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: April 28, 2010
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) |
| 1818 Market Street, Suite 1500, Philadelphia, PA | 19103-3615 | |
| (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. |
On April 27, 2010, Sunoco Logistics Partners L.P. (the “Partnership”) issued a press release announcing its financial results for the first quarter of 2010. Additional information concerning the Partnership’s first quarter earnings was presented in a slide presentation to investors during a teleconference on April 28, 2010. A copy of the slide presentation is attached as Exhibit 99.1 and is incorporated herein by reference.
The information in this report, being furnished pursuant to Items 2.02, 7.01, and 9.01 related thereto, 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
| Exhibit No. |
Exhibit | |
| 99.1 | Slide presentation given April 28, 2010 during investor teleconference. |
Forward-Looking Statements
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. The Partnership’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the 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, | |
| By: | /s/ BRUCE D. DAVIS, JR. | |
| Vice President, General Counsel and Secretary | ||
April 28, 2010
Philadelphia, PA
EXHIBIT INDEX
| Exhibit No. |
Exhibit | |
| 99.1 |
Slide presentation given April 28, 2010 during investor teleconference. |
 First Quarter 2010
Earnings Conference Call
April 28, 2010
Sunoco Logistics Partners L.P. |
 Forward-Looking Statement
You should review this slide presentation in conjunction with the first
quarter 2010 earnings conference call for Sunoco Logistics
Partners L.P., held on April 28 at 9:00 a.m. EDT. You may listen to
the
audio
portion
of
the
conference
call
on
our
website
at
www.sunocologistics.com
or
by
dialing
(USA
toll-
free) 1-877-297-3442. International callers should dial
1-706-643-1335. Please enter Conference ID
#66141485.
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 #66141485. During the call, those
statements we make that are not historical facts are forward-looking
statements. Although we believe the assumptions underlying these
statements are reasonable, investors are cautioned that such
forward-looking statements involve risks that may affect our business prospects and
performance, causing actual results to differ from those discussed during
the conference call. Such risks and uncertainties include,
among other things: our ability to successfully consummate announced
acquisitions
and
organic
growth
projects
and
integrate
them
into
existing
business
operations;
the
ability
of
announced acquisitions to be cash-flow accretive; increased
competition; changes in the demand both for crude oil that we buy
and sell, as well as for crude oil and refined products that we store and distribute; the
loss of a major customer; changes in our tariff rates; changes in
throughput of third-party pipelines that connect to our
pipelines and terminals; changes in operating conditions and costs; changes in the level 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
terrorist
acts
and
international
hostilities.
These and other applicable risks and uncertainties are described
more fully in our Form 10-K, filed
with the Securities and Exchange Commission on February 23, 2010.
We undertake no obligation to update publicly any
forward-looking statements whether as a result of new information or future events.
2 |
 Q1 2010 Assessment
Increased total distribution to $1.115 ($4.46 annualized) per unit, a
9.9 percent increase over the prior year’s
distribution –
Represents the twenty-seventh distribution increase in the
past twenty-eight quarters
Net income for the first quarter of 2010 was $43.1 million
compared to $80.9 million in the prior year:
Distributable cash flow of $53.2 million for the quarter
Debt to EBITDA ratio of 3.6x for the last twelve months
Minimum distribution growth of 10% in 2010
3 |
 Q1 2010 Operating Performance
Absence of contango market structure profits
Lower refined products volumes due to refinery
maintenance
Improved operating performance at the Nederland
terminal
Increased crude oil pipeline volumes
Contribution from 2009 acquisitions and organic projects
4 |
 5
WTI Nymex Month 2 vs. Month 1
-2
-1
0
1
2
3
4
5
2007
2008
2009
2010
Contango
Backwardation |
 Q1 2010 Financial Highlights
($ in millions, unaudited)
6
Three Months Ended
March 31,
2010
2009
Sales and other operating revenue
1,680.5
$
1,038.0
$
Other income
7.8
4.8
Total revenues
1,688.3
1,042.8
Cost of products sold and operating expenses
1,594.7
923.7
Depreciation and amortization
14.5
11.6
Selling, general and administrative expenses
20.6
17.0
Total costs and expenses
1,629.8
952.3
Operating income
58.5
90.5
Interest cost and debt expense, net
16.2
11.0
Capitalized interest
(0.8)
(1.4)
Net Income
43.1
$
80.9
$ |
 Q1 2010 Financial Highlights
7
(amounts in millions, except unit and per unit amounts, unaudited)
Three Months Ended
March 31,
2010
2009
Calculation of Limited Partners' interest:
Net Income
43.1
$
80.9
$
Less: General Partners' interest
(10.1)
(12.5)
Limited Partners' interest in Net Income
33.0
$
68.4
$
Net Income per Limited Partner unit:
Basic
1.06
$
2.38
$
Diluted
1.06
$
2.36
$
Weighted Average Limited Partners' units
outstanding (in thousands):
Basic
31,018
28,728
Diluted
31,209
28,926
|
 Q1 2010 Financial Highlights
8
( $ in millions, unaudited)
Three Months Ended
March 31,
2010
2009
Capital Expenditure Data:
Maintenance capital expenditures
4.4
$
2.6
$
Expansion capital expenditures
22.3
31.6
Total
26.7
$
34.2
$
March 31,
December 31,
2010
2009
Balance Sheet Data (at period end):
Cash and cash equivalents
2.0
$
2.0
$
Total debt
1,141.2
868.4
Total Partners' Capital
656.9
861.6
|
 Q1 2010 Financing Update
9
($ in thousands, unaudited)
Balance as of:
March 31, 2010
December 31, 2009
Revolving Credit Facilities
(1)
:
$400 million -
due November 2012
12,000
$
237,722
$
$62.5 million -
due September 2011
31,250
31,250
Senior Notes:
7.25% Senior Notes -
due 2012
250,000
250,000
6.125% Senior Notes -
due 2016
175,000
175,000
8.75% Senior Notes -
due 2014
175,000
175,000
5.50% Senior Notes -
due 2020
250,000
-
6.85% Senior Notes -
due 2040
250,000
-
Less: unamortized bond discount
(2,065)
(548)
Total Debt
1,141,185
$
868,424
$
(1)
As of March 31, 2010, the Partnership has unutilized borrowing capacity
of $414.2 million under its revolving credit facilities.
