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Intangible Assets and Goodwill | 9 Months Ended
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Sep. 30, 2015
Intangible Assets and Goodwill [Abstract] |
Intangible Assets and Goodwill | Note 9. Intangible Assets and Goodwill Intangible Assets The following table summarizes our intangible assets by business segment at the dates indicated:
|  | September 30, 2015 |  |  | December 31, 2014 |
|  | Gross Value |  |  | Accumulated Amortization |  |  | Carrying Value |  |  | Gross Value |  |  | Accumulated Amortization |  |  | Carrying Value |
NGL Pipelines & Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationship intangibles |  | $ | 550.8 |  |  | $ | (183.8 | ) |  | $ | 367.0 |  |  | $ | 340.8 |  |  | $ | (183.2 | ) |  | $ | 157.6 |
Contract-based intangibles |  |  | 283.0 |  |  |  | (189.6 | ) |  |  | 93.4 |  |  |  | 277.7 |  |  |  | (178.7 | ) |  |  | 99.0 |
IDRs (1) |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 432.6 |  |  |  | -- |  |  |  | 432.6 |
Segment total |  |  | 833.8 |  |  |  | (373.4 | ) |  |  | 460.4 |  |  |  | 1,051.1 |  |  |  | (361.9 | ) |  |  | 689.2 |
Crude Oil Pipelines & Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationship intangibles |  |  | 2,204.4 |  |  |  | (28.1 | ) |  |  | 2,176.3 |  |  |  | 1,108.0 |  |  |  | (7.7 | ) |  |  | 1,100.3 |
Contract-based intangibles |  |  | 281.4 |  |  |  | (55.4 | ) |  |  | 226.0 |  |  |  | 281.4 |  |  |  | (13.5 | ) |  |  | 267.9 |
IDRs (1) |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 855.4 |  |  |  | -- |  |  |  | 855.4 |
Segment total |  |  | 2,485.8 |  |  |  | (83.5 | ) |  |  | 2,402.3 |  |  |  | 2,244.8 |  |  |  | (21.2 | ) |  |  | 2,223.6 |
Natural Gas Pipelines & Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationship intangibles |  |  | 1,246.9 |  |  |  | (327.8 | ) |  |  | 919.1 |  |  |  | 1,163.6 |  |  |  | (308.9 | ) |  |  | 854.7 |
Contract-based intangibles |  |  | 466.0 |  |  |  | (359.4 | ) |  |  | 106.6 |  |  |  | 466.0 |  |  |  | (347.8 | ) |  |  | 118.2 |
Segment total |  |  | 1,712.9 |  |  |  | (687.2 | ) |  |  | 1,025.7 |  |  |  | 1,629.6 |  |  |  | (656.7 | ) |  |  | 972.9 |
Petrochemical & Refined Products Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationship intangibles |  |  | 185.5 |  |  |  | (37.3 | ) |  |  | 148.2 |  |  |  | 198.4 |  |  |  | (43.3 | ) |  |  | 155.1 |
Contract-based intangibles |  |  | 56.3 |  |  |  | (10.8 | ) |  |  | 45.5 |  |  |  | 56.3 |  |  |  | (7.8 | ) |  |  | 48.5 |
IDRs (1) |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 171.2 |  |  |  | -- |  |  |  | 171.2 |
Segment total |  |  | 241.8 |  |  |  | (48.1 | ) |  |  | 193.7 |  |  |  | 425.9 |  |  |  | (51.1 | ) |  |  | 374.8 |
Offshore Pipelines & Services: (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationship intangibles |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 195.8 |  |  |  | (154.9 | ) |  |  | 40.9 |
Contract-based intangibles |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 1.2 |  |  |  | (0.5 | ) |  |  | 0.7 |
Segment total |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 197.0 |  |  |  | (155.4 | ) |  |  | 41.6 |
Total intangible assets |  | $ | 5,274.3 |  |  | $ | (1,192.2 | ) |  |  | 4,082.1 |  |  | $ | 5,548.4 |  |  | $ | (1,246.3 | ) |  | $ | 4,302.1 |
(1) At December 31, 2014, we had indefinite-lived intangible assets outstanding with a carrying value of $1.46 billion recorded in connection with our acquisition of the Oiltanking IDRs in October 2014. The IDRs represented contractual rights to future cash incentive distributions to be paid by Oiltanking. In February 2015 (following completion of Step 2 of the Oiltanking acquisition), the Oiltanking IDRs were cancelled and the carrying value of the IDRs were reclassified to goodwill. (2) Our intangible assets classified within the Offshore Pipelines & Services segment were sold to Genesis in July 2015 (see Note 6). |
