Investments in Non-Controlled Entities

3 Months Ended

Mar. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investments in Non-Controlled Entities

Investments in Non-Controlled Entities

Our investments in non-controlled entities at March 31, 2020 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”)	30%
Seabrook Logistics, LLC (“Seabrook”)	50%
Texas Frontera, LLC (“Texas Frontera”)	50%

In February 2020, we sold a 10% interest in Saddlehorn to an affiliate of Black Diamond Gathering LLC, which is majority-owned by Noble Midstream Partners LP, reducing our ongoing investment in Saddlehorn to a 30% interest. We received $79.9 million in cash from the sale, and we recorded a gain of $12.9 million on our consolidated statements of income.

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 $1.5 million and $1.2 million during the three months ended March 31, 2019 and 2020, respectively.

We recorded the following revenue and expense transactions from certain of these non-controlled entities in our consolidated statements of income (in thousands):

	Three Months Ended March 31,
	2019		2020
Transportation and terminals revenue:
BridgeTex, pipeline capacity and storage	$	10,145	$	10,748
Double Eagle, throughput revenue	$	1,659	$	1,600
Saddlehorn, storage revenue	$	552	$	566
Operating expenses:
Seabrook, storage lease and ancillary services	$	6,909	$	6,899
Other operating income:
Seabrook, gain on sale of air emission credits	$	—	$	1,410

We also received a payment of $1.1 million in first quarter 2020 from BridgeTex for the loss allowance on our capacity lease contract.

Our consolidated balance sheets reflected the following balances related to our investments in non-controlled entities (in thousands):

	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	$	—

	March 31, 2020
	Trade Accounts Receivable		Other Accounts Receivable		Other Accounts Payable		Long-Term Receivables
BridgeTex	$	366	$	17	$	—	$	—
Double Eagle	$	592	$	—	$	—	$	—
HoustonLink	$	24	$	—	$	—	$	—
MVP	$	—	$	690	$	—	$	—
Powder Springs	$	307	$	310	$	—	$	7,330
Saddlehorn	$	—	$	126	$	—	$	—
Seabrook	$	1,216	$	—	$	1,695	$	—

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 7 – Leases for more details regarding this lease).

The financial results from MVP, Powder Springs and Texas Frontera are included in our refined products segment and the financial results from BridgeTex, Double Eagle, HoustonLink, Saddlehorn and Seabrook are included in our crude oil segment, each as earnings of non-controlled entities.

A summary of our investments in non-controlled entities follows (in thousands):

Investments at 12/31/2019	$	1,240,551
Additional investment	28,325
Sale of ownership interest in Saddlehorn	(66,990		)
Earnings of non-controlled entities:
Proportionate share of earnings	44,118
Amortization of excess investment and capitalized interest	(458		)
Earnings of non-controlled entities	43,660
Less:
Distributions from operations of non-controlled entities	54,743
Investments at 3/31/2020	$	1,190,803