Discontinued Operations

3 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

3. Discontinued Operations

The sale of GMSL closed on February 28, 2020. As a result of the sale, the results of GMSL and transaction related expenses directly attributable to the sale were reported as discontinued operations. Summarized operating results of the discontinued operations are as follows (in millions):

	Three Months Ended March 31,
	2020		2019
Net revenue	$	17.3	$	42.4
Cost of revenue	18.2		33.2
Selling, general and administrative	13.7		6.0
Depreciation and amortization	3.8		6.6
Other operating expenses	—		0.6
Loss from operations	(18.4)		(4.0)
Interest expense	(3.6)		(3.5)
Loss on sale of subsidiary	(39.3)		—
Income from equity investees	0.5		1.0
Other income (loss)	0.9		(0.1)
Pre-tax loss from discontinued operations	(59.9)		(6.6)
Income tax benefit (expense)	(0.1)		—
Loss from discontinued operations	$	(60.0)	$	(6.6)

The Company recorded a $39.3 million loss on the sale, inclusive of recognizing a $31.3 million loss from the realization of AOCI. The Company expects to record and overall gain from the disposition of the Marine Segment upon the sale of 30% of its interests in HMN, anticipated to close during the second quarter of 2020.

The net proceeds from the sale of GMSL were used to permanently repay HC2’s $15.0 million 2019 Revolving Credit Agreement and redeem $76.9 million aggregate principal amount of HC2’s Senior Secured Notes, plus accrued and unpaid interest since December 1, 2019 (the last regularly scheduled interest payment date).

As a result of the mandatory redemption of $15.0 million on the secured revolving line of credit as a result of the sale of GMSL, the Company allocated interest of $0.2 million, and the amortization of deferred financing costs of $0.1 million for the three months ended March 31, 2020, associated with the principal prepayment from continuing operations to discontinued operations on the Company’s Condensed Consolidated statement of operations.

As a result of the mandatory redemption of $76.9 million on the Senior Secured Notes as a result of the sale of GMSL, the Company allocated the pro-rata interest of $2.2 million, and the pro-rata amortization of deferred financing costs and original issuance discount of $0.2 million and $0.1 million, respectively, for each of the three months ended March 31, 2020 and 2019, related to the Senior Secured Notes from continuing operations to discontinued operations on the Company’s Condensed Consolidated statement of operations.

Summarized assets and liabilities of the discontinued operations are as follows (in millions):