16. DISCONTINUED OPERATIONS

On June 20, 2018, NWN Gas Storage, then a wholly owned subsidiary of NW Natural, entered into a Purchase and Sale Agreement (the Agreement) that provides for the sale by NWN Gas Storage of all of the membership interests in Gill Ranch. Gill Ranch owns a 75% interest in the natural gas storage facility located near Fresno, California known as the Gill Ranch Gas Storage Facility. Pacific Gas and Electric Company (PG&E) owns the remaining 25% interest in the Gill Ranch Gas Storage Facility.

The Agreement provides for an initial cash purchase price of $25.0 million (subject to a working capital adjustment), plus potential additional payments to NWN Gas Storage of up to $26.5 million in the aggregate if Gill Ranch achieves certain economic performance levels for the first three full gas storage years (April 1 of one year through March 31 of the following year) occurring after the closing and the remaining portion of the gas storage year during which the closing occurs.

NW Natural expects the transaction to close within 12 months of signing and in 2019. The closing of the transaction is subject to approval by the California Public Utilities Commission (CPUC) and other customary closing conditions. In July 2018, Gill Ranch filed an application with the CPUC for approval of this transaction.

As a result of NW Natural's strategic shift away from the California gas storage market and the significance of Gill Ranch's financial results in 2017, NW Natural has concluded that the pending sale of Gill Ranch qualifies as assets and liabilities held for sale and discontinued operations. As such, the assets and liabilities associated with Gill Ranch have been classified as discontinued operations assets and discontinued operations liabilities, respectively, and, the results of Gill Ranch are presented separately, net of tax, as discontinued operations from the results of continuing operations for all periods presented. The expenses included in the results of discontinued operations are the direct operating expenses incurred by Gill Ranch that may be reasonably segregated from the costs of continuing operations.

The following table presents the carrying amounts of the major components of Gill Ranch that are classified as discontinued operations assets and liabilities on the consolidated balance sheets:



	September 30,				December 31,
In thousands	2018		2017		2017
Assets:
Accounts receivable	$	395	$	1,520	$	2,126
Inventories	661		415		396
Other current assets	107		171		535
Property, plant, and equipment	11,241		235,578		10,816
Less: Accumulated depreciation	7		31,551		—
Other non-current assets	247		51		1
Discontinued operations - current assets ⁽¹⁾	12,644		2,106		3,057
Discontinued operations - non-current assets ⁽¹⁾	—		204,078		10,817
Total discontinued operations assets	$	12,644	$	206,184	$	13,874

Liabilities:
Accounts payable	$	751	$	353	$	1,287
Other current liabilities	405		848		306
Other non-current liabilities	11,847		12,106		12,043
Discontinued operations - current liabilities ⁽¹⁾	13,003		1,201		1,593
Discontinued operations - non-current liabilities ⁽¹⁾	—		12,106		12,043
Total discontinued operations liabilities	$	13,003	$	13,307	$	13,636


⁽¹⁾	The total assets and liabilities of Gill Ranch are classified as current as of September 30, 2018 because it is probable that the sale will be completed within one year.

The following table presents the operating results of Gill Ranch, which was reported within the gas storage segment historically, and is presented net of tax on the consolidated statements of comprehensive income:



	Three Months Ended September 30,						Nine Months Ended September 30,
In thousands, except per share data	2018			2017			2018			2017
Revenues	$	748		$	1,977		$	2,831		$	5,338
Expenses:
Operations and maintenance	1,549			1,248			4,139			5,169
Depreciation and amortization	106			1,131			324			3,394
Other expenses and interest	(24		)	603			790			1,799
Total expenses	1,631			2,982			5,253			10,362
Loss from discontinued operations before income taxes	(883		)	(1,005		)	(2,422		)	(5,024		)
Income tax benefit	233			397			639			1,983
Loss from discontinued operations, net of tax	$	(650	)	$	(608	)	$	(1,783	)	$	(3,041	)

Loss from discontinued operations per share of common stock:
Basic	$	(0.02	)	$	(0.02	)	$	(0.06	)	$	(0.11	)
Diluted	$	(0.02	)	$	(0.02	)	$	(0.06	)	$	(0.11	)