2018 Q4 Form 10-Q Financial Statement

#000150446118000053 Filed on November 08, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3
Revenue $2.295B $2.216B $1.452B
YoY Change 14.98% 52.59% -51.69%
Cost Of Revenue $2.049B $2.051B $1.280B
YoY Change 13.37% 60.29% -56.15%
Gross Profit $246.7M $164.2M $172.2M
YoY Change 30.37% -4.63% 99.29%
Gross Profit Margin 10.75% 7.41% 11.86%
Selling, General & Admin $24.80M $39.30M $21.20M
YoY Change -6.06% 85.38% -24.01%
% of Gross Profit 10.05% 23.93% 12.31%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $55.61M $55.16M $26.14M
YoY Change 118.12% 110.99% -8.92%
% of Gross Profit 22.54% 33.58% 15.18%
Operating Expenses $139.7M $150.4M $129.4M
YoY Change 6.8% 16.23% -15.76%
Operating Profit $144.4M $14.35M -$119.9M
YoY Change 43.65% -111.97% 234.59%
Interest Expense $39.15M $41.36M $50.12M
YoY Change -24.27% -17.48% 49.87%
% of Operating Profit 27.1% 288.27%
Other Income/Expense, Net $1.187M $1.301M $1.637M
YoY Change -36.9% -20.53% -21.34%
Pretax Income $98.18M -$25.33M -$164.2M
YoY Change 204.99% -84.58% 148.11%
Income Tax $980.0K $691.0K $49.00K
% Of Pretax Income 1.0%
Net Earnings $110.8M $355.5M -$173.4M
YoY Change 97.02% -305.05% 160.32%
Net Earnings / Revenue 4.83% 16.04% -11.94%
Basic Earnings Per Share
Diluted Earnings Per Share $879.4K $2.828M -$1.430M
COMMON SHARES
Basic Shares Outstanding 123.7M shares 122.1M shares 121.4M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $23.00M $36.40M $18.40M
YoY Change -19.3% 97.83% -21.37%
Cash & Equivalents $23.03M $36.37M $15.72M
Short-Term Investments
Other Short-Term Assets $335.0M $159.6M $112.5M
YoY Change 46.29% 41.87% 1.44%
Inventory $572.9M $679.1M $570.7M
Prepaid Expenses
Receivables $1.006B $1.367B $841.6M
Other Receivables $12.60M $17.90M $3.000M
Total Short-Term Assets $1.950B $2.260B $1.546B
YoY Change -1.04% 46.14% 23.67%
LONG-TERM ASSETS
Property, Plant & Equipment $1.726B $1.707B $1.768B
YoY Change 1.02% -3.5% 0.74%
Goodwill $1.183B $1.272B $1.339B
YoY Change -9.95% -5.06% -8.76%
Intangibles $922.8M $966.9M $1.113B
YoY Change -13.35% -13.09% -6.52%
Long-Term Investments $4.797M $800.0K $198.3M
YoY Change -70.69% -99.6% 4.0%
Other Assets $170.1M $176.1M $240.6M
YoY Change -29.93% -26.78% 10.48%
Total Long-Term Assets $4.006B $4.126B $4.663B
YoY Change -7.82% -11.53% -3.32%
TOTAL ASSETS
Total Short-Term Assets $1.950B $2.260B $1.546B
Total Long-Term Assets $4.006B $4.126B $4.663B
Total Assets $5.956B $6.385B $6.210B
YoY Change -5.71% 2.83% 2.23%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $906.0M $1.045B $635.3M
YoY Change 4.52% 64.55% 24.06%
Accrued Expenses $85.00M $88.70M $121.6M
YoY Change -13.62% -27.06% 27.87%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $339.9M $716.2M $42.40M
YoY Change 10200.0% 1589.15% 430.0%
Total Short-Term Liabilities $1.565B $2.101B $989.9M
YoY Change 34.37% 112.29% 23.91%
LONG-TERM LIABILITIES
Long-Term Debt $1.878B $1.816B $2.994B
YoY Change -35.74% -39.34% -2.27%
Other Long-Term Liabilities $74.90M $86.40M $175.9M
YoY Change -55.49% -50.88% -11.17%
Total Long-Term Liabilities $74.90M $86.40M $175.9M
YoY Change -55.49% -50.88% -11.17%
TOTAL LIABILITIES
Total Short-Term Liabilities $1.565B $2.101B $989.9M
Total Long-Term Liabilities $74.90M $86.40M $175.9M
Total Liabilities $1.640B $2.188B $1.166B
YoY Change 23.02% 87.67% 16.94%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $2.361B $2.303B $2.040B
YoY Change
Total Liabilities & Shareholders Equity $5.956B $6.385B $6.210B
YoY Change -5.71% 2.83% 2.24%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3
OPERATING ACTIVITIES
Net Income $110.8M $355.5M -$173.4M
YoY Change 97.02% -305.05% 160.32%
Depreciation, Depletion And Amortization $55.61M $55.16M $26.14M
YoY Change 118.12% 110.99% -8.92%
Cash From Operating Activities $203.6M -$46.80M $9.100M
YoY Change -2851.35% -614.29% -35.46%
INVESTING ACTIVITIES
Capital Expenditures -$110.5M -$120.8M -$19.00M
YoY Change 209.52% 535.79% -69.06%
Acquisitions
YoY Change
Other Investing Activities $279.8M $757.5M -$80.00M
YoY Change 12.37% -1046.88% -18.86%
Cash From Investing Activities $169.3M $636.7M -$99.00M
YoY Change -20.63% -743.13% -38.13%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -386.2M -567.3M 88.90M
YoY Change 95.74% -738.13% -43.88%
NET CHANGE
Cash From Operating Activities 203.6M -46.80M 9.100M
Cash From Investing Activities 169.3M 636.7M -99.00M
Cash From Financing Activities -386.2M -567.3M 88.90M
Net Change In Cash -13.30M 22.60M -1.000M
YoY Change -254.65% -2360.0% -108.0%
FREE CASH FLOW
Cash From Operating Activities $203.6M -$46.80M $9.100M
Capital Expenditures -$110.5M -$120.8M -$19.00M
Free Cash Flow $314.1M $74.00M $28.10M
YoY Change 1009.89% 163.35% -62.78%

Facts In Submission

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us-gaap Gain Loss On Disposition Of Assets1
