OTHER ASSETS

6 Months Ended

Jun. 30, 2019

NOTE 8. OTHER ASSETS

Included in other assets were the following:



	June 30, 2019		December 31, 2018		June 30, 2018
	($ in millions)
Supply contracts	$	1,131.4	$	1,099.5	$	1,118.3
Investments in non-consolidated affiliates	—		8.8		7.9
Other	43.1		42.1		43.3
Other assets	$	1,174.5	$	1,150.4	$	1,169.5

On January 1, 2019, we sold our 9.1% limited partnership interest in Bay Gas Storage Company, Ltd. (Bay Gas) for $20.0 million. The sale closed on February 7, 2019 which resulted in a gain of $11.2 million for the six months ended June 30, 2019 which was recorded to other income in the condensed statements of operations. For the three and six months ended June 30, 2018, we recorded a $21.5 million non-cash impairment charge related to an adjustment to the value of our interest in Bay Gas. Bay Gas owns, leases and operates underground gas storage and related pipeline facilities which are used to provide storage in the McIntosh, AL area and delivery of natural gas. The general partner, Sempra Energy (Sempra), announced in the second quarter of 2018 its plan to sell several assets including its 90.9% interest in Bay Gas. In connection with this decision, Sempra recorded an impairment charge related to Bay Gas adjusting the related assets’ carrying values to an estimated fair value. We recorded a reduction in our investment in the non-consolidated affiliate for the proportionate share of the non-cash impairment charge. Olin has no other non-consolidated affiliates.

In connection with the Acquisition, Olin and Dow entered into arrangements for the long-term supply of ethylene by Dow to Olin, pursuant to which, among other things, Olin made upfront payments in order to receive ethylene at producer economics and for certain reservation fees and for the option to obtain additional ethylene at producer economics. During 2016, we exercised one of the options to reserve additional ethylene at producer economics. During 2017, a payment of $209.4 million was made in connection with this option which increased the value of the long-term asset.

On February 27, 2017, we exercised the remaining option to reserve additional ethylene at producer economics from Dow. In connection with the exercise of this option, we also secured a long-term customer arrangement. As a result, an

additional payment will be made to Dow that is not to exceed $493 million, on or about the fourth quarter of 2020. During 2017, as a result of Dow’s Texas 9 ethylene cracker becoming operational, Olin recognized a long-term asset and other liability of $389.2 million, which represented the present value of the additional estimated payment. For the three months ended June 30, 2019, Olin increased the long-term asset and other liability by $50.7 million. The discounted amount of $52.7 million will be recorded as interest expense through the fourth quarter of 2020. For the three months ended June 30, 2019 and 2018, $4.2 million and $4.0 million, respectively, and for the six months ended June 30, 2019 and 2018, $8.2 million and $7.9 million, respectively, of interest expense was recorded for accretion on the 2020 payment discount.

Amortization expense of $9.4 million for both the three months ended June 30, 2019 and 2018 and $18.8 million for both the six months ended June 30, 2019 and 2018 was recognized within cost of goods sold related to these supply contracts and is reflected in depreciation and amortization on the condensed statements of cash flows. The long-term supply contracts are monitored for impairment each reporting period.