EQUITY METHOD INVESTMENTS

Our equity method investments consist of the following (in thousands):



	December 31,
	2015		2014
White Cliffs	$	297,109	$	269,635
NGL Energy	112,787		162,246
Glass Mountain	141,182		146,039
Total equity method investments	$	551,078	$	577,920

Our earnings from equity method investments consist of the following (in thousands):



	Year Ended December 31,
	2015		2014		2013
White Cliffs	$	70,238	$	57,378	$	45,459
NGL Energy⁽¹⁾	5,031		2,343		7,123
Glass Mountain	6,117		4,478		(105		)
Total earnings from equity method investments	$	81,386	$	64,199	$	52,477

(1) Excluding gains on issuance of common units of $6.4 million, $29.0 million and $26.9 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Cash distributions received from equity method investments consist of the following (in thousands):



	Year Ended December 31,
	2015		2014		2013
White Cliffs	$	86,845	$	66,768	$	57,576
NGL Energy	19,074		23,404		18,321
Glass Mountain	13,623		6,823		—
Total cash distributions received from equity method investments	$	119,542	$	96,995	$	75,897

White Cliffs

Certain summarized balance sheet information of White Cliffs is shown below (in thousands):



	December 31,
	2015		2014
Current assets	$	54,091	$	35,623
Property, plant and equipment, net	509,068		471,179
Goodwill	17,000		17,000
Other intangible assets, net	11,974		16,043
Total assets	$	592,133	$	539,845

Current liabilities	$	9,491	$	11,108
Members’ equity	582,642		528,737
Total liabilities and members’ equity	$	592,133	$	539,845

Certain summarized income statement information of White Cliffs for the years ended December 31, 2015, 2014 and 2013 is shown below (in thousands):



	Year Ended December 31,
	2015		2014		2013
Revenue	$	206,395	$	160,369	$	133,310
Operating, general and administrative expenses	$	33,284	$	23,067	$	23,825
Depreciation and amortization expense	$	34,105	$	23,257	$	18,668
Net income	$	139,000	$	114,045	$	90,817

The equity in earnings of White Cliffs for the years ended December 31, 2015, 2014 and 2013 reported in our consolidated statements of operations is less than 51% of the net income of White Cliffs for the same period. This is due to certain general and administrative expenses we incur in managing the operations of White Cliffs that the other members are not obligated to share. Such expenses are recorded by White Cliffs, and are allocated to our membership interests. White Cliffs recorded $1.3 million, $1.6 million and $1.8 million of such general and administrative expense for the years ended December 31, 2015, 2014 and 2013, respectively.

The members of White Cliffs are required to contribute capital to White Cliffs to fund various projects. For the year ended December 31, 2015, we contributed $42.8 million to these projects, including $34.5 million of contributions for an expansion project adding approximately 65,000 barrels per day of capacity. Remaining contributions related to the expansion project will be paid in 2016 and are expected to total approximately $2.3 million. The project is expected to be completed during the first half of 2016.

In August 2014, White Cliffs completed an expansion project adding a parallel 12" pipeline from Platteville, Colorado to Cushing, Oklahoma. For the years ended December 31, 2014 and 2013, we contributed $53.3 million and $95.5 million, respectively, for project funding. This expansion increased White Cliffs’ capacity to about 150,000 barrels per day and became fully operational in the third quarter of 2014.

Our membership interest in White Cliffs is significant as defined by Securities and Exchange Commission’s Regulation S-X Rule 1-02(w). Accordingly, as required by Regulation S-X Rule 3-09, we have included the audited financial statements of White Cliffs as of December 31, 2015 and 2014 and for each of the three years in the period ended December 31, 2015 as an exhibit to this Form 10-K.

NGL Energy

At December 31, 2015, we owned 4,652,568 common units representing limited partner interests in NGL Energy, which represents approximately 4.4% of the limited partner units of NGL Energy outstanding at September 30, 2015, and an 11.78% interest in the general partner of NGL Energy.

On October 27, 2014, we agreed to terminate our right to appoint two representatives to the Board of Directors of NGL Energy Holdings LLC, the general partner of NGL Energy, and our current representatives resigned. We no longer have significant influence over NGL Energy Holdings, LLC or NGL Energy. However, in accordance with ASC 323-30-S99-1, we have continued to account for these investments under the equity method as our ownership is within the 3 to 5 percent interest which is generally considered to be more than minor.

At December 31, 2015, the fair market value of our 4,652,568 common unit investment in NGL Energy was $51.4 million, based on a December 31, 2015 closing price of $11.04 per common unit. This does not reflect our 11.78% interest in the general partner of NGL Energy. The fair value of our limited partner investment in NGL Energy is categorized as a Level 1 measurement, as it is based on quoted market prices.

During the 4th quarter of 2015 the market price of NGL Energy common units fell below our carrying value per unit. In accordance with ASC 320-10-S99 “Investments - Debt and Equity Securities” we have assessed whether such decline in value is other than temporary. The evidence management considered in such assessment included the nature and volatility of such decline, as well as the latest public financial guidance, condition, and results of NGL Energy. Based on the rapid and recent nature of such decline, and our assessment of the financial condition and near-term prospects of NGL Energy, we have concluded that the decline in the value of our investment is not other than temporary. We have the ability and intent to hold the shares for a period of time sufficient to allow for a recovery in the market value. However, we will continue to closely monitor future events and developments related to NGL Energy that would impact our conclusions about the recoverability of the investment, and if future facts and circumstances indicate that the decline in value of our investment is other than temporary, a significant impairment may be recorded.

