Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)



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

For the Fiscal Year Ended December 31, 2018



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

For the transition period from to

Commission file number: 333-227607-09

ETC M-A Acquisition LLC

(Exact name of registrant as specified in its charter)



Delaware	30-0794569
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8111 Westchester Drive, Suite 600, Dallas, Texas 75225

(Address of principle executive offices) (zip code)

(214) 981-0700

(Registrant’s telephone number, including area code)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

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 x

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 x 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. x

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	x	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 Exchange Act Rule 12b-2). Yes ¨ No x

ETC M-A Acquisition LLC meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K with the reduced disclosure format. Items 1, 2 and 7 have been reduced and Items 6, 10, 11, 12 and 13 have been omitted in accordance with Instruction I.

Documents Incorporated by Reference: None

FORM 10-K

ETC M-A ACQUISITION LLC

TABLE OF CONTENTS



		Page
PART I
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	2
ITEM 1B.	UNRESOLVED STAFF COMMENTS	3
ITEM 2.	PROPERTIES	3
ITEM 3.	LEGAL PROCEEDINGS	3
ITEM 4.	MINE SAFETY DISCLOSURES	3
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON UNITS, RELATED UNITHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	4
ITEM 6.	SELECTED FINANCIAL DATA	4
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	5
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	5
ITEM 9A.	CONTROLS AND PROCEDURES	5
ITEM 9B.	OTHER INFORMATION	5
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	6
ITEM 11.	EXECUTIVE COMPENSATION	6
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MATTERS	6
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	6
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	6
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	7
ITEM 16.	FORM 10-K SUMMARY	7
	SIGNATURES	9

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PART I

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements.” All statements other than statements of historical fact contained in this report are forward-looking statements, including, without limitation, statements regarding our plans, strategies, prospects and expectations concerning our business, results of operations and financial condition. You can identify many of these statements by looking for words such as “believe,” “expect,” “intend,” “project,” “anticipate,” “estimate,” “continue” or similar words or the negative thereof.

Known material factors that could cause our actual results to differ from those in these forward-looking statements are described below, in Part I, Item 1A (“Risk Factors”) and Part II, Item 7 (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) of this report.

All forward-looking statements included in this report are based on information available to us on the date of this report. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

ITEM 1. BUSINESS

Overview

ETC M-A Acquisition LLC, a Delaware limited liability company formed in August 2013, (the “Company”) is an indirect wholly-owned subsidiary of Energy Transfer Operating, L.P. (“ETO”). In October 2018, Energy Transfer Equity, L.P. (“ETE”) and Energy Transfer Partners, L.P. (“ETP”) completed a merger of ETP with a wholly-owned subsidiary of ETE in a unit-for-unit exchange. Following the closing of the merger, ETE changed its name to “Energy Transfer LP” and its common units began trading on the New York Stock Exchange under the “ET” ticker symbol on October 19, 2018. In addition, ETP changed its name to “Energy Transfer Operating, L.P.”

In connection with the transaction, immediately prior to closing, ETE contributed 2,263,158 Sunoco LP common units to ETP in exchange for 2,874,275 ETP common units, and contributed 100% of the limited liability company interests in Sunoco LP’s general partner, Sunoco GP LLC (“General Partner”), and all of its incentive distribution rights to ETP in exchange for 42,812,389 ETP common units. As a result, following the transaction, ETP directly owns Sunoco LP’s General Partner, all of its incentive distribution rights and approximately 34.4% of its common units, which constitutes a 28.7% limited partner interest in Sunoco LP.

On January 23, 2018, Sunoco LP redeemed its previously guaranteed senior notes and issued the following senior notes, for which ETC M-A Acquisition LLC has guaranteed collection with respect to the payment of principal amounts:


•	$1 billion of 4.875% senior notes due 2023;


•	$800 million of 5.50% senior notes due 2026; and


•	$400 million of 5.875% senior notes due 2028

At December 31, 2018 the Company owned 10,489,944 Sunoco LP common units, representing 13% of the total outstanding Sunoco LP common units.

Asset Overview

The Company’s only assets consist of its investment in Sunoco LP.

Investment in Sunoco LP

Sunoco LP is engaged in the distribution of motor fuels to independent dealers, distributors, other commercial customers, and to end customers at retail sites operated by commission agents. As of December 31, 2018, Sunoco LP distributes motor fuels across more than 30 states throughout the East Coast, Midwest, South Central and Southeast regions of the Unites States, as well as Hawaii. Sunoco LP distributed approximately 7.8 billion gallons of motor fuel during 2018 through its independent dealers, distributors, other commercial customers and retail sites operated by commission agents.

