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Acquisitions and Related Transactions | 12 Months Ended
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Dec. 31, 2020
Acquisitions and Dispositions [Abstract] |
Acquisitions and Related Transactions | ACQUISITIONS, DIVESTITURES AND RELATED TRANSACTIONS: Pending Enable Acquisition On February 17, 2021, the Partnership announced its entry into a definitive merger agreement to acquire Enable. Under the terms of the merger agreement, Enable’s common unitholders will receive 0.8595 of an ET common unit in exchange for each Enable common unit. In addition, each outstanding Enable Series A preferred unit will be exchanged for 0.0265 of an ET Series G preferred unit, and ET will make a $10 million cash payment for Enable’s general partner. The transaction is subject to the approval of Enable’s unitholders and other customary regulatory approvals. SemGroup Acquisition and ET Contribution of SemGroup Assets to ETO On December 5, 2019, ET completed the acquisition of SemGroup pursuant to the terms of the Agreement and Plan of Merger, dated as of September 15, 2019 (the “Merger Agreement”). Under the terms of the Merger Agreement, a wholly owned subsidiary of ET merged with and into SemGroup (the “SemGroup Transaction”), with SemGroup surviving the merger. At the effective time of the SemGroup Transaction on December 5, 2019, each share of class A common stock, par value $0.01 per share, of SemGroup issued and outstanding immediately prior to the effective time was converted into the right to receive (i) $6.80 in cash, without interest, and (ii) 0.7275 ET Common Units representing limited partner interests in ET. Each share of Series A Cumulative Perpetual Convertible Preferred Stock, par value $0.01 per share, of SemGroup that was issued and outstanding as of immediately prior to the effective time was redeemed by SemGroup for cash at a price per share equal to 101% of the liquidation preference. During the first and second quarters of 2020, ET contributed former SemGroup assets to ETO through sale and contribution transactions. The following table represents the fair value, as of December 5, 2019, of the SemGroup assets and liabilities transferred from ET to ETO:
| At December 5, 2019
Total current assets | $ | 794 |
Property, plant and equipment | 3,891 |
Other non-current assets | 617 |
Goodwill | 295 |
Intangible assets | 460 |
Total assets | $ | 6,057 |
Total current liabilities | $ | 629 |
Long-term debt, less current maturities (1) | 2,576 |
Other non-current liabilities | 197 |
Energy Transfer Canada Preferred shares | 241 |
Total liabilities | 3,643 |
Noncontrolling interest | 822 |
Partners’ capital | 1,592 |
Total liabilities and partners’ capital | $ | 6,057 |
(1) Long-term debt at December 5, 2019 includes SemGroup senior notes with an aggregate principal amount of $1.375 billion and SemGroup subsidiary debt of $593 million, all of which was redeemed in December 2019, subsequent to the close of the SemGroup Transaction. During 2020, the Partnership has recorded impairments on certain of the contributed SemGroup assets. Those impairments include a $244 million impairment of goodwill and a $129 million impairment of other non-current assets. ET Contribution of Assets to ETO Immediately prior to the closing of the Energy Transfer Merger discussed in Note 1, ET contributed the following to ETO: •2,263,158 common units representing limited partner interests in Sunoco LP to ETO in exchange for 2,874,275 ETO common units; •100 percent of the limited liability company interests in Sunoco GP LLC, the sole general partner of Sunoco LP, and all of the IDRs in Sunoco LP, to ETO in exchange for 42,812,389 ETO common units; •12,466,912 common units representing limited partner interests in USAC and 100 percent of the limited liability company interests in USA Compression GP, LLC, the general partner of USAC, to ETO in exchange for 16,134,903 ETO common units; and •a 100 percent limited liability company interest in Lake Charles LNG and a 60 percent limited liability company interest in each of Energy Transfer LNG Export, LLC, ET Crude Oil Terminals, LLC and ETC Illinois LLC to ETO in exchange for 37,557,815 ETO common units. USAC Acquisition On April 2, 2018, ET acquired a controlling interest in USAC, a publicly traded partnership that provides compression services in the United States. Specifically, the Partnership acquired (i) all of the outstanding limited liability company interests in USA Compression GP, LLC (“USAC GP”), the general partner of USAC, and (ii) 12,466,912 