Sunoco 2012 Annual Report Download - page 28

management practices and policies, particularly if deception or other intentional misconduct is involved. Any
violations of our risk management practices or policies by our employees or agents could result in significant
financial losses.
We do not own all of the land on which our pipelines and facilities are located, and we lease certain facilities
and equipment, which subjects us to the possibility of increased costs to retain necessary land use which could
disrupt our operations.
We do not own all of the land on which certain of our pipelines and facilities are located, and we are,
therefore, subject to the risk of increased costs to maintain necessary land use. We obtain the rights to construct
and operate certain of our pipelines and related facilities on land owned by third parties and governmental
agencies for a specific period of time. Our loss of these rights, through our inability to renew rights-of-way
contracts on acceptable terms, or increased costs to renew such rights could have a material adverse effect on our
results of operations, financial condition and cash flows. In addition, we are subject to the possibility of increased
costs under our rental agreements with landowners, primarily through rental increases and renewals of expired
agreements.
Whether we have the power of eminent domain for our pipelines varies from state to state, depending upon
the type of pipeline (e.g., crude oil, or refined products) and the laws of the particular state. In either case, we
must compensate landowners for the use of their property and, in eminent domain actions, such compensation
may be determined by a court. Our inability to exercise the power of eminent domain could negatively affect our
business if we were to lose the right to use or occupy the property on which our pipelines are located.
Additionally, certain facilities and equipment (or parts thereof) used by us are leased from third parties for
specific periods. Our inability to renew equipment leases or otherwise maintain the right to utilize such facilities
and equipment on acceptable terms, or the increased costs to maintain such rights, could have a material adverse
effect on our results of operations and cash flows.
A portion of our general and administrative services have been outsourced to third-party service providers.
Fraudulent activity or misuse of proprietary data involving our outsourcing partners could expose us to
additional liability.
We utilize both Sunoco and third parties in the processing of our information and data. Breaches of our
security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary
information or sensitive or confidential data about us or our customers, including the potential loss or disclosure
of such information or data as a result of fraud or other forms of deception, could expose us to a risk of loss or
misuse of this information, result in litigation and potential liability for us, lead to reputational damage, increase
our compliance costs, or otherwise harm our business. The Partnership continues to work with ETP in
determining how the acquisition will impact these general and administrative functions going forward.
Security breaches and other disruptions could compromise our information and expose us to liability, which
would cause our business and reputation to suffer.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property,
our proprietary business information and that of our customers, suppliers and business partners, and personally
identifiable information of our employees, in our data centers and on our networks. The secure processing,
maintenance and transmission of this information is critical to our operations and business strategy. Despite our
security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or
breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our
networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access,
disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect
the privacy of personal information, regulatory penalties, disruption of our operations, damage to our reputation,
and cause a loss of confidence in our products and services, which could adversely affect our business.
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