Investments in Non-Controlled Entities

Our investments in non-controlled entities at September 30, 2016 were comprised of:



Entity		Ownership Interest
BridgeTex Pipeline Company, LLC (“BridgeTex”)		50%
Double Eagle Pipeline LLC (“Double Eagle”)		50%
HoustonLink Pipeline Company, LLC (“HoustonLink”)		50%
Powder Springs Logistics, LLC (“Powder Springs”)		50%
Saddlehorn Pipeline Company, LLC (“Saddlehorn”)		40%
Seabrook Logistics, LLC (“Seabrook”)		50%
Texas Frontera, LLC (“Texas Frontera”)		50%

In February 2016, we transferred our 50% membership interest in Osage Pipe Line Company, LLC (“Osage”) to an affiliate of HollyFrontier Corporation. In conjunction with this transaction, we entered into several commercial agreements with affiliates of HollyFrontier Corporation. We recorded these commercial agreements as $43.7 million of intangible assets and $8.3 million of other receivables in our consolidated balance sheets. The intangible assets will be amortized over the 20-year life of the contracts received. The total gain recorded in 2016 was $28.1 million.

The management fees we have recognized from BridgeTex, Osage, Powder Springs, Saddlehorn and Texas Frontera are reported as affiliate management fee revenue on our consolidated statements of income. In addition, we receive reimbursement from certain of our joint ventures for costs incurred during construction, which we included as reductions to costs and expenses on our consolidated statements of income. These construction cost reimbursements totaled $1.2 million and $2.7 million during the three and nine months ended September 30, 2016, respectively.

We recognized pipeline capacity lease revenue from BridgeTex of $8.9 million and $8.9 million for the three months ended September 30, 2015 and 2016, respectively, and $25.8 million and $26.6 million for the nine months ended September 30, 2015 and 2016, respectively, which we included in transportation and terminals revenue on our consolidated statements of income.

We recognized throughput revenue from Double Eagle of $0.8 million and $0.9 million for the three months ended September 30, 2015 and 2016, respectively, and $2.6 million and $2.5 million for the nine months ended September 30, 2015 and 2016, respectively, which we included in transportation and terminals revenue on our consolidated statements of income. At December 31, 2015 and September 30, 2016, respectively, we recognized a $0.2 million and $0.3 million trade accounts receivable from Double Eagle.

At September 30, 2016, we recognized $2.9 million, $1.4 million and $0.5 million of other receivables from Saddlehorn, BridgeTex and Powder Springs, respectively, related to the activities detailed above and miscellaneous cost reimbursements. These receivables are reported in our balance sheets as other accounts receivable.

The financial results from Texas Frontera are included in our marine storage segment, the financial results from BridgeTex, Double Eagle, HoustonLink, Osage, Saddlehorn and Seabrook are included in our crude oil segment and the financial results from Powder Springs are included in our refined products segment, each as earnings/losses of non-controlled entities.

A summary of our investments in non-controlled entities follows (in thousands):



	BridgeTex			All Others			Consolidated
Investments at December 31, 2015	$	495,267		$	270,361		$	765,628
Additional investment	31,503			143,397			174,900
Exchange of investment in non-controlled entity	—			(25,105		)	(25,105		)
Earnings of non-controlled entities:
Proportionate share of earnings	45,990			7,256			53,246
Amortization of excess investment and capitalized interest	(1,529		)	(174		)	(1,703		)
Earnings of non-controlled entities	44,461			7,082			51,543
Less:
Distributions of earnings from investments in non-controlled entities	44,461			5,586			50,047
Distributions in excess of earnings of non-controlled entities	3,333			1,167			4,500
Investments at September 30, 2016	$	523,437		$	388,982		$	912,419

Summarized financial information of our non-controlled entities for the three and nine months ended September 30, 2015 and 2016 follows (in thousands):



	Three Months Ended September 30, 2015						Three Months Ended September 30, 2016
	BridgeTex		All Others		Consolidated		BridgeTex		All Others		Consolidated
Revenue	$	47,555	$	12,530	$	60,085	$	55,843	$	14,022	$	69,865
Net income	$	28,150	$	4,151	$	32,301	$	33,514	$	5,149	$	38,663



	Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2016
	BridgeTex		All Others		Consolidated		BridgeTex		All Others		Consolidated
Revenue	$	146,320	$	33,677	$	179,997	$	155,067	$	35,451	$	190,518
Net income	$	91,806	$	11,525	$	103,331	$	91,981	$	14,907	$	106,888