Discontinued Operations

6 Months Ended

Jun. 30, 2021

Jun. 30, 2019

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Discontinued Operations

DISCONTINUED OPERATIONS

NW Holdings

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 provided 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.

On December 4, 2020, NWN Gas Storage closed the sale of all of the membership interests in Gill Ranch and received payment of the initial cash purchase price of $13.5 million less the $1.0 million deposit previously paid. Furthermore, additional payments to NWN Gas Storage may be made subject to a maximum amount of $15.0 million in the aggregate (subject to a working capital adjustment) based on the economic performance of Gill Ranch for each full gas storage year (April 1 of one year through March 31 of the following year) occurring after the closing and the remaining portion of the 2020-2021 gas storage year and will continue until such time as the maximum amount has been paid. The fair value of this arrangement at the closing date was zero based on a discounted cash flow forecast. Subsequent changes in the fair value will be recorded in earnings. The completion of the sale resulted in an after-tax gain of $5.9 million for the year ended December 31, 2020.

As a result of the disposition of the membership interests in Gill Ranch, there were no assets or liabilities classified as held for sale at June 30, 2021 or December 31, 2020 and there was no activity in the consolidated statement of comprehensive income for the three and six months ended June 30, 2021. The assets and liabilities of the discontinued operations classified as held for sale in the consolidated balance sheet at June 30, 2020 include the following:

	NW Holdings Discontinued Operations
In thousands	June 30, 2020
Assets:
Accounts receivable	$	1,621
Inventories	821
Other current assets	250
Property, plant, and equipment, net	13,328
Operating lease right of use asset	118
Other non-current assets	254
Total discontinued operations assets - current assets (1)	$	16,392
Liabilities:
Accounts payable	$	999
Other current liabilities	1,119
Operating lease liabilities	112
Other non-current liabilities	11,344
Total discontinued operations liabilities - current liabilities (1)	$	13,574

(1)     The total assets and liabilities of Gill Ranch were classified as current because it was probable that the sale would be completed within one year.

The following table presents the operating results of Gill Ranch and is presented net of tax on the consolidated statements of comprehensive income:

	NW Holdings Discontinued Operations
	Three Months Ended June 30,		Six Months Ended June 30,
In thousands, except per share data	2020		2020
Revenues	$	3,374	$	4,282
Expenses:
Operations and maintenance	2,604		4,184
General taxes	53		100
Depreciation and amortization	106		212
Other expenses and interest	228		459
Total expenses	2,991		4,955
Income (loss) from discontinued operations before income taxes	383		(673)
Income tax expense (benefit)	103		(175)
Income (loss) from discontinued operations, net of tax	$	280	$	(498)
Earnings (loss) from discontinued operations per share of common stock:
Basic	$	0.01	$	(0.01)
Diluted	$	0.01	$	(0.01)

Northwest Holdings [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Disposal Groups, Including Discontinued Operations

The following table presents the operating results of Gill Ranch and is presented net of tax on the consolidated statements of comprehensive income:

	NW Holdings Discontinued Operations
	Three Months Ended June 30,		Six Months Ended June 30,
In thousands, except per share data	2020		2020
Revenues	$	3,374	$	4,282
Expenses:
Operations and maintenance	2,604		4,184
General taxes	53		100
Depreciation and amortization	106		212
Other expenses and interest	228		459
Total expenses	2,991		4,955
Income (loss) from discontinued operations before income taxes	383		(673)
Income tax expense (benefit)	103		(175)
Income (loss) from discontinued operations, net of tax	$	280	$	(498)
Earnings (loss) from discontinued operations per share of common stock:
Basic	$	0.01	$	(0.01)
Diluted	$	0.01	$	(0.01)

Northwest Holdings [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Disposal Groups, Including Discontinued Operations

	NW Holdings Discontinued Operations
In thousands	June 30, 2020
Assets:
Accounts receivable	$	1,621
Inventories	821
Other current assets	250
Property, plant, and equipment, net	13,328
Operating lease right of use asset	118
Other non-current assets	254
Total discontinued operations assets - current assets (1)	$	16,392
Liabilities:
Accounts payable	$	999
Other current liabilities	1,119
Operating lease liabilities	112
Other non-current liabilities	11,344
Total discontinued operations liabilities - current liabilities (1)	$	13,574

(1)     The total assets and liabilities of Gill Ranch were classified as current because it was probable that the sale would be completed within one year.