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Operating Subsidiaries

Sunoco LP’s primary operations are conducted by the following consolidated subsidiaries:


•	Sunoco, LLC (“Sunoco LLC”), a Delaware limited liability company, primarily distributes motor fuel in 30 states throughout the East Coast, Midwest, South Central and Southeast regions of the United States. Sunoco LLC also processes transmix and distributes refined product through its terminals in Alabama, Arkansas, New York, and Texas.


•	Sunoco Retail LLC (“Sunoco Retail”), a Pennsylvania limited liability company, owns and operates retail stores that sell motor fuel and merchandise primarily in New Jersey.


•	Aloha Petroleum LLC, a Delaware limited liability company, distributes motor fuel and operates terminal facilities on the Hawaiian Islands.


•	Aloha Petroleum, Ltd. (“Aloha”), a Hawaii corporation, owns and operates convenience stores on the Hawaiian Islands.

SEC Reporting

We file or furnish annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any related amendments and supplements thereto with the Securities and Exchange Commission (the “SEC”). You may read and copy any materials we file or furnish with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information regarding the Public Reference Room by calling the SEC at 1-800-732-0330. In addition, the SEC maintains an Internet website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

ITEM 1A. RISK FACTORS

The risks and uncertainties described below are not the only ones faced by the Company. Additional risks and uncertainties that the Company is unaware of, or that it currently deems immaterial, may become important factors that affect it. If any of the following risks occurs, the Company’s business, financial condition, results of operations or cash flows could be materially and adversely affected.

Risks that Relate to the Company

The Company’s investment in Sunoco LP may be impacted by additional issuances of common units.

As of December 31, 2018, the Company owns 10,489,944 Sunoco LP common units. Sunoco LP’s partnership agreement allows the issuance of an unlimited number of additional limited partner interests. The issuance of additional common units or other equity securities by Sunoco LP may have the following adverse effects on the Company’s investment in Sunoco LP:


•	the Company’s proportionate ownership interest in Sunoco LP will decrease;


•	the amount of cash available for distribution by Sunoco LP on each common unit or partnership security may decrease;


•	the ratio of taxable income to distributions may increase;


•	the Company’s relative voting strength may be diminished; and


•	the market price of Sunoco LP’s common units may decline.

The payment of distributions on any additional equity securities issued by Sunoco LP increases the risk that Sunoco LP may not have sufficient cash available to maintain or increase its per unit distribution level, which in turn may impact the amount of cash distributions that the Company receives.

The Company does not control, and therefore may not be able to cause or prevent certain actions by, Sunoco LP.

Sunoco LP is independently managed, and the Company does not control the decisions of its governing body. Consequently, it may be difficult or impossible for the Company to cause Sunoco LP to take actions that it believes would be in the Company’s best interests. Likewise, the Company may be unable to prevent adverse actions taken by Sunoco LP.

The operating results of Sunoco LP may be adversely affected by unfavorable economic and market conditions.

Economic conditions worldwide have, from time to time, contributed to slowdowns in the oil and gas industry, which could impact Sunoco LP and consequently impact the value of the Company’s investment and/or the distributions that it receives from its investment in Sunoco LP. Sunoco LP has its own unique business and economic risks as follows:

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•	Sunoco LP’s ability to make, complete and integrate acquisitions from affiliates or third-parties;


•	business strategy and operations of Energy Transfer LP (“ETE”), and its conflicts of interest with Sunoco LP;


•	changes in the price of and demand for the motor fuel that Sunoco LP distributes and its ability to appropriately hedge any motor fuel it holds in inventory;


•	Sunoco LP’s dependence on limited principal suppliers;


•	competition in the wholesale motor fuel distribution and convenience store industry;


•	changing customer preferences for alternate fuel sources or improvement of fuel efficiency;


•	changes in Sunoco LP’s credit ratings, as assigned by rating agencies;


•	environmental, tax and other federal, state and local laws and regulations;


•	the fact that Sunoco LP is not fully insured against all risks incident to its business;


•	dangers inherent in the storage and transportation of motor fuel;


•	Sunoco LP’s ability to manage growth and/or contain costs;


•	Sunoco LP’s reliance on senior management, supplier trade credit and information technology; and


•	Sunoco LP’s partnership structure, which may create conflicts of interest between Sunoco LP and its general partner and its affiliates, and limits the fiduciary duties of its general partner and its affiliates.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Company does not lease or hold in fee any materially important physical properties.

