Equity Method Investments

3 Months Ended

Mar. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

For each of the following investments, we have the ability to exercise significant influence over these investments based on certain governance provisions and our participation in the significant activities and decisions that impact the management and economic performance of the investments.

Equity method investments comprise the following as of the dates indicated:


	March 31, 2019				December 31, 2018
	Ownership	Investment Amount		Ownership	Investment Amount
Amberjack – Series A / Series B	75.0% / 50.0%	$	444	75.0% / 50.0%	$	458
Mars	71.5%	167		71.5%	169
Bengal	50.0%	84		50.0%	82
Permian Basin	50.0%	76		50.0%	72
LOCAP	41.48%	9		41.48%	8
Poseidon	36.0%	—		36.0%	—
Proteus	10.0%	16		10.0%	16
Endymion	10.0%	18		10.0%	18
		$	814		$	823

Unamortized differences in the basis of the initial investments and our interest in the separate net assets within the financial statements of the investees are amortized into net income over the remaining useful lives of the underlying assets. As of March 31, 2019 and December 31, 2018, the unamortized basis differences included in our equity investments are $39 million and $40 million, respectively. For both the three months ended March 31, 2019 and March 31, 2018, the net amortization expense was $1 million.

During the first quarter of 2018, the investment amount for Poseidon was reduced to zero due to distributions received that were in excess of our investment balance and we, therefore, suspended the equity method of accounting. As we have no commitments to provide further financial support to Poseidon, we have recorded excess distributions of $8 million and $1 million in Other income as of March 31, 2019 and March 31, 2018, respectively. Once our cumulative share of equity earnings becomes greater than the amount of distributions received, we will resume the equity method of accounting as long as the equity method investment balance remains greater than zero.

Our equity method investments balance was affected by the following during the periods indicated:


	Three Months Ended March 31, 2019										Three Months Ended March 31, 2018
	Distributions Received		Income from Equity Investments		Impact of Change in Accounting Policy		Distributions Received		Income from Equity Investments		Impact of Change in Accounting Policy
Amberjack ⁽¹⁾	$	37	$	32	$	(9)	$	—	$	—	$	—
Mars	31		29		—		32		25		(7)
Bengal	3		5		—		4		4		—
Poseidon⁽²⁾	8		—		—		9		6		—
Other⁽³⁾	4		4		—		6		5		—
	$	83	$	70	$	(9)	$	51	$	40	$	(7)

⁽¹⁾We acquired an interest in Amberjack in May 2018. The acquisition of this interest has been accounted for prospectively.

⁽²⁾As stated above, the equity method of accounting has been suspended for Poseidon and excess distributions are recorded in Other income.

⁽³⁾Included in Other is the activity associated with our investments in Permian Basin, LOCAP, Proteus and Endymion.

The adoption of the revenue standard for the majority of our equity method investments followed the non-public business entity adoption date of January 1, 2019 for their stand-alone financial statements, with the exception of Mars and Permian Basin who adopted on January 1, 2018. As a result of the adoption of the revenue standard on January 1, 2019, we recognized our proportionate share of Amberjack's cumulative effect transition adjustments as a decrease to opening equity (deficit) in the amount of $9 million under the modified retrospective transition method.

Under the new lease standard (as defined in Note 7 - Leases), the adoption date for our equity method investments will follow the non-public business entity adoption date of January 1, 2020 for their stand-alone financial statements.

Summarized Financial Information

The following tables present aggregated selected unaudited income statement data for our equity method investments (on a 100% basis):


	Three Months Ended March 31, 2019
	Total revenues		Total operating expenses		Operating income		Net income
Statements of Income
Amberjack	$	81	$	19	$	62	$	62
Mars	63		22		41		41
Bengal	18		7		11		11
Poseidon	31		9		22		20
Other ⁽¹⁾	30		18		12		9

⁽¹⁾Included in Other is the activity associated with our investments in Permian Basin, LOCAP, Proteus and Endymion.


	Three Months Ended March 31, 2018
	Total revenues		Total operating expenses		Operating income		Net income
Statements of Income
Mars	$	57	$	21	$	36	$	36
Bengal	15		4		11		9
Poseidon	29		9		20		19
Other⁽¹⁾	39		18		21		19

⁽¹⁾Included in Other is the activity associated with our investments in Permian Basin, LOCAP, Proteus and Endymion.

Capital Contributions

We make capital contributions for our pro rata interest in Permian Basin to fund capital and other expenditures. We have made capital contributions of $5 million during the first quarter of 2019.