Form 8-K

 

 

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: July 28, 2010

(Date of earliest event reported): July 27, 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 2.02. Results of Operations and Financial Condition.

On July 27, 2010, Sunoco Logistics Partners L.P. (the “Partnership”) issued a press release announcing its financial results for the second quarter of 2010. A copy of this press release is attached as Exhibit 99.1 and is incorporated herein by reference.

 

Item 7.01. Regulation FD Disclosure.

On July 27, 2010, the Partnership issued a press release announcing its financial results for the second quarter 2010. Additional information concerning the Partnership’s second quarter earnings was presented in a slide presentation to investors during a teleconference on July 28, 2010. A copy of the slide presentation is attached as Exhibit 99.2 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    Press release dated July 27, 2010 announcing financial results for second quarter 2010.
99.2    Slide presentation given July 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,

its General Partner

  By:  

/s/    MICHAEL D. GALTMAN         

    Michael D. Galtman
    Controller
    (Principal Accounting Officer)

July 28, 2010

Philadelphia, PA


EXHIBIT INDEX

 

Exhibit
No.

  

Exhibit

99.1    Press release dated July 27, 2010 announcing financial results for second quarter 2010.
99.2    Slide presentation given July 28, 2010 during investor teleconference.
Press Release

Exhibit 99.1

 

LOGO

 

News Release

Sunoco Logistics Partners L.P.

1818 Market Street

Philadelphia, Pa. 19103-3615

For further information contact:

Thomas Golembeski (media) 215-977-6298

Peter Gvazdauskas (investors) 215-977-6322

  For release: 4:15 p.m. July 27, 2010

No. 17

SUNOCO LOGISTICS PARTNERS L.P. DECLARES INCREASED DISTRIBUTION, EXERCISES

RIGHTS TO ACQUIRE JOINT VENTURE INTERESTS AND REPORTS QUARTERLY RESULTS

FOR THE SECOND QUARTER 2010

PHILADELPHIA, July 27, 2010 – Sunoco Logistics Partners L.P. (NYSE: SXL) (the “Partnership”) today announced net income for the second quarter ended June 30, 2010 of $50.9 million compared with $66.6 million for the second quarter ended June 30, 2009. For the six months ended June 30, 2010, net income was $94.0 million compared to $147.5 million for the first six months of 2009. Lower earnings for both periods were driven primarily by reduced market related profits and higher interest expense associated with Senior Notes issued in 2010. Distributable cash flow, which represents the cash generated during the quarter available to pay distributions, was $54.9 million for the second quarter 2010 and $108.2 million for the first half of 2010. Distributable cash flow for the respective periods in 2009 was $71.8 million and $161.6 million.

Sunoco Partners LLC, the general partner of the Partnership, declared a cash distribution for the second quarter 2010 of $1.14 per limited partnership unit ($4.56 annualized), which is a 9.6 percent increase over the second quarter 2009 distribution and a 2.2 percent increase over the prior quarter. The distribution is payable on August 13, 2010 to unitholders of record on August 9, 2010 and represents the twenty-first consecutive quarterly distribution increase.

The Partnership also announced today that it has exercised certain rights to increase its ownership interests in Mid-Valley Pipeline Company, West Texas Gulf Pipe Line Company and West Shore Pipe Line Company. All three transactions are expected to close within the next 30 days and to be immediately accretive. These acquisitions are anticipated to be purchased for an aggregate purchase price of approximately $100 million and will initially be financed with the Partnership’s revolving credit facilities pending more permanent financing.

“Although the crude oil market structure did not provide the same level of opportunity to earn contango profits in the first half of 2010 as compared to 2009, we are pleased with the growth we have experienced in our ratable businesses,” said Michael J. Hennigan, President and Chief Operating Officer. “Specifically we continue to benefit from our expanded capacity at our Nederland terminal, the organic growth program to expand services at our refined products terminals and increased volumes on our crude oil pipelines. Additionally, we increased our crude oil storage during the quarter to be in a position to take advantage of a widened contango market structure in the third quarter, which is expected to provide strong earnings in the second half of the year.”

“We are excited about our outlook for future growth,” said Lynn L. Elsenhans, Chairman and Chief Executive Officer. “The Mariner Project with MarkWest provides us an opportunity to utilize our existing asset base and participate in the growing Marcellus Shale region. The purchase of Texon’s butane blending business has tremendous growth potential, and we are actively working to expand this business at our facilities as well as third-party locations. The acquisition of the additional ownership in the three pipelines increases the stable, fee based earnings in our base business.”