ITEM 3. LEGAL PROCEEDINGS

The Company may be subject to litigation and other proceedings. The Company is not currently a party to any lawsuits or proceedings involving environmental protection matters.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

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PART II

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

ETC M-A Acquisition LLC is an indirect wholly owned subsidiary of Energy Transfer Operating, L.P.

ITEM 6. SELECTED FINANCIAL DATA

Item 6, Selected Financial Data, has been omitted from this report pursuant to the reduced disclosure format permitted by General Instruction I to Form 10-K.

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

The information in Item 7 has been prepared pursuant to the reduced disclosure format permitted by General Instruction I to Form 10-K. Accordingly, this Item 7 includes only management’s narrative analysis of the results of operations and certain supplemental information.

Overview and Recent Developments


•	$1 billion of 4.875% senior notes due 2023;


•	$800 million of 5.50% senior notes due 2026; and


•	$400 million of 5.875% senior notes due 2028

At December 31, 2018 the Company owned 10,489,944 Sunoco LP common units, representing 13% of the total outstanding Sunoco LP common units.

Results of Operations



	Year Ended December 31,
	2018			2017
	(in millions)
(Loss) income from unconsolidated affiliate	$	(37	)	$	4
Net (loss) income	$	(37	)	$	4

The following is a discussion of the significant items and variances impacting the Company’s net (loss) income during the periods presented above:

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(Loss) income from unconsolidated affiliate. For the years ended December 31, 2018 and 2017, (loss) income from unconsolidated affiliate includes $(9) million and $22 million, respectively, related to Sunoco LP’s income from continuing operations and $(28) million and $(18) million, respectively, related to Sunoco LP’s loss from discontinued operations.

OTHER MATTERS

Contingencies

See Note 4 of the financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements starting on page F-1 of this report are incorporated by reference.

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

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such terms are defined in Rules 13a–15(e) and 15d–15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, management, including the Principal Executive Officer and Principal Financial Officer, concluded that our disclosure controls and procedures were adequate and effective as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting

The Securities and Exchange Commission (“SEC”), as required by Section 404 of the Sarbanes-Oxley Act, adopted rules that generally require every company that files reports with the SEC to evaluate its effectiveness of internal controls over financial reporting. Our management will not be required to evaluate the effectiveness of our internal controls over financial reporting until the filing of our 2019 Annual Report on Form 10-K, due to a transition period established by Item 308 of Regulation S-K.

There have been no changes in our internal controls over financial reporting (as defined in Rule 13(a)-15(f) or Rule 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Item 10, Directors, Executive Officers and Corporate Governance, has been omitted from this report pursuant to the reduced disclosure format permitted by General Instruction I to Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Item 11, Executive Compensation, has been omitted from this report pursuant to the reduced disclosure format permitted by General Instruction I to Form 10-K.

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

Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Matters, has been omitted from this report pursuant to the reduced disclosure format permitted by General Instruction I to Form 10-K.

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

Item 13, Certain Relationships and Related Transactions, and Director Independence, has been omitted from this report pursuant to the reduced disclosure format permitted by General Instruction I to Form 10-K.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

The following table presents fees for audit services rendered by Grant Thornton LLP (“Grant Thornton”) for the audit of the Company’s annual financial statements for 2018 and 2017, and fees billed for services rendered by Grant Thornton during the corresponding periods (dollars in millions).



	Fiscal 2018		Fiscal 2017
Audit Fees (1)	$	0.1	$	0.1
Audit-Related Fees	—		—
Tax Fees	—		—
All Other Fees	—		—
Total	$	0.1	$	0.1

_______________________________

(1) Includes fees for audits of annual financial statements of the Company, reviews of the related quarterly financial statements, and services that are normally provided by the independent accountants in connection with statutory and regulatory filings or engagements, including reviews of documents filed with the SEC.

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PART IV

ITEM 15. EXHIBITS, 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 forth on page 8.

ITEM 16. FORM 10-K SUMMARY

None.

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INDEX TO EXHIBITS

The exhibits listed on the following Exhibit Index are filed as part of this report. Exhibits required by Item 601 of Regulation S-K, but which are not listed below, are not applicable.



