(4) Acquisition, Disposition and Impairments

(a) Acquisition

On July 2, 2012, the Partnership, through a wholly-owned subsidiary, acquired all of the issued and outstanding common stock of Clearfield. Clearfield was a well-established crude oil, condensate and brine services company with operations in Ohio, Kentucky and West Virginia. Clearfield's business included crude oil pipelines, a barge loading terminal on the Ohio River, a rail loading terminal on the Ohio Central Railroad network, a trucking fleet and brine disposal wells. All of these assets are now included in the Partnership's ORV segment.

The Partnership paid approximately $215.4 million in cash (before working capital and certain purchase price adjustments) for the acquisition and the purchase was funded with proceeds from the senior notes offering in May 2012.

Included in the Clearfield acquisition were three local distribution companies, or LDCs, which the Partnership marketed for sale and were classified as held for disposition on the balance sheet as of December 31, 2012. The Partnership chose not to apply discontinued operations presentation on the income statement as the related amounts were immaterial during the period of the Partnership's ownership. On October 15, 2012, the Partnership entered into an agreement to sell the LDCs for an amount of $19.4 million, and the sale was completed on January 18, 2013.

The goodwill recognized from the Clearfield acquisition results primarily from the value of opportunity created from the strategic asset positioning in the Utica and Marcellus shale plays which provides the Partnership with a substantial growth platform in a new geographic area. The Partnership finalized the purchase price allocation related to the Clearfield acquisition during July 2013. As a result of the purchase price adjustments since December 31, 2012, the Partnership recognized an increase of goodwill acquired from the transaction of $1.2 million.

The Partnership recognized intangible assets related to customer relationships. The acquired intangible assets will be amortized on a straight-line basis over the estimated customer life of approximately 20 years.

The Partnership assumed a long-term liability related to additional benefit obligations. Also, the Partnership assumed a long-term liability related to inactive easement commitments for a period of 10 years.

Purchase Price Allocation in Clearfield Acquisition

The following table is a summary of the consideration paid in the Clearfield acquisition and the purchase price allocation for the fair value of the assets acquired and liabilities assumed at the acquisition date,:



Purchase Price Allocation (in thousands):
Purchase Price to Clearfield Energy, Inc.	$	215,397
Total purchase price	$	215,397
Assets acquired:
Current assets	$	17,622
Assets held for disposition	19,358
Property, plant, and equipment	91,422
Goodwill	153,802
Intangibles	37,600
Liabilities assumed:
Current liabilities	(28,274		)
Liabilities held for disposition	(1,400		)
Deferred taxes	(65,228		)
Long term liabilities	(9,505		)
Total purchase price	$	215,397

For the period from July 2, 2012 to December 31, 2012, the Partnership recognized $108.0 million of midstream revenue related to properties acquired in the Clearfield acquisition. For the period from July 2, 2012 to December 31, 2012, the Partnership recognized $94.2 million of operating costs and expenses related to properties acquired in the Clearfield acquisition.

Pro Forma Information

The following unaudited pro forma condensed financial data for the year ended December 31, 2012 and 2011 gives effect to the Clearfield acquisition as if it had occurred on January 1, 2011. The unaudited pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the transactions taken place on the dates indicated and is not intended to be a projection of future results.



	Year Ended
	December 31, 2012			December 31, 2011
	(in thousands except for per unit data)
Pro forma total revenues	$	1,897,199		$	2,266,868
Pro forma net loss	$	(39,021	)	$	(15,476	)
Pro forma net loss attributable to Crosstex Energy, Inc.	$	(14,762	)	$	(8,460	)
Pro forma net loss per common unit:
Basic and Diluted	$	(0.30	)	$	(0.18	)

(b) Intangible Asset Impairment

In August 2013, the Partnership shut down the Eunice processing plant, which is located in south Louisiana and is part of our PNGL segment, due to adverse economics driven by low NGL prices and low processing volumes which we do not see improving in the near future based on forecasted pricing. The Partnership recorded an impairment expense of $72.6 million during the third quarter of 2013 related to the intangible assets for the terminated customer relationships attributable to the plant shut down.

Changes in Operations During 2013 and 2012.

The Partnership's Sabine Pass plant held a contract with a third-party to fractionate the raw-make NGLs produced by the Sabine Pass plant. The primary term of the contract expired in March 2012 and was renewed on a month-to-month basis during the remainder of 2012. Due to the anticipated termination of this third-party fractionation agreement in early 2013, the Partnership began accelerating depreciation of this facility during the third quarter of 2012. The plant also had some equipment failures during the fourth quarter of 2012. In January 2013, the Partnership ceased plant operations because the cost to repair the equipment could not be supported by an existing month-to-month fractionation agreement. Depreciation and amortization expense during the fourth quarter of 2012 was changed to accelerate the remaining non-recoverable costs associated with the plant. Total depreciation and amortization of $28.9 million was recognized for the Sabine Pass plant during 2012. The Sabine Pass plant contributed gross operating margin of $2.0 million and $2.7 million for the years ended December 31, 2012 and 2011, respectively. The net book value for the plant is $18.9 million as of December 31, 2013 and represents the plant's fair market value. Although the Partnership does not have specific plans at this time to relocate the Sabine Pass plant, it may utilize it elsewhere in its operations.