Divestitures

The Company continually assesses the strategic fit of its various businesses and from time to time divests businesses which do not align with its long-term strategy.

Fiscal 2014

The Company intends to sell several businesses in the ROW Installation and Services segment. The businesses are accounted for as held for sale on the Consolidated Balance Sheets as of June 27, 2014 and September 27, 2013, and their results of operations have been presented as discontinued operations on the Consolidated Statements of Operations during the quarters and nine months ended June 27, 2014 and June 28, 2013. During the quarter ended June 27, 2014, the Company recorded a $1 million impairment loss related to writing down the net assets to their fair value.

On May 22, 2014, the Company, together with its wholly-owned subsidiary Tyco Far East Holdings Ltd. (the “Seller”) completed the sale of Tyco Fire & Security Services Korea Co. Ltd. and its subsidiaries that form and operate the Company’s ADT Korea business to an affiliate of The Carlyle Group pursuant to a stock purchase agreement previously reported in the Company's Current Report on Form 8-K filed with the SEC on March 4, 2014. The transaction took the form of a sale by the Seller of all of the stock of Tyco Fire & Security Services Korea Co. Ltd. for an aggregate purchase price of $1.93 billion, subject to customary adjustments as set forth in the stock purchase agreement. The Company recognized a gain of $1.0 billion, net of a $212 million charge related to the indemnification at fair value for certain tax related matters borne by the buyer that are probable of being paid. The net gain was recorded in income from discontinued operations, net of income taxes, on the Consolidated Statements of Operations for the quarter and nine months ended June 27, 2014. This business was accounted for as held for sale on the Consolidated Balance Sheets as of September 27, 2013, and its results of operations have been presented within discontinued operations on the Consolidated Statements of Operations during the quarters and nine months ended June 27, 2014 and June 28, 2013.

On March 6, 2014, the Company announced Atkore International Group Inc.'s (“Atkore”) intention to redeem all of the Company’s remaining common equity stake in Atkore. The redemption was completed on April 9, 2014 for aggregate cash proceeds of $250 million. This amount may be adjusted upward by up to $25 million if, prior to December 31, 2014, there is a sale or merger of Atkore, a sale of substantially all of Atkore's assets or an initial public offering of Atkore's stock. The Company recognized a net gain of $216 million related to this transaction, which is included in Equity gain (loss) in earnings of unconsolidated subsidiaries in the Consolidated Statement of Operations for the quarter and nine months ended June 27, 2014. The net gain is comprised of a $227 million gain on the sale of the equity investment, partially offset by an $11 million loss, which is the Company's share of loss on Atkore's debt extinguishment undertaken in connection with the redemption.

During the quarter ended December 27, 2013, the Company completed the sale of its Armourguard business in New Zealand and its fire and security business in Fiji, both of which were in its ROW Installation & Services segment, for an immaterial amount. These businesses were accounted for as held for sale as of September 27, 2013; however, the assets and liabilities have not been presented separately in the Consolidated Balance Sheets, and these businesses have not been presented in discontinued operations in the Consolidated Statements of Operations for all periods presented because the amounts were not material.

Fiscal 2013

On September 28, 2012, Tyco completed the 2012 Separation. See Note 2 for additional information. At the time of the 2012 Separation, the Company used available information to develop its best estimates for certain assets and liabilities related to the transaction. In limited instances, final determination of the balances will be made in subsequent periods, such as in the case of when final income tax returns are filed in certain jurisdictions where those returns include a combination of Tyco, ADT and/or Tyco Flow Control legal entities. During the quarter ended June 28, 2013, a net increase of $59 million was recorded within the Consolidated Statement of Shareholders' Equity as Other, primarily related to a cash true-up adjustment from Pentair. During the nine months ended June 28, 2013, a net increase of $14 million was recorded within the Consolidated Statement of Shareholders' Equity as Other, primarily related to a cash true-up adjustment received from Pentair as discussed, partially offset by a cash true-up adjustment paid to ADT during the first quarter of fiscal 2013. During the nine months ended June 27, 2014, there were no adjustments recorded within the Consolidated Statement of Shareholders' Equity related to the 2012 Separation.

The components of income from discontinued operations, net of income taxes are as follows ($ in millions):



	For the Quarters Ended						For the Nine Months Ended
	June 27, 2014			June 28, 2013			June 27, 2014			June 28, 2013
Net revenue	$	85		$	141		$	390		$	423
Pre-tax income from discontinued operations	9			26			61			73
Pre-tax separation (charges) income included within discontinued operations (See Note 2)	(1		)	3			(2		)	5
Pre-tax gain on sale of discontinued operations	1,179			—			1,175			—
Income tax expense	(171		)	(6		)	(177		)	(16		)
Income from discontinued operations, net of income taxes	$	1,016		$	23		$	1,057		$	62

Balance sheet information for the discontinued operations as of June 27, 2014 and September 27, 2013 was as follows ($ in millions):



	As of
	June 27, 2014		September 27, 2013
Accounts receivable, net	$	11	$	34
Inventories	2		10
Prepaid expenses and other current assets	12		22
Property, plant and equipment, net	—		393
Goodwill and intangible assets, net	—		370
Other assets	2		27
Total assets	$	27	$	856
Accounts payable	3		52
Accrued and other current liabilities	11		66
Other liabilities	1		118
Total liabilities	$	15	$	236

Divestiture (Losses) Gains, Net

For the quarter and nine months ended June 27, 2014, the Company recorded a net loss of $1 million and net gain of $2 million, respectively, in Selling, general and administrative expenses in the Company's Consolidated Statements of Operations, primarily related to a favorable court judgment regarding a divested business.

For the quarter and nine months ended June 28, 2013, the Company recorded a net loss of $4 million and $10 million, respectively, in Selling, general and administrative expenses in the Company's Consolidated Statements of Operations. The net loss for the quarter ended June 28, 2013 was primarily related to a net charge recorded in respect of a legacy environmental remediation obligation of a divested business. The net loss for the nine months ended June 28, 2013 also included a net indemnification loss related to the divestiture of the Company's Electrical and Metal Products business (Atkore) as well as the write-down to fair value, less cost to sell, of the North America guarding business that was held for sale in the second quarter of fiscal 2013 and subsequently divested in the third quarter of fiscal 2013.