We acquired $1.41 billion of customer relationship intangible assets as part of the EFS Midstream acquisition (see Note 8). We assigned $1.1 billion of these intangible assets to our Crude Oil Pipelines & Services segment, $230.1 million to our NGL Pipelines & Services segment and $83.3 million to our Natural Gas Pipelines & Services segment based on the nature of the services provided in connection with these relationships. These customer relationships have estimated economic lives ranging from 26 to 29 years. Amortization expense attributable to these customer relationships is recorded using a units-of-production method that closely resembles the pattern in which the economic benefits we derive from such assets are expected to be consumed or otherwise used. The following table presents the amortization expense of our intangible assets by business segment for the periods indicated:
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
NGL Pipelines & Services |  | $ | 9.7 |  |  | $ | 8.1 |  |  | $ | 24.9 |  |  | $ | 25.4 |
Crude Oil Pipelines & Services |  |  | 29.0 |  |  |  | 0.3 |  |  |  | 62.3 |  |  |  | 0.9 |
Natural Gas Pipelines & Services |  |  | 10.7 |  |  |  | 11.1 |  |  |  | 30.5 |  |  |  | 34.2 |
Petrochemical & Refined Products Services |  |  | 2.3 |  |  |  | 1.5 |  |  |  | 7.0 |  |  |  | 4.6 |
Offshore Pipelines & Services |  |  | -- |  |  |  | 2.5 |  |  |  | 4.5 |  |  |  | 7.6 |
Total |  | $ | 51.7 |  |  | $ | 23.5 |  |  | $ | 129.2 |  |  | $ | 72.7 |
The following table presents a forecast of amortization expense associated with our intangible assets for the periods indicated:
Remainder of 2015 |  |  | 2016 |  |  | 2017 |  |  | 2018 |  |  | 2019 |
$ | 50.3 |  |  | $ | 218.8 |  |  | $ | 223.5 |  |  | $ | 220.4 |  |  | $ | 208.6 |
Goodwill Goodwill represents the excess of the purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in the transaction. The following table presents changes in the carrying amount of goodwill since December 31, 2014:
|  | NGL Pipelines & Services |  |  | Crude Oil Pipelines & Services |  |  | Natural Gas Pipelines & Services |  |  | Petrochemical & Refined Products Services |  |  | Offshore Pipelines & Services |  |  | Consolidated Total |
Balance at December 31, 2014 |  | $ | 2,210.2 |  |  | $ | 918.7 |  |  | $ | 296.3 |  |  | $ | 793.0 |  |  | $ | 82.0 |  |  | $ | 4,300.2 |
Reclassification of Oiltanking IDR balances to goodwill in connection with the cancellation of such rights in February 2015 and other adjustments |  |  | 432.6 |  |  |  | 850.7 |  |  |  | -- |  |  |  | 170.8 |  |  |  | -- |  |  |  | 1,454.1 |
Reduction in goodwill related to the sale of assets |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | (82.0 | ) |  |  | (82.0 | )
Addition to goodwill related to the acquisition of EFS Midstream |  |  | 8.9 |  |  |  | 73.4 |  |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | 82.3 |
Goodwill reclassified to assets held-for-sale |  |  | -- |  |  |  | -- |  |  |  | -- |  |  |  | (5.4 | ) |  |  | -- |  |  |  | (5.4 | )
Balance at September 30, 2015 |  | $ | 2,651.7 |  |  | $ | 1,842.8 |  |  | $ | 296.3 |  |  | $ | 958.4 |  |  | $ | -- |  |  | $ | 5,749.2 |
Upon completion of Step 2 of the Oiltanking acquisition in February 2015, the IDRs of Oiltanking were cancelled and the associated carrying values were reclassified from intangible assets to goodwill and allocated to the appropriate business segments. During 2015, we retrospectively adjusted our provisional fair value estimate of the Liquidity Option Agreement by $100.3 million, with a corresponding increase to goodwill, which was allocated to the appropriate business segments at December 31, 2014 as follows: $29.8 million to NGL Pipelines & Services; $58.8 million to Crude Oil Pipelines & Services; and $11.7 million to Petrochemical & Refined Products Services. See Note 15 for additional information regarding this change. In July 2015, in connection with the sale of the Offshore Business, we removed $82.0 million of goodwill, which was allocated to these assets (see Note 6). In July 2015, we recorded $82.3 million of goodwill in connection with our acquisition of EFS Midstream. In general, we attribute this goodwill to our ability to leverage the acquired business with our existing asset base to create future business opportunities.

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
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