Related-Party Transactions

3 Months Ended

Mar. 31, 2017

We are party to the following fee-based commercial agreements with various affiliates of ETP:

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Philadelphia Energy Solutions Products Purchase Agreements – two related products purchase agreements, one with Philadelphia Energy Solutions Refining & Marketing (“PES”) and one with PES’s product financier Merrill Lynch Commodities; both purchase agreements contain 12-month terms that automatically renew for consecutive 12-month terms until either party cancels with notice. ETP Retail owns a noncontrolling interest in the parent of PES.


•	Sunoco Logistics Partners L.P. (“SXL”) Transportation and Terminalling Contracts – various agreements with subsidiaries of SXL for pipeline, terminalling and storage services. We also have agreements with subsidiaries of SXL for the purchase and sale of fuel. SXL is a consolidated subsidiary of ETP. In April 2017, ETP and SXL merged.

We are party to the Susser Distribution Contract, a 10-year agreement under which we are the exclusive distributor of motor fuel at cost (including tax and transportation costs), plus a fixed profit margin of three cents per gallon to Susser’s existing Stripes convenience stores and independently operated consignment locations. This profit margin is eliminated through consolidation from the date of common control, September 1, 2014, and thereafter, in the accompanying Consolidated Statements of Operations and Comprehensive Income.

We are party to the Sunoco Distribution Contract, a 10-year agreement under which we are the exclusive distributor of motor fuel to Sunoco Retail’s convenience stores. Pursuant to the agreement, pricing is cost plus a fixed margin of four cents per gallon. This profit margin is eliminated through consolidation from the date of common control, September 1, 2014, and thereafter, in the accompanying Consolidated Statements of Operations and Comprehensive Income.

In connection with the closing of our IPO on September 25, 2012, we also entered into an Omnibus Agreement with Susser (the “Omnibus Agreement”). Pursuant to the Omnibus Agreement, among other things, the Partnership received a three-year option to purchase from Susser up to 75 of Susser's new or recently constructed Stripes convenience stores at Susser's cost and lease the stores back to Susser at a specified rate for a 15-year initial term. The Partnership is the exclusive distributor of motor fuel to such stores for a period of 10 years from the date of purchase. During 2015, we completed all 75 sale-leaseback transactions under the Omnibus Agreement.

Summary of Transactions

Significant affiliate activity related to the Consolidated Balance Sheets and Statements of Operations and Comprehensive Income is as follows:


•	Net advances from affiliates were $1 million and $87 million as of March 31, 2017 and December 31, 2016, respectively. Advances to and from affiliates are primarily related to the cash management services that affiliates of ETP provide to Sunoco LLC and Sunoco Retail.


•	Net accounts receivable from affiliates were $13 million and $3 million as of March 31, 2017 and December 31, 2016, respectively, which are primarily related to motor fuel purchases from us.


•	Net accounts payable to affiliates was $111 million and $109 million as of March 31, 2017 and December 31, 2016, respectively, which are related to operational expenses and fuel pipeline purchases.


•	Wholesale motor fuel sales to affiliates of $21 million and $7 million for the three months ended March 31, 2017 and 2016, respectively.


•	Bulk fuel purchases from affiliates of $545 million and $340 million for the three months ended March 31, 2017 and 2016, respectively, which is included in wholesale motor fuel cost of sales in our Consolidated Statements of Operations and Comprehensive Income.