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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
OR
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-11727
ENERGY TRANSFER PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware
73-1493906
(state or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
3738 Oak Lawn Avenue, Dallas, Texas 75219
(Address of principal executive offices) (zip code)
Registrant’s telephone number, including area code: (214) 981-0700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Units
New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ¨ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨ No
The aggregate market value as of June 28, 2013, of the registrant’s Common Units held by non-affiliates of the registrant, based on the reported closing price of such Common
Units on the New York Stock Exchange on such date, was $13.80 billion. Common Units held by each executive officer and director and by each person who owns 5% or more
of the outstanding Common Units have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive
determination for other purposes.
At February 21, 2014, the registrant had 316,923,087 Common Units outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None

Table of contents

  • Page 1
    ..., 2013 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-11727 ENERGY TRANSFER PARTNERS, L.P. (Exact name of registrant as specified in its charter) Delaware (state or other jurisdiction of incorporation or organization) 73...

  • Page 2
    ...CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES OTHER INFORMATION ITEM 9. ITEM 9A. ITEM 9B. 112 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 113 ITEM 11. ITEM 12. ITEM 13. ITEM 14. EXECUTIVE COMPENSATION...

  • Page 3
    ... La Grange Acquisition, L.P., which conducts business under the assumed name of Energy Transfer Company ETC Tiger Pipeline, LLC ETC Tiger ETE ETE Holdings ET Interstate Energy Transfer Equity, L.P., a publicly traded partnership and the owner of ETP LLC ETE Common Holdings, LLC, a wholly-owned...

  • Page 4
    ... Safety Administration PES PHMSA Regency Regency Energy Partners LP, a subsidiary of ETE Sea Robin Sea Robin Pipeline Company, LLC, a subsidiary of PEPL Securities and Exchange Commission SEC Southern Union Southwest Gas Southern Union Company Pan Gas Storage, LLC (d.b.a. Southwest Gas) iii

  • Page 5
    ... SUGS Sunoco Sunoco Logistics Southern Union Gas Services Sunoco, Inc. Sunoco Logistics Partners L.P. Sunoco Partners LLC, the general partner of Sunoco Logistics Sunoco Partners TRRC Texas Railroad Commission Titan Transwestern Titan Energy Partners, L.P. Transwestern Pipeline Company, LLC...

  • Page 6
    ... parent company of the Trunkline and Sea Robin transmission systems. NGL transportation, storage and fractionation services primarily through Lone Star. Refined product and crude oil operations, including the following: • • refined product and crude oil transportation through Sunoco Logistics...

  • Page 7
    ...of Southern Union and PEPL Holdings were merged with and into Panhandle, with Panhandle as the surviving entity. Unless the context requires otherwise, the Partnership, the Operating Companies, and their subsidiaries are collectively referred to in this report as "we," "us," "ETP," "Energy Transfer...

  • Page 8
    ...with the Partnership's contribution of its retail propane operations to AmeriGas in January 2012. In January 2014, we sold 9.2 million AmeriGas common units for net proceeds of $381 million . In September 2013, Southern Union completed its sale of the assets of MGE for an aggregate purchase price of...

  • Page 9
    ... the customer, (iii) fuel retention based on a percentage of gas transported on the pipeline, or (iv) a combination of the three, generally payable monthly. We also generate revenues and margin from the sale of natural gas to electric utilities, independent power plants, local distribution companies...

  • Page 10
    ... Organic Growth Projects," we are currently developing plans to convert a portion of the Trunkline gas pipeline to crude oil transportation. The results from our interstate transportation and storage segment are primarily derived from the fees we earn from natural gas transportation and storage...

  • Page 11
    .... Two fractionation facilities and the NGL storage facilities are located at Mont Belvieu, Texas, one fractionation facility is located in Geismar, Louisiana, and the NGL pipelines primarily transport NGLs from the Permian and Delaware basins and the Barnett and Eagle Ford Shales to Mont Belvieu. We...

  • Page 12
    ... marketing business. We own an investment in Regency related to the Regency common and Class F units received by Southern Union in exchange of its interest in Southern Union Gathering Company, LLC to Regency on April 30, 2013. We conduct marketing operations in which we market the natural gas that...

  • Page 13
    ... United States and is comprised of intrastate natural gas pipeline and related natural gas storage facilities. The ET Fuel System has many interconnections with pipelines providing direct access to power plants, other intrastate, and interstate pipelines and is strategically located near high-growth...

  • Page 14
    ... gas pipeline Bi-directional capabilities The Transwestern pipeline is an open-access interstate natural gas pipeline extending from the gas producing regions of West Texas, eastern and northwestern New Mexico, and southern Colorado primarily to pipeline interconnects off the east end of its system...

  • Page 15
    ... Organic Growth Projects," we are currently developing plans to convert a portion of the Trunkline gas pipeline to crude oil transportation. Tiger Pipeline • • • Capacity of 2.4 Bcf/d Approximately 195 miles of interstate natural gas pipeline Bi-directional capabilities The Tiger pipeline...

  • Page 16
    ... to our intrastate transportation pipeline systems for deliveries of residue gas and are also connected with our NGL pipelines for delivery of NGLs. Other Midstream Assets The midstream segment also includes our interests in various midstream assets located in Texas, New Mexico and Louisiana, with...

  • Page 17
    ... storage facility. West Texas Gateway Pipeline • • Capacity of 209,000 Bbls/d Approximately 570 miles of NGL transmission pipeline The West Texas Gateway Pipeline, owned by Lone Star, began service in December 2012 and transports NGLs produced in the Permian and Delaware Basins and the Eagle...

  • Page 18
    .... Crude Oil Acquisition and Marketing Sunoco Logistics' crude oil acquisition and marketing activities include the gathering, purchasing, marketing and selling of crude oil primarily in the midcontinent United States. The operations are conducted using approximately 300 crude oil transport trucks...

  • Page 19
    ...Sunoco Logistics pipelines. The tank farm then stores the crude oil and transports it to the PES refinery via Sunoco Logistics pipelines. • MarcustHooktFacility: In 2013, Sunoco Logistics acquired Sunoco's Marcus Hook facility and related assets. The acquisition included terminalling and storage...

  • Page 20
    ... table outlines the number of Sunoco Logistics' active terminals and storage capacity by state: State Number of Terminals Storage Capacity (thousands of Bbls) Indiana Louisiana Maryland Massachusetts Michigan New Jersey New York(1) Ohio Pennsylvania Texas Virginia Total (1) 1 1 1 1 3 3 4 206...

  • Page 21
    ... Line Company(2) West Shore Pipe Line Company(3) Wolverine Pipe Line Company(4) (1) Equity Ownership 9.4% 14.0% 17.1% 31.5% Pipeline Mileage 1,850 700 650 700 The system, which is operated by Explorer employees, originates from the refining centers of Beaumont, Port Arthur and Houston, Texas...

  • Page 22
    ...These stores supplement sales of fuel products with a broad mix of merchandise such as groceries, fast foods, beverages and tobacco products. The following table sets forth information concerning Sunoco's company-operated APlus® convenience stores at December 31, 2013 : Number of stores Merchandise...

  • Page 23
    ..., petrochemical and natural gas companies, and barge, rail and truck fleet operations. In general, our NGL pipelines compete with these entities in terms of transportation fees, reliability and quality of customer service. We face competition with other storage facilities based on fees charged and...

  • Page 24
    ..., Transwestern, Panhandle Eastern, Trunkline Gas, Tiger, Fayetteville Express and Sea Robin pipelines transport natural gas in interstate commerce and thus each qualifies as a "natural-gas company" under the NGA subject to the FERC's regulatory jurisdiction. We also hold certain storage facilities...

  • Page 25
    ... policies as it considers matters such as pipeline rates and rules and policies that may affect rights of access to natural gas transportation capacity, transportation and storage facilities. In 2011, in lieu of filing a new NGA Section 4 general rate case, Transwestern filed a proposed settlement...

