UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 19, 2007
SUNOCO LOGISTICS PARTNERS L.P.
(Exact name of registrant as specified in its charter)
| Delaware | 1-31219 | 23-3096839 | ||
| (State or other jurisdiction of incorporation) |
(Commission file number) | (IRS employer identification number) |
| 1735 Market Street, Suite LL, Philadelphia, PA | 19103-7583 | |
| (Address of principal executive offices) | (Zip Code) |
(215) 977-3000
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01. | Regulation FD Disclosure. |
At meetings in Las Vegas, Nevada on September 19 and 20, 2007, executives of Sunoco Partners LLC, the general partner of Sunoco Logistics Partners L.P. (the “Partnership”), presented to certain research analysts and investors, the information about the Partnership described in the slides attached to this report as Exhibit 99.1.
Exhibit 99.1, and the slides thereof, are incorporated by reference herein, and these slides will be available on the Partnership’s website at www.sunocologistics.com, beginning at 11:00 a.m. EDT on Wednesday, September 19, 2007.
The information in this report, being furnished pursuant to Item 7.01 of Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 99.1. | Slide presentation given by executives of Sunoco Partners LLC, the general partner of Sunoco Logistics Partners L.P., on September 19 and 20, 2007. |
Safe Harbor Statement:
Statements contained in the exhibits to this report, that state the Partnership’s or its management’s expectations or predictions of the future, are forward-looking statements. Actual results could differ materially from those projected in such forward-looking statements. Factors that could affect such results include those mentioned in the exhibits to this report, and in documents that the Partnership has filed with the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SUNOCO LOGISTICS PARTNERS LP. | ||||
| By: | Sunoco Partners LLC, | |||
| its General Partner | ||||
| By: | /s/ DANIEL D. LEWIS | |||
| Daniel D. Lewis | ||||
| Comptroller | ||||
September 19, 2007
Philadelphia, PA
EXHIBIT INDEX
| Exhibit No. | Exhibit | |
| 99.1 | Slide presentation given by executives of Sunoco Partners LLC, the general partner of Sunoco Logistics Partners L.P., on September 19 and 20, 2007. |
EXHIBIT 99.1
SUNOCO LOGISTICS PARTNERS L.P.
SLIDE PRESENTATION
 Sunoco Logistics Partners L.P. September 2007 |
 Forward-Looking Statements Statements made in this presentation that are not historical facts are forward-looking statements. We believe the assumptions underlying these statements are reasonable, but caution you that such forward- looking statements involve risks that may affect our prospects and performance, causing actual results to differ from those discussed here. Such risks and uncertainties include: our ability to consummate announced acquisitions and integrate them into existing operations; our ability to complete internal growth projects; the ability of such acquisitions and internal growth projects to be cash-flow accretive; increased competition; changes in demand for crude oil we buy and sell, as well as for crude oil and refined products we store and distribute; the loss of a major customer; changes in our tariff rates; changes in throughput of third-party pipelines connected to our pipelines and terminals; changes in levels of environmental remediation spending; potential equipment malfunction; potential labor relations problems; the legislative or regulatory environment; plant construction/repair delays; and political and economic conditions, including the impact of potential terrorists acts and international hostilities. These and other applicable risks and uncertainties are described more fully in our 2007 Form 10-Q (filed with the Securities and Exchange Commission on July 31, 2007). We undertake no obligation to update publicly any forward-looking statements in this presentation, whether as a result of new information or future events. 2 |
 Sunoco
Logistics Partners L.P. Background Formed in February 2002 IPO by Sunoco, Inc. – Sunoco is the G.P. and largest unitholder (43.4% ownership) Diversified master limited partnership (MLP) – 1,800 miles of refined product pipelines – 3,700 miles of crude trunk pipelines – 36 refined product terminals – 20.4 million barrel of crude oil storage capacity (including 13.5 million at Nederland) Ownership interest in 6 product and crude oil pipelines 2006 Revenue $5.9 billion; EBITDA $155 MM Current distribution of $3.35/unit (6.2% yield) 3 |
 Sunoco
Logistics – Asset Overview 4 |
 Twelve
Months Ended 6/30/07 Financial & Operational Measures Eastern
Pipeline Terminals Western Pipeline Revenue $115 MM $132 MM $6,027 MM EBITDA $ 52 MM $ 63 MM $ 48 MM Miles of Pipeline 1,923 3,577 # Terminals 41 5 See slide 25 for EBITDA to operating income reconciliation.