	Exhibit Number		Description
	31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	99.1		Audited financial statements of Sunoco LP as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017 and 2016 (incorporated by reference to Item 8 of Sunoco LP’s Form 10-K filed February 22, 2019).
	101.INS*		XBRL Instance Document
	101.SCH*		XBRL Taxonomy Extension Schema Document
	101.CAL*		XBRL Taxonomy Calculation Linkbase Document
	101.DEF*		XBRL Taxonomy Extension Definitions Document
	101.LAB*		XBRL Taxonomy Label Linkbase Document
	101.PRE*		XBRL Taxonomy Presentation Linkbase Document

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, ETC M-A Acquisition LLC has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



ETC M-A Acquisition LLC
By:	/s/ A. Troy Sturrock
	A. Troy Sturrock
	Senior Vice President and Controller (duly authorized to sign on behalf of the registrant)
Date:	February 22, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the ETC M-A Acquisition LLC, in the capacities and on the dates indicated.



	Signature	Title	Date

(i)	Principal executive officer:
	/s/ Kelcy L. Warren	Chief Executive Officer	February 22, 2019
	Kelcy L. Warren

(ii)	Principal financial officer:
	/s/ Thomas E. Long	Chief Financial Officer	February 22, 2019
	Thomas E. Long

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INDEX TO FINANCIAL STATEMENTS

ETC M-A Acquisition LLC



Financial Statements:	Page:
Report of Independent Registered Public Accounting Firm	F - 2
Balance Sheets	F - 3
Statements of Operations	F - 4
Statement of Equity	F - 5
Statements of Cash Flows	F - 6
Notes to Financial Statements	F - 7

F - 1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors of Energy Transfer Partners, L.L.C. and

Member of ETC M-A Acquisition LLC

Opinion on the financial statements

We have audited the accompanying balance sheets of ETC M-A Acquisition LLC (a Delaware limited liability company) (the “Company”) as of December 31, 2018 and 2017, the related statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2014.

Dallas, Texas

February 22, 2019

F - 2

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ETC M-A Acquisition LLC

Balance Sheets

(Dollars in millions)



	December 31,
	2018		2017
ASSETS
Current assets:
Advances to affiliated companies	$	87	$	52
Total current assets	87		52

Investment in unconsolidated affiliate	210		282
Total assets	$	297	$	334



LIABILITIES AND EQUITY
Current liabilities:
Accrued and other current liabilities	$	3	$	3
Total current liabilities	3		3

Commitments and contingencies

Equity:
Member’s equity	294		331
Total equity	294		331
Total liabilities and equity	$	297	$	334

The accompanying notes are an integral part of these financial statements.

F - 3

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ETC M-A Acquisition LLC

Statements of Operations

(Dollars in millions)



	Year Ended December 31,
	2018			2017		2016
(Loss) income from unconsolidated affiliate	$	(37	)	$	4	$	(53	)
Net (loss) income	$	(37	)	$	4	$	(53	)

The accompanying notes are an integral part of these financial statements.

F - 4

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ETC M-A Acquisition LLC

Statement of Equity

(Dollars in millions)



	Total
Balance, December 31, 2015	$	360
Sunoco Retail Transaction	2,297
Distributions to ETP	(77		)
R&M and Atlantic Distribution	(2,200		)
Net loss	(53		)
Balance, December 31, 2016	327
Net income	4
Balance, December 31, 2017	331
Net loss	(37		)
Balance, December 31, 2018	$	294

The accompanying notes are an integral part of these financial statements.

F - 5

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ETC M-A Acquisition LLC

Statements of Cash Flows

(Dollars in millions)



	Year Ended December 31,
	2018			2017			2016
Cash flows from operating activities:
Net (loss) income	$	(37	)	$	4		$	(53	)
Reconciliation of net income to net cash provided by operating activities:
Loss (income) from unconsolidated affiliate	37			(4		)	53
Distributions from unconsolidated affiliate	35			35			30
Net cash provided by operating activities	35			35			30
Cash flows from investing activities:
Proceeds from Sunoco Retail Transaction	—			—			2,200
Net cash provided by investing activities	—			—			2,200
Cash flows from financing activities:
Advances to Sunoco, Inc.	(35		)	(35		)	(30		)
R&M and Atlantic Distribution	—			—			(2,200		)
Net cash used in financing activities	(35		)	(35		)	(2,230		)
Change in cash and cash equivalents	—			—			—
Cash and cash equivalents, beginning of period	—			—			—
Cash and cash equivalents, end of period	$	—		$	—		$	—



	Year Ended December 31,
	2018		2017		2016
Supplemental disclosure of non-cash financing activities:
Non-cash distribution to members	$	—	$	—	$	(77	)

The accompanying notes are an integral part of these financial statements.

