PHILADELPHIA, Jan. 26 /PRNewswire-FirstCall/ -- Sunoco Logistics
Partners L.P. (NYSE:SXL) (the "Partnership") today announced record
net income of $250.4 million, or $6.48 per limited partner unit on
a diluted basis, for the year ended December 31, 2009. Operating
income for the year increased $49.5 million, or 20.1 percent, to
$295.0 million with record results being achieved in all of the
Partnership's business segments. Distributable cash flow ("DCF"),
which represents the cash generated during the year which is
available to pay distributions, increased $29.2 million to $266.2
million compared to the prior year. For the fourth quarter of 2009,
net income of $54.4 million was in line with our previous guidance
but decreased $21.0 million compared to the same period in 2008.
Improved performance within the Refined Products Pipeline System
and Terminal Facilities segments were more than offset by decreased
earnings in the Crude Oil Pipeline System which were attributable
to the timing of income recognition associated with crude oil
inventory activities and crude oil market volatility which allowed
for extraordinary earnings in the prior year's fourth quarter.
Operating income for the quarter decreased $16.8 million when
compared to the prior year period. DCF for the three months ended
December 2009 decreased to $50.2 million compared to $75.9 million
in the prior quarter. Sunoco Partners LLC, the general partner of
Sunoco Logistics Partners L.P., declared a cash distribution for
the fourth quarter of 2009 of $1.09 per common partnership unit
($4.36 annualized), which is a 10.1 percent increase over the
fourth quarter of 2008 and a 2.3 percent increase over the prior
quarter. The distribution is payable February 12, 2010 to unit
holders of record on February 8, 2010. The Partnership, in a joint
announcement with Sunoco, Inc., also announced today the completion
of a repurchase of the incentive distribution rights (IDRs) held by
its general partner, Sunoco Partners LLC, a subsidiary of Sunoco,
Inc., in exchange for the issuance of a new class of IDRs and
$201.2 million, secured by a promissory note. "2009 was another
record year for Sunoco Logistics," said Deborah M. Fretz, President
and CEO of Sunoco Logistics. "We focused on maximizing utilization
of our asset base, continuing organic growth programs throughout
our system and strengthening our Lease Acquisition business. We did
see some impact with reduced volumes due to a weak demand
environment; however, we were able to take advantage of several
market opportunities such as contango by utilizing our storage
capacity and pipeline flexibility. In addition, the acquisition of
the MagTex system in late 2008 has provided us with expanded
opportunities. "We entered 2010 with a strong balance sheet and
excellent distribution coverage. We will continue to implement our
organic growth opportunities and we also expect that there will be
numerous potential acquisition opportunities that could fit well
with our current asset base. The IDR repurchase transaction which
we completed today is expected to be immediately accretive to our
limited partnership unitholders and will serve to improve our
competitive position for growth opportunities by lowering our cost
of capital." Segmented Fourth Quarter Results Refined Products
Pipeline System Operating income for the Refined Products Pipeline
System increased $0.6 million to $10.2 million for the fourth
quarter 2009 compared to the prior year's fourth quarter. Sales and
other operating revenue increased by $3.2 million to $33.1 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. These increases were partially
offset by decreased volumes on the Partnership's northeastern
pipelines. Other income increased $1.4 million due primarily to
increased income associated with the Partnership's joint venture
interests. Operating expenses, along with depreciation and
amortization expense, increased compared to the prior year's fourth
quarter primarily as a result of the MagTex acquisition. Terminal
Facilities Operating income for the Terminal Facilities segment
increased by $4.9 million to $20.5 million for the fourth quarter
ended December 31, 2009 compared to the prior year's fourth
quarter. Sales and other operating revenue increased by $8.8
million to $51.9 million despite the reduced volumes experienced in
the Partnership's refinery terminals which resulted from the idling
of the Eagle Point refinery. Revenue increases for the quarter were
due primarily to increased throughput, higher fees and additional
tankage at the Nederland terminal facility and results from the
MagTex acquisition. Revenues and cost of goods sold also increased
during the quarter with the commencement of terminal optimization
projects at the Partnership's refined products terminal facilities.
Crude Oil Pipeline System Operating income for the Crude Oil
Pipeline System decreased $22.2 million to $35.6 million for the
fourth quarter of 2009 compared to the prior year's fourth quarter
due to lower lease acquisition results. Lease acquisition results
in the fourth quarter 2008 were positively impacted by extreme
crude oil market volatility and timing of income recognition which
was not repeated in the fourth quarter of 2009. Higher crude oil
prices were a key driver of the overall increase 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 increased to $76.17 per barrel for the fourth
quarter of 2009 from $58.75 per barrel for the fourth quarter of
2008. Segmented Twelve Month Results Refined Products Pipeline
System Operating income for the Refined Products Pipeline System
increased $10.3 million to a record high of $44.7 million for the
twelve months ended December 31, 2009 compared to the prior year
period. Sales and other operating revenue increased by $24.3
million to $127.7 million due primarily to results from the MagTex
acquisition described above, along with increased pipeline fees.
