Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill And Other Intangible Assets [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill relates to the following segments (in thousands):



	December 31,
	2015		2014
Crude Transportation	$	26,628	$	36,116
SemGas	13,052		13,052
SemMexico	8,352		9,158
Total Goodwill	$	48,032	$	58,326

In addition to the amounts in the table above, approximately $46.4 million of our investment in NGL Energy and $31.0 million of our investment in Glass Mountain represents equity method goodwill. Equity method goodwill is not amortized and is tested for impairment with the equity method investment in accordance with ASC 323.

We assess our goodwill for impairment at least annually as of October 1. No impairments were indicated as of October 1, 2015. However, as a result of the continued decline in oil prices and lower forecast volumes from declining drilling activity, along with lower than expected results during the fourth quarter of 2015, we performed an interim goodwill impairment analysis as of December 31, 2015 which resulted in an impairment charge of $9.5 million related to our crude oil trucking operation which was identified as the reporting unit for purposes of the impairment test.

We used an income approach, supplemented by a market approach to calculate the fair value of the reporting unit. Under the income approach, we utilized a discounted cash flow model to determine the fair value of our crude oil trucking operations. Significant judgments and assumptions included the discount rate, anticipated revenue and volume growth rates, estimated operating expenses and capital expenditures, which were based on our operating and capital budgets as well as our strategic plans. A significant underlying assumption is that crude oil prices will eventually improve and production volumes will begin to increase. If crude oil production does not increase in the future or the production takes longer than anticipated to return, this would negatively affect our key assumptions and potentially lead to additional impairments in the future. We considered the market approach by comparing the revenue and earnings multiples implied by our income approach to those of comparable companies for reasonableness.

Changes in goodwill balances during the period from December 31, 2012 to December 31, 2015 are shown below (in thousands):



Balance, December 31, 2012	$	9,884
Barcas acquisition (Note 6)	28,322
MMGS acquisition (Note 6)	23,839
Currency translation adjustments	(24		)
Balance, December 31, 2013	62,021
Crude oil trucking asset acquisition (Note 6)	7,892
MMGS purchase price allocation adjustment	(10,787		)
Barcas purchase price allocation adjustment	(98		)
Currency translation adjustments	(702		)
Balance, December 31, 2014	58,326
Impairment loss	(9,488		)
Currency translation adjustments	(806		)
Balance, December 31, 2015	$	48,032

For U.S. federal income tax purposes, goodwill is amortized on a straight-line basis over 15 years.

Other intangible assets

The gross carrying amount and accumulated amortization of intangible assets are shown below (in thousands):



	December 31, 2015							December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount
Customer Relationships	$	188,304	$	(26,975	)	$	161,329	$	189,583	$	(17,963	)	$	171,620
Trade Names	493		(378		)	115		570		(379		)	191
Unpatented Technology	2,941		(2,162		)	779		3,457		(2,203		)	1,254
Total other intangible assets	$	191,738	$	(29,515	)	$	162,223	$	193,610	$	(20,545	)	$	173,065

Changes in other intangible asset balances during the period from December 31, 2012 to December 31, 2015 are shown below (in thousands):



Balance, December 31, 2012	$	7,585
Amortization	(6,018		)
Barcas acquisition	6,930
MMGS acquisition	166,332
Currency translation adjustments	9
Balance, December 31, 2013	174,838
Amortization	(15,875		)
Crude oil trucking asset acquisition	17,010
MMGS purchase price allocation adjustment	(2,313		)
Barcas purchase price allocation adjustment	(50		)
Currency translation adjustments	(545		)
Balance, December 31, 2014	173,065
Amortization	(10,334		)
Currency translation adjustments	(508		)
Balance, December 31, 2015	$	162,223

Our other intangible assets consist primarily of customer relationships at our Crude Transportation, SemGas and SemMexico segments. These assets may be subject to impairments in the future if we are unable to maintain the relationships with the customers to which the assets relate.

We estimate that future amortization of other intangible assets will be as follows (in thousands):



For year ending:
December 31, 2016	$	10,928
December 31, 2017	11,011
December 31, 2018	10,918
December 31, 2019	10,316
December 31, 2020	9,649
Thereafter	109,401
Total estimated amortization expense	$	162,223

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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