XML 27 R9.htm IDEA: XBRL DOCUMENT
v2.4.0.6

DISCONTINUED OPERATIONS | 6 Months Ended
--- | ---
Jun. 30, 2012
DISCONTINUED OPERATIONS |
DISCONTINUED OPERATIONS |
2. DISCONTINUED OPERATIONS In May 2009, the Venezuelan government enacted a law that reserves to the State of Venezuela certain assets and services related to hydrocarbon activities, which included substantially all of our assets and services in Venezuela. The law provides that the reserved activities are to be performed by the State, by the State-owned oil company, Petroleos de Venezuela S.A. (“PDVSA”), or its affiliates, or through mixed companies under the control of PDVSA or its affiliates. The law authorizes PDVSA or its affiliates to take possession of the assets and take over control of those operations related to the reserved activities as a step prior to the commencement of an expropriation process, and permits the national executive of Venezuela to decree the total or partial expropriation of shares or assets of companies performing those services. In June 2009, PDVSA commenced taking possession of our assets and operations in a number of our locations in Venezuela and by the end of the second quarter of 2009, PDVSA had assumed control over substantially all of our assets and operations in Venezuela. While the law provides that companies whose assets are expropriated in this manner may be compensated in cash or securities, we are unable to predict what, if any, compensation we ultimately will receive or when we may receive any such compensation. We reserve and will continue to reserve the right to seek full compensation for any and all expropriated assets and investments under all applicable legal regimes, including investment treaties and customary international law, as well as to seek resolution through direct discussions with Venezuela and/or PDVSA, which could result in us recording a gain on our investment in future periods. In June 2009, our Spanish subsidiary delivered to the Venezuelan government and PDVSA an official notice of dispute relating to the seized assets and investments under the Agreement between Spain and Venezuela for the Reciprocal Promotion and Protection of Investments and under Venezuelan law. In March 2010, our Spanish subsidiary filed a request for the institution of an arbitration proceeding against Venezuela with the International Centre for Settlement of Investment Disputes (“ICSID”) related to the seized assets and investments, which was registered by ICSID in April 2010. The arbitration hearing occurred in July 2012 and a decision from the arbitration tribunal is not expected until 2013. We maintained insurance for the risk of expropriation of our investments in Venezuela, subject to a policy limit of $50 million. During the year ended December 31, 2009, we recorded a receivable of $50 million related to this insurance policy because we determined that recovery under this policy of a portion of our loss was probable. We collected the $50 million under our policy in January 2010. Under the terms of the insurance policy, certain compensation we may receive from the Venezuelan government or PDVSA for our expropriated assets, receivables and operations will be applied first to the reimbursement of out-of-pocket expenses incurred by us and the insurance company, second to the insurance company until the $50 million payment has been repaid and third to us. As a result of PDVSA taking possession of substantially all of our assets and operations in Venezuela, we recorded asset impairments during the year ended December 31, 2009 totaling $329.7 million ($379.7 million excluding the insurance proceeds of $50 million). These charges primarily related to receivables, inventory, fixed assets and goodwill, and are reflected in Income (loss) from discontinued operations. We believe the fair value of our seized Venezuelan operations substantially exceeds the historical cost-based carrying value of the assets, including the goodwill allocable to those operations; however, GAAP requires that our claim be accounted for as a gain contingency with no benefit being recorded until resolved. Accordingly, we did not include any compensation we may receive for our seized assets and operations from Venezuela in recording the loss on expropriation. The expropriation of our business in Venezuela meets the criteria established for recognition as discontinued operations under accounting standards for presentation of financial statements. Therefore, our Venezuela contract operations and aftermarket services businesses are now reflected as discontinued operations in our condensed consolidated statements of operations. In June 2012, we committed to a plan to sell our contract operations and aftermarket services