Disposal of long-lived assets

6 Months Ended

Jun. 30, 2019

Disposal of long-lived assets [Line Items]

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

DISPOSALS OR IMPAIRMENTS OF LONG-LIVED ASSETS

Six months ended June 30, 2019

In June 2019, we entered into an agreement to sell our Sherman, Texas natural gas gathering and processing assets of our U.S. Gas segment, for $5.3 million in cash. At June 30, 2019, these assets and related liabilities are reflected on the consolidated balance sheet as held for sale and have been written down to net realizable value by recording an impairment of $5.2 million. The sale of these assets closed in July 2019. At June 30, 2019, the assets and liabilities held for sale included $5.5 million of property, plant and equipment, $1.0 million of current assets and $1.9 million of current liabilities.

At June 30, 2019, we recorded a $3.4 million impairment of our Nash, Oklahoma natural gas processing plant within our U.S. Gas segment. The impairment was triggered by the permanent idling of the Nash plant. We used a market approach to determine the fair value of the remaining assets based on assumptions of the equipment’s condition, marketability and salvage value.

On February 25, 2019, we contributed 100% of the issued and outstanding equity interests in our wholly owned subsidiary, SemCAMS ULC, an Alberta unlimited liability company, in exchange for 51% of the common shares of SemCAMS Midstream ULC (“SemCAMS Midstream”), cash, a potential payment contingent on positive final investment decision of a specific project by SemCAMS Midstream, and earnout consideration in the form of a special share in SemCAMS Midstream entitled to dividend payments if either or both of two specific projects proceed and EBITDA thresholds pertaining to those projects are achieved. No gain or loss was recorded on the contribution as we retained control of the contributed subsidiary. Certain deferred tax impacts of the transaction were recorded as an adjustment to Additional Paid-In Capital. Refer to Note 3 for further information.

Six months ended June 30, 2018

On April 12, 2018, we completed the sale of our U.K. operations, SemLogistics, for $73.1 million. We recorded a pre-tax gain on disposal of $0.4 million for the six months ended June 30, 2018. The U.K. business contributed $5.4 million of pre-tax income for the six months ended June 30, 2018, excluding the gain on disposal.

On March 15, 2018, we completed the sale of our Mexican asphalt business for $70.7 million. We recorded a pre-tax gain on disposal of $1.6 million for the six months ended June 30, 2018. The Mexican asphalt business contributed $2.3 million of pre-tax income for the six months ended June 30, 2018, excluding the gain on disposal.