v3.19.3.a.u2

Investments in Non-Controlled Entities | 12 Months Ended
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Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Non-Controlled Entities | Investments in Non-Controlled Entities We account for interests in affiliates that we do not control using the equity method of accounting. Under this method, an investment is recorded at our acquisition cost or capital contributions, as adjusted by contractual terms, plus equity in earnings or losses since acquisition or formation, plus interest capitalized, less distributions received and amortization of interest capitalized and excess net investment. Excess net investment is the amount by which our investment in a non-controlled entity exceeded our proportionate share of the book value of the net assets of that investment. We amortize excess net investment over the weighted-average depreciable asset lives of the equity investee. Our unamortized excess net investment was $34.8 million and $33.9 million at December 31, 2018 and 2019, respectively. The amount of unamortized excess investment is primarily related to our investment in BridgeTex. We evaluate equity method investments for impairment whenever events or circumstances indicate that there is an other-than-temporary loss in value of the investment. In the event that we determine that the loss in value of an investment is other-than-temporary, we would record a charge to earnings to adjust the carrying value to fair value. We recognized no equity investment impairments during 2017, 2018 and 2019. Our investments in non-controlled entities at December 31, 2019 were comprised of:
Entity |  | Ownership Interest
BridgeTex Pipeline Company, LLC (“BridgeTex”) |  | 30%
Double Eagle Pipeline LLC (“Double Eagle”) |  | 50%
HoustonLink Pipeline Company, LLC (“HoustonLink”) |  | 50%
MVP Terminalling, LLC (“MVP”) |  | 50%
Powder Springs Logistics, LLC (“Powder Springs”) |  | 50%
Saddlehorn Pipeline Company, LLC (“Saddlehorn”) |  | 40%
Seabrook Logistics, LLC (“Seabrook”) |  | 50%
Texas Frontera, LLC (“Texas Frontera”) |  | 50%
We serve as operator of BridgeTex, HoustonLink, MVP, Powder Springs, Saddlehorn, Texas Frontera and the pipeline activities of Seabrook. We receive fees for management services as well as reimbursement or payment to us for certain direct operational payroll and other overhead costs. The management fees we receive are reported as affiliate management fee revenue on our consolidated statements of income. Cost reimbursements we receive from these entities in connection with our operating services are included as reductions to costs and expenses on our consolidated statements of income and totaled $3.6 million, $3.9 million and $5.3 million, respectively, for the years ended December 31, 2017, 2018 and 2019. We recorded the following revenue and expense transactions from certain of these non-controlled entities in our consolidated statements of income (in thousands):
|  | Year Ended December 31,
|  | 2017 |  | 2018 |  | 2019
Transportation and terminals revenue: |  |  |  |  |  |
BridgeTex, capacity lease |  | $ | 36,129 |  |  | $ | 39,596 |  |  | $ | 41,806 |
Double Eagle, throughput revenue |  | $ | 4,673 |  |  | $ | 5,250 |  |  | $ | 6,213 |
Saddlehorn, storage revenue |  | $ | 2,126 |  |  | $ | 2,180 |  |  | $ | 2,234 |
Operating costs: |  |  |  |  |  |
Seabrook, storage lease and ancillary services |  | $ | — |  |  | $ | 10,572 |  |  | $ | 25,851 |
MVP, sale of air emission reduction credits (reduction of operating costs) |  | $ | — |  |  | $ | (2,161 | ) |  | $ | — |
Product sales revenue: |  |  |  |  |  |
Powder Springs, butane sales |  | $ | — |  |  | $ | 4,899 |  |  | $ | — |
Seabrook, product sales |  | $ | — |  |  | $ | — |  |  | $ | 328 |
Cost of product sales: |  |  |  |  |  |
BridgeTex, transportation charges |  | $ | 14,450 |  |  | $ | — |  |  | $ | — |
