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DISCONTINUED OPERATIONS
 3 Months Ended
Mar. 29, 2014
DISCONTINUED OPERATIONS  
DISCONTINUED OPERATIONS

(3)                                 DISCONTINUED OPERATIONS

 

As part of our operating strategy, we regularly review and negotiate potential divestitures, some of which are or may be material.

 

We report businesses or asset groups as discontinued operations when, among other things, we terminate the operations of the business or asset group, commit to a plan to divest the business or asset group or we actively begin marketing the business or asset group, and the sale of the business or asset group is deemed probable within the next twelve months.

 

The following businesses, which have been sold or for which operations have been terminated, met these requirements and therefore have been reported as discontinued operations for all periods presented:

 

Business

 

Quarter
Discontinued

 

Quarter of Sale
or Termination
of Operations

 

Thermal Product Solutions (“TPS”)

 

Q3 2013

 

Q1 2014

 

Broadcast Antenna System business (“Dielectric”)

 

Q2 2013

 

Q2 2013

 

Crystal Growing business (“Kayex”)

 

Q1 2013

 

Q1 2013

 

 

TPS — Sold for cash consideration of $38.5 and a promissory note of $4.0 during the first quarter of 2014, resulting in a gain, net of taxes, of $21.5. The promissory note is payable in full by the buyer on or before February 28, 2016.

 

Dielectric — We sold assets of the business during the second quarter of 2013 for cash consideration of $4.7, resulting in a gain of less than $0.1.

 

Kayex — We closed the business during the first quarter of 2013. In connection with the closure, we recorded a loss, net of taxes, of $2.1 during the first quarter of 2013, with such loss related primarily to severance costs and asset impairment charges. During the third and fourth quarters of 2013, we recorded an aggregate gain, net of taxes, of $3.4 associated primarily with the sale of a perpetual license related to certain of the business’s intangible assets. Proceeds from the sale of the perpetual license totaled $6.9.

 

In addition to the businesses discussed above, we recognized net losses of $0.5 and $3.1 during the three months ended March 29, 2014 and March 30, 2013, respectively, resulting from adjustments to gains/losses on dispositions of previously discontinued businesses. Refer to the consolidated financial statements contained in our 2013 Annual Report on Form 10-K for the disclosure of all businesses discontinued during 2011, 2012 and 2013.

 

The final sales price for certain of the divested businesses is subject to adjustment based on working capital existing at the respective closing dates. The working capital figures are subject to agreement with the buyers or, if we cannot come to agreement with the buyers, an arbitration or other dispute-resolution process. Final agreement of the working capital figures with the buyers for certain of these transactions has yet to occur. In addition, changes in estimates associated with liabilities retained in connection with a business divestiture (e.g., income taxes) may occur. It is possible that the sales price and resulting gains/losses on these and other previous divestitures may be materially adjusted in subsequent periods.

 

As of March 29, 2014, there were three businesses remaining in discontinued operations. We are actively pursuing the divestiture of these businesses and anticipate that these divestitures will be completed during 2014.

 

For the first three months of 2014 and 2013, income (loss) from discontinued operations and the related income taxes were as follows:

 

 

 

Three months ended

 

 

 

March 29,

 

March 30,

 

 

 

2014

 

2013

 

Income (loss) from discontinued operations

 

$

34.5

 

$

(2.6

)

Income tax provision

 

(13.1

)

(2.0

)

Income (loss) from discontinued operations, net of tax

 

$

21.4

 

$

(4.6

)

 

For the first three months of 2014 and 2013, results of operations for discontinued operations were as follows:

 

 

 

Three months ended

 

 

 

March 29,

 

March 30,

 

 

 

2014

 

2013

 

Revenues

 

$

33.7

 

$

47.4

 

Pre-tax income (loss)

 

0.6

 

(0.1

)

 

The major classes of assets and liabilities, excluding intercompany balances, of the businesses reported as discontinued operations included in the accompanying condensed consolidated balance sheets are shown below:

 

 

 

March 29,

 

December 31,

 

 

 

2014

 

2013

 

Assets:

 

 

 

 

 

Accounts receivable, net

 

$

18.2

 

$

22.8

 

Inventories, net

 

35.2

 

37.6

 

Other current assets

 

1.0

 

1.2

 

Property, plant and equipment, net

 

14.6

 

16.3

 

Goodwill and intangibles, net

 

66.4

 

70.4

 

Assets of discontinued operations

 

$

135.4

 

$

148.3

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Accounts payable

 

$

12.2

 

$

13.3

 

Accrued expenses

 

11.1

 

18.6

 

Liabilities of discontinued operations

 

$

23.3

 

$

31.9

 

 

On April 10, 2014, we sold our SPX Precision Components business for cash proceeds of $62.4. Any gain or loss associated with this transaction is not expected to be significant.