8. Goodwill and Other Intangible Assets
Goodwill The Company completed its annual impairment assessment of goodwill during the fourth quarter of 2013, and the test indicated no impairment. At December 31, 2013, the Company had $5.5 billion of goodwill allocated to the following reporting units: $5.3 billion to oil and gas exploration and production, $70 million to other gathering and processing, $100 million to WES gathering and processing, and $5 million to transportation.
Significant declines in commodity prices, difficulty or potential delays in obtaining drilling permits, or other unanticipated events could result in further goodwill impairment tests in the near term, the results of which may have a material adverse impact on the Company’s results of operations.
Other Intangible Assets Intangible assets and associated amortization expense were as follows:
|
| | | | | | | | | | | | | | | |
millions | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Amortization Expense |
December 31, 2013 | | | | | | | |
Offshore platform leases | $ | 60 |
| | $ | (50 | ) | | $ | 10 |
| | $ | 3 |
|
Customer contracts | 169 |
| | (9 | ) | | 160 |
| | 4 |
|
| $ | 229 |
| | $ | (59 | ) | | $ | 170 |
| | $ | 7 |
|
December 31, 2012 | | | | | | | |
Offshore platform leases | $ | 60 |
| | $ | (36 | ) | | $ | 24 |
| | $ | 3 |
|
Customer contracts | 169 |
| | (5 | ) | | 164 |
| | 3 |
|
| $ | 229 |
| | $ | (41 | ) | | $ | 188 |
| | $ | 6 |
|
Customer contract intangible assets are primarily related to the 2011 Wattenberg Plant acquisition. The contracts are included in the Company’s midstream reporting segment and are being amortized over 50 years. The estimated aggregate amortization expense for intangible assets for the next five years is not expected to be material.
