9. Equity Investments
Our PO joint ventures, which are also accounted for using the equity method of accounting, are discussed in Note 8 to the accompanying Consolidated Financial Statements and are, therefore, not included in the following discussion.
Our remaining direct and indirect equity investments are as follows at December 31:
| Percent of Ownership | 2013 | 2012 | |||||||
| Basell Orlen Polyolefins Sp. Z.o.o. | 50.00% | 50.00% | |||||||
| PolyPacific Pty. Ltd. | 50.00% | 50.00% | |||||||
| SunAllomer Ltd. | 50.00% | 50.00% | |||||||
| Saudi Polyolefins Company | 25.00% | 25.00% | |||||||
| Saudi Ethylene & Polyethylene Company Ltd. | 25.00% | 25.00% | |||||||
| Al-Waha Petrochemicals Ltd. | 20.95% | 20.95% | |||||||
| PolyMirae Co. Ltd. | 42.59% | 42.59% | |||||||
| HMC Polymers Company Ltd. | 28.56% | 28.56% | |||||||
| Indelpro S.A. de C.V. | 49.00% | 49.00% | |||||||
| Ningbo ZRCC Lyondell Chemical Co. Ltd. | 26.65% | 26.65% | |||||||
| Ningbo ZRCC Lyondell Chemical Marketing Co. | 50.00% | 50.00% | |||||||
| Nihon Oxirane Company | 0.00% | 40.00% | |||||||
| NOC Asia Ltd. | 40.00% | 40.00% | |||||||
| Geosel | 27.00% | 27.00% | |||||||
In December 2013, we sold our 40% interest in Nihon Oxirane Company. We recognized a $16 million loss in connection with this sale, which is reflected in our Consolidated Statements of Income in Other income (expense), net.
The changes in our equity investments are as follows:
| Year Ended December 31, | ||||||
| Millions of dollars | 2013 | 2012 | ||||
| Beginning balance | $ | 1,583 | $ | 1,559 | ||
| Investee net income | 213 | 143 | ||||
| Impairment recognized by investor | (10) | 0 | ||||
| Income from equity investments | 203 | 143 | ||||
| Distribution of earnings | (186) | (147) | ||||
| Contributions to joint ventures | 1 | 8 | ||||
| Divestiture | (18) | 0 | ||||
| Currency exchange effects | 16 | 11 | ||||
| Other | 30 | 9 | ||||
| Ending balance | $ | 1,629 | $ | 1,583 | ||
In connection with the sale of our interest in Nihon Oxirane Company, we and our joint venture partner revised the terms of the agreement governing our NOC Asia Ltd. joint venture. Under the new terms of the agreement, our participation in the joint venture is limited to a finite period. To determine whether the change in terms of the agreement gave rise to an impairment of our investment, we assessed the fair value of the investment by using discounted cash flows. The assessment concluded that the excess of carrying value of the investment over its fair value was other than temporary, resulting in the impairment charge indicated above.
The subsidiary that holds the Company's equity interest in Al-Waha Petrochemicals Ltd. has a minority shareholder, which holds 16.21% of its equity. The equity interest held by the minority shareholder can be called by the Company or can be put to the Company by the minority interest shareholder at any time. The price of the call option is the nominal value of the shares (initial $18 million investment) plus accrued interest based on LIBOR plus 40 basis points, less paid dividends. The price of the put option is €1 plus the minority shareholder's undistributed pro-rata earnings. As of December 31, 2013 and 2012, the put would have a minimal redemption amount and the call could be redeemed for $22 million and $21 million, respectively, the value of the initial investment plus accrued interest.
Summarized balance sheet information and our share of our investments accounted for under the equity method are as follows at December 31:
| 2013 | 2012 | |||||||||||||
| Company | Company | |||||||||||||
| Millions of dollars | 100% | Share | 100% | Share | ||||||||||
| Current assets | $ | 3,049 | $ | 1,032 | $ | 3,923 | $ | 1,387 | ||||||
| Noncurrent assets | 5,930 | 1,929 | 6,341 | 1,781 | ||||||||||
| Total assets | 8,979 | 2,961 | 10,264 | 3,168 | ||||||||||
| Current liabilities | 2,152 | 755 | 2,973 | 1,030 | ||||||||||
| Noncurrent liabilities | 2,366 | 643 | 2,205 | 615 | ||||||||||
| Net assets | $ | 4,461 | $ | 1,563 | $ | 5,086 | $ | 1,523 | ||||||
Summarized income statement information and our share of our investments accounted for under the equity method are set forth below:
| Year Ended December 31, | |||||||||||||||||||||
| 2013 | 2012 | 2011 | |||||||||||||||||||
| Company | Company | Company | |||||||||||||||||||
| Millions of dollars | 100% | Share | 100% | Share | 100% | Share | |||||||||||||||
| Revenues | $ | 11,017 | $ | 3,565 | $ | 10,961 | $ | 3,650 | $ | 14,960 | $ | 4,915 | |||||||||
| Cost of sales | (9,526) | (3,152) | (9,916) | (3,328) | (13,335) | (4,441) | |||||||||||||||
| Gross profit | 1,491 | 413 | 1,045 | 322 | 1,625 | 474 | |||||||||||||||
| Net operating expenses | (246) | (83) | (258) | (91) | (375) | (131) | |||||||||||||||
| Operating income | 1,245 | 330 | 787 | 231 | 1,250 | 343 | |||||||||||||||
| Interest income | 5 | 2 | 6 | 3 | 12 | 4 | |||||||||||||||
| Interest expense | (97) | (75) | (306) | (76) | (260) | (71) | |||||||||||||||
| Foreign currency translation | (2) | (1) | 74 | 21 | (6) | (6) | |||||||||||||||
| Other income (expense), net | 25 | 7 | (9) | (2) | 3 | 1 | |||||||||||||||
| Income before income taxes | 1,176 | 263 | 552 | 177 | 999 | 271 | |||||||||||||||
| Provision for income taxes | (229) | (50) | (101) | (34) | (201) | (55) | |||||||||||||||
| Net income | $ | 947 | $ | 213 | $ | 451 | $ | 143 | $ | 798 | $ | 216 | |||||||||
The difference between our carrying value and the underlying equity in the net assets of our equity investments are assigned to the investment's assets and liabilities based on an analysis of the factors giving rise to the basis difference. The amortization of the basis difference is included in Income from equity investments in the Consolidated Statement of Income.