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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ýANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
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 ý 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 ý
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 ý 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 ý 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 ý 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 ý
The aggregate market value as of June 30, 2014, of the registrants 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 $16.93 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 18, 2015, the registrant had 357,487,778 Common Units outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None

Table of contents

  • Page 1
    ... 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) 73-1493906 (I.R.S. Employer Identification No.) 3738 Oak Lawn Avenue, Dallas, Texas 75219 (Address of principal executive offices...

  • Page 2
    ... 14. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE PRINCIPAL ACCOUNTING FEES AND SERVICES PART IV...

  • Page 3
    ... assumed name of Energy Transfer Company ETC Tiger Pipeline, LLC Energy Transfer Equity, L.P., a publicly traded partnership and the owner of ETP LLC ETE Common Holdings, LLC, a wholly-owned subsidiary of ETE Energy Transfer Interstate Holdings, LLC Citrus CrossCountry DOE DOT EPA ET Crude Oil ETC...

  • Page 4
    ...credit facility Energy Transfer Partners GP, L.P., the general partner of ETP ETP Holdco Corporation Energy Transfer Partners, L.L.C., the general partner of ETP GP Securities Exchange Act of 1934 Fayetteville Express Pipeline LLC Federal Energy Regulatory Commission Florida Gas Transmission Company...

  • Page 5

  • Page 6
    ... Commission Southern Union Company Pan Gas Storage, LLC (d.b.a. Southwest Gas) Southern Union Gas Services Sunoco Logistics Partners L.P. Sunoco Partners LLC, the general partner of Sunoco Logistics Susser Holdings Corporation Titan Energy Partners, L.P. Transwestern Pipeline Company, LLC Texas...

  • Page 7
    ... ET Rover Pipeline LLC. Panhandle is the parent company of the Trunkline and Sea Robin transmission systems. Liquids operations, including NGL transportation, storage and fractionation services primarily through Lone Star. Product and crude oil operations, including the following: • • product...

  • Page 8
    ... 45% equity interest in the Bakken Pipeline Project to ETP. This transaction is expected to close in March 2015. 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 9
    ... November 2014, ETP and Regency announced that Lone Star will construct a 533 mile, 24- and 30-inch NGL pipeline from the Permian Basin to Mont Belvieu, Texas and convert Lone Star's existing West Texas 12-inch NGL pipeline into crude oil/condensate service. The new pipeline and conversion projects...

  • Page 10
    ... 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 11
    ... and the NGL storage facilities are located at Mont Belvieu, Texas, one NGL 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 also own and operate...

  • Page 12
    ... are used to facilitate the purchase and sale of crude oil and refined petroleum products pipelines primarily in the northeast, midwest and southwest regions of the United States. In 2013, Sunoco Logistics expanded its operations of pipeline transportation, acquisition, storage and marketing of NGLs...

  • Page 13
    ... most prolific production areas in the 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...

  • Page 14
    ... access to the Waha Hub near Midland, Texas, the Katy Hub near Houston, Texas and the Carthage Hub in East Texas, the three major natural gas trading centers in Texas. The ET Fuel System also includes our Bethel natural gas storage facility, with a working capacity of 6.4 Bcf, an average withdrawal...

  • Page 15
    ... gas consumed in the state. In addition, Florida Gas Transmission's pipeline system operates and maintains over 75 interconnects with major interstate and intrastate natural gas pipelines, which provide FGT's customers access to diverse natural gas producing regions. FGT's customers include electric...

  • Page 16
    ...The La Grange processing plant is a natural gas processing plant that processes the rich natural gas that flows through our system to produce residue gas and NGLs. Residue gas is delivered into our intrastate pipelines and NGLs are delivered into our NGL pipelines and then to Lone Star. Our treating...

  • Page 17
    ... 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 Ford Shale...

  • Page 18
    ... Bbls/d NGL capacity 20% non-operating interest held by Lone Star Sea Robin is a rich gas processing plant located on the Sea Robin Pipeline in southern Louisiana. The plant, which is connected to nine interstate and four intrastate residue pipelines as well as various deep-water production fields...

  • Page 19
    ... Pipe Line Company, increasing its controlling financial interest in the consolidated subsidiary to 88.6%. The remaining 11.4% was acquired from Southwest Pipeline Holding Company, LLC in January 2015. The Southwest United States pipeline system also includes the Oklahoma crude oil pipeline and...

  • Page 20
    ...tank farm then stores the crude oil and transports it to the PES refinery via Sunoco Logistics' pipelines. • Marcust Hookt Industrialt CoUplex: In 2013, Sunoco Logistics acquired Sunoco, Inc.'s Marcus Hook Industrial Complex. The acquisition included terminalling and storage assets with a capacity...

  • Page 21
    ...Pipelines Sunoco Logistics owns and operates approximately 2,400 miles of products pipelines in several regions of the United States. The products pipelines primarily transport refined products and NGLs from refineries in the northeast, midwest and southwest United States to markets in New York, New...

  • Page 22
    ... as through Sunoco LP which the Partnership controls through its ownership of the general partner. The Partnership currently plans to contribute all of the retail operations and fuel distributions business of our wholly-owned subsidiaries to Sunoco LP in future periods. In October 2014, we completed...

  • Page 23
    ...is positioned as a premium fuel brand. Brand improvements in recent years have focused on physical image, customer service and product offerings. In addition, Sunoco, Inc. believes its brands and high performance gasoline business have benefited from its sponsorship agreements with NASCAR®, INDYCAR...

  • Page 24
    ... consist of three LNG trains with a combined design nameplate outlet capacity of 16.2 metric tonnes per annum. Once completed, the liquefaction project will enable LCL to liquefy domestically produced natural gas and export it as LNG. By adding the new liquefaction facility and integrating with the...

  • Page 25
    ... with major oil, 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...

  • Page 26
    .... Our natural gas transportation and midstream revenues are derived significantly from companies that engage in exploration and production activities. The discovery and development of new shale formations across the United States has created an abundance of natural gas and crude oil resulting in...

  • Page 27
    ... by an intrastate natural gas pipeline on behalf of a local distribution company or an interstate natural gas pipeline. The rates and terms and conditions of some transportation and storage services provided on the Oasis pipeline, HPL System, East Texas pipeline and ET Fuel System are subject to...

  • Page 28
    ... 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 29
    ... and management of natural gas as well as crude oil, NGL and condensate pipeline facilities. Pursuant to these acts, PHMSA has promulgated regulations governing pipeline wall thickness, design pressures, maximum operating pressures, pipeline patrols and leak surveys, minimum depth requirements, and...

  • Page 30
    .... 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 products is subject...

  • Page 31
    ... in our capital expenditures or plant operating and maintenance expense. We currently own or lease sites that have been used over the years by prior owners and by us for various activities related to gathering, processing, storage and transmission of natural gas, NGLs, crude oil and products. Solid...