Other income increased $4.1 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 $11.7 million to $60.2 million due primarily to the
MagTex acquisition, a reduction in pipeline operating gains and
increased environmental remediation expenses. Depreciation and
amortization expense increased $4.4 million during 2009 due
primarily to the MagTex acquisition. Selling, general and
administrative expense increased $2.0 million compared to the prior
year due primarily to increased employee benefits costs. Terminal
Facilities Operating income for the Terminal Facilities segment
increased by $25.2 million to a record high of $83.7 million for
the twelve months ended December 31, 2009 compared to the prior
year period. Sales and other operating revenue increased by $28.9
million to $191.3 million due primarily to increased terminal fees,
additional tankage at the Nederland terminal facility, results from
the MagTex acquisition and the addition of refined product sales.
Partially offsetting these increases were reduced volumes at the
Partnership's refinery terminals. Other income increased $1.0
million in 2009 as a result of an insurance recovery associated
with the Partnership's refinery terminals. Cost of goods sold and
operating expenses increased by $6.9 million to $71.1 million for
the period ended December 31, 2009 due primarily to the
commencement of terminal optimization projects, increased terminal
operating losses and the addition of the MagTex acquisition. These
increases were partially offset by reduced utility expenses and the
absence of hurricane damages incurred during 2008. Depreciation and
amortization expense increased to $18.9 million for the twelve
months 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
expense increased $1.0 million compared to the prior year due
primarily to increased employee benefits costs. Crude Oil Pipeline
System Operating income for the Crude Oil Pipeline system increased
$14.0 million to a record high of $166.7 million for the year ended
December 31, 2009 compared to the prior year period due primarily
to increased pipeline fees and higher lease acquisition earnings
which benefited from the contango market structure. These increases
were partially offset by a reduction in pipeline operating gains.
Other income decreased $1.5 million compared to the prior year due
primarily to decreased equity income associated with the
Partnership's joint venture interests and the absence of an
insurance gain recognized in 2008. 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. The
average price of West Texas Intermediate crude oil at Cushing,
Oklahoma decreased to $61.93 per barrel for 2009 from $99.65 per
barrel for 2008. Other Analysis Financing Costs Net interest
expense increased $13.6 million to $44.7 million for the twelve
months ended December 31, 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 December 31, 2009, the
Partnership had total debt outstanding of $868.4 million, which
consisted of $599.4 million of Senior Notes and $269.0 million of
borrowings under the Partnership's credit facilities as compared to
$747.6 million of total debt outstanding at December 31, 2008. The
Partnership had available borrowing capacity of $188.5 million
under its credit facilities as of December 31, 2009 and a Debt to
EBITDA ratio of 2.5 for the twelve months ended December 31, 2009.
Capital Expenditures Maintenance capital expenditures for 2009 were
$32.2 million. The Partnership expects that maintenance capital
spending will be approximately $32.0 million for 2010. Expansion
capital expenditures for 2009 were $193.6 million compared to
$305.6 million in 2008. Expansion capital for 2009 includes the
acquisitions of a refined products terminal in Romulus, MI and
Excel Pipeline LLC, the owner of a crude oil pipeline which
services Gary Williams' Wynnewood, OK refinery. Expansion capital
also includes construction costs associated with the completed
project to connect the Nederland terminal to Motiva's Port Arthur,
Texas refinery, construction of additional storage tanks at
Nederland and refined products terminal optimization projects.
