Discontinued Operations

9 Months Ended

Sep. 30, 2011

5.	Discontinued Operations

During September 2011, the Company committed to a plan to divest or wind down its Pioneer Wind Energy Systems Inc. subsidiary which was established by the Company in 2010 to market its utility scale wind turbine designs, after-sales services and equipment financing to community wind and industrial customers. This decision is part of the Company’s strategy to focus on businesses that create the most shareholder value. Weak domestic wind energy market conditions combined with the inability of the Company to establish an arrangement, on commercially acceptable terms, with a qualified third party to provide outsourced parts procurement and assembly services, caused the Company to reduce and extend further out into the future its projected sales and operating profit of the business. The decision to divest or wind down the business resulted in a non-cash asset impairment charge of $1.2 million to adjust the carrying value of the subsidiary’s assets to fair value. This impairment charge was recognized in the third quarter of 2011 on certain inventory, property, plant and equipment and other assets. In addition, the Company recognized a $0.6 million charge related to its expected future severance, rent and insurance payment obligations.

The results of operations for Pioneer Wind Energy Systems Inc. are reported as discontinued operations for all periods presented and are summarized as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
Net sales	$	-		$	-		$	-		$	-
Gain (loss) from operations of discontinued business (1)		(2,029	)		(270	)		(2,440	)		522
Income tax expense		-			-			-			-
Loss from discontinued operations, net of tax	$	(2,029	)	$	(270	)]	$	(2,440	)	$	522

(1)

Includes non-cash asset impairment charges of $1.6 million and $0.2 million of anticipated expenses related to discontinuing the business during the three and nine month periods ended September 30, 2011. The nine month period ended September 30, 2010 included a $1.1 million non-cash gain on bargain purchase.

- Definition

Disclosure of accounting policy for any discontinued operations. The results of operations of a component of an entity that either has been disposed of or is classified as held for sale is reported in discontinued operations if both: (a) the operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction and (b) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. If the entity elects to allocate interest expense to a discontinued operation, it may disclose its accounting policy for this election and describe its method of allocation.

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