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Impairments (Notes)
 12 Months Ended
Dec. 31, 2019
Impairments [Abstract]  
Impairment of Goodwill, Long-lived assets and equity investments [Text Block]
4.  Gains and Losses on Divestitures and Impairments

During the years ended December 31, 2019, 2018, and 2017, we recorded net pre-tax gains of $285 million and losses of $437 million and $172 million, respectively, reflecting net gains and losses on divestitures, impairments of certain equity investments, long-lived assets, and intangible assets. The year ended December 31, 2019 amount primarily includes a net pre-tax gain of $1,296 million related to the KML and U.S. Cochin Sale (see Note 3) and impairment losses of $1,014 million as further described below.

The impairments were driven by market conditions that existed at the time and required management to estimate the fair value of the assets. The estimates of fair value are based on Level 3 valuation estimates using industry standard income approach valuation methodologies which include assumptions primarily involving management’s significant judgments and estimates with respect to general economic conditions and the related demand for products handled or transported by our assets as well as assumptions regarding commodity prices, future cash flows based on rate and volume assumptions, terminal values and discount rates. We typically use discounted cash flow analyses to determine the fair value of our assets. We may probability weight various forecasted cash flow scenarios utilized in the analysis as we consider the possible outcomes. We use
discount rates representing our estimate of the risk-adjusted discount rates that would be used by market participants specific to the particular asset.

We may identify additional triggering events requiring future evaluations of the recoverability of the carrying value of our long-lived assets, investments and goodwill that could result in future impairments. Such non-cash impairments could have a significant effect on our results of operations, which would be recognized in the period in which the carrying value is determined to be not fully recoverable.

We recognized the following non-cash pre-tax (gains) losses on divestitures of and impairment charges on assets (in millions):
 
Year Ended December 31,
 
2019
 
2018
 
2017
Natural Gas Pipelines
 
 
 
 
 
Impairments of long-lived assets(a)
$
290

 
$
636

 
$
30

Gains on divestitures of long-lived assets(b)
(967
)
 
(6
)
 
—

Impairments of equity investments(c)
650

 
270

 
150

Impairment at equity investee(d)
—

 
—

 
10

Terminals
 
 
 
 
 
Impairments of long-lived assets(e)
—

 
59

 
3

Gains on divestitures of long-lived assets(f)
(335
)
 
(6
)
 
(18
)
CO2
 
 
 
 
 
Impairments of long-lived assets(g)
74

 
79

 
(1
)
Losses on divestitures of long-lived assets
2

 
—

 
—

Impairment at equity investee
—

 
—

 
(4
)
Kinder Morgan Canada
 
 
 
 
 
Losses (gain) on divestiture of long-lived assets(h)
2

 
(595
)
 
—

Other (gains) losses on divestitures of long-lived assets
(1
)
 
—

 
2

Pre-tax (gains) losses on divestitures and impairments, net
$
(285
)
 
$
437

 
$
172

_______
(a)
2019 amount represents the non-cash impairments associated with certain gathering and processing assets in Oklahoma and northern Texas. 2018 amount represents the non-cash impairment associated with certain gathering and processing assets in Oklahoma and a project write-off associated with the Utica Marcellus Texas pipeline. 2017 amount represents the impairment of our Colden storage facility, of which $3 million is included in “Costs of sales” on our accompanying consolidated statement of income.
(b)
2019 amount includes a $957 million gain related to the KML and U.S. Cochin Sale.
(c)
Non-cash impairments of equity investments are included in “Earnings from equity investments” on our accompanying consolidated statements of income for the years ended December 31, 2019, 2018 and 2017. 2019 amount represents the non-cash impairment of our investment in Ruby. 2018 amount represents the non-cash impairment of our investment in Gulf LNG Holdings Group, LLC (Gulf LNG) which was driven by a ruling by an arbitration panel affecting a customer contract. Our share of earnings recognized by Gulf LNG on the respective customer contract is included in “Earnings from equity investments” on our accompanying consolidated statement of income for the year ended December 31, 2018. 2017 amount represents the non-cash impairment of our investment in FEP.
(d)
2017 amount represents losses on impairments recorded by equity investees and are included in “Earnings from equity investments” on our accompanying consolidated statement of income.
(e)
2018 amount primarily relates to non-cash impairments of certain northeast terminal assets.
(f)
2019 amount includes a $339 million gain related to the sale of KML and a $7 million loss included in “Other, net” on our accompanying consolidated statement of income, related to a sale of an equity investment. 2017 amount includes a $23 million gain related to the sale of a 40% membership interest in the Deeprock Development joint venture.
(g)
2019 and 2018 amounts represent impairments of oil and gas properties.
(h)
2019 and 2018 amounts represent a working capital adjustment and gain on sale, respectively, associated with the TMPL Sale.

Our largest impairment for the year ended December 31, 2019 was a $650 million non-cash impairment to our investment in Ruby in our Natural Gas Pipelines business segment. The impairment of our investment was considered from our subordinated ownership position and driven by reduced cash flow estimates identified during the period which resulted from (i) increased Canadian gas supplies and competition from other natural gas pipelines and (ii) upcoming contract expirations. These conditions were determined to be other than temporary. We utilized a discounted cash flow analysis.

Additional impairments totaling $290 million were recognized during the year ended December 31, 2019 on long-lived assets within our Natural Gas Pipelines business segment and were driven by continued reduced drilling activity in Oklahoma and northern Texas demonstrated in the fourth quarter. Our largest impairment for the year ended December 31, 2018 was a $600 million non-cash impairment in our Natural Gas Pipelines business segment driven by reduced cash flow estimates for some of our gathering and processing assets in Oklahoma identified during the period as a result of our decision to redirect our focus to other areas of our portfolio.

For our long-lived assets, the reduced estimates triggered an impairment analysis, in each case, as we determined that our carrying value may no longer be recoverable. The impairment analysis for long-lived assets was based upon a two-step process as prescribed in the accounting standards. Step 1 involved comparing the undiscounted future cash flows to be derived from the asset group to the carrying value of the asset group. Based on the results of our step 1 test, we determined that the undiscounted future cash flows were less than the carrying value of the asset group. Step 2 involved using the income approach to calculate the fair value of the asset group and comparing it to the carrying value. The impairment that we recorded represented the difference between the fair and carrying values.