Sunoco 2012 Annual Report Download - page 58

proceeds were primarily used to pay down outstanding borrowings under the revolving credit facilities, which
were used to finance the acquisitions of the controlling financial interest in Inland and the Texon crude oil
acquisition and marketing business, and for general partnership purposes. This source of cash was partially offset
by $210 million of quarterly distributions to the limited and general partners; the repayment of the $100 million
promissory note to Sunoco; an increase in advances to affiliates of $63 million; and $31 million of net
repayments under our revolving credit facilities.
For the year ended December 31, 2010, the $85 million of cash provided by financing activities was
primarily attributable to net proceeds of $494 million from the issuance of $500 million of Senior Notes, net
proceeds of $143 million related to our August 2010 equity offering and $100 million of proceeds from the July
2010 promissory note with Sunoco. These financing sources were used primarily to fund our 2010 acquisitions
and growth projects and repay the $201 million promissory note issued in connection with the repurchase and
exchange of the general partner’s IDRs. Cash provided by these sources were offset by $189 million of quarterly
distributions to the limited and general partners and $238 million of net repayments under our prior credit
facility.
Under a treasury services agreement with Sunoco, we participate in Sunoco’s centralized cash management
program. Advances to affiliates in our consolidated balance sheets at December 31, 2012 and 2011 represent
amounts due from Sunoco under this agreement.
Capital Requirements
Our operations are capital intensive, requiring significant investment to maintain, upgrade and enhance
existing assets and to meet environmental and operational regulations. The capital requirements have consisted,
and are expected to continue to consist, primarily of:
• Maintenance capital expenditures that extend the usefulness of existing assets, such as those required to
maintain equipment reliability, tankage and pipeline integrity and safety, and to address environmental
regulations,
• Expansion capital expenditures to acquire and integrate complementary assets to improve operational
efficiencies or reduce costs and to expand existing and construct new facilities, such as projects that
increase storage or throughput volume, and
• Major acquisitions to acquire and integrate complementary assets to grow the business, to improve
operational efficiencies or reduce costs.
The following table summarizes maintenance and expansion capital expenditures, including amounts paid
for acquisitions, for the periods from October 5, 2012 to December 31, 2012, from January 1, 2012 to October 4,
2012, and for the years ended December 31, 2011 and 2010:
Successor Predecessor
Period from Acquisition
(October 5, 2012) to
December 31, 2012
Period from
January 1, 2012 to
October 4, 2012
Year Ended December 31,
2011 2010
(in millions) (in millions)
Maintenance ........................... $ 21 $ 29 $ 42 $ 37
Expansion ............................. 118 206 171 137
Major Acquisitions ...................... — — 396 252
Total ............................... $139 $235 $609 $426
Maintenance capital expenditures primarily consist of recurring expenditures at each of the business
segments such as pipeline integrity costs, pipeline relocations, repair and upgrade of field instrumentation,
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