---

---

•	Our ability to successfully consummate announced acquisitions, mergers or expansions and integrate them into our existing business operations;

•	Delays related to construction of, or work on, new or existing facilities and the issuance of applicable permits;

•	Changes in the supply of, or demand for crude oil, natural gas liquids ("NGLs") and refined products that impact demand for our pipeline, terminalling and storage services;

•	Changes in the short-term and long-term demand for crude oil, NGLs and refined products we buy and sell;

•	An increase in the competition encountered by our pipelines, terminals and acquisition and marketing operations;

•	Changes in the financial condition or operating results of joint ventures or other holdings in which we have an equity ownership interest;

•	Changes in the general economic conditions in the United States;

•	Changes in laws and regulations to which we are subject, including federal, state, and local taxes, safety, environmental and employment laws;

•	Changes in regulations governing the composition of the products that we transport, terminal and store;

•	Improvements in energy efficiency and development of technology resulting in reduced demand for refined petroleum products;

•	Our ability to manage growth and/or control costs;

•	The effect of changes in accounting principles and tax laws, and interpretations of both;

•	Global and domestic economic repercussions, including disruptions in the crude oil, NGLs and refined petroleum products markets, from terrorist activities, international hostilities and other events, and the government's response thereto;

•	Changes in the level of operating expenses and hazards related to operating our facilities (including equipment malfunction, explosions, fires, spills and the effects of severe weather conditions);

•	The occurrence of operational hazards or unforeseen interruptions for which we may not be adequately insured;

•	The age of, and changes in the reliability and efficiency of our operating facilities;

•	Changes in the expected level of capital, operating, or remediation spending related to environmental matters;

•	Changes in insurance markets resulting in increased costs and reductions in the level and types of coverage available;

•	Risks related to labor relations and workplace safety;

•	Non-performance by or disputes with major customers, suppliers or other business partners;

•	Changes in our tariff rates implemented by federal and/or state government regulators;

•	The amount of our debt, which could make us vulnerable to adverse general economic and industry conditions, limit our ability to borrow additional funds, place us at competitive disadvantages compared to competitors that have less debt, or have other adverse consequences;

•	Restrictive covenants in our credit agreements;

•	Changes in our, or our general partner's, credit ratings, as assigned by ratings agencies;

•	The condition of the debt and equity capital markets in the United States, and our ability to raise capital in a cost-effective way;

•	Performance of financial institutions impacting our liquidity, including those supporting our credit facilities;

•	The effectiveness of our risk management activities, including the use of derivative financial instruments to hedge commodity risks;

•	Changes in interest rates on our outstanding debt, which could increase the costs of borrowing; and

•	The costs and effects of legal and administrative claims and proceedings against us or any entity in which we have an ownership interest, and changes in the status of, or the initiation of new litigation, claims or proceedings, to which we, or any entity in which we have an ownership interest, are a party.

---

---

•

The Crude Oil segment provides transportation, terminalling and acquisition and marketing services to crude oil markets throughout the southwest, midwest and northeast United States. Included within the segment is approximately 6,100 miles of crude oil trunk and gathering pipelines in the southwest and midwest United States and equity ownership interests in two crude oil pipelines. Our crude oil terminalling services operate with an aggregate storage capacity of approximately 33 million barrels, including approximately 26 million barrels at our Gulf Coast terminal in Nederland, Texas, approximately 3 million barrels at our Fort Mifflin terminal complex in Pennsylvania and approximately 2 million barrels at our newly acquired Midland, Texas terminal. Our crude oil acquisition and marketing activities utilize our pipeline and terminal assets, our proprietary fleet of 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, through the use of 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 southwest 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.

---

•

In November 2016, we acquired an integrated crude oil business in West Texas from Vitol. The acquisition provides us with an approximately 2 million barrel crude oil terminal in Midland, Texas, a crude oil gathering and mainline pipeline system in the Midland Basin, including a significant acreage dedication from an investment-grade Permian producer, and crude oil inventories related to Vitol crude oil purchasing and marketing business in West Texas. The acquisition also included the purchase of a 50 percent interest in the SunVit Pipeline LLC ("SunVit"), which increased our overall ownership of SunVit to 100 percent. SunVit connects the Midland terminal to our Permian Express 2 pipeline, a key takeaway to bring Permian crude oil to multiple markets. SunVit was renamed Permian Express Terminal LLC ("PET") in December 2016.

•

In October 2015, we obtained a 30 percent ownership interest in the Bakken pipeline project through acquisition of an ownership interest in the Bakken Holdings Company LLC. The Bakken pipeline consists of existing and newly constructed pipelines that are expected to provide aggregate takeaway capacity of approximately 450 thousand barrels per day ("bpd") of crude oil from the Bakken/Three Forks production area in North Dakota to key refinery and terminalling hubs in the midwest and Gulf Coast, including our Nederland terminal. The ultimate takeaway capacity target for the Bakken pipeline is 570 thousand bpd. The project is jointly owned by ETP and Phillips 66. Commercial operations are expected to commence in the second quarter 2017.

•

In July 2015, we obtained a 30 percent ownership interest in the Bayou Bridge Pipeline, LLC ("Bayou Bridge"), which consists of newly constructed pipeline that delivers crude oil from Nederland, Texas to refinery markets in Louisiana. Commercial operations from Nederland, Texas to Lake Charles, Louisiana commenced in the second quarter 2016, with continued progress on an extension of the pipeline segment to St. James, Louisiana, which is expected to commence operations in the fourth quarter 2017. The Bayou Bridge pipeline is a joint project with ETP and Phillips 66, and we are the operator of the pipeline.

•	In December 2014 and January 2015, we acquired an additional 39.7 percent ownership interest in the West Texas Gulf Pipe Line Company ("West Texas Gulf") which originates in Colorado City and delivers to destinations in Goodrich and Longview, Texas. The acquisition resulted in a wholly-owned interest in this strategic crude oil pipeline.

•	In May 2014, we acquired a crude oil purchasing and marketing business from EDF Trading North America, LLC ("EDF"). The purchase consisted of a crude oil acquisition and marketing business and related assets which handle 20 thousand bpd. The acquisition included a promissory note that was convertible to an equity interest in the Price River Terminal rail facility.

•

In May 2014, we acquired a 55 percent economic and voting interest in Price River Terminal, LLC ("PRT"), a rail facility in Wellington, Utah. As the Partnership acquired a controlling financial interest in PRT, the entity is reflected as a consolidated subsidiary of the Partnership from the acquisition date. The terms of the acquisition provide PRT's noncontrolling interest holders the option to sell their interests to the Partnership at a price defined in the purchase agreement.

---

(1)	Prior period pipeline throughput amounts have been restated to conform to current presentation.

(2)	Excludes amounts attributable to equity ownership interests which are not consolidated. Throughputs related to the acquisition from Vitol have been included from the acquisition date.

---

---

•	purchasing crude oil at both the wellhead from producers, and in bulk from aggregators at major pipeline interconnections and trading locations;

•	storing inventory during contango market conditions (when the price of crude oil for future delivery is higher than current prices);

•	buying and selling crude oil of different grades, at different locations in order to maximize value;

•	transporting crude oil using our pipelines, terminals and trucks or, when necessary or cost effective, pipelines, terminals or trucks owned and operated by third parties; and

•	marketing crude oil to major integrated oil companies, independent refiners and resellers through various types of sale and exchange transactions.

---

---

•	In April 2013, we acquired Sunoco's Marcus Hook Industrial Complex and related assets. The acquisition included terminalling and storage assets with a capacity of approximately 2 million barrels of NGLs storage capacity in underground caverns.

---

---

•	In March 2014 and August 2016, we exercised rights to acquire additional 3.9 and 1.7 percent ownership interests, respectively, in Explorer Pipeline Company ("Explorer"), increasing our overall ownership interest from 9.4 to 15.0 percent as a result of the transactions.

(1)	Excludes amounts attributable to equity ownership interests which are not consolidated.

(2)	Prior period pipeline throughput amounts have been restated to conform to current presentation.

(1)	The system, which is operated by Explorer employees, originates from the refining centers of Beaumont, Port Arthur and Houston, Texas, and extends to Chicago, Illinois, with delivery points in the Houston, Dallas/Fort Worth, Tulsa, St. Louis, and Chicago areas. Explorer charges market-based rates for all its tariffs.

(2)	The system, which is operated by Phillips 66, originates from the Billings, Montana refining center and extends to Moses Lake, Washington, with delivery points along the way. Tariff rates are regulated by the FERC for interstate shipments and the Montana Public Service Commission for intrastate shipments in Montana.

