Note 6 - Equity Method Investments and Joint Ventures

For each of the following investments, we have the ability to exercise significant influence through our participation in the management committees, which make all significant decisions. However, since we have equal or proportionate influence over each committee as a joint interest partner and all significant decisions require the consent of the other investor(s) without regard to economic interest, we have determined that these entities should not be consolidated and apply the equity method of accounting with respect to our investments in each entity.


•	ALRP - We own a 67% interest in ALRP, a recently constructed crude oil pipeline located in the Delaware and Midland basins in west Texas.


•	MPL - We own a 17% interest in MPL, which owns and operates a crude oil pipeline in Minnesota.


•	PNAC - We own a 50% interest in PNAC, which owns and operates an asphalt terminal in Nevada.


•	RGS - We own a 78% interest in RGS, which owns and operates the infrastructure that transports gas from certain fields to several re-delivery points in southwestern Wyoming, including natural gas processing facilities that are owned by us or a third party.


•	TRG - We own a 50% interest in TRG located in the southeastern Uinta Basin, which transports natural gas gathered by UBFS and other third-party volumes to gas processing facilities.


•	UBFS - We own a 38% interest in UBFS, which owns and operates the natural gas gathering infrastructure located in the southeastern Uinta Basin.

Equity Method Investments (in millions)



	ALRP (a)			MPL (a)			PNAC (a)			RGS			TRG			UBFS			Total
Balance at December 31, 2016	$	—		$	—		$	—		$	281		$	40		$	16		$	337
Acquired interests	—			120			—			—			—			—			120
Equity in earnings	—			12			—			6			2			2			22
Distributions received	—			(12		)	—			(19		)	(5		)	(3		)	(39		)
Balance at December 31, 2017 (b)	—			120			—			268			37			15			440
Acquired interests	159			—			27			—			—			—			186
Equity in earnings (loss)	6			17			(1		)	5			3			1			31
Cumulative effect of accounting standard adoption	—			—			—			—			(3		)	—			(3		)
Distributions received	(5		)	(20		)	—			(20		)	(5		)	(2		)	(52		)
Balance at December 31, 2018 (b)	$	160		$	117		$	26		$	253		$	32		$	14		$	602


(a)	These equity method investments were included in the 2018 Drop Down. Amounts were adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.


(b)	The carrying amounts of our investments that exceed the underlying equity in net assets are amortized over the useful life of the underlying fixed assets and included in equity in earnings. The carrying amount of our investments in these equity method investments exceeded the underlying equity in net assets as shown below.



	December 31,
(in millions)	2018		2017 (c)
ALRP	$	75	$	—
MPL	34		35
PNAC	17		—
RGS	125		130
TRG	14		15
UBFS	6		6


(c)	Adjusted to include the historical results of the Predecessors. See Notes 1 and 2 for further discussion.

We acquired 67% of all of the issued and outstanding limited liability company interests in ALRP as part of the 2018 Drop Down. ALRP is a variable interest entity. We are not the primary beneficiary of ALRP under the partnership agreement because the Partnership and the other minor shareholder jointly direct the activities of ALRP that most significantly impact its economic performance. In addition, we have a 78% interest in RGS. ALRP and RGS are unconsolidated variable interest entities and we use the equity method of accounting with respect to our investments in each entity.