Sunoco 2015 Annual Report Download - page 89

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Management of the Partnership does not believe that any liabilities which may arise from claims indemnified by Sunoco
would be material in relation to the Partnership's financial position, results of operations or cash flows at December 31, 2015.
There are certain other pending legal proceedings related to matters arising after the IPO that are not indemnified by Sunoco.
Management believes that any liabilities that may arise from these legal proceedings will not be material in relation to the
Partnership's financial position, results of operations or cash flows at December 31, 2015.
12. Equity Offerings
In 2014, the Partnership established an at-the-market equity offering program which allows the Partnership to issue
common units directly to the public and raise capital in a timely and efficient manner to finance its growth capital program,
while supporting the Partnership's investment grade credit ratings. In the third quarters of 2014 and 2015, respectively, the
Partnership filed registration statements which each established an additional $1.0 billion of capacity under the ATM program.
For the years ended December 31, 2015 and 2014, the Partnership issued 26.8 and 10.3 million common units under this
program, for proceeds of $890 and $477 million, net of $10 and $6 million in fees and commissions to managers, respectively.
In March 2015, the Partnership completed an overnight public offering of 13.5 million common units for net proceeds of
$547 million. In April 2015, an additional 2.0 million common units were issued for net proceeds of $82 million related to the
exercise of an option in connection with the March 2015 offering. The net proceeds from these offerings were used to repay
outstanding borrowings under the Partnership's revolving credit facility and for general partnership purposes.
In September 2014, the Partnership completed an overnight public offering of 7.7 million common units for net proceeds
of $362 million. The net proceeds from this offering were used to repay outstanding borrowings under the preceding $1.50
billion Credit Facility and for general partnership purposes.
Issuance of Redeemable Limited Partners' Interests
In October 2015, the Partnership issued 9.4 million Class B units to ETP in conjunction with the purchase of a 30 percent
ownership interest in the Bakken pipeline. The Class B units represent a new class of limited partner interests in the Partnership
which are not entitled to receive quarterly distributions that are made on the Partnership’s common units, but are otherwise
entitled to share in earnings pro-rata with common units. The Class B units will automatically convert to common units on a
one-for-one basis in the third quarter 2017. However, the Partnership can exercise an option to call the Class B units for $300
million. If not exercised, ETP can exercise a put right during the third quarter 2017, effective prior to the one-for-one
conversion date, for the greater of $313.5 million or the fair market value of the units, as defined in the unitholder agreement.
As a result of the available put option, the amount attributable to the Class B units is excluded from total equity and instead
reflected as redeemable interests in the Partnership’s consolidated balance sheet.
13. Cash Distributions
Within 45 days after the end of each quarter, the Partnership distributes all cash on hand at the end of the quarter, less
reserves established by the general partner in its discretion. This is defined as "available cash" in the partnership agreement.
The general partner has broad discretion to establish cash reserves that it determines are necessary or appropriate to properly
conduct the Partnership's business. The Partnership will make quarterly distributions to the extent there is sufficient cash from
operations after establishment of cash reserves and payment of fees and expenses, including payments to the general partner.
If cash distributions exceed $0.0833 per unit in a quarter, the general partner receives increasing percentages, up to 50
percent, of the cash distributed in excess of that amount. These distributions are referred to as "incentive distributions." The
percentage interests shown for the unitholders and the general partner for the minimum quarterly distribution are also
applicable to quarterly distribution amounts that are less than the minimum quarterly distribution.