(3)	The system, which is operated by Buckeye Partners, L.P., originates from the Chicago, Illinois refining center and extends to Madison and Green Bay, Wisconsin, with delivery points along the way. West Shore charges market-based tariff rates in the Chicago area.

(4)	The system, which is operated by Wolverine employees, originates from Chicago, Illinois and extends to Detroit, Grand Haven and Bay City, Michigan, with delivery points along the way. Wolverine charges market-based rates for tariffs at the Detroit, Jackson, Niles, Hammond and Lockport destinations.

---

(1)	We have a 45 percent ownership interest in a terminal at Inwood, New York and a 50 percent ownership interest in a terminal that we operate in Syracuse, New York. The storage capacities included in the table represent the proportionate share of capacity attributable to our ownership interests in these terminals.

---

---

---

---

---

---

---

---

---

•	a sustained recession or other adverse economic conditions that result in lower purchases of refined petroleum products;

•	higher refined products prices due to an increase in the market price of crude oil, changes in economic conditions, or other factors;

•	higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of gasoline or other refined products;

•	a shift by consumers to more fuel-efficient or alternative fuel vehicles or an increase in fuel economy, whether as a result of technological advances by manufacturers, pending legislation proposing to mandate higher fuel economy, or otherwise; and

•	a temporary or permanent material increase in the price of refined products as compared to alternative sources of refined products available to our customers.

•	severe adverse weather conditions, natural disasters, or other events (such as equipment malfunctions, explosions, fires, releases) affecting our facilities, or those of vendors and suppliers;

---

---

---

---

---

---

•	the right to share in the Partnership's distributions;

•	the rights upon dissolution and liquidation of the Partnership;

•	whether, and the terms upon which, the Partnership may redeem the securities;

•	whether the securities will be issued, evidenced by certificates and assigned or transferred; and

•	the right, if any, of the security to vote on matters relating to the Partnership, including matters relating to the relative rights, preferences and privileges of such security.

---

•	ETP and its affiliates may engage in competition with us. Neither our partnership agreement nor any other agreement requires ETP to pursue a business strategy that favors us or utilizes our assets, and our general partner may consider the interests of parties other than us, such as ETP, in resolving conflicts of interest;

•	under our partnership agreement, our general partner's fiduciary duties are restricted, and our unitholders have only limited remedies available in the event of conduct constituting a potential breach of fiduciary duty by our general partner;

•	our general partner determines the amount and timing of asset purchases and sales, capital expenditures, borrowings, issuance of additional partnership securities, and reserves, each of which can affect the amount of cash available for distribution to our unitholders and the amount received by our general partner in respect of its incentive distribution rights ("IDRs");

•	our general partner determines which costs incurred by ETP and its affiliates are reimbursable by us; and

•

our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for services rendered, or from entering into additional contractual arrangements with any of these entities on our behalf, so long as the terms of any additional contractual arrangements are fair and reasonable to us; and our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates.

---

•	we had been conducting business in any state without complying with the applicable limited partnership statute; or

•	the right or the exercise of the right by the unitholders as a group to remove or replace our general partner, to approve some amendments to the partnership agreement, or to take other action under the partnership agreement constituted participation in the "control" of our business.

---

•	make it more difficult for us to satisfy our obligations under our debt securities or other indebtedness and, if we fail to comply with the requirements of the other indebtedness, could result in an event of default under our debt securities or such other indebtedness;

•	require us to dedicate a substantial portion of our cash flow from operations to required payments on indebtedness, thereby reducing the availability of cash flow from working capital, capital expenditures and other general corporate activities;

•	limit our ability to obtain additional financing in the future for working capital, capital expenditures and other general corporate activities;

•	limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•	detract from our ability to successfully withstand a downturn in our business or the economy, generally; and

•	place us at a competitive disadvantage against less leveraged competitors.

---

---

---

---

---

---

---

•	the parties may be liable for damages to one another under the terms and conditions of the merger agreement;

•	negative reactions from the financial markets, including declines in the price of our common units due to the fact that current prices may reflect a market assumption that the Merger will be completed; and

•	the attention of our and ETP's management will have been diverted to the Merger rather than each organization's own operations and pursuit of other opportunities that could have been beneficial to that organization.

---

---

---

---

---

---

---

---

(1)	Includes general partner interest.

---

(1)

Includes equity income from our investments in the following joint ventures interests: Bakken Holdings Company LLC; Bayou Bridge Pipeline, LLC; Explorer Pipeline Company; Wolverine Pipe Line Company; West Shore Pipe Line Company; Yellowstone Pipe Line Company; Bayview Refining Company, LLC; and Permian Express Terminal LLC ("PET," formerly known as the SunVit Pipeline LLC). Equity income from the investments has been included based on our respective ownership percentages of each, and from the dates of acquisition or formation.

(2)	In June 2014, a two-for-one split was completed, which resulted in the issuance of one additional common unit for every one unit owned. All unit and per unit information is presented on a post-split basis.

---

(3)	Cash distributions paid per unit to limited partners represent payments made per unit during the period stated. Cash distributions declared per unit to limited partners represent distributions declared per unit for the quarters within the period stated. Declared distributions were paid within 45 days following the close of each quarter.

(4)

Adjusted EBITDA and Distributable Cash Flow provide additional information for evaluating our ability to make distributions to our unitholders and our general partner. The following tables reconcile (a) the difference between net income, as determined under United States generally accepted accounting principles ("GAAP"), and Adjusted EBITDA and Distributable Cash Flow and (b) net cash provided by operating activities and Adjusted EBITDA:

(1)	During the first quarter 2016, we changed our definition of distributable cash flow to conform to the presentation utilized by our general partner. The change did not have a material impact on our distributable cash flow. Prior period amounts have been recast to conform to current presentation.

---

---

(1)

Cash flows related to expansion capital expenditures in 2016 included projects to: invest in the announced Mariner NGLs projects; invest in our crude oil infrastructure by increasing our pipeline capabilities through announced expansion capital and joint projects; expand the service capabilities of our acquisition and marketing activities; and upgrade the service capabilities at our bulk marine terminals. Cash flows related to acquisitions in 2016 included $769 million related to the acquisition of the Vitol Inc. ("Vitol") crude oil business, including an additional 50 percent ownership interest in the PET crude oil pipeline, and a $17 million acquisition related to the purchase of an additional ownership interest in the Explorer crude oil pipeline.

(2)

Cash flows related to expansion capital expenditures in 2015 included projects to: invest in the previously announced Mariner NGLs projects and Allegheny Access pipeline project; invest in our crude oil infrastructure by increasing our pipeline capabilities through announced expansion capital and joint projects; expand the service capabilities of our acquisition and marketing activities; and upgrade the service capabilities at our bulk marine terminals. Cash flows related to acquisitions in 2015 included $131 million related to the acquisition of remaining ownership interest in the West Texas Gulf Pipe Line Company ("West Texas Gulf") crude oil pipeline.

(3)

Cash flows related to expansion capital expenditures in 2014 included projects to: invest in the previously announced Mariner NGLs projects and Allegheny Access pipeline project; invest in our crude oil infrastructure by increasing our pipeline capabilities through previously announced expansion capital and joint projects in Texas and Oklahoma; expand the service capabilities of our acquisition and marketing activities; and upgrade the service capabilities at our bulk marine terminals. Cash flows related to acquisitions in 2014 included $65 million related to a crude oil acquisition and marketing business and a controlling financial interest in a related rail facility, $325 million related to the acquisition of additional ownership interest in West Texas Gulf, and $42 million related to the acquisition of additional ownership interest in Explorer Pipeline Company.

(4)

Cash flows related to expansion capital expenditures in 2013 included projects to: invest in our crude oil infrastructure by increasing our pipeline capabilities through previously announced expansion capital projects in Texas and Oklahoma; expand upon our acquisition and marketing activities; upgrade the service capabilities at the Eagle Point and Nederland terminals; and invest in the previously announced Mariner and Allegheny Access projects. We also acquired the Marcus Hook Industrial Complex for $60 million in 2013.

(5)

Cash flows related to expansion capital expenditures for the periods from October 5, 2012 to December 31, 2012 and from January 1, 2012 to October 4, 2012 included projects to: expand upon our acquisition and marketing activities, upgrade the service capabilities at the Eagle Point and Nederland terminals; invest in our crude oil infrastructure by increasing our pipeline capabilities through previously announced growth projects in West Texas and expanding the crude oil trucking fleet; and to invest in the Mariner pipeline projects.

