Sunoco 2014 Annual Report Download - page 55

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expense and impairment charges. See the Analysis of Consolidated Operating Results, above, for more information on changes
in our consolidated earnings.
Net cash provided by operating activities in 2014 of $566 million was primarily the result of net income of $300 million,
adjusted for non-cash charges for depreciation and amortization totaling $296 million and a non-cash charge of $258 million to
write down crude oil, refined products and NGL inventories as a result of declining commodity prices. These sources of cash
were partially offset by a $258 million increase in working capital largely attributable to a decrease in net payables and an
increase in inventory volumes.
Net cash provided by operating activities in 2013 of $749 million was primarily the result of net income of $474 million,
adjusted for non-cash charges for depreciation and amortization totaling $265 million and a net decrease in working capital of
$20 million.
Net cash provided by operating activities in the periods in 2012 of $691 million was primarily the result of net income of
$531 million, adjusted for non-cash charges for depreciation and amortization totaling $139 million and a net decrease in
working capital of $62 million. The net change in working capital was primarily related to the timing of cash receipts and
payments related to accounts receivable and payable, respectively, and increased levels of operating inventories.
Investing Activities
Cash flows used in investing activities relate primarily to our capital expenditures, including maintenance and expansion
capital expenditures, acquisitions and investments in joint venture interests. See "Capital Requirements" below for additional
details on our investing activities.
In addition to $2.4 billion, $897 million, and $374 million of cash used for maintenance and expansion capital
expenditures in 2014, 2013 and 2012, respectively, the primary sources of net cash used in investing activities included $433
million related to acquisitions and investments in joint venture interests in 2014 and the $60 million acquisition of the Marcus
Hook Industrial Complex in 2013.
Financing Activities
Cash flows from financing activities relate primarily to the payment of distributions to partners; proceeds from senior notes
offerings, as well as overnight equity and ATM offerings; borrowings and repayments under our credit facilities; the cash
impacts of debt and equity activities; and changes to advances to affiliated companies, which prior to our transition away from
Sunoco's cash management program in 2014, represented our cash held by Sunoco in connection with our participation in that
program.
Net cash provided by financing activities of $2.4 billion in 2014 was primarily related to $1.98 billion of net proceeds
related to senior notes offerings; $839 million of net proceeds from the overnight public offering and our ATM program; and the
$239 million decrease in advances to affiliates, which represented our cash held by Sunoco in accordance with our participation
in Sunoco's cash management program. These sources of cash were partially offset by $468 million of distributions paid to
limited partners and the general partner; the $175 million repayment of the 8.75 percent Senior Notes which matured in February
2014; and $50 million of net repayments under our $1.50 billion Credit Facility.
Net cash provided by financing activities of $244 million in 2013 was primarily related to $691 million of net proceeds
from the January 2013 offering of senior notes and $96 million of net borrowings under our revolving credit facilities. These
sources of cash were partially offset by $353 million of distributions to partners and a $183 million increase in advances to
affiliated companies.
Net cash used in financing activities of $330 million for the periods in 2012 was primarily attributable to $252 million in
distributions paid to the limited partners and the general partner and the $250 million repayment of the 7.25 percent Senior Notes
in February 2012. These uses were partially offset by net borrowings under the revolving credit facilities of $139 million.
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:
• 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,
• 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, and