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SEC Filings
424B3
SUSSER HOLDINGS CORP filed this Form 424B3 on 09/02/2016
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PHILADELPHIA ENERGY SOLUTIONS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in thousands, except unit and volume data)

 

respectively. These sales are recorded as a component of net sales in the consolidated statements of operations and comprehensive income (loss). There were no sales of refined products to SXL for the year ended December 31, 2013.

Refined product purchases from SXL were $1,543 for the year ended December 31, 2015. There were no refined product purchases from SXL for the years ended December 31, 2014 and 2013. These purchases are recorded as a component of cost of sales in the consolidated statements of operations and comprehensive income (loss).

Pipeline Distribution Arrangements

Refining distributes refined products to customers and other storage locations by pipeline, barge, rail and truck in the ordinary course of business, which includes pipelines owned and operated by SXL. Fees paid to SXL under these pipeline distribution arrangements generally include transmix disposal costs and transportation costs that are based on the Federal Energy Regulatory Commission’s or the Pennsylvania Public Utility Commission’s published common carrier tariffs. Fees incurred in connection with these arrangements were $26,782 and $6,986 for the years ended December 31, 2015 and 2014, respectively. No fees were incurred under these arrangements for the year ended December 31, 2013. These fees are recorded as a component of net sales in the consolidated statements of operations and comprehensive income (loss).

Other related-party Agreements

Advisory Services Agreement

The Company is party to an advisory services agreement with Carlyle Investment Management LLC and Sunoco whereby they are paid a management fee equal to 2% and 1%, respectively, of the Company’s earnings before interest expense, income taxes, depreciation, and amortization. Management fees totaled $6,830 and $7,021 for the years ended December 31, 2015 and 2014, respectively. There was no management fee for the year ended December 31, 2013. Management fees are recorded as a component of general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income (loss).

4. INTERMEDIATION AGREEMENTS

Refining entered into an intermediation agreement with J.P. Morgan Ventures Energy Corporation (JPMVEC) on September 8, 2012. On October 7, 2014, JPMVEC assigned the intermediation agreement to Merrill Lynch Commodities (MLC) and the agreement was simultaneously amended and restated. Under these agreements, on a daily basis, Refining acquires (or acquired) substantially all of its crude oil and noncrude feedstocks for use in production at the Philadelphia refining complex from the respective counterparty and likewise sells (or sold) substantially all of refined products and blendstocks to the other party.

Under the agreement with JPMVEC, legal title for crude oil and noncrude feedstocks passed from JPMVEC to Refining when crude oil or noncrude feedstocks were drawn out of the storage tanks and processed, while title passed from Refining to JPMVEC as refined products or blendstocks were produced and delivered to storage tanks. These transactions occurred at the daily market price for the respective feedstocks and products. The Company was responsible for logistics costs associated with these purchases. Purchases and sales with JPMVEC were settled weekly on a net basis unless the net amount due to either of the parties exceeded $5,000 at which time it was settled.

 

F-38

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