2. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

As part of a strategic portfolio review conducted in 2014, the Corporation has identified certain businesses which it considers non-core. The Corporation considers businesses non-core when the business’ products or services do not complement its existing businesses and where the long-term growth prospects are below the Corporation’s expectations. As part of this initiative, the Corporation has divested four businesses in 2014. Additionally, during the third quarter of 2014, the Corporation classified certain other businesses as held for sale. The results of operations of these businesses are reported as discontinued operations within our Consolidated Statements of Earnings and prior year amounts have been restated to conform to the current year presentation.

The aggregate financial results of all discontinued operations were as follows:



(In thousands)	2014			2013			2012
Net sales	$	363,869		$	392,690		$	285,194
Loss from discontinued operations before income taxes ⁽¹⁾	(48,519		)	(3,097		)	(14,930		)
Income tax benefit/(expense)	14,268			1,674			6,181
Gain/(loss) on sale of businesses ⁽²⁾	(22,360		)	—			18,512
Earnings from discontinued operations	$	(56,611	)	$	(1,423	)	$	9,763

⁽¹⁾Loss from discontinued operations before income taxes includes approximately $41.4 million of held for sale impairment expense in the year ended December 31, 2014.

⁽²⁾ In the year ended December 31, 2014, the Corporation recognized aggregate after tax losses of $22.4 million on the sale of the Benshaw, 3D, Upstream and Vessels business. No businesses were sold in 2013. In 2012, the Corporation recognized an after tax gain of $18.5 million on the Heat Treat divestiture. Further details about these transactions are described below.

Assets held for sale

During the third quarter of 2014, the Corporation committed to a plan to sell two surface technology treatment facilities within the Commercial/Industrial segment. The Corporation also committed to a plan to sell its Engineered Packaging business and its Aviation Ground Support Equipment business, within the Defense segment, as well as its Downstream refining business, within the Energy segment. As of December 31, 2014, these businesses have been classified as held for sale and their results of operations have been presented as discontinued operations in the Consolidated Statement of Earnings.

The aggregate components of the assets classified as held for sale, are as follows:



(In thousands)	December 31, 2014
Assets held for sale:
Receivables, net	$	60,187
Inventories, net	27,414
Property, plant, and equipment, net	22,473
Goodwill	42,395
Other intangible assets, net	19,151
Other assets	5,631
Deferred tax assets, net	11,174
Reserve for assets held for sale	(41,078		)
Total assets held for sale, current	$	147,347
Liabilities held for sale
Accounts payable	$	12,579
Accrued expenses	8,320
Other current liabilities	13,930
Other liabilities	563
Total liabilities held for sale, current	$	35,392

The following table outlines the net sales and earnings/(loss) before income taxes attributable to the assets held for sale:



	Net Sales						Earnings /(loss) before income taxes
(In thousands)	2014		2013		2012		2014			2013			2012
Commercial/Industrial
Surface Technologies - Domestic	$	4,395	$	4,672	$	1,767	$	(2,264	)	$	(528	)	$	(319	)
Defense
Engineered Packaging	19,841		19,484		17,862		1,822			858			1,165
Aviation Ground Support Equipment	29,331		28,022		28,585		(8,644		)	(122		)	27
Energy
Downstream	127,594		109,270		98,341		(32,284		)	(3,175		)	(12,388		)
Total included in discontinued operations	$	181,161	$	161,448	$	146,555	$	(41,370	)	$	(2,967	)	$	(11,515	)

As of December 31, 2014, the Corporation impaired long-lived assets held for sale in the amount of $1.9 million, $6.2 million, $33.1 million for certain Domestic Surface Technologies facilities, the Corporation’s Aviation Ground Support Equipment business, and the Corporation’s Downstream refining business, respectively. Impairment charges have been included in the figures above.

Divestitures and facility closures

During 2014, the Corporation disposed of four businesses aggregating to cash proceeds of $153 million from its Defense and Energy segments. The divestitures resulted in aggregate pre-tax losses in excess of $29 million, and tax benefits of approximately $6.7 million. During 2014, the Corporation also closed three international manufacturing facilities in its Surface Technologies business. During 2012, the Corporation disposed of its Heat Treat business for $52 million. The following table outlines the net sales and earnings/(loss) before income taxes attributable to discontinued operations. Gains and losses recognized in connection with the sale of the businesses have been included in discontinued operations on the Consolidated Statement of Earnings but have been excluded in the table presented below.



	Net Sales						Earnings /(loss) before income taxes
(In thousands)	2014		2013		2012		2014			2013			2012
Commercial/Industrial
Surface Technologies - International	$	4,355	$	4,600	$	4,248	$	(6,123	)	$	(805	)	$	(989	)
Heat Treat	—		—		10,785		—			—			4,929
Defense
Benshaw	29,029		70,741		89,183		(3,061		)	2,173			5,972
3D Radar	344		5,165		7,444		(1,117		)	215			1,492
Energy
Upstream	143,182		145,609		9,335		14,267			10,898			(2,090		)
Vessels	5,798		5,127		17,644		(11,115		)	(12,611		)	(12,729		)
Total included in discontinued operations	$	182,708	$	231,242	$	138,639	$	(7,149	)	$	(130	)	$	(3,415	)

2014 Divestitures and facility closures

Surface Technologies - International

During the fourth quarter of 2014, the Corporation closed certain of its international surface technology manufacturing facilities located in Canada, Italy, and Austria. As a result of the facility closures, the Company incurred $5.3 million of pre-tax closure costs, including a $3.2 million impairment on fixed assets, which are included in the figures presented above. All operations have ceased at these facilities as of December 31, 2014.

Benshaw

On June 30, 2014, the Corporation sold the assets of its Benshaw business, within our Defense segment, to Regal-Beloit Corporation for $49.7 million in cash, net of cash sold, and final working capital adjustments. The Corporation recognized a pre-tax loss on divestiture of $7.3 million. The Corporation recognized a tax benefit of $2.9 million in connection with the sale.

3D Radar

On April 30, 2014, the Corporation sold the assets of the 3D Radar business, within the Defense segment, to Chemring Group PLC for $2.4 million in cash, net of final working capital adjustments. The disposal resulted in a $0.6 million pre-tax gain.

Upstream

On December 17, 2014, the Corporation completed the sale of its upstream oil and gas business, within the Energy segment, for $98 million in cash, net of cash sold, and final working capital adjustments. The Corporation recognized a pre-tax loss on divestiture of $13.7 million. The Corporation recognized a tax benefit of $0.6 million in connection with the sale.

Vessels

During the third quarter of 2014, the Corporation completed the sale of its Vessels business, within the Energy segment, for $2 million in cash, net of transaction costs. The Corporation recognized a pre-tax loss on divestiture of $8.6 million. The Corporation recognized a tax benefit of $3.2 million in connection with the sale.

2012 Divestitures

Heat Treat

On March 30, 2012, the Corporation sold the assets and real estate of its heat treating business, which had been reported in the Commercial/Industrial segment, to Bodycote plc for $52 million. The heat treating business’ operating results are included in discontinued operations in the Corporation’s Consolidated Statement of Earnings for all periods presented. Discontinued operations for the year ended December 31, 2012 included net sales of $10.8 million and earnings before income taxes of $4.9 million, respectively. The Corporation recognized a pre-tax gain of $29.9 million in 2012 and has recorded the gain in discontinued operations for the year ended December 31, 2012.