Sunoco 2013 Annual Report Download - page 42

40
Results of Operations
Successor Predecessor
Three
Months
Ended
December 31,
2013
Nine Months
Ended
September 30,
2013
Period from
Acquisition
(October 5,
2012) to
December 31,
2012 (1)
Period
from
January 1,
2012 to
October 4,
2012 (1)
Three
Months
Ended
December 31,
2011
Nine Months
Ended
September 30,
2011
(in millions, except per unit data) (in millions, except per unit data)
Statements of Income
Sales and other operating revenue:
Unaffiliated customers $ 3,907 $ 11,166 $ 2,989 $ 9,460 $ 3,325 $ 7,148
Affiliates 381 1,185 200 461 51 381
Gain on divestment and related matters — — — 11 — —
Total revenues 4,288 12,351 3,189 9,932 3,376 7,529
Cost of products sold 4,040 11,534 2,885 9,214 3,144 7,009
Operating expenses 30 87 48 97 34 77
Selling, general and administrative expenses 23 100 34 86 23 67
Depreciation and amortization expense 69 196 63 76 25 61
Impairment charge and related matters (2) — — — (1) 42 —
Total costs and expenses 4,162 11,917 3,030 9,472 3,268 7,214
Operating income (3) 126 434 159 460 108 315
Net interest expense (19) (58) (14) (65) (26) (63)
Other income 5 16 5 18 4 9
Income before provision for income taxes 112 392 150 413 86 261
Provision for income taxes (7) (23) (8) (24) (7) (18)
Net Income 105 369 142 389 79 243
Net Income attributable to noncontrolling
interests (3) (8) (3) (8) (3) (6)
Net Income attributable to Sunoco Logistics
Partners L.P. $ 102 $ 361 $ 139 $ 381 $ 76 $ 237
Net Income attributable to Sunoco Logistics
Partners L.P. per Limited Partner unit:
Basic $ 0.64 $ 2.63 $ 1.11 $ 3.15 $ 0.60 $ 1.96
Diluted $ 0.63 $ 2.62 $ 1.10 $ 3.14 $ 0.60 $ 1.95
(1) The effective date of the acquisition for accounting and reporting purposes was deemed to be October 1, 2012. The activity from
October 1, 2012 through October 4, 2012 was not material in relation to our financial position, results of operations or cash flows.
(2) We recognized a $42 million charge in the fourth quarter 2011 for certain crude oil terminal assets which would have been negatively
impacted in connection with Sunoco's exit from the refining business. The charge included a $31 million non-cash impairment for
asset write-downs at the Fort Mifflin Terminal Complex and $11 million for regulatory obligations. In September 2012, Sunoco
contributed the refining assets of its Philadelphia refinery to Philadelphia Energy Solutions ("PES"), a joint venture between The
Carlyle Group and Sunoco, which enabled the Philadelphia refinery to continue operating. As a result, we reversed $10 million of
regulatory obligations during 2012 which were no longer expected to be incurred.
(3) During the first quarter 2013, we adjusted our presentation of operating income to conform to the presentation utilized by ETP. Other
income, which is comprised primarily of equity income from our unconsolidated joint-venture interests, is presented separately and is
no longer included as a component of operating income. These changes did not impact our net income. Prior period amounts have
been recast to conform to current presentation.
Non-GAAP Financial Measures
To supplement our financial information presented in accordance with United States generally accepted accounting
principles ("GAAP"), management uses additional measures that are known as "non-GAAP financial measures" in its
evaluation of past performance and prospects for the future. The primary measures used by management are earnings before
interest, taxes, depreciation and amortization expenses and other non-cash items ("Adjusted EBITDA") and distributable cash
flow ("DCF"). Adjusted EBITDA and DCF do not represent and should not be considered alternatives to net income or cash
flows from operating activities as determined under GAAP and may not be comparable to other similarly titled measures of
other businesses.
Our management believes Adjusted EBITDA and DCF information enhances an investor's understanding of a business's
ability to generate cash for payment of distributions and other purposes. Adjusted EBITDA calculations are also defined and