Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ADAMS RESOURCES & ENERGY, INC. | |
Entity Central Index Key | 2,178 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Entity Common Stock, Shares Outstanding | 4,217,596 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Marketing | $ 282,229 | $ 243,704 | $ 872,020 | $ 758,627 |
Transportation | 13,082 | 12,310 | 40,153 | 39,517 |
Oil and natural gas | 0 | 863 | 1,427 | 2,427 |
Total revenues | 295,311 | 256,877 | 913,600 | 800,571 |
Costs and expenses: | ||||
Marketing | 277,906 | 240,021 | 860,567 | 737,858 |
Transportation | 12,668 | 11,039 | 36,681 | 33,537 |
Oil and natural gas | 0 | 1,011 | 951 | 2,421 |
General and administrative | 2,787 | 2,114 | 6,884 | 6,252 |
Depreciation, depletion and amortization | 3,240 | 4,514 | 10,772 | 14,385 |
Total costs and expenses | 296,601 | 258,699 | 915,855 | 794,453 |
Operating earnings (losses) | (1,290) | (1,822) | (2,255) | 6,118 |
Other income (expense): | ||||
Loss on deconsolidation of subsidiary (Note 3) | (1,870) | 0 | (3,505) | 0 |
Impairment of investments in unconsolidated affiliates | (2,500) | (1,732) | (2,500) | (1,732) |
Losses from equity investment | 0 | (68) | 0 | (468) |
Interest income | 370 | 245 | 789 | 444 |
Interest expense | (8) | 0 | (10) | 0 |
Total other income (expense), net | (4,008) | (1,555) | (5,226) | (1,756) |
(Losses) earnings before income taxes | (5,298) | (3,377) | (7,481) | 4,362 |
Income tax benefit (provision) | 2,265 | 1,224 | 3,306 | (1,681) |
Net (losses) earnings | $ (3,033) | $ (2,153) | $ (4,175) | $ 2,681 |
Earnings (losses) per share: | ||||
Basic and diluted net (losses) earnings per common share (in dollars per share) | $ (0.72) | $ (0.51) | $ (0.99) | $ 0.64 |
Weighted average number of common shares outstanding (in shares) | 4,218 | 4,218 | 4,218 | 4,218 |
Dividends per common share (in dollars per share) | $ 0.22 | $ 0.22 | $ 0.66 | $ 0.66 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 99,449 | $ 87,342 |
Accounts receivable, net of allowance for doubtful accounts of $216 and $225, respectively | 81,277 | 87,162 |
Inventory | 22,398 | 13,070 |
Derivative assets | 0 | 112 |
Income tax receivable | 4,147 | 2,735 |
Prepayments and other current assets | 1,168 | 2,097 |
Total current assets | 208,439 | 192,518 |
Property and equipment, net | 31,958 | 46,325 |
Investments in unconsolidated affiliates | 3,200 | 2,500 |
Cash deposits and other assets | 4,932 | 5,529 |
Total assets | 248,529 | 246,872 |
Current liabilities: | ||
Accounts payable | 89,339 | 79,897 |
Accounts payable – related party | 0 | 53 |
Derivative liabilities | 0 | 64 |
Current portion of capital lease obligations | 306 | 0 |
Other current liabilities | 5,860 | 6,060 |
Total current liabilities | 95,505 | 86,074 |
Other long-term liabilities: | ||
Asset retirement obligations | 1,263 | 2,329 |
Capital lease obligations | 1,465 | 0 |
Deferred taxes and other liabilities | 5,943 | 7,157 |
Total liabilities | 104,176 | 95,560 |
Commitments and contingencies (Note 10) | ||
Shareholders’ equity: | ||
Preferred stock - $1.00 par value, 960,000 shares authorized, none outstanding | 0 | 0 |
Common stock - $.10 par value, 7,500,000 shares authorized, 4,217,596 shares outstanding | 422 | 422 |
Contributed capital | 11,693 | 11,693 |
Retained earnings | 132,238 | 139,197 |
Total shareholders’ equity | 144,353 | 151,312 |
Total liabilities and shareholders’ equity | $ 248,529 | $ 246,872 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Allowance for doubtful accounts | $ 216 | $ 225 |
Shareholders’ equity: | ||
Preferred stock - par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock - shares authorized (in shares) | 960,000 | 960,000 |
Preferred stock - shares outstanding (in shares) | 0 | 0 |
Common stock - par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock - shares authorized (in shares) | 7,500,000 | 7,500,000 |
Common stock - shares outstanding (in shares) | 4,217,596 | 4,217,596 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities: | ||
Net (losses) earnings | $ (4,175) | $ 2,681 |
Adjustments to reconcile net (losses) earnings to net cash provided by (used in) operating activities: | ||
Depreciation, depletion and amortization | 10,772 | 14,385 |
Gains on sale of property | (347) | (1,948) |
Impairment of oil and natural gas properties | 3 | 87 |
Provision for doubtful accounts | (9) | 19 |
Deferred income taxes | (1,198) | (1,170) |
Net change in fair value contracts | 48 | (305) |
Losses from equity investment | 0 | 468 |
Impairment of investments in unconsolidated affiliates | 2,500 | 1,732 |
Loss on deconsolidation of subsidiary (Note 3) | 3,505 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | 5,228 | (1,767) |
Accounts receivable/payable, affiliates | 266 | 0 |
Inventories | (9,328) | (8,395) |
Income tax receivable | (1,412) | 113 |
Prepayments and other current assets | 927 | (1,570) |
Accounts payable | 9,482 | (8,795) |
Accrued liabilities | 465 | 1,378 |
Other | (240) | (252) |
Net cash provided by (used in) operating activities | 16,487 | (3,339) |
Investing activities: | ||
Property and equipment additions | (2,465) | (7,186) |
Proceeds from property sales | 430 | 3,536 |
Investments in unconsolidated affiliates | 0 | (4,700) |
Insurance and state collateral (deposits) refunds | 439 | 1,081 |
Net cash used in investing activities | (1,596) | (7,269) |
Financing activities: | ||
Dividends paid on common stock | (2,784) | (2,784) |
Net cash used in financing activities | (2,784) | (2,784) |
Increase (decrease) in cash and cash equivalents | 12,107 | (13,392) |
Cash and cash equivalents at beginning of period | 87,342 | 91,877 |
Cash and cash equivalents at end of period | $ 99,449 | $ 78,485 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Contributed Capital | Retained Earnings |
Beginning balance at Dec. 31, 2015 | $ 152,510 | $ 422 | $ 11,693 | $ 140,395 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net (losses) earnings | 2,681 | 2,681 | ||
Dividends paid on common stock | (2,784) | (2,784) | ||
Ending balance at Sep. 30, 2016 | 152,407 | 422 | 11,693 | 140,292 |
Beginning balance at Dec. 31, 2016 | 151,312 | 422 | 11,693 | 139,197 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net (losses) earnings | (4,175) | (4,175) | ||
Dividends paid on common stock | (2,784) | (2,784) | ||
Ending balance at Sep. 30, 2017 | $ 144,353 | $ 422 | $ 11,693 | $ 132,238 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization Adams Resources & Energy, Inc. (“AE”), a Delaware corporation organized in 1973, and its subsidiaries are primarily engaged in the business of crude oil marketing, transportation and storage, tank truck transportation of liquid chemicals and dry bulk and ISO tank container storage and transportation. Unless the context requires otherwise, references to “we,” “us,” “our,” the “Company” or “AE” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries. On April 21, 2017, one of our wholly owned subsidiaries, Adams Resources Exploration Corporation (“AREC”), filed a voluntary petition in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”), Case No. 17-10866 (KG). AREC operated its business and managed its properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and order of the Bankruptcy Court. AE was the primary creditor in the Chapter 11 process. On May 3, 2017, AREC filed a motion with the Bankruptcy Court for approval of an auction process to sell its assets pursuant to Section 363 of the Bankruptcy Code and for approval to engage Oil & Gas Asset Clearinghouse to conduct the auction. The auction commenced on July 19, 2017 to determine the highest or otherwise best bid to acquire all or substantially all of AREC’s assets. During the third quarter of 2017, Bankruptcy Court approval was obtained on three asset purchase and sales agreements with three unaffiliated parties, and AREC closed on the sales of substantially all of its assets (see Note 3 for further information). As a result of AREC’s voluntary bankruptcy filing in April 2017, we no longer controlled the operations of AREC; therefore, we deconsolidated AREC effective with the bankruptcy filing and recorded our investment in AREC under the cost method (see Note 3 for further information). We anticipate completing the bankruptcy process with a confirmed plan during the fourth quarter of 2017. Over the past few years, we have de-emphasized our upstream operations and do not expect this Chapter 11 filing by AREC to have a material adverse impact on any of our core businesses. Historically, we have operated and reported in three business segments: (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) oil and natural gas exploration and production. We exited the oil and natural gas exploration and production business during the third quarter of 2017 with the sale of our oil and natural gas exploration and production assets. Basis of Presentation Our results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of results expected for the full year of 2017 . In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation. The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the “ 2016 Form 10-K”) filed with the SEC on March 31, 2017. All significant intercompany transactions and balances have been eliminated in consolidation. Reclassifications Certain reclassifications have been made in the prior year’s financial statements to conform to classifications used in the current year. Losses from equity investment has been classified as a component of other income (expense), net, with its tax effect included in the income tax benefit (provision) line item on our condensed consolidated statements of operations. Use of Estimates The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates. |
General Accounting and Disclosu
General Accounting and Disclosure Matters | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