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us-gaap Gain Loss On Sales Of Assets And Asset Impairment Charges
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us-gaap Income Loss From Continuing Operations
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us-gaap Income Loss From Continuing Operations
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us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
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us-gaap Income Loss From Continuing Operations Including Portion Attributable To Noncontrolling Interest
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us-gaap Income Loss From Continuing Operations Net Of Tax Per Outstanding Limited Partnership Unit Diluted
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us-gaap Income Loss From Continuing Operations Per Outstanding Limited Partnership Unit Basic Net Of Tax
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us-gaap Income Loss From Continuing Operations Per Outstanding Limited Partnership Unit Basic Net Of Tax
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us-gaap Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity
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408447000 USD
us-gaap Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity
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404318000 USD
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us-gaap Income Loss From Discontinued Operations Net Of Tax Per Outstanding Limited Partnership Unit Diluted1
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3.33
us-gaap Income Loss From Discontinued Operations Net Of Tax Per Outstanding Limited Partnership Unit Diluted1
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3.32
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2170000 USD
us-gaap Income Loss From Equity Method Investments
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4089000 USD
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us-gaap Income Loss From Equity Method Investments
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598000 USD
CY2017Q3 us-gaap Income Tax Expense Benefit
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us-gaap Income Tax Expense Benefit
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505000 USD
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691000 USD
us-gaap Income Tax Expense Benefit
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1342000 USD
us-gaap Income Taxes Paid Net
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1473000 USD
us-gaap Income Taxes Paid Net
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1368000 USD
us-gaap Increase Decrease In Accounts Payable
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us-gaap Net Income Loss From Discontinued Operations Available To Common Shareholders Basic
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us-gaap Noncontrolling Interest Increase From Sale Of Parent Equity Interest
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us-gaap Preferred Stock Dividend Payment Terms
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us-gaap Preferred Stock Dividends Income Statement Impact
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us-gaap Preferred Stock Dividends Income Statement Impact
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0 USD
us-gaap Proceeds From Divestiture Of Businesses
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4378000 USD
us-gaap Proceeds From Equity Method Investment Dividends Or Distributions Return Of Capital
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0 USD
us-gaap Proceeds From Issuance Of Preferred Limited Partners Units
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202755000 USD
us-gaap Proceeds From Issuance Of Preferred Limited Partners Units
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22575000 USD
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us-gaap Profit Loss
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us-gaap Profit Loss
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CY2018Q1 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
1518607000 USD
CY2018Q3 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
1706612000 USD
us-gaap Provision For Doubtful Accounts
ProvisionForDoubtfulAccounts
705000 USD
us-gaap Provision For Doubtful Accounts
ProvisionForDoubtfulAccounts
163000 USD
us-gaap Repayments Of Long Term Lines Of Credit
RepaymentsOfLongTermLinesOfCredit
657500000 USD
us-gaap Repayments Of Long Term Lines Of Credit
RepaymentsOfLongTermLinesOfCredit
2153500000 USD
us-gaap Repayments Of Other Long Term Debt
RepaymentsOfOtherLongTermDebt
552000 USD
us-gaap Repayments Of Other Long Term Debt
RepaymentsOfOtherLongTermDebt
326000 USD
CY2018Q3 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
95504000 USD
CY2018Q3 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
