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 third quarter of fiscal 2016, the Company concluded that a business in the ROW Integrated Solutions & Services segment which it intends to sell met the criteria to be classified as held for sale. The assets and liabilities of this business have been presented separately as held for sale within the Consolidated Balance Sheets for all periods presented. A pre-tax loss of approximately $59 million for the write-down to fair value, less cost to sell, was recorded in Selling, general and administrative expenses within the Company's Consolidated Statements of Operations for the quarter and nine months ended June 24, 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 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 $74 million related to the sale for the nine months ended June 24, 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 nine month period was the write-off of a cumulative translation loss of $30 million. 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 nine months ended June 24, 2016 and the quarter and nine months ended June 26, 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 third quarter of fiscal 2015, the Company completed the sale of several businesses in the ROW Integrated Solutions & Services segment, and recorded a loss on sale of $29 million and $28 million in (Loss) income from discontinued operations, net of taxes within the Consolidated Statements of Operations for the quarter and nine months ended June 26, 2015, respectively. The results of operations of these businesses have been presented within discontinued operations on the Consolidated Statements of Operations during the quarter and nine months ended June 26, 2015.

In addition, during the third quarter of fiscal 2015, the Company completed the sale of another business in the ROW Integrated Solutions & Services segment. The Company recorded $22 million in Selling, general and administrative expenses within the Consolidated Statements of Operations for an anticipated loss on disposal during the quarter ended March 27, 2015. This business did not meet the criteria to be classified as a discontinued operation, and thus its results of operations were included in continuing operations in the Consolidated Financial Statements.

Divestiture Charges, net

During the third quarter of fiscal 2016, the Company recorded a net loss of $38 million in Selling, general and administrative expenses within the Company's Consolidated Statements of Operations, primarily related to the loss on anticipated sale of a business in the ROW Integrated Solutions & Services segment, as described above, partially offset by a $14 million gain related to the reversal of an indemnification reserve for a previously divested business. The Company recorded a net gain of $4 million during the third quarter of fiscal 2015, related to a business in the ROW Integrated Solutions & Services segment in Selling, general and administrative expenses within the Company's Consolidated Statements of Operations.

During the nine months ended June 24, 2016, the Company recorded a net loss of $107 million in Selling, general and administrative expenses within the Company's Consolidated Statements of Operations, primarily due to the third quarter of fiscal 2016 items as described above, in addition to the loss on sale of its Australian fire protection business. During the nine months ended June 26, 2015, the Company recorded a net loss of $19 million in Selling, general and administrative expenses within the Company's Consolidated Statements of Operations, related to several businesses in the ROW Integrated Solutions & Services segment.

Discontinued Operations

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



	For the Quarters Ended						For the Nine Months Ended
	June 24, 2016			June 26, 2015			June 24, 2016			June 26, 2015
Net revenue	$	—		$	5		$	1		$	15
Pre-tax loss from discontinued operations	—			(3		)	(2		)	(12		)
Pre-tax (loss) gain on sale of discontinued operations	(1		)	(29		)	16			(28		)
Income tax expense ⁽¹⁾	(1		)	—			(11		)	(10		)
(Loss) income from discontinued operations, net of income taxes	$	(2	)	$	(32	)	$	3		$	(50	)

⁽¹⁾ Income tax expense for the nine months ended June 24, 2016 includes $14 million related to the Company’s settlement of income tax matters pertaining to its divested ADT Korea business. These matters are 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 June 24, 2016 and September 25, 2015 was as follows ($ in millions):



	As of		As of
	June 24, 2016		September 25, 2015
Accounts receivable, net	$	9	$	54
Inventories	6		8
Prepaid expenses and other current assets	6		26
Deferred income taxes	—		1
Property, plant and equipment, net	13		24
Goodwill	—		34
Intangible assets, net	33		57
Other assets	4		4
Total assets	$	71	$	208
Accounts payable	12		22
Accrued and other current liabilities	19		43
Deferred revenue	3		5
Other liabilities	—		10
Total liabilities	$	34	$	80

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.