General Accounting and Disclosure Matters | General Accounting and Disclosure Matters Fair Value Measurements The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate such fair values. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy. Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 8 for further information). Investments in Unconsolidated Affiliates At September 30, 2017, we had no remaining balances in our medical-related investments. We currently do not have any plans to pursue additional medical-related investments. Bencap . Through February 2017, we owned a 30% member interest in Bencap LLC (“Bencap”). Bencap provides medical insurance brokerage and medical claims auditing services to employers utilizing ERISA governed employee benefit plans. We accounted for our investment in Bencap under the equity method of accounting. Underlying the terms of the investment agreement, Bencap had the option to request borrowings from us of up to $1.5 million (on or after December 5, 2016 but before October 31, 2018) that we were required to provide or forfeit our 30% member interest. During 2016 , we determined that we were unlikely to provide additional funding to Bencap due to Bencap’s lower than projected revenue growth and operating losses since investment inception. During the third quarter of 2016, we recognized an after-tax net loss of $1.4 million to write-off our investment in Bencap, which consisted of a pre-tax impairment charge of approximately $1.7 million , pre-tax losses from the equity method investment of $0.5 million and an income tax benefit of $0.8 million . In February 2017, in accordance with the terms of the investment agreement, Bencap requested additional funding of approximately $0.5 million from us. We declined the additional funding request and as a result, forfeited our 30% member interest in Bencap. At September 30, 2017 , we had no further ownership interest in Bencap. VestaCare . We own an approximate 15% equity interest (less than 3% voting interest) in VestaCare, Inc., a California corporation (“VestaCare”). VestaCare provides an array of software as a service (“SaaS”) electronic payment technologies to medical providers, payers and patients including VestaCare’s most recent product offering, VestaPay™. VestaPay™ allows medical care providers to structure fully automated and dynamically updating electronic payment plans for their patients. We account for this investment under the cost method of accounting. During the third quarter of 2017, we reviewed our investment in VestaCare and determined that the current projected operating results did not support the carrying value of the investment. As such, we recognized a pre-tax impairment charge of $2.5 million during the third quarter of 2017 and wrote-off our investment in VestaCare. At September 30, 2017, we continue to own an approximate 15% equity interest in VestaCare. AREC . As a result of AREC’s voluntary bankruptcy filing in April 2017 and our loss of control of AREC, we deconsolidated AREC in April 2017, and we recorded our investment in this subsidiary under the cost method of accounting. We recorded a non-cash charge during the second quarter of 2017 of approximately $1.6 million associated with the deconsolidation of AREC, which reflected the excess of the net assets of AREC over its estimated fair value based on the expected sales transaction price, net of estimated transaction costs. As a result of the sale of substantially all of AREC’s assets during the third quarter of 2017, we recognized an additional loss of $1.9 million , which represents the difference between the net proceeds we expect to be paid upon settlement of the bankruptcy, net of anticipated remaining closing costs identified as part of the liquidation plan, and the book value of our cost method investment. At September 30, 2017, our remaining investment in AREC was $3.2 million (see Note 3 for further information). Letter of Credit Facility We maintain a Credit and Security Agreement with Wells Fargo Bank, National Association to provide up to a $60 million stand-by letter of credit facility used to support crude oil purchases within our crude oil marketing segment. This facility is collateralized by the eligible accounts receivable within our crude oil marketing segment. The issued stand-by letters of credit are canceled as the underlying purchase obligations are satisfied by cash payment when due. The letter of credit facility places certain restrictions on Gulfmark Energy, Inc., one of our wholly owned subsidiaries. These restrictions include the maintenance of a combined 1.1 to 1.0 current ratio and the maintenance of positive net earnings excluding inventory valuation changes, as defined, among other restrictions. We are currently in compliance with all such financial covenants. No letter of credit amounts were outstanding at September 30, 2017 and December 31, 2016. The letter of credit facility was amended during the third quarter of 2017 to extend the expiration date to August 27, 2019. Prepayments and Other Current Assets The components of prepayments and other current assets were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Insurance premiums $ 201 $ 1,403 Rents, licenses and other 967 694 Total $ 1,168 $ 2,097 Property and Equipment We capitalize expenditures for major renewals and betterments, and we expense expenditures for maintenance and repairs as incurred. We capitalize interest costs incurred in connection with major capital expenditures and amortize these costs over the lives of the related assets. When properties are retired or sold, the related cost and accumulated depreciation, depletion and amortization is removed from the accounts and any gain or loss is reflected in earnings, and is included in operating costs and expenses. We accounted for oil and gas exploration and development expenditures in accordance with the successful efforts method of accounting. We capitalized direct costs of acquiring developed or undeveloped leasehold acreage, including lease bonus, brokerage and other fees. We initially capitalized exploratory drilling costs until the properties were evaluated and determined to be either productive or nonproductive. Such evaluations were made on a quarterly basis. If an exploratory well was determined to be nonproductive, the costs of drilling the well were charged to expense. Costs incurred to drill and complete development wells, including dry holes, were capitalized. At September 30, 2017 , we had no unevaluated or suspended exploratory drilling costs. Effective in April 2017, our oil and natural gas subsidiary was deconsolidated and was accounted for as a cost method investment, as a result of its bankruptcy filing (see Note 3 for further information). We calculated depreciation, depletion and amortization of the cost of proved oil and gas properties using the units-of-production method. The reserve base or denominator used to calculate depreciation, depletion and amortization for leasehold acquisition costs and the cost to acquire proved properties was the sum of proved developed reserves and proved undeveloped reserves. For lease and well equipment, development costs and successful exploration drilling costs, the reserve base included only proved developed reserves. The numerator for these calculations was actual production volumes for the period. All other property and equipment is depreciated using the straight-line method over the estimated average useful lives of three to twenty years. We review our long-lived assets for impairment whenever there is evidence that the carrying value of such assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. Producing oil and gas properties were reviewed on a field-by-field basis. Fields with carrying values in excess of their estimated undiscounted future net cash flows were deemed impaired. For properties requiring impairment, the fair value is estimated based on an internal discounted cash flow model. Cash flows are developed based on estimated future production, and prices are then discounted using a market based rate of return consistent with that used by us in evaluating cash flows for other assets of a similar nature. On a quarterly basis, we evaluated the carrying value of non-producing oil and gas leasehold properties and may have deemed them impaired based on remaining lease term, area drilling activity and our plans for the property. This fair value measure depended highly on our assessment of the likelihood of continued exploration efforts in a given area. Therefore, such data inputs are categorized as “unobservable” or “Level 3” inputs (see Note 8 for further information). Impairment provisions included in our oil and natural gas segment operating losses were not material during the three and nine months ended September 30, 2016 or for the period from January 1, 2017 through April 30, 2017. Revenue Recognition Certain commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, such trading activity contracts are marked-to-market and recorded on a net revenue basis in the accompanying consolidated financial statements. Most crude oil purchase and sale contracts qualify and are designated as non-trading activities, and we consider such contracts as normal purchases and sales activity. For normal purchases and sales, our customers are invoiced monthly based upon contractually agreed upon terms with revenue recognized in the month in which the physical product is delivered to the customer. Such sales are recorded on a gross basis in the financial statements because we take title, have risk of loss for the products, are the primary obligor for the purchase, establish the sale price independently with a third party and maintain credit risk associated with the sale of the product. Certain crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. Such buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements. Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenue gross-up $ 46,306 $ 70,236 $ 148,779 $ 245,245 Transportation segment customers are invoiced based upon contractually agreed upon terms, and the related revenue is recognized as the service is provided. Recent Accounting Developments Revenue Recognition . In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). The new accounting standard, along with its related amendments, replaces the current rules-based U.S. GAAP governing revenue recognition with a principles-based approach. We plan to adopt the new standard on January 1, 2018 using the modified retrospective approach, which requires us to apply the new revenue standard to (i) all new revenue contracts entered into after January 1, 2018 and (ii) all existing revenue contracts as of January 1, 2018 through a cumulative adjustment to equity. In accordance with this approach, our consolidated revenues for periods prior to January 1, 2018 will not be revised. The core principle in the new guidance is that a company should recognize revenue in a manner that fairly depicts the transfer of goods or services to customers in amounts that reflect the consideration the company expects to receive for those goods or services. In order to apply this core principle, companies will apply the following five steps in determining the amount of revenues to recognize: (i) identify the contract; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied. Each of these steps involves management’s judgment and an analysis of the material terms and conditions of the contract. Our implementation activities related to ASC 606 are ongoing. We do not anticipate that there will be material differences in the amount or timing of revenues recognized following the new standard’s adoption date. Although total consolidated revenues may not be materially impacted by the new guidance, we do anticipate significant changes to our disclosures based on the additional requirements prescribed by ASC 606. These new disclosures include information regarding the significant judgments used in evaluating when and how revenue is (or will be) recognized and data related to contract assets and liabilities. Additionally, we are currently evaluating our business processes, systems and controls to ensure the accuracy and timeliness of the recognition and disclosure requirements under the new revenue guidance. Leases . In February 2016, the FASB issued ASC 842, Leases (“ASC 842”), which requires substantially all leases (with the exception of leases with a term of one year or less) to be recorded on the balance sheet using a method