Investments in Unconsolidated Affiliate

12 Months Ended

Dec. 31, 2013

Investments in Unconsolidated Affiliate

Investments in Unconsolidated Affiliate

10.  Investments in Unconsolidated Affiliate

As discussed in Note 2, in September 2013, we sold our equity investment in Four Star, for net proceeds of $183 million and recorded an impairment of $20 million based on comparison of net proceeds received to the underlying carrying value of our investment. As of December 31, 2012, our investment in Four Star was $220 million (including approximately $125 million related to the excess of the carrying value of our investment in Four Star relative to the underlying equity in its net assets). Our income statement reflects (i) our share of net earnings directly attributable to Four Star, (ii) impairments of our investment and (iii) prior to its sale, the amortization of the excess of the carrying value of our investment relative to the underlying equity in the net assets of the entity.

Below is summarized financial information of the operating results of Four Star (in millions).

	Successor				Predecessor
	Year ended						Year ended
	December 31,		March 23 (inception) to		January 1 to		December 31,
	2013		December 31, 2012		May 24, 2012		2011
	(in millions)
Operating revenues	$	142	$	105	$	75	$	257
Operating expenses	94		87		58		167
Net income	30		11		11		60

	December 31, 2012
	(in millions)
Financial position data:
Current assets	$	64
Non-current assets	241
Current liabilities	51
Non-current liabilities	133
Equity in net assets	121

In addition to recording our share of Four Star operating results, we amortized the excess of our investment in Four Star prior to its sale over the underlying equity in its net assets using the unit-of-production method over the life of our estimate of Four Star’s oil and natural gas reserves. Amortization of our investment for the year ended December 31, 2013, and the period of March 23 to December 31, 2012, was $8 million and $7 million, respectively. Amortization of our investment for the predecessor period from January 1 to May 24, 2012  and for the year ended December 31, 2011 was $12 million and $34 million, respectively.

For the year ended December 31, 2013, and the period from March 23 (inception) to December 31, 2012, we received dividends from Four Star of approximately $24 million and $13 million, respectively. Dividends received from Four Star for the predecessor period from January 1 to May 24, 2012 and for the year ended December 31, 2011 were $8 million and $46 million, respectively.