  • Page 32
    ... a result of changing the intended use of a property or a sale to a third party could result in a higher 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...

  • Page 33
    ... business, financial condition or results of operations. Spills.tOur operations can result in the discharge of regulated substances, including NGLs, crude oil or other products. The Clean Water Act, or amended by the federal Oil Pollution Act of 1990, as amended, ("OPA"), and comparable state laws...

  • Page 34
    ... United States, including onshore oil and natural gas production, processing, transmission, storage and distribution facilities. On December 9, 2014, the EPA published a proposed rule that would expand the petroleum and natural gas system sources for which annual greenhouse gas emissions reporting...

  • Page 35
    ... 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 products; the relationship between natural gas, NGL and crude oil prices; the...

  • Page 36
    ...level. Sunoco Logistics' and Sunoco LP's partnership agreements allow the issuance of an unlimited number of additional limited partner interests. The issuance of additional common units or other equity securities by Sunoco Logistics or Sunoco LP will have the following effects Unitholders' current...

  • Page 37
    ... 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 and business risk profile could be adversely affected if the...

  • Page 38
    ... 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. If the Regency Merger is completed and the Bakken Pipeline Transaction is...

  • Page 39
    ... General Partner interest in Sunoco Logistics and our Sunoco Logistics common units. Sunoco Logistics is not prohibited from competing with us. Neither our partnership agreement nor the partnership agreements of Sunoco Logistics prohibits Sunoco Logistics from owning assets or engaging in businesses...

  • Page 40
    ...our credit rating and other disruptions. Such disruptions could include economic downturns; deteriorating capital market conditions; declining market prices for natural gas, NGLs and other commodities; terrorist attacks or threatened attacks on our facilities or those of other energy companies; and...

  • Page 41
    ...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 42
    ... 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. Risks Related to Our Business We do not control, and therefore may not be able to cause or prevent certain...

  • Page 43
    ... our business segments. With respect to our midstream operations, we compete for both natural gas supplies and customers for our services. Our competitors include major integrated oil companies, interstate and intrastate pipelines and companies that gather, compress, treat, process, transport, store...

  • Page 44
    ...to changing market prices. Declining prices may result in lower rates of natural gas production resulting in less use of services, while rising prices may diminish consumer demand and also limit the use of services. In addition, our competitors may attract our customers' business. If demand declines...

  • Page 45
    ... used to transport these products to our markets. The inability to acquire refined products and any required transportation services at favorable prices may adversely affect our business and results of operations. The profitability of certain activities in our natural gas gathering, processing...

  • Page 46
    ... our physical or financial positions or hedging policies 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...

  • Page 47
    ...measured by debt to total capitalization. During the fourth quarter of 2013, we recorded a goodwill impairment charge of $689 million on our Lake Charles LNG reporting unit. See Note 2 to our consolidated financial statements for additional information. If we do not make acquisitions on economically...

  • Page 48
    ...'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 and the demand for pipeline transportation in the areas proposed to be serviced by the project as well as our ability to...

  • Page 49
    ... and storage and interstate transportation and storage operations depend on key customers to transport natural gas through our pipelines and the pipelines of our joint ventures. During 2014, Kinder Morgan, Inc., EDF Inc., Natural Gas Exchange Inc., Calpine Energy Services, L.P., and XTO Energy Inc...

  • Page 50
    ... 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. Compliance...

  • Page 51
    ... transportation and storage services in tariffs filed with the TRRC, although such rates are deemed just and reasonable under Texas law unless challenged in a complaint. We are subject to other forms of state regulation, including requirements to obtain operating permits, reporting requirements, and...

  • Page 52
    ... laws and regulations may require the acquisition of permits for our operations, result in capital expenditures to manage, limit or prevent emissions, discharges or releases of various materials from our pipelines, plants and facilities, impose specific health and safety standards addressing worker...

  • Page 53
    ... production facilities and onshore processing, transmission and storage facilities in the United States, which includes certain of our operations. More recently, on December 9, 2014, the EPA published a proposed rule that would expand the petroleum and natural gas system sources for which annual...

  • Page 54
    ... limit rules are not yet final, the impact of those provisions on us is uncertain at this time. The CFTC has designated certain interest rate swaps and credit default swaps for mandatory clearing and exchange trading. The associated rules require us, in connection with covered derivative activities...

  • Page 55
    ...event, may from time to time issue further safety and environmental laws and regulations regarding offshore oil and natural gas exploration, development and production. We cannot predict with any certainty the full impact of any new laws or regulations on our customers' drilling operations or on the...

  • Page 56
    ... our cost of operations, they also reduce our direct control over the services rendered. It is uncertain what effect such diminished control will have on the quality or quantity of products delivered or services rendered, on our ability to quickly respond to changing market conditions, or on our...

  • Page 57
    ..., 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 being shipped on its pipelines or products stored in or...

  • Page 58
    ... 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 it could likely be difficult to secure alternative sources of attractively priced crude oil supply in a timely fashion...

  • Page 59
    ... of that law on us. At the state level, several states have been evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise, or other forms of taxation. Imposition of a similar tax on us in the jurisdictions in which we operate or in other...

  • Page 60
    ...-tax return 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...

  • Page 61
    ... tax purposes and subject to corporate-level income taxes. Even though we (as a partnership for U.S. federal income tax purposes) are not subject to U.S. federal income tax, some of our operations are currently, and our acquisition of Sunoco, Inc. and the ETP Holdco restructuring resulted in an...

  • Page 62
    ... tax returns and pay state and local income taxes in some or all of the jurisdictions. 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...

  • Page 63
    ... effect on us following the merger. The Partnership, Regency, Regency GP LP, the directors of the Regency GP LP, and ETE are named defendants in purported class actions and derivative petitions brought by purported Regency unitholders in Dallas County, Texas, generally alleging claims of breach of...

  • Page 64
    ... cases, properties on which our pipelines were built were purchased in fee. We also own and operate multiple natural gas and NGL storage facilities and own or lease other processing, treating and conditioning facilities in connection with our midstream operations. ITEM 3. LEGAL PROCEEDINGS Sunoco...

  • Page 65
    ... 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 66
    ... financial statements. Although no plans are currently in place, management may evaluate whether to retire the Class E Units at a future date. Class G Units In conjunction with the Sunoco Merger, we amended our partnership agreement to create Class F Units. The number of Class F Units issued...

  • Page 67
    ... newly issued Class H Units of ETP that, when combined with the 50.2 million previously issued Class H Units, generally entitle ETE to receive 90.05% of the cash distributions and other economic attributes of the general partner interest and IDRs of Sunoco Logistics (the "Bakken Pipeline Transaction...

  • Page 68
    ... all 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...

  • Page 69
    ... for federal, state or local income tax purposes, under the terms of the Partnership Agreement, we can reduce our minimum quarterly distribution and the target cash distribution levels by multiplying the same by one minus the sum of the highest marginal federal corporate income tax rate that could...