referred to as the right-of-use (“ROU”) asset approach. We plan to adopt the new standard on January 1, 2019 using the modified retrospective method described within ASC 842. The new standard introduces two lease accounting models, which result in a lease being classified as either a “finance” or “operating” lease on the basis of whether the lessee effectively obtains control of the underlying asset during the lease term. A lease would be classified as a finance lease if it meets one of five classification criteria, four of which are generally consistent with current lease accounting guidance. By default, a lease that does not meet the criteria to be classified as a finance lease will be deemed an operating lease. Regardless of classification, the initial measurement of both lease types will result in the balance sheet recognition of a ROU asset representing a company’s right to use the underlying asset for a specified period of time and a corresponding lease liability. The lease liability will be recognized at the present value of the future lease payments, and the ROU asset will equal the lease liability adjusted for any prepaid rent, lease incentives provided by the lessor, and any indirect costs. The subsequent measurement of each type of lease varies. Leases classified as a finance lease will be accounted for using the effective interest method. Under this approach, a lessee will amortize the ROU asset (generally on a straight-line basis in a manner similar to depreciation) and the discount on the lease liability (as a component of interest expense). Leases classified as an operating lease will result in the recognition of a single lease expense amount that is recorded on a straight-line basis (or another systematic basis, if more appropriate). We are in the process of reviewing our lease agreements in light of the new guidance. Although we are in the early stages of our ASC 842 implementation project, we anticipate that this new lease guidance will cause significant changes to the way leases are recorded, presented and disclosed in our consolidated financial statements. |
Subsidiary Bankruptcy, Deconsol
Subsidiary Bankruptcy, Deconsolidation and Sale | 9 Months Ended |
Sep. 30, 2017 | |
Reorganizations [Abstract] | |
Subsidiary Bankruptcy, Deconsolidation and Sale | Subsidiary Bankruptcy, Deconsolidation and Sale Bankruptcy Filing, Deconsolidation and Sale On April 21, 2017, AREC filed a voluntary petition in the Bankruptcy Court seeking relief under the Bankruptcy Code. AREC operated its business and managed its properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and order of the Bankruptcy Court. As a result of AREC’s bankruptcy filing, AE ceded its authority to the Bankruptcy Court, and AE management could not carry on AREC activities in the ordinary course of business without Bankruptcy Court approval. AE managed the day-to-day operations of AREC, but did not have discretion to make significant capital or operating budgetary changes or decisions and purchase or sell significant assets, as AREC’s material decisions were subject to review by the Bankruptcy Court. For these reasons, we concluded that AE lost control of AREC, and no longer has significant influence over AREC during the pendency of the bankruptcy. Therefore, we deconsolidated AREC effective with the filing of the Chapter 11 bankruptcy in April 2017. In order to deconsolidate AREC, the carrying values of the assets and liabilities of AREC were removed from our consolidated balance sheet as of April 30, 2017, and we recorded our investment in AREC at its estimated fair value of approximately $5.0 million . We determined the fair value of our investment based upon bids we received in the auction process. We also determined that the estimated fair value of our investment in AREC was expected to be lower than its net book value immediately prior to the deconsolidation. As a result, during the second quarter of 2017, we recorded a non-cash charge of approximately $1.6 million associated with the deconsolidation of AREC, which reflected the excess of the net assets of AREC over its estimated fair value based on the expected sales transaction price of approximately $5.0 million , net of estimated transaction costs. Subsequent to the deconsolidation of AREC, we accounted for our investment in AREC using the cost method of accounting because AE did not exercise significant influence over the operations of AREC due to the Chapter 11 filing. On August 1, 2017, a hearing was held before the Bankruptcy Court seeking approval of asset purchase and sales agreements under Section 363 of the Bankruptcy Code with three unaffiliated parties to purchase AREC’s oil and natural gas assets for aggregate cash proceeds of approximately $5.2 million . The Bankruptcy Court approved the asset purchase and sales agreements, and we closed on the sales of these assets during the third quarter of 2017. In October 2017, AREC submitted its liquidation plan to the Bankruptcy Court for approval. In connection with the sales of these assets and submission of the liquidation plan, we recognized an additional loss of $1.9 million during the third quarter of 2017, which represents the difference between the proceeds we expect to be paid upon settlement of the bankruptcy, net of anticipated remaining closing costs identified as part of the liquidation plan, and the book value of our cost method investment. We anticipate completing the bankruptcy process with a confirmed plan during the fourth quarter of 2017. DIP Financing – Related Party Relationship In connection with the bankruptcy filing, AREC entered into a Debtor in Possession Credit and Security Agreement with AE (“DIP Credit Agreement”) dated as of April 25, 2017, in an aggregate amount of up to $1.25 million , of which the funds were to be used by AREC solely to fund operations through August 11, 2017. Loans under the DIP Credit Agreement accrued interest at a rate of LIBOR plus 2.0% per annum and were due and payable upon the earlier of (a) twelve months after the petition date, (b) the closing of the sale of substantially all of AREC’s assets, (c) the effective date of a Chapter 11 plan of reorganization of AREC, and (d) the date that the DIP loan was accelerated upon the occurrence of an event of default, as defined in the DIP Credit Agreement. AREC borrowed approximately $0.4 million under the DIP Credit Agreement, and the amount was repaid during the third quarter of 2017 with proceeds from the sales of the assets. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Components of property and equipment were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Marketing $ 56,913 $ 56,907 Transportation 70,790 70,849 Oil and natural gas (successful efforts) — 62,784 Other 108 108 Total 127,811 190,648 Less accumulated depreciation, depletion and amortization (95,853 ) (144,323 ) Property and equipment, net $ 31,958 $ 46,325 During the third quarter of 2017, we entered into capital leases for certain trucks in our marketing segment. Gross property and equipment recorded under capital leases were $1.8 million at September 30, 2017 . Accumulated amortization associated with capital leases was less than $0.1 million at September 30, 2017 (see Note 10 for further information). Components of depreciation, depletion and amortization expense were as follows for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Depreciation, depletion and amortization, excluding amounts under capital leases $ 3,210 $ 4,514 $ 10,742 $ 14,385 Amortization of property and equipment under capital leases 30 — 30 — Total depreciation, depletion and amortization $ 3,240 $ 4,514 $ 10,772 $ 14,385 |
Cash Deposits and Other Assets
Cash Deposits and Other Assets | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Cash Deposits and Other Assets | Cash Deposits and Other Assets Components of cash deposits and other assets were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Amounts associated with liability insurance program: Insurance collateral deposits $ 2,252 $ 2,599 Excess loss fund 1,495 1,450 Accumulated interest income 777 812 Other amounts: State collateral deposits 51 143 Materials and supplies 320 354 Other 37 171 Total $ 4,932 $ 5,529 We have established certain deposits to support participation in our liability insurance program and remittance of state crude oil severance taxes and other state collateral deposits. Insurance collateral deposits are held by the insurance company to cover past or potential open claims based upon a percentage of the maximum assessment under our insurance policies. Excess amounts in our loss fund represent premium payments in excess of claims incurred to date that we may be entitled to recover through settlement or commutation as claim periods are closed. Interest income is earned on all amounts held by the insurance company and will be paid to us upon settlement of policy years. Insurance collateral deposits are invested at the discretion of our insurance carrier. This fair value measure relies on inputs from quoted prices for similar assets and is thus categorized as a “Level 3” valuation in the fair value hierarchy (see Note 8 for further information). |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Historically, 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) oil and natural gas exploration and production. Our oil and natural gas exploration and production wholly owned subsidiary filed for bankruptcy in April 2017 (see Note 3 for further information), 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 Total Three Months Ended September 30, 2017 Revenues $ 282,229 $ 13,082 $ — $ 295,311 Segment operating (losses) earnings 2,412 (915 ) — 1,497 Depreciation, depletion and amortization 1,911 1,329 — 3,240 Property and equipment additions 178 179 — 357 Three Months Ended September 30, 2016 Revenues $ 243,704 $ 12,310 $ 863 $ 256,877 Segment operating (losses) earnings 1,265 (430 ) (543 ) 292 Depreciation, depletion and amortization 2,418 1,701 395 4,514 Property and equipment additions — 2,329 85 2,414 Nine Months Ended September 30, 2017 Revenues $ 872,020 $ 40,153 $ 1,427 $ 913,600 Segment operating (losses) earnings 5,496 (920 ) 53 4,629 Depreciation, depletion and amortization 5,957 4,392 423 10,772 Property and equipment additions 451 189 1,825 2,465 Nine Months Ended September 30, 2016 Revenues $ 758,627 $ 39,517 $ 2,427 $ 800,571 Segment operating (losses) earnings 13,148 444 (1,222 ) 12,370 Depreciation, depletion and amortization 7,621 5,536 1,228 14,385 Property and equipment additions 514 6,480 192 7,186 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 Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Segment operating earnings $ 1,497 $ 292 $ 4,629 $ 12,370 General and administrative (2,787 ) (2,114 ) (6,884 ) (6,252 ) Operating earnings (losses) (1,290 ) (1,822 ) (2,255 ) 6,118 Loss on deconsolidation of subsidiary (1,870 ) — (3,505 ) — Impairment of investments in unconsolidated affiliates (2,500 ) (1,732 ) (2,500 ) (1,732 ) Losses from equity investment — (68 ) — (468 ) Interest income 370 245 789 444 Interest expense (8 ) — (10 ) — (Losses) earnings before income taxes $ (5,298 ) $ (3,377 ) $ (7,481 ) $ 4,362 Identifiable assets by industry segment were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Reporting segment: Marketing $ 107,388 $ 107,257 Transportation 29,492 32,120 Oil and Gas (1) 3,200 7,279 Cash and other assets 108,449 100,216 Total assets $ 248,529 $ 246,872 ____________________ (1) At September 30, 2017, amount represents our cost method investment in this segment. Intersegment sales are insignificant and all sales occurred in the United States. Other identifiable assets are primarily corporate cash, corporate accounts receivable, investments 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. |
