3. 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.

During the second quarter of 2013, the Company approved a plan to sell its North America guarding business in its NA Installation & Services segment. As of March 29, 2013, the business was still owned by Tyco. Therefore, this business has been accounted for as held for sale as of both March 29, 2013 and September 28, 2012; however, its results of operations are presented in continuing operations. Total assets to be divested of $29 million and $35 million are included in Prepaid expenses and other current assets on the accompanying Consolidated Balance Sheets as of March 29, 2013 and September 28, 2012, respectively. Total liabilities to be divested of $5 million and $8 million are included in Accrued and other current liabilities on the accompanying Consolidated Balance Sheets as of March 29, 2013 and September 28, 2012, respectively. Subsequent to March 29, 2013, the Company entered into a definitive agreement to sell the business. This business has not been presented in discontinued operations as it is not material to the Consolidated Financial Statements. The Company expects to complete the transaction during the third quarter of fiscal 2013.

Discontinued Operations

On September 28, 2012, Tyco completed the 2012 Separation and has presented its former North American residential security and flow control businesses as discontinued operations in all periods prior to the completion of the 2012 Separation. See Note 1 for additional information regarding the 2012 Separation. 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 Separation. In limited instances, final determination of the balances will be made in subsequent periods, such as in the case of working capital and the cash adjustments specified in the 2012 Separation and Distribution Agreement entered among the parties, and 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 six months ended March 29, 2013, $45 million was recorded within the Consolidated Statement of Shareholders' Equity as Other, primarily related to a cash true-up adjustment with ADT. The Company expects to finalize the cash true-up and working capital adjustments with Pentair during the second half of fiscal 2013, and these will be recorded through shareholders' equity. Any additional adjustments are not expected to be material.

Additionally, the quarter and six months ended March 30, 2012 include $11 million of income tax expense associated with tax liabilities preceding the spin-offs of Covidien plc and TE Connectivity Ltd. (the "2007 Separation"), which was recorded in (loss) income from discontinued operations, net of income taxes in the Company's Consolidated Statements of Operations. The Company was reimbursed $8 million pursuant to a tax sharing agreement (the "2007 Tax Sharing Agreement") entered into in conjunction with the 2007 Separation, which was also recorded in (loss) income from discontinued operations, net of income taxes.

During the quarter and six months ended March 30, 2012, the Company sold its Fire Equipment de Mexico, S.A. business, which was part of the Company's Global Products segment. The sale was completed for approximately $1 million of cash consideration and a pre-tax loss of $3 million was recorded in (loss) income from discontinued operations, net of income taxes in the Company's Consolidated Statements of Operations.

Net revenue, pre-tax income, pre-tax separation gain (charges), net, pre-tax gain on sale of discontinued operations, income tax expense and (loss) income from discontinued operations, net of income taxes are as follows ($ millions):

	For the Quarters Ended						For the Six Months Ended

	March 29, 2013			March 30, 2012			March 29, 2013		March 30, 2012
Net revenue	$	—		$	1,804		$	—	$	3,521

Pre-tax income	$	—		$	317		$	—	$	622
Pre-tax separation gain (charges), net (See Note 2)		(2	)		(63	)		2		(94	)
Pre-tax gain on sale of discontinued operations		—			5			—		5
Income tax expense		—			(70	)		—		(120	)

(Loss) income from discontinued operations, net of income taxes	$	(2	)	$	189		$	2	$	413

Divestiture Charges (Gains), Net

During the quarter and the six months ended March 29, 2013, the Company recorded a net loss of $9 million and $6 million, respectively, in Selling, general and administrative expenses in the Company's Consolidated Statements of Operations, primarily due to an indemnification related to the divestiture of the Company's Electrical and Metal Products business as well as the write-down to fair value, less cost to sell, of a business held for sale. Offsetting the loss for the six months ended March 29, 2013 was a net gain recorded for the quarter ending December 28, 2012 related to the favorable settlement of an indemnification resulting from the divestiture of the Company's Electrical and Metal Products business.

For both the quarter and six months ended March 30, 2012, the Company recorded a net loss of $3 million in Selling, general and administrative expenses in the Company's Consolidated Statements of Operations in connection with the divestiture of certain businesses that did not meet the criteria for discontinued operations.