Discontinued Operations

12 Months Ended

Dec. 31, 2012

Discontinued Operations

Note 4: Discontinued Operations

On December 17, 2012, we sold our Thermax and Raydex cable business for $265.6 million, and recognized a pre-tax gain of $211.6 million ($124.7 million after-tax). At the time the transaction closed, we received $265.6 million in cash, subject to a working capital adjustment. The Thermax and Raydex operations were included in the Americas and EMEA segments. We have reported the gain from the sale of Thermax and Raydex as well as the results of its operations in discontinued operations. As of December 31, 2012, we have a net current liability of discontinued operations on our consolidated balance sheet of $86.9 million related to our tax obligations from the gain on disposal of Thermax and Raydex.

On December 16, 2010, we sold Trapeze Networks, Inc. (Trapeze) for $152.1 million, and recognized a pre-tax gain of $88.3 million ($44.8 million after-tax). At the time the transaction closed, we received $136.9 million in cash with the remaining $15.2 million placed in escrow as partial security for our indemnity obligations under the sale agreement. As of December 31, 2012, we have not collected any amounts from the escrow, and we remain in negotiations with the buyer of Trapeze regarding the status of the escrow and certain claims raised by the buyer. Based on the current status of the negotiations, we reduced the carrying value of the escrow receivable and recognized a loss of $7.0 million ($4.3 million net of tax) during 2012, which is included in our gain from disposal of discontinued operations. The loss reduced the amount of the escrow receivable on our Consolidated Balance Sheet to $8.0 million, which is our best estimate of the amount to be collected. During 2011, we recorded $0.2 million of expense related to the sale of Trapeze. The Trapeze operations comprised the entirety of our former Wireless segment. We have reported the gain from the sale of Trapeze as well as the results of its operations in discontinued operations.

During 2005, we completed the sale of our discontinued communications cable operation in Phoenix, Arizona (Phoenix Communications). In connection with this sale and related tax deductions, we established a liability for uncertain tax positions. The statute of limitations associated with the tax positions expired during our fiscal third quarter of 2012. Therefore, we reversed the uncertain tax position liability and the associated accrued interest and penalties. In 2012, we recognized a net gain of $14.1 million due to the reversal of the uncertain tax position liability, which is included in our gain from disposal of discontinued operations. We also recognized a gain of $4.0 million ($2.6 million net of tax) due to the reversal of the accrued interest and penalties, which is included in our income (loss) from discontinued operations. In 2011 and 2010, we recognized interest expense of $0.9 million ($0.7 million net of tax) and $1.0 million ($0.6 million net of tax), respectively, related to these uncertain tax positions. We have reported these amounts in discontinued operations.

Operating results from discontinued operations for 2012, 2011, and 2010 include the following revenues and income (loss) before taxes:

	2012				2011					2010
	Revenues		Income (Loss) Before Taxes		Revenues		Income (Loss) before Taxes			Revenues		Income (Loss) Before Taxes
	(In thousands)
Thermax and Raydex	$	95,668	$	21,479	$	99,766	$	21,792		$	73,704	$	12,546
Trapeze		—		—		—		(196	)		57,339		(10,791	)
Phoenix Communications		—		3,980		—		(949	)		—		(978	)
Total	$	95,668	$	25,459	$	99,766	$	20,647		$	131,043	$	777

Listed below are the major classes of assets and liabilities belonging to the discontinued operations of the Company at December 31, 2011 (in thousands).

Assets:
Cash	$	165
Receivables		10,527
Inventories		17,969
Other current assets		213
Property, plant and equipment, net		6,820
Intangible Assets		12,168
Goodwill		11,441
Tax assets		5,551
Total assets	$	64,854
Liabilities:
Accounts payable and accrued liabilities	$	16,328
Deferred income taxes		4,370
Total liabilities	$	20,698