F - 6

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ETC M-A Acquisition LLC

Notes to Financial Statements

(Tabular dollar amounts are in millions)


1.	Operations and Organization:

In connection with the transaction, immediately prior to closing, ETE contributed 2,263,158 Sunoco LP common units to ETP in exchange for 2,874,275 ETP common units, and contributed 100% of the limited liability company interests in Sunoco LP’s general partner, Sunoco GP LLC (“General Partner”), and all of its incentive distribution rights to ETP in exchange for 42,812,389 ETP common units. As a result, following the transaction, ETO directly owns Sunoco LP’s General Partner, all of its incentive distribution rights and approximately 34.4% of its common units, which constitutes a 28.7% limited partner interest in Sunoco LP.

Prior to December 2, 2016, the Company’s membership interests were owned 99% by ETP Retail Holdings, LLC (“Retail Holdings”), an indirect wholly-owned subsidiary of ETO, and 1% by another indirect wholly-owned subsidiary of ETO. On December 2, 2016, the 1% membership interest was contributed to Retail Holdings; therefore, the Company is now a direct wholly-owned subsidiary of Retail Holdings.

Retail Holdings was formed in May 2014. In June 2014, the equity interests in multiple entities were contributed to Retail Holdings, including (a) the 99% membership interest in the Company and (b) 100% of the membership interests in Sunoco, LLC (“Sunoco LLC”). Sunoco LLC was formed by Sunoco, Inc. (“Sunoco”) in June 2014, at which time Sunoco contributed certain retail assets (the “Contributed Assets”) of its subsidiaries to Sunoco LLC. Pursuant to the contribution agreement, Sunoco contributed substantially all of its wholesale motor fuel distribution business which included:


•	dealer, distributor and fuel supply agreements,


•	fuel supply agreements to distribute motor fuel to Sunoco convenience stores and other retail fuel outlets,


•	real property owned in fee,


•	leases and subleases under which it was a tenant, and


•	leases and subleases under which it was a landlord.

All of the Contributed Assets were recorded at book value as this transaction was considered to be a reorganization of entities under common control. As discussed above, Sunoco contributed its interest in Sunoco LLC to Retail Holdings in June 2014. Sunoco was acquired by ETP in October 2012.

In April 2015, Sunoco LP acquired a 31.58% membership interest and 50.1% voting interest in Sunoco LLC from Retail Holdings (the “Sunoco LLC Transaction”) in exchange for $775 million in cash and 795,482 Sunoco LP common units.

Sunoco Retail LLC (“Sunoco Retail”) was formed in December 2015 as an indirect wholly-owned subsidiary of ETO. On March 31, 2016, 100% of the equity interests in Sunoco Retail were contributed to Retail Holdings. Immediately prior to this contribution, Sunoco Retail’s assets included (i) the retail assets and the ethanol plant located in Fulton, NY formerly owned by Sunoco, Inc. (R&M), (ii) the retail assets formerly owned by Atlantic Refining & Marketing Corp; and (iii) 100% of the membership interests in Sunmarks LLC.

On March 31, 2016 (effective January 1, 2016), Retail Holdings contributed to Sunoco LP the remaining 68.42% membership interest and 49.9% voting interest in Sunoco LLC and 100% of the membership interest in Sunoco Retail for $2.2 billion in cash (including working capital) and the issuance to Retail Holdings of 5,710,922 Sunoco LP common units (the “Sunoco Retail Transaction”). Concurrently with the execution of the transaction, Retail Holdings distributed the $2.2 billion in cash to Sunoco, Inc. (R&M) and Atlantic Refining & Marketing Corp in the amount of $2 billion and $0.2 billion, respectively (the “R&M and Atlantic Distribution”).

In connection with the Sunoco LLC Transaction and the Sunoco Retail Transaction, Retail Holdings entered into guarantees of collection on an aggregate $1.6 billion of senior notes issued by Sunoco LP (the “Guarantees”). On December 2, 2016, Retail Holdings contributed to the Company 6,506,404 Sunoco LP common units (consisting of 795,482 Sunoco LP common units

F - 7

Table of Contents

received in the Sunoco LLC Transaction and 5,710,922 Sunoco LP common units received in the Sunoco Retail Transaction) and assigned to the Company the Guarantees.