|
 EBITDA
& Free Cash Flow 50 60 70 80 90 100 110 120 130 140 150 160 2003 2004 2005 2006 Free Cash Flow EBITDA Year 6 1 st Half 2007
EBITDA $86 MM Free Cash Flow $60 MM |
 Distribution (per unit) Distribution Summary Current distribution of $3.35 (6.2% yield) 2007 YTD Distribution growth 6.4% 50 / 50 75 / 25 85 / 15 98 / 2 LP/GP Split (%) $1.75 $1.85 $1.95 $2.05 $2.15 $2.25 $2.35 $2.45 $2.55 $2.65 $2.75 $2.85 $2.95 $3.05 $3.15 $3.25 $3.35 7 |
 Sunoco
Logistics (SXL) Unit Price $20 $30 $40 $50 $60 $70 2/02 2/03 2/04 2/05 2/06 2/07 Since IPO: + 133% 8 |
 Key
Business Attributes Conservative balance sheet, stable & diversified cash
flows, stable distribution Well located, flexible assets – opportunities for increased utilization / capacity expansion – well positioned for accretive organic growth projects and acquisitions Key relationship with Sunoco, Inc. - largest investor and largest customer Diversified customer base, broad geographic footprint and expanded business platform from recent acquisitions Experienced, growth oriented management team Strong, consistent financial performance 9 |
 Sunoco Logistics Growth Strategies Expand our tankage at Nederland Develop organic growth projects originating from Nederland Increase profitability of existing asset base Increase the size and strength of our domestic crude lease acquisition business Continue to grow our Eastern Pipeline system Pursue accretive acquisitions 10 |
 Sunoco Logistics - Nederland Terminal 11 13.5 million barrels of crude oil terminal capacity Canadian crude Strategic petroleum reserve Offshore domestic pipeline Close to refining centers -Port Arthur -Lake Charles |
 7000 7400 7800 8200 8600 9000 2006 2007 2008 2009 2010 2011 2012 Gulf Coast Crude Imports/Offshore Production 12 Source: EAI Report – June 2007 |
 Sunoco Logistics Growth Strategies Shell Capacity MM BBLS January 2007 12.8 2007-2008 Construction 3.8 Motiva Project - 2010 2.0 Lake Charles Project - 2010 2.0 Additional Buildout Capability 10.0 Total Potential Capacity 30.6 13 • Expand our Tankage at Nederland |
 SXL NEDERLAND TERMINAL Midland and
Big Springs SXL 10" From Patoka IL. Canadian Crude To
Longview Mid-Valley PL to Ohio, Red River PL to Cushing, McMurry PL to Tyler To Wortham /
Corsicana 1.Sunoco PL to Ringold and Wichita Falls Basin to
Cushing
To
Longview
2.Mid-Valley PL to Ohio Red river PL to Cushing, McMurry PL to Tyler Citgo 20” Citgo Lake Charles ConocoPhillips
Lake Charles 24” Exxon Mobil
Beaumont 5 Ship Docks 3BargeDocks DOE 42” Shell 22” Total
Port Arthur SPR Big Hill Valero
Port Arthur Lucas ExxonMobil
Baytown Shell 20” OTI
Houston OTI 24” Shell Deer Park Lyondell
Houston Shell PL East Houston Shell 16” BP26” BP Amoco
Texas City NEDERLAND TERMINAL DISTRIBUTION SYSTEM OCS XOM 20” Waterborne Transport SXL 30” Motiva Port Arthur SPR West Hackberry Calcasieu Lake Charles SXL 26” 14 |
    Western
Crude Oil System – 2007 15 Nederland Terminal • Canadian Crude • Offshore Domestic P/L • Close to Refining Centers - Port Arthur - Lake Charles |
 Sunoco Logistics Growth Strategies Develop organic growth projects originating from Nederland - Motiva Port Arthur Refinery Expansion $80 Million Project 2010 Start-Up - Lake Charles Pipeline Project $200 Million Project 2010 Start-Up - Other Opportunities 16 |
 VALERO REFINERY TOTAL REFINERY NEDERLAND TERMINAL MOTIVA MILLER TANK FARM NED. TERM. T0 MOTIVA 30” PL Approved Nederland Project • Nederland Terminal - (3) 660 MB Tanks - Pump Station @ 8,000 HP - Piping & Manifold Modifications - Delivery Meters • Pipeline - 8.1 Miles of 30” - Delivery Meters Motiva Project Map 17 |
 LAKE CHARLES REFINERIES SUNOCO LOGISTICS NEDERLAND TERMINAL SUNOCO LOGISTICS PROPOSED PIPELINE Nederland to Lake Charles Pipeline 18 |
 Sunoco Logistics Growth Strategies Increase profitability of existing asset base - Strong demand provides margin expansion opportunities - Expanded asset base provides flexibility to respond to changes in market situation - Increased throughput – broader customer base 19 |
