, from the sale of the business.

On March 2, 2010, the Company completed the sale of its SSI Surgical Services Inc. business to a privately-owned multi-service line healthcare company for approximately $25 million and realized a gain of $2.2 million, net of tax.

The results of the Company’s discontinued operations for the years 2012, 2011 and 2010 were as follows:

	2012			2011		2010
	(Dollars in thousands)
Net revenues	$	16,616		$	277,972	$	465,504
Costs and other expenses		18,328			255,919		411,377
Goodwill impairment(1)		9,700			—		—
Gain on disposition(2)		2,205			270,630		114,702
Income (loss) from discontinued operations before income taxes		(9,207	)		292,683		168,829
Taxes (benefit) on income (loss) from discontinued operations		(1,887	)		87,038		54,046
Income (loss) from discontinued operations		(7,320	)		205,645		114,783
Less: Income from discontinued operations attributable to noncontrolling interest		—			617		500
Income (loss) from discontinued operations attributable to common shareholders	$	(7,320	)	$	205,028	$	114,283

(1) During 2012, the Company recognized a non-cash goodwill impairment charge of $9.7 million to adjust the carrying value of the orthopedic business to its estimated fair value.

(2) The $2.2 million pre-tax gain on disposition during 2012 primarily reflects the gain recognized on the working capital adjustment related to the sale of the cargo systems and cargo container businesses.

Net assets and liabilities of discontinued operations sold in 2012 are as follows:

	(Dollars in thousands)
Net assets	$	46,209
Net liabilities		(1,457	)
	$	44,752