Segmented Second Quarter Results

Refined Products Pipeline System

Operating income for the Refined Products Pipeline System increased $2.1 million to $12.7 million for the second quarter ended June 30, 2010 compared to the prior year’s quarter. Sales and other operating revenue increased slightly to $31.4 million compared to the prior year’s quarter due primarily to higher pipeline volumes and fees which were partially offset by the permanent shut-down of Sunoco’s Eagle Point refinery in the fourth quarter 2009. Operating expenses decreased $1.9 million to $13.4 million compared to the prior year’s quarter due primarily to reduced environmental remediation costs and increased pipeline operating gains which were impacted by higher refined products prices.

Terminal Facilities

Operating income for the Terminal Facilities segment increased $6.7 million to $27.8 million for the second quarter ended June 30, 2010 compared to the prior year’s quarter. Total revenues for the second quarter of 2010 increased $10.9 million to $59.2 million. Revenue increases during the quarter were due primarily to increased tank revenues and higher volumes at the Nederland facility, including the additional tankage to support Motiva’s Port Arthur, TX refinery and additional volumes from a refined products terminal acquired in September 2009. Revenues and cost of products sold also increased compared to the prior year quarter as a result of the commencement of terminal optimization projects at the Partnership’s refined products terminals during the fourth quarter of 2009. Depreciation and amortization expense increased $0.8 million to $5.4 million for the second quarter 2010 as a result of new tankage at the Partnership’s Nederland facility and a refined products terminal acquired in September 2009.

Crude Oil Pipeline System

Operating income for the Crude Oil Pipeline System decreased $17.5 million to $29.1 million for the second quarter of 2010 compared to the prior year’s quarter. This decrease in operating income was the result of lower lease acquisition results and the absence of a non-recurring tariff adjustment recognized in 2009 related to prior period activity. Partially offsetting these reductions were higher pipeline revenues, which included revenues from a pipeline in Oklahoma which was acquired in 2009, and increased pipeline operating gains which were favorably impacted by higher crude oil prices. Other income increased $1.8 million compared to the prior year’s quarter due to increased equity income from the Partnership’s joint venture interests. Depreciation and amortization expense increased $1.3 million to $5.0 million for the second quarter 2010 due primarily to the 2009 pipeline acquisition.

Higher crude oil prices were a key driver of the increase in total revenue and 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 $77.99 per barrel for the second quarter of 2010 from $59.61 per barrel for the second quarter of 2009.


Segmented Six Month Results

Refined Products Pipeline System

Operating income for the Refined Products Pipeline System decreased $1.0 million to $20.2 million for the first half of 2010 compared to the prior year period. Sales and other operating revenue decreased $2.0 million to $60.6 million due primarily to the permanent shut-down of Sunoco’s Eagle Point refinery in the fourth quarter 2009 and refinery maintenance activity during the first quarter of 2010, partially offset by higher pipeline fees. Operating expenses decreased $2.7 million to $26.6 million compared to the prior year period due primarily to the timing of maintenance activity, decreased utility costs, and increased pipeline operating gains which were impacted by higher refined products prices. Selling, general and administrative expenses increased to $12.0 million compared to $11.1 million in the prior year period due primarily to the non-recurring expenses related primarily to the Partnership’s incentive distribution rights repurchase and adjustments to compensation costs related to employee departures.

Terminal Facilities

Operating income for the Terminal Facilities segment increased $8.0 million to $50.4 million for the first half of 2010 compared to the prior year period. Total revenues increased $19.7 million to $114.3 million despite reduced volumes in the Partnership’s refinery terminals which were negatively impacted by refinery maintenance activity in the first quarter and the permanent shut-down of the Eagle Point refinery. Revenue increases during the first six months of the year were due primarily to increased tank revenues and higher volumes at the Nederland facility, including the additional tankage to support Motiva’s Port Arthur, TX refinery and additional volumes from the refined products terminal acquired in September 2009. Revenues and cost of products sold also increased compared to the prior year period as a result of the commencement of terminal optimization projects at the Partnership’s refined products terminals during the fourth quarter of 2009. Depreciation and amortization expense increased $2.0 million to $11.3 million for the first half of 2010 as a result of increased tankage at the Partnership’s Nederland facility and the acquisition of a refined products terminal previously mentioned. Selling, general and administrative expenses increased to $11.4 million compared to $10.1 million in the prior year period due primarily to the non-recurring expenses described above.

