Note 5 – Investing Activities

Gain on remeasurement of equity-method investment in the Consolidated Statement of Operations

We recognized a $2.544 billion noncash gain in 2014 associated with the ACMP Acquisition. (See Note 2 – Acquisitions.)

Impairment of equity-method investments in the Consolidated Statement of Operations

During the third quarter of 2015, we recognized other-than-temporary impairment charges of $458 million and $3 million related to WPZ’s equity-method investments in the Delaware basin gas gathering system and certain of the Appalachia Midstream Investments, respectively. During the fourth quarter of 2015, we recognized additional impairment charges for these investments of $45 million and $559 million, respectively, as well as impairment charges of $241 million and $45 million associated with WPZ’s equity-method investments in UEOM and Laurel Mountain, respectively. (See Note 17 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk.) These charges are reported within the Williams Partners segment.

Equity earnings (losses) in the Consolidated Statement of Operations

Equity earnings (losses) in 2015 includes a loss of $19 million associated with WPZ’s share of underlying property impairments at certain of the Appalachia Midstream Investments. This loss is reported within the Williams Partners segment.

Equity earnings (losses) in 2014 includes:


•	Write-offs of capitalized project development costs on our discontinued investments in Bluegrass Pipeline of $67 million and Moss Lake of $4 million;

•

a $7 million equity loss recognized from our interest in ACMP that was accounted for under the equity-method of accounting for the first six months of the year, including $19 million of equity losses associated with certain compensation-related costs at ACMP that were triggered by the acquisition and $30 million noncash amortization of the difference between the cost of our investment and our underlying share of the net assets for the first six months of the year.

Equity earnings (losses) in 2013 includes $93 million of equity earnings recognized from our interest in ACMP, acquired at the end of 2012, that was accounted for under the equity-method of accounting, partially offset by $63 million noncash amortization of the difference between the cost of our investment and our underlying share of the net assets.

Other investing income (loss) – net in the Consolidated Statement of Operations

Other investing income (loss) – net includes $27 million, $41 million, and $50 million of interest income for 2015, 2014 and 2013, respectively, associated with a receivable related to the sale of certain former Venezuela assets. Due to changes in circumstances that led to late payments and increased uncertainty regarding the recovery of the receivable, we began accounting for the receivable under a cost recovery model in first quarter 2015. Subsequently, we received payments greater than the remaining carrying amount of the receivable, which resulted in the recognition of interest income.

Other investing income (loss) – net in 2013 also includes a $31 million gain resulting from ACMP’s equity issuances during 2013. These equity issuances resulted in the dilution of our limited partner interest at that time from approximately 24 percent to 23 percent, which is accounted for as though we sold a portion of our investment.

Investments in the Consolidated Balance Sheet



	December 31,
	2015		2014
	(Millions)
Equity-method investments:
Appalachia Midstream Investments (1)	$	2,464	$	3,033
UEOM — 62% (2)	1,525		1,411
Delaware basin gas gathering system — 50%	977		1,478
Discovery — 60%	602		602
OPPL – 50%	445		453
Caiman II — 58%	418		432
Laurel Mountain — 69%	391		459
Gulfstream — 50%	293		317
Other	221		215
	$	7,336	$	8,400

___________


(1)	Includes equity-method investments in multiple gathering systems in the Marcellus Shale with an approximate average 45 percent interest.


(2)	WPZ acquired an approximate 13 percent additional interest in UEOM in 2015. (See Note 2 – Acquisitions).

We have differences between the carrying value of our equity-method investments and the underlying equity in the net assets of the investees of $2.4 billion at December 31, 2015 and $3.7 billion at December 31, 2014. These differences primarily relate to our investments in Appalachian Midstream Investments, Delaware basin gas gathering system, and UEOM resulting from property, plant, and equipment, as well as customer-based intangible assets and goodwill.

Purchases of and contributions to equity-method investments in the Consolidated Statement of Cash Flows

We generally fund our portion of significant expansion or development projects of these investees through additional capital contributions. These transactions increased the carrying value of our investments and included:



	Years Ended December 31,
	2015		2014		2013
	(Millions)
UEOM (1)	$	357	$	57	$	—
Appalachia Midstream Investments	93		84		—
Delaware basin gas gathering system	57		20		—
Discovery	35		106		193
Caiman II	—		175		192
Other	53		40		70
	$	595	$	482	$	455

___________


(1)	2015 includes additional interest in UEOM acquired by WPZ. (See Note 2 – Acquisitions.)

Dividends and distributions

The organizational documents of entities in which we have an equity-method interest generally require distribution of available cash to members on at least a quarterly basis. These transactions reduced the carrying value of our investments and included:



	Years Ended December 31,
	2015		2014		2013
	(Millions)
Appalachia Midstream Investments	$	219	$	130	$	—
Discovery	116		36		12
Gulfstream	88		81		81
OPPL	45		27		27
UEOM	42		—		—
Caiman II	33		13		—
Delaware basin gas gathering system	33		—		—
Laurel Mountain	31		39		—
Access Midstream Investments	—		64		93
Other	26		50		34
	$	633	$	440	$	247

In addition, on September 24, 2015, WPZ received a special distribution of $396 million from Gulfstream reflecting its proportional share of the proceeds from new debt issued by Gulfstream. The new debt was issued to refinance Gulfstream’s debt maturities. Subsequently, WPZ contributed $248 million to Gulfstream for its proportional share of amounts necessary to fund debt maturities of $500 million due on November 1, 2015. WPZ also expects to contribute its proportional share of amounts necessary to fund debt maturities of $300 million due on June 1, 2016, as reflected by the accrued liability of $149 million in Accrued liabilities in the Consolidated Balance Sheet at December 31, 2015.

Summarized Financial Position and Results of Operations of All Equity-Method Investments



	December 31,
	2015			2014
	(Millions)
Assets (liabilities):
Current assets	$	773		$	599
Noncurrent assets	9,549			9,135
Current liabilities	(633		)	(850		)
Noncurrent liabilities	(1,450		)	(954		)



	Years Ended December 31,
	2015		2014		2013
	(Millions)
Gross revenue	$	1,707	$	1,623	$	2,406
Operating income	690		534		699
Net income	611		460		627