GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill by segment are as follows at the dates indicated (in thousands):



	Domestic Pipelines & Terminals			Global Marine Terminals			Merchant Services		Total

January 1, 2014	$	279,615		$	537,894		$	3,991	$	821,500
Acquisition (1)	—			172,632			—		172,632
Purchase price adjustments (2)	(335		)	(930		)	508		(757		)
December 31, 2014	279,280			709,596			4,499		993,375
Acquisition (1)	10,626			—			—		10,626
Purchase price adjustments (2)	—			(5,253		)	—		(5,253		)
December 31, 2015	$	289,906		$	704,343		$	4,499	$	998,748

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(1)	See Note 3 for discussion of our acquisitions.

(2)

Goodwill is recorded at the acquisition date based on preliminary fair value information. Subsequent to the acquisition but not to exceed one year from the acquisition date, we record any material adjustments to the initial estimate in the reporting period in which the adjustment amounts are determined based on new information obtained about facts and circumstances that existed as of the acquisition date. During 2014, we recorded adjustments to the purchase price allocations for the Perth Amboy facility and Hess Terminals acquisitions. During 2015, we recorded adjustments to the purchase price allocations for the Buckeye Texas Partners Transaction. See Note 3 for discussion of our acquisitions.

For our annual goodwill impairment test as of October 31, 2015, we performed quantitative assessments to determine the fair value of each of our reporting units. Based on such calculations, each reporting unit’s fair value was in excess of its carrying value. Prior to the current year change in our goodwill annual impairment test date, our annual goodwill impairment tests were performed as of January 1st. For our January 1, 2015 goodwill impairment test, we performed a qualitative assessment to determine whether the fair value of the Domestic Pipelines & Terminals reporting unit was more likely than not less than the carrying value. Based on economic conditions and industry and market considerations, we determined the fair value of the reporting unit exceeded the carrying value; therefore, the quantitative impairment test was not required. Additionally, we performed quantitative assessments to determine the fair value of each of the remaining reporting units. Based on such calculations, each reporting unit’s fair value was in excess of its carrying value. Therefore, we did not record any goodwill impairment for the years ended December 31, 2015 and 2014. See Note 2 for further discussion of the change of our annual impairment test date.

Intangible Assets

Intangible assets consist of the following at the dates indicated (in thousands):



	December 31,
	2015			2014

Customer relationships	$	231,620		$	231,620
Accumulated amortization	(70,349		)	(57,246		)
Net carrying amount	161,271			174,374

Customer contracts	395,690			446,233
Accumulated amortization	(65,589		)	(66,683		)
Net carrying amount	330,101			379,550
Total intangible assets, net	$	491,372		$	553,924

For the years ended December 31, 2015, 2014 and 2013, amortization expense related to intangible assets was $62.6 million, $47.4 million and $24.4 million, respectively. Amortization expense related to intangible assets is expected to be $68.0 million for 2016, $66.6 million for 2017, $65.7 million for 2018, $64.9 million for 2019 and $64.9 million for 2020.

- 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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