Note 7—Equity Method Investments

WesPac Energy LLC and WesPac Midstream LLC

On July 1, 2010, the Company acquired a 50% membership interest in WesPac Energy LLC, a Nevada limited liability company (“WesPac”), from Kealine Holdings, LLC (“Kealine”), a Nevada limited liability company. Kealine held the remaining 50% membership interest in WesPac. WesPac developed pipeline and terminal projects in the United States, Canada and Mexico.

On September 30, 2013, WesPac, Kealine and the Company entered into a contribution agreement (the “Agreement”) with Highstar Capital IV, LP (“Highstar”), to form a new entity, WesPac Midstream LLC, a Delaware limited liability company (“WesPac-Midstream”), owned collectively by Highstar, Kealine and the Company. WesPac contributed certain project assets to WesPac-Midstream. Highstar contributed $6.1 million in cash for an 85% ownership interest in certain developmental projects. Of this amount, $3.04 million was distributed to the Company and accounted for as a reduction of the carrying value of the WesPac investment. Highstar also obtained a 75% interest in two of WesPac-Midstream’s more mature projects. Highstar may make additional payments to Kealine and the Company for the two projects contingent on completion of certain milestones as follows:

1. When the first project reaches “commercial acceptance” (as that term is defined in the Agreement), a payment of $4.5 million will be made ($2.25 million to the Company), and an additional payment of $4.5 million when the project goes into production ($2.25 million to the Company).

2. If the second project successfully reaches “commercial acceptance” prior to January 31, 2014, a payment of $4.5 million ($2.25 million to the Company) will be made and a similar payment when the project goes into production. If “commercial acceptance” is not received prior to July 1, 2014, no contingent payments will be made for this project.

Highstar will fund WesPac-Midstream’s operations over the next two years. The Company is not required to fund any of WesPac-Midstream’s activities and retains one of five board seats.

During the third quarter 2013 and prior to the Agreement, WesPac recorded a third quarter loss of $0.2 million and the Company recorded its 50% share of the loss of $0.1 million. After recording the loss, the carrying value of the WesPac investment prior to the sale to Highstar, was $11.5 million.

In July 2010, the Company recorded a $5 million amount greater than its pro-rata share of the WesPac equity as part of its original investment (“basis difference”). In December 2011, as a result of certain events impacting WesPac, the Company recorded a reduction of $1.7 million of its $5 million basis difference. As a result of the Agreement, the Company eliminated the remaining basis difference of $3.25 million to recognize an other than temporary decrease in the value of its basis difference. The non-cash impairment charge was recorded as a Selling, General and Administrative expense. The Company’s remaining $4.76 million investment represents the Company’s pro-rata equity ownership in both the WesPac and WesPac-Midstream entities.

The following is a summary of the financial position and results as of and for the periods ended:

	September 30, 2013		December 31, 2012

WesPac & WesPac-Midstream
Balance sheet data
Assets	$	18,856	$	16,896
Liabilities	1,067		1,063
Net assets	$	17,789	$	15,833
Company’s equity investment	$	4,757	$	11,463

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012

Earnings data:
Revenue	$	10		$	—		$	99		$	511
Expenses	$	235		$	358		$	754		$	1,002
Earnings before taxes	$	(225	)	$	(358	)	$	(655	)	$	(491	)
Company’s equity in earnings	$	(113	)	$	(178	)	$	(328	)	$	(245	)

St.—Bernard Levee Partners

The Company purchased a 30% interest in St.—Bernard Levee Partners (“Bernard”) in 2009 for $300 and accounts for this investment using the equity method. Bernard engaged in construction activities in Louisiana, and all work was completed in January 2013. The Company’s share of Bernard distributions for the nine months ended September 30, 2013 and 2012, was $145 and $1,260, respectively. The following is a summary of the financial position and results as of and for the periods ended:

	September 30, 2013		December 31, 2012

*St. — Bernard Levee Partners*
Balance sheet data
Assets	$	22	$	592
Liabilities	22		86
Net assets	$	—	$	506
Company’s equity investment	$	—	$	150

	Three months ended September 30,					Nine months ended September 30,
	2013		2012			2013			2012

Earnings data:
Revenue	$	—	$	36		$	—		$	3,970
Expenses	$	—	$	(36	)	$	16		$	162
Earnings before taxes	$	—	$	72		$	(16	)	$	3,808
Company’s equity in earnings	$	—	$	19		$	(5	)	$	1,140

Alvah, Inc.

As part of the acquisition of Q3C, the Company acquired a 49% membership interest in Alvah, Inc., a California corporation (“Alvah”). Alvah is engaged in electrical contracting activities, primarily in Northern California and worked as a subcontractor for ARB both prior to and subsequent to the Q3C acquisition. In December 2012, the company received $98 from a distribution by Alvah. During the three and nine months ending September 30, 2013, payments made by ARB to Alvah were $2,154 and $5,064, respectively, and payments made by Q3C were $2 and $214, respectively. For the same periods in the prior year, ARB made payments of $1,609 and $3,762, respectively and Q3C made payments of $120 and $353, respectively.

The following is a summary of the financial position and results as of and for the period ended:

	September 30, 2013		December 31, 2012

Balance sheet data
Assets	$	3,849	$	2,177
Liabilities	1,677		1,208
Net assets	$	2,172	$	969
Company’s equity investment in venture	$	1,789	$	1,200

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012

Earnings data:
Revenue	$	4,824	$	—	$	10,832	$	—
Expenses	$	4,185	$	—	$	9,630	$	—
Earnings after taxes	$	639	$	—	$	1,202	$	—
Company’s equity in earnings	$	313	$	—	$	589	$	—

Because Alvah was not acquired until November 2012, no activity is shown for the prior year.