  • Page 70
    ... based on (i) the currently effective partnership agreement provisions, (ii) the assumed closing of the issuance of additional Class H Units and Class I Units, which is expected to occur in March 2015, and (iii) the assumed closing of the Regency Merger, which is expected to occur in the second...

  • Page 71
    ... continuing operations per Common Unit Cash distributions per unit Balance Sheet Data (at period end): Total assets Long-term debt, less current maturities Total equity Other Financial Data: Capital expenditures: Maintenance (accrual basis) Growth (accrual basis) Cash paid for acquisitions 51,158...

  • Page 72
    ...this report. References to "we," "us," "our," the "Partnership" and "ETP" shall mean Energy Transfer Partners, L.P. and its subsidiaries. Our consolidated subsidiary, Susser Petroleum Partners LP, changed its name in October 2014 to Sunoco LP. Additionally, Trunkline LNG Company, LLC, a consolidated...

  • Page 73
    ...Holding Company, LLC in January 2015. Lone Star NGL Pipeline and Conversion Project In November 2014, ETP and Regency announced that Lone Star will construct a 533 mile, 24- and 30-inch NGL pipeline from the Permian Basin to Mont Belvieu, Texas and convert Lone Star's existing West Texas 12-inch NGL...

  • Page 74
    ... 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, such as Oasis and ET Fuel, may...

  • Page 75
    ...a service in a percent-of-proceeds contract or produced under a keep-whole arrangement. In addition to NGL price risk, our processing activity is also subject to price risk from natural gas because, in order to process the gas, in some cases we must purchase it. Therefore, lower gas prices generally...

  • Page 76
    ... Conversely, 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 products, crude oil and other hydrocarbons through our pipelines...

  • Page 77
    ...under common control. Accordingly, ETP's consolidated financial statements have been retrospectively adjusted to reflect consolidation of Southern Union into ETP beginning March 26, 2012 (the date ETE acquired Southern Union). Year Ended December 31, 2014 Compared to the Year Ended December 31, 2013...

  • Page 78
    ...of the carrying amount of the units sold. As of December 31, 2014, the Partnership's remaining interest in AmeriGas common units consisted of 3.1 million units held by a wholly-owned captive insurance company. GoodwilltIUpairUent. In 2013, Lake Charles LNG recorded a $689 million goodwill impairment...

  • Page 79
    ..., our investment in AmeriGas, Southern Union's local distribution operations, our approximate 33% non-operating interest in PES, our investment in Regency and our natural gas marketing operations. In 2014, certain costs previously reported as selling, general and administrative expenses were...

  • Page 80
    ...statements. Intrastate Transportation and Storage Years Ended December 31, 2014 Natural gas transported (MMBtu/d) Revenues Cost of products sold Gross margin Unrealized (gains) losses on commodity risk management activities Operating expenses, excluding non-cash compensation expense Selling, general...

  • Page 81
    ...our Houston pipeline system. Margin from natural gas sales and other increased $20 million primarily due to favorable results from our optimization activities. • Retainedtfueltrevenues. Retained fuel revenues include gross volumes retained as a fee at the current market price; the cost of consumed...

  • Page 82
    Table of Contents Interstate Transportation and Storage Years Ended December 31, 2014 Natural gas transported (MMBtu/d) Natural gas sold (MMBtu/d) Revenues Operating expenses, excluding non-cash compensation, amortization and accretion expenses Selling, general and administrative expenses, ...

  • Page 83
    ... Union's gathering and processing operations which were deconsolidated on April 30, 2013. VoluUes. Gathered volumes, NGL produced and equity NGLs increased for the year ended December 31, 2014 compared to the prior year primarily due to increased production by our customers in the Eagle Ford...

  • Page 84
    .... Transportation margin increased $69 million due to higher volumes transported from west Texas and the Eagle Ford Shale on our Lone Star pipeline system and $56 million due to increases in NGL production from our processing plants that connect to various fractionators via our wholly-owned...

  • Page 85
    ... of $28 million from crude oil pipelines, primarily due to an increase of $69 million from higher throughput volumes largely attributable to expansion projects placed in service, partially offset by lower average pipeline revenue per barrel of $9 million and higher operating expenses of $29 million...

  • Page 86
    ... per site) Motor fuel gross profit (cents per gallon): Total Company-operated Merchandise sales Revenue Cost of products sold Gross margin Unrealized gains on commodity risk management activities Operating expenses, excluding non-cash compensation expense Selling, general and administrative expenses...

  • Page 87
    ...of Southern Union's local distribution operations in 2013. In connection with the Lake Charles LNG Transaction, ETP agreed to continue to provide management services for ETE through 2015 in relation to both Lake Charles LNG's regasification facility and the development of a liquefaction project...

  • Page 88
    ... expense, net of interest capitalized Gain on deconsolidation of Propane Business Gain on sale of AmeriGas common units Goodwill impairment Gains (losses) on interest rate derivatives Non-cash unit-based compensation expense Unrealized gains (losses) on commodity risk management activities Inventory...

  • Page 89
    ... Union's recognition of a net curtailment gain of $15 million related to its postretirement benefit plans. IncoUetTaxtExpensetfroUtContinuingtOperations. Income tax expense increased primarily due to the acquisitions of Southern Union and Sunoco, Inc. in 2012, both of which are taxable corporations...

  • Page 90
    ... $ $ $ 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 expenses, excluding non-cash compensation expense Selling, general and administrative, excluding non-cash...

  • Page 91
    ... December 31, 2013 Transportation fees Natural gas sales and other Retained fuel revenues Storage margin, including fees Total gross margin $ 491 80 96 48 715 $ 2012 550 95 79 73 797 $ Change (59) (15) 17 (25) (82) $ $ $ Our 2013 margin decreased as compared to 2012 due to the net impact of the...

  • Page 92
    ...decrease in employee-related costs. Interstate Transportation and Storage Years Ended December 31, 2013 Natural gas transported (MMBtu/d) Natural gas sold (MMBtu/d) Revenues $ Operating expenses, excluding non-cash compensation, amortization and accretion expenses Selling, general and administrative...

  • Page 93
    ... production by our customers in the Eagle Ford Shale area and also due to our increased capacity levels as a result of assets placed in service. The decrease in equity NGLs for ETP's legacy assets for the year ended December 31, 2013 compared to the prior year was primarily due to processing plants...

  • Page 94
    ... 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 a fractionation fee...

  • Page 95
    ...assets recently placed in service. Investment in Sunoco Logistics Years Ended December 31, 2013 Revenue Cost of products sold Gross margin Unrealized gains on commodity risk management activities Operating expenses, excluding non-cash compensation expense Selling, general and administrative expenses...

  • Page 96
    ... of the MACS acquisition in October 2013. All Other Years Ended December 31, 2013 Revenue Cost of products sold Gross margin Unrealized (gains) losses on commodity risk management activities Operating expenses, excluding non-cash compensation expense Selling, general and administrative expenses...

