Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations [Abstract]

Discontinued Operations

Note 2: Discontinued Operations

Effective June 1, 2014, the Company completed the sale of its Reciprocating Compression business to General Electric for gross cash consideration of approximately $550 million, before transaction costs.

On August 18, 2014, the Company announced that it had entered into a definitive agreement to sell its Centrifugal Compression business to Ingersoll Rand for gross cash consideration of $850 million, subject to closing adjustments.  The sale was completed effective January 1, 2015.

The Company’s historical consolidated Results of Operations statement has been retrospectively revised to reflect the results of operations for both businesses as discontinued operations for all periods presented.  Summarized financial information relating to these businesses is shown below:

	Year Ended December 31,
(dollars in millions)	2014			2013			2012
Revenues	$	428		$	701		$	707
Cost of sales (excluding depreciation and amortization)		(306	)		(498	)		(503	)
All other costs		(94	)		(105	)		(108	)
Gain on sale of the Reciprocating Compression business, before tax		95			–			–
Income before income taxes		123			98			96
Income tax provision		(97	)		(33	)		(30	)
Income from discontinued operations, net of income taxes	$	26		$	65		$	66

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

Sales price	$	550
Net assets sold		(442	)
Transaction and other costs associated with the sale		(13	)
Pre-tax gain		95
Tax provision(1)		(88	)
Gain on sale	$	7

^(1)– The tax provision associated with the gain on the sale of the Reciprocating Compression business was approximately $88 million, which was 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 (dollars in millions):

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

Assets and liabilities of the Centrifugal Compression business held for sale in the Company’s Consolidated Balance Sheet at December 31, 2014 were as follows:

(dollars in millions)	December 31, 2014
Receivables, net	$	37
Inventories, net		86
Other current assets		14
Plant and equipment, net		45
Goodwill		35
Assets of discontinued operations	$	217
Accounts payable, accrued and other current liabilities	$	89
Other long-term liabilities		1
Liabilities of discontinued operations	$	90