AQUISITIONS AND DISCONTINUED OPERATIONS

9 Months Ended

Oct. 02, 2021

Acquisitions and Discontinued Operations [Abstract]

ACQUISITIONS AND DISCONTINUED OPERATIONS

As indicated in Note 1, on September 2, 2020, November 11, 2020, April 19, 2021 and August 2, 2021, we completed the acquisitions of ULC, Sensors & Software, Sealite and ECS, respectively. The pro forma effects of these acquisitions, to the applicable periods, are not material to the accompanying condensed consolidated results of operations.

Sale of Transformer Solutions Business

As discussed in Note 1, on October 1, 2021, we completed the sale of Transformer Solutions for net cash proceeds of $620.6. In connection with the sale, we recorded a gain of $357.7 to “Gain (loss) on disposition of discontinued operations, net of tax” within our condensed consolidated statements of operations for the three and nine months ended October 2, 2021.

The final sales price for Transformer Solutions is subject to adjustment based on cash, debt and working capital existing at the closing date, as well as for specified transaction expenses and other specified items, and is subject to agreement with the Purchaser, with final agreement of these items yet to occur. Accordingly, it is possible that the sales price and resulting gain for this divestiture may be materially adjusted in subsequent periods.

The results of Transformer Solutions are presented as a discontinued operation for all periods presented. Major line items constituting pre-tax income and after-tax income (loss) of Transformer Solutions for the three and nine months ended October 2, 2021 and September 26, 2020 are shown below:


	Three months ended				Nine months ended
	October 2, 2021		September 26, 2020		October 2, 2021		September 26, 2020
Revenues	$	94.4	$	95.1	$	313.5	$	319.6
Costs and expenses:
Cost of product sold	81.3		78.4		258.0		253.5
Selling, general and administrative	10.3		7.0		28.4		23.0


Other income, net	—		0.2		—		0.9

Income before income tax	2.8		9.9		27.1		44.0
Income tax provision	(33.8)		(2.7)		(6.8)		(10.5)
Income (loss) from discontinued operations, net of tax	$	(31.0)	$	7.2	$	20.3	$	33.5

The assets and liabilities of Transformer Solutions have been classified as assets and liabilities of discontinued operations as of December 31, 2020. The major line items constituting Transformer Solutions assets and liabilities as of December 31, 2020 are shown below:


ASSETS

Accounts receivable, net	$	50.9
Contract assets	48.6
Inventories, net	18.9
Other current assets	3.2
Property, plant and equipment:
Land	6.5
Buildings and leasehold improvements	63.1
Machinery and equipment	141.1
	210.7
Accumulated depreciation	(131.0)
Property, plant and equipment, net	79.7
Goodwill	131.3
Other assets	8.1
Total assets - discontinued operations	$	340.7
LIABILITIES
Accounts payable	$	34.1
Contract liabilities	57.2
Accrued expenses	24.5
Deferred and other income taxes	21.6
Other long-term liabilities	9.1
Total liabilities - discontinued operations	$	146.5

Wind-Down of the Heat Transfer Business

As discussed in Note 1, we completed the wind-down of Heat Transfer in the fourth quarter of 2020. As a result of completing the wind-down plan, we are reporting Heat Transfer as a discontinued operation for all prior periods presented.

Major line items constituting pre-tax income (loss) and after-tax income (loss) of Heat Transfer for the three and nine months ended September 26, 2020 are shown below:


	Three months ended		Nine months ended
	September 26, 2020		September 26, 2020
Revenues	$	—	$	3.2

Cost of product sold	0.1		2.6
Selling, general and administrative	(0.1)		0.1

Special charges, net	0.1		0.5

Income (loss) before income tax	(0.1)		—
Income tax provision	—		—
Income (loss) from discontinued operations, net of tax	$	(0.1)	$	—

We recognized net gain (loss) of $(3.3) and $0.0 during the three and nine months ended October 2, 2021 and net gain (loss) of $0.1 and $(1.2) during the three and nine months ended September 26, 2020 within “Gain (loss) on disposition of discontinued operations, net of tax” resulting primarily from revisions to liabilities, including income tax liabilities, retained in connection with prior businesses classified as discontinued operations.