Energy Transfer 2015 Annual Report Download - page 90

Table of Contents
In 2013, Lake Charles LNG recorded a $689 million goodwill impairment. The decline in the estimated fair value was primarily due to changes related to (i)
the structure and capitalization of the planned LNG export project at Lake Charles LNG’s Lake Charles facility, (ii) an analysis of current macroeconomic
factors, including global natural gas prices and relative spreads, as of the date of our assessment, (iii) judgments regarding the prospect of obtaining
regulatory approval for a proposed LNG export project and the uncertainty associated with the timing of such approvals, and (iv) changes in assumptions
related to potential future revenues from the import facility and the proposed export facility. An assessment of these factors in the fourth quarter of 2013 led
to a conclusion that the estimated fair value of the Lake Charles LNG reporting unit was less than its carrying amount.
 Our interest rate derivatives are not designated as hedges for accounting purposes; therefore, changes in fair value
are recorded in earnings each period. Losses on interest rate derivatives during the year ended December 31, 2014 resulted from decreases in forward interest
rates, which caused our forward-starting swaps to decrease in value. Conversely, increases in forward interest rates resulted in gains on interest rate derivatives
during the year ended December 31, 2013.
 See discussion of the unrealized gains on commodity risk management activities included in
“Segment Operating Results” below.
Inventory valuation reserve adjustments were recorded for the inventory associated with Sunoco Logistics’ crude oil, NGLs
and refined products inventories and our retail marketing operations as a result of commodity price changes between periods.
 Non-operating environmental remediation was primarily related to Sunoco, Inc.’s recognition of environmental
obligations related to closed sites.
 In 2014, amounts were related to a marketing business that was sold effective April 1, 2014. In 2013,
amounts were primarily related to Southern Union’s local distribution operations.
 and  See additional information in “Supplemental
Information on Unconsolidated Affiliates” and “Segment Operation Results” below.
 Other, net in 2014 primarily includes amortization of regulatory assets and other income and expense amounts. Other, net in 2013 was primarily
related to biodiesel tax credits recorded by Sunoco, Inc., amortization of regulatory assets and other income and expense amounts.
      Income tax expense is based on the earnings of our taxable subsidiaries. In addition, the year ended
December 31, 2014 included the impact of the Lake Charles LNG Transaction, which was treated as a sale for tax purposes, resulting in $76 million of
incremental income tax expense.
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