Elster Group SE

CIK:0001492261|SEC Filings

Discontinued operations

12 Months Ended

Dec. 31, 2011

In 2006, Elster Group sold its heat treatment business in accordance with the decision of Elster Group’s management to focus on the Group’s key competence as a metering solutions provider. Elster Group agreed to indemnify the buyer for certain contingent losses that originated prior to the sale of the business and recorded a liability for an expected purchase price adjustment resulting from such indemnification. In the fiscal year 2010, Elster Group obtained evidence that the issue underlying the indemnification had been resolved and released the accrued liability. The gain arising from this release of a liability for expected purchase price adjustment was recorded as income from discontinued operations in 2010.

In 2007 Elster Group also sold its furnace business and agreed to indemnify the buyer for certain contingent losses that originated prior to the sale of the business. Elster Group was notified by the buyer in the third quarter of 2011 about a contingent loss that originated prior to the sale of the business. Elster group has settled this indemnification with the buyer and recorded a liability of $1,594. This is presented as loss from discontinued operations in 2011.

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities
Net income	$ 105,381	$ 92,038	$ 52,344
Adjustments to reconcile net income to cash from operating activities
Depreciation, amortization and impairment losses	83,793	87,861	88,618
Loss on extinguishment of debt	13,438	2,378	0
Share-based compensation expense (credit)	415	(13,214)	(33,250)
Loss (gain) on sale of other long-lived assets, net	165	1,050	(2,506)
Dividends from equity method investments	3,952	2,329	2,176
Changes in operating assets and liabilities
Change in accounts receivable	(13,479)	(19,595)	32,419
Change in accounts payable	4,957	12,216	(14,161)
Change in inventories	(13,824)	(10,361)	53,180
Change in other assets and liabilities	6,939	(13,379)	(59,199)
Cash flows from operating activities	191,737	141,323	119,621
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets	(48,327)	(42,391)	(30,492)
Proceeds from disposals of property, plant and equipment and intangible assets	4,218	11,938	14,838
Proceeds from shareholder loan payments	0	2,485	0
Business combinations, net of cash acquired	0	0	(27,389)
Net cash flow used in investing activities	(44,109)	(27,968)	(43,043)
Cash flows from financing activities
Proceeds from issuance of Senior Notes	364,600	0	0
Proceeds from other bank borrowings	509,484	63,560	84,555
Payment of deferred financing cost	(20,577)	0	0
Repayment of bank borrowings	(1,126,632)	(184,771)	(157,835)
Capital increase, net of IPO costs	0	153,254	0
Repayment of capital lease obligations	(274)	(1,084)	(1,103)
Repayment of shareholder loan	0	(6,752)	0
Dividends to noncontrolling interests	(8,552)	(831)	(3,048)
Sale of noncontrolling interest in subsidiary	0	2,034	0
Net cash flow from (used in) financing activities	(281,951)	25,410	(77,431)
Net increase (decrease) in cash and cash equivalents	(134,323)	138,765	(853)
Effect of exchange rate fluctuations on cash held	1,981	2,137	1,972
Cash and cash equivalents at January 1	216,294	75,392	74,273
Cash and cash equivalents at December 31	83,952	216,294	75,392
Income taxes paid	31,555	28,667	42,657
Interest paid	$ 40,674	$ 50,052	$ 45,372

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 83,952	$ 216,294
Accounts receivable (net of allowance for doubtful accounts of $8,033 and $9,732, respectively)	284,130	278,217
Receivables from related parties	5,900	14,197
Inventories	163,101	154,549
Prepaid expenses	6,236	21,122
Other current assets	42,625	52,863
Income tax refunds	8,121	14,501
Deferred tax assets	19,192	16,022
Total current assets	613,257	767,765
Noncurrent assets
Property, plant and equipment, net	196,577	202,899
Other intangible assets, net	175,442	216,406
Goodwill	919,060	936,950
Other assets	52,953	31,496
Deferred tax assets	14,060	8,741
Total noncurrent assets	1,358,092	1,396,492
Total assets	1,971,349	2,164,257
Current liabilities
Pension and other long-term employee benefits, current portion	13,524	13,486
Payroll, bonuses and related accruals	55,087	57,808
Short-term debt and current portion of long-term debt	6,093	18,010
Accounts payable	203,115	204,343
Warranties, current portion	24,645	23,403
Other current liabilities	110,763	74,514
Deferred revenue	8,099	4,039
Income tax payable	25,177	17,863
Deferred tax liabilities	7,026	6,694
Total current liabilities	453,529	420,160
Noncurrent liabilities
Pension and other long-term employee benefits, less current portion	149,630	137,490
Payroll, bonuses and related accruals	1,390	1,326
Long-term debt, less current portion	573,633	822,447
Warranties, less current portion	5,097	8,161
Other non-current liabilities	1,911	40,505
Income taxes payable	16,870	17,271
Deferred tax liabilities	51,040	60,668
Total noncurrent liabilities	799,571	1,087,868
Total liabilities	1,253,100	1,508,028
Equity
Ordinary shares, €1 nominal value (47,220,041 shares authorized and 28,220,041 shares issued and outstanding as of December 31, 2011 and 2010)	36,528	36,528
Additional paid-in capital	651,453	651,038
Retained earnings (accumulated deficit)	32,021	(68,858)
Accumulated other comprehensive income (loss)	(13,966)	22,006
Total equity attributable to Elster Group SE	706,036	640,714
Noncontrolling interests	12,213	15,515
Total equity	718,249	656,229
Total liabilities and equity	$ 1,971,349	$ 2,164,257