XML 63 R12.htm IDEA: XBRL DOCUMENT

Investments in Unconsolidated Affiliates

12 Months Ended

Dec. 31, 2019

Investments in Unconsolidated Affiliates [Abstract]

Investments in Unconsolidated Affiliates

Note 5. Investments in Unconsolidated Affiliates

The following table presents our investments in unconsolidated affiliates by business segment at the dates indicated. We account for these investments using the equity method.

	Ownership Interest at December 31,	December 31,
	2019	2019		2018
NGL Pipelines & Services:
Venice Energy Service Company, L.L.C. (“VESCO”)	13.1%	$	23.2	$	24.1
K/D/S Promix, L.L.C. (“Promix”)	50%		25.7		28.9
Baton Rouge Fractionators LLC (“BRF”)	32.2%		15.6		16.3
Skelly-Belvieu Pipeline Company, L.L.C. (“Skelly-Belvieu”)	50%		33.1		35.6
Texas Express Pipeline LLC (“Texas Express”)	35%		358.1		337.6
Texas Express Gathering LLC (“TEG”)	45%		41.1		43.6
Front Range Pipeline LLC (“Front Range”)	33.3%		207.0		175.9
Crude Oil Pipelines & Services:
Seaway Crude Holdings LLC (“Seaway”)	50%		1,353.1		1,369.7
Eagle Ford Pipeline LLC (“Eagle Ford Crude Oil Pipeline”)	50%		386.5		388.7
Eagle Ford Terminals Corpus Christi LLC (“Eagle Ford Corpus Christi”)	50%		126.9		109.1
Natural Gas Pipelines & Services:
White River Hub, LLC (“White River Hub”)	50%		19.1		20.1
Old Ocean Pipeline, LLC (“Old Ocean”)	50%		8.2		2.7
Petrochemical & Refined Products Services:
Centennial Pipeline LLC (“Centennial”) (1)	50%		–		59.1
Baton Rouge Propylene Concentrator LLC (“BRPC”)	30%		2.0		3.2
Transport 4, LLC (“Transport 4”)	25%		0.6		0.5
Total		$	2,600.2	$	2,615.1

(1)	The investment in Centennial was written off in December 2019.

NGL Pipelines & Services

The principal business activity of each investee included in our NGL Pipelines & Services segment is described as follows:

•	VESCO owns the Venice natural gas processing facility and a related gathering system located in south Louisiana.

•	Promix owns an NGL fractionation facility and a related gathering system located in south Louisiana.

•	BRF owns an NGL fractionation facility located in south Louisiana.

•	Skelly-Belvieu owns a pipeline that transports mixed NGLs from Skellytown, Texas to Mont Belvieu, Texas.

•

Texas Express owns an NGL pipeline that extends from Skellytown to our Mont Belvieu NGL fractionation and storage complex. Mixed NGLs from the Rocky Mountains, Permian Basin and Mid-Continent regions are delivered to the Texas Express Pipeline via an interconnect with our Mid-America Pipeline System near Skellytown. In addition, mixed NGLs from the Denver-Julesburg (“DJ”) Basin in Colorado are delivered to the Texas Express Pipeline via an interconnect with the Front Range Pipeline near Skellytown. The Texas Express Pipeline is also used to transport mixed NGLs gathered by TEG to Mont Belvieu.

•	TEG owns two NGL gathering systems that deliver mixed NGLs to the Texas Express Pipeline.

•	Front Range owns an NGL pipeline that transports mixed NGLs from natural gas processing facilities located in the DJ Basin to an interconnect with our Texas Express Pipeline and Mid-America Pipeline System and other third party facilities near Skellytown.

Crude Oil Pipelines & Services

The principal business activity of each investee included in our Crude Oil Pipelines & Services segment is described as follows:

•

Seaway owns a crude oil pipeline system that connects the Cushing, Oklahoma hub, which is a major industry trading hub and price settlement point for West Texas Intermediate on the NYMEX, with markets in Southeast Texas. The Seaway Pipeline is comprised of the Longhaul System, the Freeport System and the Texas City System.

•

Eagle Ford Crude Oil Pipeline owns a pipeline that transports crude oil and condensate for producers in South Texas. The system originates in Gardendale, Texas and extends to Three Rivers, Texas and further to Corpus Christi, Texas. The system interconnects with our South Texas Crude Oil Pipeline System and a marine terminal owned by Eagle Ford Corpus Christi.

