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Intangible Assets and Goodwill
 9 Months Ended
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.