Discontinued Operations

6 Months Ended

Jul. 02, 2011

Discontinued Operations

Discontinued Operations

Note 17 Discontinued Operations

Sale of Navis, LLC

On March 18, 2011, we sold our Navis marine terminal solutions business and the related WhereNet marine terminal solutions product line of our Zebra Enterprise Solutions ("ZES") business segment for approximately $188,588,000 in cash to Cargotec Corporation. Zebra recorded a short-term receivable from buyer in the amount of $13,790,000, which is due 12 months from the sale date. Zebra also recorded a long-term receivable from the buyer in the amount of $13,790,000, which is due 18 months from the transaction date. These receivables represent funds held in escrow that are subject to adjustment according to terms of the sales agreement.

Sale of proveo AG

On August 3, 2011, we entered into a Share Purchase Agreement with F Two NV (a Belgium company) to sell all of our interest in Zebra Enterprise Solutions GmbH (formerly proveo AG) business. The proceeds received from the buyer were immaterial. The accounting for the proveo transaction will be included in the 2011 third quarter results.

Beginning in the first quarter of 2011, Zebra is required to report the results of these businesses as discontinued operations. The amounts presented below for discontinued operations include Navis and proveo operations assets and liabilities, and the operating results of these businesses for both 2011 and 2010 periods. With the Navis sale, Zebra consolidated the former ZES Location Solutions product line. The reporting of separate business segments will no longer be required.

The components of assets and liabilities of discontinued operations in our unaudited consolidated balance sheet are as follows (in thousands):

	As of
	July 2, 2011		December 31, 2010
Assets:
Cash and cash equivalents	$	486	$	1,301
Accounts receivable, net		299		24,003
Inventories		372		772
Deferred income taxes		0		3,492
Prepaid expenses and other current assets		0		3,328
Property and equipment, net		0		1,890
Goodwill		0		72,230
Other intangibles, net		0		39,951
Other assets		0		1,202
Assets of discontinued operations	$	1,157	$	148,169
Liabilities:
Accounts payable	$	291	$	726
Accrued liabilities		238		2,927
Deferred revenue		272		17,791
Deferred rent		0		199
Other long-term liabilities		0		184
Liabilities of discontinued operations	$	801	$	21,827

Summary results for discontinued operations in our unaudited consolidated statement of earnings are as follows (in thousands):

	Three Months Ended						Six Months Ended
	July 2, 2011			July 3, 2010			July 2, 2011			July 3, 2010
Net sales	$	1,079		$	17,176		$	13,712		$	31,632
Loss from discontinued operations		(1,097	)		833			(12,724	)		(436	)
Income tax benefit		104			(341	)		1,105			114
Gain on sale of discontinued operations		788			0			68,001			0
Income tax (expense) on sale		0			0			(25,081	)		0
Income (loss) from discontinued operations	$	(205	)	$	492		$	31,301		$	(322	)

The components of cash flows of discontinued operations in our unaudited consolidated statement of cash flows are as follows (in thousands):

	Six Months Ended
	July 2, 2011			July 3, 2010
Cash flows from discontinued operations:
Net cash provided (used) by operating activities	$	(827	)	$	(4,260	)
Net cash provided (used) by investing activities		0			0
Net cash provided (used) by financing activities		0			0
Effect of exchange rate changes on cash		12			2,979
Net decrease in cash and cash equivalents	$	(815	)	$	(1,281	)
Cash and cash equivalents at beginning of period	$	1,301		$	1,693
Cash and cash equivalents at end of period	$	486		$	412