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Discontinued Operations | 3 Months Ended
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Mar. 31, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | 4. Discontinued Operations Spin-off of Exterran Corporation In 2015 we completed the Spin-off. In order to effect the Spin-off and govern our relationship with Exterran Corporation after the Spin-off, we entered into several agreements with Exterran Corporation, which include but are not limited to the separation and distribution agreement, the tax matters agreement and the supply agreement. Certain terms of these agreements are described as follows:
• | The separation and distribution agreement specifies our right to receive payments from a subsidiary of Exterran Corporation based on a notional amount corresponding to payments received by Exterran Corporation’s subsidiaries from PDVSA Gas, in respect of the sale of Exterran Corporation’s subsidiaries’ and joint ventures’ previously nationalized assets promptly after such amounts are collected by Exterran Corporation’s subsidiaries. During the three months ended March 31, 2017 we received $19.7 million from Exterran Corporation pursuant to this term of the separation and distribution agreement. Exterran Corporation was due to receive the remaining principal amount as of March 31, 2018 of approximately $20.9 million.
• | The tax matters agreement governs the respective rights, responsibilities and obligations of Exterran Corporation and us with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes. Subject to the provisions of this agreement Exterran Corporation and we agreed to indemnify the primary obligor of any return for tax periods beginning before and ending before or after the Spin-off (including any ongoing or future amendments and audits for these returns) for the portion of the tax liability (including interest and penalties) that relates to their respective operations reported in the filing. As of March 31, 2018, we classified $6.4 million of unrecognized tax benefits (including interest and penalties) as long-term liability associated with discontinued operations since it relates to operations of Exterran Corporation prior to the Spin-off. We have also recorded an offsetting $6.4 million indemnification asset related to this reserve as long-term assets associated with discontinued operations.
• | The supply agreement, which expired November 2017, set forth the terms under which Exterran Corporation provided manufactured equipment, including the design, engineering, manufacturing and sale of natural gas compression equipment, on an exclusive basis to us and the Partnership, subject to certain exceptions. We have entered into a new non-exclusive supply agreement with Exterran Corporation to be one of our suppliers of newly-manufactured compression equipment. For the three months ended March 31, 2018 and March 31, 2017, we purchased $37.8 million and $37.2 million, respectively, of newly-manufactured compression equipment from Exterran Corporation and others.
Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Exterran Corporation’s business with Exterran Corporation. Pursuant to the separation and distribution agreement, we and Exterran Corporation generally release the other party from all claims arising prior to the Spin-off that relate to the other party’s business. Other discontinued operations activity 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 certain deferred tax assets related to our contract water treatment business have been reported as discontinued operations in our condensed consolidated balance sheet. This business was previously included in our contract operations segment. The following table summarizes the balance sheet data for discontinued operations (in thousands):
| March 31, 2018 |  | December 31, 2017
| Exterran Corporation |  | Contract Water Treatment Business |  | Total |  | Exterran Corporation |  | Contract Water Treatment Business |  | Total
Other current assets | $ | 300 |  |  | $ | — |  |  | $ | 300 |  |  | $ | 300 |  |  | $ | — |  |  | $ | 300 |
Total current assets associated with discontinued operations | 300 |  |  | — |  |  | 300 |  |  | 300 |  |  | — |  |  | 300 |
Other assets, net | 6,421 |  |  | — |  |  | 6,421 |  |  | 6,421 |  |  | — |  |  | 6,421 |
Deferred income taxes | — |  |  | 6,536 |  |  | 6,536 |  |  | — |  |  | 6,842 |  |  | 6,842 |
Total assets associated with discontinued operations | $ | 6,721 |  |  | $ | 6,536 |  |  | $ | 13,257 |  |  | $ | 6,721 |  |  | $ | 6,842 |  |  | $ | 13,563 |
Other current liabilities | $ | 297 |  |  | $ | — |  |  | $ | 297 |  |  | $ | 297 |  |  | $ | — |  |  | $ | 297 |
Total current liabilities associated with discontinued operations | 297 |  |  | — |  |  | 297 |  |  | 297 |  |  | — |  |  | 297 |
Deferred income taxes | 6,421 |  |  | — |  |  | 6,421 |  |  | 6,421 |  |  | — |  |  | 6,421 |
Total liabilities associated with discontinued operations | $ | 6,718 |  |  | $ | — |  |  | $ | 6,718 |  |  | $ | 6,718 |  |  | $ | — |  |  | $ | 6,718 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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