  • Page 97
    ... effective upon our acquisition of Sunoco, Inc. on October 5, 2012; and our investment in Regency common and Class F units, which were received by Southern Union in exchange of its interest in Southern Union Gathering Company, LLC to Regency on April 30, 2013. The decrease in operating expenses for...

  • Page 98
    ... Business and (ii) ETP's loss on extinguishment of debt recognized in connection with the use of proceeds to redeem of long-term debt. (b) (c) (d) Sunoco historical amounts in 2012 include only the period from January 1, 2012 through September 30, 2012. Southern Union historical amounts in 2012...

  • Page 99
    .... Capital expenditures by Sunoco LP are reflected as indirect because Sunoco LP is a publicly traded subsidiary. (2) (3) (4) The assets used in our natural gas and liquids operations, including pipelines, gathering systems and related facilities, are generally long-lived assets and do not require...

  • Page 100
    ... may issue 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...

  • Page 101
    ..., and the sale of AmeriGas common units, respectively, and paid net cash of $1.74 billion for acquisitions, primarily for the ETP Holdco Acquisition and MACS. YeartEndedtDeceUbert31,t2012 Cash used in investing activities in 2012 was $2.29 billion. Total capital expenditures (excluding the allowance...

  • Page 102
    ...) Total direct capital expenditures Indirect(1): Investment in Sunoco Logistics Investment in Sunoco LP(3) Total indirect capital expenditures Total capital expenditures Year Ended December 31, 2013: Direct(1): Intrastate transportation and storage Interstate transportation and storage Midstream...

  • Page 103
    ... 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 purposes. In 2014, we had a net increase in our debt level of $1.69 billion primarily due to Sunoco Logistics' issuance of $2.00...

  • Page 104
    ... of 5.35% senior notes due May 2045. Sunoco Logistics' used the net proceeds from the offerings to pay borrowings under the Sunoco Logistics Credit Facility and for general partnership purposes. Credit Facilities ETP Credit Facility The ETP Credit Facility allows for borrowings of up to $2.5 billion...

  • Page 105
    ... West Texas Gulf Pipe Line Company, a subsidiary of Sunoco Logistics, maintains 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. At December 31, 2014...

  • Page 106
    ... 1 during an acquisition period. Sunoco Logistics' ratio of total consolidated debt, excluding net unamortized fair value adjustments, to consolidated Adjusted EBITDA was 3.7 to 1 at December 31, 2014, as calculated in accordance with the credit agreements. The West Texas Gulf Pipeline Company's $35...

  • Page 107
    ... contribution of the Propane Business, ETP entered into a Contingent Residual Support Agreement ("CRSA") with AmeriGas, Finance Company, AmeriGas Finance Corp. and UGI Corp., pursuant to which ETP will provide contingent, residual support of the Supported Debt. PEPL Holdings Guarantee of Collection...

  • Page 108
    ...ETE Class H Units held by ETE Holdings General Partner interest held by ETE Incentive distributions held by ETE IDR relinquishments related to previous transactions Total distributions declared to the partners of ETP $ 1,179 119 219 21 754 (250) 2,042 $ 2013 997 268 105 20 701 (199) 1,892 $ 2012 775...

  • Page 109
    ... of the Susser Merger. Such relinquishments would cease upon the agreement of an exchange of the Sunoco LP general partner interest and the incentive distribution rights between ETE and ETP. Cash Distributions Paid by Sunoco Logistics Sunoco Logistics is required by its partnership agreement to...

  • Page 110
    ...31, 2014 Limited Partners: Common units held by public Common units held by ETP General Partner interest held by ETP Incentive distributions held by ETP Total distributions declared Cash Distributions Paid by Sunoco LP Sunoco LP is required by its partnership agreement to distribute all cash on hand...

  • Page 111
    ...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 112
    ... 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 as refined product marketing revenues, are recognized when title to the product is transferred to the...

  • Page 113
    ... instrument contracts to limit our exposure to margin fluctuations in natural gas, NGL and refined products. These contracts consist primarily of futures and swaps. In addition, prior to the contribution of our retail propane activities to AmeriGas, we used derivatives to limit our exposure to...

  • Page 114
    ... use of natural gas in industrial and power generation activities, management expects supply and demand to exist for the foreseeable future. We have in place a rigorous repair and maintenance program that keeps the pipelines and the natural gas gathering and processing systems in good working...

  • Page 115
    ... for regulated subsidiaries. The calculation of the net periodic benefit cost and benefit obligation requires the use of a number of assumptions. Changes in these assumptions can have a significant effect on the amounts reported in the financial statements. The Partnership believes that the two most...

  • Page 116
    ..., processing, storage and transportation services; the prices and market demand for, and the relationship between, natural gas and NGLs; energy prices generally; the prices of natural gas and NGLs compared to the price of alternative and competing fuels; the general level of petroleum product demand...

  • Page 117
    ...-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. Inflation Interest rates on existing and future credit facilities and future debt offerings could be significantly higher than current levels...

  • Page 118
    ...extent open commodity positions exist, fluctuating commodity prices can impact our financial position and results of operations, either favorably or unfavorably. Sunoco Logistics manages exposures to crude oil, refined products and NGL commodity prices by monitoring inventory levels and expectations...

  • Page 119
    ... presented in MMBtu for natural gas, thousand megawatt for power and barrels for natural gas liquids, crude and refined products. Dollar amounts are presented in millions. December 31, 2014 Fair Value Asset (Liability) Effect of Hypothetical 10% Change December 31, 2013 Fair Value Asset (Liability...

  • Page 120
    ...) and the relationship between prompt month and forward months. Interest Rate Risk As of December 31, 2014, we had $2.04 billion of floating rate debt outstanding. A hypothetical change of 100 basis points would result in a change to interest expense of $22 million annually. We manage a portion of...

  • Page 121
    ... 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, 2014. Management's Report on Internal Control over Financial Reporting The management of Energy Transfer Partners, L.P. and...

  • Page 122
    ... management concluded that our internal control over financial reporting was effective as of December 31, 2014. Grant Thornton LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2014, as stated in...

  • Page 123
    ... was acquired during 2014. Management's assertion on the effectiveness of the Partnership's internal control over financial reporting excluded internal control over financial reporting of Susser Holdings Corporation. We did not audit the internal control over financial reporting of Sunoco LP...

  • Page 124
    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, 2014 that has materially affected, or is reasonably...

  • Page 125
    .... 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 126
    ...the General Partner or its Board of Directors of any duties they may owe the Partnership or the Unitholders. These duties are limited by our Partnership Agreement (see "Risks Related to Conflicts of Interest" in Item 1A. Risk Factors in this annual report). Audit Committee The Board of Directors has...

