XML 30 R12.htm IDEA: XBRL DOCUMENT

Discontinued Operations, Impairment and Dispositions

12 Months Ended

Dec. 31, 2011

Property, Plant and Equipment Impairment or Disposal [Abstract]

Property, Plant and Equipment Impairment or Disposal Disclosure

(4) Discontinued Operations, Impairments and Dispositions

(a) Discontinued Operations

The Partnership sold its midstream assets in Alabama, Mississippi and south Texas for $217.6 million in August 2009. Sales proceeds, net of transaction costs and other obligations associated with the sale, of $212.0 million were used to repay long-term indebtedness and the Partnership recognized a gain on sale of $97.2 million. In October 2009, the Partnership sold its Treating assets for net proceeds of $265.4 million. Sales proceeds, net of transaction costs and other obligations associated with the sale, of $258.1 million were used to repay long-term indebtedness and the Partnership recognized a gain on sale of $86.3 million.

The revenues, operating expenses, general and administrative expenses associated directly with the sold assets, depreciation and amortization expense, Treating inventory impairment of $1.0 million during 2009, allocated Texas margin tax and an allocated interest expense related to the operations of the sold assets have been segregated from continuing operations and reported as discontinued operations for all periods. Interest expense of $34.4 million for the year ended 2009 was allocated to discontinued operations related to the debt repaid from the proceeds from the asset dispositions using average historical interest rates for each of the three years. The interest allocation for 2009 also included make-whole interest payments and the write-off of unamortized debt issue costs related to the debt repaid. No corporate office general and administrative expenses have been allocated to income from discontinued operations. Following are revenues and income from discontinued operations (in thousands):

	Years Ended December 31,
	2009
Midstream revenues	$	327,242
Treating revenues	$	45,534
Income from discontinued operations, net of tax	$	(1,519)
Gain from sale of discontinued operations, net of tax	$	159,961

(b) Other Disposition

The Partnership disposed of assets that were not considered discontinued operations in the years ended December 31, 2010 and 2009. The 2010 disposition was related to assets in east Texas for a gain of $14.0 million. The 2009 disposition was related to the Arkoma gathering assets in Oklahoma.

Impairments of $1.3 million and $2.9 million were recorded in the years ended December 31, 2010 and 2009, respectively, related to long-lived assets. Impairments during 2009 totaling $2.9 million were taken on the Bear Creek processing plant and the Vermillion treating plant to bring the fair value of the plants to a marketable value for these idle assets. The impairment in 2010 primarily relates to the write down of certain excess pipe inventory prior to its sale.

Potential Changes in Sabine Plant during 2012. Currently, its Sabine plant has a contract with a third-party to fractionate the raw-make NGLs produced by the plant. The Partnership has been unsuccessful in renewing this contract, which expires on March 1, 2012. The Partnership has an interim solution to continue to provide for fractionation of the NGLs produced by the Sabine plant. Ultimately, the Partnership plans to connect the Sabine gas supply to its Eunice plant, which can process the gas and fractionate the produced NGLs. If this processing change is made, the Partnership will likely cease operating the Sabine plant. Although the Partnership does not have specific plans at this time to relocate the Sabine plant once it is idled, the Partnership may consider it for utilization elsewhere in its operations. The net book value of the Sabine plant was $34.0 million as of December 31, 2011. If the plant is idled on a long term basis as contemplated above, an impairment may be recorded to expense the non-recoverable costs associated with the plant's current location, which are estimated to be less than $15.0 million based on the net book value as of December 31, 2011.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details