As discussed in Note 1, “Basis of Presentation,” on December 1, 2020, we completed the sale of our CA business to Intelsat. As a result of the Transaction, the CA business is reported for all periods as discontinued operations.

The following table summarizes the results of discontinued operations which are presented as Net loss from discontinued operations in our unaudited condensed consolidated statements of operations (in thousands):

	For the Three Months
	Ended March 31,
	2021			2020
Revenue:
Service revenue	$	-		$	93,056
Equipment revenue		-			20,492
Total revenue		-			113,548

Operating expenses:
Cost of service revenue (exclusive of items shown below)		-			59,748
Cost of equipment revenue (exclusive of items shown below)		-			17,529
Engineering, design and development		-			15,506
Sales and marketing		-			5,202
General and administrative		1,801			12,460
Impairment of long-lived assets		-			46,389
Depreciation and amortization		-			29,091
Total operating expenses		1,801			185,925
Operating income (loss)		(1,801	)		(72,377	)

Total other (income) expense		-			2,997

Loss before income taxes		(1,801	)		(75,374	)
Income tax provision		-			16
Net loss from discontinued operations, net of tax	$	(1,801	)	$	(75,390	)

Gain on sale – Upon the closing of the Transaction on December 1, 2020, we received initial gross proceeds of $386.3 million, which reflects the $400.0 million purchase price, adjusted for cash, debt, transaction expenses and working capital. The final purchase price remains subject to change due to customary post-closing purchase price adjustment procedures set forth in the purchase and sale agreement between Gogo and Intelsat that are not yet complete. In February 2021, Intelsat delivered a draft closing statement that would reduce the working capital portion of the purchase price computation by $9.4 million, which would result in Gogo returning to Intelsat $9.4 million of the initial gross proceeds. Gogo is reviewing Intelsat’s draft closing statement in accordance with the terms of the purchase and sale agreement. As this post-closing purchase price adjustment is not yet finalized and therefore represents a contingent gain, $9.4 million has been recorded as a deferred gain on sale included within Accrued liabilities. As a result, during December 2020, we recognized within Gain on sale of CA business a pretax gain on sale of $38.0 million, computed as the $386.3 million of initial gross proceeds less (i) the potential $9.4 million post-closing purchase price adjustment not yet finalized, (ii) the carrying value of the assets and liabilities transferred in the Transaction and (iii) Transaction-related costs.

Stock-based compensation – In August 2020, the compensation committee of our Board of Directors (the “Compensation Committee”) approved modifications to the vesting conditions and exercise periods of outstanding equity compensation awards held by certain of our then-current employees who became employees of Intelsat in the Transaction. These modifications became effective upon the consummation of the Transaction. Pursuant to such modifications, the options and restricted stock units (“RSUs”) held by Intelsat employees generally vest on the earlier of (i) the original vesting date and (ii) November 30, 2021; provided that the employee does not voluntarily resign from and is not terminated for cause by Intelsat prior to such date. Certain of these awards vest based on conditions that are not classified as a service, market or performance condition and as a result such awards are classified as a liability. Other than mark-to-market accounting adjustments, all costs related to stock-based compensation for our prior employees who became employees of Intelsat in the Transaction were recognized as of December 31, 2020.

The following is a summary of our stock-based compensation expense by operating expense line contained within the results of discontinued operations (in thousands):

		For the Three Months
		Ended March 31,
		2021		2020
Cost of service revenue	$	-	$	444
Engineering, design and development		-		597
Sales and marketing		-		423
General and administrative		1,053		209
Total stock-based compensation expense	$	1,053	$	1,673

For additional information on our stock-based compensation plans, see Note 16, “Employee Retirement and Postretirement Benefits.”

Other Costs Classified to Discontinued Operations – During the three months ended March 31, 2021, we incurred $0.7 million of additional costs (exclusive of the stock-based compensation expense noted above) primarily due to employer-paid taxes arising from the exercise of stock options by former employees now employed by Intelsat.