On January 23, 2018, Sunoco LP redeemed the guaranteed senior notes and issued an aggregate $2.2 billion of senior notes for which the Company has guaranteed collection of principal amounts. See Note 4 for additional details.


2.	Summary of Significant Accounting Policies:

Basis of Presentation

The financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

For purposes of these financial statements, the aggregate total of 10,489,944 Sunoco LP common units are presented as the investment in unconsolidated affiliate held by the Company.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Cash

The Company considers cash and cash equivalents to include investments with original maturities of three months or less.

Investment in Unconsolidated Affiliate

The Company owns an interest in Sunoco LP which is accounted for by the equity method for which the Company exercises significant influence over, but does not control, the investee’s operating and financial policies.

Income Taxes

As a limited liability company, the Company is treated as a disregarded entity for federal income tax purposes; therefore, the Company’s financial statements do not reflect income taxes.

Fair Value of Financial Instruments

The carrying amounts recorded for advances to affiliated companies and accrued and other current liabilities in the financial statements approximate fair value because of the short-term maturity of the instruments.


3.	Investment in Unconsolidated Affiliate:

Sunoco LP

At December 31, 2018, the Company’s investment in Sunoco LP consisted of 10,489,944 Sunoco LP common units that were issued to the Company as part of the consideration for various transactions. The Company’s investment represented approximately 13% of the total outstanding Sunoco LP common units at December 31, 2018. The Company’s investment in Sunoco LP is accounted for in our financial statements using the equity method, because the Company is presumed to have significant influence over Sunoco LP due to the affiliate relationship resulting from both entities being under the common control of Energy Transfer Operating, L.P.

The loss from the unconsolidated affiliate of $37 million on the Company’s statement of operations for the year ended December 31, 2018 includes the impact of non-cash impairments and loss on extinguishment of debt recorded by Sunoco LP, which impacted the Company’s loss from unconsolidated affiliates by $4 million during the period.

The income from the unconsolidated affiliate of $4 million on the Company’s statement of operations for the year ended December 31, 2017 includes the impact of non-cash impairments recorded by Sunoco LP, which reduced the Company’s income from unconsolidated affiliates by $42.5 million during the period.

F - 8

Table of Contents

The loss from the unconsolidated affiliate of $53 million on the Company’s statement of operations for the year ended December 31, 2016 includes the impact of non-cash impairments recorded by Sunoco LP, which impacted the Company’s loss from unconsolidated affiliates by $67 million during the period.


4.	Commitments and Contingencies:

ETC M-A Acquisition LLC Guarantee of Sunoco LP Notes

On January 23, 2018, Sunoco LP redeemed its previously guaranteed senior notes and issued the following senior notes, for which the Company has guaranteed collection with respect to the payment of principal amounts:


•	$1 billion of 4.875% senior notes due 2023;


•	$800 million of 5.50% senior notes due 2026; and


•	$400 million of 5.875% senior notes due 2028.

Under the guarantee of collection, the Company would have the obligation to pay the principal of each series of notes once all remedies, including in the context of bankruptcy proceedings, have first been fully exhausted against Sunoco LP with respect to such payment obligation, and holders of the notes are still owed amounts in respect of the principal of such notes. The Company will not otherwise be subject to the covenants of the indenture governing the notes.

In connection with the issuance of the Notes, Sunoco LP entered into a registration rights agreement with the initial purchasers pursuant to which it agreed to complete an offer to exchange the Notes for an issue of registered notes with terms substantively identical to each series of Notes and evidencing the same indebtedness as the Notes on or before January 23, 2019. The exchange offer was completed on December 3, 2018.


5.	Quarterly Financial Data (unaudited):

The following table provides certain quarterly financial information for the periods presented:



	2018										2017
	4th QTR			3rd QTR		2nd QTR		1st QTR			4th QTR		3rd QTR		2nd QTR			1st QTR
(Loss) income from unconsolidated affiliate	$	(11	)	$	12	$	7	$	(45	)	$	22	$	11	$	(27	)	$	(2	)
Net (loss) income	(11		)	12		7		(45		)	22		11		(27		)	(2		)

F - 9

Document And Entity Information
$ in Millions

12 Months Ended

Dec. 31, 2018

USD ($)

Document Information [Line Items]

