GOODWILL

2013 Goodwill Impairment

The estimated fair value was less than the carrying value of the Statia Terminals reporting unit. To determine the amount of goodwill impairment loss, we first considered whether any other assets assigned to the Statia Terminals reporting unit were impaired. The only significant assets of this reporting unit, other than goodwill, consist of property, plant and equipment, which we determined were fully recoverable. The hypothetical fair value allocation for the Statia Terminals reporting unit indicated the estimated fair value of goodwill was $0. As a result, we recognized a $304.5 million goodwill impairment charge in the fourth quarter of 2013, which represents all of the goodwill allocated to the Statia Terminals reporting unit.

The goodwill impairment charge resulted from changes in demand for storage at our St. Eustatius and Point Tupper terminal locations. Increased supply from various shale formations within the U.S. has reduced the need for storage at these locations, which historically functioned as break bulk facilities for light crude moving from foreign sources into the U.S. These changes in crude flow patterns, as well as the backwardation of the forward pricing curve, reduced demand at these terminals. Primarily resulting from those factors, a customer at our St. Eustatius terminal vacated a significant portion of its storage in the fourth quarter of 2013.

Changes in the carrying amount of goodwill by segment were as follows:



	Storage			Pipeline		Fuels Marketing			Total
	(Thousands of Dollars)
Balances as of January 1, 2012
Goodwill	$	618,614		$	174,848	$	53,255		$	846,717
Accumulated impairment losses	—			—		—			—
Net goodwill	618,614			174,848		53,255			846,717
TexStar Asset Acquisition preliminary purchase price allocation	—			127,896		—			127,896
Asphalt Operations impairment	—			—		(22,132		)	(22,132		)
Terminal sales (a)	(3,764		)	—		—			(3,764		)
Other (b)	2,307			—		—			2,307
Balances as of December 31, 2012
Goodwill	617,157			302,744		53,255			973,156
Accumulated impairment losses	—			—		(22,132		)	(22,132		)
Net goodwill	617,157			302,744		31,123			951,024
TexStar Asset Acquisition final purchase price allocation	—			3,463		—			3,463
Impairments	(331,913		)	—		—			(331,913		)
Other (b)	(5,145		)	—		—			(5,145		)
Balances as of December 31, 2013
Goodwill	612,012			306,207		53,255			971,474
Accumulated impairment losses	(331,913		)	—		(22,132		)	(354,045		)
Net goodwill	$	280,099		$	306,207	$	31,123		$	617,429


(a)	Goodwill associated with five terminals in Georgia and Alabama sold on April 16, 2012.


(b)	Includes purchase price adjustments related to acquisitions still subject to the measurement period that ends at the earlier of 12 months from the acquisition date or when information becomes available. Also includes foreign currency translation adjustments.