Investing Activities

12 Months Ended

Dec. 31, 2022

Note 8 – Investing Activities

Investments


	Ownership Interest at December 31, 2022	December 31,
		2022		2021
		(Millions)
Equity method:
Appalachia Midstream Investments	(1)	$	2,975	$	3,056
RMM	50%	395		401
OPPL	50%	386		388
Blue Racer	50%	383		377
Discovery	60%	345		328
Gulfstream	50%	220		215
Laurel Mountain	69%	205		226
Other	Various	139		130
		5,048		5,121
Other		17		6
		$	5,065	$	5,127

___________

(1)Includes equity-method investments in multiple gathering systems in the Marcellus Shale region with an approximate average 66 percent interest.

Basis differential

The carrying value of our Appalachia Midstream Investments exceeds our portion of the underlying net assets by approximately $1.1 billion and $1.2 billion at December 31, 2022 and 2021, respectively. These differences were assigned at the acquisition date to property, plant, and equipment and customer relationship intangible assets. Certain of our other equity-method investments have a carrying value less than our portion of the underlying equity in the net assets primarily due to other than temporary impairments that we have recognized but that were not required to be recognized in the investees’ financial statements. These differences total approximately $1.1 billion and $1.2 billion at December 31, 2022 and 2021, respectively, and were assigned to property, plant, and equipment and customer relationship intangible assets. Differences in the carrying value of our equity-method investments and

our portion of the equity in the underlying net assets are generally amortized over the remaining useful lives of the associated underlying assets and included in Equity earnings (losses) within our Consolidated Statement of Income.

Purchases of and contributions to equity-method investments

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:


	Year Ended December 31,
	2022		2021		2020
	(Millions)
Appalachia Midstream Investments	$	83	$	84	$	116
Discovery	41		—		—
Cardinal Pipeline Company, LLC	16		—		—
Gulfstream	14		26		3
Blue Racer (1)	—		3		157




Other	12		2		49
	$	166	$	115	$	325

___________

(1)See following discussion in the section Acquisition of additional interests in BRMH below.

Acquisition of additional interests in BRMH

As of December 31, 2019, we effectively owned a 29 percent indirect interest in Blue Racer through our 58 percent interest in Blue Racer Midstream Holdings, LLC (BRMH), whose primary asset is a 50 percent interest in Blue Racer. In November 2020, we paid $157 million, net of cash acquired, to acquire an additional 41 percent ownership interest in BRMH before acquiring the remaining interest of BRMH in September 2021. As such, we control and consolidate BRMH, reporting the 50 percent interest in Blue Racer as an equity-method investment. Since substantially all of the fair value of the BRMH assets acquired is concentrated in a single asset, the investment in Blue Racer, and we previously held a noncontrolling interest in BRMH, we recorded the November 2020 and September 2021 additional purchases of interests as asset acquisitions. Prior to November 2021 BRMH was named Caiman Energy II, LLC and was accounted for as an equity-method investment.

Dividends and distributions

The organizational documents of entities in which we have an equity-method investment 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:


	Year Ended December 31,
	2022		2021		2020
	(Millions)
Appalachia Midstream Investments	$	415	$	433	$	357
Laurel Mountain	112		33		31
Gulfstream	89		90		93
RMM	52		45		39
Blue Racer (1)	49		47		47
Discovery	49		44		21
OPPL	34		26		50

Other	65		39		15
	$	865	$	757	$	653

___________

(1)See previous discussion in the section Acquisition of additional interests in BRMH above.

Equity Earnings (Losses)

Equity earnings (losses) in 2020 includes a $78 million loss associated with the first-quarter full impairment of goodwill recognized by our investee RMM, which was allocated entirely to our member interest per the terms of the membership agreement. Also included in 2020 are losses of $11 million, $26 million, and $10 million for our share of asset impairments at Laurel Mountain, Appalachia Midstream Investments, and Blue Racer, respectively.

Impairments of Equity-Method Investments

See Note 15 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk for information regarding impairments of our equity-method investments of $1,046 million for 2020.

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


	December 31,
	2022		2021
	(Millions)
Assets (liabilities):
Current assets	$	964	$	743
Noncurrent assets	12,701		13,211
Current liabilities	(632)		(435)
Noncurrent liabilities	(3,789)		(3,774)


	Year Ended December 31,
	2022		2021		2020
	(Millions)
Gross revenue	$	5,520	$	4,688	$	2,625
Operating income	1,268		1,191		508
Net income	1,102		1,006		459