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Goodwill | 12 Months Ended
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Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract] |
Goodwill | Note 6 – Goodwill We recognized goodwill of approximately $46.6 million related to the March 1, 2017 acquisition of gas gathering and processing and crude oil gathering assets in the Permian Basin, which was initially attributed to the New Midland and New Delaware reporting units in our Gathering and Processing segment. The reporting units were further aggregated into the Permian Midland and Permian Delaware reporting units as of December 31, 2020. At December 31, 2020, we had $45.2 million of goodwill included in Other long-term assets on the Consolidated Balance Sheets. Changes in the net amounts of our goodwill are as follows:
|  | New Midland |  |  | New Delaware |  |  | Delaware Supersystem |  |  | Permian Midland |  |  | Permian Delaware |  |  | Total |
Balance as of December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 23.2 |  |  | $ | 23.4 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 46.6 |
Accumulated impairment losses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net |  |  | 23.2 |  |  |  | 23.4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 46.6 |
Impairment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Reporting unit aggregation (1) |  |  | — |  |  |  | (23.4 | ) |  |  | 23.4 |  |  |  | — |  |  |  | — |  |  |  | — |
Balance as of December 31, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 23.2 |  |  |  | — |  |  |  | 23.4 |  |  |  | — |  |  |  | — |  |  |  | 46.6 |
Goodwill allocated to held for sale assets |  |  | — |  |  |  | — |  |  |  | (1.4 | ) |  |  | — |  |  |  | — |  |  |  | (1.4 | )
Accumulated impairment losses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net |  |  | 23.2 |  |  |  | — |  |  |  | 22.0 |  |  |  | — |  |  |  | — |  |  |  | 45.2 |
Impairment |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Reporting unit aggregation (2) |  |  | (23.2 | ) |  |  | — |  |  |  | (22.0 | ) |  |  | 23.2 |  |  |  | 22.0 |  |  |  | — |
Balance as of December 31, 2020: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 23.2 |  |  |  | 22.0 |  |  |  | 45.2 |
Accumulated impairment losses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 23.2 |  |  | $ | 22.0 |  |  | $ | 45.2 |
| (1) | In 2019, we began aggregating the results of Delaware Supersystem activity, including New Delaware. Discrete financial information for New Delaware is no longer available and management now reviews aggregate Delaware Supersystem operating results.
| (2) | In 2020, as a result of the high degree of operational integration of our Permian gathering and processing assets and management’s increased focus and review of combined operating results within our Permian Midland and Permian Delaware regions, we further aggregated our New Midland and Permian Supersystem reporting units into the Permian Midland and Permian Delaware reporting units, respectively.
The future cash flows and resulting fair values of these reporting units are sensitive to changes in crude oil, natural gas and NGL prices. The direct and indirect effects of significant declines in commodity prices from the date of acquisition would likely cause the fair values of these reporting units to fall below their carrying values, and could result in an impairment of goodwill. As described in Note 3 – Significant Accounting Policies, we evaluate goodwill for impairment at least annually on November 30, or more frequently if we believe necessary based on events or changes in circumstances. For our 2020 annual evaluation, we performed a qualitative assessment, which indicated that it is not more likely than not that the fair values of the Permian Midland and Permian Delaware reporting units were less than their carrying amounts, and therefore, a quantitative goodwill impairment test was not necessary. Our qualitative assessment considered, among other things, the overall financial performance and future outlook of the Permian Midland and Permian Delaware reporting units, industry and market considerations, and other relevant entity specific events. We did not record any goodwill impairment charges for the year ended December 31, 2019, as the fair values of the respective reporting units exceeded their carrying values. While no impairment was recorded, a portion of goodwill attributable to the former Permian Supersystem reporting unit was allocated to held for sale assets, which were subsequently sold in January 2020. Our 2018 annual evaluation of goodwill for impairment was completed in the fourth quarter of 2018. Due to the impact of lower forecasted commodity prices and a reduction in forecasted volumes as a result of changes in producers’ drilling activity, we recorded impairment expense of $210.0 million in our Consolidated Statements of Operations, representing the impairment of the remaining goodwill attributable to our acquisition of Atlas Energy L.P. and Atlas Pipeline Partners L.P. in 2015 (the “Atlas Merger”). Our annual quantitative evaluations in 2019 and 2018 utilized an income approach including a terminal value to estimate the fair values of our reporting units based on a DCF analysis. The future cash flows for our reporting units are based on our estimates, at that time, of future revenues, income from operations and other factors, such as working capital and timing of capital expenditures. We take into account current and expected industry and market conditions, including commodity pricing and volumetric forecasts in the basins in which the reporting units operate. The discount rates used in our DCF analysis are based on a weighted average cost of capital determined from relevant market comparisons. The fair value measurements utilized for the evaluation of goodwill for impairment are based on inputs that are not observable in the market and therefore represent Level 3 inputs, as defined in Note 16 – Fair Value Measurements. These inputs require significant judgments and estimates at the time of valuation.

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