Discontinued Operations

9 Months Ended

Sep. 29, 2012

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. We received $13,790,000 of the previously escrowed funds in the first quarter of 2012, and we received the remaining escrowed funds in the amount of $13,790,000 in the third quarter of 2012.

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 loss recorded upon divestiture was $1,248,000. As part of the sale, Zebra agreed with the buyer to provide a revolving loan of up to €1,000,000 which was due August 3, 2012 and bore interest at 6.5%. Zebra realized tax benefits in the amount of $13,308,000 with the divestiture of proveo AG. These tax benefits are primarily related to the difference in book basis versus tax basis. On June 29, 2012 F Two NV (a Belgium company) sold the business and assigned the revolving loan to OBQ SA (a Luxembourg company) with Zebra’s consent. The revolving loan commitment was reduced to a lesser amount of up to €526,058. The due date for borrowings under the agreement was extended from August 3, 2012 to December 31, 2012. The interest rate remains unchanged at 6.5%.

Beginning in the first quarter of 2011, Zebra reported the results of these businesses as discontinued operations. The amounts presented below for discontinued operations include the operating results of Navis and proveo for the three and nine months ended September 29, 2012 and October 1, 2011. After the Navis sale, Zebra consolidated the remaining Location Solutions product lines.

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

	Three Months Ended					Nine Months Ended
	September 29, 2012		October 1, 2011			September 29, 2012			October 1, 2011
Net sales	$	0	$	233		$	0		$	13,945
Income (loss) from discontinued operations	$	15	$	(1,246	)	$	(135	)	$	(13,970	)
Income tax (expense) benefit		501		0			338			1,105
Gain (loss) on sale of discontinued operations		0		(1,248	)		613			66,753
Income tax (expense) benefit on sale		0		13,308			0			(11,773	)
Income from discontinued operations	$	516	$	10,814		$	816		$	42,115

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

	Nine Months Ended
	September 29, 2012		October 1, 2011
Cash flows from discontinued operations:
Net cash used by operating activities	$	0	$	(1,301	)
Net cash provided by (used in) investing activities		0		0
Net cash provided by (used in) financing activities		0		0
Effect of exchange rate changes on cash		0		0
Net decrease in cash and cash equivalents		0		(1,301	)
Cash and cash equivalents at beginning of period		0		1,301
Cash and cash equivalents at end of period	$	0	$	0