Energy Transfer 2012 Annual Report Download - page 111

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over many years. Management believes that none of the current remediation locations, which are in various stages of ongoing
remediation, is individually material to Sunoco as its largest accrual for any one Superfund site, operable unit or remediation area
was approximately $28 million at December 31, 2012. As a result, Sunoco’s exposure to adverse developments with respect to
any individual site is not expected to be material. However, if changes in environmental laws or regulations occur or the assumptions
used to estimate losses at multiple sites are adjusted, such changes could impact multiple Sunoco facilities, formerly owned facilities
and third-party sites at the same time. As a result, from time to time, significant charges against income for environmental
remediation may occur; however, management does not believe that any such charges would have a material adverse impact on
the Company’s consolidated financial position.
Deferred Income Taxes. ETP recognizes benefits in earnings and related deferred tax assets for net operating loss carryforwards
(“NOLs”) and tax credit carryforwards. If necessary, a charge to earnings and a related valuation allowance are recorded to reduce
deferred tax assets to an amount that is more likely than not to be realized by the Partnership in the future. Deferred income tax
assets attributable to state and federal NOLs and federal tax alternative minimum tax credit carryforwards totaling $268 million
have been included in ETP's consolidated balance sheet as of December 31, 2012. All of the deferred income tax assets attributable
to state and federal NOL benefits expiring before 2032 as more fully described below and the federal alternative minimum tax
credits are attributable to the acquisitions of Southern Union and Sunoco. The state NOL carryforward benefits of 104 million
begin to expire in 2013 with a substantial portion expiring between 2029 and 2032. The federal NOLs benefits of $127 million
expire between 2030 and 2032, while the $37 million of the federal tax alternative minimum tax credit carryforwards have no
expiration date. We have determined that a valuation allowance totaling $90 million (net of federal income tax effects) is required
for the state NOLs at December 31, 2012 primarily due to significant restrictions on their use in the Commonwealth of Pennsylvania.
In making the assessment of the future realization of the deferred tax assets, we rely on future reversals of existing taxable temporary
differences, tax planning strategies and forecasted taxable income based on historical and projected future operating results. The
potential need for valuation allowances is regularly reviewed by management. If it is more likely than not that the recorded asset
will not be realized, additional valuation allowances which increase income tax expense may be recognized in the period such
determination is made. Likewise, if it is more likely than not that additional deferred tax assets will be realized, an adjustment to
the deferred tax asset will increase income in the period such determination is made.
Forward-Looking Statements
This annual report contains various forward-looking statements and information that are based on our beliefs and those of our
General Partner, as well as assumptions made by and information currently available to us. These forward-looking statements are
identified as any statement that does not relate strictly to historical or current facts. When used in this annual report, words such
as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “estimate,” “intend,” “could,” “believe,” “may,” “will” and similar
expressions and statements regarding our plans and objectives for future operations, are intended to identify forward-looking
statements. Although we and our General Partner believe that the expectations on which such forward-looking statements are
based are reasonable, neither we nor our General Partner can give assurances that such expectations will prove to be correct.
Forward-looking statements are subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or
uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those anticipated,
estimated, projected or expected. Among the key risk factors that may have a direct bearing on our results of operations and
financial condition are:
• the volumes transported on our pipelines and gathering systems;
• the level of throughput in our processing and treating facilities;
• the fees we charge and the margins we realize for our gathering, treating, processing, storage and transportation services;
• the prices and market demand for, and the relationship between, natural gas and NGLs;
• energy prices generally;
• the prices of natural gas and NGLs compared to the price of alternative and competing fuels;
• the general level of petroleum product demand and the availability and price of NGL supplies;
• the level of domestic oil, natural gas and NGL production;
• the availability of imported oil, natural gas and NGLs;
• actions taken by foreign oil and gas producing nations;
• the political and economic stability of petroleum producing nations;
• the effect of weather conditions on demand for oil, natural gas and NGLs;
• availability of local, intrastate and interstate transportation systems;
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