Discontinued Operations

12 Months Ended

Dec. 31, 2016

Discontinued Operations [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

5. Discontinued Operations

During 2014, the Company announced that it had reached an agreement to sell its Grid business in order to focus on its IIoT business and on future opportunities in this market. On September 30, 2014, the Company completed the sale of its Grid business to S&T AG ("S&T"), a publicly traded European IT systems provider.

The consideration received for the sale of the Grid business totaled approximately $4.9 million. The Company also entered into a sub-lease arrangement as well as a supply arrangement for a component of the technology sold to S&T. The supply arrangement has a term of 39 months and the sub-lease agreement concluded during the fourth quarter of 2015 in conjunction with the Company's cancellation of its headquarters facility leases. Both the supply agreement and the sub-lease agreement has been considered indirect cashflows as they were deemed to be insignificant.

After the impairment charges taken in the second quarter of 2014 (see Notes 3 and 10), and net of transaction costs, the sale of the Grid business resulted in a loss of $254,000, recorded as loss on sale of discontinued operations for the year endedDecember 31, 2014.

The assets and liabilities of the Company's Grid division joint venture (see Note 18) were not included in the sale to S&T. As of December 31, 2014, the Company was in the process of negotiating the sale of the joint venture's remaining net assets and recorded the assets and liabilities of the joint venture at the lower of their carrying amount or fair value less cost to sell and had classified them as held for sale on the Company's consolidated balance sheets. The remaining asset and liabilities principally relate to deferred revenues and the related deferred costs of sales, and accrued liabilities. As of December 31, 2015, the Company determined that the joint venture's remaining net assets would not be sold. As such, they were removed from held for sale.

As a result of restructuring activities during the third quarter of 2014, a total of $1.4 million of restructuring costs is included in loss from discontinued operations for the year endedDecember 31, 2014. All of this amount was paid as of September 30, 2015.

The Company has classified the results of operations of the Grid business as discontinued operations for the year ended December 31, 2014. There was no activity related to the Grid business during the years ended December 31, 2016, and 2015. The table below provides a summary of the components of the net loss from discontinued operations for 2014 and excludes certain shared overhead costs that were previously allocated to the Grid segment as ASC 205-20 prohibits the allocation of general overhead costs to discontinued operations.

	Year ended December 31,
	2014
Revenues (1)	$	18,392
Cost of revenues	11,774
Operating expenses	15,614
Loss from discontinued operations before income taxes	(8,996		)
Income taxes	—
Loss on sale of Grid business	(254		)
Net loss from discontinued operations, net of income taxes	(9,250		)
Net loss from discontinued operations attributable to non-controlling interest, net of income taxes	535
Net loss from discontinued operations attributable to Echelon Corporation Stockholders, net of income taxes	$	(8,715	)

⁽¹⁾ Includes related party amounts of $112,000 for the year ended December 31, 2014.

The sale agreement contains certain indemnification provisions related to the Grid business whereby the Company may have obligations related to the period it owned the Grid business. The Company believes the estimated fair value of these indemnification provisions are minimal and accordingly, no liability is recorded for these indemnifications as of December 31, 2016.