Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

(3) Goodwill and Intangible Assets

Goodwill

We perform our goodwill assessments at the reporting unit level for all reporting units. We use a discounted cash flow analysis to perform the assessments. Key assumptions in the analysis include the use of an appropriate discount rate, terminal year cash flow multiples, and estimated future cash flows, including volume and price forecasts, capital expenditures, and estimated operating and general and administrative costs. In estimating cash flows, we incorporate current and historical market and financial information, among other factors. Impairment determinations involve significant assumptions and judgments, and differing assumptions regarding any of these inputs could have a significant effect on the various valuations.

Goodwill Impairment Analysis for the nine months ended September 30, 2020

During March 2020, we determined that a sustained decline in our unit price and weakness in the overall energy sector, driven by low commodity prices and lower consumer demand due to the COVID-19 pandemic, caused a change in circumstances warranting an interim impairment test. Based on these triggering events, we performed a quantitative goodwill impairment analysis on the remaining goodwill in the Permian reporting unit. Based on this analysis, a goodwill impairment loss for our Permian reporting unit in the amount of $184.6 million was recognized as an impairment loss on the consolidated statement of operations for the nine months ended September 30, 2020.

Goodwill Impairment Analysis for the nine months ended September 30, 2019

During the first quarter of 2019, we recognized a $186.5 million goodwill impairment in our Louisiana reporting unit.

Intangible Assets

The following table represents our change in carrying value of intangible assets (in millions):


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Nine Months Ended September 30, 2020
Customer relationships, beginning of period	$	1,795.8	$	(545.9)	$	1,249.9
Amortization expense	—		(92.7)		(92.7)
Retirements (1)	(1.6)		0.6		(1.0)
Customer relationships, end of period	$	1,794.2	$	(638.0)	$	1,156.2

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(1)Intangible assets retired as a result of the disposition of certain non-core assets.

Intangible assets associated with customer relationships are amortized on a straight-line basis over the expected period of benefits of the customer relationships, which range from 10 to 20 years.

The weighted average amortization period is 15.0 years. Amortization expense was $30.9 million for each of the three months ended September 30, 2020 and 2019, and $92.7 million and $92.8 million for the nine months ended September 30, 2020 and 2019, respectively.

The following table summarizes our estimated aggregate amortization expense for the next five years and thereafter (in millions):


2020 (remaining)	$	30.8
2021	123.4
2022	123.4
2023	123.4
2024	123.4
Thereafter	631.8

Total	$	1,156.2