Goodwill

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired and is not amortized. We perform an annual assessment of whether goodwill retains its value. This assessment is done more frequently if indicators of potential impairment exist. We performed our annual goodwill impairment review in the fourth quarter of 2023, 2022, and 2021.

For the year ended December 31, 2023, we performed a quantitative assessment for our Delaware Gathering reporting unit and a qualitative assessment for our other reporting units. Our 2023 testing of goodwill did not identify any impairments other than our Delaware Gathering reporting unit, which reported a goodwill impairment charge of $14.8 million. The impairment was primarily driven by the significant increases in interest rates and timing of system connections with our producer customers.

For the quantitative assessment, the discounted cash flow fair value estimate is based on known or knowable information at the measurement date. The significant assumptions that were used to develop the estimates of the fair values under the discounted cash flow method included management’s best estimates of the discount rate of 16% as well as estimates of future cash flows, which are impacted primarily by future volumes and EBITDA projections. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the interim goodwill impairment test will prove to be an accurate prediction of the future. The fair value measurements for the individual reporting units represent Level 3 measurements.

We performed a qualitative assessment for the years ended December 31, 2022, and December 31, 2021. In 2022 and 2021, the annual impairment review resulted in the determination that no indicators of impairment of goodwill were present. Accumulated goodwill impairment was $14.8 million as of December 31, 2023. There was no accumulated goodwill impairment at December 31, 2022.

A summary of our goodwill by segment is as follows (in thousands):


		Gathering and Processing		Wholesale Marketing and Terminalling		Storage and Transportation		Total
Balance,	December 31, 2021	$	4,155	$	7,499	$	549	$	12,203
Acquisition		14,848		—		—		14,848

Balance,	December 31, 2022	19,003		7,499		549		27,051
Goodwill Impairment		(14,848)		—		—		(14,848)
Balance,	December 31, 2023	$	4,155	$	7,499	$	549	$	12,203