NOTE 3: DISCONTINUED OPERATIONS
In the third quarter of fiscal 2012, our Board of Directors approved a plan to exit CIS, which provided remote cloud hosting, and to dispose of the related assets, and we reported CIS as discontinued operations beginning with our financial results presented in our Quarterly Report on Form 10-Q for the third quarter of fiscal 2012. We continue to actively market the remaining assets of CIS and expect to complete the disposition of assets of CIS in the first half of fiscal 2014. In the fourth quarter of fiscal 2012, our Board of Directors approved a plan to divest Broadcast Communications, that provided digital media management solutions in support of broadcast customers, and we reported Broadcast Communications as discontinued operations beginning with our financial results presented in our Fiscal 2012 Form 10-K. On February 4, 2013, we completed the sale of Broadcast Communications to an affiliate of The Gores Group, LLC pursuant to a definitive Asset Sale Agreement entered into December 5, 2012 for $225 million, including $160 million in cash, subject to customary adjustments (including a post-closing working capital adjustment, which is currently in dispute), a $15 million subordinated promissory note and an earnout of up to $50 million based on future performance. Should the dispute related to the post-closing working capital adjustment to the purchase price be resolved unfavorably to us, we believe such an outcome would not have a material adverse effect on our financial condition, results of operations or cash flows. Both CIS and Broadcast Communications were formerly part of our Integrated Network Solutions segment. Our historical financial results, except for disclosures related to our cash flows, have been restated to account for CIS and Broadcast Communications as discontinued operations.
Based on market indications during fiscal 2013, we recorded non-cash impairment charges totaling $16.5 million to write down assets of CIS to their estimated fair value, less estimated costs to sell. Prior to the sale of Broadcast Communications, during the first and second quarters of fiscal 2013, based on indicators of value, including financial performance, market conditions and our entering into a definitive Asset Sale Agreement relating to the sale of Broadcast Communications, we recorded non-cash impairment charges totaling $314.4 million to write down net assets of Broadcast Communications to their estimated fair value, less estimated costs to sell. The impairments related to goodwill, other long-lived assets and inventory, a substantial portion of which was deductible for tax purposes. The impairments do not impact covenant compliance under our credit arrangements, and we do not expect the impairments to impact our ongoing financial performance, although no assurance can be given.
Summarized financial information for our discontinued operations related to CIS and Broadcast Communications is as follows:
| 2013 | 2012 | 2011 | ||||||||||
| (In millions) | ||||||||||||
| Revenue from product sales and services | $ | 259.7 | $ | 512.7 | $ | 506.2 | ||||||
| Loss before income taxes | $ | (342.1) | $ | (627.2) | $ | (24.8) | ||||||
| Income taxes | 20.9 | 99.1 | 13.2 | |||||||||
| Loss from discontinued operations | (321.2) | (528.1) | (11.6) | |||||||||
| Loss on sale of discontinued operations, net of income tax benefit of $.5 million | (32.2) | ― | ― | |||||||||
| Discontinued operations, net of income taxes | $ | (353.4) | $ | (528.1) | $ | (11.6) | ||||||
| Receivables | $ | ― | $ | 103.6 | ||||||||
| Inventories | ― | 128.0 | ||||||||||
| Other current assets | ― | 9.4 | ||||||||||
| Total current assets | ― | 241.0 | ||||||||||
| Property, plant and equipment | 27.0 | 89.0 | ||||||||||
| Goodwill | ― | 267.7 | ||||||||||
| Other non-current assets | ― | 35.0 | ||||||||||
| Total assets | 27.0 | 632.7 | ||||||||||
| Accounts payable | ― | 26.9 | ||||||||||
| Accrued and other liabilities | ― | 109.3 | ||||||||||
| Total liabilities | ― | 136.2 | ||||||||||
| Net assets of discontinued operations | $ | 27.0 | $ | 496.5 | ||||||||