Expansion capital expenditures for 2008 include the $185.4 million
MagTex acquisition. Sunoco Logistics Partners L.P. Financial
Highlights (in thousands, except units and per unit amounts)
(unaudited) Three Months Ended ------------------ December 31,
------------ Income Statement 2009 2008 ---- ---- Sales and other
operating revenue $1,661,010 $1,573,003 Other income 6,575 4,444
----- ----- Total Revenues 1,667,585 1,577,447 --------- ---------
Cost of products sold and operating expenses 1,572,817 1,469,294
Depreciation and amortization 12,692 10,555 Selling, general and
administrative expenses 15,690 14,457 Impairment Charge - - --- ---
Total costs and expenses 1,601,199 1,494,306 --------- ---------
Operating income 66,386 83,141 Interest cost and debt expense, net
12,729 9,063 Capitalized interest (696) (1,242) ---- ------ Net
Income $54,353 $75,320 ======= ======= Calculation of Limited
Partners' interest: Net Income $54,353 $75,320 Less: General
Partner's interest (1) (13,780) (10,912) ------- ------- Limited
Partners' interest in Net Income $40,573 $64,408 ======= =======
Net Income per Limited Partner unit (1) Basic $1.31 $2.25 =====
===== Diluted $1.30 $2.23 ===== ===== Weighted average Limited
Partners' units outstanding: Basic 30,981,265 28,657,485 ==========
========== Diluted 31,199,159 28,854,397 ========== ==========
Capital Expenditure Data: Maintenance capital expenditures $16,846
$9,997 Expansion capital expenditures 50,179 232,203 ------ -------
Total $67,025 $242,200 ======= ======== Twelve Months Ended
------------------- December 31, ------------ Income Statement 2009
2008 ---- ---- Sales and other operating revenue $5,401,804
$10,112,320 Other income 27,873 24,298 ------ ------ Total Revenues
5,429,677 10,136,618 --------- ---------- Cost of products sold and
operating expenses 5,023,307 9,786,014 Depreciation and
amortization 48,020 40,054 Selling, general and administrative
expenses 63,306 59,284 Impairment Charge - 5,674 --- ----- Total
costs and expenses 5,134,633 9,891,026 --------- ---------
Operating income 295,044 245,592 Interest cost and debt expense,
net 49,007 34,967 Capitalized interest (4,325) (3,855) ------
------ Net Income $250,362 $214,480 ======== ======== Calculation
of Limited Partners' interest: Net Income $250,362 $214,480 Less:
General Partner's interest (1) (52,665) (37,097) ------- -------
Limited Partners' interest in Net Income $197,697 $177.383 ========
======== Net Income per Limited Partner unit (1) Basic $6.52 $6.19
===== ===== Diluted $6.48 $6.15 ===== ===== Weighted average
Limited Partners' units outstanding: Basic 30,310,618 28,650,069
========== ========== Diluted 30,517,891 28,836,603 ==========
========== Capital Expenditure Data: Maintenance capital
expenditures $32,172 $25,652 Expansion capital expenditures 193,656
305,592 ------- ------- Total $225,828 $331,244 ======== ========
December 31, December 31, 2009 2008 Balance Sheet Data (at period
end): Cash and cash equivalents $2,000 $2,000 Total Debt 868,424
747,631 Total Partners' Capital 861,614 669,900 (1) Effective
January 1, 2009, the Partnership changed its calculation of
earnings per unit to conform to updated accounting guidance that
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 $0.61 and $1.17 for the three and
twelve months ended December 31, 2008 respectively. Sunoco
Logistics Partners L.P. Operating Highlights (unaudited) Three
Months Ended December 31, ------------- 2009 2008 ---- ---- Refined
Products Pipeline System: (1)(2)(3) Total shipments (barrel miles
per day) (4) 56,540,785 55,025,429 Revenue per barrel mile (cents)
0.636 0.590 Terminal Facilities: Terminal throughput (bpd): Refined
product terminals (3) 466,167 460,239 Nederland terminal 531,405
479,609 Refinery terminals (5) 573,344 669,478 Crude Oil Pipeline
System: (1)(2)(6) Crude oil pipeline throughput (bpd) 687,095
711,620 Crude oil purchases at wellhead (bpd) 177,164 184,965 Gross
margin per barrel of pipeline throughput (cents) (7) 60.4 93.4
Twelve Months Ended December 31, ------------ 2009 2008 ---- ----
Refined Products Pipeline System: (1)(2)(3) Total shipments (barrel
miles per day) (4) 57,741,323 46,867,934 Revenue per barrel mile
(cents) 0.606 0.603 Terminal Facilities: Terminal throughput (bpd):
Refined product terminals (3) 462,219 436,213 Nederland terminal
597,144 525,954 Refinery terminals (5) 591,180 653,326 Crude Oil
Pipeline System: (1)(2)(6) Crude oil pipeline throughput (bpd)
657,991 682,616 Crude oil purchases at wellhead (bpd) 181,564
177,662 Gross margin per barrel of pipeline throughput (cents) (7)
73.0 63.0 (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 Romulus, MI terminal and 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) Includes results from the Partnership's purchase of the
Excel pipeline from the acquisition date. (7) 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. Earnings Contribution by
Business Segment (in thousands, unaudited) Three Months Ended
