Discontinued Operations

3 Months Ended

Mar. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

3. 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 tax matters agreement.

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, 2019, we classified $8.5 million of unrecognized tax benefits (including interest and penalties) as noncurrent liabilities associated with discontinued operations related to operations of Exterran Corporation prior to the Spin-off. We have also recorded an offsetting $8.5 million indemnification asset related to this reserve to noncurrent assets associated with discontinued operations.

The following table summarizes the statements of operations data for discontinued operations (in thousands):



	Three Months Ended March 31,
	2019			2018
Other income, net	$	(1,432	)	$	—
Income from discontinued operations before income taxes	1,432			—
Provision for income taxes	1,705			—
Loss from discontinued operations, net of tax	$	(273	)	$	—

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



	March 31, 2019		December 31, 2018
Other current assets	$	—	$	300
Other assets	8,467		7,063
Total assets associated with discontinued operations	$	8,467	$	7,363

Accrued liabilities	$	269	$	297
Deferred income taxes	8,467		7,063
Total liabilities associated with discontinued operations	$	8,736	$	7,360