Divestitures and Discontinued Operations

Divested Operations

Hussmann Divestiture

On September 30, 2011, the Company completed a transaction to sell its Hussmann refrigerated display case business to a newly-formed affiliate (Hussmann Parent) of private equity firm Clayton Dubilier & Rice, LLC (CD&R). This transaction included the equipment business and certain of the service branches in the U.S. and Canada, and the equipment, service and installation businesses in Mexico, Chile, Australia, New Zealand, and Japan (Hussmann Business). The final transaction allowed Hussmann Parent the option to acquire the remaining North American Hussmann service and installation branches (Hussmann Branches). Hussmann Parent exercised its option on October 13, 2011. The Hussmann Business and Branches, which are reported as part of the Climate Solutions segment, manufacture, market, distribute, install, and service refrigerated display merchandising equipment, refrigeration systems, over the counter parts, and other commercial and industrial refrigeration applications.

The Hussmann Business divestiture, which was originally announced on April 21, 2011 and anticipated to be a sale of 100% of the Company's interest in the Hussmann Business, with no retained ongoing interest, met the criteria for classification as held for sale and for treatment as discontinued operations in accordance with GAAP during the first and second quarters of 2011. Therefore, the Company reported the Hussmann Business as a discontinued operation, classified the assets and liabilities as held for sale, and recognized $384 million of after-tax impairment losses in the first half of 2011 to write the net assets of the Hussmann Business down to their estimated fair value. During the third quarter of 2011, the Company negotiated the final terms of a transaction to sell the Hussmann Business and Branches to CD&R in exchange for $370 million in cash, subject to purchase price adjustments, and common stock of Hussmann Parent, such that following the sale, CD&R would own cumulative convertible participating preferred stock of Hussmann Parent, initially representing 60% of the outstanding capital stock (on an as-converted basis) of Hussmann Parent, and the Company would own all of the common stock, representing the remaining 40% of the outstanding capital stock (on an as-converted basis) of Hussmann Parent. At September 30, 2011, the Hussmann Branches met the held for sale criteria outlined in GAAP. However, the Hussmann Business and Branches did not qualify for treatment as a discontinued operation as the Company's equity interest in the Hussmann Parent represents significant continuing involvement. Therefore, the results of the Hussmann Business and Branches have been presented as continuing operations beginning with this third quarter 2011 Form 10-Q for all periods presented.

On September 30, 2011, the Company received consideration of $433 million for the Hussmann Business and Branches, which included cash consideration, after purchase price adjustments, of $354 million as well as the equity interest valued at $79 million. Accordingly, the Company recorded a pre-tax loss on sale/asset impairment charge of $265 million ($171 million after-tax), which reflected net assets of $580 million, an accumulated other comprehensive loss of $85 million, an estimated indemnification obligation assumed of $25 million, and transaction costs of $8 million.

Results for the Hussmann Business and Hussmann Branches for the periods ended September 30 are as follows:



	Three months ended						Nine months ended
In millions	2011				2010		2011				2010
Net revenues	$	281.8			$	319.4	$	781.7			$	839.1
Loss on sale/asset impairment	(264.8		)	*	—		(651.6		)	*	—
Net earnings (loss) attributable to Ingersoll-Rand plc	(157.9		)		26.8		(528.3		)		49.8
Diluted earnings (loss) per share attributable to Ingersoll-Rand plc ordinary shareholders:	(0.46		)		0.08		(1.52		)		0.15

* Included in Loss on sale/asset impairment for the three and nine months ended September 30, 2011 are transaction costs of $8.4 million and $11.6 million, respectively.

The Company's ownership interest in Hussmann will be reported using the equity method of accounting for the fourth quarter of 2011 and going forward. The Company's equity investment in the Hussmann Parent is reported within Other noncurrent assets in the Condensed Consolidated Balance Sheet and the related equity earnings will be reported within Other, net in the Company's Condensed Consolidated Income Statement.

