Divestiture-Related Activities

9 Months Ended

Sep. 25, 2011

Divestiture-Related Activities [Abstract]

Divestiture-Related Activities

Note 16 — Divestiture-related activities

Discontinued Operations

During 2011, management approved plans to sell the Company's cargo container business and cargo systems business, reporting units constituting the Company's Aerospace Segment. On October 21, 2011, the Company announced that it has entered into a definitive agreement to sell its cargo systems and container aerospace businesses to a subsidiary of AAR CORP. for $280 million. The transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close by the end of 2011. For financial statement purposes, the assets, liabilities, results of operations and cash flows of these businesses have been segregated from continuing operations and are presented in the Company's condensed consolidated financial statements as discontinued operations for all periods presented. See "Assets and Liabilities Held for Sale" below for details of the businesses' assets and liabilities.

The Company retained liabilities for certain matters such as product warranties and other contingent liabilities with respect to certain of its discontinued operations. During the second and third quarters of 2011, the Company accrued approximately $8.7 million and $1.0 million, respectively, for these retained liabilities. The amount recorded in the second quarter of 2011 included $7.5 million associated with Teleflex's potential responsibility for recall costs associated with potentially defective products, which was a subject of pending litigation related to the Company's former Commercial Segment. The accrual of the $7.5 million was based on the Company's assessment of litigation developments during the second quarter. During the third quarter of 2011, the Company settled the litigation as it related to the recall costs and, as part of the settlement, paid $7.6 million in September 2011.

On March 22, 2011, the Company completed the sale of its marine business to an affiliate of H.I.G. Capital, LLC for $123.1 million (consisting of $100.9 million in cash, net of $1.5 million of cash included in the marine business as part of the net assets sold), plus a subordinated promissory note in the amount of $4.5 million and the assumption by the buyer of approximately $15.5 million in liabilities related to the marine business). The Company realized a gain of $57.0 million, net of tax benefits, from the sale of the business. As a result of the disposition, the Company realized accumulated losses from pension and postretirement obligations of approximately $8.4 million and cumulative translation gains of approximately $33.4 million as part of the gain on sale, resulting in a net change of approximately $25.0 million in accumulated other comprehensive income. The marine business consisted of the Company's businesses that were engaged in the design, manufacture and distribution of steering and throttle controls and engine and drive assemblies for the recreational marine market, heaters for commercial vehicles and burner units for military field feeding appliances. The marine business represented the Company's entire Commercial Segment.

On December 31, 2010, the Company completed the sale of the actuation business of its subsidiary Telair International Incorporated to TransDigm Group, Incorporated for approximately $94 million and realized a gain of $51.0 million, net of tax, from the sale of the business.

On June 25, 2010, the Company completed the sale of its rigging products and services business ("Heavy Lift") to Houston Wire & Cable Company for $50 million and realized a gain of $17.0 million, net of tax, from the sale of the business.

On March 2, 2010, the Company completed the sale of its SSI Surgical Services Inc. business ("SSI") to a privately-owned healthcare company for approximately $25 million and realized a gain of $2.2 million, net of tax, from the sale of the business.

The prior period financial statements have been revised to present the actuation, marine, cargo container and cargo systems businesses as discontinued operations.

The following table presents the operating results of the operations that have been treated as discontinued operations for the periods presented:

	Three Months Ended					Nine Months Ended
	September  25, 2011			September  26, 2010		September  25, 2011			September  26, 2010
	(Dollars in thousands)
Net revenues	$	56,980		$	97,952	$	197,332		$	316,146
Costs and other expenses		43,694			83,809		177,449			280,556
Gain (loss) on disposition(1)		(4	)		—		52,265			38,562
Income from discontinued operations before income taxes		13,282			14,143		72,148			74,152
Provision for income taxes(2)		2,969			2,595		(4,810	)		29,215
Income from discontinued operations		10,313			11,548		76,958			44,937
Less: Income from discontinued operations attributable to noncontrolling interest		125			113		443			346
Income from discontinued operations attributable to common shareholders	$	10,188		$	11,435	$	76,515		$	44,591

(1) Gain on disposition for the nine months ended September 25, 2011 includes curtailment and settlement losses of approximately $11.5 million on the pension and other postretirement obligations that were transferred to the buyer in connection with the sale of the marine business and an adjustment related to pension and other postretirement liabilities of $3.5 million that occurred during the second quarter of 2011.

(2) The provision for income taxes for the nine months ended September 25, 2011 was impacted favorably by the realization of net tax benefits resulting from the resolution (including the expiration of statutes of limitation) of U.S. federal, state, and foreign tax matters relating to prior years and by the tax on the gain from sale of the marine business being incurred at significantly lower than statutory effective tax rates.

Net assets and liabilities of the discontinued operations sold in 2011 were comprised of the following:

	(Dollars in thousands)
Net assets	$	109,979
Net liabilities		(36,399	)
	$	73,580

Assets and Liabilities Held for Sale

The table below provides information regarding assets and liabilities held for sale at September 25, 2011 and December 31, 2010. At September 25, 2011, the assets and liabilities held for sale included the Company's cargo container and cargo systems businesses and five buildings. On October 21, 2011, the Company announced that it has entered into a definitive agreement to sell its cargo systems and container aerospace businesses to a subsidiary of AAR CORP. for $280 million. The transaction is subject to certain regulatory approvals and other customary closing conditions and is expected to close by the end of 2011. These assets and liabilities are classified as current within the consolidated balance sheets as the Company expects these businesses to be sold within twelve months.

	September 25, 2011		December 31, 2010
	(Dollars in thousands)
Assets held for sale:
Accounts receivable, net	$	32,651	$	—
Inventories, net		53,155		—
Other current assets		1,661		—
Property, plant and equipment, net		25,879		7,959
Other assets		4,947		—
Total assets held for sale	$	118,293	$	7,959
Liabilities held for sale:
Current liabilities	$	49,005	$	—
Noncurrent liabilities		4,526		—
Total liabilities held for sale	$	53,531	$	—

The cargo systems business uses leased facilities in its operations. In connection with these operating leases, the Company's cargo systems business had a residual value guarantee in the amount of approximately $7.4 million at September 25, 2011. The future payments under the operating leases cannot exceed the minimum rent obligation plus the residual value guarantee amount. The residual value guarantee amount is based upon the unamortized lease value of the asset under lease, and is payable by the Company's cargo systems business if the lease is not renewed or the purchase option is not exercised with respect to the leased assets. At September 25, 2011, the Company's cargo systems business had no liabilities recorded for these obligations. Any residual value guarantee amounts paid to the lessor may be recovered by the Company from the sale of the assets to a third party.