Discontinued operations

3 Months Ended

Mar. 31, 2021

Discontinued operations

Discontinued operations

3. DISCONTINUED OPERATIONS

On April 8, 2020, the Company completed the sale of the Company’s former Canadian subsidiary (“MDA Business”), to Neptune Acquisition Inc., a corporation existing under the laws of the Province of British Columbia and an affiliate of Northern Private Capital Ltd. (“MDA Purchaser”), for an aggregate purchase price of $729 million (C$1.0 billion) (“MDA Transaction”). The Company recognized an after-tax gain on disposal of discontinued operations of $317 million, net of $12 million in taxes, on the MDA Transaction for the year ended December 31, 2020. The operating results and cash flows related to the MDA Business are reflected as discontinued operations in the Unaudited Condensed Consolidated Statements of Operations and the Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020. There was no activity within discontinued operations for the three months ended March 31, 2021.

In addition, the Company and the MDA Purchaser entered into a Transition Services Agreement pursuant to which the MDA Purchaser would receive certain services (“Services”). The Services were provided based on an agreed upon fee arrangement through April 8, 2021.

Income from discontinued operations, net of tax for the MDA Business in the Unaudited Condensed Consolidated Statement of Operations consists of the following:

		Three Months Ended
		March 31, 2020
Revenues:
Product	$	39
Service		36
Total revenues		75
Costs and expenses:
Product costs, excluding depreciation and amortization		34
Service costs, excluding depreciation and amortization		21
Selling, general and administrative		13
Depreciation and amortization		4
Impairment loss		12
Operating loss		(9)
Interest expense, net		1
Other income, net 1		(36)
Income before taxes		26
Income tax benefit		(4)
Income from discontinued operations, net of tax	$	30

¹ Other income, net includes the $39 million recovery of the previously recorded liability in relation to the Company’s dispute with a customer for the three months ended March 31, 2020.