Discontinued Operations and Dispositions

3 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Dispositions

The Company accounts for disposals that represent a strategic shift that should have or will have a major effect on operations as discontinued operations in the consolidated condensed statements of income (loss) commencing in the period in which the business or group of businesses meets the criteria of a discontinued operation. These results include any gain or loss recognized on disposal or adjustment of the carrying amount to fair value less cost to sell.

AA Transaction

On September 23, 2021, MIH completed the AA Transaction for $4.475 billion including cash and the assumption of debt and other transaction and reorganization related obligations. The Company received $3.525 billion from KKR at the closing of the AA Transaction.

The MIH Board elected to return certain proceeds from the AA Transaction to unitholders in a one-time distribution, after a disposition payment by MIH to the Manager of $228.6 million. The Board declared a one-time distribution of $37.386817 per common unit of the Company, paid on October 7, 2021 to unitholders of record as of the close of trading on October 4, 2021.

The sale of Atlantic Aviation was part of the Company's efforts to unlock value for its unitholders. On September 21, 2021, the unitholders of MIC approved the AA Transaction at the Special Meeting and therefore the Company determined that each of the criteria to be classified as held for sale under ASC 205-20, Presentation of Financial Statements — Discontinued Operations, had been met as it relates to Atlantic Aviation. It was additionally determined that the sale of Atlantic Aviation is considered a strategic shift for the Company that will have a major effect on operations. Accordingly, Atlantic Aviation was classified as a discontinued operation and the Atlantic Aviation segment was eliminated. All prior periods have been restated to reflect these changes.

The Company recognized a book gain on sale of approximately $2.95 billion as a result of the AA Transaction. The Company incurred $50.2 million in transaction costs and a disposition payment of $228.6 million to its Manager, both of which were included in Selling, general and administrative expenses in the consolidated condensed statement of income (loss).

Summarized financial information for discontinued operations included in the Company's consolidated condensed statement of income (loss) related to the Atlantic Aviation business for the quarter ended March 31, 2021 is as follows ($ in thousands):


	Quarter Ended March 31,
		2021
Service revenue		$	209,604
Cost of services		(82,233)
Selling, general and administrative expenses		(65,411)
Depreciation and amortization		(23,771)
Interest expense, net		(11,412)

Other income, net		838
Net income from discontinued operations before income taxes		$	27,615
Provision for income taxes		(7,548)
Net income from discontinued operations		$	20,067