Sunoco 2013 Annual Report Download - page 146

144
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
On February 5, 2010, our general partner, Sunoco Partners LLC, completed the sale of 6.6 million common units of the
Partnership in a registered public secondary offering.
On October 5, 2012, Sunoco, Inc. (“Sunoco”) was acquired by Energy Transfer Partners, L.P. (“ETP”). Prior to this
transaction, Sunoco (through its wholly-owned subsidiary Sunoco Partners LLC) served as the Partnership’s general partner
and owned a two percent general partner interest, all of the Partnership’s incentive distribution rights and a 32.4 percent limited
partner interest in the Partnership. In connection with the acquisition, Sunoco’s interests in the general partner and limited
partnership were contributed to ETP, resulting in a change of control of the Partnership’s general partner. As a result, the
Partnership became a consolidated subsidiary of ETP on the acquisition date.
In July 2013, the limited liability company agreement of Sunoco Partners LLC was amended to reflect the addition of
ETE Common Holdings, LLC ("ETE Holdings") as an owner of a 0.1 percent membership interest in our general partner. ETE
Holdings is a wholly-owned subsidiary of Energy Transfer Equity, L.P. and an affiliate of ETP. In addition, the 33.5 million
common units in us owned by Sunoco Partners LLC were assigned to ETP.
As of February 17, 2014, ETP, the controlling owner of our general partner, owns a 33.6 percent partnership interest in us,
which includes a two percent general partner interest (through its controlled subsidiary Sunoco Partners LLC) and 33.5 million
common units, representing a 32.2 percent limited partner interest in us. The general partner’s ability to manage and operate us
effectively gives the general partner the ability to control us.
Distribution and Payments to the General Partner and Its Affiliates
The following table summarizes the distribution and payments made and to be made us to the general partner and its
affiliates in connection with the ongoing operation and in the case of liquidation. These distributions and payments were
determined by and among affiliated entities and, consequently, are not the result of arm’s-length negotiations.
Operational Stage
Payments to the general partner and
its affiliates We paid the general partner an administrative fee, $15 million for the year ended December 31, 2013, for the provision of various general and administrative services
for our benefit. In addition, the general partner is entitled to reimbursement for all
expenses it incurs on our behalf, including other general and administrative expenses.
These reimbursable expenses include the salaries and the cost of employee benefits of
employees of the general partner who provide services to us. The general partner has
sole discretion in determining the amount of these expenses.
Removal or withdrawal of the general
partner If our general partner withdraws or is removed, its general partner interest and its incentive distribution rights will either be sold to the new general partner for cash or
converted into common units, in each case for an amount equal to the fair market
value of those interests as provided in the Partnership Agreement
Liquidation Stage
Liquidation Upon liquidation, the partners, including our general partner, will be entitled to
receive liquidating distributions according to their particular capital account balances.
Concurrently with and subsequent to the closing of the February 2002 IPO, we entered into several agreements with
Sunoco, Inc. (R&M), and/or one or more of its affiliates. Some of these agreements have expired, been assigned and been
extended or replaced. These agreements include the Omnibus Agreement, the Pipelines and Terminals Storage and Throughput
Agreement, the Interrefinery Lease Agreement, an intellectual property license agreement, certain crude oil purchase and sale
agreements, a treasury services agreement, various asset acquisition agreements and other agreements. The material agreements
that are still outstanding are discussed in more detail under “Management’s Discussion and Analysis of Financial Condition and
Results of Operations-Agreements with Related Parties.”