Sunoco 2014 Annual Report Download - page 77

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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,
2014 and 2013:
2014 Acquisitions
• In December 2014, the Partnership acquired an additional 28.3 percent ownership interest in the West Texas Gulf
Pipe Line Company from Chevron Pipe Line Company, increasing our controlling financial interest to 88.6
percent. As this transaction represented the acquisition of ownership interest in a consolidated subsidiary, the
$325 million purchase price resulted in the reduction of noncontrolling interest and partners’ equity of $66 and
$259 million, respectively, in accordance with applicable accounting guidance. In January 2015, the Partnership
acquired the remaining noncontrolling interest in West Texas Gulf for $131 million. This resulted in a further
reduction of noncontrolling interest and partners’ equity of $26 and $105 million, respectively, in January 2015.
• In the second quarter 2014, the Partnership acquired a crude oil purchasing and marketing business from EDF
Trading North America, LLC ("EDF"). The purchase consisted of a crude oil acquisition and marketing business
and related assets which handle 20 thousand barrels per day. The acquisition also included a promissory note that
was convertible to an equity interest in a rail facility (see below). The acquisition is included in the Crude Oil
Acquisition and Marketing segment.
• In the second quarter 2014, the Partnership acquired a 55 percent economic and voting interest in Price River
Terminal, LLC ("PRT"), a rail facility in Wellington, Utah. As the Partnership acquired a controlling financial
interest in PRT, the entity is reflected as a consolidated subsidiary of the Partnership from the acquisition date and
is included in the Crude Oil Acquisition and Marketing segment. The terms of the acquisition provide PRT’s
noncontrolling interest holders the option to sell their interests to the Partnership at a price defined in the purchase
agreement. As a result, the noncontrolling interests attributable to PRT are excluded from the Partnership's total
equity and are instead reflected as redeemable interests in the condensed consolidated balance sheet as of
December 31, 2014.
The $65 million purchase price for the EDF and PRT acquisitions (net of cash received) consisted primarily of net
working capital largely attributable to inventory ($24 million), properties, plants and equipment ($14 million), and
intangible assets ($28 million). These preliminary fair value allocations also resulted in an increase to goodwill ($12
million) and redeemable noncontrolling interests ($15 million).
2013 Acquisition
• In the second quarter 2013, the Partnership acquired Sunoco's Marcus Hook Industrial Complex and related assets
(the "Marcus Hook Industrial Complex") 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 Industrial Complex through March 31, 2017. The reimbursement
proceeds are reflected as contributions to equity. The Partnership will be indemnified against environmental
liabilities resulting from events which occurred at the Marcus Hook Industrial Complex 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 $60 million purchase price for this acquisition (net of cash received) consisted primarily of current and long-term
assets ($14 million) and properties, plants and equipment ($66 million); offset by on-taking of current and long term
liabilities ($16 million).
No pro forma information has been presented as the impact of the acquisitions during 2014 and 2013 was not material in
relation to the Partnership's consolidated results of operations or financial position.