------------------ December 31, ------------ 2009 2008 ---- ----
Refined Products Pipeline System: Sales and other operating revenue
33,081 $29,879 Other income 3,438 2,014 ----- ----- Total Revenues
36,519 31,893 ------ ------ Operating expenses 16,405 14,825
Depreciation and amortization 4,118 2,702 Selling, general and
administrative expenses 5,750 4,684 ----- ----- Operating Income
10,246 $9,682 ====== ====== Terminal Facilities: Sales and other
operating revenues 51,895 $43,134 Other Income 456 8 --- --- Total
Revenues 52,351 $43,142 ------ ------- Cost of products sold and
operating expenses 22,699 18,744 Depreciation and amortization
4,448 4,255 Selling, general and administrative expenses 4,685
4,525 Impairment Charge - - --- --- Operating Income 20,519 $15,618
====== ======= Crude Oil Pipeline System: Sales and other operating
revenue 1,576,034 $1,499,990 Other income 2,681 2,422 ----- -----
Total Revenues 1,578,715 1,502,412 --------- --------- Cost of
products sold and operating expenses 1,533,713 1,435,725
Depreciation and amortization 4,126 3,598 Selling, general and
administrative expenses 5,255 5,248 ----- ----- Operating Income
35,621 $57,841 ====== ======= Twelve Months Ended
------------------- December 31, ------------- 2009 2008 ---- ----
Refined Products Pipeline System: Sales and other operating revenue
127,729 $103,457 Other income 12,629 8,535 ------ ----- Total
Revenues 140,358 111,992 ------- ------- Operating expenses 60,152
48,433 Depreciation and amortization 13,711 9,351 Selling, general
and administrative expenses 21,807 19,776 ------ ------ Operating
Income 44,688 $34,432 ====== ======= Terminal Facilities: Sales and
other operating revenues 191,284 $162,424 Other Income 1,860 833
----- --- Total Revenues 193,144 163,257 ------- ------- Cost of
products sold and operating expenses 71,137 64,283 Depreciation and
amortization 18,937 16,446 Selling, general and administrative
expenses 19,406 18,378 Impairment Charge - 5,674 --- -----
Operating Income 83,664 $58,476 ====== ======= Crude Oil Pipeline
System: Sales and other operating revenue 5,082,791 $9,846,439
Other income 13,384 14,930 ------ ------ Total Revenues 5,096,175
9,861,369 --------- --------- Cost of products sold and operating
expenses 4,892,018 9,673,298 Depreciation and amortization 15,372
14,257 Selling, general and administrative expenses 22,093 21,130
------ ------ Operating Income 166,692 $152,684 ======= ========
Sunoco Logistics Partners L.P. Non-GAAP Financial Measures (in
thousands, unaudited) Distributable Cash Flow Three Months Three
Months ("DCF") Ended Ended ------------ ------------ December 31,
December 31, 2009 2008 ------------- -------------- Net Income
54,353 75,320 Add: Interest cost and debt expense 12,729 9,063
Less: Capitalized Interest (696) (1,242) Add. Depreciation and
amortization 12,692 10,555 Add: Impairment charge - - --- ---
EBITDA 79,078 93,696 Less: Interest cost and debt expense; net
12,033 7,821 Less: Maintenance Capital 16,846 9,997 Add: Sunoco
reimbursements - - --- --- Distributable Cash Flow ("DCF") 50,199
75,878 ====== ====== Distributable Cash Flow Twelve Months Twelve
Months ("DCF") Ended Ended ------------- ------------- December 31,
December 31, 2009 2008 ------------- ------------- Net Income
250,362 214,480 Add: Interest cost and debt expense 49,007 34,967
Less: Capitalized Interest (4,325) (3,855) Add. Depreciation and
amortization 48,020 40,054 Add: Impairment charge - 5,674 --- -----
EBITDA 343,064 291,320 Less: Interest cost and debt expense; net
44,682 31,112 Less: Maintenance Capital 32,172 25,652 Add: Sunoco
reimbursements - 2,426 --- ----- Distributable Cash Flow ("DCF")
266,210 236,982 ======= ======= Twelve Months Ended December 31,
2009 Earnings before interest, taxes, depreciation and amortization
("EBITDA") -------------------- Net Income 250,362 Add: Interest
cost and debt expense, net 49,007 Less: Capitalized interest
(4,325) Add: Depreciation and amortization 48,020 ------ EBITDA
343,064 ======= Total Debt as of December 31, 2009 868,424 Total
Debt to EBITDA Ratio 2.5 An investor call with management regarding
the fourth-quarter results is scheduled for Wednesday morning,
January 27 at 9:00 am EST. 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 49826444". 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 #49826444.
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 10.1
million shell barrels of refined products terminal capacity and
approximately 23.0 million shell barrels of crude oil terminal
capacity (including approximately 19.6 million shell barrels of
capacity at the Texas Gulf Coast Nederland Terminal). The Crude Oil
Pipeline System consists of approximately 3,850 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 November 4, 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: Thomas
Golembeski (media), +1-215-977-6298, or Neal Murphy (investors),
+1-215-977-6322 Web Site: http://www.sunocologistics.com/
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