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Discontinued Operations
 6 Months Ended
Jun. 30, 2015
Discontinued Operations.  
Discontinued Operations

 

3.  Discontinued Operations

 

In August 2012, our Venezuelan subsidiary sold its previously nationalized assets to PDVSA Gas, S.A. (“PDVSA Gas”) for a purchase price of approximately $441.7 million. We received installment payments, including an annual charge, totaling $18.1 million during the three months ended June 30, 2014, and $18.7 million and $35.9 million during the six months ended June 30, 2015 and 2014, respectively. The remaining principal amount due to us of approximately $99 million as of June 30, 2015, is payable in quarterly cash installments through the third quarter of 2016. We have not recognized amounts payable to us by PDVSA Gas as a receivable and will therefore recognize quarterly payments received in the future as income from discontinued operations in the periods such payments are received. In July 2015, we received an additional installment payment, including an annual charge, of $18.9 million. The proceeds from the sale of the assets are not subject to Venezuelan national taxes due to an exemption allowed under the Venezuelan Reserve Law applicable to expropriation settlements. In addition, and in connection with the sale, we and the Venezuelan government agreed to waive rights to assert certain claims against each other.

 

In connection with the sale of these assets, we have agreed to suspend the arbitration proceeding previously filed by our Spanish subsidiary against Venezuela pending payment in full by PDVSA Gas of the purchase price for these nationalized assets.

 

In December 2013, we abandoned our contract water treatment business as part of our continued emphasis on simplification and focus on our core businesses. The abandonment of this business meets the criteria established for recognition as discontinued operations under GAAP. Therefore, our contract water treatment business is reflected as discontinued operations in our condensed consolidated financial statements. This business was previously included in our North American contract operations business segment. During the three months ended June 30, 2015, we restored the remaining tax deductible temporary differences relating to our contract water treatment business that were reversed in the first quarter of 2015 resulting in deferred tax assets associated with discontinued operations. There was no impact on income from discontinued operations, net of tax, as the restoration resulted in a reduction to deferred tax assets for net operating losses previously reflected as current deferred income taxes in our condensed consolidated balance sheet as of March 31, 2015.

 

The following tables summarize the operating results of discontinued operations (in thousands):

 

 

 

Three Months Ended June 30, 2015

 

Three Months Ended June 30, 2014

 

 

 

Venezuela

 

Contract
Water
Treatment
Business

 

Total

 

Venezuela

 

Contract
Water
Treatment
Business

 

Total

 

Revenue

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Expenses and selling, general and administrative

 
150

 
187

 
337

 
121

 
104

 
225

 

Recovery attributable to expropriation

 
(476

)

—

 
(476

)
(16,563

)

—

 
(16,563

)

Other (income) loss, net

 
(53

)

—

 
(53

)
(1,472

)
120

 
(1,352

)

Benefit from income taxes

 

—

 
(62

)
(62

)

—

 
(79

)
(79

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of tax

 

$
379

 

$
(125

)

$
254

 

$
17,914

 

$
(145

)

$
17,769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2015

 

Six Months Ended June 30, 2014

 

 

 

Venezuela

 

Contract
Water
Treatment
Business

 

Total

 

Venezuela

 

Contract
Water
Treatment
Business

 

Total

 

Revenue

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Expenses and selling, general and administrative

 
234

 
259

 
493

 
245

 
177

 
422

 

Recovery attributable to expropriation

 
(16,982

)

—

 
(16,982

)
(32,984

)

—

 
(32,984

)

Other (income) loss, net

 
(2,374

)

—

 
(2,374

)
(3,858

)
(27

)
(3,885

)

Benefit from income taxes

 

—

 
(104

)
(104

)

—

 
(49

)
(49

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of tax

 

$
19,122

 

$
(155

)

$
18,967

 

$
36,597

 

$
(101

)

$
36,496

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table summarizes the balance sheet data for discontinued operations (in thousands):

 

 

 

June 30, 2015

 

December 31, 2014

 

 

 

Venezuela

 

Contract
Water
Treatment
Business

 

Total

 

Venezuela

 

Contract
Water
Treatment
Business

 

Total

 

Cash

 

$
358 

 

$

—

 

$
358 

 

$
431 

 

$

—

 

$
431 

 

Accounts receivable

 

—

 

—

 

—

 
2 

 
69 

 
71 

 

Other current assets

 
39 

 

—

 
39 

 
35 

 

—

 
35 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets associated with discontinued operations

 
397 

 

—

 
397 

 
468 

 
69 

 
537 

 

Deferred tax assets

 

—

 
16,506 

 
16,506 

 

—

 
17,469 

 
17,469 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets associated with discontinued operations

 

$
397 

 

$
16,506 

 

$
16,903 

 

$
468 

 

$
17,538 

 

$
18,006 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

—

 

$

—

 

$

—

 

$
214 

 

$
1 

 

$
215 

 

Accrued liabilities

 
769 

 
160 

 
929 

 
1,124 

 
727 

 
1,851 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities associated with discontinued operations

 
769 

 
160 

 
929 

 
1,338 

 
728 

 
2,066 

 

Other long-term liabilities

 
154 

 

—

 
154 

 
317 

 

—

 
317 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities associated with discontinued operations

 

$
923 

 

$
160 

 

$
1,083 

 

$
1,655 

 

$
728 

 

$
2,383