Sunoco 2012 Annual Report Download - page 24

operating results. Although we evaluate and monitor each capital spending project and try to anticipate
difficulties that may arise, such delays or cost increases may arise as a result of factors that are beyond our
control, including:
• denial or delay in issuing requisite regulatory approvals and/or permits;
• unplanned increases in the cost of construction materials or labor;
• disruptions in transportation of modular components and/or construction materials;
• severe adverse weather conditions, natural disasters, or other events (such as equipment malfunctions
explosions, fires, spills) affecting our facilities, or those of vendors and suppliers;
• shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;
• changes in market conditions impacting long lead-time projects;
• market-related increases in a project’s debt or equity financing costs; and
• nonperformance by, or disputes with, vendors, suppliers, contractors, or sub-contractors involved with
a project.
Our forecasted operating results also are based upon our projections of future market fundamentals that are
not within our control, including changes in general economic conditions, availability to our customers of
attractively priced alternative supplies of crude oil and refined products and overall customer demand.
An impairment of goodwill and intangible assets could reduce our earnings.
At December 31, 2012, our consolidated balance sheet reflected $1.37 billion of goodwill and $843 million
of intangible assets. Accounting principles generally accepted in the United States require us to test goodwill for
impairment on an annual basis or when events or circumstances occur, indicating that goodwill might be
impaired. Long-lived assets such as intangible assets with finite useful lives are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If we
determine that any of our goodwill or intangible assets were impaired, we would be required to take an
immediate charge to earnings with a correlative effect on partners’ capital and balance sheet leverage as
measured by debt to total capitalization.
Future acquisitions and expansions may increase substantially the level of our indebtedness and contingent
liabilities, and we may be unable to integrate them effectively into our existing operations.
We evaluate and acquire assets and businesses that we believe complement or diversify our existing assets
and businesses. Acquisitions may require substantial capital or the incurrence of substantial indebtedness. If we
consummate any future material acquisitions, our capitalization and results of operations may change
significantly.
Acquisitions and business expansions, including the integration with our new general partner, involve
numerous risks, including difficulties in the assimilation of the assets and operations of the acquired businesses,
inefficiencies and difficulties that arise because of unfamiliarity with new assets, new geographic areas and the
businesses associated with them. Further, unexpected costs and challenges may arise whenever businesses with
different operations or management are combined and we may experience unanticipated delays in realizing the
benefits of an acquisition. In some cases, we have indemnified the previous owners and operators of acquired
assets.
Following an acquisition, we may discover previously unknown liabilities associated with the acquired
business for which we have no recourse under applicable indemnification provisions. In addition, the terms of an
acquisition may require us to assume certain prior known or unknown liabilities for which we may not be
indemnified or have adequate insurance.
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