PHILADELPHIA, July 21 /PRNewswire-FirstCall/ -- Sunoco Logistics
Partners L.P. (NYSE:SXL) (the "Partnership") today announced net
income for the second quarter ended June 30, 2009 of $66.6 million,
or $1.74 per limited partner unit on a diluted basis, compared with
$51.3 million, or $1.47 per limited partner unit on a diluted
basis, for the second quarter ended June 30, 2008. Operating income
for the second quarter ended June 30, 2009 increased by $18.9
million, or 31.9 percent, from the prior year's second quarter. The
improvement was driven by higher lease acquisition results,
increased crude oil pipeline and storage revenues and the November
2008 acquisition of the MagTex refined products pipeline and
terminals system. The increase in operating income was partially
offset by a $3.6 million increase in interest expense associated
with higher borrowings for asset acquisitions and organic growth
opportunities. Distributable cash flow for the quarter increased
24.8 percent to $71.8 million compared to the second quarter of
2008. For the six months ended June 30, 2009, net income increased
to $147.5 million compared to $88.8 million for the first six
months of 2008. Operating income for the first half of 2009
increased $64.2 million, or 61.4 percent, when compared to the
prior year period. The increase was the result of significant
improvements in the lease acquisition business, contribution from
the MagTex acquisition and increased crude oil pipeline and storage
revenues. Increased interest expense partially offset the increase
in operating income, leading to an improvement of $58.7 million to
net income. Distributable cash flow for the first half of 2009
increased 49.5 percent to $161.6 million compared to the prior year
period. Sunoco Partners LLC, the general partner of Sunoco
Logistics Partners L.P., declared a cash distribution for the
second quarter of 2009 of $1.04 per common partnership unit ($4.16
annualized), which is an 11.2 percent increase over the second
quarter of 2008 and a 2.5 percent increase over the prior quarter.
The distribution is payable August 14, 2009 to unit holders of
record on August 7, 2009. It is the twenty-fourth distribution
increase in the past twenty-five quarters. "Our strong second
quarter performance is a combination of stable cash flows in our
base business along with crude oil market opportunities resulting
from a contango market structure," said Deborah M. Fretz, President
and Chief Executive Officer. "We utilized our crude oil marketing
expertise in conjunction with our crude oil pipeline network and
the Nederland Terminal to take advantage of the contango market."
"Additionally, we continue to see forward growth in the base
business. Last year's acquisition of the Texas MagTex refined
products system as well as the investment in new tankage at
Nederland are contributing to growth in cash flow. Despite
continued pressure on refiner margins, and the weak economy, our
geographic and business diversification has served us well. We
continue to invest in organic growth opportunities like the ongoing
Nederland capacity expansion, marketing terminal optimization, the
2009 completion of a pipeline from Nederland to Port Arthur and
extensions of the MagTex pipeline system. All of these projects
will contribute to future cash flow growth. Our conservative
balance sheet and access to liquidity have us well positioned to
further expand our business platform." Segmented Second Quarter
Results Refined Products Pipeline System Operating income for the
Refined Products Pipeline System increased $2.0 million to $10.6
million for the second quarter ended June 30, 2009 compared to the
prior year's second quarter. Sales and other operating revenue
increased by $7.6 million to $31.2 million due primarily to results
from the Partnership's acquisition of the MagTex refined products
pipeline and terminals system in November 2008 and increased
pipeline fees. Operating expenses increased $4.5 million to $15.3
million for the second quarter 2009 due primarily to the MagTex
acquisition and a reduction in refined product operating gains.
Depreciation and amortization expense increased for the three
months ended June 30, 2009 primarily due to the MagTex acquisition.
Terminal Facilities Operating income for the Terminal Facilities
segment increased by $3.3 million to $21.2 million for the second
quarter ended June 30, 2009 compared to the prior year's second
quarter. Sales and other operating revenue increased by $7.6
million to $46.9 million due primarily to increased throughput,
higher fees and additional tankage Nederland terminal facility, as
well as results from the MagTex acquisition. Other income increased
$0.6 million from the prior year's second quarter as a result of an
insurance recovery associated with the Partnership's refinery
terminals. Cost of goods sold and operating expenses increased by
$3.7 million to $17.6 million for the second quarter of 2009 due
primarily to the MagTex acquisition and lower operating gains.