Entity Registrant Name

ETC M-A Acquisition LLC

Entity Central Index Key

0001752773

Current Fiscal Year End Date

--12-31

Entity Filer Category

Non-accelerated Filer

Document Period End Date

Dec. 31, 2018

Document Type

10-K

Document Fiscal Year Focus

2018

Document Fiscal Period Focus

Amendment Flag

false

Entity Emerging Growth Company

false

Entity Small Business

false

Entity Common Stock, Shares Outstanding | shares

Entity Shell Company

false

Entity Well-known Seasoned Issuer

Entity Voluntary Filers

Entity Current Reporting Status

Yes

Entity Public Float | $

$ 0

Balance Sheets - USD ($)
$ in Millions

Dec. 31, 2018

Dec. 31, 2017

Current assets:

Advances to affiliated companies

$ 87

$ 52

Total current assets

Investment in unconsolidated affiliate

210

282

Total assets

297

334

Current liabilities:

Accrued and other current liabilities

Total current liabilities

Commitments and contingencies

Equity:

Member’s equity

294

331

Total equity

294

331

Total liabilities and equity

$ 297

$ 334

Statements of Operations - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Income Statement [Abstract]

(Loss) income from unconsolidated affiliate

$ (11)

$ 12

$ 7

$ (45)

$ 22

$ 11

$ (27)

$ (2)

$ (37)

$ 4

$ (53)

Net (loss) income

$ (11)

$ 12

$ 7

$ (45)

$ 22

$ 11

$ (27)

$ (2)

$ (37)

$ 4

$ (53)

Statement of Equity - USD ($)
$ in Millions

Total

ETP [Member]

R&M Atlantic [Member]

Partners' Capital

$ 360

Net Income (Loss) Attributable to Parent

(53)

Partners' Capital Account, Acquisitions

2,297

Partners' Capital Account, Distributions

$ 77

$ 2,200

Partners' Capital

327

Net Income (Loss) Attributable to Parent

Partners' Capital

331

Member’s equity

331

Net Income (Loss) Attributable to Parent

(37)

Partners' Capital

294

Member’s equity

$ 294

Statements of Cash Flows - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Cash flows from operating activities:

Net Income (Loss) Attributable to Parent

$ (11)

$ 22

$ (37)

$ 4

$ (53)

Reconciliation of net income to net cash provided by operating activities:

Loss (income) from unconsolidated affiliate

(22)

(4)

Distributions from unconsolidated affiliate

Net cash provided by operating activities

Cash flows from investing activities:

Proceeds from Sunoco Retail Transaction

2,200

Net cash provided by investing activities

2,200

Cash flows from financing activities:

Advances to Sunoco, Inc.

(35)

(30)

R&M and Atlantic Distribution

(2,200)

Net cash used in financing activities

(35)

(2,230)

Change in cash and cash equivalents

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

$ 0

Non-cash Distribution

$ 0

$ (77)

Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

Basis of Presentation

The financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

For purposes of these financial statements, the aggregate total of 10,489,944 Sunoco LP common units are presented as the investment in unconsolidated affiliate held by the Company.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash

The Company considers cash and cash equivalents to include investments with original maturities of three months or less.

Equity Method Investments [Policy Text Block]

Investment in Unconsolidated Affiliate

Income Tax, Policy [Policy Text Block]

Income Taxes

As a limited liability company, the Company is treated as a disregarded entity for federal income tax purposes; therefore, the Company’s financial statements do not reflect income taxes.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

Operations and Organization (Details) - USD ($)
$ in Millions

1 Months Ended

3 Months Ended

12 Months Ended

Dec. 02, 2016

Jan. 31, 2018

Apr. 30, 2015

Dec. 31, 2018

Mar. 31, 2016

Jun. 30, 2014

Dec. 31, 2016

Description of the Business

Distribution Made to Limited Partner, Cash Distributions Paid

$ 2,200

Guarantor Obligations, Maximum Exposure, Undiscounted

$ 1,600

Early Repayment of Senior Debt

$ 2,200

ETP Retail Holdings [Member]

Description of the Business

Limited partnership interest

99.00%

Wholly-Owned Subsidiary [Member]

Description of the Business

Limited partnership interest

1.00%

Sunoco, LLC [Member]

Description of the Business

Limited partnership interest

100.00%

Sunoco, Inc. (R&M) [Member]

Description of the Business

Distribution Made to Limited Partner, Cash Distributions Paid

2,000

Atlantic Refining and Marketing Corp [Member]

