Property, Plant and Equipment

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Note 4.  Property, Plant and Equipment

The historical costs of our property, plant and equipment and related accumulated depreciation balances were as follows at the dates indicated:

	Estimated Useful Life			December 31,
	in Years			2020		2019
Plants, pipelines and facilities (1)		3-45	(5)	$	49,972.8	$	47,201.2
Underground and other storage facilities (2)		5-40	(6)		4,207.5		3,965.5
Transportation equipment (3)		3-10			204.9		198.9
Marine vessels (4)		15-30			932.7		905.9
Land					371.9		372.3
Construction in progress					1,807.7		2,641.2
Total					57,497.5		55,285.0
Less accumulated depreciation					15,584.7		13,681.6
Property, plant and equipment, net				$	41,912.8	$	41,603.4

(1)	Plants, pipelines and facilities include processing plants; NGL, natural gas, crude oil and petrochemical and refined products pipelines; terminal loading and unloading facilities; buildings; office furniture and equipment; laboratory and shop equipment and related assets.
(2)	Underground and other storage facilities include underground product storage caverns; above ground storage tanks; water wells and related assets.
(3)	Transportation equipment includes tractor-trailer tank trucks and other vehicles and similar assets used in our operations.
(4)	Marine vessels include tow boats, barges and related equipment used in our marine transportation business.
(5)	In general, the estimated useful lives of major assets within this category are: processing plants, 20-35 years; pipelines and related equipment, 5-45 years; terminal facilities, 10-35 years; buildings, 20-40 years; office furniture and equipment, 3-20 years; and laboratory and shop equipment, 5-35 years.
(6)	In general, the estimated useful lives of assets within this category are: underground storage facilities, 5-35 years; storage tanks, 10-40 years; and water wells, 5-35 years.

The following table summarizes our depreciation expense and capitalized interest amounts for the years indicated:

	For the Year Ended December 31,
	2020		2019		2018
Depreciation expense (1)	$	1,681.9	$	1,562.6	$	1,436.2
Capitalized interest (2)		115.0		143.8		147.9

(1)	Depreciation expense is a component of “Costs and expenses” as presented on our Statements of Consolidated Operations.
(2)	Capitalized interest is a component of “Interest expense” as presented on our Statements of Consolidated Operations.

Asset Retirement Obligations

We record AROs in connection with legal requirements to perform specified retirement activities under contractual arrangements and/or governmental regulations.  Our contractual AROs primarily result from right-of-way agreements associated with our pipeline operations and property leases associated with our plant sites.  In addition, we record AROs in connection with governmental regulations associated with the abandonment or retirement of above-ground brine storage pits and certain marine vessels.  We also record AROs in connection with regulatory requirements associated with the renovation or demolition of certain assets containing hazardous substances such as asbestos.  We typically fund our AROs using cash flow from operations.

Property, plant and equipment at December 31, 2020 and 2019 includes $69.7 million and $69.6 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset.

The following table presents information regarding our AROs for the years indicated:

	For the Year Ended December 31,
	2020			2019			2018
ARO liability beginning balance	$	132.1		$	126.3		$	86.7
Liabilities incurred		4.6			5.0			24.4
Liabilities settled		(1.5	)		(2.3	)		(2.5	)
Revisions in estimated cash flows		6.1			(4.8	)		11.5
Accretion expense		8.2			7.9			6.2
ARO liability ending balance	$	149.5		$	132.1		$	126.3

The following table presents our forecast of ARO-related accretion expense for the years indicated:

2021		2022		2023		2024		2025
$	8.6	$	9.1	$	9.6	$	10.3	$	10.9

Impairments of Property, Plant and Equipment

The following table presents our non-cash asset impairment charges involving property, plant and equipment by business segment for the years indicated:

	For the Year Ended December 31,
	2020		2019		2018
NGL Pipelines & Services:
South Texas natural gas processing plants	$	86.9	$	15.6
Other		121.2		23.5	$	18.6
Crude Oil Pipelines & Services:
Cancellation of Midland-to-ECHO 4 project		42.2
Other		3.3		2.6		11.2
Natural Gas Pipelines & Services:
South Texas natural gas gathering pipelines		37.8
Other		5.5		4.8		13.9
Petrochemical & Refined Products Services:
Marine transportation business		252.1
Other		40.8		4.6		3.1
Total impairment charges for property, plant and equipment	$	589.8	$	51.1	$	46.8

The following information summarizes our significant asset impairment charges involving property, plant and equipment that were recognized during the year ended December 31, 2020:

• In December 2020, we evaluated our marine transportation business for impairment due to a lower demand outlook for such services. As a result of our review, we recognized an impairment charge of $256.7 million, which reduced the carrying value of this asset group to its estimated fair value of $410.0 million at December 31, 2020.  The impairment charge reduced property, plant and equipment by $252.1 million and intangible assets by $4.6 million. Our marine transportation assets, which consist of 65 tow boats, 160 tank barges and shipyard and repair facilities, serve refinery and storage terminal customers along the Mississippi River, the intracoastal waterway between Texas and Florida, and the Tennessee-Tombigbee waterway system.

• In December 2020, we evaluated certain of our natural gas gathering and processing assets in South Texas for impairment due to a lower production outlook.  As a result of our review, we recognized an aggregate impairment charge of $125.7 million, which reduced the total carrying value of these assets to their estimated fair value of $21.3 million at December 31, 2020.  The impairment charge reduced property, plant and equipment by $124.7 million and intangible assets by $1.0 million.  The natural gas assets impacted by this review were our Armstrong, Gilmore, Shilling and Indian Springs natural gas processing facilities and our Indian Springs and Big Thicket Gathering Systems.

• In September 2020, we recognized $42.2 million of impairment expense due to our cancellation of the Midland-to-ECHO 4 pipeline construction project.  In connection with the cancellation, we reclassified $311.7 million of pipe and related items that were purchased for the project from construction in progress to long-term spare parts, where they will be held for future use. Long-term spare parts is a component of “Other assets” as presented on our Consolidated Balance Sheet. While being held as long-term spare parts, these assets are depreciated over their expected useful lives as spare parts.

• The remainder of our impairment charges for 2020 (i.e., those classified as “Other” in the preceding table) are attributable to the complete write-off of assets that are no longer expected to be used or constructed.

For information regarding our non-recurring fair value estimates for the marine transportation business and our South Texas natural gas gathering and processing assets, see Note 14.