FAQ

Many of our investors and potential investors have similar questions about us, our affiliates, and other more specific financial information. We've created this section so we can answer the most common of those questions.

If you don't find an answer to a question you have, or would like more information than we have provided, please contact us and we will provide all the details that we can.

To make this section easier to navigate, we've organized it by question:

1. What is a Master Limited Partnership (MLP)?
2. Why did Sunoco, Inc. form a Master Limited Partnership?
3. Who owns Sunoco Logistics?
4. What assets are included in Sunoco Logistics?
5. Where will growth occur within Sunoco Logistics?
6. What is the distribution payment?
7. When will the distribution be paid?
8. How much of the distribution is return of capital/tax deferred?
9. What are the tax implications?
10. What is a unitholder's tax basis in the units?
11. What information will I receive for income tax reporting purposes?
12. Does Sunoco Logistics have a Distribution Reinvestment Plan?
13. How can I buy units of Sunoco Logistics?
14. What is the stock symbol for Sunoco Logistics and on which exchange is it traded?
15. Who is Sunoco Logistics' transfer agent and how does a registered unitholder contact the agent for account information?
16. How can I communicate directly with Sunoco Logistics?
17. What are Sunoco Logistics' Corporate Governance Policies?
18. What does the recently enacted law on mutual funds investing in MLPs mean?

1. What is a Master Limited Partnership (MLP)?
An MLP is a publicly traded partnership. The nature of a partnership provides for the "pass through" of income to its partners. This essentially avoids double taxation on profits often paid by corporations, which pay corporate income tax in addition to its shareholders paying taxes on dividends. Individual investors buy ownership interests, or units, in the partnership similar to purchasing shares of stock in a corporation.

2. Why did Sunoco, Inc. form a Master Limited Partnership?
Sunoco, Inc. formed a Master Limited Partnership to enable them to use this as a growth vehicle for its pipelines, terminalling, and storage business. MLPs typically are valued at a higher value than corporations, and thus this enables Sunoco, Inc., through the MLP, to compete effectively in bidding for and acquiring other pipeline, terminalling, and storage assets.

3. Who owns Sunoco Logistics?
Sunoco, Inc. owns 43.4% of Sunoco Logistics through a 41.4% interest in the Limited Partner units, and a 2% General Partner interest. Individual unitholders own the remaining 56.6% interest.

4. What assets are included in Sunoco Logistics?
Sunoco, Inc. created Sunoco Logistics by transferring most of its pipeline, terminalling, and storage assets to us. These assets include the Eastern Pipeline System, Terminal Facilities and the Western Pipeline System. Sunoco, Inc. retained certain pipeline assets, because they may not provide consistent revenues and cash flows. Sunoco Logistics has a 10-year option through 2012 to purchase certain of these assets retained by Sunoco, Inc.

5. Where will growth occur within Sunoco Logistics?
Sunoco Logistics plans to grow the company both organically, as well as through acquisitions. We plan to grow organically by increasing the volume of crude oil and refined product shipped through our pipelines, by building new or expanding the size of our existing pipelines, and by expanding and adding additional tankage at out terminals. We will also pursue accretive acquisitions that either complement our existing asset base, or which result in either geographical or product diversification into new regions or into related but new areas of business. Also, Sunoco, Inc. has agreed not to compete with Sunoco Logistics in the areas of pipelines, terminalling, and storage as long as it controls the General Partner interest. See press releases for any recent acquisitions or expansions.

6. What is the distribution payment?
A distribution is similar to a dividend that you would receive from a corporation. A distribution represents the cash payment made to unitholders on a quarterly basis. See our distribution history for past distribution payments made.

7. When will the distribution be paid?
Upon approval of the Board of Directors of the General Partner, cash distributions are to be paid no later than 45 days after the end of each calendar quarter, and therefore will be paid in mid- May, August, November, and February of each year.

8. How much of the distribution is return of capital/tax deferred?
Sunoco Logistics projects that approximately 80% of the distribution will represent a return of capital.