Depreciation and amortization expense increased to $4.6 million for
the second quarter of 2009 due to the MagTex acquisition and
increased tankage at the Nederland facility. Selling, general and
administrative expenses increased to $4.9 million compared to $4.2
million in the prior year period due to increased employee costs,
along with an insurance recovery recorded in the second quarter of
2008. Crude Oil Pipeline System Operating income for the Crude Oil
Pipeline system increased $13.7 million to $46.6 million for the
second quarter of 2009 compared to the prior year's second quarter
due primarily to significantly higher lease acquisition results and
optimization of crude oil storage capabilities as the crude oil
markets remained in contango during the second quarter of 2009.
Increased pipeline fees associated with resolution of a $6.8
million prior year tariff adjustment also contributed to the
improved operating performance. Other income decreased $1.6 million
compared to the prior year's quarter due primarily to decreased
equity income associated with the Partnership's joint venture
interests and an insurance gain recognized during the second
quarter of 2008. Selling, general and administrative expenses
increased to $5.8 million compared to $5.0 million in the prior
year period due to increased general employee costs. Lower crude
oil prices were a key driver of the overall decrease in total
revenue, cost of products sold and operating expenses from the
prior year's quarter. The average price of West Texas Intermediate
crude oil at Cushing, Oklahoma decreased to $59.61 per barrel for
the second quarter of 2009 from $124.00 per barrel for the second
quarter of 2008. Segmented Six Month Results Refined Products
Pipeline System Operating income for the Refined Products Pipeline
System increased $5.9 million to $21.2 million for the six months
ended June 30, 2009 compared to the prior year period. Sales and
other operating revenue increased by $14.7 million to $62.6 million
due primarily to results from the MagTex acquisition described
above, along with increased pipeline fees. Other income increased
$1.1 million compared to the prior year period as a result of an
increase in equity income associated with the Partnership's joint
venture interests. Operating expenses increased by $6.8 million to
$29.3 million due primarily to the MagTex acquisition and a
reduction in refined products operating gains. Depreciation and
amortization expense increased $2.0 million during the first half
of 2009 due primarily to the MagTex acquisition. Selling, general
and administrative expenses increased to $11.1 million compared to
$9.9 million in the prior year period due to increased incentive
compensation expense and general employee costs. Terminal
Facilities Operating income for the Terminal Facilities segment
increased by $13.3 million to $42.4 million for the six months
ended June 30, 2009 compared to the prior year period. Sales and
other operating revenue increased by $14.5 million to $93.2 million
due primarily to the increased throughput, higher fees and
additional tankage at the Nederland terminal facility, along with
the MagTex acquisition. Other income increased $0.6 million from
the first six months of 2009 as a result of the insurance recovery
discussed above. Cost of goods sold and operating expenses
increased by $5.1 million to $32.7 million for the period ended
June 30, 2009 due primarily to the MagTex acquisition. Depreciation
and amortization expense increased to $9.3 million for the first
half of 2009 due to the MagTex acquisition and increased tankage at
the Nederland facility. During 2008, a $5.7 million non-cash
impairment charge was recognized related to the Partnership's
decision to discontinue efforts to expand LPG storage capacity at
its Inkster, Michigan facility. Selling, general and administrative
expenses increased $1.0 million to $10.1 million during the first
half of 2009 due to increased incentive compensation expense,
general employee costs and an insurance recovery recorded in second
quarter of 2008. Crude Oil Pipeline System Operating income for the
Crude Oil Pipeline system increased $45.0 million to $105.2 million
for the first six months of 2009 compared to the prior year period
due primarily to significantly higher lease acquisition results and
increased pipeline fees described above. Other income decreased
$2.7 million compared to the prior year's quarter due primarily to
decreased equity income associated with the Partnership's joint
venture interests and an insurance gain recognized during the
second quarter of 2008. Selling, general and administrative
expenses increased to $11.7 million compared to $10.5 million in
the prior year period due to increased incentive compensation
expense, along with general employee and legal costs. Lower crude
oil prices were a key driver of the overall decrease in total
revenue, cost of products sold and operating expenses from the
prior year period. The average price of West Texas Intermediate
crude oil at Cushing, Oklahoma decreased to $51.46 per barrel for
the first six months of 2009 from $110.98 per barrel for the first
six months of 2008. Other Analysis Financing Costs Net interest
expense increased $5.5 million to $21.2 million for the six months
ended June 30, 2009, compared to the prior year period. The
increase was due primarily to higher borrowings associated with the
$185.4 million MagTex acquisition, increased contango inventory
positions and organic growth projects. At June 30, 2009, the
Partnership had total debt outstanding of $860.3 million, which
consisted of $599.4 million of Senior Notes and $260.9 million of
borrowings under the Partnership's credit facilities as compared to
$747.6 million at December 31, 2008. The Partnership had available
borrowing capacity of $196.6 million under its credit facilities as
of June 30, 2009 and a Debt to EBITDA ratio of 2.4x for the twelve
months ended June 30, 2009. In April and May 2009, the Partnership
completed a public offering of 2.25 million common units. Net
proceeds of $109.5 million were used to reduce outstanding
borrowings under the Partnership's $400 million revolving credit
facility and for general partnership purposes. In connection with
these offerings, the general partner contributed $2.3 million to
the Partnership to maintain its 2.0 percent general partner
interest. Capital Expenditures Maintenance capital expenditures for
the six months ended June 30, 2009 were $9.0 million. The
Partnership expects that maintenance capital spending will be
approximately $30.0 million for the full year. Expansion capital
expenditures for the first six months of 2009 were $61.4 million
compared to $44.5 million for the first six months of 2008.