(6)	Expansion capital expenditures are capital expenditures made to acquire and integrate complimentary assets and joint projects, to improve operational efficiencies or reduce costs and to expand existing and construct new facilities, such as projects that increase storage or throughput volume.

(7)	Maintenance capital expenditures are capital expenditures required to maintain equipment reliability, tankage and pipeline integrity and safety, and to address environmental regulations. We treat maintenance expenditures that do not extend the useful life of existing assets as operating expenses as incurred.

---

(1)	Excludes amounts attributable to equity ownership interests which are not consolidated.

(2)	Throughputs related to the acquisition from Vitol have been included from the acquisition date.

(3)	Prior period pipeline throughput amounts have been restated to conform to current presentation.

(4)	Represents total segment sales and other operating revenue less costs of products sold and operating expenses.

---

---

•

Vitol Crude Oil - In November 2016, we acquired an integrated crude oil business in West Texas from Vitol Inc. ("Vitol"). The acquisition provided us with an approximately 2 million barrel crude oil terminal in Midland, Texas, a crude oil gathering and mainline pipeline system in the Midland Basin, including a significant acreage dedication from an investment-grade Permian producer, and crude oil inventories related to Vitol's crude oil purchasing and marketing business in West Texas. The acquisition also included the purchase of a 50 percent interest in SunVit, which increased our overall ownership of SunVit to 100 percent.

•	Explorer Pipeline Company - In March 2014 and August 2016, we exercised rights to acquire additional 3.9 and 1.7 percent ownership interests, respectively, in Explorer Pipeline Company ("Explorer"), increasing our overall ownership interest from 9.4 to 15.0 percent. Our ownership interest continues to be reported as an equity method investment in our Refined Products segment.

•

West Texas Gulf Pipe Line Company - In December 2014, we acquired an additional 28.3 percent ownership interest in West Texas Gulf Pipe Line Company ("West Texas Gulf") from Chevron Pipe Line Company, increasing our controlling financial interest to 88.6 percent. The remaining noncontrolling interest in West Texas Gulf was acquired in January 2015. The pipeline is now wholly-owned and continues to be reported in our Crude Oil segment.

•

EDF Trading - In May 2014, we acquired a crude oil purchasing and marketing business from EDF Trading North America, LLC ("EDF"). The purchase consisted of a crude oil acquisition and marketing business and related assets which handle 20 thousand barrels per day. The acquisition also included a promissory note that was convertible to an equity interest in a rail facility (see Price River Terminal, below). The acquisition is included in our Crude Oil segment.

•

Price River Terminal - In May 2014, we acquired a 55 percent economic and voting interest in Price River Terminal, LLC ("PRT"), a rail facility in Wellington, Utah. The terms of the acquisition provide PRT's noncontrolling interest holders the option to sell their interests to the Partnership at a price defined in the purchase agreement. Since we acquired a controlling financial interest in PRT, the entity was reflected as a consolidated subsidiary from the acquisition date and is included in the Crude Oil segment.

---

---

---

(1)	During the first quarter 2016, we changed our definition of distributable cash flow to conform to the presentation utilized by our general partner. The change did not have a material impact on our distributable cash flow. Prior period amounts have been recast to conform to current presentation.

---

---

(1)	Represents non-cash inventory adjustments related to changes in commodity prices.

(2)	Excludes amounts attributable to equity ownership interests which are not consolidated. Throughputs related to the acquisition from Vitol have been included from the acquisition date.

(3)	Prior period pipeline throughput amounts have been restated to conform to current presentation.

(4)	Represents total segment sales and other operating revenue less costs of products sold and operating expenses.

---

---

(1)	Represents non-cash inventory adjustments related to changes in commodity prices.

(2)	Represents total segment sales and other operating revenue less costs of products sold and operating expenses.

---

(1)	Represents non-cash inventory adjustments related to changes in commodity prices.

(2)	Excludes amounts attributable to equity ownership interests which are not consolidated.

(3)	Prior period pipeline throughput amounts have been restated to conform to current presentation.

(4)	Represents total segment sales and other operating revenue less costs of products sold and operating expenses.

---

---

---

---

•	Expansion capital expenditures to acquire and integrate complementary assets to improve operational efficiencies or reduce costs and to expand existing and construct new facilities, such as projects that increase storage or throughput volume, and joint projects which complement our existing asset base,

•	Maintenance capital expenditures that extend the usefulness of existing assets, such as those required to maintain equipment reliability, tankage and pipeline integrity and safety, and to address environmental regulations, and

•	Acquisitions to acquire and integrate complementary assets to grow the business, to improve operational efficiencies or reduce costs.

---

---

---

---

•	Pipeline Operator Agreement: We have agreements with certain of our joint venture interests to serve as operators of their respective pipeline systems. The agreements include a specified management fee and have either a defined termination date or are able to be terminated by both parties in certain cases.

•	Refined Product Terminal Services Agreement: We have a five-year product terminal services agreement with Sunoco under which Sunoco may throughput refined products at our terminals. The agreement contains no minimum throughput obligations for Sunoco. The agreement runs through February 2017.

•

Fort Mifflin Terminal Services Agreement: We have an agreement with Philadelphia Energy Solutions ("PES") relating to the Fort Mifflin terminal complex. Under this agreement, PES will deliver a minimum average of 300 thousand bpd of crude oil and refined products per contract year at the Fort Mifflin facility. PES does not have exclusive use of the Fort Mifflin terminal complex; however, we are obligated to provide the necessary tanks, marine docks and pipelines for PES to meet its minimum requirements under the agreement. We executed a 10-year agreement with PES in September 2012. We had a previous agreement with Sunoco which included terms similar to those contained in the agreement with PES.

•

Inter-Refinery Pipeline Lease: In September 2012, Sunoco assigned its lease for the use of our inter-refinery pipelines between the Philadelphia and Marcus Hook refineries to PES. Under the 20-year lease agreement which expires in February 2022, PES leases the inter-refinery pipelines for an annual fee which escalates at 1.67 percent each January 1 for the term of the agreement. The lease agreement also requires PES to reimburse us for any non-routine maintenance expenditures, as defined, incurred during the term of the agreement. There were no material reimbursements under this agreement during 2014 through 2016.

•	Marcus Hook Industrial Complex Storage and Terminalling Services: In connection with our second quarter 2013 acquisition of the Marcus Hook Industrial Complex, we assumed an agreement to provide butane storage and terminalling services to PES at the facility. The 10 year agreement extends through September 2022.

•	Refined Products Storage Agreements: We have agreements with an affiliated entity to utilize storage services at the Mont Belvieu, Texas and Hattiesburg, Mississippi terminal locations. The agreements run through November 2018.

•	Purchase and Sale Agreements: We have agreements for the purchase and sale of crude oil, NGLs and refined products with affiliated entities. These agreements are negotiated at market-based rates, do not extend beyond 2017, and can be terminated by either party in certain cases.

•	Terminalling Services: We have agreements with affiliates for the use of our terminal assets. The agreements are based on market terms and negotiated based on the respective term. These agreements vary in duration and can be terminated by either party in certain cases.

•	Pipeline Agreements: We have agreements with affiliated parties to utilize our pipelines to supply their business needs. All pipeline movements are on the same terms that would be available to unaffiliated customers under similar terms and are based on published tariff rates on the respective pipeline.

---

•	our obligation to pay the general partner or Sunoco an annual administrative fee for the provision by Sunoco and its affiliates of certain general and administrative services;

•	an indemnity by Sunoco for certain environmental, toxic tort and other liabilities; and

•	our obligation to indemnify Sunoco and its affiliates for events and conditions associated with the operation of the assets that occur on or after the closing of the IPO and for environmental and toxic tort liabilities related to the assets to the extent Sunoco is not required to indemnify us.

•	the assets contributed to SXL, other than environmental and toxic tort liabilities, that arise out of the operation of the assets prior to the closing of the IPO and that are asserted within ten years after the closing of the IPO;

•	certain defects in title to the assets contributed to SXL and failure to obtain certain consents and permits necessary to conduct the business that arise within ten years after the closing of the IPO;

•	legal actions related to the period prior to the IPO currently pending against Sunoco or its affiliates; and

•	events and conditions associated with any assets retained by Sunoco or its affiliates.

