Annual report pursuant to Section 13 and 15(d)

Equity Method Investments

v3.8.0.1
Equity Method Investments
12 Months Ended
Dec. 31, 2017
Equity Method Investments  
Equity Method Investments

(11)Equity Method Investments

 

In the second quarter of 2016, the Partnership exercised its option to purchase a 15% equity interest in Stonewall, which operates the 67-mile Stonewall pipeline on which Antero is an anchor shipper.

On February 6, 2017, we formed the Joint Venture to develop processing and fractionation assets in Appalachia with MarkWest, a wholly owned subsidiary of MPLX. We and MarkWest each own a 50% equity interest in the Joint Venture and MarkWest operates the Joint Venture assets. The Joint Venture assets consist of processing plants in West Virginia, and a one-third interest in a MarkWest fractionator in Ohio.

Our consolidated net income includes the Partnership’s proportionate share of the net income of the Joint Venture and Stonewall. When the Partnership records its proportionate share of net income, it increases equity income in the consolidated statements of operations and comprehensive income and the carrying value of that investment on its balance sheet. When distributions on its proportionate share of net income are received, they are recorded as reductions to the carrying value of the investment on the balance sheet. The Partnership uses the equity method of accounting to account for its investments in Stonewall and the Joint Venture because the Partnership exercises significant influence, but not control, over the entities. Our judgment regarding the level of influence over our equity investments includes considering key factors such as the Partnership’s ownership interest, representation on the board of directors and participation in policy-making decisions of Stonewall and the Joint Venture.

The following table is a reconciliation of our investments in these unconsolidated affiliates (in thousands):

 

 

 

 

 

 

 

 

 

 

 

MarkWest

 

Total Investment in

 

 

Stonewall

 

Joint Venture

 

Unconsolidated Affiliates

Balance at December 31, 2015

$

 —

 

 —

 

 —

Initial investment

 

45,044

 

 —

 

45,044

Additional investments

 

30,472

 

 —

 

30,472

Equity in net income of unconsolidated affiliates

 

485

 

 —

 

485

Distributions from unconsolidated affiliates

 

(7,702)

 

 —

 

(7,702)

Balance at December 31, 2016

 

68,299

 

 —

 

68,299

Initial investment

 

 —

 

153,770

 

153,770

Additional investments

 

 —

 

81,234

 

81,234

Equity in net income of unconsolidated affiliates

 

10,304

 

9,890

 

20,194

Distributions from unconsolidated affiliates

 

(11,475)

 

(8,720)

 

(20,195)

Balance at December 31, 2017

$

67,128

 

236,174

 

303,302