Expansion capital for 2009 includes construction in progress,
pursuant to an agreement with Motiva Enterprises LLC, of three
crude oil storage tanks at its Nederland terminal and a crude oil
pipeline from Nederland to Motiva's Port Arthur, Texas refinery.
Expansion capital also includes refined products terminal
optimization and construction of two additional crude oil storage
tanks at Nederland, which are expected to be placed into service
during the second half of 2009. These two crude oil storage tanks
will have a total capacity of approximately 1.2 million shell
barrels. Sunoco Logistics Partners L.P. Financial Highlights (in
thousands, except units and per unit amounts) (unaudited) Three
Months Ended Six Months Ended June 30, June 30, -------- --------
Income Statement 2009 2008 2009 2008 ---- ---- ---- ---- Sales and
other operating revenue $1,282,697 $3,315,421 $2,320,730 $5,709,810
Other income 7,774 8,783 12,539 13,609 ----- ----- ------ ------
Total Revenues 1,290,471 3,324,204 2,333,269 5,723,419 ---------
--------- --------- --------- Cost of products sold and operating
expenses 1,184,794 3,240,861 2,108,488 5,564,111 Depreciation and
amortization 11,508 9,830 23,088 19,489 Selling, general and
administrative expenses 15,842 14,126 32,916 29,557 Impairment
Charge - - - 5,674 ------ ------ ------ ----- Total costs and
expenses 1,212,144 3,264,817 2,164,492 5,618,831 ---------
--------- --------- --------- Operating income 78,327 59,387
168,777 104,588 Interest cost and debt expense, net 12,692 8,928
23,686 17,398 Capitalized interest (1,008) (864) (2,458) (1,636)
------ ---- ------ ------ Net Income $66,643 $51,323 $147,549
$88,826 ======= ======= ======== ======= Calculation of Limited
Partners' interest: Net Income $66,643 $51,323 $147,549 $88,826
Less: General Partner's Interest (1) (12,988) (8,919) (25,517)
(16,461) ------- ------ ------- ------- Limited Partners' interest
in Net Income $53,655 $42,404 $122,032 $72,365 ======= =======
======== ======= Net Income per Limited Partner unit (1) Basic
$1.76 $1.48 $4.12 $2.53 ===== ===== ===== ===== Diluted $1.74 $1.47
$4.09 $2.51 ===== ===== ===== ===== Weighted average Limited
Partners' units outstanding: Basic 30,551,349 28,657,485 29,628,856
28,642,571 ========== ========== ========== ========== Diluted
30,756,024 28,840,262 29,829,994 28,823,146 ========== ==========
========== ========== Capital Expenditure Data: Maintenance capital
expenditures $6,372 $4,449 $9,022 $7,771 Expansion capital
expenditures 30,281 24,915 61,377 44,724 ------ ------ ------
------ Total $36,653 $29,364 $70,399 $52,495 ======= =======
======= ======= June 30, December 31, 2009 2008 --------
------------ Balance Sheet Data (at period end): Cash and cash
equivalents $2,000 $2,000 Total Debt 860,324 747,631 Total
Partners' Capital 848,920 669,900 (1) Effective January 1, 2009,
the Partnership adopted the requirements of EITF 07-04,
"Application of the Two-Class Method under FASB Statement No. 128,
Earnings per Share, to Master Limited Partnerships." EITF 07-04
requires undistributed earnings to be allocated to the limited
partner and general partner interests in accordance with the
Partnership agreement. Prior period amounts have been restated for
comparative purposes. This change resulted in an increase in net
income per diluted LP unit of $0.27 and $0.34 for the three and six
months ended June 30, 2008 respectively. Sunoco Logistics Partners
L.P. Earnings Contribution by Business Segment (in thousands,
unaudited) Three Months Ended Six Months Ended June 30, June 30,
-------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Refined
Products Pipeline System: Sales and other operating revenue $31,216
$23,608 $62,616 $47,893 Other income 3,030 2,971 5,347 4,250 -----
----- ----- ----- Total Revenues 34,246 26,579 67,963 52,143 ------
------ ------ ------ Operating expenses 15,349 10,882 29,322 22,506
Depreciation and amortization 3,182 2,242 6,392 4,434 Selling,
general and administrative expenses 5,145 4,866 11,087 9,936 -----
----- ------ ----- Operating Income $10,570 $8,589 $21,162 $15,267
======= ====== ======= ======= Terminal Facilities: Sales and other