  • Page 26
    ... Operations Section of the Department of Natural Resources' Office of Conservation is generally responsible for regulating intrastate pipelines and gathering facilities in Louisiana and has authority to review and authorize natural gas transportation transactions and the construction, acquisition...

  • Page 27
    ... rules and orders. The ICA requires that tariff rates for petroleum pipelines be "just and reasonable" and not unduly discriminatory and that such rates and terms and conditions of service be filed with the FERC. This statute also permits interested persons to challenge proposed new or changed rates...

  • Page 28
    ... may be significant. Environmental Matters General. Our operation of processing plants, pipelines and associated facilities, including compression, in connection with the gathering, processing, storage and transmission of natural gas and the storage and transportation of NGLs, crude oil and refined...

  • Page 29
    ... state laws, impose liability without regard to fault or the legality of the original conduct on certain classes of persons that contributed to a release of a "hazardous substance" into the environment. These persons include the owner and operator of the site where a release occurred and companies...

  • Page 30
    ... cost remediation strategy in the future. The Partnership currently owns or operates certain retail gasoline outlets where releases of petroleum products have occurred. Federal and state laws and regulations require that contamination caused by such releases at these sites and at formerly owned...

  • Page 31
    ... operations are subject to the federal Clean Air Act and comparable state laws and regulations. These laws and regulations regulate emissions of air pollutants from various industrial sources, including our processing plants, and also impose various monitoring and reporting requirements. Such laws...

  • Page 32
    ... we transport, process, or otherwise handle in connection with our services. In addition, the EPA has published a final rule requiring the reporting of greenhouse gas emissions from specified large greenhouse gas sources in the United States on an annual basis, including onshore oil and natural gas...

  • Page 33
    ... transported in our pipelines and gathering systems; the level of throughput in our processing and treating operations; the fees we charge and the margins we realize for our services; the price of natural gas, NGLs, crude oil and refined products; the relationship between natural gas, NGL and crude...

  • Page 34
    ... its per unit distribution level. Sunoco Logistics' partnership agreement allows it to issue an unlimited number of additional limited partner interests. The issuance of additional common units or other equity securities by Sunoco Logistics will have the following effects: Unitholders' current...

  • Page 35
    ... current obligations to our creditors. Although we have taken certain steps in our organizational structure, financial reporting and contractual relationships to reflect the separateness of us, ETP GP and ETP LLC from the entities that control ETP GP (ETE and its general partner), our credit ratings...

  • Page 36
    ... by the partnership agreement provision providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than the General Partner and its affiliates, cannot be voted on any matter. The control of our General Partner may be transferred to a third...

  • Page 37
    ... Unitholders or to pay interest or principal on our debt when due. We do not have the same flexibility as other types of organizations to accumulate cash, which may limit cash available to service our debt or to repay debt at maturity. Unlike a corporation, our partnership agreement requires us to...

  • Page 38
    ...result controls us. ETE also owns the general partner of Regency, a publicly traded partnership with which we compete in the natural gas gathering, processing and transportation business. The directors and officers of our General Partner and its affiliates have fiduciary duties to manage our General...

  • Page 39
    ... in other businesses or activities, including those that might be in direct competition with us. Regency competes with us with respect to our natural gas operations. Additionally, two directors of Regency's general partner currently serve as directors of LE GP, LLC, the general partner of ETE...

  • Page 40
    ... transportation and storage of natural gas. The principal elements of competition among pipelines are rates, terms of service, access to sources of supply and the flexibility and reliability of service. Natural gas and NGLs also competes with other forms of energy, including electricity, coal, fuel...

  • Page 41
    ... on our business or results of operations. We may be unable to retain or replace existing midstream, transportation, terminalling and storage customers or volumes due to declining demand or increased competition in oil, natural gas and NGL markets, which would reduce our revenues and limit our...

  • Page 42
    ...processing, transportation and storage operations are largely dependent upon natural gas commodity prices, price spreads between two or more physical locations and market demand for natural gas and NGLs. For a portion of the natural gas gathered on our systems, we purchase natural gas from producers...

  • Page 43
    ... and procedures are not followed. Our natural gas and NGL revenues depend on our customers' ability to use our pipelines and third-party pipelines over which we have no control. Our natural gas transportation, storage and NGL businesses depend, in part, on our customers' ability to obtain access to...

  • Page 44
    ... of the current grants, that all of the rights-of-way will be obtained in a timely fashion or that we will acquire new rights-of-way as needed. Further, whether we have the power of eminent domain for our pipelines varies from state to state, depending upon the type of pipeline and the laws of the...

  • Page 45
    ... will occur over an extended period of time, but we may not materially increase our revenues until long after the project's completion. In addition, the success of a pipeline construction project will likely depend upon the level of oil and natural gas exploration and development drilling activity...

  • Page 46
    ... volumes of natural gas on pipelines in our ET Fuel System. We also have an eight-year fee-based transportation contract with Luminant Energy Company LLC ("Luminant") to transport natural gas on the ET Fuel System. We also extended two natural gas storage contracts with Luminant to store natural gas...

  • Page 47
    ... their customers; construction of new facilities; acquisition, extension or abandonment of services or facilities; reporting and information posting requirements; accounts and records; and relationships with affiliated companies involved in all aspects of the natural gas and energy businesses...

  • Page 48
    ... services. Under Section 311, rates charged for transportation and storage must be fair and equitable. Amounts collected in excess of fair and equitable rates are subject to refund with interest, and the terms and conditions of service, set forth in the pipeline's statement of operating conditions...

  • Page 49
    ... agreements with our customers. Intrastate transportation of NGLs is largely regulated by the state in which such transportation takes place. Lone Star's NGL Pipeline transports NGLs within the state of Texas and is subject to regulation by the TRRC. This NGLs transportation system offers services...

  • Page 50
    ... requiring the monitoring and reporting of greenhouse gas emissions from specified onshore and offshore production facilities and onshore processing, transmission and storage facilities in the United States on an annual basis, which include certain of our operations. While Congress has from time...

  • Page 51
    ... the board of directors of our General Partner and make certain filings in order to rely on this exception. In addition, mandatory clearing requirements applicable to other market participants, such as swap dealers, may change the cost and availability of the swaps that we use for hedging. Rules...

  • Page 52
    ... of acquired assets or businesses; changes in laws and regulations, including safety, tax, consumer protection and accounting matters; competitive pressures from the same and alternative energy sources; failure to acquire new customers and retain current customers thereby reducing or limiting any...

  • Page 53
    ...of natural gas reserves in the vicinity of our facilities, which could adversely affect our business, financial condition results of operations and cash flows. Also, if similar events were to occur in the future in the U.S. Gulf of Mexico in areas where we conduct operations, the United States could...

  • Page 54
    ... services on a timely basis at the prices we expect, or as required by contract, due to events such as regional economic, business, environmental or political events, information technology system failures, or military actions, could result in significant disruptions and costs to our operations...

  • Page 55
    ...current market conditions or funding requirements. Additionally, if the current cost recovery mechanisms are changed or eliminated, the impact of these benefits on operating results could significantly increase. Mergers among Sunoco Logistics' customers and competitors could result in lower volumes...

  • Page 56
    ...these areas, as compared to alternative sources of crude oil available to Sunoco Logistics' customers, could materially reduce demand for crude oil in these areas. In either case, the volumes of crude oil transported in Sunoco Logistics' crude oil pipelines and terminal facilities could decline, and...

  • Page 57
    ... to its unitholders. Current law may change so as to cause Sunoco Logistics to be treated as a corporation for federal income tax purposes or to otherwise subject it to a material amount of entity-level taxation. States are evaluating ways to subject partnerships to entity level taxation through the...

