Discontinued operations

9 Months Ended

Sep. 30, 2021

Discontinued operations.

Discontinued operations

3. DISCONTINUED OPERATIONS

On April 8, 2020, the Company completed the sale of its 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 ($1.0 billion Canadian dollars) (“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 for the three and nine months ended September 30, 2020 and the Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020. There was no activity within discontinued operations for the three or nine months ended September 30, 2021.

In addition, the Company and the MDA Purchaser entered into a Transition Services Agreement pursuant to which the MDA Purchaser received certain services (“Services”). The Services were provided based on an agreed upon fee arrangement that ended on 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		Nine Months Ended
		September 30, 2020		September 30, 20201
Revenues:
Product	$	—	$	44
Service		—		42
Total revenues		—		86
Costs and expenses:
Product costs, excluding depreciation and amortization		—		38
Service costs, excluding depreciation and amortization		—		24
Selling, general and administrative		—		13
Depreciation and amortization		—		4
Impairment loss		—		12
Operating loss		—		(5)
Interest expense, net		—		1
Other income, net2		—		(34)
Income before taxes		—		28
Income tax benefit		—		(4)
Income from operations of discontinued operations, net of tax		—		32
Gain on disposal of discontinued operations, net of tax3		1		305
Income from discontinued operations, net of tax	$	1	$	337

¹ For the nine months ended September 30, 2020, MDA results are presented through April 7, 2020.

² 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 nine months ended September 30, 2020.

³ For the three months ended September 30, 2020, the $1 million Gain on disposal of discontinued operations, net of tax, was driven by a reduction of the income tax on the gain on disposal of the MDA Business.