Transactions with Affiliates
Transactions with Affiliates | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | Transactions with Affiliates We enter into certain transactions in the normal course of business with affiliated entities including direct cost reimbursement for shared phone and administrative services. In addition, we lease our corporate office space from an affiliated entity. We utilize our former affiliate, Bencap, to administer certain of our employee medical benefit programs including a detail audit of individual medical claims. Bencap earns a fee from us for providing such services at a discounted amount from its standard charge to non-affiliates. As discussed further in Note 2, at September 30, 2017, we have no further ownership interest in Bencap. Activities with affiliates were as follows for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Overhead recoveries $ — $ 2 $ — $ 30 Affiliate billings to us 16 13 52 51 Billings to affiliates 1 1 3 3 Rentals paid to affiliate 137 155 462 473 Fees paid to Bencap (1) — 309 108 439 ___________________ (1) Amounts represent fees paid to Bencap through the date of the forfeiture of our investment during the first quarter of 2017. As a result of the investment forfeiture, Bencap is no longer an affiliate. DIP Financing In connection with its voluntary bankruptcy filing, AREC entered into a DIP Credit Agreement with AE, of which the amounts outstanding were repaid during the third quarter of 2017 with proceeds from the sales of AREC’s assets. We earned interest income of approximately $0.1 million under the DIP Credit Agreement through September 30, 2017 (see Note 3 for further information). |
Derivative Instruments and Fair
Derivative Instruments and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Fair Value Measurements | Derivative Instruments and Fair Value Measurements Derivative Instruments Our crude oil marketing segment is involved in the purchase and sale of crude oil. We seek to profit by procuring the commodity as it is produced and then delivering the material to the end users or the intermediate use marketplace. As typical for the industry, such transactions are made pursuant to the terms of forward month commodity purchase and/or sale contracts. Some of these contracts meet the definition of a derivative instrument, and therefore, we account for such contracts at fair value, unless the normal purchase and sale exception is applicable. Such underlying contracts are standard for the industry and are the governing document for our crude oil marketing segment. None of our derivative instruments have been designated as hedging instruments. At September 30, 2017 , our commodity purchase and sale contracts had a fair value of zero. At December 31, 2016, the estimated fair value of forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated balance sheet were as follows (in thousands): December 31, 2016 Balance Sheet Location and Amount Current Other Current Other Assets Assets Liabilities Liabilities Asset derivatives: Fair value forward hydrocarbon commodity contracts at gross valuation $ 378 $ — $ — $ — Liability derivatives: Fair value forward hydrocarbon commodity contracts at gross valuation — — 330 — Less counterparty offsets (266 ) — (266 ) — As reported fair value contracts $ 112 $ — $ 64 $ — At December 31, 2016 , our derivative valuations were comprised of two commodity purchase and sale contracts. These contracts encompassed approximately 65 barrels per day of diesel fuel during January through March 2017 and 145,000 barrels of crude oil during January 2017 through April 2017. We only enter into commodity contracts with creditworthy counterparties, and we evaluate our exposure to significant counterparties on an ongoing basis. At September 30, 2017 and December 31, 2016 , we were not holding nor have we posted any collateral to support our forward month fair value derivative activity. We are not subject to any credit-risk related trigger events. We have no other financial investment arrangements that would serve to offset our derivative contracts. Forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands): Earnings (losses) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues – Marketing $ (748 ) $ 180 $ (48 ) $ 304 Fair Value Measurements At September 30, 2017 , we had no Level 1, 2 or 3 financial assets and liabilities with value. The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at December 31, 2016 (in thousands): December 31, 2016 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Assets Observable Unobservable and Liabilities Inputs Inputs Counterparty (Level 1) (Level 2) (Level 3) Offsets Total Derivatives: Current assets $ — $ 378 $ — $ (266 ) $ 112 Current liabilities — (330 ) — 266 (64 ) Net value $ — $ 48 $ — $ — $ 48 These assets and liabilities are measured on a recurring basis and are classified based on the lowest level of input used to estimate their fair value. Our assessment of the relative significance of such inputs requires judgments. When determining fair value measurements, we make credit valuation adjustments to reflect both our own nonperformance risk and our counterparty’s nonperformance risk. When adjusting the fair value of derivative contracts for the effect of nonperformance risk, we consider the impact of netting and any applicable credit enhancements. Credit valuation adjustments utilize Level 3 inputs, such as credit scores to evaluate the likelihood of default by us or our counterparties. At September 30, 2017 and December 31, 2016 , credit valuation adjustments were not significant to the overall valuation of our fair value contracts. As a result, applicable fair value assets and liabilities are included in their entirety in the fair value hierarchy. Nonrecurring Fair Value Measurements Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The following table presents categories of long-lived assets that were subject to non-recurring fair value measurements during the nine months ended September 30, 2017 (in thousands): Fair Value Measurements at the End of the Reporting Period Using Quoted Prices in Active Significant Carrying Markets for Other Significant Total Value at Identical Assets Observable Unobservable Non-Cash September 30, and Liabilities Inputs Inputs Impairment 2017 (Level 1) (Level 2) (Level 3) Loss Investment in AREC $ 3,200 $ — $ 3,200 $ — $ 3,505 Investment in VestaCare — — — — 2,500 $ 6,005 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands): Nine Months Ended September 30, 2017 2016 Cash paid for federal and state taxes $ 381 $ 2,582 Non-cash transactions: Change in accounts payable related to property and equipment additions — 382 Property and equipment acquired under capital leases 1,808 — |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Capital Lease Obligations During the third quarter of 2017, we entered into capital leases for certain of our trucks in our marketing segment. The following table summarizes our principal contractual commitments outstanding under our capital leases at September 30, 2017 for the next five years, and in total thereafter (in thousands): Remainder of 2017 $ 100 2018 398 2019 398 2020 398 2021 398 Thereafter 255 Total minimum lease payments 1,947 Less: Amount representing interest (176 ) Present value of capital lease obligations 1,771 Less current portion of capital lease obligations (306 ) Total long-term capital lease obligations $ 1,465 Insurance Policies Under our automobile and workers’ compensation insurance policies, we can either receive a return of premium paid or be assessed for additional premiums up to pre-established limits. Additionally, in certain instances the risk of insured losses is shared with a group of similarly situated entities. We have appropriately recognized estimated expenses and liabilities related to these policies for losses incurred but not reported to us or our insurance carrier as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Estimated expenses and liabilities $ 1,573 $ 2,657 We maintain a self-insurance program for managing employee medical claims. A liability for expected claims incurred but not reported is established on a monthly basis. As claims are paid, the liability is relieved. We also maintain third party insurance stop-loss coverage for annual aggregate medical claims exceeding $4.5 million . Medical accrual amounts were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Accrued medical claims $ 1,424 $ 1,411 Litigation AREC was named as a defendant in a number of Louisiana lawsuits involving alleged environmental contamination from prior drilling operations. Such suits typically allege improper disposal of oilfield wastes in earthen pits, with one matter involving allegations that drilling operations in 1986 contributed to the formation of a sinkhole in 2012 (the “Sinkhole Cases”). The Sinkhole Cases, while arising from a singular event, include a number of different lawsuits brought in Louisiana State Court and one consolidated action in the United States District Court for the Eastern District of Louisiana. In addition to the Sinkhole Cases, AREC is also currently involved in two other suits. These suits are styled LePetit Chateau Deluxe v. Adams Resources Exploration Corporation dated March 2004 and Henning Management, LLC v. Adams Resources Exploration Corporation dated November 2013. Each suit involves multiple industry defendants with substantially larger proportional interest in the properties. In the LePetit Chateau Deluxe matter, all the larger defendants have settled the case. The plaintiffs in each of these matters are seeking unspecified compensatory and punitive damages. While we do not believe that these claims will result in a material adverse effect on us, significant attorney fees may be incurred to address claims related to these suits. At December 31, 2016 , we had $0.5 million accrued for future legal costs for these matters. During May 2017, AREC was dismissed without prejudice as a party to the suit with Henning Management. We also determined that the likelihood of future claims from other remaining litigation was remote. As such, we released the $0.5 million accrual for future legal settlements related to these matters. At September 30, 2017 , we had no remaining accruals for legal costs for these matters. From time to time as incidental to our operations, we may become involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, we are a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. We are presently unaware of any claims against us that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on our financial position or results of operations. |
