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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K



☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-31219

ENERGY TRANSFER OPERATING, 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.)

8111 Westchester Drive, Suite 600, Dallas, Texas 75225

(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	Trading Symbol(s)	Name of each exchange on which registered
7.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units	ETPprC	New York Stock Exchange
7.625% Series D Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units	ETPprD	New York Stock Exchange
7.600% Series E Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units	ETPprE	New York Stock Exchange
7.500% Senior Notes due 2020	ETP 20	New York Stock Exchange
4.250% Senior Notes due 2023	ETP 23	New York Stock Exchange
5.875% Senior Notes due 2024	ETP 24	New York Stock Exchange
5.500% Senior Notes due 2027	ETP 27	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 every Interactive Data File required to be submitted 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 such files).

Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ý Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ý

DOCUMENTS INCORPORATED BY REFERENCE

None

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		PAGE
PART I

ITEM 1.	BUSINESS	1

ITEM 1A.	RISK FACTORS	33

ITEM 1B.	UNRESOLVED STAFF COMMENTS	68

ITEM 2.	PROPERTIES	68

ITEM 3.	LEGAL PROCEEDINGS	69

ITEM 4.	MINE SAFETY DISCLOSURES	71

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON UNITS, RELATED UNITHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	72

ITEM 6.	SELECTED FINANCIAL DATA	73

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	75

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	121

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	123

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	124

ITEM 9A.	CONTROLS AND PROCEDURES	124

ITEM 9B.	OTHER INFORMATION	125

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	126

ITEM 11.	EXECUTIVE COMPENSATION	130

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS	143

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	143

ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	144

PART IV

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	145

ITEM 16.	FORM 10-K SUMMARY	145

	SIGNATURES	152

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Forward-Looking Statements

Certain matters discussed in this report, excluding historical information, as well as some statements by Energy Transfer Operating, L.P. (the “Partnership,” or “ETO”) in periodic press releases and some oral statements of the Partnership’s officials during presentations about the Partnership, include forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Statements using words such as “anticipate,” “believe,” “intend,” “project,” “plan,” “expect,” “continue,” “estimate,” “goal,” “forecast,” “may,” “will” or similar expressions help identify forward-looking statements. Although the Partnership and its General Partner believe such forward-looking statements are based on reasonable assumptions and current expectations and projections about future events, no assurance can be given that such assumptions, expectations, or projections will prove to be correct. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Partnership’s actual results may vary materially from those anticipated, projected or expected, forecasted, estimated or expressed in forward-looking statements since many of the factors that determine these results are subject to uncertainties and risks that are difficult to predict and beyond management’s control. For additional discussion of risks, uncertainties and assumptions, see “Item 1A. Risk Factors” included in this annual report.

Definitions

The following is a list of certain acronyms and terms used throughout this document:



	/d		per day

	AOCI		accumulated other comprehensive income (loss)

	AROs		asset retirement obligations

	Bbls		barrels

	BBtu		billion British thermal units

	Bcf		billion cubic feet

	Btu		British thermal unit, an energy measurement used by gas companies to convert the volume of gas used to its heat equivalent, and thus calculate the actual energy used

	Capacity		capacity of a pipeline, processing plant or storage facility refers to the maximum capacity under normal operating conditions and, with respect to pipeline transportation capacity, is subject to multiple factors (including natural gas injections and withdrawals at various delivery points along the pipeline and the utilization of compression) which may reduce the throughput capacity from specified capacity levels

	CDM		CDM Resource Management LLC and CDM Environmental & Technical Services LLC, collectively

	Citrus		Citrus, LLC

	Dakota Access		Dakota Access, LLC, a less than wholly-owned subsidiary of ETO

	DOE		United States Department of Energy

	DOJ		United States Department of Justice

	DOT		United States Department of Transportation

	EPA		United States Environmental Protection Agency

	ET		Energy Transfer LP, the parent company of ETO

	ETC OLP		La Grange Acquisition, L.P., which conducts business under the assumed name of Energy Transfer Company and is a wholly-owned subsidiary of ETO

	ETC Sunoco		ETC Sunoco Holdings LLC (formerly, Sunoco Inc.), a wholly-owned subsidiary of ETO