The assets and liabilities held for sale for Hussmann at September 30, 2011 represent those related to the Hussmann Branches as they will be sold to Hussmann Parent subsequent to the balance sheet date. The components of assets and liabilities recorded as held for sale on the Condensed Consolidated Balance Sheet are as follows:



In millions	September 30, 2011			December 31, 2010
Assets
Current assets	$	66.6		$	225.0
Property, plant and equipment, net	0.3			107.4
Goodwill	—			407.4
Intangible assets, net	—			389.5
Other assets and deferred income taxes	0.1			5.5
Assets held for sale before asset impairment	$	67.0		$	1,134.8
Asset impairment	(23.0		)	—
Assets held for sale	$	44.0		$	1,134.8
Liabilities
Current liabilities	$	43.6		$	106.1
Noncurrent liabilities	0.4			61.0
Liabilities held for sale	$	44.0		$	167.1

Discontinued operations

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



	Three months ended						Nine months ended
In millions	2011			2010			2011			2010
Net revenues	$	—		$	24.2		$	—		$	62.4
Pre-tax earnings (loss) from operations	$	(12.9	)	$	(49.2	)	$	(37.2	)	$	(133.9	)
Pre-tax gain (loss) on sale	(7.2		)	(0.3		)	(40.8		)	(0.7		)
Tax benefit (expense)	11.5			10.0			29.9			16.9
Discontinued operations, net of tax	$	(8.6	)	$	(39.5	)	$	(48.1	)	$	(117.7	)

Discontinued operations by business for the three and nine months ended September 30 are as follows:



	Three months ended						Nine months ended
In millions	2011			2010			2011			2010
Energy Systems, net of tax	$	(0.5	)	$	(9.5	)	$	—		$	(12.5	)
KOXKA, net of tax	(0.3		)	(19.5		)	(1.0		)	(68.9		)
Other discontinued operations, net of tax	(7.8		)	(10.5		)	(47.1		)	(36.3		)
Discontinued operations, net of tax	$	(8.6	)	$	(39.5	)	$	(48.1	)	$	(117.7	)

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 nine months ended September 30 were as follows:



	Three months ended							Nine months ended
In millions	2011			2010				2011		2010
Net revenues	$	—		$	3.9			$	—	$	5.7
After-tax earnings (loss) from operations	$	(0.3	)	$	(9.5	)	*	$	—	$	(12.5	)	*
Gain (loss) on sale, net of tax	(0.2		)	—				—		—
Discontinued operations, net of tax	$	(0.5	)	$	(9.5	)		$	—	$	(12.5	)

* Included in discontinued operations for Energy Systems for the three and nine months ended September 30, 2010 is an after-tax impairment loss of $8.3 million related to the initial write-down of the net assets to their estimated fair value.

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 nine months ended September 30 were as follows:



	Three months ended							Nine months ended
In millions	2011			2010				2011			2010
Net revenues	$	—		$	20.3			$	—		$	56.7
After-tax earnings (loss) from operations	$	(0.3	)	$	(19.5	)	*	$	(1.0	)	$	(68.9	)	*
Gain (loss) on sale, net of tax	—			—				—			—
Discontinued operations, net of tax	$	(0.3	)	$	(19.5	)		$	(1.0	)	$	(68.9	)

* Included in discontinued operations for KOXKA for the three and nine months ended September 30, 2010 is an after-tax impairment loss of $15.1 million and $53.9 million, respectively, related to the 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.

The Company is a party to a dispute relating to an incentive plan associated with the sale of one of its businesses in 2004. During the three and nine months ended September 30, 2011, the Company recorded $4 million ($6.0 million before tax) and $25 million ($39.5 million before tax) of after-tax charges, respectively, within discontinued operations as a result of certain associated court rulings. The Company disagrees with these rulings and plans to appeal. See Note 18 for additional details regarding this dispute.

The Company also recorded retained costs from previously sold businesses, which are mainly those related to postretirement benefits, product liability and legal costs (mostly asbestos-related).