9. What are the tax implications?
Sunoco Logistics will not pay any federal income tax. This allows for a higher potential cash flow payout to unitholders. Instead, each unitholder will be required to report on his or her income tax return his share of our income, gains, losses, and deductions without regard to whether corresponding cash distributions are received. As a result, a unitholder's share of taxable income, and possibly the income tax payable by the unitholder with respect to that income may exceed the cash actually distributed to that unitholder. This differs from corporations, which are subject to "double taxation", whereby the corporation's earnings are taxed to the corporation and their corporate distributions are further subject to taxation at the shareholder level. Since MLPs generally pay more cash distributions than the amount of taxable income allocated, the tax basis of the unitholder is decreased by the difference between total cash received and taxable income reported. Cash distributions will become taxable if the unitholder's cost basis is reduced to zero. The term "tax deferred distribution" refers to the portion of the cash distribution that exceeds the amount of taxable income allocated to the unitholder. It is the responsibility of each unitholder to investigate the legal and tax consequences under the law of pertinent states and localities of his or her investment in Sunoco Logistics. You should also consult your own tax advisor in regard to these matters.

10. What is a unitholder's tax basis in the units?
A unitholder's initial tax basis in the units will generally be the amount paid for the units. Cash distributions from Sunoco Logistics reduces a unitholder's tax basis in the investment and are not taxable to a unitholder as long as the unitholder's tax basis in Sunoco Logistics exceeds zero. Distributions are taxable to the extent they exceed a unitholder's tax basis in the investment. A unitholder's share of Sunoco Logistics' taxable income is taxable to the unitholder and increases the unitholder's tax basis in the investment. This taxable income amount is reported to the unitholder in the individualized Schedule K-1 that is mailed annually to each unitholder in late February. Unitholders may also be subject to income tax reporting requirements in states in which Sunoco Logistics has operations.

11. What information will I receive for income tax reporting purposes?
Sunoco Logistics will provide its unitholders with a Schedule K-1 during the latter part of February for the prior tax year.

12. Does Sunoco Logistics have a Distribution Reinvestment Plan?
No, Sunoco Logistics does not have a Distribution Reinvestment Plan.

13. How can I buy units of Sunoco Logistics?
A potential unitholder can go through a broker to purchase units.

14. What is the stock symbol for Sunoco Logistics and on which exchange are they traded?
Sunoco Logistics is traded on the New York Stock Exchange under the symbol "SXL."

15. Who is Sunoco Logistics' transfer agent and how does a registered unitholder contact the agent for account information?
Sunoco Logistics is not able to make address or name changes, confirm holdings or transactions, or perform other administrative tasks affecting the accounts of either registered or non-registered owners of Sunoco Logistics. To make these changes or to make other inquiries please contact our transfer agent.

16. How can I communicate directly with Sunoco Logistics?
Sunoco Logistics encourages questions and discussions with all of its unitholders and potential investors. Please contact us at your convenience.

17. What are Sunoco Logistics' Corporate Governance Policies?
We are committed to having "best practices" corporate governance policies. We conform to all required Securities and Exchange Commission ("SEC") and New York Stock Exchange ("NYSE") policies. For a list of our published policies, please see our corporate governance page.

18. What does the recently enacted law on mutual funds investing in MLPs mean?
The new provision adds net income derived from an interest in a publicly traded partnership (PTP, i.e., an MLP) to the list of mutual fund qualified income. To maintain its special tax status as a regulated investment company (RIC), a mutual fund must derive at least 90% of its income from qualified sources. As a result of this provision, RICs may now invest freely in PTPs as long as such investments do not constitute more than 25% of their assets, and as long as they do not own more than 10% of any one PTP. Under the previous law, income from PTPs was considered "nonqualifying" and could not exceed 10% of the mutual fund's income. For more information, please see: THE NEW LAW ON MUTUAL FUND INVESTMENT IN MLPS prepared by the Coalition of Publicly Traded Partnerships.

If you have any other questions, please contact Investor Relations.