	ETC Tiger		ETC Tiger Pipeline, LLC, a wholly-owned subsidiary of ETO

	ETCO		Energy Transfer Crude Oil Company, LLC, a less than wholly-owned subsidiary of ETO

	ETP GP		Energy Transfer Partners GP, L.P., the general partner of ETO

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	ETP Holdco		ETP Holdco Corporation, a wholly owned subsidiary of ETO

	ETP LLC		Energy Transfer Partners, L.L.C., the general partner of ETP GP

	Exchange Act		Securities Exchange Act of 1934, as amended

	ExxonMobil		Exxon Mobil Corporation

	FEP		Fayetteville Express Pipeline LLC

	FERC		Federal Energy Regulatory Commission

	FGT		Florida Gas Transmission Company, LLC, a wholly-owned subsidiary of Citrus

	GAAP		accounting principles generally accepted in the United States of America

	Gulf States		Gulf States Transmission LLC, a wholly-owned subsidiary of ETO

	HFOTCO		Houston Fuel Oil Terminal Company, a wholly-owned subsidiary of ETO, which owns the Houston Terminal

	HPC		RIGS Haynesville Partnership Co., a wholly-owned subsidiary of ETO

	IDRs		incentive distribution rights

	KMI		Kinder Morgan Inc.

	Lake Charles LNG		Lake Charles LNG Company, LLC (previously named Trunkline LNG Company, LLC), a wholly-owned subsidiary of ETO

	LCL		Lake Charles LNG Export Company, LLC, a wholly-owned subsidiary of ETO

	LIBOR		London Interbank Offered Rate

	LNG		liquefied natural gas

	Lone Star		Lone Star NGL LLC, a wholly-owned subsidiary of ETO

	MBbls		thousand barrels

	MEP		Midcontinent Express Pipeline LLC

	Mi Vida JV		Mi Vida JV LLC

	Mid-Valley		Mid-Valley Pipeline Company, a wholly-owned subsidiary of ETO

	MMBls		million barrels

	MMcf		million cubic feet

	MTBE		methyl tertiary butyl ether

	NGL		natural gas liquid, such as propane, butane and natural gasoline

	NYMEX		New York Mercantile Exchange

	NYSE		New York Stock Exchange

	ORS		Ohio River System LLC, a less than wholly-owned subsidiary of ETO

	OSHA		federal Occupational Safety and Health Act

	OTC		over-the-counter

	Panhandle		Panhandle Eastern Pipe Line Company, LP and its subsidiaries, wholly-owned by ETO

	PCBs		polychlorinated biphenyls

	PennTex		PennTex Midstream Partners, LP, acquired by ETO during 2016-2017 and now a wholly-owned subsidiary named ETC PennTex LLC

	PEP		Permian Express Partners LLC, a less than wholly-owned subsidiary of ETO

iii

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	PES		Philadelphia Energy Solutions Refining and Marketing LLC, non-controlling interest owned by ETO

	Phillips 66		Phillips 66 Partners LP

	PHMSA		Pipeline Hazardous Materials Safety Administration

	Preferred Unitholders		Unitholders of the Series A Preferred Units, Series B Preferred Units, Series C Preferred Units, Series D Preferred Units, Series E Preferred Units, Series F Preferred Units and Series G Preferred Units, collectively

	Ranch JV		Ranch Westex JV LLC

	Regency		Regency Energy Partners LP, a wholly-owned subsidiary of ETO

	Retail Holdings		ETP Retail Holdings, LLC, a wholly-owned subsidiary of ETO

	RIGS		Regency Intrastate Gas System, a wholly-owned subsidiary of ETO

	Rover		Rover Pipeline LLC, a less than wholly-owned subsidiary of ETO

	Sea Robin		Sea Robin Pipeline Company, LLC, a wholly-owned subsidiary of Panhandle

	SEC		Securities and Exchange Commission

	SemGroup		SemGroup Corporation

	Series A Preferred Units		6.250% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

	Series B Preferred Units		6.625% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

	Series C Preferred Units		7.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

	Series D Preferred Units		7.625% Series D Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

	Series E Preferred Units		7.600% Series E Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

	Series F Preferred Units		6.750% Series F Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units