  • Page 58
    ... U.S. federal income tax, some of our operations are currently, and our acquisition of Sunoco and the Holdco restructuring resulted in an increase in the proportion of our operations that are conducted through subsidiaries that are organized as corporations for U.S. federal income tax purposes. The...

  • Page 59
    ... We currently own property or conduct business in many states, most of which impose an income tax on individuals, corporations and other entities. As we make acquisitions or expand our business, we may control assets or conduct business in additional states that impose a personal or corporate income...

  • Page 60
    ... repair of the pipeline. In 2012, the EPA issued a proposed consent agreement related to the releases that occurred at Sunoco Logistics' pump station/tank farm in Barbers Hill, Texas and pump station/tank farm located in Cromwell, Oklahoma in 2010 and 2011, respectively. These matters were referred...

  • Page 61
    ... to the November 2008 products release by Sunoco Pipeline L.P., a subsidiary of Sunoco Logistics, in Murrysville, Pennsylvania. Sunoco Logistics is currently in discussions with the PADEP. The timing or outcome of this matter cannot be reasonably determined at this time. However, we do not expect...

  • Page 62
    ... are currently in place, management may evaluate whether to retire the Class E Units at a future date. In conjunction with the Sunoco Merger, we amended our partnership agreement to create the Class F Units. The number of Class F Units issued was determined at the closing of the Sunoco Merger and...

  • Page 63
    ... borrowings are generally borrowings that are made under our credit facilities and in all cases used solely for working capital purposes or to pay distributions to partners. Available Cash is more fully defined in our Partnership Agreement, which is an exhibit to this report. Operating Surplus and...

  • Page 64
    ... distributions to ETP by Sunoco Partners LLC with respect to the incentive distribution rights and general partner interest in Sunoco Logistics, calculated on a cumulative basis beginning October 31, 2013. We are also required to make incremental cash distributions to the Class H Unitholders in the...

  • Page 65
    ... overall state and local income tax rates. The total amount of distributions declared is reflected in Note 7 to our consolidated financial statements. All distributions were made from Available Cash from our operating surplus. IDR Subsidies As described above, our partnership agreement requires...

  • Page 66
    ... 31, 2013 relating to our purchases of units in openmarket transactions to meet our obligations under our equity incentive plans for employees, officers and directors. ITEM 6. SELECTED FINANCIAL DATA The selected financial data should be read in conjunction with "Item 7. Management's Discussion...

  • Page 67
    ... 31, 2013 2012 2011 2010 2009 Statement of Operations Data: Total revenues $ Operating income Income from continuing operations Basic income (loss) from continuing operations per limited partner unit Diluted income (loss) from continuing operations per limited partner unit Cash distributions...

  • Page 68
    ... parent company of the Trunkline and Sea Robin transmission systems. NGL transportation, storage and fractionation services primarily through Lone Star. Refined product and crude oil operations, including the following: • • refined product and crude oil transportation through Sunoco Logistics...

  • Page 69
    ... of Energy conditionally granting authorization to export up to 15 million metric tonnes per annum of LNG to non-free trade agreement countries from the existing LNG import terminal owned by Trunkline LNG Company, LLC, which is located in Lake Charles, Louisiana. Lake Charles Exports, LLC previously...

  • Page 70
    ...our system. The natural gas is then sold to electric utilities, independent power plants, local distribution companies, industrial end-users and other marketing companies. The HPL System purchases natural gas at the wellhead for transport and selling. Other pipelines with access to West Texas supply...

  • Page 71
    ...when NGLs and olefins prices decrease as compared to natural gas prices, so does the value of the percent we retain as a fee. • Investment in Sunoco Logistics - Revenues are generated by charging tariffs for transporting refined products, crude oil and other hydrocarbons through our pipelines as...

  • Page 72
    ... and demand of natural gas and NGLs, including the ongoing economic recovery, coal to gas switching for power generation, exports to Mexico, conversion of natural gas pipelines to more profitable commodities, and increasing supply of natural gas from shale developments and associated gas from crude...

  • Page 73
    ... 31, 2013 2012 464 Change Segment Adjusted EBITDA: Intrastate transportation and storage Interstate transportation and storage Midstream NGL transportation and services Investment in Sunoco Logistics Retail marketing All other $ $ Total Depreciation and amortization Interest expense, net of...

  • Page 74
    ... in 2013 was primarily related to biodiesel tax credits recorded by Sunoco, amortization of regulatory assets and other income and expense amounts. Other, net in 2012 was primarily related to Southern Union's recognition of a net curtailment gain of $15 million related to its postretirement benefit...

  • Page 75
    ... compression operations, our investment in AmeriGas, Southern Union's local distribution operations, our approximate 33% non-operating interest in PES, our investment in Regency, our natural gas marketing operations and our wholesale propane businesses. In 2013, certain costs previously reported as...

  • Page 76
    ... Business" and Notes 1 and 14 to our consolidated financial statements. Intrastate Transportation and Storage Years Ended December 31, 2013 Natural gas transported (MMBtu/d) Revenues $ Cost of products sold Gross margin Unrealized (gains) losses on commodity risk management activities Operating...

  • Page 77
    ... used to hedge transportation activities. Retainedtfueltrevenues. Retained fuel revenues include gross volumes retained as a fee at the current market price; the cost of consumed fuel is included in operating expenses. Retention fuel revenue increased primarily due to higher average natural gas...

  • Page 78
    ... of the Sea Robin pipeline. Revenues. Interstate transportation and storage revenues increased for the year ended December 31, 2013 compared to the prior year primarily due to the consolidation of Southern Union's transportation and storage operations beginning March 26, 2012 and the recognition of...

  • Page 79
    ... placed in service. The decrease in equity NGL production for ETP's legacy assets for the year ended December 31, 2013 compared to the prior year was primarily due to processing plants optimizing NGL recoveries in response to the current NGL price environment. Volumes from Southern Union's gathering...

  • Page 80
    ... and Kenedy gas processing plants in service in February 2013 and December 2012, respectively. Average daily fractionated volumes increased due to the commissioning of Lone Star's fractionators at Mont Belvieu, Texas. These volumes include all physical and contractual volumes where we collected...

  • Page 81
    ...transition services agreement and a decrease in employee related costs, including allocated overhead expenses. Investment in Sunoco Logistics Years Ended December 31, 2013 Revenue 2012 Change $ Cost of products sold Gross margin Unrealized gains on commodity risk management activities Operating...

  • Page 82
    ... upon our acquisition of Sunoco on October 5, 2012; our investment in Regency related to the Regency common and Class F units received by Southern Union in exchange of its interest in Southern Union Gathering Company, LLC to Regency on April 30, 2013; and our natural gas marketing operations. The...

  • Page 83
    ... 31, 2012 2011 Change Segment Adjusted EBITDA: Intrastate transportation and storage Interstate transportation and storage Midstream NGL transportation and services Investment in Sunoco Logistics Retail marketing All other $ Total Depreciation and amortization Interest expense, net of interest...

  • Page 84
    ...in 2012 primarily due to Southern Union's recognition of a net curtailment gain of $15 million related to its postretirement benefit plans. IncoUetTaxtExpense. Income tax expense increased primarily due to the acquisitions of Southern Union and Sunoco in 2012, both of which are taxable corporations...

  • Page 85
    ... Ended December 31, 2012 2011 Change Equity in earnings (losses) of unconsolidated affiliates: AmeriGas Citrus FEP Other Total equity in earnings of unconsolidated affiliates Proportionate share of interest, depreciation, amortization, non-cash compensation expense, loss on debt extinguishment...

  • Page 86
    ... from system optimization and other operational activities. The margin from the natural gas sales and other includes purchased natural gas for transport and sale, derivatives used to hedge transportation activities, and gains and losses on derivatives used to hedge net retained fuel. Excluding...

