Sunoco 2013 Annual Report Download - page 73

71
Net Income Attributable to Sunoco Logistics Partners L.P. Per Limited Partner Unit
The Partnership uses the two-class method to determine basic and diluted earnings per unit. The two-class method is an
earnings allocation formula that determines the earnings for each class of equity ownership and participating security according
to distributions declared and participation rights in undistributed earnings. The Partnership calculates basic and diluted net
income attributable to Sunoco Logistics Partners L.P. ("net income attributable to SXL") per limited partner unit by dividing net
income attributable to SXL, after deducting the amounts allocated to the general partner’s interest and incentive distribution
rights ("IDRs"), by the weighted average number of limited partner units and Class A units outstanding during the period. IDRs
in a master limited partnership are treated as participating securities for the purpose of computing net income attributable to
limited partner units. The general partner holds all of the IDRs. In addition, when earnings differ from cash distributions,
undistributed or over distributed earnings are to be allocated to the general partner and limited partners based on the contractual
terms of the partnership agreement.
3. Acquisitions
A key component of the Partnership's primary business strategy is to pursue strategic and accretive acquisitions that
complement its existing asset base. The Partnership completed the following acquisitions during the years ended December 31,
2013 and 2011:
2013 Acquisition
• In the second quarter 2013, the Partnership acquired Sunoco's Marcus Hook facility and related assets (the
"Marcus Hook Facility") for $60 million in cash, including acquisition costs. The acquisition included
terminalling and storage assets located in Pennsylvania and Delaware and commercial agreements, including a
reimbursement agreement under which Sunoco will reimburse the Partnership $40 million for certain operating
expenses of the Marcus Hook Facility through March 31, 2017. The reimbursement proceeds will be reflected as
contributions to equity. The Partnership will be indemnified against environmental liabilities resulting from
events which occurred at the Marcus Hook Facility prior to the closing of the transaction. Since the transaction
was with an entity under common control, the assets acquired and liabilities assumed were recorded by the
Partnership at Sunoco's net carrying value plus acquisition costs. The difference between Sunoco's net carrying
value and the consideration transferred was recorded by the Partnership as an increase to equity. The acquisition
was included within the Terminal Facilities segment.
The following table summarizes the effects of the 2013 acquisition on the Partnership's consolidated balance sheet:
Marcus Hook Facility
(in millions)
Increase in:
Current assets $ 6
Properties, plants and equipment, net 66
Other assets 8
Current liabilities (1)
Other deferred credits and liabilities (15)
Sunoco Logistics Partners L.P. equity (4)
Cash paid for acquisition $ 60
2011 Acquisitions
• In August 2011, the Partnership acquired a refined products terminal, located in East Boston, Massachusetts, from
affiliates of ConocoPhillips for $56 million plus the fair value of inventory. The terminal includes a 10-bay truck
rack and tanks providing approximately 1 million barrels of storage capacity and is the sole service provider to
Logan International Airport under a long-term contract to supply jet fuel. The acquisition was included within the
Terminal Facilities segment.
• In August 2011, the Partnership acquired a crude oil purchasing and marketing business from Texon L.P.
("Texon") for $205 million plus the fair value of its crude oil inventory. The purchase consisted of a crude oil
acquisition and marketing business and gathering assets for approximately 75,000 barrels per day at the wellhead
in 16 states, primarily in the western United States. The acquisition was included within the Crude Oil Acquisition
and Marketing segment.