|
 Refined Products Pipeline System
(amounts in millions, unless otherwise noted, unaudited)
10
Three Months Ended
March 31,
2010
2009
Financial Highlights
Sales and other operating revenue
29.1
$
31.4
$
Other income
2.3
2.3
Total revenues
31.4
33.7
Operating expenses
13.2
14.0
Depreciation and amortization
4.0
3.2
Selling, general and administrative expenses
6.7
5.9
Operating income
7.5
$
10.6
$
Operating Highlights
(1)
Total shipments (barrel miles per day)
(2)
51.7
60.0
Revenue per barrel mile (cents)
0.626
0.581
(1)
(2)
shipped.
Represents total average daily pipeline throughput multiplied by the
number of miles of pipeline through which each barrel has been Excludes amounts attributable to equity ownership interests in
the corporate joint ventures. |
 Terminal Facilities
(amounts in millions, unless otherwise noted, unaudited)
11
Three Months Ended
March 31,
2010
2009
Financial Highlights
Sales and other operating revenue
55.0
$
46.3
$
Cost of products sold and operating expenses
20.0
15.1
Depreciation and amortization
5.9
4.7
Selling, general and administrative expenses
6.6
5.2
Operating income
22.5
$
21.3
$
Operating Highlights
Terminal throughput (000's bpd)
Refined product terminals
(1)
458.5
460.0
Nederland terminal
725.9
652.7
Refinery terminals
(2)
497.8
582.8
(1)
Includes
results
from
the
Partnership's
purchase
of
a
refined
products
terminal
in
Romulus,
MI
from
the
acqusition
date.
(2)
Consists of the Partnership Fort Mifflin Terminal Complex, the Marcus
Hook Tank Farm and the Eagle Point Dock. |
 Crude Oil Pipeline System
12
(amounts in millions, unless otherwise noted, unaudited)
Three Months Ended
March 31,
2010
2009
Financial Highlights
Sales and other operating revenue
1,596.4
$
960.3
$
Other income
5.4
2.5
Total revenues
1,601.8
962.8
Cost of products sold and operating expenses
1,561.5
894.6
Depreciation and amortization
4.7
3.7
Selling, general and administrative expenses
7.3
5.9
Operating income
28.3
$
58.6
$
Operating Highlights
(1)(2)
Crude oil pipeline throughput (000's bpd)
837.1
664.1
Crude oil purchases at wellhead (000's bpd)
184.5
191.2
Gross margin per barrel of pipeline throughput (cents)
(3)
40.1
103.9
(1)
Excludes amounts attributable to equity ownership interests in the
corporate joint ventures. (2)
Includes
results
from
the
Partnership's
purchase
of
the
Excel
crude
oil
pipeline
from
the
acqusition
date.
(3)
Represents
total
segment
sales
and
other
operating
revenue
minus
cost
of
products
sold
and
operating
expenses
and
depreciation
and
amortization divided by crude oil pipeline throughput.
|
 Non-GAAP Financial Measures
($ in millions, unaudited)
13
Three Months Ended March 31,
2010
2009
Net Income
43.1
$
80.9
$
Interest expense, net
15.4
9.5
Depreciation and amortization
14.5
11.6
EBITDA
(1)
73.0
102.0
Interest expense, net
(15.4)
(9.5)
Maintenance capital expenditures
(4.4)
(2.7)
Distributable cash flow ("DCF")
(1)
53.2
$
89.8
$
Non-GAAP Financial Measures
(1) In this release, the Partnership’s EBITDA and DCF references
are not presented in accordance with generally accepted accounting principles (“GAAP”) and
are not intended to be used in lieu of GAAP presentations of net
income. Management of the Partnership believes EBITDA and DCF information enhance 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 revolving credit facilities 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 DCF do not
represent and should not be considered an alternative to net income or operating income as
determined under United States GAAP and may not be comparable to other
similarly titled measures of other businesses. |
 Non-GAAP Financial Measures
($ in millions, unaudited)
14
Non-GAAP Financial Measures
(1) In this release, the Partnership’s EBITDA and DCF references
are not presented in accordance with generally accepted accounting principles (“GAAP”) and
are not intended to be used in lieu of GAAP presentations of net
income. Management of the Partnership believes EBITDA and DCF information enhance 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 revolving credit facilities 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 DCF do not
represent and should not be considered an alternative to net income or operating income as
determined under United States GAAP and may not be comparable to other
similarly titled measures of other businesses.
Earnings before interest, taxes, depreciation
Twelve Months
and amortization ("EBITDA")
(1)
Ended March 31,
2010
Net Income
212.5
$
Add: Interest costs and debt expense, net
54.2
Less: Capitalized interest
(3.7)
Add: Depreciation and amortization
51.0
EBITDA
314.0
$
Total Debt as of March 31, 2010
1,141
$
Total Debt to EBITDA Ratio
3.6 |