Property, Plant and Equipment

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, plant and equipment with associated accumulated depreciation is shown below:



(In millions)	Estimated Useful Lives	June 30, 2020		December 31, 2019
L&S
Pipelines	2-51 years	$	5,719	$	5,572
Refining Logistics	13-40 years	2,324		2,870
Terminals	4-40 years	1,281		1,109
Marine	15-20 years	960		906
Land, building and other	1-61 years	1,834		1,817
Construction-in progress		520		660
Total L&S property, plant and equipment		12,638		12,934
G&P
Gathering and transportation	5-40 years	7,374		7,159
Processing and fractionation	15-40 years	5,923		5,545
Land, building and other	3-40 years	489		484
Construction-in-progress		368		745
Total G&P property, plant and equipment		14,154		13,933
Total property, plant and equipment		26,792		26,867
Less accumulated depreciation⁽¹⁾		5,034		4,722
Property, plant and equipment, net		$	21,758	$	22,145


(1)	The June 30, 2020 balance includes property, plant and equipment impairment charges recorded during the first quarter of 2020 as discussed below.

Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate that the carrying value of the assets may not be recoverable based on the expected undiscounted future cash flow of an asset group. For purposes of impairment evaluation, long-lived assets must be grouped at the lowest level for which independent cash flows can be identified, which is at least at the segment level and in some cases for similar assets in the same geographic region where cash flows can be separately identified. If the sum of the undiscounted cash flows is less than the carrying value of an asset group, fair value is calculated, and the carrying value is written down if greater than the calculated fair value.

No impairment triggers were identified in the second quarter of 2020; however, during the first quarter of 2020, we did identify an impairment trigger relating to asset groups within our Western G&P reporting unit as a result of significant impacts to forecasted cash flows for these asset groups resulting from the first quarter events and circumstances as discussed in Note 1. The cash flows associated with these assets were significantly impacted by volume declines reflecting decreased forecasted producer customer production as a result of lower commodity prices. After assessing each asset group within the Western G&P reporting unit for impairment, only the East Texas G&P asset group resulted in the fair value of the underlying assets being less than the carrying value. As a result, an impairment of $174 million was recorded to “Impairment expense” on the Consolidated Statements of Income in the first quarter of 2020. Fair value of the assets was determined using a combination of an income and cost approach. The income approach utilized significant assumptions including management’s best estimates of the expected future cash flows, the estimated useful life of the asset group and discount rate. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment and economic obsolescence. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment analysis will prove to be an accurate prediction of the future. The fair value measurements for the asset group fair values represent Level 3 measurements.