v3.19.3.a.u2
Investments in Non-Controlled Entities
 12 Months Ended
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