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Assets held for sale and discontinued operations | 9 Months Ended
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Sep. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Assets held for sale and discontinued operations | Assets held for sale and discontinued operations Assets held for sale The assets and liabilities of Pronghorn were classified as held for sale in the fourth quarter of 2016. Pronghorn's results of operations for 2016 were included in the pipeline and midstream segment. Pronghorn On November 21, 2016, WBI Energy Midstream announced it had entered into a purchase and sale agreement to sell its 50 percent non-operating ownership interest in Pronghorn to Tesoro Logistics. The transaction closed on January 1, 2017, which generated approximately $100 million of proceeds for the Company. The sale of Pronghorn further reduces the Company's risk exposure to commodity prices. The carrying amounts of the major classes of assets and liabilities that were classified as held for sale associated with Pronghorn on the Company's Consolidated Balance Sheets were as follows:
| December 31, 2016 |
| (In thousands)
Assets |
Current assets: |
Prepayments and other current assets | $ | 68 |
Total current assets held for sale | 68 |
Noncurrent assets: |
Net property, plant and equipment | 93,424 |
Goodwill | 9,737 |
Less allowance for impairment of assets held for sale | 2,311 |
Total noncurrent assets held for sale | 100,850 |
Total assets held for sale | $ | 100,918 |
Discontinued operations The assets and liabilities of the Company's discontinued operations have been classified as held for sale and the results of operations are shown in loss from discontinued operations, other than certain general and administrative costs and interest expense which do not meet the criteria for income (loss) from discontinued operations. At the time the assets were classified as held for sale, depreciation, depletion and amortization expense was no longer recorded. Dakota Prairie Refining On June 24, 2016, WBI Energy entered into a membership interest purchase agreement with Tesoro to sell all of the outstanding membership interests in Dakota Prairie Refining to Tesoro. WBI Energy and Calumet each previously owned 50 percent of the Dakota Prairie Refining membership interests and were equal members in building and operating Dakota Prairie Refinery. To effectuate the sale, WBI Energy acquired Calumet’s 50 percent membership interest in Dakota Prairie Refining on June 27, 2016. The sale of the membership interests to Tesoro closed on June 27, 2016. The sale of Dakota Prairie Refining reduces the Company’s risk by decreasing exposure to commodity prices. In connection with the sale, WBI Energy had cash in an escrow account for RINs obligations, which was included in current assets held for sale on the Consolidated Balance Sheet at September 30, 2016. The Company retained certain liabilities of Dakota Prairie Refining which were reflected in current liabilities held for sale on the Consolidated Balance Sheets. In October 2016, the RINs liability was paid and the cash was removed from escrow. Also, Centennial continues to guarantee certain debt obligations of Dakota Prairie Refining; however, Tesoro has agreed to indemnify Centennial for any losses and litigation expenses arising from the guarantee. For more information related to the guarantee, see Note 16. The carrying amounts of the major classes of assets and liabilities that are classified as held for sale related to the operations of and activity associated with Dakota Prairie Refining on the Company's Consolidated Balance Sheets were as follows:
| September 30, 2017 |  |  | September 30, 2016 |  | December 31, 2016 |
| (In thousands)
Assets |  |  |  |
Current assets: |  |  |  |
Receivables, net | $ | — |  |  | $ | 13 |  | $ | — |
Income taxes receivable | 8,444 |  | (a) | 32,388 |  | 13,987 |
Prepayments and other current assets | — |  |  | 7,741 |  | — |
Total current assets held for sale | 8,444 |  |  | 40,142 |  | 13,987 |
Noncurrent assets: |  |  |  |
Deferred income taxes | — |  |  | 2,984 |  | — |
Total noncurrent assets held for sale | — |  |  | 2,984 |  | — |
Total assets held for sale | $ | 8,444 |  |  | $ | 43,126 |  | $ | 13,987 |
Liabilities |  |  |  |
Current liabilities: |  |  |  |
Accounts payable | $ | — |  |  | $ | 7,063 |  | $ | 7,425 |
Other accrued liabilities | — |  |  | 7,743 |  | — |
Total current liabilities held for sale | — |  |  | 14,806 |  | 7,425 |
Noncurrent liabilities: |  |  |  |
Deferred income taxes (b) | 55 |  |  | — |  | 14 |
Total noncurrent liabilities held for sale | 55 |  |  | — |  | 14 |
Total liabilities held for sale | $ | 55 |  |  | $ | 14,806 |  | $ | 7,439 |
(a) | On the Company's Consolidated Balance Sheets, this amount was reclassified to income taxes payable and is reflected in current liabilities held for sale.
(b) | On the Company's Consolidated Balance Sheets, these amounts were reclassified to noncurrent deferred income tax assets and are
reflected in noncurrent assets held for sale.
