DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

On October 5, 2018, we sold all of the capital stock of our MEGTEC and Universal businesses to Dürr Inc., a wholly owned subsidiary of Dürr AG, pursuant to a stock purchase agreement executed on June 5, 2018 for $130.0 million, subject to adjustment. We received $115.0 million in cash, net of $19.5 million in cash sold with the businesses, and $7.7 million, which was deposited in escrow pending final settlement of working capital and other customary matters. The escrow matters are expected to be resolved within 18 months from the closing date. We primarily used proceeds from the transaction to reduce outstanding balances under our U.S. Revolving Credit Facility and for working capital purposes.

Beginning with June 30, 2018, the MEGTEC and Universal businesses, which were previously included in our Industrial segment, are classified as held for sale and as discontinued operations because the disposal represents a strategic shift that will have a major effect on our operations. Accordingly, we recorded a $72.3 million non-cash impairment charge in June 2018 to reduce the carrying value of the MEGTEC and Universal businesses to the fair value, less an amount of estimated sale costs; the non-cash impairment charge is included in Loss from discontinued operations, net of tax, and is presented below as a goodwill impairment.

The following table presents selected financial information regarding the discontinued operations included in the Condensed Consolidated Statement of Operations:



	Three months ended September 30,					Nine months ended September 30,
(in thousands)	2018			2017		2018			2017
Revenue	$	50,969		$	51,833	$	167,408		$	138,463
Cost of operations	40,597			40,504		130,785			109,601
Selling, general and administrative	9,220			9,885		26,244			31,329
Goodwill impairment	—			—		72,309			—
Restructuring charge	—			111		—			262
Research and development	424			398		1,180			1,331
Loss (gain) on asset disposals	(2,234		)	—		(2,234		)	2
Operating income (loss)	2,962			935		(60,877		)	(4,062		)
Net income (loss)	(1,447		)	532		(60,875		)	(3,078		)

The following table presents the major classes of assets that have been presented as assets and liabilities held for sale in our Condensed Consolidated Balance Sheets:



(in thousands)	September 30, 2018		December 31, 2017
Cash and cash equivalents	$	17,646	$	12,950
Accounts receivable – trade, net	36,428		39,196
Accounts receivable – other	1,873		157
Contracts in progress	20,403		25,409
Inventories	8,959		9,245
Other current assets	4,858		1,515
Current assets of discontinued operations	90,167		88,472
Net property, plant and equipment	26,365		27,224
Goodwill	46,411		118,720
Deferred income taxes	1,882		359
Intangible assets	32,364		34,715
Other assets	2,274		18
Noncurrent assets of discontinued operations	109,296		181,036
Total assets of discontinued operations	$	199,463	$	269,508

Accounts payable	$	13,673	$	19,838
Accrued employee benefits	4,324		3,095
Advance billings on contracts	10,199		9,073
Accrued warranty expense	4,928		5,506
Other accrued liabilities	23,403		9,987
Current liabilities of discontinued operations	56,527		47,499
Pension and other accumulated postretirement benefit liabilities	6,294		6,388
Other noncurrent liabilities	1,833		6,612
Noncurrent liabilities of discontinued operations	8,127		13,000
Total liabilities of discontinued operations	$	64,654	$	60,499

The significant components included in our Condensed Consolidated Statements of Cash Flows for the discontinued operations are as follows:



	Nine months ended September 30,
(in thousands)	2018			2017
Depreciation and amortization	$	3,482		$	7,633
Goodwill impairment	72,309			—
Loss (gain) on asset disposals	(2,234		)	2
Benefit from deferred income taxes	(974		)	(282		)
Purchase of property, plant equipment	(77		)	(888		)
Acquisition of Universal, net of cash acquired	—			(52,547		)

DIVESTITURES

Sale of Palm Beach Resource Recovery Corporation ("PBRRC")

On September 17, 2018, we sold all of the issued and outstanding capital stock of PBRRC, a subsidiary that held two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida, to Covanta Pasco, Inc., a wholly owned subsidiary of Covanta Holding Company for $45 million, subject to adjustment. We received $38.8 million in cash and $4.9 million that was deposited in escrow pending final settlement of working capital and other customary matters. The escrow is available to resolve any submitted claims or adjustments up to 18 months from the closing date, and was primarily recorded in non-current other assets as of September 30, 2018. We recognized a $39.7 million pre-tax gain on sale of this business in the three months ended September 30, 2018, net of $0.8 million of transaction costs. PBRRC was formerly part of the Renewable segment and represented most of the operations and maintenance revenue in the three and nine months ended September 30, 2018 and 2017.

We continue to evaluate further dispositions and additional opportunities for cost savings, as well as other alternatives to increase our financial flexibility as we progress towards completion on our Renewable loss projects, as described in Note 6.