Description of the Business

Distribution Made to Limited Partner, Cash Distributions Paid

$ 200

Sunmarks [Member]

Description of the Business

Limited partnership interest

100.00%

ETE & ETP Merger [Member] | Energy Transfer Partners Limited Partnership [Member]

Description of the Business

Partners' Capital Account, Units, Contributed

2,874,275

Partners' Capital Account, Units, Converted

42,812,389

Limited partnership interest

28.70%

ETE & ETP Merger [Member] | Sunoco LP [Member]

Description of the Business

Partners' Capital Account, Units, Contributed

2,263,158

Retail Transaction [Member] | Sunoco, LLC [Member]

Description of the Business

Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest

68.42%

Retail Transaction [Member] | Sunoco Retail [Member]

Description of the Business

Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest

100.00%

Retail Transaction [Member] | Sunoco LP [Member]

Description of the Business

Sale of Stock, Number of Shares Issued in Transaction

5,710,922

Business Acquisition, Equity Interest Issued or Issuable, Number of Shares

5,710,922

Sunoco LLC Transaction [Member]

Description of the Business

Business Acquisition, Percentage of Voting Interests Acquired

50.10%

49.90%

Payments to Acquire Businesses, Gross

$ 775

Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage

31.58%

Sunoco LLC Transaction [Member] | Sunoco LP [Member]

Description of the Business

Sale of Stock, Number of Shares Issued in Transaction

795,482

Business Acquisition, Equity Interest Issued or Issuable, Number of Shares

795,482

ETC M-A Contribution [Member] | Sunoco LP [Member]

Description of the Business

Sale of Stock, Number of Shares Issued in Transaction

6,506,404

Common Units [Member] | ETE & ETP Merger [Member] | Energy Transfer Partners Limited Partnership [Member]

Description of the Business

Limited partnership interest

34.40%

Summary of Significant Accounting Policies (Details)

Dec. 31, 2018

Sunoco LP [Member]

Investments in and Advances to Affiliates, Balance, Shares

10,489,944

Investment in Unconsolidated Affiliate Investment in Unconsolidated Affiliate - Narrative (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Schedule of Equity Method Investments [Line Items]

Income (Loss) from Equity Method Investments

$ 11.0

$ (12.0)

$ (7.0)

$ 45.0

$ (22.0)

$ (11.0)

$ 27.0

$ 2.0

$ 37.0

$ (4.0)

$ 53.0

Equity Method Investment, Other than Temporary Impairment

$ 4.0

$ 42.5

$ 67.0

Equity Method Investment, Ownership Percentage

13.00%

Commitment and Contingenices (Narrative) (Details)
$ in Millions

Dec. 31, 2018

USD ($)

4.875% Senior Notes due 2023 [Member]

Loss Contingencies

Senior Notes

$ 1,000

Debt Instrument, Interest Rate, Stated Percentage

4.875%

5.5% Senior Notes due 2026 [Member]

Loss Contingencies

Senior Notes

$ 800

Debt Instrument, Interest Rate, Stated Percentage

5.50%

5.875% Senior Notes due 2028 [Member]

Loss Contingencies

Senior Notes

$ 400

Debt Instrument, Interest Rate, Stated Percentage

5.875%

Quarterly Financial Data (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Quarterly Financial Data [Abstract]

Income (Loss) from Equity Method Investments

$ (11)

$ 12

$ 7

$ (45)

$ 22

$ 11

$ (27)

$ (2)

$ (37)

$ 4

$ (53)

Net Income (Loss) Attributable to Parent

$ (11)

$ 12

$ 7

$ (45)

$ 22

$ 11

$ (27)

$ (2)

$ (37)

$ 4

$ (53)

Label

Element

Value

Cash and Cash Equivalents, at Carrying Value

us-gaap_CashAndCashEquivalentsAtCarryingValue

$ 0


1.	I have reviewed this annual report on Form 10-K of ETC M-A Acquisition LLC;


2.	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 circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: February 22, 2019	/s/ Kelcy L. Warren
	Kelcy L. Warren
	Chief Executive Officer


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Document And Entity Information $ in Millions	12 Months Ended
Document And Entity Information $ in Millions	Dec. 31, 2018 USD ($) shares
Document Information [Line Items]
Entity Registrant Name	ETC M-A Acquisition LLC
Entity Central Index Key	0001752773
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Dec. 31, 2018
Document Type	10-K
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding \| shares	0
Entity Shell Company	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float \| $	$ 0