Sunoco 2013 Annual Report Download - page 21

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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, 2013, our consolidated balance sheet reflected $1.35 billion of goodwill and $794 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 a substantial increase in indebtedness. If we consummate any future
material acquisitions, our capitalization and results of operations may change significantly.
Acquisitions and business expansions 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.
Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately
insured.
Our operations and those of our customers and suppliers may be subject to operational hazards or unforeseen
interruptions such as natural disasters, adverse weather, accidents, fires, explosions, hazardous materials releases, and other
events beyond our control. If one or more of the facilities that we own, or any third-party facilities that we receive from or
deliver to, are damaged by any disaster, accident, catastrophe or other event, our operations could be significantly interrupted.
These interruptions might involve a loss of equipment or life, injury, extensive property damage, or maintenance and repair
outages. The duration of the interruption will depend on the seriousness of the damages or required repairs. We may not be able
to maintain or obtain insurance to cover these types of interruptions, or in coverage amounts desired, at reasonable rates. In
some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. Any event that
interrupts the revenues generated by our operations, or which causes us to make significant expenditures not covered by
insurance, could materially and adversely affect our results of operations, financial position, or cash flows.
We are exposed to the credit and other counterparty risk of our customers in the ordinary course of our business.
We have various credit terms with virtually all of our customers, and our customers have varying degrees of
creditworthiness. Although we evaluate the creditworthiness of each of our customers, we may not always be able to fully
anticipate or detect deterioration in their creditworthiness and overall financial condition, which could expose us to an
increased risk of nonpayment or other default under our contracts and other arrangements with them. In the event that a
material customer or customers default on their payment obligations to us, this could materially and adversely affect our results
of operations, financial position, or cash flows.
Mergers among our customers and competitors could result in lower volumes being shipped on our pipelines or products
stored in or distributed through our terminals, or reduced crude oil marketing margins or volumes.
Mergers between existing customers could provide strong economic incentives for the combined entities to utilize their
existing systems instead of ours in those markets where the systems compete. As a result, we could lose some or all of the
volumes and associated revenues from these customers and we could experience difficulty in replacing those lost volumes and
revenues, which could materially and adversely affect our results of operations, financial position, or cash flows.