  • Page 87
    ... a decrease in employee-related costs and allocated overhead expenses. Interstate Transportation and Storage Years Ended December 31, 2012 2011 2,800,655 6,811,339 22,405 18,065 1,109 $ 447 Change Natural gas transported (MMBtu/d) Natural gas sold (MMBtu/d) Revenues Operating expenses, excluding...

  • Page 88
    ... to an increase in demand fees as a result of incremental volume commitments in our shippers' take or pay contracts. Midstream Years Ended December 31, 2012 2011 Change 344,007 Gathered volumes (MMBtu/d): ETP legacy assets Southern Union gathering and processing NGLs produced (Bbls/d): ETP legacy...

  • Page 89
    ...consolidation of Southern Union's gathering and processing operations. In addition, growth from assets placed into service in the Eagle Ford Shale resulted in $8 million of additional selling, general and administrative expenses. NGL Transportation and Services Years Ended December 31, 2012 2011 132...

  • Page 90
    ....t NGL Transportation and Storage selling, general and administrative expenses increased due to operations of Lone Star for twelve months in 2012 compared to eight months in 2011. Investment in Sunoco Logistics Years Ended December 31, 2012 2011 3,189 $ 2,885 304 Change Revenue...

  • Page 91
    ...; Southern Union's local distribution operations beginning March 26, 2012; our natural gas compression operations; an approximate 33% non-operating interest in PES, a refining joint venture, effective upon our acquisition of Sunoco on October 5, 2012; and our natural gas marketing operations...

  • Page 92
    ... financial information of ETP has been prepared in accordance with Article 11 of Regulation S-X and reflects the pro forma impacts of the Propane Transaction, Sunoco Merger and Holdco Transaction for the year ended December 31, 2012 and 2011, giving effect that each occurred on January 1, 2011. This...

  • Page 93
    ... of the Propane Business and (ii) ETP's loss on extinguishment of debt recognized in connection with the use of proceeds to redeem of long-term debt. Sunoco historical amounts in 2012 include only the period from January 1, 2012 through September 30, 2012. Southern Union historical amounts in...

  • Page 94
    ...debt or equity securities prior to that time as we deem prudent to provide liquidity for new capital projects, to maintain investment grade credit metrics or other partnership purposes. Sunoco Logistics' primary sources of liquidity consist of cash generated from operating activities and borrowings...

  • Page 95
    ...purchase and sales of inventories, and the timing of advances and deposits received from customers. Following is a summary of operating activities by period: YeartEndedtDeceUbert31,t2013 Cash provided by operating activities in 2013 was $2.37 billion and net income was $768 million . The difference...

  • Page 96
    ...million , respectively, incurred by Southern Union's gathering and processing operations prior to deconsolidation on April 30, 2013. We received $147 million in capital contributions from Regency related to their 30% share of Lone Star. (2) Financing Activities Changes in cash flows from financing...

  • Page 97
    ... activities was $325 million in 2013. We received $1.61 billion in net proceeds from Common Unit offerings. Net proceeds from the offerings were used to repay outstanding borrowings under the ETP Credit Facility, to fund capital expenditures, and acquisitions, as well as for general partnership...

  • Page 98
    ... Notes due January 2043. Sunoco Logistics' used the net proceeds of $691 million from the offering to repay borrowings outstanding under the Sunoco Logistics' Credit Facilities and for general partnership purposes. September 2013 Senior Notes Offering In September 2013, ETP issued $700 million...

  • Page 99
    ... at December 31, 2013 . West Texas Gulf Pipe Line Company, a subsidiary of Sunoco Logistics, has a $35 million revolving credit facility which expires in April 2015 . The facility is available to fund West Texas Gulf's general corporate purposes including working capital and capital expenditures...

  • Page 100
    ... on Southern Union's ability to prepay debt. Covenants Related to Sunoco Logistics Sunoco Logistics' $1.50 billion credit facility contains various covenants, including limitations on the creation of indebtedness and liens, and other covenants related to the operation and conduct of the business of...

  • Page 101
    ... an acquisition period. Sunoco Logistics' ratio of total consolidated debt, excluding net unamortized fair value adjustments, to consolidated Adjusted EBITDA was 2.8 to 1 at December 31, 2013 , as calculated in accordance with the credit agreements. The $35 million credit facility limits West Texas...

  • Page 102
    ... Cash Distributions Paid by ETP We expect to use substantially all of our cash provided by operating and financing activities from the Operating Companies to provide distributions to our Unitholders. Under our Partnership Agreement, we will distribute to our partners within 45 days after the end of...

  • Page 103
    ...from our operating surplus and are shown in the year with respect to which they relate): Years Ended December 31, 2013 2012 2011 Distributions to the partners of ETP: Limited Partners: Common units held by public Common units held by ETE Class H Units held by ETE Holdings General Partner interest...

  • Page 104
    .... The natural gas industry conducts its business by processing actual transactions at the end of the month following the month of delivery. Consequently, the most current month's financial results for the midstream, NGL and intrastate transportation and storage segments are estimated using volume...

  • Page 105
    ... System. Generally, we purchase natural gas from the market, including purchases from our marketing operations, and from producers at the wellhead. In addition, our intrastate transportation and storage segment generates revenues and margin from fees charged for storing customers' working natural...

  • Page 106
    ... job are deducted at the time revenue is recognized. Terminalling and storage revenues are recognized at the time the services are provided. Pipeline revenues are recognized upon delivery of the barrels to the location designated by the shipper. Crude oil acquisition and marketing revenues, as well...

  • Page 107
    ..., among other things, changes in general economic conditions in regions in which our markets are located, the availability and prices of natural gas, our ability to negotiate favorable sales agreements, the risks that natural gas exploration and production activities will not occur or be successful...

  • Page 108
    ... replaced, but the pipeline and the natural gas gathering and processing systems will continue in operation as long as supply and demand for natural gas exists. Based on the widespread use of natural gas in industrial and power generation activities, management expects supply and demand to exist for...

  • Page 109
    ... expectations given current investment objectives and historical results. Net periodic benefit cost increases as the expected rate of return on plan assets is correspondingly reduced. Legal Matters .ttWe are subject to litigation and regulatory proceedings as a result of our business operations and...

  • Page 110
    ... 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...

  • Page 111
    Table of Contents hazards or operating risks incidental to the gathering, treating, processing and transporting of natural gas and NGLs; competition from other midstream companies and interstate pipeline companies; loss of key personnel; loss of key natural gas producers or the providers of ...

  • Page 112
    ...our consolidated statements of operations. We use futures and basis swaps, designated as fair value hedges, to hedge our natural gas inventory stored in our Bammel storage facility. Changes in the spreads between the forward natural gas prices designated as fair value hedges and the physical Bammel...

  • Page 113
    ...amounts for open positions related to Houston Ship Channel, Waha Hub, NGPL TexOk, West Louisiana Zone and Henry Hub locations. The fair values of the commodity-related financial positions have been determined using independent third party prices, readily available market information and appropriate...

  • Page 114
    ...affect cash flows until the swaps are settled. For Southern Union's fixed to floating interest rate swaps, a hypothetical change of 100 basis points in interest rates would result in a net change in annual cash flows of $3 million. Credit Risk Credit risk refers to the risk that a counterparty may...

  • Page 115
    ... the Chief Executive Officer and Chief Financial Officer of ETP LLC, concluded that our disclosure controls and procedures were adequate and effective as of December 31, 2013 . Management's Report on Internal Control over Financial Reporting The management of Energy Transfer Partners, L.P. and...

  • Page 116
    ... is to express an opinion on the Partnership's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit...

  • Page 117
    Table of Contents Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or Rule 15d-15(f)) that occurred in the three months ended December 31, 2013 that has materially affected, or is ...

  • Page 118
    .... Our current directors who are not independent consist of Kelcy L. Warren, ETP LLC's Chief Executive Officer, and Marshall S. McCrea III, ETP LLC's President and Chief Operating Officer, as well as Jamie Welch, the Group Chief Financial Officer of ETE's general partner. As a limited partnership, we...

