Sunoco 2012 Annual Report Download - page 46

continue to prepare for additional capacity on this phase. In addition, we are actively developing a second phase
for this project which would take additional West Texas crude oil to the Gulf Coast.
West Texas Crude
In 2011, we announced plans to expand takeaway capacity out of the Permian Basin in West Texas as there
is a market need for incremental crude transportation to various refining centers in Texas, the mid-continent and
the United States Gulf Coast (“West Texas Crude Expansion”). We completed three successful Open Seasons on
this project during 2012 which will add approximately 110,000 barrels per day of capacity and will utilize
existing pipelines. The project is expected to be fully completed by the second quarter of 2013.
Conservative Capital Structure
Our goal is to maintain substantial liquidity and a conservative capital structure. Sunoco Logistics Partners
Operations L.P. (the “Operating Partnership”) and Sunoco Partners Marketing and Terminals L.P., our wholly-
owned subsidiaries, have a five-year $350 million unsecured credit facility (the “$350 million Credit Facility”)
and a $200 million 364 day unsecured credit facility (the “$200 million Credit Facility”), respectively. We will
maintain our conservative capital structure by combining debt and equity issuances to finance our future growth.
Cash Distribution Increases
As a result of our continued growth, our general partner increased our cash distributions to limited partners
in all quarters in the three years ended December 31, 2012. For the quarter ended December 31, 2012, the
distribution increased to $0.5450 per common unit ($2.18 annualized). The distribution for the fourth quarter of
2012 was paid on February 14, 2013.
In January 2010, we repurchased, and our general partner transferred and assigned to us for cancellation, the
incentive distribution rights (“IDRs”) held by the general partner under the Second Amended and Restated
Agreement of Limited Partnership, as amended, as consideration for (i) our issuance to the general partner of
new IDRs issued under the Third Amended and Restated Agreement of Limited Partnership and (ii) our issuance
to the general partner of a promissory note in the amount of $201 million, which was repaid in full during the
first quarter of 2010. The new IDRs provide for target distribution levels and distribution “splits” between the
general partner and the holders of our limited partnership units equal to those applicable to the cancelled IDRs,
except that (i) the general partner’s distribution split for distributions above the current second target distribution
of $0.1917 per limited partnership unit per quarter (or $0.7668 per limited partnership unit on an annualized
basis) and up to the third target distribution increased to 37% from 25% (these percentages include the general
partner’s two percent interest); and (ii) the third target distribution increased from $0.2333 to $0.5275 per limited
partnership unit per quarter (or from $0.9332 to $2.1100 per limited partnership unit on an annualized basis). See
Note 13 to the consolidated financial statements included in Item 8. “Financial Statements and Supplementary
Data” for more information on these changes.
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