USAC common units representing limited partner interests in USAC for cash consideration equal to $250 million (the “USAC Transaction”). Concurrently, USAC cancelled its IDRs and converted its economic general partner interest into a non-economic general partner interest in exchange for the issuance of 8,000,000 USAC common units to USAC GP. Concurrent with these transactions, ETO contributed to USAC all of the issued and outstanding membership interests of CDM for aggregate consideration of approximately $1.7 billion, consisting of (i) 19,191,351 USAC common units, (ii) 6,397,965 units of a newly authorized and established class of units representing limited partner interests in USAC (“USAC Class B Units”) and (iii) $1.23 billion in cash, including customary closing adjustments (the “CDM Contribution”). The USAC Class B Units are a new class of partnership interests of USAC that have substantially all of the rights and obligations of a USAC common unit, except the USAC Class B Units will not participate in distributions for the first four quarters following the closing date of April 2, 2018. Each USAC Class B Unit will automatically convert into one USAC common unit on the first business day following the record date attributable to the quarter ending June 30, 2019. Prior to the USAC acquisition, the CDM entities were indirect wholly-owned subsidiaries of ETO. Beginning April 2018, ETE’s consolidated financial statements reflected USAC as a consolidated subsidiary. Summary of Assets Acquired and Liabilities Assumed The USAC Transaction was recorded using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair values as of the acquisition date. The total purchase price was allocated as follows:
| At April 2, 2018
Total current assets(2) | $ | 786 |
Property, plant and equipment | 1,332 |
Other non-current assets | 15 |
Goodwill(1) | 366 |
Intangible assets | 222 |
Total assets | $ | 2,721 |
Total current liabilities | $ | 110 |
Long-term debt, less current maturities | 1,527 |
Other non-current liabilities | 2 |
Total liabilities | 1,639 |
Noncontrolling interest | 832 |
Partners’ capital | 250 |
Total liabilities and partners’ capital | $ | 2,721 |
(1)None of the goodwill is expected to be deductible for tax purposes. Goodwill recognized from the business combination primarily relates to the value attributed to additional growth opportunities, synergies and operating leverage within USAC’s operations. (2)Includes cash and cash equivalents of $711 million held by USAC as of the acquisition date. The fair values of the assets acquired and liabilities assumed were determined using various valuation techniques, including the income and market approaches. Sunoco LP Retail Store Divestment On January 23, 2018, Sunoco LP completed the disposition of assets pursuant to the purchase agreement with 7-Eleven, Inc. (the “7-Eleven Transaction”). As a result of the 7-Eleven Transaction, previously eliminated wholesale motor fuel sales to Sunoco LP’s retail locations are reported as wholesale motor fuel sales to third parties. In connection with the 7-Eleven Transaction, Sunoco LP entered into a 15-year take-or-pay fuel supply arrangement with 7-Eleven and SEI Fuel. For the period from January 1, 2018 through January 22, 2018, Sunoco LP recorded sales to the sites that were subsequently sold to 7-Eleven of $199 million, which sales were eliminated in consolidation. The Partnership has concluded that it meets the accounting requirements for reporting the financial position, results of operations and cash flows of the 7-Eleven Transaction and the operations of the related assets as discontinued operations. There were no results of operations associated with discontinued operations for the year ended December 31, 2019. The results of operations associated with discontinued operations for the years ended December 31, 2018 and 2017 are presented in the following table:
| Year Ended December 31, 2018
REVENUES | $ | 349 |
COSTS AND EXPENSES |
Cost of products sold | 305 |
Operating expenses | 61 |
Selling, general and administrative | 7 |
Total costs and expenses | 373 |
OPERATING LOSS | (24) |
OTHER EXPENSE |
Interest expense, net | 2 |
Loss on extinguishment of debt | 20 |
Other, net | 61 |
LOSS FROM DISCONTINUED OPERATIONS BEFORE INCOME TAX EXPENSE | (107) |
Income tax expense | 158 |
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES | (265) |
LOSS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES ATTRIBUTABLE TO ET | $ | (10) |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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