Divestitures and Discontinued Operations

The components of discontinued operations for the three and six months ended June 30 are as follows:



	Three months ended						Six months ended
In millions	2011			2010			2011			2010
Net revenues	$	217.8		$	240.1		$	369.5		$	427.6
Pre-tax earnings (loss) from operations	$	(189.7	)	$	(32.9	)	$	(394.9	)	$	(48.5	)
Pre-tax gain (loss) on sale	(33.7		)	—			(33.6		)	(0.4		)
Tax benefit (expense)	8.2			(11.0		)	14.6			(9.1		)
Discontinued operations, net	$	(215.2	)	$	(43.9	)	$	(413.9	)	$	(58.0	)

Discontinued operations by business for the three and six months ended June 30 are as follows:



	Three months ended						Six months ended
In millions	2011			2010			2011			2010
Hussmann, net of tax	$	(183.8	)	$	18.0		$	(374.2	)	$	20.1
Energy Systems, net of tax	0.2			(1.5		)	0.5			(3.0		)
KOXKA, net of tax	(0.4		)	(44.9		)	(0.7		)	(49.4		)
Other discontinued operations, net of tax	(31.2		)	(15.5		)	(39.5		)	(25.7		)
Total discontinued operations, net of tax	$	(215.2	)	$	(43.9	)	$	(413.9	)	$	(58.0	)

Hussmann Divestiture

On April 21, 2011, the Company announced a plan to divest its Hussmann refrigerated display case equipment business in the U.S. and Canada, and the equipment, service and installation businesses in Mexico, Chile, Australia, New Zealand, and Japan. This business, which was previously reported as part of the Climate Solutions segment, manufactures, markets, distributes, installs, and services refrigerated display merchandising equipment, refrigeration systems, over the counter parts, and other commercial and industrial refrigeration applications.

The planned divestiture met both the component and held for sale criteria in accordance with GAAP during the first quarter of 2011. Therefore, the Company reported this business as a discontinued operation and classified the assets and liabilities as held for sale for all periods presented. During the first quarter of 2011, the Company recognized a $186 million after-tax impairment loss within discontinued operations primarily related to the write-down of the net assets to their estimated fair value. The Company assumed a fair value less cost to sell at March 31, 2011 of $800 million, which included assets held for sale of approximately $913 million, liabilities held for sale of approximately $160 million and accumulated other comprehensive loss of approximately $47 million in the Condensed Consolidated Balance Sheet at March 31, 2011. During the second quarter of 2011, the Company reduced the forecast for the Hussmann Business and revised its estimate of fair value less cost to sell. As a result, the Company recorded an additional $198 million after-tax impairment charge to reflect a fair value less cost to sell estimate at June 30, 2011 of $600 million, which includes assets held for sale of approximately $747 million, liabilities held for sale of approximately $198 million and accumulated other comprehensive loss of approximately $51 million in the Condensed Consolidated Balance Sheet at June 30, 2011. No assurance related to the planned divestiture can be given by the Company as to the timing, consummation or terms, including consideration or the possibility of continuing ownership by the Company for all or some portion of the Hussmann Business for a period of time.

Net revenues and after-tax earnings of the Hussmann Business for the three and six months ended June 30 were as follows:



	Three months ended						Six months ended
In millions	2011				2010		2011				2010
Net revenues	$	217.8			$	220.3	$	369.5			$	389.5
After-tax earnings (loss) from operations	$	(183.8	)	**	$	18.0	$	(374.2	)	*	$	20.1
Gain (loss) on sale, net of tax	—				—		—				—
Total discontinued operations, net of tax	$	(183.8	)		$	18.0	$	(374.2	)		$	20.1

* Included in discontinued operations for Hussmann for the six months ended June 30, 2011 is an after-tax impairment loss of approximately $384 million.

** Included in discontinued operations for Hussmann in the second quarter of 2011 is an after-tax impairment loss of approximately $198 million.

