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Discontinued Operations | 6 Months Ended
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Jun. 30, 2013
Discontinued Operations |
Discontinued Operations | 3. Discontinued Operations On December 21, 2012, the Company completed the sale of all of the outstanding shares of its subsidiary, Flomatic Corporation (Flomatic). The sale excluded the backflow product line of Flomatic, which was retained by the Company. Flomatic, located in Glens Falls, New York, specializes in manufacturing and selling check valves, foot valves and automatic hydraulic control valves for the well water industry. The Company acquired Flomatic as part of its acquisition of Danfoss Socla S.A.S. (Socla) in April 2011. The Company evaluated the operations of Flomatic and determined that it would not have a substantial continuing involvement in Flomatic’s operations and cash flows. As a result, Flomatic’s cash flows and operations were eliminated from the continuing operations of the Company and classified as discontinued operations for all periods presented.
|  | Second Quarter Ended |  | Six Months Ended |
|  | June 30, 2013 |  | July 1, 2012 |  | June 30, 2013 |  | July 1, 2012 |
|  | (in millions) |
Operating income — Flomatic |  | $ | — |  | $ | 0.5 |  | $ | — |  | $ | 0.8 |
Income before income taxes |  | — |  | 0.5 |  | — |  | 0.8 |
Income tax expense . |  | — |  | 0.2 |  | — |  | 0.3 |
Income from discontinued operations, net of taxes |  | $ | — |  | $ | 0.3 |  | $ | — |  | $ | 0.5 |
Revenues reported in discontinued operations are as follows:
|  | Second Quarter Ended |  | Six Months Ended |
|  | June 30, 2013 |  | July 1, 2012 |  | June 30, 2013 |  | July 1, 2012 |
|  | (in millions) |
Flomatic revenues. |  | $ | — |  | $ | 3.7 |  | $ | — |  | $ | 6.7 |
Sale of Watts Insulation GmbH Austria (“Austroflex”) On August 1, 2013, the Company completed the sale of all of the outstanding shares of an indirectly wholly-owned subsidiary, Austroflex, receiving proceeds from the sale of approximately $9 million. Austroflex is an Austrian-based manufacturer of pre-insulated flexible pipe systems for district heating, solar applications and under-floor radiant heating systems. Austroflex did not meet performance expectations since its purchase approximately three years ago. The estimated loss after tax on disposal of the business is approximately $2 million. Further, for the year ended December 31, 2011, the Company wrote down Austroflex’s long-lived assets by $14.8 million. Austroflex’s results of operations will be presented as discontinued operations beginning the third quarter of 2013. The carrying amounts of major classes of assets and liabilities associated with the assets held in use as of June 30, 2013 and December 31, 2012 are as follows:
|  | June 30, 2013 |  | December 31, 2012 |
|  | (in millions) |
Inventory and accounts receivable |  | $ | 4.9 |  | $ | 3.7 |
Prepaid expenses and other assets |  | 2.9 |  | 3.8 |
Property, plant and equipment |  | 1.6 |  | 1.9 |
Goodwill |  | 4.2 |  | 4.2 |
Assets of discontinued operations |  | $ | 13.6 |  | $ | 13.6 |
Accrued expenses and other liabilities |  | $ | 2.3 |  | $ | 1.9 |
Deferred income taxes |  | 0.3 |  | 0.3 |
Liabilities of discontinued operations |  | $ | 2.6 |  | $ | 2.2 |

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- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 144 -Paragraph 43-48 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 + Details
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