In the first quarter of 2017, the Company recorded a reversal of a previously accrued liability of $7.0 million ($4.3 million after tax) due to the resolution of a legal matter. At September 30, 2017, Dakota Prairie Refining had not incurred any material exit and disposal costs, and does not expect to incur any material exit and disposal costs. The Company performed a fair value assessment of the assets and liabilities classified as held for sale. In the second quarter of 2016, the fair value assessment was determined using the market approach based on the sale transaction to Tesoro. The fair value assessment indicated an impairment based on the carrying value exceeding the fair value, which resulted in the Company recording an impairment of $251.9 million ($156.7 million after tax) in the quarter ended June 30, 2016. The impairment was included in operating expenses from discontinued operations. The fair value of Dakota Prairie Refining’s assets has been categorized as Level 3 in the fair value hierarchy. Fidelity In the second quarter of 2015, the Company began the marketing and sale process of Fidelity with an anticipated sale to occur within one year. Between September 2015 and March 2016, the Company entered into purchase and sale agreements to sell all of Fidelity's oil and natural gas assets. The completion of these sales occurred between October 2015 and April 2016. The sale of Fidelity was part of the Company's strategic plan to grow its capital investments in the remaining business segments and to focus on creating a greater long-term value. The carrying amounts of the major classes of assets and liabilities that are classified as held for sale related to the operations of Fidelity on the Company's Consolidated Balance Sheets were as follows:
| September 30, 2017 |  | September 30, 2016 |  |  | December 31, 2016 |  |
| (In thousands) |
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Receivables, net | $ | 304 |  | $ | 7,930 |  |  | $ | 355 |  |
Total current assets held for sale | 304 |  | 7,930 |  |  | 355 |  |
Noncurrent assets: |  |  |  |  |
Net property, plant and equipment | 2,064 |  | 5,507 |  |  | 5,507 |  |
Deferred income taxes | 62,163 |  | 104,726 |  |  | 91,098 |  |
Other | 161 |  | 161 |  |  | 161 |  |
Less allowance for impairment of assets held for sale | — |  | 938 |  |  | 938 |  |
Total noncurrent assets held for sale | 64,388 |  | 109,456 |  |  | 95,828 |  |
Total assets held for sale | $ | 64,692 |  | $ | 117,386 |  |  | $ | 96,183 |  |
Liabilities |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 68 |  | $ | 175 |  |  | $ | 141 |  |
Taxes payable | 11,745 |  | 2,205 |  | (a) | 19 |  | (a)
Other accrued liabilities | 2,380 |  | 3,084 |  |  | 2,358 |  |
Total current liabilities held for sale | 14,193 |  | 5,464 |  |  | 2,518 |  |
Total liabilities held for sale | $ | 14,193 |  | $ | 5,464 |  |  | $ | 2,518 |  |
(a) | On the Company's Consolidated Balance Sheets, these amounts were reclassified to prepayments and other current assets and are reflected in current assets held for sale.
The Company reclassified current income tax assets of $47.5 million and current income tax liabilities of $4.1 million to noncurrent assets - deferred income taxes at September 30, 2016, pursuant to the retrospective application of the adoption of the ASU related to the balance sheet classification of deferred taxes. For more information on this ASU, see Note 6. The Company performed a fair value assessment of the assets and liabilities classified as held for sale. In the second quarter of 2016, the fair value assessment was determined using the income and market approaches. The income approach was determined by using the present value of future estimated cash flows. The market approach was based on market transactions of similar properties. The estimated carrying value exceeded the fair value and the Company recorded an impairment of $900,000 ($600,000 after tax) in the second quarter of 2016. In the first quarter of 2016, the fair value assessment was determined using the market approach largely based on a purchase and sale agreement. The estimated fair value exceeded the carrying value and the Company recorded an impairment reversal of $1.4 million ($900,000 after tax) in the first quarter of 2016. The impairment and impairment reversal were included in operating expenses from discontinued operations. The estimated fair value of Fidelity's assets have been categorized as Level 3 in the fair value hierarchy. The Company incurred transaction costs of approximately $300,000 in the first quarter of 2016. In addition to the transaction costs, and due in part to the change in plans to sell the assets of Fidelity rather than sell Fidelity as a company, Fidelity incurred and expensed approximately $5.6 million of exit and disposal costs for the nine months ended September 30, 2016, and has incurred $10.5 million of exit and disposal costs to date. Fidelity incurred no exit and disposal costs for the three and nine months ended September 30, 2017, and the Company does not expect to incur any additional material exit and disposal costs. The exit and disposal costs are associated with severance and other related matters and exclude the office lease expiration discussed in the following paragraph. Fidelity vacated its office space in Denver, Colorado in 2016. The Company incurred lease payments of approximately $900,000 in 2016. A lease termination payment of $3.2 million was made during the second quarter of 2016. Existing office furniture and fixtures were relinquished to the lessor in the second quarter of 2016. Dakota Prairie Refining and Fidelity The reconciliation of the major classes of income and expense constituting pretax income (loss) from discontinued operations, which includes Dakota Prairie Refining and Fidelity, to the after-tax loss from discontinued operations on the Company's Consolidated Statements of Income was as follows:
| Three Months Ended | Nine Months Ended
| September 30, | September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016 |
| (In thousands)
Operating revenues | $ | 121 |  | $ | 162 |  | $ | 356 |  | $ | 122,894 |
Operating expenses | 384 |  | 230 |  | (4,988 | ) | 513,756 |
Operating income (loss) | (263 | ) | (68 | ) | 5,344 |  | (390,862 | )
Other income (expense) | — |  | 375 |  | (13 | ) | 762 |
Interest expense | — |  | — |  | 239 |  | 1,753 |
Income (loss) from discontinued operations before income taxes | (263 | ) | 307 |  | 5,092 |  | (391,853 | )
Income taxes | 1,935 |  | 5,707 |  | 8,794 |  | (92,315 | )
Loss from discontinued operations | (2,198 | ) | (5,400 | ) | (3,702 | ) | (299,538 | )
Loss from discontinued operations attributable to noncontrolling interest | — |  | — |  | — |  | (131,691 | )
Loss from discontinued operations attributable to the Company | $ | (2,198 | ) | $ | (5,400 | ) | $ | (3,702 | ) | $ | (167,847 | )
The pretax income (loss) from discontinued operations attributable to the Company, related to the operations of and activity associated with Dakota Prairie Refining, were $0 and $935,000 for the three months ended and $6.9 million and $(253.0) million for the nine months ended September 30, 2017 and 2016, respectively.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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