---

---

---

---

---

---

---

---

---

---

---

---

---

---

•

In November 2016, the Partnership completed an acquisition from Vitol Inc. ("Vitol") of an integrated crude oil business in West Texas for $760 million plus working capital. The acquisition provides the Partnership with an approximately 2 million barrel crude oil terminal in Midland, Texas, a crude oil gathering and mainline pipeline system in the Midland Basin, including a significant acreage dedication from an investment-grade Permian producer, and crude oil inventories related to Vitol crude oil purchasing and marketing business in West Texas. The acquisition also included the purchase of a 50 percent interest in the SunVit Pipeline LLC ("SunVit"), which resulted in the entity becoming a wholly-owned subsidiary of the Partnership. SunVit, which was renamed Permian Express Terminal LLC ("PET") in the fourth quarter 2016, connects the Midland terminal to the Partnership's Permian Express 2 pipeline, a key takeaway to bring Permian crude oil to multiple markets. The acquisition is included in the Crude Oil segment.

---

•	In August 2016 and March 2014, the Partnership acquired additional ownership interests in the Explorer Pipeline Company ("Explorer") for $17 and $42 million, respectively, which increased the total ownership interest from 9.4 to 15.0 percent. The equity-method investment continues to be reported within the Refined Products segment.

•

In December 2014, the Partnership acquired an additional 28.3 percent ownership interest in West Texas Gulf from Chevron Pipe Line Company for $325 million, increasing the Partnership's controlling financial interest to 88.6 percent. In January 2015, the Partnership acquired the remaining noncontrolling ownership interest in West Texas Gulf for $131 million. As these transactions represented the acquisition of ownership interest in a consolidated subsidiary, noncontrolling interest and partners' equity were reduced by $92 and $364 million, respectively, in accordance with applicable accounting guidance. West Texas Gulf is reflected as a consolidated subsidiary within the Crude Oil segment.

•

In the second quarter 2014, the Partnership acquired a crude oil purchasing and marketing business from EDF Trading North America, LLC ("EDF"). The purchase consisted of a crude oil acquisition and marketing business and related assets which handle 20 thousand barrels per day. The acquisition also included a promissory note that was convertible to an equity interest in a rail facility (see below). The acquisition is included in the Crude Oil segment.

•

In the second quarter 2014, the Partnership acquired a 55 percent economic and voting interest in PRT, a rail facility in Wellington, Utah. As the Partnership acquired a controlling financial interest in PRT, the entity is reflected as a consolidated subsidiary of the Partnership from the acquisition date and is included in the Crude Oil segment. The terms of the acquisition provide PRT's noncontrolling interest holders the option to sell their interests to the Partnership at a price defined in the purchase agreement. As a result, the noncontrolling interests attributable to PRT are excluded from the Partnership's total equity and are instead reflected as redeemable interests in the consolidated balance sheet.

•	Pipeline Operator Agreement: The Partnership has agreements with certain of its joint venture interests to serve as operators of their respective pipeline systems. The agreements include a specified management fee and have either a defined termination date or are able to be terminated by both parties in certain cases.

•	Refined Products Terminal Services Agreement: The Partnership has a five-year refined products terminal services agreement with Sunoco under which Sunoco may throughput refined products at the Partnership's terminals. The agreement contains no minimum throughput obligations for Sunoco. The agreement runs through February 2017.

•

Fort Mifflin Terminal Services Agreement: The Partnership has an agreement with Philadelphia Energy Solutions ("PES") relating to the Fort Mifflin terminal complex. Under this agreement, PES will deliver an average of 300 thousand barrels per day of crude oil and refined products per contract year at the Fort Mifflin facility. PES does not have exclusive use of the Fort Mifflin terminal complex; however, the Partnership is obligated to provide the necessary tanks, marine docks and pipelines for PES to meet its minimum requirements under the agreement. The Partnership executed the ten-year agreement with PES in September 2012. The Partnership had a previous agreement with Sunoco, with terms similar to those contained in the agreement with PES.

---

•

Inter-Refinery Pipeline Lease: In September 2012, Sunoco assigned its lease for the use of the Partnership's inter-refinery pipelines between the Philadelphia refinery and the Marcus Hook Industrial Complex to PES. Under the twenty-year lease agreement which expires in February 2022, PES leases the inter-refinery pipelines for an annual fee which escalates at 1.67 percent each January 1 for the term of the agreement. The lease agreement also requires PES to reimburse the Partnership for any non-routine maintenance expenditures, as defined, incurred during the term of the agreement. There were no material reimbursements under this agreement during the years 2014 through 2016.

•	Marcus Hook Industrial Complex Storage and Terminalling Services: In connection with the 2013 acquisition of the Marcus Hook Industrial Complex, the Partnership assumed an agreement to provide butane storage and terminal services to PES at the facility. The 10 year agreement extends through September 2022.

•	Refined Products Storage Agreements: The Partnership has agreements with an affiliated entity to utilize storage services at the Mont Belvieu, Texas and Hattiesburg, Mississippi terminal locations. The agreements run through November 2018.

•	Purchase and Sale Agreements: The Partnership has agreements for the purchase and sale of crude oil, NGLs and refined products with affiliated entities. These agreements are negotiated at market-based rates, do not extend beyond 2017, and can be terminated by either party in certain cases.

•

Terminalling Services: The Partnership has agreements with affiliates for the use of its terminal assets, as well as its use of an affiliated terminal asset to facilitate the Partnership's acquisition and marketing activities. The agreements are based on market terms and negotiated based on the respective term. These agreements vary in duration and can be terminated by either party in certain cases.

•	Pipeline Agreements: The Partnership has agreements with affiliated parties to utilize its pipelines to supply their business needs. All pipeline movements are on the same terms that would be available to unaffiliated customers under similar terms and are based on published tariff rates on the respective pipeline.

---

---

(1)	As of December 31, 2016 and 2015, the Partnership had rights-of-way with a book value of $1.1 billion.

(2)	As of December 31, 2016 and 2015, accrued capital expenditures were $249 and $286 million, respectively.

---

(1)	Effective November 1, 2016, SunVit Pipeline LLC became a wholly-owned, consolidated subsidiary of the Partnership, and was subsequently renamed Permian Express Terminal LLC in December 2016.

(2)	The investment in Bakken HoldCo provides the Partnership with a 30 percent overall ownership interest in the Bakken pipeline project through its ownership in the subsidiary companies which will operate the pipeline system.

---

---

---

(1)	Includes $50 million of commercial paper outstanding at December 31, 2016. There was no commercial paper outstanding at December 31, 2015.

(2)	The $1.0 billion 364-Day Credit Facility, including its $630 million term loan, is classified as long-term debt at December 31, 2016 as the Partnership has the ability and intent to refinance such borrowings on a long-term basis.

(3)	The 6.125 percent Senior Notes were classified as long-term debt at December 31, 2015 as the Partnership repaid these notes in May 2016 with borrowings under its $2.50 billion Credit Facility, due in 2020.

(4)	Represents fair value adjustments on senior notes resulting from the application of push-down accounting in connection with the acquisition of the Partnership's general partner by ETP on October 5, 2012.

(5)	In the fourth quarter 2015, the Partnership adopted accounting guidance which requires certain debt issuance costs to be reflected as a reduction in the total long-term debt liability for all periods presented. The net long-term debt balance now includes $34 and $32 million of debt issuance costs at December 31, 2016 and 2015, respectively.

---

---

---

(1)	Includes general partner interest.

---

---

(1)

Certain awards granted prior to October 5, 2012 were subject to the Partnership achieving certain market-based and cash distribution performance targets as compared to a peer group average, or certain cash distribution performance targets as defined by the Compensation Committee, which caused the actual amount of units that ultimately vested to range between 0 to 200 percent of the original units granted.

---

---

---

•

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 6,100 miles of crude oil trunk and gathering pipelines in the southwest and midwest United States and equity ownership interests in two crude oil pipelines. Our crude oil terminalling services operate with an aggregate storage capacity of approximately 33 million barrels, including approximately 26 million barrels at our Gulf Coast terminal in Nederland, Texas, approximately 2 million barrels at our Midland, Texas terminal 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 of 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 southwest 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.

---

---

(1)	Sales and other operating revenue for the periods presented includes the following amounts from ETP and its affiliates:

(2)	Represents non-cash adjustments on the Partnership's crude oil, NGLs and refined products inventories.

(3)	Total capital expenditures exclude acquisitions and investments in equity ownership interests of $796, $131, and $448 million for the years ended December 31, 2016, 2015 and 2014, respectively.

