Related-Party Transactions

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

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Philadelphia Energy Solutions Products Purchase Agreements – two related products purchase agreements, one with Philadelphia Energy Solutions Refining & Marketing (“PES”) and one with PES's product financier Merrill Lynch Commodities; both purchase agreements contain 12-month terms that automatically renew for consecutive 12-month terms until either party cancels with notice. ETP Retail owns a noncontrolling interest in the parent of PES. PES Holdings, LLC (“PES Holdings”) and eight affiliates filed for Chapter 11 bankruptcy protection on January 21, 2018 in the United States Bankruptcy Court for the District of Delaware to implement a prepackaged reorganization plan that will allow its shareholders to retain a minority stake. PES Holdings’ Chapter 11 Plan (“Plan”) proposes to inject $260 million in new capital into PES Holdings, cut debt service obligations by about $35 million per year and remove debt maturities before 2022. Under that Plan, PES Holdings’ non-debtor parent, Philadelphia Energy Solutions, in which ETP holds an indirect 33% equity interest, will provide a $65 million cash contribution in in exchange for a 25% stake in the reorganized debtor. After the restructuring, the proportionate ownership of Carlyle Group, L.P. and ETP in PES Holdings will be 16.26% and 8.13%, respectively. Finally, Sunoco Logistics Partners Operations L.P. (“SXL Operating Partnership”), a subsidiary of ETP, is providing an additional $75 million exit loan ranked pari passu with the other debt. SXL Operating Partnership’s, PES Holdings’ and ETP’s current contracts will be assumed, without any impairments, in the Chapter 11, and business operations will continue uninterrupted. The financial reorganization is expected to complete in the first quarter of 2018.


•	ETP Transportation and Terminalling Contracts – various agreements with subsidiaries of ETP for pipeline, terminalling and storage services. We also have agreements with subsidiaries of ETP for the purchase and sale of fuel.

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

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

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

Summary of Transactions

Related party transactions with affiliates for the years ended December 31, 2017, 2016, and 2015 were as follows (in millions):



	Year Ended December 31, 2017		Year Ended December 31, 2016		Year Ended December 31, 2015
Motor fuel sales to affiliates	$	55	$	62	$	20
Bulk fuel purchases from affiliates	$	2,416	$	1,867	$	2,449

Included in the bulk fuel purchases above are purchases from PES, which constitutes 19.6%, 20.3% and 20.8% of our total cost of sales for the years ended December 31, 2017, 2016 and 2015, respectively.

Additional significant affiliate activity related to the Consolidated Balance Sheets are as follows:


•	Net advances from affiliates were $85 million and $87 million at December 31, 2017 and 2016, respectively. Advances to and from affiliates are primarily related to the treasury services agreements between Sunoco LLC and Sunoco (R&M), LLC and Sunoco Retail and Sunoco (R&M), LLC, which are in place for purposes of cash management.


•	Net accounts receivable from affiliates were $155 million and $3 million at December 31, 2017 and 2016, respectively, which are primarily related to motor fuel purchases from us.


•	Net accounts payable to affiliates was $206 million and $109 million as of December 31, 2017 and 2016, respectively, attributable to operational expenses.