Sunoco 2011 Annual Report Download - page 107

2011, total compensation cost related to nonvested awards not yet recognized was $16 million, and the weighted-
average period over which this cost is expected to be recognized in income is 2.2 years. The stock-based
compensation expense and the total compensation cost related to nonvested awards not yet recognized reflect the
Company’s estimates of performance factors pertaining to performance-based common stock unit awards. In
addition, equity-based compensation expense attributable to Sunoco Logistics Partners L.P. and SunCoke Energy
for 2011, 2010 and 2009 amounted to $8, $5 and $5 million, respectively.
In connection with the separation of SunCoke Energy (Note 16), certain stock options and common stock
units issued under LTPEP II and LTPEP III were modified in January 2012. In general, all Sunoco stock options
held by Sunoco employees and directors were converted into Sunoco and SunCoke stock options. The terms of
the Sunoco stock options are unchanged except for the modification of the exercise price to reflect the change in
the price per share of the Sunoco common stock after the spin-off. The SunCoke Energy stock options held by
Sunoco employees and directors are fully vested and exercisable. Sunoco stock options held by SunCoke Energy
employees were converted to SunCoke Energy stock options. The aggregate intrinsic value of the modified stock
options issued on the date of the spin-off is equal to the intrinsic value of the Sunoco stock options which were
converted just prior to the spin-off. Outstanding Sunoco common stock units held by Sunoco employees were
effectively split into two components representing the Sunoco common stock units and SunCoke Energy
common stock units. The Sunoco common stock units remain outstanding under the same terms and conditions
as the original awards. The portion of the award representing SunCoke Energy common stock units was vested at
the original grant target amount and such value was paid out in cash based upon the market value of the SunCoke
Energy stock on the date of the spin-off. All Sunoco common stock units held by SunCoke Energy employees
were converted into SunCoke Energy common stock units which vest over the remaining term of the original
award. All SunCoke Energy common stock issued as a result of option exercises or the vesting of common stock
units will be issued under SunCoke Energy’s incentive stock compensation plan. Sunoco is currently evaluating
the accounting impact of these modifications on its future stock-based compensation expense.
16. Noncontrolling Interests
Logistics Operations
Sunoco is the general partner of the Partnership, which consists of a 2-percent ownership interest and
incentive distribution rights, and currently owns a 32-percent interest in the Partnership’s limited partner units.
On December 2, 2011, the Partnership completed a three-for-one split of its limited partnership units. The unit
split resulted in the issuance of two additional limited partnership units for every one limited partnership unit
owned. All limited partnership unit information included in this report is presented on a post-split basis.
In 2009, the Partnership issued 6.75 million limited partnership units in a public offering, generating $110
million of net proceeds. In February 2010, Sunoco received $201 million in cash from the Partnership in
connection with a modification of the incentive distribution rights (see below). Also in February 2010, Sunoco
sold 6.60 million of its limited partnership units to the public, generating $145 million of net proceeds. In August
2010, the Partnership issued 6.04 million limited partnership units in a public offering, generating $144 million
of net proceeds.
Since the issuance/sale of the limited partnership units subsequent to January 1, 2009 and the modification
of the incentive distribution rights discussed above did not result in a loss of control of the Partnership, they have
been accounted for as equity transactions. As a result, the $110 million of cash proceeds in 2009 from the public
equity offering was reflected as an increase in noncontrolling interests ($88 million) and capital in excess of par
value ($14 million, net of income taxes). The $145 and $144 million, respectively, of cash proceeds from the
February and August 2010 public equity offerings were reflected as increases in noncontrolling interests ($48 and
$114 million, respectively) and capital in excess of par value ($58 and $18 million, respectively, net of income
taxes). The modification of the incentive distribution rights resulted in a $121 million decrease in noncontrolling
interests and a $75 million increase in capital in excess of par value, net of income taxes.
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