NOTE 3. BUSINESS DEVELOPMENT, ASSETS HELD FOR SALE AND DISPOSITIONS

Business Development and Organic Growth

Alexandria/Arlington County Energy-from-Waste Facility

We entered into a new tip fee contract with the City of Alexandria and Arlington County to provide for continued waste supply to our Alexandria EfW facility through 2025. Both parties have the option to terminate the agreement in 2019. The agreement also provides the City of Alexandria and Arlington County with the option to extend the agreement to 2038.

Braintree Transfer Station

In March 2012, we began a major renovation project to increase recycling capacity at the Braintree transfer station located near our Southeast Massachusetts EfW facility. The project is expected to cost approximately $7 million and is expected to be completed by the end of 2012. The town of Braintree extended the site lease agreement with the facility to 2030.

Montgomery County Energy-from-Waste Facility

We extended the service agreement for our Montgomery County EfW facility and Derwood transfer station from 2016 to 2021 on substantially the same terms as in the existing agreement.

Niagara Energy-from-Waste Facility

During the first quarter of 2012, we extended a steam sale contract from 2013 to 2021 for our Niagara EfW facility. This contract combined with new and extended contracts entered in 2011 will increase the steam demand from our customer base and will require us to invest a total of approximately $10 million in capital expenditures in 2012 and 2013 to install a new natural gas package boiler and steam line to connect to our new customers.

Organic Growth Investments

During the three months ended March 31, 2012, we invested approximately $4 million in various organic growth initiatives by enhancing the capabilities of our existing assets, deploying new or improved technologies targeted at increasing revenue and expanding our customer base and service offerings.

Assets Held for Sale and Dispositions

In 2010, we adopted a plan to sell our interests in certain fossil fuel independent power production facilities in the Philippines, India, and Bangladesh. During 2011, we sold the majority of those assets and have one remaining asset held for sale for our interest in a barge-mounted 126 MW (gross) diesel/natural gas-fired electric power generation facility located near Haripur, Bangladesh. In April 2012, we completed the sale of our interest in the Haripur project. For additional information, see Note 14. Subsequent Events.

The assets and liabilities associated with these businesses are presented in our condensed consolidated balance sheets as “Current Assets Held for Sale” and “Current Liabilities Held for Sale.” The results of operations of these businesses are included in the condensed consolidated statements of operations as “Income from discontinued operations, net of tax.” The cash flows of these businesses are also presented separately in our condensed consolidated statements of cash flows.

The following table summarizes the operating results of the discontinued operations for the periods indicated (in millions):


	Three Months Ended March 31,
	2012			2011
Revenues	$	—		$	46
Operating expenses, including net gain on disposal of assets held for sale in 2011 ⁽¹⁾	$	(1	)	$	99
(Loss) income before income tax benefit (expense) and equity in net income from unconsolidated investments	$	(1	)	$	146
Equity in net income from unconsolidated investments	$	1		$	6
Income from discontinued operations, net of income tax expense of $0 and $2, respectively	$	—		$	149

(1)

During the first quarter of 2011, we recorded a net after-tax gain on disposal of assets held for sale of $136 million.

The following table sets forth the assets and liabilities of the assets held for sale included in the condensed consolidated balance sheets as of the dates indicated (in millions):


	As of
	March 31, 2012		December 31, 2011
Cash and cash equivalents	$	2	$	2
Accounts receivable		1		1
Investments in investees and joint ventures		15		15

Assets held for sale	$	18	$	18

Accrued expenses and other	$	3	$	3

Liabilities held for sale	$	3	$	3