Energy Transfer 2012 Annual Report Download - page 162

F - 17
Advances to and Investments in Affiliates
We own interests in a number of related businesses that are accounted for by the equity method. In general, we use the equity
method of accounting for an investment in which we have a 20% to 50% ownership and exercise significant influence over,
but do not control, the investee’s operating and financial policies.
Goodwill
Goodwill is tested for impairment annually or more frequently if circumstances indicate that goodwill might be impaired.
Our annual impairment test is performed as of August 31 for subsidiaries in our intrastate transportation and storage and
midstream segments and as of December 31 for subsidiaries in our interstate transportation and storage and NGL transportation
and services segments and all others. No goodwill impairments were recorded for the periods presented in these consolidated
financial statements.
Changes in the carrying amount of goodwill were as follows:
Intrastate
Transportation
and Storage
Interstate
Transportation
and Storage Midstream
NGL
Transportation
and Services
Investment
in Sunoco
Logistics Retail Marketing All Other Total
Balance, December 31, 2010 $ 10 $ 99 $ 50 $ — $ — $ — $ 623 $ 782
Goodwill acquired — — — 432 — — 6 438
Other — — — — — — — —
Balance, December 31, 2011 10 99 50 432 — — 629 1,220
Goodwill acquired — 1,785 338 — 1,368 1,272 375 5,138
Goodwill contributed in
deconsolidation of
Propane Business — — — — — — (619)(619)
Goodwill allocated to the
disposal group — — — — — — (133)(133)
Balance, December 31, 2012 $ 10 $ 1,884 $ 388 $ 432 $ 1,368 $ 1,272 $ 252 $5,606
Goodwill is recorded at the acquisition date based on a preliminary purchase price allocation and generally may be adjusted
when the purchase price allocation is finalized. A net increase in goodwill of $4.39 billion was recorded during the year ended
December 31, 2012, primarily due to $2.64 billion from the Sunoco Merger and $2.50 billion related to Southern Union, offset
by $619 million in goodwill that was contributed as part of the deconsolidation of our Propane Business (see footnote 3), and
$133 million classified as assets held for sale (see footnote 3). We acquired control of Southern Union through the Holdco
Transaction. Because that transaction was a combination of entities under common control, we retrospectively consolidated
Southern Union into the Partnership's consolidated financial statements beginning on March 26, 2012 and also recorded
Southern Union's assets (including goodwill) and liabilities at ETE's basis. The Sunoco Merger and Holdco Transaction are
described in Note 3. This additional goodwill is not expected to be deductible for tax purposes.
Intangible Assets
Intangible assets are stated at cost, net of amortization computed on the straight-line method. We eliminate from our balance
sheet the gross carrying amount and the related accumulated amortization for any fully amortized intangibles in the year they
are fully amortized.
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