Powder Springs, butane purchases |  | $ | — |  |  | $ | 410 |  |  | $ | — |
Other income: |  |  |  |  |  |
MVP, easement sale |  | $ | — |  |  | $ | — |  |  | $ | 289 |
Our consolidated balance sheets reflected the following balances related to our investments in non-controlled entities (in thousands):
|  | December 31, 2018
|  | Trade Accounts Receivable |  | Other Accounts Receivable |  | Other Accounts Payable |  | Long-Term Receivables
BridgeTex |  | $ | 318 |  |  | $ | 1,549 |  |  | $ | — |  |  | $ | — |
Double Eagle |  | $ | 546 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
MVP |  | $ | — |  |  | $ | 397 |  |  | $ | — |  |  | $ | — |
Powder Springs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,221 |
Saddlehorn |  | $ | — |  |  | $ | 183 |  |  | $ | — |  |  | $ | — |
Seabrook |  | $ | — |  |  | $ | — |  |  | $ | 1,140 |  |  | $ | — |
|  | December 31, 2019
|  | Trade Accounts Receivable |  | Other Accounts Receivable |  | Other Accounts Payable |  | Long-Term Receivables
BridgeTex |  | $ | 392 |  |  | $ | 26 |  |  | $ | — |  |  | $ | — |
Double Eagle |  | $ | 445 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
HoustonLink |  | $ | 60 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
MVP |  | $ | — |  |  | $ | 418 |  |  | $ | — |  |  | $ | — |
Powder Springs |  | $ | 161 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,006 |
Saddlehorn |  | $ | — |  |  | $ | 126 |  |  | $ | — |  |  | $ | — |
Seabrook |  | $ | 941 |  |  | $ | — |  |  | $ | 1,349 |  |  | $ | — |
We entered into a long-term terminalling and storage contract with Seabrook for exclusive use of dedicated tankage that provides our customers with crude oil storage capacity and dock access for crude oil imports and exports on the Texas Gulf Coast (see Note 10 – Leases for more details regarding this lease). The financial results from MVP and Texas Frontera are included in our marine storage segment, the financial results from BridgeTex, Double Eagle, HoustonLink, Saddlehorn and Seabrook are included in our crude oil segment and the financial results from Powder Springs are included in our refined products segment, each as earnings of non-controlled entities. A summary of our investments in non-controlled entities (representing only our proportionate interests) follows (in thousands):
Investments at December 31, 2018 |  | $ | 1,076,306 |
Additional investment |  | 212,380 |
Indemnification settlement |  | (5,000 | )
Earnings of non-controlled entities: |  |
Proportionate share of earnings |  | 170,814 |
Amortization of excess investment and capitalized interest |  | (1,853 | )
Earnings of non-controlled entities |  | 168,961 |
Less: |  |
Distributions from operations of non-controlled entities |  | 203,602 |
Distributions from returns of investments in non-controlled entities |  | 8,494 |
Investments at December 31, 2019 |  | $ | 1,240,551 |
Summarized financial information of our non-controlled entities (representing 100% of the interests in these entities) follows (in thousands):
|  | December 31,
|  | 2018 |  | 2019
Current assets |  | $ | 258,698 |  |  | $ | 260,033 |
Noncurrent assets |  | 2,461,456 |  |  | 2,768,696 |
Total assets |  | $ | 2,720,154 |  |  | $ | 3,028,729 |
Current liabilities |  | $ | 170,558 |  |  | $ | 160,566 |
Noncurrent liabilities |  | 73,700 |  |  | 60,886 |
Total liabilities |  | $ | 244,258 |  |  | $ | 221,452 |
Equity |  | $ | 2,475,896 |  |  | $ | 2,807,277 |
|  | Year Ended December 31,
|  | 2017 |  | 2018 |  | 2019
Revenue |  | $ | 419,214 |  |  | $ | 631,420 |  |  | $ | 782,013 |
Net income |  | $ | 256,423 |  |  | $ | 416,128 |  |  | $ | 507,464 |

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SX 210.3A-04) -URI http://asc.fasb.org/extlink&oid=116822174&loc=d3e355119-122828 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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