Sunoco 2014 Annual Report Download - page 49

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47
Net income attributable to Sunoco Logistics Partners L.P. was $102 and $139 million for the fourth quarter 2013 and the
period from October 5, 2012 to December 31, 2012, respectively. The $37 million decrease was driven by decreased operating
performance from the Crude Oil Acquisition and Marketing and Products Pipelines segments, increased depreciation expense
and the absence of $12 million of adjustments on commodity hedges that were recognized in connection with push-down
accounting. These decreases were partially offset by improved operating performance in the Crude Oil Pipelines segment and
decreased selling, general and administrative expenses primarily attributable to a non-cash accrued liability adjustment. Net
interest expense increased due largely to the $700 million Senior Notes offering in January 2013 and was partially offset by
increased capitalized interest associated with our expansion capital program.
Net income attributable to SXL was $361 and $381 million for the nine months ended September 30, 2013 and the period
from January 1, 2012 to October 4, 2012, respectively. Results for 2012 included $25 million of non-recurring gains recognized
in connection with the sale of the Big Sandy terminal and pipelines assets, the reversal of regulatory obligations that were
recorded in 2011 and an asset sale by one of our joint venture interests. Excluding these items, net income attributable to SXL
increased $5 million compared to the prior period. Improved operating performance from the Crude Oil Pipelines and Crude Oil
Acquisition and Marketing segments was largely offset by higher depreciation and amortization expense attributable to the
acquisition of our general partner by ETP; higher selling, general and administrative expenses and decreased operating
performance from the Products Pipelines segment. The decrease in net interest expense was primarily related to increased
capitalized interest associated with our expansion capital program. Additional interest expense related to the $700 million Senior
Notes offering in January 2013 was largely offset by non-cash amortization related to fair value adjustments on our long-term
debt.
Analysis of Operating Segments
We manage our operations through four operating segments: Crude Oil Pipelines, Crude Oil Acquisition and Marketing,
Terminal Facilities, and Products Pipelines.
Crude Oil Pipelines
Our Crude Oil Pipelines segment consists of crude oil trunk and gathering pipelines in the southwest and midwest United
States, including those owned by our joint venture interests. Revenues are generated from tariffs and the associated fees paid by
shippers utilizing our transportation services to deliver crude oil and other feedstocks to refineries within those regions. Rates for
shipments on these pipelines are regulated by the Federal Energy Commission ("FERC") and the Railroad Commission of Texas
("Texas R.R.C.").