(4)	Net income includes $39, $24, and $25 million for the years ended December 31, 2016, 2015 and 2014, respectively, of equity income attributable to the equity ownership interest.

(1)	Total identifiable assets include the Partnership's unallocated $15 million cash and cash equivalents, $153 million of properties, plants and equipment, net, and $10 million of other assets.

(2)	Total identifiable assets include the Partnership's unallocated $36 million cash and cash equivalents, $133 million of properties, plants and equipment, net, and $7 million of other assets.

(3)	Total identifiable assets include the Partnership's unallocated $47 million cash and cash equivalents, $124 million of properties, plants and equipment, net, and $9 million of other assets.

---

(1)	Gross profit equals sales and other operating revenue less cost of products sold and operating expenses.

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

•	late filing of a Form 4 for Mr. Bray; and

•	late filing of a Form 4 for Mr. Lauterbach.

---

•	reward executives with an industry-competitive total compensation package of competitive base salaries and significant incentive opportunities, yielding a total compensation package approaching the top-quartile of the market;

•	attract, retain and reward talented executive officers and key management employees by providing total compensation competitive with that of other executive officers and key management employees employed by publicly traded limited partnerships of similar size and in similar lines of business;

•	motivate executive officers and key employees to achieve strong financial and operational performance;

•	emphasize performance-based or "at-risk" compensation; and

•	reward individual performance.

---

---

•

Base Salary: Base salary is designed to provide for a competitive fixed level of pay that attracts and retains executive officers, and compensates them for their level of responsibility and sustained individual performance (including experience, scope of responsibility, and results achieved). The salaries of the NEOs are reviewed on an annual basis. With respect to the 2016 year, salary increases were generally discussed and approved by the Compensation Committee in July 2016, although the Compensation Committee provided for an increase in Mr. Gvazdauskas' base salary in January 2016 as well. As discussed above, the base salaries of the NEOs are targeted to yield an annual base salary slightly below median level of market (i.e., approximately the 40th percentile of market) and are determined by the Compensation Committee after taking into account the recommendations of our President and Chief Executive Officer. Base salaries also are influenced by internal pay equity (fair and consistent application of compensation practices). At the NEO level, the balance of compensation is weighted toward pay-at-risk compensation (annual bonuses and long-term incentives). The table below shows the base salaries determined for the NEOs with respect to the 2016 year (following all 2016 increases), as well as the base salaries in effect for the NEOs at the end of the 2015 year for comparison purposes:

•

Annual Bonuses: In addition to base salary, the Compensation Committee makes a determination whether to award our NEOs discretionary annual cash bonuses following the end of the year. Discretionary bonuses, if awarded, are intended to reward our NEOs for the achievement of financial performance objectives during the year for which the bonuses are awarded in light of the contribution of each individual to our profitability and success during such year. The Compensation Committee does not establish its own financial performance objectives in advance for purposes of determining whether to approve any annual bonuses, and the Compensation Committee does not utilize any formulaic approach to determine annual bonuses.

---

•	Long-Term Incentive Awards (Equity Awards):

•

Why the LTIP was adopted: Long-term incentive awards for executive officers are granted under the LTIP in order to promote achievement of our long-term strategic business objectives. The LTIP was designed to align the economic interests of executive officers, key employees and directors with those of our unitholders and to provide an incentive to management for continuous employment with the general partner and its affiliates. Long-term incentive awards are based upon the common units representing limited partnership interests in us, although they may be payable in common units or in cash. The Compensation Committee administers the LTIP and, in its discretion, may terminate or amend the LTIP at any time with respect to any units for which a grant has not yet been made, including increasing the number of units that may be granted, subject to unitholder approval as required by the exchange upon which the common units are listed at that time. Changes to any outstanding grant that would materially impair the rights of a participant cannot be made without the consent of the affected participant.

•	The elements of compensation under the LTIP: The LTIP provides for the following types of awards: restricted units, phantom units, unit options, unit appreciation rights, unit awards or other unit-based awards. No types of awards other than restricted units have been granted since the inception of the LTIP.

---

•

Accounting and Tax Considerations: We account for the equity compensation expense of our general partner's employees, including the NEOs, in accordance with GAAP, which requires us to estimate and record an expense for each equity award over the vesting period of the award. The expense for restricted units settled in common units is recognized ratably over the vesting period. For cash compensation, the accounting rules require us to record it as an expense at the time the obligation is accrued. Because we are a partnership, and our general partner is a limited liability company, Internal Revenue Code ("Code") Section 162(m) does not apply to the compensation paid to our NEOs and, accordingly, the Compensation Committee did not consider its impact in determining compensation levels for 2016.

•

Equity Grant Practices: Equity awards to employees are approved at meetings of our general partner's Compensation Committee. In limited situations, however, such awards may be approved by unanimous written consent of the Compensation Committee. The grant date of an equity award is the date of the Compensation Committee meeting at which such equity award is approved. The Compensation Committee may, in its discretion, refrain from approving grants of equity awards to employees if the meeting at which such approval is to be considered occurs during a period in which management is in possession of material non-public information, in which case, approval of such equity awards may be deferred to the next Compensation Committee meeting. No grant approvals were deferred to a later Compensation Committee meeting in 2016.

•

Unit Ownership Guidelines: Our general partner has established guidelines for the ownership of our common units, applicable to certain executives of the general partner with respect to common units representing limited partnership interests in the Partnership. The applicable unit ownership guidelines are denominated as a multiple of base salary, and the amount of common units required to be owned increases with the level of responsibility. Under the current guidelines, the President and Chief Executive Officer is expected to own common units having a minimum value of five times his base salary, the Chief Financial Officer and Treasurer is expected to own common units having a minimum value of four times his base salary, and each of the remaining NEOs are expected to own common units having a minimum value of three times their respective base salaries. Our general partner and the Compensation Committee believe that the ownership of our common units, as reflected in these guidelines, is an important means of tying the financial risks and rewards for our executives to our total unitholder return and better aligning the interests of such executives with those of our unitholders. Any executive subject to the guidelines who has not yet met his or her respective ownership guideline must accumulate our common units until such guideline is met. Except for sales of common units in settlement of tax obligations relating to the receipt and payment of LTIP awards, such persons are prohibited from disposing of any of our common units until the applicable ownership guideline has been attained. However, those individuals who have met or exceeded their applicable ownership guideline may dispose of our common units in a manner consistent with applicable law and our policies, but only to the extent that such individual's remaining ownership of common units would continue to exceed the applicable ownership guideline.

---

•

Insider Trading (Including Hedging) Policy: The employees of our general partner are subject to the Sunoco Partners LLC Insider Trading Policy which, among other things, prohibits such employees from entering into short sales, or purchasing, selling, or exercising any puts, calls, or similar derivative security instruments pertaining to our common units, all of which could incentivize an employee towards engaging in overly risky behavior for short-term gains. This prohibition does not extend to unit options that may be issued in accordance with the terms of the LTIP.

•

Other Plans: During 2016, employees of our general partner, including the NEOs, participated in the following benefit plans offered by ETP or its affiliates, including certain of Sunoco, Inc.'s plans, in which our general partner was a participating employer prior to the merger transaction with ETP (the "Merger") and continues to participate. Sunoco, Inc., a Pennsylvania corporation ("Sunoco"), owned our general partner prior to the Merger. In connection with the Merger, Sunoco became a wholly-owned subsidiary of ETP and its affiliates and transferred its membership interests in our general partner to ETP.

•

The Sunoco, Inc. Retirement Plan (the "SCIRP") was a qualified defined benefit plan, under which benefits were subject to Code limits for pay and amount. On October 31, 2014, Sunoco terminated the SCIRP. Following the SCIRP's receipt in November 2015 of a favorable Determination Letter from the Internal Revenue Service ("IRS") for such standard termination, benefit distributions were made in December 2015 to those participants electing to commence receipt of benefits from the SCIRP, which included each of the NEOs other than Mr. Lauterbach. On December 22, 2015, Sunoco transferred all of the SCIRP's future benefit obligations to an insurance company through the purchase of a group annuity contract ("GAC"). The GAC obligates the insurance company to provide all future benefits to participants, in accordance with the existing SCIRP provisions in existence on December 22, 2015. The single lump sum value of Mr. Lauterbach's SCIRP benefit that was transferred to the insurance company, valued on March 1, 2016, was $249,397. Effective upon the purchase of the GAC, the insurance company is solely responsible for providing Mr. Lauterbach's benefit, including all interest earned. The provisions of the SCIRP that are still applicable to Mr. Lauterbach are described below under "Pension Benefits."