  • Page 119
    ...Governance Committees Although we are not required under NYSE rules to appoint a Compensation Committee or a Nominating/Corporate Governance Committee because we are a limited partnership, our Board of Directors has established a Compensation Committee to establish standards and make recommendations...

  • Page 120
    ... addressed to the desired person or entity to the attention of our General Counsel at Energy Transfer Partners, L.P., 3738 Oak Lawn Avenue, Dallas, Texas 75219 or [email protected] . Communications are distributed to the Board of Directors, or to any individual director or directors...

  • Page 121
    ... years in the natural gas industry. Mr. Warren also has relationships with chief executives and other senior management at natural gas transportation companies throughout the United States, and brings a unique and valuable perspective to the Board of Directors. Marshall S. (Mackie) McCrea, III. Mr...

  • Page 122
    ... and Chief Executive Officer from 1995 until 2006 when it was sold. Currently, Mr. Grimm is President of Rising Star Energy Development Company, Rising Star Petroleum, LLC and is Chairman of the Board of RSP Permian, which is active in the drilling and developing of West Texas Permian Basin oil...

  • Page 123
    ...filing requirements applicable to our officers, directors, and greater than 10% beneficial owners were met in a timely manner, with the exception of a late filing of a Form 4 transaction by Mr. Warren. ITEM 11. EXECUTIVE COMPENSATION Overview As a limited partnership, we are managed by our General...

  • Page 124
    ...named executive officers" are the following officers of our General Partner: Kelcy L. Warren, Chief Executive Officer; Marshall S. (Mackie) McCrea, III, President and Chief Operating Officer; Martin Salinas, Jr., Chief Financial Officer; Thomas P. Mason, Senior Vice President, General Counsel...

  • Page 125
    ... total compensation competitive with that of other executive officers and key management employees employed by publicly traded limited partnerships of similar size and in similar lines of business; motivate executive officers and key employees to achieve strong financial and operational performance...

  • Page 126
    ... the annual base salary, annual short-term cash bonus or long-term equity incentive awards of the named executive officers to the compensation levels at the identified "peer group" companies. Mercer did not provide any non-executive compensation services for the Partnership during 2013. BasetSalary...

  • Page 127
    ... Logistics in addition to the Partnership. At Sunoco Logistics, Mr. McCrea serves as Chairman of the Board of Sunoco Logistics' general partner and Mr. Salinas serves as a member of the board and Chief Financial Officer of Sunoco Logistics' general partner. It is expected that the long-term equity...

  • Page 128
    ....ttOur named executive officers do not have any employment agreements that call for payments of termination or severance benefits or that provide for any payments in the event of a change in control of our General Partner. Our 2004 Unit Plan provides for immediate vesting of all unvested unit awards...

  • Page 129
    ... named executive officers is not subject to the deduction limitations under Section 162(m) of the Internal Revenue Code and therefore is generally fully deductible for federal income tax purposes. AccountingtfortUnit-BasedtCoUpensation For our unit-based compensation arrangements, including equity...

  • Page 130
    ... management of ETP. Based on this review and discussion, we have recommended to the board of directors of our General Partner that the Compensation Discussion and Analysis be included in this annual report on Form 10-K. The Compensation Committee of the Board of Directors of Energy Transfer Partners...

  • Page 131
    ...000 Marshall S. (Mackie) McCrea, III President and Chief Operating Officer 2013 2012 2011 1,080,961 700,000 13,323 12,802 12,972 36,923 35,998 32,590 13,323 12,279 615,049 750,000 Thomas P. Mason Senior Vice President, General Counsel and Secretary Richard Cargile 2013 2012 2011 517,308 466...

  • Page 132
    ...of Unit Awards(1) ETP Unit Awards: Kelcy L. Warren N/A 12/30/2013 12/30/2013 12/30/2013 12/30/2013 - 16,724 69,375 40,923 9,500 $ $ - 943,234 3,912,750 2,308,057 535,800 445,400 Martin Salinas, Jr. Marshall S. (Mackie) McCrea, III Thomas P. Mason Richard Cargile Sunoco Logistics Unit...

  • Page 133
    .../2013 1/10/2013 3/14/2012 Sunoco Logistics Unit Awards: 10,800 Martin Salinas, Jr. Marshall S. (Mackie) McCrea, III 12/5/2013 1/24/2013 12/5/2013 1/24/2013 6,550 6,666 27,300 494,394 503,150 2,060,604 1,006,375 13,333 (1) ETP Common Unit awards outstanding to Messrs. Salinas, McCrea, Mason...

  • Page 134
    ... Unit Awards Number of Units Acquired on Vesting (1) Name (#) Value Realized on Vesting(1) ($) ETP Unit Awards: Kelcy L. Warren - 16,837 95,200 $ - 908,053 5,134,326 1,577,493 194,155 Martin Salinas, Jr. Marshall S. (Mackie) McCrea, III Thomas P. Mason Richard Cargile Sunoco Logistics Unit...

  • Page 135
    ... control event within the meaning of Treasury Regulation Section 1.409A-3(i)(5). Director Compensation The Compensation Committee periodically reviews and makes recommendations regarding the compensation of the directors of our General Partner. In 2013, non-employee directors received an annual fee...

  • Page 136
    ... E Units Class G Units Class H Units Kelcy L. Warren Marshall S. (Mackie) McCrea , III Martin Salinas, Jr. Jamie Welch Thomas P. Mason Richard Cargile Paul E. Glaske Ted Collins, Jr. Michael K. Grimm David K. Skidmore All Directors and Executive Officers as a Group (10 Persons) ETE(4) ETE Holdings...

  • Page 137
    ...of various general and administrative services for ETE's benefit for the years ended December 31, 2013, 2012 and 2011 , respectively. Immediately following the closing of the Partnership's acquisition of Sunoco, ETE contributed its interest in Southern Union into Holdco, an ETP-controlled entity, in...

  • Page 138
    ... loss. On April 30, 2013, Southern Union completed its contribution to Regency of all of the issued and outstanding membership interest in Southern Union Gathering Company, LLC, and its subsidiaries, including SUGS (the "SUGS Contribution"). The general partner and IDRs of Regency are owned by ETE...

  • Page 139
    ... of SUGS from Southern Union to Regency and the sale of Southern Union's distribution operations. Includes fees in 2013 for audits of Sunoco's benefit plans. Includes fees in 2013 and 2012 in connection with the service organization control report on Southern Union's centralized data center...

  • Page 140
    ... Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as a part of this Report: (1) Financial Statements - see Index to Financial Statements appearing on page F-1. (2) Financial Statement Schedules - None. (3) Exhibits - see Index to Exhibits...

  • Page 141
    ... its general partner. Energy Transfer Partners, L.L.C., its general partner By: /s/ Kelcy L. Warren Kelcy L. Warren Chief Executive Officer and officer duly authorized to sign on behalf of the registrant Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been...

  • Page 142
    ...Equity, L.P. Southern Union Company and CrossCountry Energy, LLC (incorporated by reference to Exhibit 2.1 to the Registrant's Form 8-K filed July 20, 2011) 2.8 Agreement and Plan of Merger, dated as of April 29, 2012 by and among Energy Transfer Partners, L.P., Sam Acquisition Corporation, Energy...

  • Page 143
    ... Partnership of Energy Transfer Partners GP, L.P. (incorporated by reference to the same numbered Exhibit to the Registrant's Form 10-Q for the quarter ended March 31, 2010) Registration Rights Agreement, dated April 30, 2013, by and between Southern Union Company and Regency Energy Partners LP...

