Sunoco 2014 Annual Report Download - page 82
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80
9. Goodwill and Other Intangible Assets
Goodwill
Goodwill represents the excess of consideration transferred plus the fair value of noncontrolling interests of an acquired
business over the fair value of net assets acquired. Goodwill is subject to impairment testing at least annually. The Partnership's
goodwill balance at December 31, 2014 and 2013 was $1,358 and $1,346 million, respectively. The $12 million increase in the
Partnership's goodwill balance is related to the Partnership's 2014 acquisitions of EDF and PRT (Note 3).
Identifiable Intangible Assets
The Partnership's identifiable intangible assets are comprised of customer relationships, which consist of throughput and
deficiency contracts and historical shipping rights, and patented technology associated with the Partnership's butane blending
services. The values assigned to these intangible assets are amortized to earnings using a straight-line approach, over a
weighted average amortization period of approximately 17 years. Amortization expense related to these intangibles was $52,
$49, $12 and $20 million for the years ended December 31, 2014 and 2013; and for the periods from October 5, 2012 to
December 31, 2012 and from January 1, 2012 to October 4, 2012, respectively.
Customer relationship intangible assets represent the estimated economic value assigned to certain relationships acquired
in connection with business combinations or asset purchases whereby (i) the Partnership acquired information about or access
to customers, (ii) the customers now have the ability to transact business with the Partnership and (iii) the Partnership is
positioned, due to limited competition, to provide products or services to the customers. The customer relationship intangible
assets are amortized on a straight-line basis over their respective economic lives. Technology-related intangible assets consist
of the Partnership's patents for blending of butane into refined products. These patents are amortized over their remaining legal
lives.
Successor
December 31,
Weighted Average
Amortization Period 2014 2013
(in years) (in millions)
Gross
Customer relationships 18 $ 836 $ 808
Technology 10 47 47
Total gross 883 855
Accumulated amortization
Customer relationships (102)(56)
Technology (11)(5)
Total accumulated amortization (113)(61)
Total Net $ 770 $ 794
The Partnership forecasts annual amortization expense of $52 million in year 2015, and approximately $51 million of
annual amortization expense for each year thereafter through 2019 for these intangible assets.
Intangible assets attributable to rights-of-way are included in properties, plants and equipment in the Partnership's
consolidated balance sheets at December 31, 2014 and December 31, 2013 (Note 7).