operating revenues $46,904 $39,272 $93,191 $78,656 Other Income
1,391 825 1,392 825 ----- --- ----- --- Total Revenues 48,295
40,097 94,583 79,481 ------ ------ ------ ------ Cost of products
sold and operating expenses 17,613 13,913 32,724 27,601
Depreciation and amortization 4,613 4,056 9,338 7,993 Selling,
general and administrative expenses 4,878 4,218 10,086 9,093
Impairment Charge - - - 5,674 -- -- -- ----- Operating Income
$21,191 $17,910 $42,435 $29,120 ======= ======= ======= =======
Crude Oil Pipeline System: Sales and other operating revenue
$1,204,577 $3,252,541 $2,164,923 $5,583,261 Other income 3,353
4,987 5,800 8,534 ----- ----- ----- ----- Total Revenues 1,207,930
3,257,528 2,170,723 5,591,795 --------- --------- ---------
--------- Cost of products sold and operating expenses 1,151,832
3,216,066 2,046,442 5,514,004 Depreciation and amortization 3,713
3,532 7,358 7,062 Selling, general and administrative expenses
5,819 5,042 11,743 10,528 ----- ----- ------ ------ Operating
Income $46,566 $32,888 $105,180 $60,201 ======= ======= ========
======= Sunoco Logistics Partners L.P. Operating Highlights
(unaudited) Three Months Ended Six Months Ended June 30, June 30,
-------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- Refined
Products Pipeline System: (1)(2)(3) Total shipments (barrel miles
per day) (4) 58,066,789 43,138,696 58,805,197 44,310,512 Revenue
per barrel mile (cents) 0.591 0.601 0.586 0.594 Terminal
Facilities: Terminal throughput (bpd): Refined product terminals
(3) 463,611 428,704 461,831 423,662 Nederland terminal 646,368
526,350 649,501 539,702 Refinery terminals (5) 599,503 622,011
591,179 648,604 Crude Oil Pipeline System: (1)(2) Crude oil
pipeline throughput (bpd) 670,133 694,124 667,156 684,808 Crude oil
purchases at wellhead (bpd) 181,496 177,414 186,302 174,436 Gross
margin per barrel of pipeline throughput (cents) (6) 80.4 51.2 92.0
49.8 (1) Excludes amounts attributable to equity ownership
interests in corporate joint ventures. (2) Effective January 1,
2009, the Partnership realigned its operating segments as discussed
above. Prior period amounts have been recast to reflect the current
operating segments. (3) Includes results from the Partnership's
purchase of the MagTex refined products pipeline and terminals
system from the acquisition date. (4) Represents total average
daily pipeline throughput multiplied by the number of miles of
pipeline through which each barrel has been shipped. (5) Consists
of the Partnership's Fort Mifflin Terminal Complex, the Marcus Hook
Tank Farm and the Eagle Point Dock. (6) Represents total segment
sales minus cost of products sold and operating expenses and
depreciation and amortization divided by crude oil pipeline
throughput. Sunoco Logistics Partners L.P. Non-GAAP Financial
Measures (in thousands, unaudited) Distributable Cash Flow ("DCF")
Three Three Six Six Months Months Months Months Ended Ended Ended
Ended June 30, June 30, June 30, June 30, 2009 2008 2009 2008 ----
---- ---- ---- Net Income $66,643 $51,323 $147,549 $88,826 Add:
Interest cost and debt expense; net 11,684 8,064 21,228 15,762 Add:
Depreciation and amortization 11,508 9,830 23,088 19,489 Add:
Impairment charge - - - 5,674 ----- ----- ----- ----- EBITDA 89,835
69,217 191,865 129,751 Less: Interest cost and debt expense; net
(11,684) (8,064) (21,228) (15,762) Less: Maintenance Capital
(6,372) (4,449) (9,022) (7,771) Add: Sunoco reimbursements - 782 -
1,851 ----- ----- ----- ----- Distributable Cash Flow ("DCF")
$71,779 $57,486 $161,615 $108,069 ======= ======= ======== ========
Earnings before interest, taxes, Twelve Months Ended depreciation
and amortization June 30, 2009 ("EBITDA") ------------------- Net
Income $273,203 Add: Interest cost and debt expense, net 41,255
Less: Capitalized interest (4,677) Add: Depreciation and
amortization 43,653 ------ EBITDA $353,434 ======== Total Debt as
of June 30, 2009 $860,324 Total Debt to EBITDA Ratio 2.4x An
investor call with management regarding the second-quarter results
is scheduled for Wednesday morning, July 22 at 9:00 am EDT. Those
