Energy Transfer 2013 Annual Report Download - page 158

Table of Contents
•CrossCountry, a Delaware limited liability company that indirectly owns a 50% interest in Citrus Corp., which owns 100% of the FGT
interstate natural gas pipeline.
•ETC Compression, a 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 assets, and refined products and crude oil acquisition and marketing assets.
•Holdco, a Delaware limited liability company that indirectly owns Panhandle and Sunoco. As discussed in Note 3, ETP acquired ETE’s 60%
interest in Holdco on April 30, 2013. Panhandle and Sunoco operations are described as follows:
•Panhandle owns and operates assets in the regulated and unregulated natural gas industry and is primarily engaged in the transportation, storage
and distribution of natural gas in the United States. As discussed in Note 3, on April 30, 2013, Southern Union completed its contribution to
Regency of all of the issued and outstanding membership interests in Southern Union Gathering Company, LLC, and its subsidiaries,
including SUGS. Also, as discussed in Note 3, Southern Union completed its sale of the assets of MGE and NEG in 2013. Additionally, as
discussed in Note 3, in January 2014, Panhandle consummated a merger with Southern Union, the indirect parent of Panhandle, and PEPL
Holdings, the sole limited partner of Panhandle, pursuant to which each of Southern Union and PEPL Holdings were merged with and into
Panhandle, with Panhandle surviving the merger.
•Sunoco owns and operates retail marketing assets, which sell gasoline and middle distillates at retail and operates convenience stores in 24
states, primarily on the east coast and in the midwest region of the United States.
Our financial statements reflect the following reportable business segments:
•intrastate transportation and storage;
•interstate transportation and storage;
•midstream;
•NGL transportation and services;
•investment in Sunoco Logistics;
•retail marketing; and
•all other.
2. ESTIMATES, SIGNIFICANT ACCOUNTING POLICIES AND BALANCE SHEET DETAIL:
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the accrual for and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
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 operations are estimated using volume
estimates and market prices. Any differences between estimated results and actual results are recognized in the following month’s financial statements.
Management believes that the estimated operating results represent the actual results in all material respects.
Some of the other significant estimates made by management include, but are not limited to, the timing of certain forecasted transactions that are hedged,
the fair value of derivative instruments, useful lives for depreciation and amortization, purchase accounting allocations and subsequent realizability of
intangible assets, fair value measurements used in the goodwill impairment test, market value of inventory, assets and liabilities resulting from the
regulated ratemaking process, contingency reserves and environmental reserves. Actual results could differ from those estimates.
Revenue Recognition
Revenues for sales of natural gas and NGLs are recognized at the later of the time of delivery of the product to the customer or the time of sale or
installation. Revenues from service labor, transportation, treating, compression and gas processing are recognized upon completion of the service.
Transportation capacity payments are recognized when earned in the period the capacity is made available.
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