Goodwill And Other Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill And Other Intangible Assets [Abstract]

11. Goodwill and Other Intangible Assets

Goodwill

The following table presents a summary of Devon’s goodwill.


	U.S.		EnLink		Total

	(Millions)
Balance as of December 31, 2014	$	2,618	$	3,685	$	6,303

Acquired during period		-		48		48
Impairment		-		(576)		(576)
Balance as of September 30, 2015	$	2,618	$	3,157	$	5,775

See Note 2 for discussion of changes in goodwill resulting from acquisitions during the first nine months of 2015.

Devon performs an annual impairment test of goodwill at October 31, or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable. Sustained weakness in the overall energy sector driven by low commodity prices, together with a decline in EnLink’s unit price, caused a change in circumstances warranting an interim impairment test of EnLink’s reporting units. In the third quarter of 2015, Devon recorded a noncash goodwill impairment of $576 million related to EnLink’s Louisiana reporting unit.

Other Intangible Assets

The assessment of EnLink’s customer relationships was also updated as of September 30, 2015 due to the factors in the aforementioned goodwill impairment analysis. Level 3 fair value measurements were utilized for the impairment analysis of definite-lived intangible assets, which included discounted cash flow estimates, consistent with those utilized in the goodwill impairment assessment. This assessment resulted in Devon recognizing a $223 million noncash other intangible assets impairment related to EnLink’s Crude and Condensate reporting unit.

The following table presents other intangible assets reported in other long-term assets in the accompanying consolidated balance sheets.


	September 30, 2015		December 31, 2014

	(Millions)
Customer relationships	$	646	$	569
Accumulated amortization		(43)		(36)
Net intangibles	$	603	$	533

The weighted-average amortization period for other intangible assets is 11.4 years. Amortization expense for intangibles was approximately $14.6 million and $10.2 million for the three months ended September 30, 2015 and 2014, respectively, and $44.3 million and $23.2 million for the nine months ended September 30, 2015 and 2014, respectively.

The following table presents a summary of the estimated remaining aggregate amortization expense for the next five years.


Year		Amortization Amount
		(Millions)
2015	$	10
2016	$	41
2017	$	41
2018	$	41
2019	$	41

- 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.

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