  • Page 127
    ... 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 128
    ... the Board of Directors of the general partner of Sunoco Logistics and Sunoco LP. Jamie Welch. Mr. Welch is the Group Chief Financial Officer and Head of Business Developments for the Energy Transfer family since June 2013. Mr. Welch has also served on the Board of Directors of ETE, ETP, and Sunoco...

  • Page 129
    ... 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 reserves...

  • Page 130
    ... production company. As an energy professional, active oil and gas producer and successful business owner, Mr. Skidmore possesses valuable first-hand knowledge of the energy transportation business and market conditions affecting its economics. Compensation of the General Partner Our General Partner...

  • Page 131
    ...our outstanding Class H Units. All of our employees are employed by and receive employee benefits from our Operating Companies. Compensation Discussion and Analysis Named Executive Officers We do not have officers or directors. Instead, we are managed by the board of directors of our General Partner...

  • Page 132
    ...our General Partner. For the year ended December 31, 2014, we paid 100% of the compensation of the executive officers of our General Partner as we represent the only business currently managed by our General Partner. For a more detailed description of the compensation of our named executive officers...

  • Page 133
    ..., 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. In addition to the information...

  • Page 134
    ... Partnership's financial, strategic and operating objectives for 2014. The cash bonuses awarded to each of the named executive officers for 2014 were consistent with their respective targets. EquitytAwards. We currently have two incentive plans: (i) the Amended and Restated Energy Transfer Partners...

  • Page 135
    ... Financial Officer of Sunoco Logistics' general partner, and Mr. Mason serves as a member of the board and legal advisor in matters related to mergers and acquisitions and financing activities. It is expected that the long-term equity awards of the named executive officers of the Partnership will...

  • Page 136
    ... to the general partners of Sunoco Logistics and Regency. In connection with those roles at Sunoco Logistics and Regency, in December 2014, the compensation committee of Sunoco Logistics' general partner awarded Messrs. McCrea, Salinas and Mason time-based restricted units of Sunoco Logistics in the...

  • Page 137
    ... the event of a change of control, as defined in the plan. In the case of the December 2014 long-term incentive awards to the named executive officers under the 2008 Incentive Plan, the SUN Plan or as applicable the equity incentive plans of Sunoco Logistics and Regency, the awards would immediately...

  • Page 138
    ...operating segment. We generally determine whether, and to what extent, our named executive officers receive a cash bonus based on our achievement of specified financial performance objectives as well as the individual contributions of our named executive officers to the Partnership's success. We use...

  • Page 139
    ... 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 140
    ... Kelcy L. Warren (4) Chief Executive Officer Martin Salinas, Jr. Chief Financial Officer Marshall S. (Mackie) McCrea, III President and Chief Operating Officer Thomas P. Mason Senior Vice President, General Counsel and Secretary Robert W. Owens President of Retail Marketing (1) Year 2014 2013 2012...

  • Page 141
    ... Underlying Options (#) Name ETP Unit Awards: Kelcy L. Warren Martin Salinas, Jr. Marshall S. (Mackie) McCrea, III Thomas P. Mason Sunoco Logistics Unit Awards: Martin Salinas, Jr. Marshall S. (Mackie) McCrea, III Thomas P. Mason Regency Unit Awards: Thomas P. Mason Sunoco LP Unit Awards: Robert...

  • Page 142
    .../2014 12/30/2013 1/10/2013 12/20/2011 12/15/2010 Robert W. Owens 12/30/2013 12/5/2012 Sunoco Logistics Unit Awards: Martin Salinas, Jr. 12/5/2014 12/5/2013 1/24/2013 Marshall S. (Mackie) McCrea, III 12/5/2014 12/5/2013 1/24/2013 Thomas P. Mason Regency Unit Awards: Thomas P. Mason Sunoco LP Unit...

  • Page 143
    ... Units, Sunoco Logistics common units, or Regency common units, accordingly, on December 31, 2014. Option Exercises and Units Vested Table Unit Awards Name ETP Unit Awards: Kelcy L. Warren Martin Salinas, Jr. Marshall S. (Mackie) McCrea, III Thomas P. Mason Robert W. Owens Sunoco Logistics Unit...

  • Page 144
    ... In addition, in the event of a change in control of the partnership, all unvested awards granted under the 2004 Unit Plan, as well as awards granted in 2014 under the 2008 Incentive Plan, the SUN Plan and/or the equity incentive plans of Regency and Sunoco Logistics would be accelerated. For awards...

  • Page 145
    ... the Sunoco Executive DC Plan as any change in 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 2014...

  • Page 146
    ... General Partner and all directors and executive officers of our General Partner as a group. The General Partner knows of no other person not disclosed herein who beneficially owns more than 5% of our Common Units. Title of Class Common Units Name and Address of Beneficial Owner(1) Kelcy L. Warren...

  • Page 147
    ... the provision of various general and administrative services for ETE's benefit for the years ended December 31, 2014, 2013 and 2012, respectively. Immediately following the closing of the Partnership's acquisition of Sunoco, Inc., ETE contributed its interest in Southern Union into ETP Holdco, an...

  • Page 148
    ... on whether ETP has net income or 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...

  • Page 149
    ... 2014 and 2013 for financial statement audits and interim reviews of subsidiary entities in connection with contribution and sale transactions. Includes fees in 2013 for audits of Sunoco, Inc.'s benefit plans. Includes fees in 2014 and 2013 in connection with the service organization control report...

  • Page 150
    ...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 set...

  • Page 151
    ... Energy Transfer Partners, L.L.C., its general partner /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 signed by the following persons...

  • Page 152
    ... as of March 23, 2012, to the Amended and Restated Agreement and Plan of Merger, by and among Energy Transfer Partners, L.P., Citrus ETP Acquisition L.L.C., Energy Transfer Equity, L.P., Southern Union Company, and CrossCountry Energy, LLC dated July 19, 2011 (incorporated by reference to Exhibit...

  • Page 153
    ... Amended and Restated Limited Liability Company Agreement of Energy Transfer Partners, L.L.C., dated as of August 10, 2010 (incorporated by reference to Exhibit 3.3 to Registrant's Form 8-K filed on March 28, 2012) Certificate of Limited Partnership of Sunoco Logistics Partners L.P. (incorporated by...

  • Page 154
    ... of Limited Partnership of Energy Transfer Partners GP, L.P. (incorporated by reference to Exhibit 3.14 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 155
    ...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 10.2 to the Registrant's Form 10...

  • Page 156
    ... and among Energy Transfer Equity, L.P., Sigma Acquisition Corporation and Southern Union Company (incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K filed September 15, 2011) Second Amended and Restated Credit Agreement dated as of October 27, 2011 among Energy Transfer Partners...

  • Page 157
    ... Energy Transfer Partners, L.P. and Energy Transfer Equity, L.P. (incorporated by reference to Exhibit 10.1 to Registrant's Form 8-K filed on May 1, 2012) Purchase and Sale Agreement dated as of December 14, 2012 among Southern Union Company, Plaza Missouri Acquisition, Inc. and for certain limited...