wishing to listen can access the call by dialing (USA toll free)
1-877-297-3442; International (USA toll) 1-706-643-1335 and request
"Sunoco Logistics Partners Earnings Call, Conference Code
18196313". This event may also be accessed by a webcast, which will
be available at http://www.sunocologistics.com/. A number of
presentation slides will accompany the audio portion of the call
and will be available to be viewed and printed shortly before the
call begins. Individuals wishing to listen to the call on the
Partnership's web site will need Windows Media Player, which can be
downloaded free of charge from Microsoft or from Sunoco Logistics
Partners' conference call page. Please allow at least fifteen
minutes to complete the download. Audio replays of the conference
call will be available for two weeks after the conference call
beginning approximately two hours following the completion of the
call. To access the replay, dial 1-800-642-1687. International
callers should dial 1-706-645-9291. Please enter Conference ID
#18196313. Sunoco Logistics Partners L.P. (NYSE:SXL), headquartered
in Philadelphia, is a master limited partnership formed to acquire,
own and operate refined product and crude oil pipelines and
terminal facilities. The Refined Products Pipeline System consists
of approximately 2,200 miles of refined product pipelines located
in the Northeastern and Midwestern United States, the recently
acquired MagTex Pipeline System, and interests in four refined
products pipelines, consisting of a 9.4 percent interest in
Explorer Pipeline Company, a 31.5 percent interest in Wolverine
Pipe Line Company, a 12.3 percent interest in West Shore Pipe Line
Company and a 14.0 percent interest in Yellowstone Pipe Line
Company. The Terminal Facilities consist of approximately 9.7
million shell barrels of refined products terminal capacity and
approximately 21.2 million shell barrels of crude oil terminal
capacity (including approximately 17.8 million shell barrels of
capacity at the Texas Gulf Coast Nederland Terminal). The Crude Oil
Pipeline System consists of approximately 3,800 miles of crude oil
pipelines, located principally in Oklahoma and Texas, a 55.3
percent interest in Mid-Valley Pipeline Company, a 43.8 percent
interest in the West Texas Gulf Pipe Line Company and a 37.0
percent interest in the Mesa Pipe Line System. For additional
information visit Sunoco Logistics' web site at
http://www.sunocologistics.com/. Portions of this document
constitute forward-looking statements as defined by federal law.
Although Sunoco Logistics Partners L.P. believes that the
assumptions underlying these statements are reasonable, investors
are cautioned that such forward-looking statements are inherently
uncertain and necessarily involve risks that may affect the
Partnership's business prospects and performance causing actual
results to differ from those discussed in the foregoing release.
Such risks and uncertainties include, by way of example and not of
limitation: whether or not the transactions described in the
foregoing news release will be cash flow accretive; increased
competition; changes in demand for crude oil and refined products
that we store and distribute; changes in operating conditions and
costs; changes in the level of environmental remediation spending;
potential equipment malfunction; potential labor issues; the
legislative or regulatory environment; plant construction/repair
delays; nonperformance by major customers or suppliers; and
political and economic conditions, including the impact of
potential terrorist acts and international hostilities. These and
other applicable risks and uncertainties have been described more
fully in the Partnership's Form 10-Q filed with the Securities and
Exchange Commission on May 6, 2009. The Partnership undertakes no
obligation to update any forward-looking statements in this
release, whether as a result of new information or future events.
DATASOURCE: Sunoco Logistics Partners L.P. CONTACT: Media, Thomas
Golembeski, +1-215-977-6298, or Investors, Neal Murphy,
+1-215-977-6322, both of Sunoco Logistics Partners L.P. Web Site:
http://www.sunocologistics.com/
Copyright