General Accounting and Disclo17
General Accounting and Disclosure Matters (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization | Organization Adams Resources & Energy, Inc. (“AE”), a Delaware corporation organized in 1973, and its subsidiaries are primarily engaged in the business of crude oil marketing, transportation and storage, tank truck transportation of liquid chemicals and dry bulk and ISO tank container storage and transportation. Unless the context requires otherwise, references to “we,” “us,” “our,” the “Company” or “AE” are intended to mean the business and operations of Adams Resources & Energy, Inc. and its consolidated subsidiaries. On April 21, 2017, one of our wholly owned subsidiaries, Adams Resources Exploration Corporation (“AREC”), filed a voluntary petition in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”), Case No. 17-10866 (KG). AREC operated its business and managed its properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and order of the Bankruptcy Court. AE was the primary creditor in the Chapter 11 process. On May 3, 2017, AREC filed a motion with the Bankruptcy Court for approval of an auction process to sell its assets pursuant to Section 363 of the Bankruptcy Code and for approval to engage Oil & Gas Asset Clearinghouse to conduct the auction. The auction commenced on July 19, 2017 to determine the highest or otherwise best bid to acquire all or substantially all of AREC’s assets. During the third quarter of 2017, Bankruptcy Court approval was obtained on three asset purchase and sales agreements with three unaffiliated parties, and AREC closed on the sales of substantially all of its assets (see Note 3 for further information). As a result of AREC’s voluntary bankruptcy filing in April 2017, we no longer controlled the operations of AREC; therefore, we deconsolidated AREC effective with the bankruptcy filing and recorded our investment in AREC under the cost method (see Note 3 for further information). We anticipate completing the bankruptcy process with a confirmed plan during the fourth quarter of 2017. Over the past few years, we have de-emphasized our upstream operations and do not expect this Chapter 11 filing by AREC to have a material adverse impact on any of our core businesses. Historically, we have operated and reported in three business segments: (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) oil and natural gas exploration and production. We exited the oil and natural gas exploration and production business during the third quarter of 2017 with the sale of our oil and natural gas exploration and production assets. |
Basis of Presentation | Basis of Presentation Our results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of results expected for the full year of 2017 . In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals necessary for fair presentation. The condensed consolidated financial statements and the accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the rules of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 (the “ 2016 Form 10-K”) filed with the SEC on March 31, 2017. All significant intercompany transactions and balances have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications have been made in the prior year’s financial statements to conform to classifications used in the current year. Losses from equity investment has been classified as a component of other income (expense), net, with its tax effect included in the income tax benefit (provision) line item on our condensed consolidated statements of operations. |
Use of Estimates | Use of Estimates The preparation of our financial statements in conformity with GAAP requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on historical experience and on various other assumptions and information we believe to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. While we believe the estimates and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements The carrying amounts reported in the unaudited condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the immediate or short-term maturity of these financial instruments. Marketable securities are recorded at fair value based on market quotations from actively traded liquid markets. A three-tier hierarchy has been established that classifies fair value amounts recognized in the financial statements based on the observability of inputs used to estimate such fair values. The hierarchy considers fair value amounts based on observable inputs (Levels 1 and 2) to be more reliable and predictable than those based primarily on unobservable inputs (Level 3). At each balance sheet reporting date, we categorize our financial assets and liabilities using this hierarchy. Fair value contracts consist of derivative financial instruments and are recorded as either an asset or liability measured at its fair value. Changes in fair value are recognized immediately in earnings unless the derivatives qualify for, and we elect, cash flow hedge accounting. We had no contracts designated for hedge accounting during any current reporting periods (see Note 8 for further information). |
Investments | Investments in Unconsolidated Affiliates At September 30, 2017, we had no remaining balances in our medical-related investments. We currently do not have any plans to pursue additional medical-related investments. Bencap . Through February 2017, we owned a 30% member interest in Bencap LLC (“Bencap”). Bencap provides medical insurance brokerage and medical claims auditing services to employers utilizing ERISA governed employee benefit plans. We accounted for our investment in Bencap under the equity method of accounting. Underlying the terms of the investment agreement, Bencap had the option to request borrowings from us of up to $1.5 million (on or after December 5, 2016 but before October 31, 2018) that we were required to provide or forfeit our 30% member interest. During 2016 , we determined that we were unlikely to provide additional funding to Bencap due to Bencap’s lower than projected revenue growth and operating losses since investment inception. During the third quarter of 2016, we recognized an after-tax net loss of $1.4 million to write-off our investment in Bencap, which consisted of a pre-tax impairment charge of approximately $1.7 million , pre-tax losses from the equity method investment of $0.5 million and an income tax benefit of $0.8 million . In February 2017, in accordance with the terms of the investment agreement, Bencap requested additional funding of approximately $0.5 million from us. We declined the additional funding request and as a result, forfeited our 30% member interest in Bencap. At September 30, 2017 , we had no further ownership interest in Bencap. VestaCare . We own an approximate 15% equity interest (less than 3% voting interest) in VestaCare, Inc., a California corporation (“VestaCare”). VestaCare provides an array of software as a service (“SaaS”) electronic payment technologies to medical providers, payers and patients including VestaCare’s most recent product offering, VestaPay™. VestaPay™ allows medical care providers to structure fully automated and dynamically updating electronic payment plans for their patients. We account for this investment under the cost method of accounting. During the third quarter of 2017, we reviewed our investment in VestaCare and determined that the current projected operating results did not support the carrying value of the investment. As such, we recognized a pre-tax impairment charge of $2.5 million during the third quarter of 2017 and wrote-off our investment in VestaCare. At September 30, 2017, we continue to own an approximate 15% equity interest in VestaCare. AREC . As a result of AREC’s voluntary bankruptcy filing in April 2017 and our loss of control of AREC, we deconsolidated AREC in April 2017, and we recorded our investment in this subsidiary under the cost method of accounting. We recorded a non-cash charge during the second quarter of 2017 of approximately $1.6 million associated with the deconsolidation of AREC, which reflected the excess of the net assets of AREC over its estimated fair value based on the expected sales transaction price, net of estimated transaction costs. As a result of the sale of substantially all of AREC’s assets during the third quarter of 2017, we recognized an additional loss of $1.9 million , which represents the difference between the net proceeds we expect to be paid upon settlement of the bankruptcy, net of anticipated remaining closing costs identified as part of the liquidation plan, and the book value of our cost method investment. At September 30, 2017, our remaining investment in AREC was $3.2 million (see Note 3 for further information). |
Letter of Credit Facility | Letter of Credit Facility We maintain a Credit and Security Agreement with Wells Fargo Bank, National Association to provide up to a $60 million stand-by letter of credit facility used to support crude oil purchases within our crude oil marketing segment. This facility is collateralized by the eligible accounts receivable within our crude oil marketing segment. The issued stand-by letters of credit are canceled as the underlying purchase obligations are satisfied by cash payment when due. The letter of credit facility places certain restrictions on Gulfmark Energy, Inc., one of our wholly owned subsidiaries. These restrictions include the maintenance of a combined 1.1 to 1.0 current ratio and the maintenance of positive net earnings excluding inventory valuation changes, as defined, among other restrictions. We are currently in compliance with all such financial covenants. No letter of credit amounts were outstanding at September 30, 2017 and December 31, 2016. The letter of credit facility was amended during the third quarter of 2017 to extend the expiration date to August 27, 2019. |
Prepayments and Other Current Assets | Prepayments and Other Current Assets The components of prepayments and other current assets were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Insurance premiums $ 201 $ 1,403 Rents, licenses and other 967 694 Total $ 1,168 $ 2,097 |
