Divestitures

The Company has continued to assess the strategic fit of its various businesses and has pursued the divestiture of certain businesses which do not align with its long-term strategy.

Fiscal 2016

During the second quarter of fiscal 2016, the Company completed the sale of its Australian fire protection business, included within its ROW Integrated Solutions & Services segment. The assets and liabilities of this business have been presented separately as held for sale within the Consolidated Balance Sheets as of September 25, 2015. The Company recorded a pre-tax loss of $75 million related to the sale for the six months ended March 25, 2016. This loss included a $57 million write-down to fair value, less costs to sell, which was recorded during the first quarter of fiscal 2016. Also included in the loss for the six month period was the write-off of a cumulative translation loss of $31 million, of which $24 million was provided for during the first quarter of fiscal 2016. This business has not been presented in discontinued operations within the Consolidated Statements of Operations, as the criteria to be presented as a discontinued operation were not satisfied.

During the second quarter of fiscal 2016, the Company completed the sale of a business within its Global Products segment. The assets and liabilities have not been presented separately as held for sale within the Consolidated Balance Sheets as the amounts were not material to the presentation of all periods. A pre-tax loss of approximately $17 million was recorded in Selling, general and administrative expenses within the Company’s Consolidated Statements of Operations during the fourth quarter of fiscal 2015 which represented the Company's best estimate to write-down the business to fair value, less costs to sell. Upon completing the sale, the Company recorded an immaterial gain. This business has not been presented in discontinued operations as the amounts were not material to the Consolidated Financial Statements.

In addition, during the second quarter of fiscal 2016, the Company completed the sale of another business within the ROW Integrated Solutions & Services segment and realized a loss that was not material. This business is accounted for as held for sale within the Consolidated Balance Sheets as of September 25, 2015, and its results of operations have been presented as discontinued operations within the Consolidated Statements of Operations for the quarters and six months ended March 25, 2016 and March 27, 2015.

During the first quarter of fiscal 2016, the Company recorded a pre-tax gain of $17 million resulting from the transfer to Pentair Ltd. (formerly known as Tyco Flow Control International Ltd.) of Tyco's equity interest in a joint venture related to the Company's former Flow Control business as repayment of a loan established at the time of the 2012 Separation. This gain was recorded in Income (loss) from discontinued operations, net of income taxes, within the Consolidated Statements of Operations for the quarter ended December 25, 2015.

Fiscal 2015

During the quarter ended March 27, 2015, the Company concluded that several businesses in the ROW Installation & Services segment which it intended to sell met the criteria to be classified as held for sale. The Company completed the sale of these businesses during fiscal 2015. To the extent the criteria required to be presented as a discontinued operation have been satisfied, the businesses results of operations have been presented as such on the Consolidated Statements of Operations during the quarters and six months ended March 27, 2015.

Divestiture Charges, net

During the second quarter of fiscal 2016, the Company recorded a net loss of $17 million in Selling, general and administrative expenses within the Company's Consolidated Statements of Operations, primarily related to the loss on sale of the Australia fire protection business, as described above. The Company recorded a net divestiture loss of $22 million during the second quarter of fiscal 2015, related to a business in the ROW Integrated Solutions & Services segment which was not presented within discontinued operations, as described above.

During the six months ended March 25, 2016, the Company recorded a net loss of $69 million in Selling, general and administrative expenses within the Company's Consolidated Statements of Operations, primarily due to the sale of its Australian fire protection business, as described above. The Company recorded a net divestiture loss of $23 million during the six months ended March 27, 2015.

Discontinued Operations

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



	For the Quarters Ended						For the Six Months Ended
	March 25, 2016			March 27, 2015			March 25, 2016			March 27, 2015
Net revenue	$	—		$	5		$	1		$	10
Pre-tax loss from discontinued operations	(1		)	(6		)	(2		)	(9		)
Pre-tax gain on sale of discontinued operations	—			—			17			1
Income tax benefit (expense) ⁽¹⁾	2			(10		)	(10		)	(10		)
Income (loss) from discontinued operations, net of income taxes	$	1		$	(16	)	$	5		$	(18	)

⁽¹⁾ Income tax expense for the six months ended March 25, 2016 includes $12 million related to the Company’s settlement of an income tax matter in the first quarter of fiscal 2016 pertaining to its divested ADT Korea business for the 2012 period. This matter is unrelated to the liability established of $212 million during fiscal 2014 which relates to the indemnification for certain tax related matters in connection with the sale. The Company continues to maintain such liability until the matter is resolved.

Balance sheet information for the assets and liabilities of businesses classified as held for sale as of September 25, 2015 was as follows ($ in millions):



	As of
	September 25, 2015
Accounts receivable, net	$	44
Inventories	3
Prepaid expenses and other current assets	22
Deferred income taxes	1
Property, plant and equipment, net	13
Goodwill	3
Intangible assets, net	16
Total assets	$	102
Accounts payable	12
Accrued and other current liabilities	26
Deferred revenue	2
Other liabilities	10
Total liabilities	$	50

Because the Company utilizes a centralized approach to cash management and the financing of its operations, all cash that is generated by discontinued operations is routinely transferred to the Company's financing subsidiaries in continuing operations. As a result, transfers from discontinued operations within the Company's Consolidated Statement of Cash Flows reflects the net cash movements from discontinued operations to continuing operations that have occurred during the period.