
2.	IMPAIRMENT

In 2012, we suspended the operations of the Aruba Refinery and reorganized the associated crude oil and refined products terminal assets into a terminaling and transshipment facility (collectively, the Aruba Terminal), which we continue to operate. We also wrote off all of the carrying value of the refining assets at that time because we determined they had no value after considering estimated salvage costs, and in 2014, we formally abandoned those refining assets. (We now refer to those refining assets as the Aruba Refinery.) Since that time, we have been in negotiations with the Government of Aruba (GOA) to settle our obligations under various agreements, including agreements that require us to dismantle our leasehold improvements under certain conditions.

In June 2016, the GOA entered into definitive agreements with an unrelated third party that provide for such third party to lease the Aruba Refinery and Aruba Terminal from the GOA, restart and operate the Aruba Refinery, and operate the Aruba Terminal. Because of this development, we now believe that it is more likely than not that we will ultimately transfer ownership of the Aruba Refinery and Aruba Terminal to the GOA and settle the obligations mentioned above. Therefore, we evaluated the Aruba Terminal for potential impairment as of June 30, 2016 and concluded that it was impaired, resulting in an asset impairment loss of $56 million related to our refining segment. See Note 12 for disclosure related to the method to determine fair value. No income tax benefit was recorded for this asset impairment loss as we do not expect to realize a tax benefit.

We are continuing to negotiate with the GOA regarding the matters discussed above and with the unrelated third party, but the resolution of those matters is not yet known. In addition, a negotiated resolution, if reached, must ultimately be voted on and approved by the Aruba Parliament.