Property and Equipment | Property and Equipment We capitalize expenditures for major renewals and betterments, and we expense expenditures for maintenance and repairs as incurred. We capitalize interest costs incurred in connection with major capital expenditures and amortize these costs over the lives of the related assets. When properties are retired or sold, the related cost and accumulated depreciation, depletion and amortization is removed from the accounts and any gain or loss is reflected in earnings, and is included in operating costs and expenses. We accounted for oil and gas exploration and development expenditures in accordance with the successful efforts method of accounting. We capitalized direct costs of acquiring developed or undeveloped leasehold acreage, including lease bonus, brokerage and other fees. We initially capitalized exploratory drilling costs until the properties were evaluated and determined to be either productive or nonproductive. Such evaluations were made on a quarterly basis. If an exploratory well was determined to be nonproductive, the costs of drilling the well were charged to expense. Costs incurred to drill and complete development wells, including dry holes, were capitalized. At September 30, 2017 , we had no unevaluated or suspended exploratory drilling costs. Effective in April 2017, our oil and natural gas subsidiary was deconsolidated and was accounted for as a cost method investment, as a result of its bankruptcy filing (see Note 3 for further information). We calculated depreciation, depletion and amortization of the cost of proved oil and gas properties using the units-of-production method. The reserve base or denominator used to calculate depreciation, depletion and amortization for leasehold acquisition costs and the cost to acquire proved properties was the sum of proved developed reserves and proved undeveloped reserves. For lease and well equipment, development costs and successful exploration drilling costs, the reserve base included only proved developed reserves. The numerator for these calculations was actual production volumes for the period. All other property and equipment is depreciated using the straight-line method over the estimated average useful lives of three to twenty years. We review our long-lived assets for impairment whenever there is evidence that the carrying value of such assets may not be recoverable. Any impairment recognized is permanent and may not be restored. Property and equipment is reviewed at the lowest level of identifiable cash flows. Producing oil and gas properties were reviewed on a field-by-field basis. Fields with carrying values in excess of their estimated undiscounted future net cash flows were deemed impaired. For properties requiring impairment, the fair value is estimated based on an internal discounted cash flow model. Cash flows are developed based on estimated future production, and prices are then discounted using a market based rate of return consistent with that used by us in evaluating cash flows for other assets of a similar nature. On a quarterly basis, we evaluated the carrying value of non-producing oil and gas leasehold properties and may have deemed them impaired based on remaining lease term, area drilling activity and our plans for the property. This fair value measure depended highly on our assessment of the likelihood of continued exploration efforts in a given area. Therefore, such data inputs are categorized as “unobservable” or “Level 3” inputs (see Note 8 for further information). Impairment provisions included in our oil and natural gas segment operating losses were not material during the three and nine months ended September 30, 2016 or for the period from January 1, 2017 through April 30, 2017. |
Revenue Recognition | Revenue Recognition Certain commodity purchase and sale contracts utilized by our crude oil marketing business qualify as derivative instruments with certain specifically identified contracts also designated as trading activity. From the time of contract origination, such trading activity contracts are marked-to-market and recorded on a net revenue basis in the accompanying consolidated financial statements. Most crude oil purchase and sale contracts qualify and are designated as non-trading activities, and we consider such contracts as normal purchases and sales activity. For normal purchases and sales, our customers are invoiced monthly based upon contractually agreed upon terms with revenue recognized in the month in which the physical product is delivered to the customer. Such sales are recorded on a gross basis in the financial statements because we take title, have risk of loss for the products, are the primary obligor for the purchase, establish the sale price independently with a third party and maintain credit risk associated with the sale of the product. Certain crude oil contracts may be with a single counterparty to provide for similar quantities of crude oil to be bought and sold at different locations. These contracts are entered into for a variety of reasons, including effecting the transportation of the commodity, to minimize credit exposure, and/or to meet the competitive demands of the customer. Such buy/sell arrangements are reflected on a net revenue basis in the accompanying unaudited condensed consolidated financial statements. Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenue gross-up $ 46,306 $ 70,236 $ 148,779 $ 245,245 Transportation segment customers are invoiced based upon contractually agreed upon terms, and the related revenue is recognized as the service is provided. |
Recent Accounting Developments | Recent Accounting Developments Revenue Recognition . In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”). The new accounting standard, along with its related amendments, replaces the current rules-based U.S. GAAP governing revenue recognition with a principles-based approach. We plan to adopt the new standard on January 1, 2018 using the modified retrospective approach, which requires us to apply the new revenue standard to (i) all new revenue contracts entered into after January 1, 2018 and (ii) all existing revenue contracts as of January 1, 2018 through a cumulative adjustment to equity. In accordance with this approach, our consolidated revenues for periods prior to January 1, 2018 will not be revised. The core principle in the new guidance is that a company should recognize revenue in a manner that fairly depicts the transfer of goods or services to customers in amounts that reflect the consideration the company expects to receive for those goods or services. In order to apply this core principle, companies will apply the following five steps in determining the amount of revenues to recognize: (i) identify the contract; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied. Each of these steps involves management’s judgment and an analysis of the material terms and conditions of the contract. Our implementation activities related to ASC 606 are ongoing. We do not anticipate that there will be material differences in the amount or timing of revenues recognized following the new standard’s adoption date. Although total consolidated revenues may not be materially impacted by the new guidance, we do anticipate significant changes to our disclosures based on the additional requirements prescribed by ASC 606. These new disclosures include information regarding the significant judgments used in evaluating when and how revenue is (or will be) recognized and data related to contract assets and liabilities. Additionally, we are currently evaluating our business processes, systems and controls to ensure the accuracy and timeliness of the recognition and disclosure requirements under the new revenue guidance. Leases . In February 2016, the FASB issued ASC 842, Leases (“ASC 842”), which requires substantially all leases (with the exception of leases with a term of one year or less) to be recorded on the balance sheet using a method referred to as the right-of-use (“ROU”) asset approach. We plan to adopt the new standard on January 1, 2019 using the modified retrospective method described within ASC 842. The new standard introduces two lease accounting models, which result in a lease being classified as either a “finance” or “operating” lease on the basis of whether the lessee effectively obtains control of the underlying asset during the lease term. A lease would be classified as a finance lease if it meets one of five classification criteria, four of which are generally consistent with current lease accounting guidance. By default, a lease that does not meet the criteria to be classified as a finance lease will be deemed an operating lease. Regardless of classification, the initial measurement of both lease types will result in the balance sheet recognition of a ROU asset representing a company’s right to use the underlying asset for a specified period of time and a corresponding lease liability. The lease liability will be recognized at the present value of the future lease payments, and the ROU asset will equal the lease liability adjusted for any prepaid rent, lease incentives provided by the lessor, and any indirect costs. The subsequent measurement of each type of lease varies. Leases classified as a finance lease will be accounted for using the effective interest method. Under this approach, a lessee will amortize the ROU asset (generally on a straight-line basis in a manner similar to depreciation) and the discount on the lease liability (as a component of interest expense). Leases classified as an operating lease will result in the recognition of a single lease expense amount that is recorded on a straight-line basis (or another systematic basis, if more appropriate). We are in the process of reviewing our lease agreements in light of the new guidance. Although we are in the early stages of our ASC 842 implementation project, we anticipate that this new lease guidance will cause significant changes to the way leases are recorded, presented and disclosed in our consolidated financial statements. |
General Accounting and Disclo18
General Accounting and Disclosure Matters (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Components of prepayments | The components of prepayments and other current assets were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Insurance premiums $ 201 $ 1,403 Rents, licenses and other 967 694 Total $ 1,168 $ 2,097 |
Reporting revenue of crude oil contracts on a gross revenue basis | Reporting these crude oil contracts on a gross revenue basis would increase our reported revenues as follows for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenue gross-up $ 46,306 $ 70,236 $ 148,779 $ 245,245 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedules of components of property and equipment and depreciation, depletion, and amortization expense | Components of property and equipment were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Marketing $ 56,913 $ 56,907 Transportation 70,790 70,849 Oil and natural gas (successful efforts) — 62,784 Other 108 108 Total 127,811 190,648 Less accumulated depreciation, depletion and amortization (95,853 ) (144,323 ) Property and equipment, net $ 31,958 $ 46,325 Components of depreciation, depletion and amortization expense were as follows for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Depreciation, depletion and amortization, excluding amounts under capital leases $ 3,210 $ 4,514 $ 10,742 $ 14,385 Amortization of property and equipment under capital leases 30 — 30 — Total depreciation, depletion and amortization $ 3,240 $ 4,514 $ 10,772 $ 14,385 |
Cash Deposits and Other Assets