•

The Sunoco, Inc. Pension Restoration Plan (the "Pension Restoration Plan") is a nonqualified plan that provides retirement benefits that otherwise would have been provided under the SCIRP, except for the Code limits. Effective June 30, 2010, Sunoco froze benefits, including accrued and vested benefits, payable under this plan for all salaried employees of our general partner who participate in this plan, including the NEOs. Benefits from the Pension Restoration Plan are payable upon the eligible NEO's separation of service.

•

The Energy Transfer Partners GP, L.P. 401(k) Plan (the "ETP 401(k) Plan") is a defined contribution 401(k) plan, which covers substantially all of our general partner's employees, including the NEOs. Employees may elect to defer up to 75 percent of their eligible compensation before applicable taxes, as limited under the Code. For 2016, a participant was eligible to make elective deferrals up to $18,000. The Partnership provides a matching contribution equal to 100 percent on the first five percent of each participant's elective deferrals. Participants age 50 or over at any time in 2016 could elect to make a catch-up contribution of up to $6,000. Catch-up contributions are not eligible for a matching contribution from the Partnership. The amounts deferred by the participant to the ETP 401(k) Plan account are fully vested at all times, and the amounts contributed by the Partnership become vested based on years of service. We provide this benefit as a means to incentivize employees and provide them with an opportunity to save for their retirement.

•

The ETP Deferred Compensation Plan (the "ETP DC Plan") is a nonqualified deferred compensation plan, which permits eligible highly compensated employees to defer a portion of their salary, bonus and/or quarterly non-vested phantom unit distribution equivalent income until retirement, termination of employment or other designated distribution event. Each year under the ETP DC Plan, eligible employees are permitted to make an irrevocable election to defer up to 50 percent of their annual base salary, 50 percent of their DER payments, and/or 50 percent of their annual bonus under the ASIP during the following year. Pursuant to the ETP DC Plan, the Partnership may make annual discretionary matching contributions to participants' accounts; however, the Partnership has not made any discretionary contributions to participants' accounts and currently has no plans to make any discretionary contributions to participants' accounts. All amounts credited under the ETP DC Plan, other than discretionary credits, are immediately 100 percent vested. Participant accounts are credited with deemed earnings (or losses) based on hypothetical investment fund choices made by the participants among available funds.

---

•

The ETP Deferred Compensation Plan for Former Sunoco Executives is a nonqualified deferred compensation plan established by ETP in connection with the October 2012 merger ("2012 Merger"). Pursuant to his offer letter agreement with ETP effective as of October 5, 2012, in connection with the 2012 Merger (the "Offer Letter"), Mr. Hennigan waived any future rights or benefits to which he otherwise would have been entitled under both the Sunoco, Inc. Executive Retirement Plan ("SERP"), a nonqualified plan that provided supplemental pension benefits over and above the benefits under the SCIRP and the Pension Restoration Plan, and the Pension Restoration Plan, in return for which, the present value ($2,789,413) of such deferred compensation benefits was credited to Mr. Hennigan's account under this plan. Mr. Hennigan is our only executive officer eligible to participate in this plan. Mr. Hennigan's account is 100 percent vested and will be distributed in one lump sum payment upon his retirement, termination of employment or other designated distribution event, including a change of control, as defined in the plan. His account is credited with deemed earnings (or losses) based on hypothetical investment fund choices made by him among available funds.

•

Other Benefits: Employees of our general partner, including NEOs, participate in the Energy Transfer Partners GP, L.P. Health and Welfare Program for Active Employees (the "Midstream Plan"). The Midstream Plan offers a variety of other benefits arrangements, including medical, dental, vision, life insurance, disability insurance, holidays and vacation, offered to similarly situated employees. These benefits arrangements, which are the same for all midstream employees of the ETE family of partnerships, are provided on an enterprise-wide basis. NEOs receive the same benefits and are responsible to pay the same premium, deductible and out-of-pocket maximums as other employees.

•

Severance Benefits: An employee, including an NEO, is an employee at will. This means that our general partner may terminate an employee's employment at any time, with or without notice, and with or without cause or reason. Our NEOs do not have employment agreements or any other agreements, other than certain LTIP acceleration events described below, that call for payments on termination or severance benefits upon separation from employment or in the event of a Change of Control of the general partner. Upon certain terminations of employment, certain benefits may be paid or provided to our NEOs. Our general partner has adopted the Energy Transfer Partners GP, L.P. Severance Plan (the "Severance Plan"), which provides for payment of severance benefits in the event of certain qualifying terminations (defined below) to all salaried employees on a nondiscriminatory basis. In general, the Severance Plan provides payment of two weeks of annual base salary for each year or partial year of employment service with the general partner up to a maximum of fifty-two weeks (or one year) of annual base salary, with a minimum of four weeks of annual base salary. The Severance Plan also provides up to three months of continued, subsidized group health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). The Severance Plan provides that the Partnership may determine to pay benefits, in addition to those provided under the Severance Plan, based on special circumstances, which additional benefits shall be unique and non-precedent setting. The Severance Plan defines a qualifying termination as an involuntary termination that occurs in connection with a reduction-in-force, reorganization, restructuring, position elimination or any other termination designated by the plan administrator as a qualifying termination, although a qualifying termination may not be a termination for cause, retirement, death, disability or a voluntary resignation for any reason.

---

(1)	The amounts shown in this column reflect annual bonuses payable under the ASIP for performance during 2016, 2015 and 2014, as applicable, which are payable on or before March 15th of the year immediately following the year to which the plan related.

(2)

The amounts shown in this column reflect the aggregate grant date fair value of restricted unit awards under the LTIP, calculated in accordance with FASB ASC Topic 718, disregarding the estimate of forfeitures. See Note 14 to our consolidated financial statements for fiscal 2016 for additional detail regarding assumptions underlying the value of these equity awards. The amounts shown in this column generally reflect the grants of time-based restricted units approved by the Compensation Committee at its regularly scheduled meetings in December. However, in January 2014, the Compensation Committee approved an additional grant of restricted units to Mr. Hennigan for his performance during 2013.

(3)	The amounts shown in this column reflect the change in present value for all defined benefit pension plans and supplemental executive retirement plans in which the NEOs participated. The applicable disclosure rules require the change in pension value be shown as zero if the actual calculation of the change in pension value is less than zero (i.e., a decrease).

---

(4)	The table below shows the components of this column for 2016:

(a)	During 2016, our general partner was a participating employer in the ETP 401(k) Plan, which provides a matching contribution equal to 100 percent on the first five percent of each participant's elective deferrals.

(b)	The amounts shown in this column reflect the cash payments made to each NEO during 2016, which were equal to each cash distribution per common unit made by us on our common units during 2016 with respect to each common unit subject to a restricted unit held by such NEO that has not either vested or been forfeited. Pursuant to the terms of the awards, these cash amounts are paid quarterly.

(5)	Compensation information for only fiscal year 2016 and 2015 is provided for Mr. Gvazdauskas because he was not a NEO in fiscal year 2014.

---

(1)	The restricted unit awards vest 60 percent in December 2019 and the remaining 40 percent in December 2021.

(2)	Reflects the grant date fair value of restricted unit awards granted under the LTIP during fiscal 2016, computed in accordance with FASB ASC Topic 718. See Note 14 to our consolidated financial statements for fiscal 2016 for additional detail regarding assumptions underlying the value of these equity awards.

---

(1)	The restricted unit awards vest as follows:

•	ratably in December of each year through 2017 for Mr. Hennigan's awards granted in December 2012;

•	ratably in December of each year through 2017 for awards granted in January 2013;

•	60 percent in December 2016 and the remaining 40 percent in December 2018 for awards granted in December 2013;

•	60 percent in December 2016 and the remaining 40 percent in December 2018 for Mr. Hennigan's award granted in January 2014;

•	60 percent in December 2017 and the remaining 40 percent in December 2019 for awards granted in December 2014;

•	60 percent in December 2018 and the remaining 40 percent in December 2020 for awards granted in December 2015; and

•	60 percent in December 2019 and the remaining 40 percent in December 2021 for awards granted in December 2016.

(2)

The market value or payout value of the unearned restricted units is equal to the closing price of our common units on December 30, 2016 of $24.02 (as December 31, 2016 was not a trading day), multiplied by the number of restricted units outstanding. The amounts shown in this column do not include amounts for related DER payments that could be included in the payout. See "Potential Payments Upon Termination or Change of Control" for a discussion of the treatment of these awards under certain termination events or in the event of a change of control.

