Nautilus 2009 Annual Report Download - page 47

Table of Contents
anticipated cash proceeds, net of sale transaction costs. The estimated loss amount may be adjusted in future periods, depending on changes that
may occur in the underlying facts and circumstances and finalization of the related sale transactions, and the amount of the adjustment may be
material.
Operating results of the commercial business discontinued operation are as follows:
The income tax expense in 2008 results from valuation allowances provided against certain deferred income tax assets related to the commercial
business discontinued operation. Commercial business discontinued operation assets held-for-sale and related disposal loss impairments as of
December 31, 2009 are as follows:
Currently, the Company expects to incur additional cash charges related to its planned divestiture, including estimated employee termination
severance payments of approximately $1.6 million and estimated termination charges for leases and other commercial contract obligations of
approximately $1.8 million, which are not reflected in 2009 operating results because such liabilities were not incurred as of year-end. The
estimated amounts of additional costs may be adjusted in future periods, depending on changes that may occur in the underlying facts and
circumstances, and the amount of adjustment may be material.
Cash flows of the commercial business after completion of the sale transactions may include settlements of then outstanding accounts receivable,
trade payables and contractual obligations, settlements of sales agreement contingencies and receipts of passive royalties, all of which, according
to accounting guidance, are not considered to be direct cash flows of the disposed segment.
In 2008, the Company recognized a $3.8 million charge, included in discontinued operations, due to uncertainties regarding access to, and future
recovery of, certain assets of its China sales operation. In 2009, the Company recovered a portion of these assets and, as a result of this and other
changes in circumstances, reduced the previously accrued loss amount by $2.3 million. At December 31, 2009 the Company had an allowance of
$1.5 million due to uncertainties regarding the future recovery of China trade receivables.
43
Year ended December 31,
(In thousands) 2009 2008
Revenue
$
74,644
$
127,466
Loss before income taxes
$
(24,909
)
$
(30,194
)
Estimated loss on sale of commercial discontinued operation
(9,491
)
—
Income tax expense (benefit)
(90
)
10,208
Loss from discontinued operation
–
commercial business
$
(34,310
)
$
(40,402
)
(In thousands)
Inventories
Property,
Plant &
Equipment
Totals
Assets of discontinued operation held
-
for
-
sale, before impairment adjustments
$
14,164
$
6,883
$
21,047
Impairment adjustments included in loss from discontinued operations:
Estimated loss on remaining commercial business assets held-for-sale at December 31,
2009
(3,897
)
(6,369
)
(10,266
)
Assets of discontinued operation held
-
for
-
sale, as adjusted
$
10,267
$
514
$
10,781