Energy Transfer 2012 Annual Report Download - page 78

70
These increases in depreciation and amortization were offset by the impact from the January 2012 deconsolidation of the Propane
Business, for which our consolidated results reflected $4 million and $82 million in depreciation and amortization for the years
ended December 31, 2012 and 2011, respectively.
Interest Expense. Interest expense increased primarily due to:
• interest expense recorded by Southern Union of $130 million from March 26, 2012 through December 31, 2012;
• interest expense related to Sunoco Logistics and Sunoco of $14 million and $9 million, respectively, from October 5,
2012 through December 31, 2012; and
• incremental interest expense due to the issuance of $1.5 billion of senior notes in May 2011 to fund the LDH acquisition
and the issuance of $2.0 billion of senior notes in January 2012 to fund the Citrus Acquisition; offset by
• a reduction of several series of our higher coupon notes that were repurchased in the tender offers completed in January
2012; and
• an increase in capitalized interest related to our growth projects.
Gain on Deconsolidation of Propane Business. A gain on deconsolidation was recognized as a result of the contribution of our
Propane Business to AmeriGas in January 2012.
Losses on Non-Hedged Interest Rate Derivatives. Losses on non-hedged interest rate derivatives decreased due to the recognition
of losses in 2011 resulting from significant forward rate decreases during 2011.
LIFO Valuation Reserve. A LIFO valuation reserve was recorded for the inventory associated with Sunoco's retail marketing
operations as a result of commodity price changes subsequent to the inventory being recorded at fair value in connection with
purchase accounting.
Loss on Extinguishment of Debt. A loss on extinguishment of debt was recognized in January 2012 in connection with our tender
offers in which we repurchased approximately $750 million in aggregate principal amount of Senior Notes.
Adjusted EBITDA Related to Unconsolidated Affiliates and Equity in Earnings of Unconsolidated Affiliates. Amounts reflected
for 2012 primarily include our proportionate share of such amounts related to AmeriGas, Citrus and FEP. The 2011 amounts
primarily represented our proportionate share of such amounts for FEP only. Such amounts were included in calculating Segment
Adjusted EBITDA and net income.
Adjusted EBITDA Attributable to Discontinued Operations. Amounts reflect the operations of Canyon, which was sold in October
2012, and, for the period from March 26, 2012 to December 31, 2012, Southern Union's distribution operations.
Other, net. Other, net increased in 2012 primarily due to Southern Union's recognition of a net curtailment gain of $15 million
related to its postretirement benefit plans.
Income Tax Expense. Income tax expense increased primarily due to the acquisitions of Southern Union and Sunoco, both of
which are taxable corporations.
Table of Contents