Energy Transfer 2010 Annual Report Download - page 138

In our natural gas compression business, revenue is recognized for compressor packages and technical
service jobs using the completed contract method which recognizes revenue upon completion of the job.
Costs incurred on a job are deducted at the time revenue is recognized.
Regulatory Accounting - Regulatory Assets and Liabilities
Our interstate transportation segment is subject to regulation by certain state and federal authorities and has
accounting policies that conform to the accounting requirements and ratemaking practices of the regulatory
authorities. The application of these accounting policies allows us to defer expenses and revenues on the
balance sheet as regulatory assets and liabilities when it is probable that those expenses and revenues will be
allowed in the ratemaking process in a period different from the period in which they would have been
reflected in the consolidated statement of operations by an unregulated company. These deferred assets and
liabilities will be reported in results of operations in the period in which the same amounts are included in
rates and recovered from or refunded to customers. Management’s assessment of the probability of recovery
or pass through of regulatory assets and liabilities will require judgment and interpretation of laws and
regulatory commission orders. If, for any reason, we cease to meet the criteria for application of regulatory
accounting treatment for all or part of our operations, the regulatory assets and liabilities related to those
portions ceasing to meet such criteria would be eliminated from the consolidated balance sheet for the
period in which the discontinuance of regulatory accounting treatment occurs.
Cash, Cash Equivalents and Supplemental Cash Flow Information
Cash and cash equivalents include all cash on hand, demand deposits, and investments with original
maturities of three months or less. We consider cash equivalents to include short-term, highly liquid
investments that are readily convertible to known amounts of cash and that are subject to an insignificant
risk of changes in value.
We place our cash deposits and temporary cash investments with high credit quality financial institutions.
At times, our cash and cash equivalents may be uninsured or in deposit accounts that exceed the Federal
Deposit Insurance Corporation insurance limit.
As a result of our acquisition of a natural gas compression equipment business in exchange for ETP
Common Units, cash acquired in connection with acquisitions during 2009 exceeded the cash we paid
during the period.
The net change in operating assets and liabilities (net of acquisitions) included in cash flows from operating
activities is comprised as follows:
Years Ended December 31,
2010 2009 2008
Accounts receivable $ 63,481 $ 28,431 $ 220,635
Accounts receivable from related companies 3,437 (29,042) 6,849
Inventories 14,639 (101,592) 96,145
Exchanges receivable 1,312 22,074 (7,888)
Other current assets 33,201 8,155 (57,041)
Intangibles and other assets 5,475 (1,517) (15,930)
Accounts payable (47,905) (16,024) (296,185)
Accounts payable to related companies (11,594) 4,459 (13,957)
Exchanges payable (3,752) (35,433) 14,254
Accrued and other current liabilities 41,135 (93,399) 75,329
Other non-current liabilities (203) 1,401 1,741
Price risk management assets and liabilities, net 25,982 (108,193) 75,874
Net change in operating assets and liabilities, net of effects of
acquisitions $ 125,208 $ (320,680) $ 99,826
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