  • Page 144
    ... 29, 2006 to Indenture dated January 18, 2005, among Energy Transfer Partners, L.P, the subsidiary guarantors named therein and Wachovia Bank, National Association, as trustee (incorporated by reference to the same numbered Exhibit the Registrant's Form 10-K for the year ended August 31, 2006) Fifth...

  • Page 145
    ....3 Second Amendment , dated April 30, 2013, to the Operation and Service Agreement, dated May 19, 2011, as amended, by and among La Grange Acquisition, L.P. d/b/a Energy Transfer Company, Regency Energy Partners LP, Regency GP LP and Regency Gas Services LP (incorporated by reference to Exhibit 10...

  • Page 146
    ...(r) to Southern Union's Annual Report on Form 10-K for the year ended December 31, 2006) Contingent Residual Support Agreement by and among Energy Transfer Partners, L.P., AmeriGas Finance LLC, AmeriGas Finance Corp., AmeriGas Partners, L.P. and, for certain limited purposes, UGI Corporation, dated...

  • Page 147
    ... 2002. Report of Independent Registered Public Accounting Firm - Ernst & Young LLP opinion on consolidated financial statements of Sunoco Logistics Partners LP. Statement of Policies Relating to Potential Conflicts among Energy Transfer Partners, L.P., Energy Transfer Equity, L.P. and Regency Energy...

  • Page 148
    ... STATEMENTS Energy Transfer Partners, L.P. and Subsidiaries Page Report of Independent Registered Public Accounting Firm F-2 F-3 Consolidated Balance Sheets - December 31, 2013 and 2012 Consolidated Statements of Operations - Years Ended December 31, 2013, 2012 and 2011 Consolidated Statements...

  • Page 149
    ... Partners L.P. as of December 31, 2012 and for the period from October 5, 2012 to December 31, 2012, is based solely on the report of the other auditors. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require...

  • Page 150
    ... ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in millions) December 31, 2013 2012 ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Accounts receivable from related companies Inventories Exchanges receivable Price risk management...

  • Page 151
    Table of Contents ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in millions) December 31, 2013 2012 LIABILITIES AND EQUITY CURRENT LIABILITIES: Accounts payable Accounts payable to related companies Exchanges payable Price risk management liabilities Accrued...

  • Page 152
    Table of Contents ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in millions, except per unit data) Years Ended December 31, 2013 2012 2011 REVENUES: Natural gas sales NGL sales Crude sales Gathering, transportation and other fees Refined product ...

  • Page 153
    Table of Contents ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in millions) Years Ended December 31, 2013 Net income Other comprehensive income (loss), net of tax: Reclassification to earnings of gains and losses on derivative instruments ...

  • Page 154
    Table of Contents ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (Dollars in millions) Limited Partners General Partner Common Unitholders Class H Units Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest Total Balance, December 31, 2010...

  • Page 155
    ...of Contents ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in millions) Years Ended December 31, 2013 2012 2011 CASH FLOWS FROM OPERATING ACTIVITIES: Net income Reconciliation of net income to net cash provided by operating activities: Depreciation...

  • Page 156
    ... of borrowings from affiliates Net proceeds from issuance of Limited Partner units Capital contributions received from noncontrolling interest Distributions to partners Distributions to noncontrolling interest Debt issuance costs Other Net cash provided by financing activities INCREASE IN CASH AND...

  • Page 157
    ... 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. ETC OLP's intrastate transportation and storage operations...

  • Page 158
    ... Delaware limited liability company engaged in natural gas compression services and related equipment sales. Sunoco Logistics, a publicly traded Delaware limited partnership that owns and operates a logistics business, consisting of refined products and crude oil pipelines, terminalling and storage...

  • Page 159
    ...System. Generally, we purchase natural gas from the market, including purchases from our marketing operations, and from producers at the wellhead. In addition, our intrastate transportation and storage segment generates revenues and margin from fees charged for storing customers' working natural gas...

  • Page 160
    ... At December 31, 2012, we had $123 million of regulatory assets included in the consolidated balance sheet as non-current assets held for sale. Southern Union's distribution operations were sold in 2013. Although Panhandle's natural gas transmission systems and storage operations are subject to the...

  • Page 161
    ... midstream, NGL and intrastate transportation and storage operations deal with counterparties that are typically either investment grade or are otherwise secured with a letter of credit or other form of security (corporate guaranty prepayment or master setoff agreement). Management reviews midstream...

  • Page 162
    ... at the time of review. Actual balances are charged against the reserve when all collection efforts have been exhausted. Our interstate transportation and storage operations have a concentration of customers in the electric and gas utility industries as well as natural gas producers. This...

  • Page 163
    ... 31, 2012. Capitalized interest is included for pipeline construction projects, except for certain interstate projects for which an allowance for funds used during construction ("AFUDC") is accrued. Interest is capitalized based on the current borrowing rate of our revolving credit facility when...

  • Page 164
    ...Contents Components and useful lives of property, plant and equipment were as follows: December 31, 2013 2012 Land and improvements Buildings and improvements (5 to 45 years) Pipelines and equipment (5 to 83 years) Natural gas and NGL storage facilities (5 to 46 years) Bulk storage, equipment and...

  • Page 165
    ... measured at fair value in 2012 as a result of the acquisition of Southern Union, and those estimated fair values had been recorded at the reporting unit through the application of "push-down" accounting. For purposes of the hypothetical purchase price allocation used in the goodwill impairment test...

  • Page 166
    ... assets for impairment annually, or more frequently if circumstances dictate. Other Non-Current Assets, net Other non-current assets, net are stated at cost less accumulated amortization. Other non-current assets, net consisted of the following: December 31, 2013 2012 70 Unamortized financing...

  • Page 167
    ... 31, 2013 2012 Southern Union Sunoco Sunoco Logistics $ 55 84 41 $ 46 53 41 140 $ 180 $ Individual component assets have been and will continue to be replaced, but the pipeline and the natural gas gathering and processing systems will continue in operation as long as supply and demand for...

  • Page 168
    ... as prepayments for natural gas deliveries in the following month. Prepayments and security deposits may also be required when customers exceed their credit limits or do not qualify for open credit. Environmental Remediation We accrue environmental remediation costs for work at identified sites...

  • Page 169
    ... 31, 2013 and 2012 based on inputs used to derive their fair values: Fair Value Measurements at December 31, 2013 Fair Value Total Level 1 Level 2 Assets: Interest rate derivatives Commodity derivatives: Natural Gas: Basis Swaps IFERC/NYMEX Swing Swaps IFERC Fixed Swaps/Futures Power: $ 47...

  • Page 170
    ...(390) $ $ - - (7) (49) (272) At December 31, 2013 , the fair value of the Trunkline LNG reporting unit was classified as Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. We used the income approach to measure the fair...

  • Page 171
    ... 2013, 2012 and 2011 , our qualifying income met the statutory requirement. The Partnership conducts certain activities through corporate subsidiaries which are subject to federal, state and local income taxes. Holdco, which owns Sunoco and Southern Union, is a corporate subsidiary. The Partnership...

  • Page 172
    ... under GAAP in our consolidated financial statements. Our net income for partners' capital and statement of operations presentation purposes is allocated to the General Partner and Limited Partners in accordance with their respective partnership percentages, after giving effect to priority income...

  • Page 173
    ...Subordinated Notes due 2066. At the time of the Panhandle Merger, Southern Union did not have operations of its own, other than its ownership of Panhandle and noncontrolling interest in PEI Power II, LLC, Regency (31.4 million common units and 6.3 million Class F Units), and ETP ( 2.2 million Common...

  • Page 174
    ... The Partnership has not presented SUGS as discontinued operations due to the expected continuing involvement with SUGS through affiliate relationships, as well as the direct investment in Regency common and Class F units received, which has been accounted for using the equity method. Acquisition of...

  • Page 175
    ...26, 2012 (the date ETE acquired Southern Union). This change only impacted interim periods in 2012, and no prior annual amounts have been adjusted. SuUUarytoftAssetstAcquiredtandtLiabilitiestAssuUed We accounted for the Sunoco Merger using the acquisition method of accounting, which requires, among...

