Company: PAGP
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001581990-25-000021
Chunk: 63

Company: PLAINS GP HOLDINGS LP
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 63
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, L.P., an entity that is associated with a member of our board of directors. See Note 7 for additional information.The Ironwood Midstream acquisition was accounted for as a business combination using the acquisition method of accounting. In accordance with applicable accounting guidance, the fair value of the assets acquired and liabilities assumed following the acquisition was utilized as the consideration transferred for the purchase price allocation. The determination of the fair value of the assets and liabilities assumed was estimated in accordance with applicable accounting guidance. The analysis was performed based on estimates that are reflective of market participant assumptions. The following table reflects our preliminary determination of the fair value of the Ironwood Midstream acquisition assets and liabilities (in millions):Identifiable Assets Acquired and Liabilities Assumed:Estimated Useful Lives (in years)Recognized AmountProperty and equipment3-30$435 Intangible assets1627 Working capital and other assets and liabilitiesN/A19 $481 

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Table of ContentsPLAINS GP HOLDINGS, L.P. AND SUBSIDIARIESNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the tangible asset is a Level 3 measurement in the fair value hierarchy and was determined using a cost approach for tangible assets, which was based on costs incurred on similar recent construction projects, and a market approach for rights-of-way. A Level 3 measurement is one for which there are no observable market inputs. The fair value of the intangible assets is also a Level 3 measurement in the fair value hierarchy and was determined by applying a discounted cash flow approach. Such approach utilized a discount rate of 18%, based on our estimate of the risk that a theoretical market participant would assign to the intangible asset. The projection of future crude oil volumes transported and the estimated tariff rates for transportation were also key assumptions in the valuation of the intangible assets. Projected future volumes and estimated tariff rates were based on current contracts in place with assumptions for forecasted rate increases and contract renewals.The fair value of intangible asset is comprised of customer relationships that will be amortized over their useful lives, which have a remaining weighted average life of approximately 16 years. The value assigned to such intangible asset will be amortized to earnings under the declining balance method of amortization. Amortization expense was approximately $1 million and $2 million during the three and six months ended June 30, 2025, respectively, and the future amortization expense for the remainder of 202