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Property, Plant and Equipment and Intangible Assets
6 Months Ended
Jun. 30, 2018
Property Plant And Equipment And Intangible Assets [Abstract]  
Property, Plant and Equipment and Intangible Assets

Note 6 — Property, Plant and Equipment and Intangible Assets

 

 

 

June 30, 2018

 

 

December 31, 2017

 

 

Estimated Useful Lives (In Years)

Gathering systems

 

$

7,193.0

 

 

$

7,037.2

 

 

5 to 20

Processing and fractionation facilities

 

 

3,687.2

 

 

 

3,569.6

 

 

5 to 25

Terminaling and storage facilities

 

 

1,313.4

 

 

 

1,244.1

 

 

5 to 25

Transportation assets

 

 

392.1

 

 

 

343.6

 

 

10 to 25

Other property, plant and equipment

 

 

312.0

 

 

 

303.7

 

 

3 to 25

Land

 

 

144.3

 

 

 

125.7

 

 

Construction in progress

 

 

2,409.0

 

 

 

1,581.5

 

 

Property, plant and equipment

 

 

15,451.0

 

 

 

14,205.4

 

 

 

Accumulated depreciation

 

 

(4,029.7

)

 

 

(3,775.4

)

 

 

Property, plant and equipment, net

 

$

11,421.3

 

 

$

10,430.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

2,736.6

 

 

$

2,736.6

 

 

10 to 20

Accumulated amortization

 

 

(662.3

)

 

 

(570.8

)

 

 

Intangible assets, net

 

$

2,074.3

 

 

$

2,165.8

 

 

 

 

Intangible Assets

 

Intangible assets consist of customer contracts and customer relationships acquired in the Permian Acquisition and the acquisition of the Flag City Plant assets in SouthTX in 2017, the mergers with Atlas Energy L.P. and Atlas Pipeline Partners L.P. in 2015 (collectively, the “Atlas mergers”) and our Badlands acquisition in 2012. The fair values of these acquired intangible assets were determined at the date of acquisition based on the present values of estimated future cash flows. Key valuation assumptions include probability of contracts under negotiation, renewals of existing contracts, economic incentives to retain customers, past and future volumes, current and future capacity of the gathering system, pricing volatility and the discount rate.

 

Amortization expense attributable to these assets is recorded over the periods in which we benefit from services provided to customers. We are amortizing these assets over lives ranging from 10 to 20 years using a method that closely reflects the cash flow pattern underlying their intangible asset valuation, or the straight-line method, if a reliably determinable pattern of amortization could not be identified.

The estimated annual amortization expense for intangible assets is approximately $182.6 million, $171.6 million, $159.4 million, $149.5 million and $141.2 million for each of the years 2018 through 2022.

 

The changes in our intangible assets are as follows:

 

Balance at December 31, 2017

 

$

2,165.8

 

Amortization

 

 

(91.5

)

Balance at June 30, 2018

 

$

2,074.3

 

 

Asset Sale

 

During the second quarter of 2018, we sold our inland marine barge business to a third party for approximately $69.3 million. As a result of the sale, we recognized a gain of $48.1 million in our Consolidated Statements of Operations for the three months ended June 30, 2018 as part of Other operating (income) expense. We continue to own and operate two ocean-going barges.