Sunoco 2015 Annual Report Download - page 74

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SUNOCO LOGISTICS PARTNERS L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Basis of Presentation
Sunoco Logistics Partners L.P. (the "Partnership" or "SXL") is a publicly traded Delaware limited partnership that owns
and operates a logistics business, consisting of a geographically diverse portfolio of integrated pipeline, terminalling, and
acquisition and marketing assets which are used to facilitate the purchase and sale of crude oil, natural gas liquids ("NGLs")
and refined products. The Partnership conducts its business activities in 35 states located throughout the United States. Sunoco
Partners LLC, a Pennsylvania limited liability company and the general partner of the Partnership, is a consolidated subsidiary
of Energy Transfer Partners, L.P. ("ETP"), a publicly traded Delaware limited partnership.
During the fourth quarter 2015, the Partnership realigned its reporting segments as a result of the continued investment in
its organic growth capital program which has served to increase the integration that exists between its assets that service each
commodity. This has also resulted in a shift in Management's strategic decision making process, resource allocation
methodology, and assessment of the Partnership's financial results. The updated reporting segments are: Crude Oil, Natural Gas
Liquids and Refined Products. The new segmentation will provide the Partnership's investors with a more meaningful view of
its business that is consistent with that of Management. For the purpose of comparability, all prior year segment disclosures
have been recast to conform to the current year presentation. Such recasts have no impact on previously reported consolidated
earnings.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements reflect the results of the Partnership and its wholly-owned subsidiaries, including
Sunoco Logistics Partners Operations L.P. (the "Operating Partnership"), the proportionate shares of the Partnership's undivided
interests in assets, and the accounts of entities in which the Partnership has a controlling financial interest. A controlling
financial interest is evidenced by either a voting interest greater than 50 percent or a risk and rewards model that identifies the
Partnership or one of its subsidiaries as the primary beneficiary of a variable interest entity. At December 31, 2015, the
Partnership held a controlling financial interest in Inland Corporation ("Inland"), Mid-Valley Pipeline Company ("Mid-
Valley"), and Price River Terminal, LLC ("PRT"), as well as a wholly-owned interest in West Texas Gulf Pipe Line Company
("West Texas Gulf"), and as such, these entities are reflected as consolidated subsidiaries of the Partnership. The Partnership is
not the primary beneficiary of any variable-interest entities ("VIEs"). All significant intercompany accounts and transactions
are eliminated in consolidation and noncontrolling interests in net income and equity are shown separately in the consolidated
statements of comprehensive income and balance sheets. Equity ownership interests in corporate joint ventures in which the
Partnership does not have a controlling financial interest, but over which the Partnership can exercise significant influence, are
accounted for under the equity method of accounting.
Use of Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles
("GAAP") requires management to make estimates and assumptions that affect amounts reported in the consolidated financial
statements and accompanying notes. Actual amounts could differ from these estimates.
Reclassification
Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the current year
presentation. The changes did not impact reported net income for any periods presented.
New Accounting Pronouncements
In the fourth quarter 2015, the Partnership adjusted its presentation of costs associated with issuances of debt in response
to the early adoption of Accounting Standards Update ("ASU") 2015-03. This guidance requires costs incurred to issue certain
debt instruments to be reflected as a reduction of the reported long-term debt liability within the consolidated balance sheet, as
opposed to being reported as an asset. This change was retrospectively applied to all prior reporting periods presented, but did
not impact the Partnership's overall financial position or results of operations.