DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2011

DISCONTINUED OPERATIONS

NOTE 2 – DISCONTINUED OPERATIONS

The following discussion provides information pertaining to our significant discontinued operations.

Charter Fleet Business

In conjunction with classifying the charter fleet business as a discontinued operation during the quarter ended September 30, 2010, we recognized a $27.7 million write-down of the carrying value of these assets to their estimated net realizable value, based on the estimated fair value of consideration expected from the sale and estimated selling costs.

The following table presents selected financial information regarding the results of operations attributable to our charter fleet business:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(Unaudited) (In thousands)
Revenues	$	11,062	$	17,921	$	20,566	$	32,582
Income before provision for income taxes		2,330		3,261		4,741		6,404
Provision for income taxes		720		415		1,469		1,519
Income from discontinued operations, net of tax	$	1,610	$	2,846	$	3,272	$	4,885

The following table presents the carrying values of the major classes of assets and liabilities held for sale that are included in our unaudited condensed consolidated balance sheets:

	June 30, 2011		December 31, 2010
	(Unaudited)
	(In thousands)
Cash	$	1,968	$	1,426
Accounts receivable – net		8,357		5,253
Other assets		3,550		3,482
Total current assets held for sale		13,875		10,161
Property, plant and equipment – net		69,401		68,595
Other assets		8,709		8,555
Total long-term assets held for sale		78,110		77,150
Total assets held for sale	$	91,985	$	87,311
Accounts payable and accrued liabilities	$	8,372	$	8,748
Other liabilities		14,540		12,154
Total liabilities associated with assets held for sale	$	22,912	$	20,902

Spin-off of B&W

On July 30, 2010, we completed the spin-off of B&W to our stockholders through a stock distribution. B&W’s assets and businesses primarily consisted of those that we previously reported as our Government Operations and Power Generation Systems segments. In connection with the spin-off, our stockholders received 100% (approximately 116 million shares) of the outstanding common stock of B&W. The distribution of B&W common stock occurred by way of a pro rata stock dividend to our stockholders. Each stockholder generally received one share of B&W common stock for every two shares of our common stock held by such stockholder on July 9, 2010, and cash in lieu of any fractional shares. Prior to the completion of the spin-off, B&W made a cash distribution to us totaling $100 million.

In order to effect the distribution and govern MII’s relationship with B&W after the distribution, MII and B&W entered into a master separation agreement and several other agreements, including a tax sharing agreement and transition services agreements.

Financial Information

The following table presents selected financial information regarding the results of operations of our former B&W business for the three-month and six-month periods ended June 30, 2010. Loss on disposal of discontinued operations represents costs incurred in connection with the B&W spin-off.

	Three Months Ended June 30, 2010			Six Months Ended June 30, 2010
	(Unaudited) (In thousands)
Revenues	$	688,496		$	1,350,884
Loss on disposal of discontinued operations		(66,218	)		(90,420	)
Income before provision for income taxes		81,267			118,138
		15,049			27,718
Provision for income taxes		20,552			26,881
Income (loss) from discontinued operations, net of tax	$	(5,503	)	$	837