•	Eagle Ford Corpus Christi owns a marine crude oil terminal located in Corpus Christi, Texas that can load ocean-going vessels with either crude oil or condensate. The terminal commenced operations in the third quarter of 2019.

Natural Gas Pipelines & Services

The principal business activity of each investee included in our Natural Gas Pipelines & Services segment is described as follows:

•	White River Hub owns a natural gas hub facility serving producers in the Piceance Basin of northwest Colorado.

•	Old Ocean owns a natural gas pipeline that extends from near Maypearl, Texas to Sweeny, Texas.

Petrochemical & Refined Products Services

The principal business activity of each investee included in our Petrochemical & Refined Products Services segment is described as follows:

•	BRPC owns a propylene fractionation facility located in south Louisiana.

•	Transport 4 provides pipeline and terminal logistics services used by our refined products pipelines.

Centennial

In December 2019, we recorded a $76.4 million impairment charge to fully write-off our 50% equity method investment in Centennial, which owns the Centennial Pipeline and related terminal infrastructure. The impairment charge is a component of operating costs and expenses for the year ended December 31, 2019 as presented on our Statements of Consolidated Operations.

The Centennial assets were idled in 2013 while management investigated multiple capital project opportunities to repurpose the pipeline. As a result of losses incurred following idling of the pipeline, we tested our equity method investment in Centennial for impairment in each of the last three fiscal years. Our valuation estimates, which were based on a combination of market and income approaches, indicated that the fair value of our investment was in excess of its carrying value during the years ended December 31, 2018 and 2017 and that no impairment was indicated. However, due to recent declines in the viability of potential commercial transactions involving the pipeline, we concluded that our investment was not recoverable and had no fair value at December 31, 2019.

We continue to own a 50% equity interest in the Centennial Pipeline, which is being maintained in an idled state in accordance with governmental regulations.

Equity Earnings

The following table presents our equity in income (loss) of unconsolidated affiliates by business segment for the years indicated:

	For the Year Ended December 31,
	2019			2018			2017
NGL Pipelines & Services	$	114.5		$	117.0		$	73.4
Crude Oil Pipelines & Services		449.2			365.4			358.4
Natural Gas Pipelines & Services		6.3			6.8			3.8
Petrochemical & Refined Products Services (1)		(7.0	)		(9.2	)		(9.6	)
Total	$	563.0		$	480.0		$	426.0

(1)

The losses recorded for this segment are primarily due to protection, maintenance and pipeline integrity costs of the idled Centennial Pipeline, which was purged and filled with nitrogen in 2013. Although we wrote off our investment in Centennial in 2019, we, as a 50% owner of Centennial, have a continuing obligation to fund the pipeline’s costs in its idled state.

Excess Cost

On occasion, the price we pay to acquire an ownership interest in a company exceeds the underlying carrying value of the capital accounts we acquire. These excess cost amounts are attributable to the fair value of the underlying tangible assets of these entities exceeding their respective book carrying values at the time of our acquisition of ownership interests in these entities. We amortize such excess cost amounts as a reduction to equity earnings in a manner similar to depreciation. The following table presents our unamortized excess cost amounts by business segment at the dates indicated:

	December 31,
	2019		2018
NGL Pipelines & Services	$	20.5	$	21.7
Crude Oil Pipelines & Services		16.6		17.4
Petrochemical & Refined Products Services		–		1.7
Total	$	37.1	$	40.8

In total, amortization of excess cost amounts were $2.1 million for each of the years ended December 31, 2019, 2018 and 2017. We forecast that our amortization of excess cost amount will approximate $2.0 million in each of the next five years.

Summarized Combined Financial Information of Unconsolidated Affiliates

Combined balance sheet information for the last two years and results of operations data for the last three years for our unconsolidated affiliates are summarized in the following table (all data presented on a 100% basis):

	December 31,
	2019		2018
Balance Sheet Data:
Current assets	$	358.1	$	350.2
Property, plant and equipment, net		5,379.7		5,359.1
Other assets		68.7		80.4
Total assets	$	5,806.5	$	5,789.7

Current liabilities	$	230.9	$	220.6
Other liabilities		69.6		77.9
Combined equity		5,506.0		5,491.2
Total liabilities and combined equity	$	5,806.5	$	5,789.7

	For the Year Ended December 31,
	2019		2018		2017
Income Statement Data:
Revenues	$	1,950.2	$	1,721.3	$	1,509.0
Operating income		1,250.4		1,074.6		925.9
Net income		1,251.8		1,069.1		929.5