147472000 USD
CY2018Q3 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
115403000 USD
CY2018Q3 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
111376000 USD
CY2018Q3 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
110013000 USD
CY2018Q3 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
335065000 USD
CY2018Q3 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
914833000 USD
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod
P6M
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod
P1Y
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod
P1Y
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod
P1Y
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod
P1Y
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod
P1Y
us-gaap Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Period
RevenueRemainingPerformanceObligationExpectedTimingOfSatisfactionPeriod
CY2017Q3 us-gaap Sales Revenue Net
SalesRevenueNet
3876676000 USD
us-gaap Water Production Costs
WaterProductionCosts
22161000 USD
CY2017Q3 us-gaap Weighted Average Limited Partnership Units Outstanding
WeightedAverageLimitedPartnershipUnitsOutstanding
121314636 shares
us-gaap Weighted Average Limited Partnership Units Outstanding
WeightedAverageLimitedPartnershipUnitsOutstanding
120927400 shares
CY2018Q3 us-gaap Weighted Average Limited Partnership Units Outstanding
WeightedAverageLimitedPartnershipUnitsOutstanding
122380197 shares
us-gaap Weighted Average Limited Partnership Units Outstanding
WeightedAverageLimitedPartnershipUnitsOutstanding
121964593 shares
CY2017Q3 us-gaap Weighted Average Limited Partnership Units Outstanding Diluted
WeightedAverageLimitedPartnershipUnitsOutstandingDiluted
121314636 shares
us-gaap Weighted Average Limited Partnership Units Outstanding Diluted
WeightedAverageLimitedPartnershipUnitsOutstandingDiluted
120927400 shares
CY2018Q3 us-gaap Weighted Average Limited Partnership Units Outstanding Diluted
WeightedAverageLimitedPartnershipUnitsOutstandingDiluted
122380197 shares
us-gaap Sales Revenue Net
SalesRevenueNet
7607381000 USD
CY2018Q3 us-gaap Sales Revenue Net
SalesRevenueNet
6654634000 USD
us-gaap Sales Revenue Net
SalesRevenueNet
12499068000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
14886000 USD
us-gaap Share Based Compensation
ShareBasedCompensation
24730000 USD
us-gaap Stock Issued During Period Value Conversion Of Convertible Securities
StockIssuedDuringPeriodValueConversionOfConvertibleSecurities
2000 USD
CY2018Q1 us-gaap Taxes Payable Current
TaxesPayableCurrent
40829000 USD
CY2018Q3 us-gaap Taxes Payable Current
TaxesPayableCurrent
33521000 USD
CY2018Q1 us-gaap Temporary Equity Carrying Amount Including Portion Attributable To Noncontrolling Interests
TemporaryEquityCarryingAmountIncludingPortionAttributableToNoncontrollingInterests
82576000 USD
CY2018Q3 us-gaap Temporary Equity Carrying Amount Including Portion Attributable To Noncontrolling Interests
TemporaryEquityCarryingAmountIncludingPortionAttributableToNoncontrollingInterests
104362000 USD
CY2018Q1 us-gaap Unamortized Debt Issuance Expense
UnamortizedDebtIssuanceExpense
20645000 USD
CY2018Q3 us-gaap Unamortized Debt Issuance Expense
UnamortizedDebtIssuanceExpense
18108000 USD
CY2017Q3 us-gaap Water Production Costs
WaterProductionCosts
2674000 USD
us-gaap Water Production Costs
WaterProductionCosts
2827000 USD
CY2018Q3 us-gaap Water Production Costs
WaterProductionCosts
7892000 USD
us-gaap Weighted Average Limited Partnership Units Outstanding Diluted
WeightedAverageLimitedPartnershipUnitsOutstandingDiluted
121964593 shares
us-gaap Nature Of Operations
NatureOfOperations
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Organization and Operations</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">NGL Energy Partners LP (&#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; or the &#8220;Partnership&#8221;) is </font><font style="font-family:inherit;font-size:10pt;">a Delaware limited partnership</font><font style="font-family:inherit;font-size:10pt;">. </font><font style="font-family:inherit;font-size:10pt;">NGL Energy Holdings LLC serves as our general partner.</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">At</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">our operations included:</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our Crude Oil Logistics segment purchases crude oil from producers and transports it to refineries or for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs, and provides storage, terminaling, trucking, marine and pipeline transportation services through its owned assets.