---

(1)	The amounts shown in this column reflect the vesting and payout, in the form of our common units, of LTIP grants during 2016.

(2)	Value realized on vesting was determined by multiplying the number of common units to be issued upon vesting by the closing market price of our common units on the date prior to the vesting date. These amounts do not reflect the value of units withheld by our general partner to satisfy tax withholding obligations.

---

(1)	Credited years of service reflect actual plan service with the general partner, including years of service credited with Sunoco prior to employment with our general partner.

(2)

Mr. Lauterbach's accrued benefits under the SCIRP have been deferred until his next eligible benefit commencement date and have been transferred to an insurance company for management and payment at the applicable time. The present value of his benefits has been set equal to his actual cash balance account as of December 31, 2016, which is equivalent to valuing the present value with a discount rate of 4.22 percent, or the Career Pay Formula interest crediting rate, and which present value is lower than his estimate at year-end 2014.

•	The retirement benefit is expressed as an account balance, comprised of pay credits and indexing adjustments.

•	Pay credits equal seven percent of pay for the year up to the Social Security (FICA) Wage Base ($113,700 in 2013, $117,000 in 2014, and $118,500 in 2015) plus 12 percent of pay that exceeds the Wage Base for the year.

•	Beginning November 1, 2014, in connection with the SCIRP's standard termination, the indexing adjustment was fixed at 4.22 percent annually.

---

---

(1)	These amounts reflect the net gains (losses) attributable to the investment funds in which Mr. Chalson is deemed to have chosen to invest his contributions under the ETP DC Plan.

---

(1)	These amounts reflect the net gains (losses) attributable to the investment funds in which Mr. Hennigan is deemed to have chosen to invest his contributions under the ETP Deferred Compensation Plan for Former Sunoco Executives.

---

•	Retirement:

•	SCIRP/Pension Restoration Plan: The benefits payable to the NEOs upon retirement are described above in the section entitled "Pension Benefits."

•

LTIP: Outstanding restricted units would be forfeited unless specified in the applicable award agreement. The NEOs' December 2016 and 2015 award agreements provide that a NEO with at least ten years of service with the general partner, who leaves the general partner voluntarily due to retirement, is eligible for accelerated vesting of 40 percent of his or her award for a NEO age 65 to 68 or 50 percent of his or her award for a NEO over age 68. Under the assumptions described above, none of the restricted units granted in December 2016 and 2015 would vest upon a NEO's retirement because none of the NEOs met the age criteria for vesting at such time.

•	Voluntary Termination: Mr. Lauterbach elected to defer his benefits under the SCIRP and would be eligible for payment of his SCIRP benefit from the selected insurance company upon voluntary termination. NEOs participating in the Pension Restoration Plan (Ms. Shea-Ballay and Mr. Chalson) would be eligible to receive their benefit as a lump sum six months following their date of termination.

•	Involuntary Termination-For Cause: Benefits accrued under the SCIRP and Pension Restoration Plan would be paid according to the terms of those plans applicable to terminated or retirement eligible employees, as described in the Voluntary Termination section above.

•	Involuntary Termination-Not for Cause:

•	SCIRP/Pension Restoration Plan: Benefits accrued under the SCIRP and Pension Restoration Plan would be paid according to the terms of those plans applicable to terminated or retirement eligible employees, as described in the Voluntary Termination section above.

•

LTIP: Outstanding restricted units would be forfeited unless specified in the applicable award agreement. Mr. Hennigan's award agreement for restricted units granted in December 2014 and his October 5, 2012 Offer Letter provide for vesting immediately upon involuntary not-for-cause termination. Under the assumptions described above, Mr. Hennigan's restricted units granted in December 2014 and December 2012 would vest at a total value of $3,143,222 upon his involuntary not-for-cause termination, which value includes DER payments due to accelerated vesting of unit ownership.

•	Severance Plan: The NEOs would be eligible for severance benefits under the Severance Plan. At a maximum, the NEOs could receive one year of salary as a cash severance benefit, and could receive up to three months of COBRA continuation coverage.

•	Involuntary Termination-Change of Control:

•	SCIRP/Pension Restoration Plan: Benefits accrued under the SCIRP and Pension Restoration Plan would be paid according to the terms of those plans applicable to terminated or retirement eligible employees, as described in the Voluntary Termination section above.

•

LTIP: Under the version of the LTIP prior to the amended and restated LTIP adopted on December 1, 2015 (the "Original LTIP"), unless specified otherwise in the applicable award agreement, if a change of control occurs, there is a "double trigger" mechanism, requiring both a change of control and a qualifying termination of employment (as defined in the plan) following such change of control, to trigger the payment of outstanding restricted units and accompanying DER payments. All restricted units granted prior to December 1, 2015 remain subject to the terms and conditions of the Original LTIP. Under the amended and restated LTIP, awards may also become vested upon a change of control at the discretion of the Compensation Committee, or if otherwise specified in the applicable award agreement. The NEOs' December 2016 and 2015 award agreements provide for vesting immediately upon a change of control. Under the assumptions described above, and assuming the occurrence of the double trigger for the restricted units granted prior to

---

•

ETP DC Plan and ETP Deferred Compensation Plan for Former Sunoco Executives: As discussed in our CD&A above, all amounts under the ETP DC Plan and the ETP Deferred Compensation Plan for Former Sunoco Executives (other than discretionary credits) are 100 percent vested. Upon a change in control (as defined in the ETP DC Plan and the ETP Deferred Compensation Plan for Former Sunoco Executives), distributions from the ETP DC Plan and/or the ETP Deferred Compensation Plan for Former Sunoco Executives would be made in accordance with the normal distribution provisions. A change in control is generally defined in the ETP DC Plan and the ETP Deferred Compensation Plan for Former Sunoco Executives as any change in control event within the meaning of Treasury Regulation Section 1.409A-3(i)(5).

•	Severance Plan: The Severance Plan would not provide any enhanced benefits to the NEOs upon an involuntary termination that is in connection with a change in control event. If an NEO is terminated by us without cause in connection with a change in control benefit, the NEO would not receive benefits in excess of the amounts set forth above with respect to an involuntary termination without cause.

•	Death:

•

SCIRP/Pension Restoration Plan: Due to the SCIRP's standard termination, Mr. Lauterbach's spouse, beneficiary(ies) or estate would receive from the selected insurance company 100 percent of his benefit accrued under the Career Pay formula. The spouse, beneficiary(ies) or estate of Ms. Shea-Ballay and Mr. Chalson, as applicable, would be eligible to receive 100 percent of his or her benefit payable from the Pension Restoration Plan.

•

LTIP: Outstanding restricted units would be forfeited unless specified in the applicable award agreement. The NEOs' December 2016, December 2015 and December 2014 award agreements, as well as Mr. Hennigan's October 5, 2012 Offer Letter, provide for vesting immediately upon death. Under the assumptions described above, Mr. Hennigan's restricted units granted in December 2016, December 2015, December 2014 and December 2012 would vest at a total value of $9,385,350, and Messrs. Gvazdauskas', Lauterbach's and Chalson's and Ms. Shea-Ballay's restricted units granted in December 2016, December 2015 and December 2014 would vest at a total value of $1,573,336, $1,020,806, $1,154,306 and $1,435,119, respectively, upon his or her death, each of which values includes DER payments due to accelerated vesting of unit ownership.

•	Life Insurance: In the event of death, the NEOs participate in the life insurance plans offered to all of our employees (i.e., basic life insurance benefits equal to one and one-half times the NEO's annual base salary, up to a maximum of $750,000 plus any supplemental life insurance benefit (one times to six times base salary, to a maximum of $2,000,000) elected and paid for by the NEO).

•	Termination Due to Disability:

•	SCIRP/Pension Restoration Plan: Benefits accrued under the SCIRP and Pension Restoration Plan would be paid according to the terms of those plans applicable to terminated or retirement eligible employees, as described in the Voluntary Termination section above.

•

LTIP: Under the Original LTIP, all unvested restricted units will be paid out as awarded in the event of permanent disability. All restricted units granted prior to December 1, 2015 remain subject to the terms and conditions of the Original LTIP. Under the amended and restated LTIP, outstanding restricted units would be forfeited unless specified in the applicable award agreement. The NEOs' December 2016 and December 2015 award agreements provide for vesting immediately upon termination due to disability. Under the assumptions described above, all outstanding restricted units held by the NEOs would vest for Messrs. Hennigan, Gvazdauskas, Lauterbach and Chalson and Ms. Shea-Ballay at a total value of $11,005,622, $1,741,194, $1,268,862, $1,402,361 and $1,683,175, respectively, upon his or her termination due to disability, each of which values includes DER payments due to accelerated vesting of unit ownership.

