Segment Reporting

9 Months Ended

Sep. 30, 2018

Segment ReportingHistorically, our three reporting segments have been: (i) crude oil marketing, transportation and storage, (ii) tank truck transportation of liquid chemicals and dry bulk and ISO tank container storage and transportation and (iii) upstream crude oil and natural gas exploration and production. Our upstream crude oil and natural gas exploration and production wholly owned subsidiary filed for bankruptcy in April 2017, and as a result of our loss of control of the wholly owned subsidiary, AREC was deconsolidated and is accounted for under the cost method of accounting. AREC remained a reportable segment until its deconsolidation, effective April 30, 2017.

Information concerning our various business activities was as follows for the periods indicated (in thousands):


	Reporting Segments
	Marketing		Transportation		Oil and Gas and Other		Total

Three Months Ended September 30, 2018
Revenues	$	453,626	$	14,265	$	—	$	467,891
Segment operating (losses) earnings ⁽¹⁾	2,982		790		—		3,772
Depreciation, depletion and amortization	1,277		1,063		—		2,340
Property and equipment additions ⁽²⁾	612		4,416		—		5,028

Three Months Ended September 30, 2017
Revenues	$	282,229	$	13,082	$	—	$	295,311
Segment operating (losses) earnings ⁽¹⁾⁽⁴⁾	2,412		(915)		—		1,497
Depreciation, depletion and amortization	1,911		1,329		—		3,240
Property and equipment additions ⁽²⁾	178		179		—		357

Nine Months Ended September 30, 2018
Revenues	$	1,266,055	$	41,509	$	—	$	1,307,564
Segment operating (losses) earnings ⁽¹⁾	11,712		2,002		—		13,714
Depreciation, depletion and amortization	4,110		2,904		—		7,014
Property and equipment additions ⁽²⁾⁽³⁾	1,682		6,061		13		7,756

Nine Months Ended September 30, 2017
Revenues	$	872,020	$	40,153	$	1,427	$	913,600
Segment operating (losses) earnings ⁽¹⁾⁽⁴⁾	5,496		(920)		53		4,629
Depreciation, depletion and amortization	5,957		4,392		423		10,772
Property and equipment additions ⁽²⁾	451		189		1,825		2,465

_______________

(1) Our marketing segment’s operating earnings included inventory liquidation gains of $0.1 million and $2.5 million for the three and nine months ended September 30, 2018, respectively, inventory valuation gains of $2.0 million for the three months ended September 30, 2017 and inventory valuation losses of $0.1 million for the nine months ended September 30, 2017.

(2) Our marketing segment’s property and equipment additions do not include approximately $1.2 million and $1.8 million of tractors acquired during the nine months ended September 30, 2018 and 2017, respectively, under capital leases. See Note 12 for further information.

(3) During the nine months ended September 30, 2018, we had $13 thousand of property and equipment additions for leasehold improvements at our corporate headquarters level, which is not attributed or allocated to any of our reporting segments.

(4) Segment operating (losses) earnings for the three and nine months ended September 30, 2017 included approximately $0.4 million of costs related to a voluntary early retirement program that was implemented in August 2017.

Segment operating earnings reflect revenues net of operating costs and depreciation, depletion and amortization expense and are reconciled to earnings (losses) before income taxes, as follows for the periods indicated (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,

	2018		2017		2018		2017

Segment operating earnings	$	3,772	$	1,497	$	13,714	$	4,629
General and administrative ⁽¹⁾	(1,533)		(2,787)		(6,100)		(6,884)
Operating earnings (losses)	2,239		(1,290)		7,614		(2,255)
Loss on deconsolidation of subsidiary	—		(1,870)		—		(3,505)
Impairment of investment in unconsolidated
affiliate	—		(2,500)		—		(2,500)

Interest income	601		370		1,486		789
Interest expense	(26)		(8)		(60)		(10)
(Losses) earnings before income taxes	$	2,814	$	(5,298)	$	9,040	$	(7,481)

_______________

(1) General and administrative expenses for the three and nine months ended September 30, 2017 included approximately $1.0 million of costs related to a voluntary early retirement program we implemented in August 2017.

Identifiable assets by industry segment were as follows at the dates indicated (in thousands):


	September 30,		December 31,
	2018		2017

Reporting segment:
Marketing	$	143,427	$	134,745
Transportation	32,049		29,069
Oil and Gas⁽¹⁾	425		425
Cash and other assets	137,411		118,465
Total assets	$	313,312	$	282,704

_______________

(1) Amounts represent our cost method investment in this segment.

Intersegment sales are insignificant. Other identifiable assets are primarily corporate cash, corporate accounts receivable and properties not identified with any specific segment of our business. Accounting policies for transactions between reportable segments are consistent with applicable accounting policies as disclosed herein.