  • Page 176
    ...38 million of merger-related costs during the year ended December 31, 2012 related to Southern Union. Southern Union's revenue included in our consolidated statement of operations was approximately $1.26 billion since the acquisition date to December 31, 2012. Southern Union's net income included in...

  • Page 177
    ...Star. Lone Star owns and operates a natural gas liquids storage, fractionation and transportation business. Lone Star's storage assets are primarily located in Mont Belvieu, Texas, and its West Texas Pipeline transports NGLs through an intrastate pipeline system that originates in the Permian Basin...

  • Page 178
    ...being treated as equity method goodwill and non-amortizable intangible assets. In January 2014, we sold 9.2 million AmeriGas common units for net proceeds of $381 million . Net proceeds from this sale were used to repay borrowings under the ETP Credit Facility and general partnership purposes. FEP...

  • Page 179
    ...(to) from General Partner Distributions on employee unit awards, net of allocation to General Partner $ 735 296 439 $ Income (loss) from continuing operations available to Limited Partners $ $ 505 (66) (2) (10) (78) $ 343.4 2012 1,757 $ 62 1,695 463 1,232 1 (9) 1,224 $ 248.3 2011 700 28 672...

  • Page 180
    ...premiums, discounts and fair value adjustments, net Southern Union Debt (1) 7.60% Senior Notes due February 1, 2024 8.25% Senior Notes due November 14, 2029 Floating Rate Junior Subordinated Notes due November 1, 2066 Southern Union $700 million Revolving Credit Facility due May 20, 2016 Unamortized...

  • Page 181
    ... with the Panhandle Merger, Southern Union's debt obligations were assumed by Panhandle. Sunoco Logistics' 8.75% Senior Notes due February 15, 2014 were classified as long-term debt as Sunoco Logistics repaid these notes in February 2014 with borrowings under its $1.50 billion credit facility due...

  • Page 182
    ... Notes due January 2043. Sunoco Logistics' used the net proceeds of $691 million from the offering to repay borrowings outstanding under the Sunoco Logistics' Credit Facilities and for general partnership purposes. September 2013 Senior Notes Offering In September 2013, ETP issued $700 million...

  • Page 183
    ... at December 31, 2013 . West Texas Gulf Pipe Line Company, a subsidiary of Sunoco Logistics, has a $35 million revolving credit facility which expires in April 2015 . The facility is available to fund West Texas Gulf's general corporate purposes including working capital and capital expenditures...

  • Page 184
    ... on Southern Union's ability to prepay debt. Covenants Related to Sunoco Logistics Sunoco Logistics' $1.50 billion credit facility contains various covenants, including limitations on the creation of indebtedness and liens, and other covenants related to the operation and conduct of the business of...

  • Page 185
    ... 1. West Texas Gulf's fixed charge coverage ratio and leverage ratio were 1.12 to 1 and 0.88 to 1, respectively, at December 31, 2013 . We were in compliance with all requirements, tests, limitations, and covenants related to our debt agreements as of December 31, 2013 . 7. EQUITY: Limited Partner...

  • Page 186
    ... ETP Credit Facility and/or to fund capital expenditures and capital contributions to joint ventures, and for general partnership purposes. Equity Distribution Program From time to time, we have sold Common Units through an equity distribution agreement. Such sales of Common Units are made by means...

  • Page 187
    ... For a summary of the net IDR subsidy amounts resulting from this transaction, see "Quarterly Distributions of Available Cash" below. Quarterly Distributions of Available Cash The Partnership Agreement requires that we distribute all of our Available Cash to our Unitholders and our General Partner...

  • Page 188
    ...Date Rate March 31, 2011 June 30, 2011 September 30, 2011 December 31, 2011 March 31, 2012 June 30, 2012 September 30, 2012 December 31, 2012 March 31, 2013 June 30, 2013 September 30, 2013 December 31, 2013 February 7, 2011 May 6, 2011 August 5, 2011 November 4, 2011 February 7, 2012 May 4, 2012...

  • Page 189
    ... other postretirement benefits $ $ - (39) $ Total (39) $ 1 5 6 8. UNIT-BASED COMPENSATION PLANS: ETP Unit-Based Compensation Plan We have issued equity incentive plans for employees, officers and directors, which provide for various types of awards, including options to purchase ETP Common...

  • Page 190
    ... the activity of the awards granted to employees and non-employee directors: Weighted Average Grant-Date Fair Value Per Unit Number of Units Unvested awards as of December 31, 2012 Awards granted Awards vested Awards forfeited Unvested awards as of December 31, 2013 1.9 2.1 (0.6) (0.2) $ 3.2 46...

  • Page 191
    ..., Oasis Pipeline Company, Inland Corporation, Mid-Valley Pipeline Company and West Texas Gulf Pipeline Company. The latter three entities were acquired in the Sunoco Merger. Holdco, which was formed via the Sunoco Merger and the Holdco Transaction (see Note 3), includes Sunoco and Southern Union and...

  • Page 192
    ... tax liability as follows: December 31, 2013 2012 (123) (1,420) Net deferred income tax liability, beginning of year Southern Union acquisition Sunoco acquisition SUGS Contribution to Regency Tax provision (including discontinued operations) Other Net deferred income tax liability $ $ (3,606...

  • Page 193
    ...audit of PEPL, a subsidiary of Southern Union, for the period from January 1, 2010 through December 31, 2011, to evaluate its compliance with the Uniform System of Accounts as prescribed by the FERC, annual and quarterly financial reporting to the FERC, reservation charge crediting policy and record...

  • Page 194
    ... Merger, in which PEPL Holdings was merged with and into Panhandle, the guarantee of collection for the Regency Debt was assumed by Panhandle. NGL Pipeline Regulation We have interests in NGL pipelines located in Texas and New Mexico. We commenced the interstate transportation of NGLs in 2013...

  • Page 195
    ..., from time to time, be involved in litigation and claims arising out of our operations in the normal course of business. Natural gas and crude are flammable and combustible. Serious personal injury and significant property damage can arise in connection with their transportation, storage or use. In...

  • Page 196
    ...Texas naming as defendants ETP, ETP GP, ETP LLC, the boards of directors of ETP LLC (collectively with ETP GP and ETP LLC, the "ETP Defendants"), certain members of management for ETP and ETE, ETE, and Southern Union. The lawsuit is styled W. J. Garrett Trust v. Bill W. Byrne, et al., Cause No. 2011...

  • Page 197
    ... environmental cost recoveries. The AG is seeking a refund to New England Gas Company customers for alleged "excessive and imprudently incurred costs" related to legal fees associated with Southern Union's environmental response activities. In the complaint, the AG requests that the MDPU initiate...

  • Page 198
    ... some cases, our subsidiaries could potentially be held responsible for contamination caused by other parties. Certain gathering and processing systems are responsible for soil and groundwater remediation related to releases of hydrocarbons. Southern Union's distribution operations are responsible...

  • Page 199
    ... the Office of Pipeline Safety, has promulgated a rule requiring pipeline operators to develop integrity management programs to comprehensively evaluate their pipelines, and take measures to protect pipeline segments located in what the rule refers to as "high consequence areas." Activities under...

  • Page 200
    ...occurs, any gain or loss associated with the derivative is recorded in cost of products sold in the consolidated statement of operations. We may use derivatives in our NGL transportation and services segment to manage our storage facilities and the purchase and sale of purity NGLs. Sunoco Logistics...

  • Page 201
    ... differ as commodity prices change and the underlying physical transaction occurs. Interest Rate Risk We are exposed to market risk for changes in interest rates. To maintain a cost effective capital structure, we borrow funds using a mix of fixed rate debt and variable rate debt. We also manage...