•

Long Term Disability: The Executive Long Term Disability Plan ("ELTD") provides salary replacement benefits to executives, who become eligible before age 60, at the Senior Vice President level or higher. To participate, an executive must make an affirmative election during the biannual open enrollment. The ELTD pays benefits if the participant is deemed to be disabled, as defined by the ELTD, by the general partner's disability plan administrator. The ELTD provides salary replacement benefits (up to $7,500 per month) that are in addition to our long-term disability plan benefit that is available to all salaried employees on a nondiscriminatory basis (which benefits are up to 60 percent of total monthly compensation or $10,000 per

---

---

•	annual retainers for the chairs of the Audit Committee and Compensation Committee, which were $15,000 and $7,500, respectively, in cash (paid quarterly) for 2016;

•	annual retainers for the members of the Audit and Compensation Committees, which were $10,000 and $5,000, respectively, in cash (paid quarterly) for 2016;

•	per meeting fees for the members of the Audit Committee and Compensation Committee, which were $1,200 and $1,200, respectively, in cash per meeting for 2016; and

•	an initial grant of 2,500 restricted common units upon a director first being elected or appointed to the Board.

---

(1)	The amounts shown in this column reflect the cash fees earned by directors with respect to the 2016 year.

(2)	The amounts shown in this column reflect the aggregate grant date fair value of restricted unit awards under the LTIP, calculated in accordance with FASB ASC Topic 718. See Note 14 to our consolidated financial statements for fiscal 2016 for additional detail regarding assumptions underlying the value of these equity awards.

(3)	The amounts shown in this column reflect the cash payments made to each director during 2016, which were equal to each cash distribution per common unit made by us on our common units during 2016 with respect to each common unit subject to a restricted unit held by such director that has not either vested or been forfeited.

(4)

Mr. Perry resigned from his position on the Board on December 31, 2016. In connection with that resignation he forfeited all outstanding equity awards that he held on that date, therefore he did not hold any outstanding equity awards as of December 31, 2016. In January 2017, the SXL Compensation Committee approved a cash payment to Mr. Perry of $153,728 representing the fair value of the unit awards forfeited upon his resignation.

(5)	Mr. Welch resigned from his position on the Board on February 25, 2016 and did not receive an equity grant during 2016.

---

---

---

---

---

(1)

The address for Messrs. Anderson, Angelle, Bray, Hennigan, Mason, McCrea, Gvazdauskas, Shea-Ballay, Lauterbach, and Chalson is 3807 West Chester Pike, Newtown Square, Pennsylvania 19073. The address for ETP is 8111 Westchester Drive, Suite 600, Dallas, Texas 75225. The principal business address given for Tortoise Capital Advisors, L.L.C. in the Schedule 13G/A filed on February 13, 2017 is 11550 Ash Street, Suite 300, Leawood, Kansas 66211. The principal business address given for OppenheimerFunds, Inc. in the Schedule 13G/A filed on February 6, 2017 is 225 Liberty Street, New York, New York 10281. The principal business address given for ALPS Advisors, Inc. in the Schedule 13G filed on January 26, 2017 is 1290 Broadway, Suite 1100, Denver, CO 80203.

(2)	Beneficial ownership for the purposes of the foregoing table is defined by Rule 13d-3 under the Exchange Act. Under that rule, a person is generally considered to be the beneficial owner of a security if he has or shares the power to vote or direct the voting thereof or to dispose or direct the disposition thereof or has the right to acquire either of those powers within sixty (60) days.

(3)

Tortoise Capital Advisors, L.L.C., a Delaware limited liability company, filed a Schedule 13G/A on February 13, 2017 to report that, as of December 31, 2016, it had sole voting and dispositive power over 382,046 common units of the Partnership, shared voting power over 20,989,234 common units of the Partnership, shared dispositive power over 23,383,015 common units of the Partnership, and beneficial ownership of 23,765,061 common units of the Partnership.

(4)	OppenheimerFunds, Inc., a Colorado corporation, filed a Schedule 13G/A on February 6, 2017 to report that, as of December 31, 2016, it had shared voting and dispositive power over 18,973,974 common units of the Partnership. OppenheimerFunds, Inc. disclaims beneficial ownership of the 18,973,974 common units of the Partnership pursuant to Rule 13d-4 of the Exchange Act.

(5)	ALPS Advisors, Inc., a Colorado corporation, filed a Schedule 13G on January 26, 2017 to report that, as of December 31, 2016, it had shared voting and dispositive power over 17,181,855 common units of the Partnership. ALPS Advisors, Inc. disclaims beneficial ownership of the 17,181,855 common units of the Partnership pursuant to Rule 13d-4 of the Exchange Act.

(6)	Mr. Hennigan's spouse has voting and investment power with respect to 14,400 of these units.

(7)	On October 8, 2015, the Partnership issued 9,416,196 Class B units to ETP. The Class B units have the same terms and conditions of voting rights as the Partnership's common units, but are not entitled to receive quarterly distributions that are made on the Partnership's common units.

---

(1)	Beneficial ownership for the purposes of the foregoing table is defined by Rule 13d-3 under the Exchange Act. Under that rule, a person is generally considered to be the beneficial owner of a security if he has or shares the power to vote or direct the voting thereof or to dispose or direct the disposition thereof or has the right to acquire either of those powers within sixty (60) days.

(2)	Due to their positions as officers or directors of the general partner of ETE, certain officers and directors of our general partner, who are also officers or directors of ETE's general partner, may be deemed to own beneficially certain limited partnership interests in ETP, held by ETE, to the extent of their respective interests therein. Any such deemed ownership is not reflected in the table.

(3)	23,640 of these ETP common units are held in the Jacob McCrea 2012 Trust over which Mr. McCrea maintains control.

---

---

---

(1)

Audit fees consist of fees for the audit of the Partnership's annual consolidated financial statements, review of consolidated financial statements included in the Partnership's quarterly reports on Form 10-Q, review of registration statements, issuance of comfort letters and consents, and review of documents filed with the SEC. Audit fees also include the fees for the audit of the Partnership's internal control as required by Section 404 of the Sarbanes-Oxley Act of 2002.

---

(a)	The following documents are filed as part of this report:

(a)	The financial statements and notes thereto are included in Item 8. Financial Statements and Supplementary Data.

(b)	All financial statement schedules required are included in the financial statements or notes thereto.

(c)	Exhibits:

---

---

---

---

---

---

1.	Appendix I - Definition of "Outside Termination Date". The definition of "Outside Termination Date" set forth in Appendix I of the Original Agreement is deleted in its entirety and replaced with the following:

2.

Ratification. Except as specifically provided in this Amendment, all terms and provisions of the Original Agreement shall remain unchanged and in full force and effect, and the Original Agreement, as modified by this Amendment, is hereby ratified, acknowledged and reaffirmed by the Parties. To the extent any term of this Amendment conflicts with any term of the Original Agreement, the term of this Amendment shall control.

---

3.

No Other Amendments. Except as expressly set forth herein, the execution of this Amendment shall not directly or indirectly in any way whatsoever (a) impair, prejudice or otherwise adversely affect any Party’s right at any time to exercise any right, privilege or remedy in connection with the Original Agreement, (b) amend or alter any provision of the Original Agreement (other than the amendments provided for in this Amendment) or (c) constitute any course of dealing or other basis for altering any obligation of any Party or any right, privilege or remedy of any Party under the Original Agreement.

4.	References. Each reference in the Original Agreement to "this Agreement," "hereunder," "hereof," "herein" or any other word or words of similar import shall mean and be a reference to the Original Agreement as amended hereby.

5.	Counterparts. This Amendment may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all of such counterparts shall constitute for all purposes one agreement. Any signature hereto delivered by a Party by facsimile or other electronic transmission shall be deemed an original signature hereto.

---

(1)	Represents one-third of the total operating lease rental expense, which is that portion deemed to be interest.

(2)	Represents income before income tax expense for all consolidated entities.

(3)	Represents dividends received from equity-method investments.

---

1.	I have reviewed this annual report on Form 10-K of Sunoco Logistics Partners L.P.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated entities, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

1.	I have reviewed this annual report on Form 10-K of Sunoco Logistics Partners L.P.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated entities, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.