Cash Deposits and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of cash deposits and other assets | Components of cash deposits and other assets were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Amounts associated with liability insurance program: Insurance collateral deposits $ 2,252 $ 2,599 Excess loss fund 1,495 1,450 Accumulated interest income 777 812 Other amounts: State collateral deposits 51 143 Materials and supplies 320 354 Other 37 171 Total $ 4,932 $ 5,529 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Information concerning business activities | Information concerning our various business activities was as follows for the periods indicated (in thousands): Reporting Segments Marketing Transportation Oil and Gas Total Three Months Ended September 30, 2017 Revenues $ 282,229 $ 13,082 $ — $ 295,311 Segment operating (losses) earnings 2,412 (915 ) — 1,497 Depreciation, depletion and amortization 1,911 1,329 — 3,240 Property and equipment additions 178 179 — 357 Three Months Ended September 30, 2016 Revenues $ 243,704 $ 12,310 $ 863 $ 256,877 Segment operating (losses) earnings 1,265 (430 ) (543 ) 292 Depreciation, depletion and amortization 2,418 1,701 395 4,514 Property and equipment additions — 2,329 85 2,414 Nine Months Ended September 30, 2017 Revenues $ 872,020 $ 40,153 $ 1,427 $ 913,600 Segment operating (losses) earnings 5,496 (920 ) 53 4,629 Depreciation, depletion and amortization 5,957 4,392 423 10,772 Property and equipment additions 451 189 1,825 2,465 Nine Months Ended September 30, 2016 Revenues $ 758,627 $ 39,517 $ 2,427 $ 800,571 Segment operating (losses) earnings 13,148 444 (1,222 ) 12,370 Depreciation, depletion and amortization 7,621 5,536 1,228 14,385 Property and equipment additions 514 6,480 192 7,186 |
Reconciliation of segment earnings to earnings before income taxes | 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 Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Segment operating earnings $ 1,497 $ 292 $ 4,629 $ 12,370 General and administrative (2,787 ) (2,114 ) (6,884 ) (6,252 ) Operating earnings (losses) (1,290 ) (1,822 ) (2,255 ) 6,118 Loss on deconsolidation of subsidiary (1,870 ) — (3,505 ) — Impairment of investments in unconsolidated affiliates (2,500 ) (1,732 ) (2,500 ) (1,732 ) Losses from equity investment — (68 ) — (468 ) Interest income 370 245 789 444 Interest expense (8 ) — (10 ) — (Losses) earnings before income taxes $ (5,298 ) $ (3,377 ) $ (7,481 ) $ 4,362 |
Identifiable assets by industry segment | Identifiable assets by industry segment were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Reporting segment: Marketing $ 107,388 $ 107,257 Transportation 29,492 32,120 Oil and Gas (1) 3,200 7,279 Cash and other assets 108,449 100,216 Total assets $ 248,529 $ 246,872 ____________________ (1) At September 30, 2017, amount represents our cost method investment in this segment. |
Transactions with Affiliates (T
Transactions with Affiliates (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Activities with affiliates | Activities with affiliates were as follows for the periods indicated (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Overhead recoveries $ — $ 2 $ — $ 30 Affiliate billings to us 16 13 52 51 Billings to affiliates 1 1 3 3 Rentals paid to affiliate 137 155 462 473 Fees paid to Bencap (1) — 309 108 439 ___________________ (1) Amounts represent fees paid to Bencap through the date of the forfeiture of our investment during the first quarter of 2017. As a result of the investment forfeiture, Bencap is no longer an affiliate. |
Derivative Instruments and Fa23
Derivative Instruments and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives reflected in the consolidated balance sheet | At September 30, 2017 , our commodity purchase and sale contracts had a fair value of zero. At December 31, 2016, the estimated fair value of forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated balance sheet were as follows (in thousands): December 31, 2016 Balance Sheet Location and Amount Current Other Current Other Assets Assets Liabilities Liabilities Asset derivatives: Fair value forward hydrocarbon commodity contracts at gross valuation $ 378 $ — $ — $ — Liability derivatives: Fair value forward hydrocarbon commodity contracts at gross valuation — — 330 — Less counterparty offsets (266 ) — (266 ) — As reported fair value contracts $ 112 $ — $ 64 $ — |
Derivatives reflected in the consolidated statement of operations | Forward month commodity contracts (derivatives) reflected in the accompanying unaudited condensed consolidated statements of operations were as follows for the periods indicated (in thousands): Earnings (losses) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Revenues – Marketing $ (748 ) $ 180 $ (48 ) $ 304 |
Fair value assets and liabilities | The following tables set forth, by level with the Level 1, 2 and 3 fair value hierarchy, the carrying values of our financial assets and liabilities at December 31, 2016 (in thousands): December 31, 2016 Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Assets Observable Unobservable and Liabilities Inputs Inputs Counterparty (Level 1) (Level 2) (Level 3) Offsets Total Derivatives: Current assets $ — $ 378 $ — $ (266 ) $ 112 Current liabilities — (330 ) — 266 (64 ) Net value $ — $ 48 $ — $ — $ 48 |
Fair value, nonrecurring | The following table presents categories of long-lived assets that were subject to non-recurring fair value measurements during the nine months ended September 30, 2017 (in thousands): Fair Value Measurements at the End of the Reporting Period Using Quoted Prices in Active Significant Carrying Markets for Other Significant Total Value at Identical Assets Observable Unobservable Non-Cash September 30, and Liabilities Inputs Inputs Impairment 2017 (Level 1) (Level 2) (Level 3) Loss Investment in AREC $ 3,200 $ — $ 3,200 $ — $ 3,505 Investment in VestaCare — — — — 2,500 $ 6,005 |
Supplemental Cash Flow Inform24
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental cash flows and non-cash transactions were as follows for the periods indicated (in thousands): Nine Months Ended September 30, 2017 2016 Cash paid for federal and state taxes $ 381 $ 2,582 Non-cash transactions: Change in accounts payable related to property and equipment additions — 382 Property and equipment acquired under capital leases 1,808 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of principal contractual commitments outstanding under capital leases | The following table summarizes our principal contractual commitments outstanding under our capital leases at September 30, 2017 for the next five years, and in total thereafter (in thousands): Remainder of 2017 $ 100 2018 398 2019 398 2020 398 2021 398 Thereafter 255 Total minimum lease payments 1,947 Less: Amount representing interest (176 ) Present value of capital lease obligations 1,771 Less current portion of capital lease obligations (306 ) Total long-term capital lease obligations $ 1,465 |
Expenses and losses incurred but not reported | We have appropriately recognized estimated expenses and liabilities related to these policies for losses incurred but not reported to us or our insurance carrier as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Estimated expenses and liabilities $ 1,573 $ 2,657 |
Accrued medical claims | Medical accrual amounts were as follows at the dates indicated (in thousands): September 30, December 31, 2017 2016 Accrued medical claims $ 1,424 $ 1,411 |
Organization and Basis of Pre26
Organization and Basis of Presentation (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
General Accounting and Disclo27
General Accounting and Disclosure Matters - Investments (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Investments [Abstract] | ||||||
Pre-tax impairment charge | $ 2,500,000 | $ 1,732,000 | $ 2,500,000 | $ 1,732,000 | ||
Pre-tax losses from equity method investment | 0 | 68,000 | 0 | 468,000 | ||
Loss on deconsolidation of subsidiary | $ 1,870,000 | 0 | $ 3,505,000 | $ 0 | ||
Bencap LLC | ||||||
Investments [Abstract] | ||||||
Percentage of equity method investment | 30.00% | 0.00% | 0.00% | |||
Maximum borrowing amount | $ 1,500,000 | |||||
Recognized net loss from investment | (1,400,000) | |||||
Pre-tax impairment charge | 1,700,000 | |||||
Pre-tax losses from equity method investment | 500,000 | |||||
Income tax benefit | $ 800,000 | |||||
Additional funding request | $ 500,000 | |||||
Percentage of member interest forfeited | 30.00% | |||||
VestaCare, Inc. [Member] | ||||||
Investments [Abstract] | ||||||
Percentage of equity method investment | 15.00% | 15.00% | ||||
Pre-tax impairment charge | $ 2,500,000 | |||||
Voting interest | 3.00% | 3.00% | ||||
AREC [Member] | ||||||
Investments [Abstract] | ||||||
Cost method investments | $ 3,200,000 | $ 3,200,000 | ||||
AREC [Member] | ||||||
Investments [Abstract] | ||||||
Loss on deconsolidation of subsidiary | $ 1,600,000 | |||||
AREC [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||||
Investments [Abstract] | ||||||
Loss on disposal | $ 1,900,000 |
General Accounting and Disclo28
General Accounting and Disclosure Matters - Letters of Credit Facility and Earnings Per Share (Details) - Wells Fargo Bank - Standby Letter of Credit | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Letter of Credit Facility [Abstract] | ||
Line of credit facility, maximum borrowing capacity | $ 60,000,000 | |
Current ratio | 1.1 | |
Stand-by letters of credit | $ 0 | $ 0 |
General Accounting and Disclo29
General Accounting and Disclosure Matters - Prepayments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Prepaid Expense, Current [Abstract] | ||
Insurance premiums | $ 201 | $ 1,403 |
Rents, licenses and other | 967 | 694 |
Total | $ 1,168 | $ 2,097 |
General Accounting and Disclo30
General Accounting and Disclosure Matters - Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Unevaluated or suspended exploratory drilling costs | $ 0 | $ 0 | ||
Revenue Recognition [Abstract] | ||||
Revenue gross-up | $ 46,306,000 | $ 70,236,000 | $ 148,779,000 | $ 245,245,000 |
Minimum | ||||
Property, Plant and Equipment [Abstract] | ||||
Property and equipment, useful life | 3 years | |||
Maximum | ||||
Property, Plant and Equipment [Abstract] | ||||
Property and equipment, useful life | 20 years |
Subsidiary Bankruptcy, Decons31
Subsidiary Bankruptcy, Deconsolidation and Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 01, 2017 | Apr. 30, 2017 | Apr. 25, 2017 | |
Subsidiary Bankruptcy and Deconsolidation [Line Items] | ||||||||
Loss on deconsolidation of subsidiary (Note 3) | $ 1,870 | $ 0 | $ 3,505 | $ 0 | ||||
Accounts receivable – related party | $ 400 | |||||||
AREC [Member] | ||||||||
Subsidiary Bankruptcy and Deconsolidation [Line Items] | ||||||||
Loss on deconsolidation of subsidiary (Note 3) | 1,600 | |||||||
Adams Resources Exploration Corporation [Member] | ||||||||
Subsidiary Bankruptcy and Deconsolidation [Line Items] | ||||||||
DIP financing amount | $ 1,250 | |||||||
Adams Resources Exploration Corporation [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Subsidiary Bankruptcy and Deconsolidation [Line Items] | ||||||||
DIP financing, interest rate | 2.00% | |||||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | AREC [Member] | ||||||||
Subsidiary Bankruptcy and Deconsolidation [Line Items] | ||||||||
Expected transaction price | $ 5,000 | $ 5,200 | $ 5,000 | |||||
Loss on disposal | $ 1,900 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 127,811 | $ 127,811 | $ 190,648 | ||
Less accumulated depreciation, depletion and amortization | (95,853) | (95,853) | (144,323) | ||