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our Water Solutions segment provides services for the treatment and disposal of wastewater generated from crude oil and natural gas production and for the disposal of solids such as tank bottoms, drilling fluids and drilling muds and performs truck and frac tank washouts. In addition, our Water Solutions segment sells the recovered hydrocarbons that result from performing these services and it also sells freshwater to producers for exploration and production activities.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our Liquids segment supplies natural gas liquids to retailers, wholesalers, refiners, and petrochemical plants throughout the United States and in Canada using its leased underground storage and fleet of leased railcars, markets regionally through its</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">19</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">owned terminals throughout the United States, and provides terminaling and storage services at its salt dome storage facility joint venture in Utah.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our Refined Products and Renewables segment conducts gasoline, diesel, ethanol, and biodiesel marketing operations, purchases refined petroleum and renewable products primarily in the Gulf Coast, Southeast and Midwest regions of the United States and schedules them for delivery at various locations throughout the country. In addition, in certain storage locations, our Refined Products and Renewables segment may also purchase unfinished gasoline blending components for subsequent blending into finished gasoline to supply our marketing business as well as third parties.</font></div></td></tr></table><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Recent Developments</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On July 10, 2018, we completed the sale of virtually all of our Retail Propane segment to Superior Plus Corp. (&#8220;Superior&#8221;)</font><font style="font-family:inherit;font-size:10pt;"> for total consideration of </font><font style="font-family:inherit;font-size:10pt;">$896.5 million</font><font style="font-family:inherit;font-size:10pt;"> in cash after adjusting for estimated working capital. Accordingly, upon satisfaction of the significant closing conditions for this transaction during the month of June 2018, the assets, liabilities and redeemable noncontrolling interest of the Retail Propane segment were classified as held for sale in our unaudited condensed consolidated balance sheets. This sale included all </font><font style="font-family:inherit;font-size:10pt;">three</font><font style="font-family:inherit;font-size:10pt;"> of the retail propane businesses we acquired during the three months ended June 30, 2018 (see </font><font style="font-family:inherit;font-size:10pt;font-weight:normal;">Note&#160;4</font><font style="font-family:inherit;font-size:10pt;">). We retained our </font><font style="font-family:inherit;font-size:10pt;">50%</font><font style="font-family:inherit;font-size:10pt;"> ownership interest in Victory Propane, LLC (&#8220;Victory Propane&#8221;), which we subsequently sold on August 14, 2018 (see </font><font style="font-family:inherit;font-size:10pt;font-weight:normal;">Note&#160;2</font><font style="font-family:inherit;font-size:10pt;">). This transaction, combined with the sale of a portion of our Retail Propane segment to DCC LPG (&#8220;DCC&#8221;) on March 30, 2018, represents a strategic shift in our operations and will have a significant effect on our operations and financial results going forward. Accordingly, the results of operations and cash flows related to the entire Retail Propane segment (including equity in earnings of Victory Propane) have been classified as discontinued operations for all periods presented and prior periods have been retrospectively adjusted in the unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Use of Estimates</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amount of assets and liabilities reported at the date of the consolidated financial statements and the amount of revenues and expenses reported during the periods presented.</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Critical estimates we make in the preparation of our unaudited condensed consolidated financial statements include, among others, determining the fair value of assets and liabilities acquired in business combinations, the fair value of derivative instruments, the collectibility of accounts receivable, the recoverability of inventories, useful lives and recoverability of property, plant and equipment and amortizable intangible assets, the impairment of long-lived assets and goodwill, the fair value of asset retirement obligations, the value of equity-based compensation, accruals for environmental matters and estimating certain revenues. Although we believe these estimates are reasonable, actual results could differ from those estimates.</font></div></div>

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