Sunoco 2015 Annual Report Download - page 94

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17. Concentration of Credit Risk
The Partnership's trade relationships are primarily with major integrated oil companies, independent oil companies and
other pipelines and wholesalers. These concentrations of customers may affect the Partnership's overall credit risk as the
customers may be similarly affected by changes in economic, regulatory or other factors. The Partnership maintains credit
policies with regard to its counterparties that management believes minimize the overall credit risk through credit analysis,
credit approvals, credit limits and monitoring procedures. The credit positions of the Partnership's customers are analyzed prior
to the extension of credit and periodically after it has been extended. For certain transactions, the Partnership may utilize letters
of credit, prepayments, guarantees and secured interests in assets.
In 2015 and 2014, approximately 23 and 25 percent of the Partnership's total revenues, respectively, were derived from
two investment grade customers with crude oil sales and other revenues comprising greater than 10 percent of total revenues.
While this concentration has the ability to negatively impact revenues going forward, management does not anticipate a
material adverse effect in the Partnership's financial position, results of operations or cash flows as the absolute price levels for
crude oil normally do not bear a relationship to gross profit. In addition, these customers are subject to netting arrangements
which allow the Partnership to offset payable activities and mitigate credit exposure.
18. Business Segment Information
The Partnership operates in 35 states throughout the United States and in three principal business segments.
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.
• The Crude Oil segment provides transportation, terminalling and acquisition and marketing services to crude oil
markets throughout the southwest, midwest and northeastern United States. Included within the segment is
approximately 5,900 miles of crude oil trunk and gathering pipelines in the southwest and midwest United States and
equity ownership interests in three crude oil pipelines. Our crude oil terminalling services operate with an aggregate
storage capacity of approximately 28 million barrels, including approximately 24 million barrels at our Gulf Coast
terminal in Nederland, Texas and approximately 3 million barrels at our Fort Mifflin terminal complex in
Pennsylvania. Our crude oil acquisition and marketing activities utilize our pipeline and terminal assets, our
proprietary fleet crude oil tractor trailers and truck unloading facilities, as well as third-party assets, to service crude
oil markets principally in the mid-continent United States.
• The Natural Gas Liquids segment transports, stores, and executes acquisition and marketing activities utilizing a
complementary network of pipelines, storage and blending facilities, and strategic off-take locations that provide
access to multiple NGLs markets. The segment contains approximately 900 miles of NGLs pipelines, primarily related
to our Mariner systems located in the northeast and southwest United States. Terminalling services are facilitated by
approximately 5 million barrels of NGLs storage capacity, including approximately 1 million barrels of storage at our
Nederland, Texas terminal facility and 3 million barrels at our Marcus Hook, Pennsylvania terminal facility (the
"Marcus Hook Industrial Complex"). This segment also carries out our NGLs blending activities, including utilizing
our patented butane blending technology.
• The Refined Products segment provides transportation and terminalling services, utilizing approximately 1,800 miles
of refined products pipelines and approximately 40 active refined products marketing terminals. Our marketing
terminals are located primarily in the northeast, midwest and southeast United States, with approximately 8 million
barrels of refined products storage capacity. The Refined Products segment includes our Eagle Point facility in New
Jersey, which has approximately 6 million barrels of refined products storage capacity. The segment also includes our
equity ownership interests in four refined products pipeline companies. The segment also performs terminalling
activities at our Marcus Hook Industrial Complex. The Refined Products segment utilizes our integrated pipeline and
terminalling assets, as well as acquisition and marketing activities, to service refined products markets in several
regions of the United States.