Energy Transfer 2012 Annual Report Download - page 155

F - 10
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts, except per unit data, are in millions)
1. OPERATIONS AND ORGANIZATION:
The consolidated financial statements and notes thereto of Energy Transfer Partners, L.P., and its subsidiaries (“Energy Transfer
Partners,” the “Partnership,” “we” or “ETP”) presented herein for the years ended December 31, 2012, 2011 and 2010, have
been prepared in accordance with GAAP and pursuant to the rules and regulations of the SEC. We consolidate all majority-
owned subsidiaries and subsidiaries we control, even if we do not have a majority ownership. All significant intercompany
transactions and accounts are eliminated in consolidation. Management has evaluated subsequent events through the date the
financial statements were issued.
We also own varying undivided interests in certain pipelines. Ownership of these pipelines has been structured as an ownership
of an undivided interest in assets, not as an ownership interest in a partnership, limited liability company, joint venture or
other forms of entities. Each owner controls marketing and invoices separately, and each owner is responsible for any loss,
damage or injury that may occur to their own customers. As a result, we apply proportionate consolidation for our interests
in these assets.
Certain prior period amounts have been reclassified to conform to the 2012 presentation. In October 2012, we sold Canyon
for approximately $207 million. The results of continuing operations of Canyon have been reclassified to loss from
discontinued operations and the prior year amounts have been restated to present Canyon's operations as discontinued
operations. Canyon was previously included in our midstream segment. In December 2012, Southern Union entered into a
purchase and sale agreement with the Laclede Entities, pursuant to which Laclede Missouri has agreed to acquire the assets
of Missouri Gas Energy division and Laclede Massachusetts has agreed to acquire the assets of the New England Gas Company
division. For the period from March 26, 2012 to December 31, 2012 the results of operations of the distribution operations
have been reclassified to income from discontinued operations. The assets and liabilities of the disposal group have been
reclassified and reported as assets and liabilities held for sale as of December 31, 2012.
In accordance with GAAP, we have accounted for the Holdco Transaction (described in Note 3), whereby ETP obtained
control of Southern Union, as a reorganization of entities under common control. Accordingly, ETP's consolidated financial
statements have been retrospectively adjusted to reflect consolidation of Southern Union into ETP beginning March 26, 2012
(the date ETE acquired Southern Union). This change only impacted interim periods in 2012, and no prior annual amounts
have been adjusted.
We are managed by our general partner, ETP GP, which is in turn managed by its general partner, ETP LLC. ETE owns ETP
LLC, the general partner of our General Partner. The consolidated financial statements of the Partnership presented herein
include our operating subsidiaries described below.
Business Operations
Our activities are primarily conducted through our operating subsidiaries (collectively, the “Operating Companies”) as follows:
• ETC OLP, a Texas limited partnership engaged in midstream and intrastate transportation and storage natural gas
operations. ETC OLP owns and operates, through its wholly and majority-owned subsidiaries, natural gas gathering
systems, intrastate natural gas pipeline systems and gas processing plants and is engaged in the business of purchasing,
gathering, transporting, processing, and marketing natural gas and NGLs in the states of Texas, Louisiana, New Mexico
and West Virginia. Our intrastate transportation and storage operations primarily focus on transporting natural gas in
Texas through our Oasis pipeline, ET Fuel System, East Texas pipeline and HPL System. Our midstream operations focus
on the gathering, compression, treating, conditioning and processing of natural gas, primarily on or through our Southeast
Texas System, Eagle Ford System, North Texas System and Northern Louisiana assets. ETC OLP also owns a 70% interest
in Lone Star.
• ET Interstate, a Delaware limited liability company with revenues consisting primarily of fees earned from natural gas
transportation services and operational gas sales. ET Interstate is the parent company of:
• Transwestern, a Delaware limited liability company engaged in interstate transportation of natural gas.
Transwestern’s revenues consist primarily of fees earned from natural gas transportation services and operational
gas sales.
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