  • Page 158
    ... Income for the years ended December 31, 2014, 2013 and 2012; (iv) our Consolidated Statement of Partners' Capital for the years ended December 31, 2014, 2013 and 2012; (v) our Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012; and (vi) the notes to our...

  • Page 159
    ... STATEMENTS Energy Transfer Partners, L.P. and Subsidiaries Page F-2 F-3 F-5 F-6 F-7 F-8 F - 10 Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Equity...

  • Page 160
    ... for Sunoco Logistics Partners L.P. 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 that...

  • Page 161
    ... ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in millions) December 31, 2014 ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable, net Accounts receivable from related companies Inventories Exchanges receivable Price risk management assets...

  • Page 162
    ... NON-CURRENT LIABILITIES COMMITMENTS AND CONTINGENCIES (Note 11) REDEEMABLE NONCONTROLLING INTERESTS EQUITY: General Partner Limited Partners: Common Unitholders (355,510,227 and 333,826,372 units authorized, issued and outstanding as of December 31, 2014 and 2013, respectively) Class E Unitholders...

  • Page 163
    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, 2014 REVENUES: Natural gas sales NGL sales Crude sales Gathering, transportation and other fees Refined product sales Other ...

  • Page 164
    Table of Contents ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in millions) Years Ended December 31, 2014 Net income $ Other comprehensive income (loss), net of tax: Reclassification to earnings of gains and losses on derivative ...

  • Page 165
    ... Subsidiary units issued for cash Capital contributions from noncontrolling interest Lake Charles LNG Transaction (see Note 3) Susser Merger (see Note 3) Sunoco Logistics acquisition of a noncontrolling interest Other comprehensive loss, net of tax Other, net Net income Balance, December 31, 2014...

  • Page 166
    ... from unconsolidated affiliates Other non-cash Net change in operating assets and liabilities, net of effects of acquisitions and deconsolidations (see Note 2) Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for Susser Merger, net of cash received (see Note...

  • Page 167
    ...Units Subsidiary equity offerings, net of issuance costs Capital contributions received from noncontrolling interest Distributions to partners Distributions to noncontrolling interest Debt issuance costs Other Net cash provided by financing activities... of these consolidated financial statements. F-9

  • Page 168
    ..., 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 primarily focus on transporting natural gas in Texas through our Oasis pipeline, ET Fuel System, East Texas pipeline and...

  • Page 169
    ...and refined products, crude oil and NGL acquisition and marketing assets. ETP owns an indirect 100% equity interest in Susser and the general partner interest, incentive distribution rights and a 42.8% limited partner interest in Sunoco LP. Susser operates convenience stores in Texas, New Mexico and...

  • Page 170
    ...the pipeline, or (iv) a combination of the three, generally payable monthly. Fuel retained for a fee is typically valued at market prices. Our intrastate transportation and storage segment also generates revenues and margin from the sale of natural gas to electric utilities, independent power plants...

  • Page 171
    ... the difference between the purchase and resale prices. 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...

  • Page 172
    ... limit. 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, 2014 Accounts receivable Accounts receivable from related companies Inventories Exchanges receivable Other current...

  • Page 173
    ... 23 678 22 2013 2012 Regency common and Class F units received in exchange for contribution of SUGS $ AmeriGas limited partner interest received in exchange for contribution of Propane $ Business NON-CASH FINANCING ACTIVITIES: Issuance of Common Units in connection with the Susser Merger (see Note...

  • Page 174
    ...on its crude oil, refined products and NGL inventories as a result of a decline in the market price of these products. The write-down was calculated based upon current replacement costs. We utilize commodity derivatives to manage price volatility associated with our natural gas inventory. Changes in...

  • Page 175
    ... plant for interstate projects. It represents the cost of servicing the capital invested in construction work-in-process. AFUDC is segregated into two component parts - borrowed funds and equity funds. Components and useful lives of property, plant and equipment were as follows: December 31, 2014...

  • Page 176
    ... Lake Charles LNG reporting unit was less than its carrying amount 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...

  • Page 177
    ... We review non-amortizable intangible 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, 2014...

  • Page 178
    ... use of natural gas in industrial and power generation activities, management expects supply and demand to exist for the foreseeable future. We have in place a rigorous repair and maintenance program that keeps the pipelines and the natural gas gathering and processing systems in good working...

  • Page 179
    ... 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 180
    ...31, 2014 and 2013 based on inputs used to derive their fair values: Fair Value Measurements at December 31, 2014 Fair Value Total Assets: Interest rate derivatives Commodity derivatives: Natural Gas: Basis Swaps IFERC/NYMEX Swing Swaps IFERC Fixed Swaps/Futures Forward Physical Swaps Power: Forwards...

  • Page 181
    ... inputs developed using company-specific information. We used the income approach to measure the fair value of the Lake Charles LNG reporting unit. Under the income approach, we calculated the fair value based on the present value of the estimated future cash flows. The discount rate used, which...

  • Page 182
    ... ended December 31, 2014, 2013 and 2012, 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. These corporate subsidiaries include Susser and ETP Holdco, which owns...

  • Page 183
    ...in which the change occurs through AOCI in equity or are reflected as a regulatory asset or regulatory liability for regulated subsidiaries. Allocation of Income For purposes of maintaining partner capital accounts, the Partnership Agreement specifies that items of income and loss shall generally be...

  • Page 184
    ... Susser Merger, ETP acquired an indirect 100% equity interest in Susser and the general partner interest and the incentive distribution rights in Sunoco LP, approximately 11 million Sunoco LP common and subordinated units, and Susser's existing retail operations, consisting of 630 convenience store...

  • Page 185
    ... revenue and net income related to Susser of $2.32 billion and $105 million, respectively. No pro forma information has been presented, as the impact of these acquisitions was not material in relation to ETP's consolidated results of operations. MACS to Sunoco LP In October 2014, Sunoco LP acquired...

  • Page 186
    ... in PEI Power II, LLC, Regency (31.4 million common units and 6.3 million Class F Units), and ETP (2.2 million Common Units). In connection with the Panhandle Merger, Panhandle also assumed PEPL Holdings' guarantee of $600 million of Regency senior notes. 2013 Transactions Sale of Southern Union...

  • Page 187
    ... 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 ETE's ETP Holdco Interest On April 30, 2013, ETP acquired ETE's 60% interest in ETP Holdco for approximately...

  • Page 188
    ... Union into ETP beginning March 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...

  • Page 189
    ...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 190
    ...distribution of $463 million in cash to Southern Union, net of closing adjustments, and the payment of $30 million in cash to a subsidiary of ETP. This direct investment in Regency common and Class F units received has been accounted for using the equity method. The carrying amount of our investment...

  • Page 191
    ... Non-current liabilities Equity Total liabilities and equity $ 2,324 13,206 12,659 28,189 $ 1,455 10,286 8,429 20,170 $ $ Years Ended December 31, 2014 Revenue Operating income Net income $ 9,467 841 279 $ 2013 6,806 1,043 574 $ 2012 4,057 635 338 In addition to the equity method investments...