 Sunoco Logistics Growth Strategies Increase the size and strength of our domestic crude lease acquisition business - Tanks for Contango positions - Blending opportunities - Bi-directional pipelines 20 |
 Sunoco Logistics Growth Strategies Continue to grow our Eastern Pipeline system Organic Growth Ethanol (2nd Quarter 2006) Pipeline Expansions (1st Quarter 2007) - Pittsburgh - Marysville – Toledo Expanded customer base Acquisition Syracuse, NY Terminal (2nd Quarter 2007) 21 |
 Eastern Pipeline – Terminal System 22 |
 Organic Projects (On Line 2007) Investment Eastern System $27 MM Canadian Crude Pipeline Expansion Pittsburgh Pipeline Expansion Western System $43 MM New Tanks - Nederland Connections - Pipeline Total Organic Investments $ 70 MM Growth in Annualized Cash Flow (pre-financing) $
15 MM (1) 23 (1) Annualized cash flow consists of $22 - $24 million of revenue less $7 - $9 million of direct operating costs. These costs do not include indirect costs,
debt, or equity financing costs. |
 Sunoco Logistics Growth Strategies Recent Acquisitions 2005 Investment - Corsicana, TX to Wichita Falls, TX Pipeline $100 MM - Mesa Pipeline – West Texas (37% interest) $ 7 MM 2006 - Amdel Pipeline – Texas $ 68 MM - Millennium/Kilgore Pipelines – East Texas $ 41 MM - Mid-Valley Pipeline – Midwest United States $ 65 MM (55.3% interest) 2007 - Van Buren Products Terminal New York (50% interest) $ 13 MM Total $294 MM 24 Pursue accretive acquisitions - Leverage strong balance sheet and strong GP Support - Leverage expanded asset base and business infrastructure to create synergies
|
 EBITDA Reconciliation ($ millions) LTM (2) 2003 2004 2005 2006 6/30/07 EBITDA (1) East 47.7 45.3 42.8 53.8 52.4 Terminals 41.4 47.9 50.8 54.5 62.9 West 17.5 16.1 23.5 46.5 47.7 106.6 109.3
117.1 154.8 163.0 Depreciation and amortization (27.2) (31.9) (33.8) (36.6) (36.8) Operating Income 79.5 77.4 83.3 118.2 126.2 Management of the Partnership believes EBITDA and distributable cash flow information enhances an investor's understanding of a business’ ability to generate cash for payment of distributions and other purposes. In addition, EBITDA is also used as a measure in the Partnership's $400 million revolving credit facility in determining its compliance with certain covenants. However, there may be contractual, legal, economic or other reasons which may prevent the Partnership from satisfying principal and interest obligations with respect to indebtedness and may require the Partnership to allocate funds for other purposes. EBITDA and distributable cash flow do not represent and should not be considered alternatives to net income, operating income or cash flows from operating activities as determined under United States generally accepted accounting principles and may not be comparable to other similarly titled measures of other businesses. (1) Earnings before interest, taxes, depreciation and amortization (2) LTM – Last twelve months Appendix 25 |
 Capitalization ($ millions) As of 6/30/07 Debt 7.25% Notes (matures 2012) 250 fixed 6.125% Senior Notes (matures 2016) 175 fixed $300 MM Revolver (matures 2010) 140 (1) floating Cash (9) Net Debt 556 Debt / Total Capital 49% Debt / EBITDA 3.46x EBITDA / Interest 4.92x Rating: BBB / Baa2 (S&P, Moody’s) Stable, Investment Grade 26 (1) Includes investment in Contango inventory position $81.3 mm |
 2002 2003 2004 2005 2006 2007 EST Organic 12 6 18 43 87 115 Acquisitions 65 4 47 106 174 13 Total
77 10 65
149 261 128 Sunoco Logistics –
Growth Capital ($mm) 27 |
 Sunoco Logistics Partners Summary • Stable portfolio of assets which provide ratable cash flow - Since IPO: - Compounded annual distribution growth +12.6% - Unit price increase +133% • Conservative balance sheet • Strong organic growth potential • Organization focused on growth 28 |