Assets Held For Sale

In December 2017, our management committed to a plan to sell the gas trading and storage businesses because they represented non-core businesses that were not aligned with our strategic objectives. At that time, we determined that the assets and liabilities associated with our gas trading and storage businesses met the criteria for classification as assets held for sale, but did not meet the criteria for classification as discontinued operations. On March 1, 2018, the Company closed a transaction to sell Enstor Energy Services, LLC, which operated AVANGRID’s gas trading business, to CCI U.S. Asset Holdings LLC, a subsidiary of Castleton Commodities International, LLC for $66 million, subject to working capital, cash and other adjustments. The transaction price did not differ materially from the estimated fair value of our gas trading business at December 31, 2017, but is subject to adjustment based on closing and other contract provisions, including certain transition services. On May 1, 2018, the Company closed a transaction to sell Enstor Gas, LLC, which operated AVANGRID’s gas storage business, to Amphora Gas Storage USA, LLC for $66 million, subject to working capital, cash, and other adjustments. The agreement to sell Enstor Gas, LLC contains, among other things, a transition services agreement which obligates ARHI to provide certain transition services for up to one year after the closing date. In connection with the held for sale classification, we recorded a loss from held for sale measurement of $0.5 million and $15.6 million in the three and nine months ended September 30, 2018, respectively, which is included in Loss from assets held for sale in the condensed consolidated statements of income related to final purchase price negotiations and certain related working capital adjustments. Income (loss) before income tax, adjusted for corporate overhead, attributed to the gas businesses was $(0.3) million and $4.2 million for the three and nine months ended September 30, 2018, respectively, and $(33.7) million and $(54.6) million for the three and nine months ended September 30, 2017, respectively.

The current assets and current liabilities held for sale relating to our gas trading and storage businesses consisted of the following as of December 31, 2017:



	December 31,
As of	2017
(Millions)
Accounts receivable, net	$	137
Derivative assets	25
Fuel and gas in storage	77
Prepayments and other current assets	19
Property, plant and equipment	71
Intangible assets	28
Assets held for sale	$	357

Accounts payable and accrued liabilities	107
Derivative liabilities	14
Other liabilities	16
Liabilities held for sale	$	137

The fair values of the assets held for sale were determined using Level 3 inputs and were estimated based on recent market analysis studies, recent offers, and management has performed its own fair valuation modeling using discounted cash flows updated for market participant assumptions as completed by third party valuation firms. Unobservable inputs obtained from third parties were adjusted as necessary for the condition and attributes of the specific assets.