  • Page 192
    ...continuing operations Class H Unitholder's interest in income from continuing operations Common Unitholders' interest in income (loss) from continuing operations Additional earnings allocated (to) from General Partner Distributions on employee unit awards, net of allocation to General Partner Income...

  • Page 193
    ... Notes due October 15, 2014 9.625% Senior Notes due April 15, 2015 5.75% Senior Notes due January 15, 2017 9.00% Debentures due November 1, 2024 Unamortized premiums, discounts and fair value adjustments, net - 250 400 65 35 750 250 250 400 65 70 1,035 Sunoco Logistics Debt 8.75% Senior Notes due...

  • Page 194
    ..., net 800 35 150 100 4,260 - 35 200 118 2,503 Sunoco LP Debt Sunoco LP $1.25 billion Revolving Credit Facility due September 25, 2019 683 683 - - Other Less: current maturities $ (1) (2) 223 19,340 1,008 18,332 $ 228 17,088 637 16,451 In connection with the Panhandle Merger, Southern Union...

  • Page 195
    ...West Texas Gulf Pipe Line Company, a subsidiary of Sunoco Logistics, maintains 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. A t December 31, 2014...

  • Page 196
    ... in any credit rating, by itself, cause an event of default under any of Panhandle's lending agreements. Financial covenants exist in certain of Panhandle's debt agreements that require Panhandle to maintain a certain level of net worth, to meet certain debt to total capitalization ratios and to...

  • Page 197
    ... debt. Upon the first achievement by Sunoco LP of an investment grade credit rating, all security interests securing the Sunoco LP Credit Facility will be released. We were in compliance with all requirements, tests, limitations, and covenants related to our debt agreements as of December 31, 2014...

  • Page 198
    ... $ Net Proceeds 671 657 Proceeds from the offerings listed above were used to repay amounts outstanding under the 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...

  • Page 199
    ..., management may evaluate whether to retire some or all of the Class E Units at a future date. All of the 8.9 million Class E Units outstanding are held by a subsidiary and are reported as treasury units. Class G Units In conjunction with the Sunoco Merger, we amended our partnership agreement to...

  • Page 200
    ... 10.3 million common units pursuant to the equity distribution agreement, which were used for general partnership purposes. Additionally, Sunoco Logistics completed an overnight public offering of 7.7 million common units for net proceeds of $362 million in September 2014. The net proceeds from this...

  • Page 201
    ... based on (i) the currently effective partnership agreement provisions, (ii) the assumed closing of the issuance of additional Class H Units and Class I Units, which is expected to occur in March 2015, and (iii) the assumed closing of the Regency Merger, which is expected to occur in the second...

  • Page 202
    ... business on June 5, 2014. The unit split was effective June 12, 2014. All Sunoco Logistics unit and per unit information included in this report is presented on a post-split basis. Sunoco LP Quarterly Distributions of Available Cash Distributions declared by Sunoco LP subsequent to our acquisition...

  • Page 203
    ... benefits Total 9. 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 Units, restricted units, phantom units, Common Units...

  • Page 204
    ... at the Partnership level. The completion of the Southern Union Merger, Sunoco Merger, ETP Holdco Transaction and Susser Merger (see Note 3) significantly increased the activities conducted through corporate subsidiaries. A reconciliation of income tax expense (benefit) at the U.S. statutory rate to...

  • Page 205
    ... corporate subsidiaries have state net operating loss carryforward benefits of $111 million, net of federal tax, which expire between 2014 and 2033. The valuation allowance of $84 million is applicable to the state net operating loss carryforward benefits applicable to Sunoco, Inc. pre-acquisition...

  • Page 206
    ...to 2007 and Southern Union and its subsidiaries are no longer subject to examination by the IRS for tax years prior to 2004. Sunoco, Inc. has been examined by the IRS for tax years through 2012. However, statutes remain open for tax years 2007 and forward due to carryback of net operating losses and...

  • Page 207
    ... 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 208
    ... capital projects or repayment of long-term obligations. Litigation and Contingencies We may, 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 oil are flammable and combustible. Serious personal injury...

  • Page 209
    ... AG's motion to be reimbursed expert and consultant costs by Southern Union of up to $150,000 was granted. By tariff, these costs are recoverable through rates charged to New England Gas Company customers. The hearing officer previously stayed discovery pending resolution of a dispute concerning the...

  • Page 210
    ..., storing, gathering, treating, compressing, blending and processing natural gas, natural gas liquids and other products. As a result, there can be no assurance that significant costs and liabilities will not be incurred. Costs of planning, designing, constructing and operating pipelines, plants and...

  • Page 211
    ... state laws that regulate the protection of the health and safety of employees. In addition, OSHA's hazardous communication standard requires that information be maintained about hazardous materials used or produced in our operations and that this information be provided to employees, state...

  • Page 212
    ... 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 liquids transportation and services segment to manage our storage facilities and the purchase and sale of purity NGLs. Sunoco...

  • Page 213
    ... TexOk, West Louisiana Zone and Henry Hub locations. 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 our interest rate exposure by...

  • Page 214
    ...agreements with a single counterparty or affiliated group of counterparties. The Partnership's counterparties consist of a diverse portfolio of customers across the energy industry, including petrochemical companies, commercial and industrials, oil and gas producers, municipalities, gas and electric...

  • Page 215
    ... Balance Sheet Location Derivatives in offsetting agreements: OTC contracts Price risk management assets (liabilities) Broker cleared derivative Other current assets contracts Offsetting agreements: Counterparty netting Payments on margin deposit December 31, 2014 December 31, 2013 Liability...

  • Page 216
    ... from AOCI into Income (Effective Portion) Years Ended December 31, 2014 2013 2012 Derivatives in cash flow hedging relationships: Commodity derivatives Total Cost of products sold $ $ (3) (3) $ $ 4 4 $ $ 14 14 Location of Gain/(Loss) Recognized in Income on Derivatives Amount of Gain...

  • Page 217
    ..., 2014, 2013 and 2012, respectively. Pension and Other Postretirement Benefit Plans Panhandle Panhandle offered postretirement health care and life insurance plans that were available to substantially all of its employees, pending the retiree meeting certain age and service requirements. Sunoco, Inc...

  • Page 218
    ...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, 2014 Pension Benefits Funded Plans Change in benefit obligation: Benefit obligation...

  • Page 219
    ... used in determining benefit obligations at the dates indicated are shown in the table below: December 31, 2014 Pension Benefits Discount rate Rate of compensation increase 3.62% N/A Other Postretirement Benefits 2.24% N/A December 31, 2013 Pension Benefits 4.65% N/A Other Postretirement Benefits...

