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 completed the acquisition of the Hussmann Branches on November 30, 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. The Company also recorded approximately $3 million of transaction costs during the first half of 2011 related to the sale. During the third quarter of 2011, the Company negotiated 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, initially representing the remaining 40% of the outstanding capital stock (on an as-converted basis) of Hussmann Parent. 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 for all periods presented.

For the Hussmann divestiture, the Company received consideration of $438 million for the Hussmann Business and Branches, which included cash consideration, after purchase price adjustments, of $351 million as well as the equity interest valued at $87 million. Accordingly, the Company recorded a pre-tax loss on sale/asset impairment charge of $260 million ($162 million after-tax) during the second half of 2011, which reflected net assets of $576 million, an accumulated other comprehensive loss of $86 million, an estimated indemnification obligation assumed of $27 million, and transaction costs of $9 million.

Results for the Hussmann Business and Branches for the years ended December 31 are as follows:



In millions	2011*				2010		2009
Net revenues	$	818.5			$	1,106.1	$	1,008.9
Loss on sale/asset impairment	(646.9		)	**	—		—
Net earnings (loss) attributable to Ingersoll-Rand plc	(513.1		)		55.7		13.1
Diluted earnings (loss) per share attributable to Ingersoll-Rand plc ordinary shareholders:	(1.51		)		0.16		0.04

* Results represent the operating results of Hussmann Business and Branches through their respective divestiture transaction dates.

** Included in Loss on sale/asset impairment for the year ended December 31, 2011 are transaction costs of $12.2 million.

The Company's ownership interest in Hussmann Parent is reported using the equity method of accounting subsequent to September 30, 2011. The Company's equity investment in the Hussmann Parent is reported within Other noncurrent assets in the Consolidated Balance Sheet and the related equity earnings reported within Other, net in the Company's Consolidated Statement of Income.

The components of Hussmann assets and liabilities recorded as held for sale on the Consolidated Balance Sheet at December 31, 2010 are as follows:



In millions	December 31, 2010
Assets
Current assets	$	225.0
Property, plant and equipment, net	107.4
Goodwill	407.4
Intangible assets, net	389.5
Other assets and deferred income taxes	5.5
Assets held for sale	$	1,134.8
Liabilities
Current liabilities	$	106.1
Noncurrent liabilities	61.0
Liabilities held for sale	$	167.1

Discontinued Operations

The components of discontinued operations for the years ended December 31 are as follows:



In millions	2011			2010			2009
Net revenues	$	72.2		$	143.6		$	186.1
Pre-tax earnings (loss) from operations	(69.0		)	(173.4		)	(95.6		)
Pre-tax gain (loss) on sale	(57.7		)	(5.4		)	(28.6		)
Tax benefit (expense)	69.9			61.3			87.6
Discontinued operations, net of tax	$	(56.8	)	$	(117.5	)	$	(36.6	)

During 2009, the Company recorded a tax benefit of $22 million primarily associated with reducing its liability for unrecognized tax benefits, and a tax charge of $29 million associated with correcting immaterial accounting errors. See Note 16 for a further description of these tax matters.

Discontinued operations by business for the years ended December 31 are as follows:



In millions	2011			2010			2009
Integrated Systems and Services, net of tax	$	(6.3	)	$	(0.8	)	$	(3.0	)
Energy Systems, net of tax	0.2			(17.6		)	(4.3		)
KOXKA, net of tax	(3.3		)	(54.0		)	(17.7		)
Other discontinued operations, net of tax	(47.4		)	(45.1		)	(11.6		)
Discontinued operations, net of tax	$	(56.8	)	$	(117.5	)	$	(36.6	)

Integrated Systems and Services Divestiture

On December 30, 2011, the Company completed the divestiture of its security installation and service business, which was sold under the Integrated Systems and Services brand in the United States and Canada, to Kratos Public Safety & Security Solutions, Inc. This business, which was previously reported as part of the Security Technologies segment, designs, installs and services security systems. The Company reported this business as a discontinued operation for all periods presented. The Company recorded a pre-tax loss on sale of $6.7 million ($5.0 million after-tax) within discontinued operations.

Net revenues and after-tax earnings of the Integrated Systems and Services business for the year ended December 31 were as follows:



In millions	2011			2010			2009
Net revenues	$	72.2		$	78.0		$	92.7
After-tax earnings (loss) from operations	$	(1.3	)	$	(0.8	)	$	(3.0	)
Gain (loss) on sale, net of tax	(5.0		)	—			—
Discontinued operations, net of tax	$	(6.3	)	$	(0.8	)	$	(3.0	)

The components of Integrated Systems and Services assets and liabilities recorded as held for sale on the Consolidated Balance Sheet at December 31, 2010 are as follows:



In millions	December 31, 2010
Assets
Current assets	$	25.3
Goodwill	2.5
Intangible assets, net	4.4
Assets held for sale	$	32.2
Liabilities
Current liabilities	$	9.1
Liabilities held for sale	$	9.1

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 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 years ended December 31 were as follows:



In millions	2011			2010				2009
Net revenues	$	—		$	8.9			$	10.9
After-tax earnings (loss) from operations	$	(0.4	)	$	(14.4	)	*	$	(4.3	)
Gain (loss) on sale, net of tax	0.6			(3.2		)		—
Discontinued operations, net of tax	$	0.2		$	(17.6	)		$	(4.3	)

* Included in discontinued operations for Energy Systems in 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 2010, the Company recognized a $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 years ended December 31 were as follows:



In millions	2011			2010				2009
Net revenues	$	—		$	56.7			$	82.5
After-tax earnings (loss) from operations	$	(3.3	)	$	(53.1	)	*	$	(17.7	)
Gain (loss) on sale, net of tax	—			(0.9		)		—
Discontinued operations, net of tax	$	(3.3	)	$	(54.0	)		$	(17.7	)

* Included in discontinued operations for KOXKA for 2010 is an after-tax impairment loss of $53.9 million related to the write-down of the net assets to their estimated fair value. Also included in 2010 is a $12.2 million tax benefit resulting from a reduction in the Company’s deferred tax asset valuation allowance for net operating losses.

Other Discontinued Operations

The components of other discontinued operations for the years ended December 31 were as follows:



In millions	2011			2010			2009
Retained costs, net of tax	$	(31.8	)	$	(45.0	)	$	12.4
Net gain (loss) on disposals, net of tax	(15.6		)	(0.1		)	(24.0		)
Discontinued operations, net of tax	$	(47.4	)	$	(45.1	)	$	(11.6	)

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, and is continuing to pursue other claims against Doosan Infracore, regarding post closing matters. 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.

Other discontinued operations, net of tax from previously sold businesses is mainly related to postretirement benefits, product liability and legal costs (mostly asbestos-related), costs related to settlement of a lawsuit and tax effects of post closing purchase price adjustments.