INVESTMENTS IN UNCONSOLIDATED AFFILIATES

3 Months Ended

Mar. 31, 2014

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

(8) INVESTMENTS IN UNCONSOLIDATED AFFILIATES

        At March 31, 2014 and December 31, 2013, our investments in unconsolidated affiliates include a 42.5% interest in BOSTCO and a 50% interest in Frontera. BOSTCO is a terminal facility construction project for approximately 7.1 million barrels of storage capacity at an estimated cost of approximately $505 million. BOSTCO is located on the Houston Ship Channel and began initial commercial operations in the fourth quarter of 2013 (see Note 3 of Notes to consolidated financial statements). Frontera is a terminal facility located in Brownsville, Texas that encompasses approximately 1.5 million barrels of light petroleum product storage capacity, as well as related ancillary facilities.

        The following table summarizes our investments in unconsolidated affiliates:

	Percentage of ownership						Carrying value (in thousands)
	March 31, 2014			December 31, 2013			March 31, 2014		December 31, 2013
BOSTCO		42.5	%		42.5	%	$	203,960	$	186,181
Frontera		50	%		50	%		25,075		25,424
Total investments in unconsolidated affiliates							$	229,035	$	211,605

        At March 31, 2014 and December 31, 2013, our investment in BOSTCO includes approximately $4.2 million and $3.6 million, respectively, of excess investment related to the capitalization of interest on our investment during the construction of BOSTCO. Excess investment is the amount by which our investment exceeds our proportionate share of the book value of the net assets of the BOSTCO entity.

        Earnings (losses) from investments in unconsolidated affiliates were as follows (in thousands):

	Three months ended March 31,
	2014			2013
BOSTCO	$	(80	)	$	—
Frontera		243			40
Total earnings from unconsolidated affiliates	$	163		$	40

        Additional capital investments in unconsolidated affiliates were as follows (in thousands):

	Three months ended March 31,
	2014		2013
BOSTCO	$	17,972	$	56,897
Frontera		45		66
Total additional capital investments in unconsolidated affiliates	$	18,017	$	56,963

        Cash distributions received from unconsolidated affiliates were as follows (in thousands):

	Three months ended March 31,
	2014		2013
BOSTCO	$	113	$	—
Frontera		637		178
Total cash distributions received from unconsolidated affiliates	$	750	$	178

        The summarized financial information of our unconsolidated affiliates was as follows (in thousands):

        Balance sheets:

	BOSTCO						Frontera
	March 31, 2014			December 31, 2013			March 31, 2014			December 31, 2013
Current assets	$	28,913		$	30,776		$	4,415		$	4,465
Long-term assets		489,486			458,707			46,892			47,691
Current liabilities		(54,970	)		(66,469	)		(1,157	)		(1,308	)
Long-term liabilities		—			—			—			—
Net assets	$	463,429		$	423,014		$	50,150		$	50,848

        Statements of comprehensive income (loss):

	BOSTCO Three months ended March 31,					Frontera Three months ended March 31,
	2014			2013		2014			2013
Operating revenue	$	8,337		$	—	$	3,045		$	2,890
Operating expenses		(8,455	)		—		(2,559	)		(2,810	)
Net earnings (loss) and comprehensive income (loss)	$	(118	)	$	—	$	486		$	80