Sunoco 2014 Annual Report Download - page 48

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The following table reconciles the differences between net income, as determined under GAAP, and Adjusted EBITDA
and DCF:
Successor Predecessor
Year Ended
December 31,
2014
Year Ended
December 31,
2013
Three Months
Ended
December 31,
2013
Nine Months
Ended
September 30,
2013
Period from
Acquisition,
October 5, 2012 to
December 31,
2012 (1)
Period from
January 1, 2012 to
October 4, 2012 (1)
(in millions) (in millions)
Net Income $ 300 $ 474 $ 105 $ 369 $ 142 $ 389
Interest expense, net 67 77 19 58 14 65
Depreciation and amortization
expense 296 265 69 196 63 76
Impairment charge and other related
matters 258 — — — — 9
Provision for income taxes 25 30 7 23 8 24
Non-cash compensation expense 16 14 4 10 2 6
Unrealized losses/(gains) on
commodity risk management
activities (17) (1) 11 (12) (3) 6
Amortization of excess equity
method investment 2 2 1 1 — —
Proportionate share of
unconsolidated affiliates’ interest,
depreciation and provision for
income taxes 24 20 4 16 5 16
Non-cash accrued liability
adjustment — (10) (10) — — —
Adjustments to commodity hedges
resulting from "push-down"
accounting — — — — (12) —
Adjusted EBITDA 971 871 210 661 219 591
Interest expense, net (67) (77) (19) (58) (14) (65)
Provision for current income taxes (2) (29) (24) (6) (18) (10) (24)
Amortization of fair value
adjustments on long-term debt (14) (23) (6) (17) (6) —
Distributions versus Adjusted
EBITDA of unconsolidated affiliates (35) (27) (6) (21) (3) (25)
Maintenance capital expenditures (76) (53) (16) (37) (21) (29)
Distributable Cash Flow attributable
to noncontrolling interests (12) (16) (3) (13) (2) (9)
Contributions attributable to
acquisition from affiliate 12 9 3 6 — —
Distributable Cash Flow (2) $ 750 $ 660 $ 157 $ 503 $ 163 $ 439
(1) The effective date of the acquisition for accounting and reporting purposes was deemed to be October 1, 2012. The activity from
October 1, 2012 through October 4, 2012 was not material in relation to our financial position, results of operations or cash flows.
(2) During the third quarter 2014, we changed our definition of Distributable Cash Flow to conform to the presentation utilized by ETP.
This change did not have a material impact on our Distributable Cash Flows. Prior period amounts have been recast to conform to
current presentation.
Analysis of Consolidated Operating Results
Net income attributable to Sunoco Logistics Partners L.P. ("net income attributable to SXL") was $291 and $463 million
for the years ended December 31, 2014 and 2013, respectively. Results in 2014 included a $258 million write down of crude oil,
refined products and NGL inventories which resulted from the decline in commodity prices. Excluding this item, net income
attributable to SXL increased $86 million compared to the prior period. This increase was driven by improved operating
performance in the Crude Oil Pipelines, Terminal Facilities, and Products Pipelines segments. Lower net interest expense also
contributed to the increase, where higher capitalized interest in connection with our expansion capital program was largely offset
by additional interest expenses related to $2.0 billion of senior notes offerings. These improvements were partially offset by
lower operating performance in the Crude Oil Acquisition and Marketing segment, higher depreciation and amortization
expense, and increased selling, general and administrative expenses.