DISCONTINUED OPERATIONS

Our business strategy has been to focus on ultra-deepwater floater and premium jackup operations and de-emphasize other assets and operations that are not part of our long-term strategic plan or that no longer meet our standards for economic returns. Consistent with this strategy, we sold 12 jackup rigs, five dynamically positioned semisubmersible rigs, one moored semisubmersible rig and two drillships during the three-year period ended December 31, 2018.

We continue to focus on our fleet management strategy in light of the new composition of our rig fleet and will continue to review our fleet composition as we position Ensco for the future. As part of this strategy, we may act opportunistically from time to time to monetize assets to enhance shareholder value and improve our liquidity profile, in addition to selling or disposing of older, lower-specification or non-core rigs.

Prior to 2015, individual rig disposals were classified as discontinued operations once the rigs met the criteria to be classified as held-for-sale. The operating results of the rigs through the date the rig was sold as well as the gain or loss on sale were included in results from discontinued operations, net, in our consolidated statement of operations. Net proceeds from the sales of the rigs were included in investing activities of discontinued operations in our consolidated statement of cash flows in the period in which the proceeds were received.

During 2015, we adopted the Financial Accounting Standards Board’s Accounting Standards Update 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("Update 2014-08"). Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. As a result, individual assets that are classified as held-for-sale beginning in 2015 are not reported as discontinued operations and their operating results and gain or loss on sale of these rigs are included in continuing operations in our consolidated statements of operations. Rigs that were classified as held-for-sale prior to 2015 continue to be reported as discontinued operations.

The following rig sales were included in discontinued operations during the three-year period ended December 31, 2018 (in millions):



Rig	Date of Sale	Segment⁽¹⁾	Net Proceeds		Net Book Value⁽²⁾		Pre-tax Gain (Loss)
ENSCO 7500	April 2018	Floaters	$	2.6	$	1.5	$	1.1
ENSCO 90	June 2017	Jackups	.3		.3		—
ENSCO DS-2	May 2016	Floaters	5.0		4.0		1.0
ENSCO 58	April 2016	Jackups	.7		.3		.4
ENSCO 6000	April 2016	Floaters	.6		.8		(.2		)
			$	9.2	$	6.9	$	2.3

⁽¹⁾ The rigs' operating results were reclassified to discontinued operations in our consolidated statements of operations for each of the years in the three-year period ended December 31, 2018 and were previously included within the specified operating segment.

⁽²⁾ Includes the rig's net book value as well as inventory and other assets on the date of the sale.

The following table summarizes income (loss) from discontinued operations for each of the years in the three-year period ended December 31, 2018 (in millions):



	2018			2017			2016
Revenues	$	—		$	—		$	—
Operating expenses	2.0			1.5			3.1
Operating loss	(2.0		)	(1.5		)	(3.1		)
Income tax expense (benefit)	7.1			(2.1		)	(10.1		)
Gain on disposal of discontinued operations, net	1.0			.4			1.1
Income (loss) from discontinued operations	$	(8.1	)	$	1.0		$	8.1

Income tax benefit from discontinued operations for the years ended December 31, 2018, 2017 and 2016 included $6.9 million of discrete tax expense and $2.1 million and $10.2 million of discrete tax benefits, respectively.

Debt and interest expense are not allocated to our discontinued operations.