Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued Operations

(3) DISCONTINUED OPERATIONS:

In April 2011, the Company sold its Pacific Scientific Aerospace ("PSA") business for a sale price of $680 million in cash. This business, which was part of the Industrial Technologies segment and supplies safety, security and electric power components to commercial and military aerospace markets globally, had annual revenues of $377 million in 2010. Upon closing of the transaction, the Company recorded an after-tax gain on the sale of approximately $202 million or $0.29 per diluted share.

In November 2011, the Company entered into a definitive agreement to sell its integrated scanning system business (the "Accu-Sort businesses" or "ASI") for a sale price of approximately $135 million in cash, and the sale was consummated in January 2012. In addition, in December 2011, the Company entered into a definitive agreement to sell its Kollmorgen Electro-Optical ("KEO") business for a sale price of approximately $210 million in cash, and the sale was consummated in February 2012. These businesses were part of the Industrial Technologies segment. ASI supplies bar code scanning and dimensional measurement systems and KEO designs, develops, manufactures, and integrates highly engineered, stabilized electro-optical/ISR systems that integrate into submarines, surface ships and ground vehicles. The businesses had combined annual revenues of $275 million in 2011. The Company expects to reflect an aggregate after-tax gain on the sale of these businesses of approximately $93 million or $0.13 per diluted share in its first quarter 2012 results in connection with the closing of these transactions.

The Company has reported the PSA, ASI and KEO businesses as discontinued operations in its consolidated financial statements. Accordingly, the results of operations for all periods presented have been reclassified to reflect these businesses as discontinued operations and the assets and liabilities of these businesses have been reclassified as held for sale for all periods presented. The Company allocated a portion of the consolidated interest expense to discontinued operations based on the ratio of the discontinued businesses' net assets to the Company's consolidated net assets.

The key components of income from discontinued operations for the years ended December 31 were as follows ($ in millions):

	2011			2010			2009
Net sales	$	385.8		$	652.6		$	668.3
Operating expenses		(328.3	)		(535.9	)		(565.5	)
Allocated interest expense		(2.0	)		(3.6	)		(4.0	)
Earnings before income taxes		55.5			113.1			98.8
Income tax expense		(20.2	)		(38.3	)		(34.1	)
Earnings from discontinued operations		35.3			74.8			64.7
Gain on PSA sale, net of $126 million of related income taxes		201.7			—			—
Earnings from discontinued operations, net of income taxes	$	237.0		$	74.8		$	64.7

As of December 31, 2011 and 2010, the aggregate components of assets and liabilities classified as discontinued operations and included in other assets and other liabilities consisted of the following ($ in millions):

	2011		2010
Accounts receivable, net	$	82.7	$	143.6
Inventories		10.5		59.5
Prepaid expenses and other		9.3		21.6
Property, plant & equipment, net		31.5		62.5
Goodwill and other intangibles, net		104.0		381.4
Total assets	$	238.0	$	668.6
Accounts payable	$	32.7	$	91.0
Accrued expenses and other		47.8		84.4
Total liabilities	$	80.5	$	175.4
Classification of assets and liabilities in the balance sheet:
Current assets	$	238.0	$	530.9
Non-current assets		—		137.7
Total assets	$	238.0	$	668.6
Current liabilities	$	80.5	$	167.3
Non-current liabilities		—		8.1
Total liabilities	$	80.5	$	175.4

During 2009, the Company divested of five businesses or product lines for approximately $10 million of net cash proceeds. The divested businesses and product lines were part of the Industrial Technologies and former Tools and Components segments. The Company recorded no significant gain or loss, either individually or in the aggregate, associated with these divestitures. The businesses divested by the Company have not been treated as discontinued operations in the accompanying financial statements as the impact of these businesses to the Company's results of operations, financial position, cash flows and segment information was not significant.