Discontinued Operations

9 Months Ended

Sep. 30, 2016

Discontinued Operations

Discontinued Operations

3. Discontinued Operations

On February 1, 2016, we sold certain trucking and marketing assets in the Mid-Continent area (the “Mid-Continent Business”) to JP Development, simultaneous with JP Development’s sale of its GSPP pipeline assets to a third party buyer. The sales price related to the Mid-Continent Business was $9,685,000, in cash, which included certain adjustments related to inventory and other working capital items. As of December 31, 2015, the Mid-Continent Business met all the criteria to be classified as assets held for sale in accordance with ASC 360; therefore, we classified all the related assets and liabilities as held for sale in the condensed consolidated balance sheet at that date. The operating results of the Mid-Continent Business have been classified as discontinued operations for all periods presented in the condensed consolidated statements of operations. We combined the cash flows from the Mid-Continent Business with the cash flows from continuing operations for all periods presented in the condensed consolidated statements of cash flows. The Mid-Continent Business will not generate any continuing cash flows subsequent to the date of disposition. Prior to the classification as discontinued operations, we reported the Mid-Continent Business in our crude oil pipelines and storage segment. The following table summarizes selected financial information related to the Mid-Continent Business’ operations for the three and nine months ended September 30, 2016 and 2015.

Condensed Consolidated Statements of Operations

The discontinued operations of the Mid-Continent Business are summarized below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
	(in thousands)
REVENUES
Crude oil sales	$	—	$	104,933	$	11,493	$	371,919
Gathering, transportation and storage fees		—		4		—		10
Other revenues		—		5		2		47
Total revenues		—		104,942		11,495		371,976
COSTS AND EXPENSES
Cost of sales, excluding depreciation and amortization		—		104,995		11,687		369,429
Operating expense		—		354		172		1,008
General and administrative		—		139		31		726
Depreciation and amortization		—		568		211		1,713
Gain on disposal of assets, net		—		(31)		(114)		(7)
Total costs and expenses		—		106,025		11,987		372,869
OPERATING LOSS		—		(1,083)		(492)		(893)
OTHER INCOME (EXPENSE)
Interest expense		—		(164)		(47)		(221)
Other income, net		—		—		—		2
LOSS FROM DISCONTINUED OPERATIONS BEFORE INCOME TAXES		—		(1,247)		(539)		(1,112)
Income tax expense		—		—		—		—
NET LOSS FROM DISCONTINUED OPERATIONS	$	—	$	(1,247)	$	(539)	$	(1,112)

Condensed Consolidated Balance Sheets

The current and non-current assets and liabilities of the Mid-Continent Business are as follows:

	December 31,
	2015
	(in thousands)
ASSETS
Current assets
Inventory	$	2,692
Prepaid expenses and other current assets		38
Total Current assets of discontinued operations held for sale		2,730
Non-current assets
Property, plant and equipment, net		5,203
Intangible assets, net		1,138
Deferred financing costs and other assets, net		303
Total Non-current assets of discontinued operations held for sale		6,644
Total Assets of discontinued operations held for sale	$	9,374
LIABILITIES
Current liabilities
Accrued liabilities	$	640
Total Current liabilities of discontinued operations held for sale	$	640

The following table summarizes other selected financial information related to the Mid-Continent Business:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
	(in thousands)
Depreciation	$	—	$	297	$	115	$	922
Amortization		—		271		96		791
Capital expenditures		—		43		—		416
Other operating noncash items related to discontinued operations:
Derivative valuation changes	$	—	$	(3,466)	$	—	$	(2,053)
Gain on disposal of assets		—		(31)		(114)		(7)