Discontinued Operations

6 Months Ended

Mar. 31, 2016

Discontinued Operations [Abstract]

Discontinued Operations

2. DISCONTINUED OPERATIONS

On 29 March 2016, the Board of Directors approved the Company’s exit of its Energy-from-Waste (EfW) business. As a result, efforts to start up and operate the two EfW projects located in Tees Valley, United Kingdom, have been discontinued. The decision to exit the business and stop development of the projects was based on continued difficulties encountered; and the Company’s conclusion, based on testing and analysis completed during the second fiscal quarter of 2016, that significant additional time and resources would be required to make the projects operational. As a result, the EfW segment has been presented as a discontinued operation. Prior year EfW business segment information has been reclassified to conform to current year presentation. During the three months ended 31 March 2016, we recorded a loss of $945.7 ($846.6 after-tax) for the disposal of the business. Income tax benefits related only to one of the projects, as the other did not qualify for a local tax deduction. This loss includes $913.5 to write down plant assets, previously recorded as construction in progress, to their estimated net realizable value of $20.0 and $32.2 to record a liability for plant disposition and other costs. We estimated the net realizable value of the projects assuming an orderly liquidation of assets capable of being marketed on a secondary equipment market based on market quotes and our experience with selling similar equipment. An asset’s orderly liquidation value is the amount that could be realized from a liquidation sale, given a reasonable period of time to find a buyer, selling the asset in the existing condition where it is located and assuming the highest and best use of the asset by market participants. We recorded a valuation allowance of $58.0 and unrecognized tax benefits of $7.9 related to deferred tax assets on capital assets generated from the loss.

The following table summarizes the carrying amount of the accrual for our actions to dispose of the EfW business
at 31 March 2016:
		Asset		Contract
		Actions		Actions/Other		Total
	Loss on disposal of business	$	913.5	$	32.2	$	945.7
	Noncash expenses		(913.5)		-		(913.5)
	31 March 2016	$	-	$	32.2	$	32.2

The results of discontinued operations are summarized below:
			Three Months Ended				Six Months Ended
			31 March				31 March
			2016		2015		2016		2015
	Loss before taxes	$	(3.8)	$	(2.5)	$	(21.3)	$	(4.8)
	Income tax provision		(2.7)		.6		.6		1.2
	Loss from operations of discontinued operations		(6.5)		(1.9)		(20.7)		(3.6)
	Loss on disposal, net of tax		(846.6)		-		(846.6)		-
	Loss from Discontinued Operations, net of tax	$	(853.1)	$	(1.9)	$	(867.3)	$	(3.6)

The loss from operations of discontinued operations primarily relates to land leases, commercial and administrative costs, and costs incurred related to project suspension activities.

Assets and liabilities of discontinued operations consist of the following:
			31 March		30 September
			2016		2015
	Plant and equipment	$	20.0	$	-
	Other current assets		.4		1.8
	Total Current Assets	$	20.4	$	1.8
	Plant and equipment	$	-	$	891.8
	Total Noncurrent Assets	$	-	$	891.8
	Payables and accrued liabilities	$	43.7	$	17.0
	Other current liabilities		2.8		-
	Total Current Liabilities	$	46.5	$	17.0
	Other noncurrent liabilities	$	-	$	2.5
	Total Noncurrent Liabilities	$	-	$	2.5