  • Page 220
    ... Contents The weighted-average assumptions used in determining net periodic benefit cost for the periods presented are shown in the table below: December 31, 2014 Pension Benefits Discount rate Expected return on assets: Tax exempt accounts Taxable accounts Rate of compensation increase 4.65% 7.50...

  • Page 221
    ...$ $ $ Primarily comprised of approximately 41% equities, 48% fixed income securities, 6% cash, and 5% in other investments as of December 31, 2013. The Level 1 plan assets are valued based on active market quotes. The Level 2 plan assets are valued based on the net asset value per share (or its...

  • Page 222
    ... the development of a liquefaction project at Lake Charles LNG's facility, for which ETE has agreed to pay incremental management fees to ETP of $75 million per year for the years ending December 31, 2014 and 2015. The Partnership also has related party transactions with several of its equity method...

  • Page 223
    ... and services segment includes the Bakken crude project, for which capital expenditures had previously been reported in the "All other" segment. During the fourth quarter 2013, management realigned the composition of our reportable segments, and as a result, our natural gas marketing operations are...

  • Page 224
    ... services segment are primarily reflected in NGL sales and gathering, transportation and other fees. Revenues from our investment in Sunoco Logistics segment are primarily reflected in crude sales. Revenues from our retail marketing segment are primarily reflected in refined product sales. We report...

  • Page 225
    ... 1,032 $ 2012 122 209 168 53 63 28 13 656 $ $ $ Years Ended December 31, 2014 Equity in earnings (losses) of unconsolidated affiliates: Intrastate transportation and storage Interstate transportation and storage Midstream Liquids transportation and services Investment in Sunoco Logistics Retail...

  • Page 226
    ... expense, net of interest capitalized Gain on deconsolidation of Propane Business Gain on sale of AmeriGas common units Goodwill impairment Gains (losses) on interest rate derivatives Non-cash unit-based compensation expense Unrealized gains (losses) on commodity risk management activities Inventory...

  • Page 227
    ... and storage Interstate transportation and storage Midstream Liquids transportation and services Investment in Sunoco Logistics Retail marketing All other Total additions to property, plant and equipment excluding acquisitions, net of contributions in aid of construction costs 2013 2012 $ 169...

  • Page 228
    ... in Sunoco Logistics and retail marketing segments. The three months ended December 31, 2013 reflected ETP's recognition of a goodwill impairment of $689 million. For the three months ended December 31, 2014 and 2013, distributions paid for the period exceeded net income attributable to partners by...

  • Page 229
    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, 2014 Fixed Chsrges: Interest expense, net Cspitslized interest Interest chsrges included in rentsl expense Totsl...

  • Page 230
    ... Transfer Terminalling Company, LLC, a Delaware limited liability company Enhanced Service Systems, Inc., a Delaware corporation ET Company I, Ltd., a Texas limited partnership ET Crude Oil Terminals, LLC, a Delaware limited partnership ET Fuel Pipeline, L.P., a Delaware limited partnership ET Rover...

  • Page 231

  • Page 232
    ... HPL Resources Company LP, a Delaware limited partnership HPL Storage GP LLC, a Delaware limited liability company HSC Acquirer LLC, a Delaware limited liability company LA GP, LLC, a Texas limited liability company La Grange Acquisition, L.P., a Texas limited partnership Lake Charles Exports, LLC...

  • Page 233
    Lone Star NGL Asset GP LLC, a Delaware limited liability company Lone Star NGL Asset Holdings II LLC, a Delaware limited liability company

  • Page 234
    ..., a Delaware corporation Oasis Pipeline, LP, a Texas limited partnership Pan Gas Storage LLC , a Delaware limited liability company Panhandle Eastern Pipe Line Company, LP, a Delaware limited partnership Panhandle Energy LNG Services, LLC, a Delaware limited liability company Panhandle Holdings LLC...

  • Page 235
    Susser Company, Ltd., a Texas limited partnership Susser Finance Corporation, a Delaware corporation

  • Page 236
    ... LLC, a Texas limited liability company Texas Energy Transfer Company, Ltd., a Texas limited partnership Texas Energy Transfer Power, LLC, a Texas limited liability company TND Beverage, LLC, a Texas limited liability company Town & Country Food Stores, Inc., a Texas corporation Trans-Pecos Pipeline...

  • Page 237
    Sun International Limited, a Bermuda other

  • Page 238
    ... Sunoco Pipeline L.P., a Texas limited partnership West Texas Gulf Pipe Line Company, a Delaware corporation SUBSIDIARIES OF SUNOCO LP, a Delaware limited partnership: Aloha Petroleum, Ltd., a Hawaii Corporation MACS Retail LLC, a Virginia limited liability company Mid-Atlantic Convenience Stores...

  • Page 239
    ... FIRM We have issued our reports dated March 2, 2015, with respect to the consolidated financial 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, 2014. We hereby consent to the...

  • Page 240
    ... with respect to the consolidated statements comprehensive income, equity and cash flows of Sunoco Logistics Partners L.P., included in this Annual Report (Form 10-K) of Energy Transfer Partners, L.P. for the year ended December 31, 2014. /s/Ernst & Young LLP Philadelphia, Pennsylvania March 2, 2015

  • Page 241
    ... 28, 2015, with respect to the consolidated financial statements of Susser Holdings Corporation (not presented separately herein), included in this Annual Report (Form 10-K) of Energy Transfer Partners, L.P. for the year ended December 31, 2014. /s/Ernst & Young LLP Houston, Texas February 28, 2015

  • Page 242
    ... dated February 27, 2015, with respect to the consolidated financial statements of Sunoco LP (not presented separately herein) and the effectiveness of internal control over financial reporting of Sunoco LP, included in this Annual Report (Form 10-K) of Energy Transfer Partners, L.P. for the year...

  • Page 243
    ... CHIEF EXECUTIVE OFFICER PURSUANT TO 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...

  • Page 244
    ... 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 245
    ... In connection with the annual report of Energy Transfer Partners, L.P. (the "Partnership") on Form 10-K for the year ended December 31, 2014 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...

  • Page 246
    ... In connection with the annual report of Energy Transfer Partners, L.P. (the "Partnership") on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Martin Salinas, Jr., Chief Financial Officer, certify, pursuant to...

  • Page 247
    ... the Board of Directors of Sunoco Partners LLC and Limited Partners of Sunoco Logistics Partners, L.P. We have audited the accompanying consolidated statements of comprehensive income, equity, and cash flows of Sunoco Logistics Partners L.P. (the "Partnership") for the period from October 5, 2012 to...

  • Page 248
    ... of Susser Holdinos Corporation We have audited the accompanyino consolidated financial statements of Susser Holdinos Corporation (the Company) which comprise the consolidated balance sheets as of December 31, 2014 and December 29, 2013, and the related consolidated statements of operations and...

  • Page 249
    ... December 31, 2013 and 2012, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Sunoco LP's internal control over financial reporting as of December 31, 2014, based...

  • Page 250