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Discontinued Operations
 9 Months Ended
Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations Discontinued Operations
On August 8, 2024, we entered into a series of transactions designed to facilitate an orderly wind-down of a majority of the Company’s Global Ecommerce reporting segment. In connection with the wind-down, an affiliate of Hilco Commercial Industrial, LLC (“Hilco”) subscribed for 81% of the voting interests in the subsidiary, DRF Logistics, LLC owning a majority of the Global Ecommerce segment’s net assets and operations (DRF Logistics, LLC and its subsidiary, DRF LLC, the “Ecommerce Debtors”) for de minimis consideration (the “GEC Sale”), with a subsidiary of Pitney Bowes retaining 19% of the voting interests and 100% of the economic interests. Subsequent to the GEC Sale, the Ecommerce Debtors, at the direction of their own governing bodies, filed petitions to commence Chapter 11 bankruptcy cases and conduct an orderly wind-down of the Ecommerce Debtors (the “GEC Chapter 11 Cases”). We refer to the GEC Sale, the GEC Chapter 11 Cases and any associated transactions as the “Ecommerce Restructuring”.
In connection with the GEC Chapter 11 Cases, we entered into a Restructuring Support Agreement (the “RSA”) with the Ecommerce Debtors. The RSA provides for, among other things, an orderly wind-down of the Ecommerce Debtors, shared services between the Company and the Ecommerce Debtors for a period of time, a global settlement between the Company and the Ecommerce Debtors, and a senior secured, super-priority debtor-in-possession term loan (the “DIP Facility”) in an aggregate principal amount of up to $47 million. Through September 30, 2024, we provided funding under the DIP Facility of $28 million, which was fully reserved. It appears unlikely that the DIP Facility will be repaid in full.
The Company and the Ecommerce Debtors have entered into a master settlement agreement (the “Settlement Agreement”), which attaches the RSA and the DIP Facility and which contemplates the separation of the relationship and transactions among the Company and its subsidiaries and the Ecommerce Debtors, including the settlement and release of claims the Ecommerce Debtors may have against the Company. The Settlement Agreement is subject to the approval of the Bankruptcy Court and there is no assurance that such approval will be granted.
Immediately prior to the GEC Sale, we had various intercompany receivables with the Ecommerce Debtors with an aggregate value of $116 million. After the GEC Sale, those intercompany receivables were converted to third-party receivables, for which we have ascribed a fair value of zero. Subsequent collections, if any, will be recorded when received or collection is assured.
We account for the investment in the Ecommerce Debtors using the equity method which requires the initial fair value of the investment to be recorded as an asset. We determined that the fair value of our economic interest in the Ecommerce Debtors was zero and is therefore not reflected in our consolidated balance sheet. While we no longer control the management of the Ecommerce Debtors, we retain an economic equity interest therein; however, such interest is not anticipated to receive any recovery or distribution as part of the Ecommerce Restructuring. We nevertheless remain exposed to the economic risks and continued costs applicable to the Ecommerce Debtors through our investment in the DIP Facility. Hilco anticipates the Ecommerce Restructuring will be substantially completed by the end of 2024.

Financial information of discontinued operations is as follows:

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenue$115,797 $280,718 $728,462 $842,261 
Cost of revenue
120,167 291,974 737,856 854,408 
Selling, general and administrative
39,536 26,673 99,806 90,911 
Goodwill impairment
— — — 75,390 
Other
7,017 5,702 10,463 18,825 
Total costs and expenses
166,720 324,349 848,125 1,039,534 
Loss from discontinued operations
(50,923)(43,631)(119,663)(197,272)
Loss on sale
(218,847)— (218,847)— 
Loss from discontinued operations before taxes
(269,770)(43,631)(338,510)(197,272)
Tax benefit(8,712)(13,300)(27,721)(35,180)
Loss from discontinued operations, net of tax
$(261,058)$(30,331)$(310,789)$(162,092)
The major categories of assets and liabilities included in assets of discontinued operations and liabilities of discontinued operations are as follows:
December 31, 2023
Cash and cash equivalents$999 
Accounts and other receivables, net141,993 
Inventories7,005 
Other current assets and prepayments16,269 
Property, plant and equipment, net129,550 
Intangible assets41,850 
Operating lease assets
183,467 
Other assets11,308 
Assets of discontinued operations$532,441 
Accounts payable and accrued liabilities$46,057 
Current operating lease liabilities30,187 
Advance billings12,829 
Noncurrent operating lease liabilities
151,413 
Other noncurrent liabilities16,620 
Liabilities of discontinued operations$257,106