ACLARA DIVESTITURE

9 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

ACLARA DIVESTITURE

2. ACLARA DIVESTITURE

On March 28, 2014, the Company completed the sale of Aclara Technologies LLC (Aclara) to an affiliate of Sun Capital Partners, Inc. The divestiture generated approximately $132 million of gross cash proceeds at closing. As of March 28, 2014, the Company expected to receive an estimated working capital adjustment of approximately $5 million and an additional $10.2 million related to specific Aclara receivables retained by ESCO (in addition to approximately $10 million that was received prior to closing). As of June 30, 2014, the Company has received approximately $5.4 million of collections related to these specific Aclara receivables. Both of the remaining outstanding receivables totaling $9.8 million were included in Other Current Assets on the Company’s Consolidated Balance Sheet as of June 30, 2014. However, the parties have not reached agreement on the calculation of the final working capital adjustment as further described in Management’s Discussion and Analysis under Item 2. Aclara is a supplier of special purpose fixed-network communications systems for electric, gas and water utilities, including hardware and software to support advanced metering applications. Aclara is reflected as discontinued operations and/or assets/liabilities held for sale in the financial statements and related notes for all periods presented.

Aclara’s pretax earnings (loss) recorded in discontinued operations were zero and $15.6 million for the three and nine-month periods ended June 30, 2014 compared to $(2.8) million and $(17.5) million for the corresponding periods of 2013. Aclara’s net sales were zero and $129.6 million for the three and nine-month periods ended June 30, 2014 compared to $44.6 million and $127.5 million for the corresponding periods of 2013. In addition, the Company recorded a $50.4 million after-tax loss on the sale of Aclara in the second quarter of 2014. Aclara’s operations were included within the Company's USG segment prior to the classification as discontinued operations.

The major classes of Aclara assets and liabilities held for sale included in the Consolidated Balance Sheets at September 30, 2013 are shown below (in millions).

	September 30, 2013
Assets:
Accounts receivable, net	$	55.5
Inventories		34.9
Other current assets		18.5
Current assets		108.9
Net property, plant & equipment		14.5
Intangible assets, net		66.0
Goodwill		57.9
Other assets		11.8
Total assets	$	259.1
Liabilities:
Accounts payable	$	22.2
Accrued expenses and other current liabilities		41.4
Current liabilities		63.6
Other liabilities		16.0
Total liabilities	$	79.6