Our policy is to record our equity in earnings of NGL Energy on a one-quarter lag, as we do not expect information on the earnings of NGL Energy to always be available in time to consistently record the earnings in the quarter in which they are generated. Accordingly, the equity in earnings from NGL Energy, which is reflected in our consolidated statements of operations and comprehensive income for the years ended December 31, 2015, 2014 and 2013 relates to the earnings of NGL Energy for the twelve months ended September 30, 2015, 2014 and 2013 respectively.

Certain unaudited summarized balance sheet information of NGL Energy is shown below (in thousands):



	(Unaudited) September 30,
	2015		2014
Current assets	$	1,276,919	$	2,585,053
Property plant and equipment, net	1,845,112		1,433,313
Goodwill	1,490,928		1,170,490
Intangible and other assets, net	1,836,878		1,362,823
Total assets	$	6,449,837	$	6,551,679

Current liabilities	$	852,170	$	1,759,980
Long-term debt	3,093,694		2,437,351
Other noncurrent liabilities	17,679		39,518
Equity	2,486,294		2,314,830
Total liabilities and equity	$	6,449,837	$	6,551,679

Certain unaudited summarized income statement information of NGL Energy for the twelve months ended September 30, 2015, 2014 and 2013 is shown below (in thousands):



	(Unaudited) Twelve Months Ended September 30,
	2015		2014		2013
Revenue	$	14,504,581	$	15,748,520	$	5,935,715
Costs of products sold	$	13,573,066	$	15,054,291	$	5,478,361
Operating, general and administrative expenses	$	625,035	$	440,609	$	276,905
Depreciation and amortization expense	$	221,067	$	162,443	$	94,050
Net income	$	22,995	$	11,409	$	44,378

During the years ended December 31, 2015, 2014 and 2013, our limited partnership interest was diluted in connection with NGL Energy common unit issuances. Accordingly, we recorded non-cash gains of $6.4 million, $29.0 million and $26.9 million for the years ended December 31, 2015, 2014 and 2013, respectively, related to these transactions, which are included in "gain on issuance of common units by equity method investee" in our consolidated statements of operations and comprehensive income.

During the year ended December 31, 2015, we sold 1,999,533 of our NGL Energy common units for $56.3 million, net of related costs of $0.5 million. We recorded a net gain of $14.5 million in "other expense (income), net" in our consolidated statement of operations and comprehensive income. During the year ended December 31, 2014, we sold 2,481,308 of our NGL Energy common units for $88.8 million, net of related costs of $3.1 million. We recorded a net gain of $34.2 million in "other expense (income), net" in our consolidated statement of operations and comprehensive income.

Our ownership interest in NGL Energy is significant as defined by Securities and Exchange Commission’s Regulation S-X Rule 1-02(w). Accordingly, as required by Regulation S-X Rule 3-09, we will amend this Form 10-K to include the audited financial statements of NGL Energy as of March 31, 2016 and 2015 and for each of the three years in the period ended March 31, 2016 as an exhibit, when available.

Glass Mountain

We hold a 50% interest in Glass Mountain which we account for under the equity method. Glass Mountain began operations in the first quarter of 2014.

The excess of the recorded amount of our investment over the book value of our share of the underlying net assets represents equity method goodwill and capitalized interest of $31.0 million and $4.0 million, respectively, at December 31, 2015. Capitalized interest is amortized as a reduction of earnings from equity method investments.

The equity in earnings of Glass Mountain for the years ended December 31, 2015 and 2014 reported in our consolidated statement of operations and comprehensive income is less than 50% of the net income of Glass Mountain for the same period due to amortization of capitalized interest for the period.

Certain summarized balance sheet information of Glass Mountain is shown below (in thousands):



	December 31,
	2015		2014
Current assets	$	7,856	$	8,810
Property, plant and equipment, net	205,920		215,876
Total assets	$	213,776	$	224,686

Current liabilities	$	1,036	$	2,643
Other liabilities	28		42
Members’ equity	212,712		222,001
Total liabilities and members’ equity	$	213,776	$	224,686

Certain summarized income statement information of Glass Mountain for the year ended December 31, 2015 and 2014 is shown below (in thousands):



	Year Ended December 31,
	2015		2014
Revenue	$	38,526	$	30,398
Cost of Sales	$	3,392	$	757
Operating, general and administrative expenses	$	6,643	$	6,419
Depreciation and amortization expense	$	15,828	$	13,872
Net income	$	12,657	$	9,344

We invested $2.7 million, $16.2 million and $57.8 million in Glass Mountain for the years ended December 31, 2015, 2014 and 2013, respectively.

Our ownership interest in Glass Mountain is not significant as defined by Securities and Exchange Commission's Regulation S-X Rule 1-02(w). Accordingly, no audited financial statements of Glass Mountain pursuant to Regulation S-X 3-09 have been included as an exhibit to this Form 10-K.