Property and equipment, net | 31,958 | 31,958 | 46,325 | ||
Depreciation, depletion and amortization, excluding amount under capital leases | 3,210 | $ 4,514 | 10,742 | $ 14,385 | |
Amortization of property and equipment under capital leases | 30 | 0 | 30 | 0 | |
Total depreciation, depletion and amortization | 3,240 | $ 4,514 | 10,772 | $ 14,385 | |
Marketing | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 56,913 | 56,913 | 56,907 | ||
Transportation | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 70,790 | 70,790 | 70,849 | ||
Oil and natural gas (successful efforts) | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 0 | 0 | 62,784 | ||
Other | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 108 | 108 | $ 108 | ||
Property and equipment recorded under capital leases | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 1,800 | 1,800 | |||
Less accumulated depreciation, depletion and amortization | $ (100) | $ (100) |
Cash Deposits and Other Asset33
Cash Deposits and Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Insurance collateral deposits | $ 2,252 | $ 2,599 |
Excess loss fund | 1,495 | 1,450 |
Accumulated interest income | 777 | 812 |
State collateral deposits | 51 | 143 |
Materials and supplies | 320 | 354 |
Other | 37 | 171 |
Total | $ 4,932 | $ 5,529 |
Segment Reporting, Information
Segment Reporting, Information Concerning Business Activities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 3 | |||
Revenues | $ 295,311 | $ 256,877 | $ 913,600 | $ 800,571 |
Segment operating (losses) earnings | (1,290) | (1,822) | (2,255) | 6,118 |
Depreciation, depletion and amortization | 3,240 | 4,514 | 10,772 | 14,385 |
Reportable segments | ||||
Segment Reporting [Abstract] | ||||
Revenues | 295,311 | 256,877 | 913,600 | 800,571 |
Segment operating (losses) earnings | 1,497 | 292 | 4,629 | 12,370 |
Depreciation, depletion and amortization | 3,240 | 4,514 | 10,772 | 14,385 |
Property and equipment additions | 357 | 2,414 | 2,465 | 7,186 |
Reportable segments | Marketing | ||||
Segment Reporting [Abstract] | ||||
Revenues | 282,229 | 243,704 | 872,020 | 758,627 |
Segment operating (losses) earnings | 2,412 | 1,265 | 5,496 | 13,148 |
Depreciation, depletion and amortization | 1,911 | 2,418 | 5,957 | 7,621 |
Property and equipment additions | 178 | 0 | 451 | 514 |
Reportable segments | Transportation | ||||
Segment Reporting [Abstract] | ||||
Revenues | 13,082 | 12,310 | 40,153 | 39,517 |
Segment operating (losses) earnings | (915) | (430) | (920) | 444 |
Depreciation, depletion and amortization | 1,329 | 1,701 | 4,392 | 5,536 |
Property and equipment additions | 179 | 2,329 | 189 | 6,480 |
Reportable segments | Oil and Gas (1) | ||||
Segment Reporting [Abstract] | ||||
Revenues | 0 | 863 | 1,427 | 2,427 |
Segment operating (losses) earnings | 0 | (543) | 53 | (1,222) |
Depreciation, depletion and amortization | 0 | 395 | 423 | 1,228 |
Property and equipment additions | $ 0 | $ 85 | $ 1,825 | $ 192 |
Segment Reporting, Reconciliati
Segment Reporting, Reconciliation of Segment Earnings to Earnings Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Operating earnings (losses) | $ (1,290) | $ (1,822) | $ (2,255) | $ 6,118 |
Loss on deconsolidation of subsidiary (Note 3) | (1,870) | 0 | (3,505) | 0 |
Impairment of investments in unconsolidated affiliates | (2,500) | (1,732) | (2,500) | (1,732) |
Losses from equity investment | 0 | (68) | 0 | (468) |
Interest income | 370 | 245 | 789 | 444 |
Interest expense | (8) | 0 | (10) | 0 |
(Losses) earnings before income taxes | (5,298) | (3,377) | (7,481) | 4,362 |
Reportable segments | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Operating earnings (losses) | 1,497 | 292 | 4,629 | 12,370 |
Corporate non-segment | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Operating earnings (losses) | (2,787) | (2,114) | (6,884) | (6,252) |
Segment reconciling items | ||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract] | ||||
Loss on deconsolidation of subsidiary (Note 3) | (1,870) | 0 | (3,505) | 0 |
Impairment of investments in unconsolidated affiliates | (2,500) | (1,732) | (2,500) | (1,732) |
Losses from equity investment | 0 | (68) | 0 | (468) |
Interest income | 370 | 245 | 789 | 444 |
Interest expense | $ (8) | $ 0 | $ (10) | $ 0 |
Segment Reporting, Identifiable
Segment Reporting, Identifiable Assets by Industry Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reconciliation [Abstract] | ||
Total assets | $ 248,529 | $ 246,872 |
Reportable segments | ||
Segment Reconciliation [Abstract] | ||
Total assets | 248,529 | 246,872 |
Reportable segments | Marketing | ||
Segment Reconciliation [Abstract] | ||
Total assets | 107,388 | 107,257 |
Reportable segments | Transportation | ||
Segment Reconciliation [Abstract] | ||
Total assets | 29,492 | 32,120 |
Reportable segments | Oil and Gas (1) | ||
Segment Reconciliation [Abstract] | ||
Total assets | 3,200 | 7,279 |
Corporate non-segment | ||
Segment Reconciliation [Abstract] | ||
Total assets | $ 108,449 | $ 100,216 |
Transactions with Affiliates (D
Transactions with Affiliates (Details) - Affiliated entities - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Transactions with Affiliates [Abstract] | ||||
Affiliate billings to us | $ 0 | $ 2 | $ 0 | $ 30 |
Affiliate billings to us | 16 | 13 | 52 | 51 |
Billings to affiliates | 1 | 1 | 3 | 3 |
Rentals paid to affiliate | 137 | 155 | 462 | 473 |
Fees paid to Bencap | $ 0 | $ 309 | 108 | $ 439 |
Interest income - related party | $ 100 |
Derivative Instruments and Fa38
Derivative Instruments and Fair Value Measurements - Use of Derivative Instruments (Details) - Commodity Contract bbl in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)barrel_of_oil_per_daycontractbbl | |
Fair Value Forward Hydrocarbon Commodity Contracts at Gross Valuation [Abstract] | |
Number of contracts held | contract | 2 |
January 2017 Through April 2017 | |
Fair Value Forward Hydrocarbon Commodity Contracts at Gross Valuation [Abstract] | |
Volume committed per day under commodity purchase and sale contract | barrel_of_oil_per_day | 65 |
Total volume committed under commodity purchase and sale contract | bbl | 145 |
Not Designated as Hedging Instrument | Current Assets | |
Fair Value Forward Hydrocarbon Commodity Contracts at Gross Valuation [Abstract] | |
Asset Derivatives | $ 378 |
Liability Derivatives | 0 |
Less Counterparty Offsets | (266) |
As Reported Fair Value Contracts | 112 |
Not Designated as Hedging Instrument | Other Assets | |
Fair Value Forward Hydrocarbon Commodity Contracts at Gross Valuation [Abstract] | |
Asset Derivatives | 0 |
Liability Derivatives | 0 |
Less Counterparty Offsets | 0 |
As Reported Fair Value Contracts | 0 |
Not Designated as Hedging Instrument | Current Liabilities | |
Fair Value Forward Hydrocarbon Commodity Contracts at Gross Valuation [Abstract] | |
Asset Derivatives | 0 |
Liability Derivatives | 330 |
Less Counterparty Offsets | (266) |
As Reported Fair Value Contracts | 64 |
Not Designated as Hedging Instrument | Other Liabilities | |
Fair Value Forward Hydrocarbon Commodity Contracts at Gross Valuation [Abstract] | |
Asset Derivatives | 0 |
Liability Derivatives | 0 |
Less Counterparty Offsets | 0 |
As Reported Fair Value Contracts | $ 0 |
Derivative Instruments and Fa39
Derivative Instruments and Fair Value Measurements - Derivatives by Hedging Relationship and Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Derivatives: | |||||
Loss on deconsolidation of subsidiary (Note 3) | $ 1,870 | $ 0 | $ 3,505 | $ 0 | |
Fair Value, Measurements, Recurring | |||||
Derivatives: | |||||
Current assets | $ 112 | ||||
Current assets, counterparty offsets | (266) | ||||
Current liabilities | (64) | ||||
Current liabilities, counterparty offsets | 266 | ||||
Net value | 48 | ||||
Net value, counterparty offsets | 0 | ||||
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | |||||
Derivatives: | |||||
Current assets | 0 | ||||
Current liabilities | 0 | ||||
Net value | 0 | ||||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | |||||
Derivatives: | |||||
Current assets | 378 | ||||
Current liabilities | (330) | ||||
Net value | 48 | ||||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 [Member] | |||||
Derivatives: | |||||
Current assets | 0 | ||||
Current liabilities | 0 | ||||
Net value | $ 0 | ||||
Fair Value, Measurements, Nonrecurring | |||||
Derivatives: | |||||
Loss on deconsolidation of subsidiary (Note 3) | 6,005 | ||||
AREC [Member] | Fair Value, Measurements, Nonrecurring | |||||
Derivatives: | |||||
Investment in AREC | 3,200 | 3,200 | |||
Loss on deconsolidation of subsidiary (Note 3) | 3,505 | ||||
AREC [Member] | Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | |||||
Derivatives: | |||||
Investment in AREC | 0 | 0 | |||
AREC [Member] | Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | |||||
Derivatives: | |||||
Investment in AREC | 3,200 | 3,200 | |||
AREC [Member] | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 [Member] | |||||
Derivatives: | |||||
Investment in AREC | 0 | 0 | |||
VestaCare, Inc. [Member] | Fair Value, Measurements, Nonrecurring | |||||
Derivatives: | |||||
Investment in AREC | 0 | 0 | |||
Loss on deconsolidation of subsidiary (Note 3) | 2,500 | ||||
VestaCare, Inc. [Member] | Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | |||||
Derivatives: | |||||
Investment in AREC | 0 | 0 | |||
VestaCare, Inc. [Member] | Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3) | |||||
Derivatives: | |||||
Investment in AREC | 0 | 0 | |||
VestaCare, Inc. [Member] | Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 [Member] | |||||
Derivatives: | |||||
Investment in AREC | 0 | 0 | |||
Commodity Contract | Revenues - Marketing | Not Designated as Hedging Instrument | |||||
Derivative, Gain (Loss) on Derivative, Net [Abstract] | |||||
Revenues – Marketing | $ (748) | $ 180 | $ (48) | $ 304 |
Supplemental Cash Flow Inform40
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for federal and state taxes | $ 381 | $ 2,582 |
Non-cash transactions: | ||
Change in accounts payable related to property and equipment additions | 0 | 382 |
Property and equipment acquired under capital leases | $ 1,808 | $ 0 |
Commitments and Contingencies41
Commitments and Contingencies (Capital Lease Commitments) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2017 | $ 100 | |
2,018 | 398 | |
2,019 | 398 | |
2,020 | 398 | |
2,021 | 398 | |
Thereafter | 255 | |
Total minimum lease payments | 1,947 | |
Less: Amount representing interest | (176) | |
Present value of capital lease obligations | 1,771 | |
Less current portion of capital lease obligations | (306) | $ 0 |
Capital lease obligations | $ 1,465 | $ 0 |
Commitments and Contingencies42
Commitments and Contingencies (Details) | 9 Months Ended | |
Sep. 30, 2017USD ($)lawsuit | Dec. 31, 2016USD ($) | |
Loss Contingencies [Line Items] | ||
Estimated expenses and liabilities | $ 1,573,000 | $ 2,657,000 |
Accrued medical claims | $ 1,424,000 | 1,411,000 |
Total number of law suits | lawsuit | 2 | |
Reversal of accrual | $ 500,000 | |
Loss contingency accrual | 0 | $ 500,000 |
Minimum | ||
Loss Contingencies [Line Items] | ||
Aggregate medical claims for umbrella insurance coverage per calendar year | $ 4,500,000 |