Discontinued Operations

6 Months Ended

Jun. 30, 2014

Discontinued Operations [Abstract]

Discontinued Operations

Note 2: Discontinued Operations

Effective June 1, 2014, the Company completed its previously announced sale of its Reciprocating Compression business, a division of the Process and Compression Systems (PCS) segment, to General Electric for cash consideration of approximately $547 million, net of transaction costs.  As a result of this sale, the Reciprocating Compression business is being reported as a discontinued operation in the Company's results of operations for the three- and six-month periods ended June 30, 2014 and 2013.

   Summarized financial information for the Reciprocating Compression business is as follows (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Results of Operations:
Revenues	$	64		$	78		$	111		$	135
Cost of sales (excluding depreciation and amortization)		(49	)		(58	)		(86	)		(99	)
All other costs		(11	)		(14	)		(29	)		(27	)
Gain on sale of Reciprocating Compression business, before tax		95			–			95			–
Income  before income taxes		99			6			91			9
Income tax provision		(86	)		(2	)		(84	)		(3	)
Income from discontinued operations, net of income taxes	$	13		$	4		$	7		$	6

The gain on the sale of the Reciprocating Compression business was determined as follows (in millions):

 

Sales price	$	550
Net assets sold		(442	)
Transaction and other costs associated with the sale		(13	)
Pre-tax gain		95
Tax provision		(85	)
Gain on sale	$	10

The tax provision associated with the pre-tax gain is impacted by nondeductible goodwill of approximately $192 million included in the total net assets sold.

The net assets sold of the Reciprocating Compression business were as follows (in millions):

Accounts receivable	$	79
Inventory		122
Goodwill		214
All other		27
Net assets sold	$	442