E-Z-GO 2008 Annual Report Download - page 69

Notes to the Consolidated Financial Statements
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computation of basic earnings per share using the two-class method. This FSP is effective in the first quarter of 2009 and is to be applied on a
retrospective basis to all periods presented. In the first quarter of 2008, we granted restricted stock units that include nonforfeitable rights to
dividends. Accordingly, restricted stock units awarded since the beginning of 2008 will be considered participating securities and will be included
in our earnings per share calculation upon the adoption of this FSP. The adoption of this FSP will not have a material impact on our earnings per
share, and it will have no impact on our financial position or results of operations.
Other new pronouncements issued but not effective until after January 3, 2009 are not expected to have a significant effect on our consolidated
financial position or results of operations.
Note 2. Discontinued Operations
In November 2008, we completed the sale of our Fluid & Power business unit to Clyde Blowers Limited, a U.K.-based worldwide leader in the
areas of power, materials handling, intermodal transport and logistics, and pump technologies. This sale included our Gear Technologies,
Hydraulics, Maag Pump and Union Pump product lines, along with each of their respective brands. We received approximately $527 million in
cash, a six-year note with a face value of $28 million and up to $50 million based on final 2008 operating results that will be determined by the
end of the first quarter of 2009, which will be primarily payable in a six-year note. We recorded an after-tax gain of $111 million for this sale. After
taxes and other deal-related expenses are paid, we expect total net after-tax proceeds for the sale to be approximately $380 million, excluding any
payments due to us related to the 2008 operating results.
In August 2006, we completed the sale of our Fastening Systems business to Platinum Equity, a private equity investment firm, for approximately
$613 million in cash and the assumption of $16 million of net indebtedness and certain liabilities. There was no gain or loss recorded
upon completion of the sale. Prior to the consummation of the sale of the Fastening Systems business, we recorded an impairment charge of
$120 million in 2006 to record the business at the estimated fair value less cost to sell.
The Fluid & Power and Fastening Systems businesses met the discontinued operations criteria and have been included in discontinued
operations for all periods presented in our Consolidated Financial Statements. The results of the Fluid & Power business were previously
reported in the Industrial segment.
We generally use a centralized approach to the cash management and financing of our manufacturing operations and, accordingly, do not allocate
debt or interest expense to our discontinued businesses. Any debt and related interest expense of a specific entity within a business is recorded by
the respective entity. General corporate overhead previously allocated to the businesses for reporting purposes is excluded from amounts
reported as discontinued operations.
The assets and liabilities of our discontinued businesses are as follows:
January 3, December 29,
(In millions) 2009 2007
Accounts receivable, net $ — $ 125
Inventories — 131
Other current assets — 20
Property, plant and equipment, net — 81
Goodwill — 216
Other assets 10 26
Total assets of discontinued operations of Fluid & Power 10 599
Assets of discontinued operations of Fastening Systems 26 8
Total assets of discontinued operations $ 36 $ 607
Accounts payable and accrued liabilities $ 12 $ 178
Accrued postretirement benefits other than pensions — 38
Other liabilities 24 115
Long-term debt — 2
Total liabilities of discontinued operations of Fluid & Power 36 333
Liabilities of discontinued operations of Fastening Systems 115 134
Total liabilities of discontinued operations $ 151 $ 467