  • Page 202
    ... were designated as hedges for accounting purposes: Notional Amount Outstanding Entity Term July 2013(2) July 2014(2) Type(1) Forward-starting to pay a fixed rate of 4.03% and receive a floating rate December 31, 2013 December 31, 2012 ETP ETP ETP ETP ETP Southern Union (3) Southern Union...

  • Page 203
    ...Price risk management assets (liabilities) Broker cleared derivative Other current assets contracts (liabilities) Offsetting agreements: Collateral paid to OTC counterparties Counterparty netting Liability Derivatives December 31, 2013 December 31, 2013 December 31, 2012 December 31, 2012 $ 41...

  • Page 204
    ... Ended December 31, 2013 2012 2011 Derivatives not designated as hedging instruments: Commodity derivatives - Trading Commodity derivatives - Non-trading Commodity contracts - Non-trading Interest rate derivatives Cost of products sold Cost of products sold Deferred gas purchases Gains (losses...

  • Page 205
    ... benefits for all active participants who did not meet certain criteria were eliminated. Southern Union previously had postretirement health care and life insurance plans that covered substantially of its distribution and transportation and storage operations employees as well as all corporate...

  • Page 206
    ... the years an employee provides services. The following table contains information at the dates indicated about the obligations and funded status of pension and other postretirement plans on a combined basis: December 31, 2013 Pension Benefits December 31, 2012 Other Postretirement Benefits Other...

  • Page 207
    ... net curtailment gain recognition was $15 million . (2) Southern Union has historically recovered certain qualified pension benefit plan and other postretirement benefit plan costs through rates charged to utility customers in its distribution operations. Certain utility commissions require that...

  • Page 208
    .... The assumed health care cost trend rates used to measure the expected cost of benefits covered by Southern Union and Sunoco's other postretirement benefit plans are shown in the table below: December 31, 2013 2012 Health care cost trend rate assumed for next year Rate to which the cost trend is...

  • Page 209
    .../macro, long/short equities, merger arbitrage/event driven, credit, and short selling strategies, to generate long-term capital appreciation through a portfolio having a diversified risk profile with relatively low volatility and a low correlation with traditional equity and fixed-income markets...

  • Page 210
    ... with certain natural gas and NGLs sales and transportation services and compression equipment, and Regency provides us with certain contract compression services. These related party transactions are generally based on transactions made at marketrelated rates. Sunoco Logistics has an agreement with...

  • Page 211
    ... the Sunoco Merger and Holdco Transaction, our reportable segments were re-evaluated and changed in 2012. Our financial statements currently reflect the following reportable segments, which conduct their business exclusively in the United States, as follows: • intrastate transportation and storage...

  • Page 212
    ... transportation and storage; midstream; NGL transportation and services; investment in Sunoco Logistics; retail marketing; and all other. During the fourth quarter 2013, management realigned the composition of our reportable segments, and as a result, our natural gas marketing operations...

  • Page 213
    ...The following tables present the financial information by segment: Years Ended December 31, 2013 Revenues: Intrastate transportation and storage: Revenues from external customers Intersegment revenues 2012 2011 $ 2,250 202 $ 2,452 Interstate transportation and storage: Revenues from external...

  • Page 214
    ... - 2,274 (1,079) 4,175 Years Ended December 31, 2013 2012 2011 Depreciation and amortization: Intrastate transportation and storage Interstate transportation and storage Midstream NGL transportation and services Investment in Sunoco Logistics Retail marketing All other $ 122 244 $ 172 91 265...

  • Page 215
    ...and storage Midstream NGL transportation and services Investment in Sunoco Logistics Retail marketing All other $ $ Total Segment Adjusted EBITDA Depreciation and amortization Interest expense, net of interest capitalized Gain on deconsolidation of Propane Business Gain on sale of AmeriGas common...

  • Page 216
    ...2013 2012 2011 Additions to property, plant and equipment excluding acquisitions, net of contributions in aid of construction costs (accrual basis): Intrastate transportation and storage Interstate transportation and storage Midstream NGL transportation and services Investment in Sunoco Logistics...

  • Page 217
    ...Partners and General Partner. Based on this allocation approach, net income per Limited Partner unit (basic and diluted) for the three months ended June 30, 2012 was approximately zero, after taking into account distributions to be paid with respect to incentive distribution rights and employee unit...

  • Page 218
    Exhibit 12.1 ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (in millions, except for rstio smounts) (Unsudited) Yesrs Ended December 31, 2013 2012 2011 2010 474 2009 413 Fixed Chsrges: Interest expense, net Cspitslized interest Loss on ...

  • Page 219
    ...company Energy Transfer Dutch Holdings, LLC, a Delaware limited liability company Energy Transfer Employee Management Company, a Delaware corporation Energy Transfer Fuel GP, LLC, a Delaware limited liability company Energy Transfer Fuel, LP, a Delaware limited partnership Energy Transfer Group, LLC...

  • Page 220

  • Page 221
    ...company Lone Star NGL Asset Holdings II LLC, a Delaware limited liability company Lone Star NGL Asset GP LLC, a Delaware limited liability company Lone Star NGL Development LP, a Delaware limited partnership Lone Star NGL Pipeline LP, a Delaware limited partnership Lone Star NGL Product Services LLC...

  • Page 222
    Oasis Pipeline, LP, a Texas limited partnership Pan Gas Storage LLC , a Delaware limited liability company

  • Page 223
    ... General Holdings, LLC, a Texas limited liability company SEC-EP Realty Ltd., a Texas limited partnership Southern Union Gas Company, Inc., a Texas corporation Southern Union Panhandle LLC, a Delaware limited liability company Southside Oil, LLC, a Virginia limited liability company SU Gas Services...

  • Page 224
    Lesley Corporation, a Delaware corporation Libre Insurance Company, Ltd., a Bermuda other

  • Page 225
    ... Line Company, a Texas corporation Sun Pipe Line Delaware (Out) LLC, a Delaware limited liability company Sun Refining and Marketing Company, a Delaware corporation Sun Services Corporation, a Pennsylvania corporation Sun Transport, LLC, a Pennsylvania limited liability company Sun-Del Pipeline LLC...

  • Page 226
    Sunoco Partners NGL Facilities LLC, a Delaware limited liability company Sunoco Partners Operating LLC, a Delaware limited liability company

  • Page 227
    ... Acquisition LLC, a Delaware limited liability company Sunoco Partners Rockies LLC, a Delaware limited liability company Sunoco Pipeline Acquisition LLC, a Delaware limited liability company Sunoco Pipeline L.P., a Texas limited partnership West Texas Gulf Pipe Line Company, a Delaware corporation

  • Page 228
    ... statements and internal control over financial reporting included in the Annual Report of Energy Transfer Partners, L.P. on Form 10-K for the year ended December 31, 2013 . We hereby consent to the incorporation by reference of said reports in the Registration Statements of Energy Transfer Partners...

  • Page 229
    ...-159878 of Energy Transfer Partners, L.P. (6) Registration Statement on Form S-8 No. 333-146338 of Energy Transfer Partners, L.P. of our report dated March 1, 2013, with respect to the consolidated financial statements of Sunoco Logistics Partners L.P., included in this Annual Report (Form 10-K) of...

  • Page 230
    ... SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Kelcy L. Warren, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Energy Transfer Partners, L.P. (the "registrant"); Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state...

  • Page 231
    ... that: 1. 2. I have reviewed this annual report on Form 10-K of Energy Transfer Partners, L.P. (the "registrant"); Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the...

  • Page 232
    ... the annual report of Energy Transfer Partners, L.P. (the "Partnership") on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kelcy L. Warren, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350...

  • Page 233
    ... 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the annual report of Energy Transfer Partners, L.P. (the "Partnership") on Form 10-K for the year ended December 31, 2013 as filed with the Securities and...

  • Page 234
    ... responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we...

  • Page 235