The components of assets and liabilities recorded as held for sale on the Condensed Consolidated Balance Sheet as of June 30, 2011 and December 31, 2010 are as follows:



In millions	June 30, 2011		December 31, 2010
Assets
Current assets	$	219.0	$	170.4
Property, plant and equipment, net	105.8		106.8
Goodwill	23.8		407.4
Intangible assets, net	386.9		389.5
Other assets and deferred income taxes	11.8		7.2
Assets held for sale	$	747.3	$	1,081.3
Liabilities
Current liabilities	$	135.3	$	99.0
Noncurrent liabilities	62.3		53.1
Liabilities held for sale	$	197.6	$	152.1

Energy Systems Divestiture

On December 30, 2010, the Company completed the divestiture of its gas microturbine generator business, which was sold under the Energy Systems brand, to Flex Energy, Inc. The business, which was previously reported as part of the Industrial Technologies segment, designs, manufactures, markets, distributes, and services gas powered microturbine generators which feature energy efficient design and low emissions technology. During the third quarter of 2010, the Company recognized an $8.3 million after-tax impairment loss within discontinued operations related to the write-down of the net assets to their estimated fair value.

Net revenues and after-tax earnings of the Energy Systems business for the three and six months ended June 30 were as follows:



	Three months ended					Six months ended
In millions	2011		2010			2011		2010
Net revenues	$	—	$	1.3		$	—	$	1.8
After-tax earnings (loss) from operations	$	0.2	$	(1.5	)	$	0.3	$	(3.0	)
Gain (loss) on sale, net of tax	—		—			0.2		—
Total discontinued operations, net of tax	$	0.2	$	(1.5	)	$	0.5	$	(3.0	)

KOXKA Divestiture

On October 4, 2010, the Company completed the divestiture of its European refrigerated display case business, which was sold under the KOXKA brand, to an affiliate of American Industrial Acquisition Corporation (AIAC Group). The business, which was previously reported as part of the Climate Solutions segment, designs, manufactures and markets commercial refrigeration equipment through sales branches and a network of distributors throughout Europe, Africa and the Middle East. During the second and third quarters of 2010, the Company recognized a combined $53.9 million after-tax impairment loss within discontinued operations related to the write-down of the net assets to their estimated fair value.

Net revenues and after-tax earnings of the KOXKA business for the three and six months ended June 30 were as follows:



	Three months ended							Six months ended
In millions	2011			2010				2011			2010
Net revenues	$	—		$	18.5			$	—		$	36.3
After-tax earnings (loss) from operations	$	(0.4	)	$	(44.9	)	*	$	(0.7	)	$	(49.4	)	*
Gain (loss) on sale, net of tax	—			—				—			—
Total discontinued operations, net of tax	$	(0.4	)	$	(44.9	)		$	(0.7	)	$	(49.4	)

* Included in discontinued operations for KOXKA for the three and six months ended June 30, 2010 is an after-tax impairment loss of $38.8 million related to the initial write-down of the net assets to their estimated fair value.

Other Discontinued Operations

On November 30, 2007, the Company completed the sale of its Bobcat, Utility Equipment and Attachments businesses (collectively, Compact Equipment) to Doosan Infracore for gross proceeds of approximately $4.9 billion, subject to post-closing purchase price adjustments. Compact Equipment manufactured and sold compact equipment, including skid-steer loaders, compact track loaders, mini-excavators and telescopic tool handlers; portable air compressors, generators and light towers; general-purpose light construction equipment; and attachments. The Company is in dispute regarding post-closing matters with Doosan Infracore. During the second quarter of 2011, the Company collected approximately $48.3 million of its outstanding receivable from Doosan Infracore related to certain purchase price adjustments. The Company is continuing to pursue other claims against Doosan Infracore.

During the second quarter of 2011, after an adverse summary judgment ruling on liability issues was rendered in May, the Company recorded an after-tax charge of approximately $21 million ($33.5 million pre-tax) related to an incentive plan established for the sale of one of the Company's businesses for which the maximum damages alleged by the plaintiffs is $115 million. The Company has also recorded retained costs from previously sold businesses, which are mainly those related to postretirement benefits, product liability and legal costs (mostly asbestos-related).