businesses in Canada as part of our continued emphasis on simplification and focus on our core business. We expect this sale to be completed within the next twelve months. Our Canadian contract operations and aftermarket services businesses are now reflected as discontinued operations in our condensed consolidated financial statements, including all periods prior to June 2012. These operations were previously included in our North American contract operations and aftermarket services business segments. In conjunction with the planned disposition, we recorded an impairment of intangible assets and long-lived assets that totaled $40.8 million during the three months ended June 30, 2012. The impairment charges are reflected in Loss from discontinued operations. The table below summarizes the operating results of the discontinued operations (in thousands):
|  | Three months ended June 30, |  | Three months ended June 30 |
|  | 2012 |  | 2011 |
|  | Venezuela |  | Canada |  | Total |  | Venezuela |  | Canada |  | Total |
Revenue |  | $ | — |  | $ | 13,966 |  | $ | 13,966 |  | $ | — |  | $ | 13,504 |  | $ | 13,504 |
Expenses and selling, general and administrative |  | 271 |  | 13,826 |  | 14,097 |  | 135 |  | 14,492 |  | 14,627 |
Loss attributable to expropriation and impairments |  | 1,568 |  | 40,813 |  | 42,381 |  | 148 |  | — |  | 148 |
Other (income) loss, net |  | — |  | 860 |  | 860 |  | (69 | ) | (94 | ) | (163 | )
Provision for income taxes |  | 823 |  | (1,304 | ) | (481 | ) | 355 |  | 1,613 |  | 1,968 |
Loss from discontinued operations, net of tax |  | $ | (2,662 | ) | $ | (40,229 | ) | $ | (42,891 | ) | $ | (569 | ) | $ | (2,507 | ) | $ | (3,076 | )
|  | Six months ended June 30, |  | Six months ended June 30, |
|  | 2012 |  | 2011 |
|  | Venezuela |  | Canada |  | Total |  | Venezuela |  | Canada |  | Total |
Revenue |  | $ | — |  | $ | 25,240 |  | $ | 25,240 |  | $ | — |  | $ | 25,055 |  | $ | 25,055 |
Expenses and selling, general and administrative |  | 443 |  | 27,677 |  | 28,120 |  | 591 |  | 28,723 |  | 29,314 |
Loss attributable to expropriation and impairments |  | 1,581 |  | 40,813 |  | 42,394 |  | 1,461 |  | — |  | 1,461 |
Other (income) loss, net |  | — |  | 174 |  | 174 |  | (150 | ) | (431 | ) | (581 | )
Provision for (benefit from) income taxes |  | 1,263 |  | (2,658 | ) | (1,395 | ) | 805 |  | 67 |  | 872 |
Loss from discontinued operations, net of tax |  | $ | (3,287 | ) | $ | (40,766 | ) | $ | (44,053 | ) | $ | (2,707 | ) | $ | (3,304 | ) | $ | (6,011 | )
The table below summarizes the balance sheet data for discontinued operations (in thousands):
|  | June 30, 2012 |  | December 31, 2011 |
|  | Venezuela |  | Canada |  | Total |  | Venezuela |  | Canada |  | Total |
Cash |  | $ | 480 |  | $ | 94 |  | $ | 574 |  | $ | 304 |  | $ | 135 |  | $ | 439 |
Accounts receivable |  | 9 |  | 14,432 |  | 14,441 |  | 9 |  | 13,973 |  | 13,982 |
Inventory |  | 1,017 |  | 19,436 |  | 20,453 |  | 1,017 |  | 19,590 |  | 20,607 |
Other current assets |  | 2,210 |  | 2,327 |  | 4,537 |  | 2,683 |  | 953 |  | 3,636 |
Total current assets associated with discontinued operations |  | 3,716 |  | 36,289 |  | 40,005 |  | 4,013 |  | 34,651 |  | 38,664 |
Property, plant and equipment |  | — |  | 22,035 |  | 22,035 |  | — |  | 69,788 |  | 69,788 |
Intangible and other long-term assets |  | — |  | 7,053 |  | 7,053 |  | — |  | 9,432 |  | 9,432 |
Total assets associated with discontinued operations |  | $ | 3,716 |  | $ | 65,377 |  | $ | 69,093 |  | $ | 4,013 |  | $ | 113,871 |  | $ | 117,884 |
Accounts payable |  | $ | 561 |  | $ | 5,195 |  | $ | 5,756 |  | $ | 589 |  | $ | 5,515 |  | $ | 6,104 |
Accrued liabilities |  | 3,922 |  | 1,997 |  | 5,919 |  | 4,295 |  | 3,924 |  | 8,219 |
Deferred revenues |  | 1,499 |  | 698 |  | 2,197 |  | 1,499 |  | 320 |  | 1,819 |
Total current liabilities associated with discontinued operations |  | 5,982 |  | 7,890 |  | 13,872 |  | 6,383 |  | 9,759 |  | 16,142 |
Other long-term liabilities |  | 15,390 |  | 951 |  | 16,341 |  | 14,140 |  | 548 |  | 14,688 |
Total liabilities associated with discontinued operations |  | $ | 21,372 |  | $ | 8,841 |  | $ | 30,213 |  | $ | 20,523 |  | $ | 10,307 |  | $ | 30,830 |

X
- Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1474-107760 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 144 -Paragraph 43-48 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e957-107759 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=8077374&loc=d3e2443-110228 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1012-107759 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1510-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6892542&loc=d3e1020-107759 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration