Discontinued Operations

On November 1, 2018, we completed the separation of our infrastructure-related businesses, Arcosa. The separation was effected through a pro rata dividend to Trinity's shareholders of all outstanding Arcosa shares and was structured to qualify as a tax-free distribution for federal income tax purposes. Trinity did not retain an ownership interest in Arcosa following the completion of the spin-off transaction. In connection with the Arcosa spin-off, we recorded a reduction to retained earnings of approximately $1,753.5 million, representing the distribution of Arcosa's net assets to Trinity shareholders and Trinity's contribution of cash to Arcosa pursuant to the separation and distribution agreement. Upon completion of the spin-off transaction on November 1, 2018, the accounting requirements for reporting Arcosa as a discontinued operation were met.

We incurred $36.3 million and $14.2 million in spin-off related transaction costs during the years ended December 31, 2018 and 2017, respectively, of which $31.2 million and $14.2 million are included in income from discontinued operations, net of income taxes in the accompanying Consolidated Statements of Operations. These costs primarily relate to the preparation of regulatory filings, investment banking fees, professional fees associated with various legal, accounting, and tax matters related to the spin-off, and other separation activities within the finance, tax, legal, and information technology functions.

In connection with the spin-off transaction, Trinity and Arcosa entered into various agreements to effect the distribution and provide a framework for their relationship after the separation, including a separation and distribution agreement, a transition services agreement, an employee matters agreement, a tax matters agreement, and an intellectual property matters agreement. These agreements provide for the allocation between Trinity and Arcosa of assets, employees, liabilities, and obligations (including property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at, and after Arcosa's separation from Trinity and govern certain relationships between Trinity and Arcosa after the spin-off. Trinity is also party to certain commercial agreements with Arcosa entities. These agreements have various durations ranging between one and eighteen months. We have determined that the continuing cash flows generated by these agreements do not constitute significant continuing involvement in the operations of Arcosa. The amount billed for transition services provided under the above agreements was not material to our results of operations for the year ended December 31, 2018. As of December 31, 2018, our Consolidated Balance Sheet included a net payable of $10.4 million to Arcosa, primarily related to the final settlement of employee-related matters, tax matters, and certain other separation-related matters contemplated in the agreements described above.

Subsequent to the spin-off and through December 31, 2018, our net sales to Arcosa totaled $6.4 million and our purchases from Arcosa totaled $25.6 million. These transactions, which occurred pursuant to the commercial agreements described above, are reflected as third-party transactions in our Consolidated Statements of Operations. At December 31, 2018, the accounts receivable and accounts payable balances recorded on our Consolidated Balance Sheet associated with these purchases and sales were $1.3 million and $10.6 million, respectively.

Arcosa is a stand-alone public company which separately reports its financial results. Due to differences between the basis of presentation for discontinued operations and the basis of presentation as a stand-alone company, the financial results of Arcosa included within discontinued operations may not be indicative of the actual financial results of Arcosa as a stand-alone company.

The following is a summary of operating results included in income from discontinued operations for the years ended December 31, 2018, 2017, and 2016:



	Year Ended December 31,
	2018			2017		2016
	(in millions)
Revenues	$	1,042.0		$	1,265.4	$	1,498.5
Cost of revenues	840.8			971.0		1,142.9
Selling, engineering, and administrative expenses	116.8			116.3		93.7
Other (income) expense	(0.4		)	1.6		5.2
Income from discontinued operations before income taxes	84.8			176.5		256.7
Provision for income taxes	30.7			73.1		95.2
Income from discontinued operations, net of income taxes	$	54.1		$	103.4	$	161.5

The following is a summary of assets and liabilities attributable to discontinued operations, which were included in our Consolidated Balance Sheet as of December 31, 2017:



	December 31, 2017
Assets:	(in millions)
Receivables, net of allowance for doubtful accounts	165.3
Income tax receivable	4.9
Inventories	237.9
Property, plant, and equipment, net	577.6
Goodwill	571.5
Other assets	97.0
Total assets, discontinued operations	$	1,654.2

Liabilities:
Accounts payable	$	56.0
Accrued liabilities	118.0
Debt	0.5
Deferred income taxes	14.8
Other liabilities	9.1
Total liabilities, discontinued operations	$	198.4