Crude Oil Pipeline System

Operating income for the Crude Oil Pipeline System decreased $47.7 million to $57.5 million for the first half of 2010 compared to the prior year period. This decrease in operating income was the result of a reduced level of market related income driven primarily by the contraction of the contango market structure in 2010 and the absence of a favorable non-recurring tariff adjustment recognized in 2009. Partially offsetting these reductions were higher pipeline revenues, which included revenues from a crude oil pipeline in Oklahoma acquired in 2009, and increased pipeline operating gains which were favorably impacted by higher crude oil prices. Other income increased $4.7 million compared to the prior year period due to increased equity income from the Partnership’s joint venture interests. Depreciation and amortization expense increased $2.3 million to $9.6 million for the first half of 2010 due primarily to the 2009 crude oil pipeline acquisition. Selling, general and administrative expenses increased to $12.7 million compared to $11.7 million in the prior year period primarily as a result of the non-recurring expenses described above.

Higher crude oil prices were a key driver of the increase in total revenue and cost of products sold and operating expenses from the prior year period. The average price of West Texas Intermediate crude oil at Cushing, Oklahoma increased to $78.39 per barrel for the six months ended June 30, 2010 from $51.46 per barrel for the six months ended June 30, 2009.


Other Analysis

Financing Update

Net interest expense increased by $12.9 million for the six months ended June 30, 2010, compared to the prior year period. This increase was primarily attributable to the offering of $500.0 million of Senior Notes completed during the first quarter 2010.

At June 30, 2010, the Partnership’s total debt balance was $1.2 billion, including $115.3 million of borrowings under its revolving credit facilities. This compares to total debt of $868.4 million at December 31, 2009, which included $269.0 million of borrowings under its revolving credit facilities. The Partnership had available borrowing capacity of $342.2 million under its credit facilities as of June 30, 2010 and a Debt to EBITDA ratio of 3.9x for the twelve months ended June 30, 2010.

The Partnership’s total debt balance has increased, in part, due to higher crude oil inventories. Inventory levels have risen in order to take advantage of third quarter 2010 contango opportunities. At June 30, 2010, the Partnership held approximately $225 million of crude oil inventory related to contango which has been partially funded by borrowings under its revolving credit facilities. Excluding this investment, the Partnership would have had an Adjusted Debt to EBITDA ratio of 3.7x for the twelve months ended June 30, 2010.

Capital Expenditures

Maintenance capital expenditures for the six months ended June 30, 2010 were $14.3 million. The Partnership continues to expect maintenance capital spending for 2010 of approximately $32 million.

Expansion capital expenditures for the first six months of 2010 were $61.9 million compared to $61.4 million for the first six months of 2009. Expansion capital for 2010 includes construction projects to expand services at the Partnership’s refined products terminals, increase tankage at the Nederland facility and to expand upon the Partnership’s refined products platform in the southwest United States. The Partnership expects to invest $175 million to $200 million in expansion capital for 2010, excluding acquisitions.

On July 1, 2010, the Partnership completed its acquisition of a butane blending business from Texon L.P. for $140 million plus inventory. The Partnership funded the acquisition with a $100 million loan from Sunoco, Inc. and borrowings under the $395 million revolving credit facility. The business consists of patented technology for sophisticated blending of butane into gasoline, contracts with several large terminal operators currently utilizing the patented technology, butane inventories and other related assets.

Non-GAAP Financial Measures

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. EBITDA and distributable cash flow do not represent and should not be considered an alternative to net income or cash flows from operating activities as determined under United States generally accepted accounting principles (GAAP) and may not be comparable to other similarly titled measures of other businesses. Reconciliations of these measures to the comparable GAAP measure are provided in the table accompanying this release.


Sunoco Logistics Partners L.P.

Financial Highlights

(in thousands, except units and per unit amounts)

(unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2010     2009     2010     2009  

Income Statement:

        

Sales and other operating revenue

   $ 2,028,871      $ 1,282,697      $ 3,709,379      $ 2,320,730   

Other income

     9,390        7,774        17,153        12,539   
                                

Total revenues

     2,038,261        1,290,471        3,726,532        2,333,269   

Cost of products sold and operating expenses

     1,939,120        1,184,794        3,533,827        2,108,488   

Depreciation and amortization

     13,949        11,508        28,469        23,088   

Selling, general and administrative expenses

     15,584        15,842        36,170        32,916   
                                

Total costs and expenses

     1,968,653        1,212,144        3,598,466        2,164,492   

Operating income

     69,608        78,327        128,066        168,777   

Interest cost and debt expense, net

     19,885        12,692        36,049        23,686   

Capitalized interest

     (1,176     (1,008     (1,964     (2,458
                                

Net Income

   $ 50,899      $ 66,643      $ 93,981      $ 147,549   
                                

Calculation of Limited Partners’ interest:

        

Net Income

   $ 50,899      $ 66,643      $ 93,981      $ 147,549   

Less: General Partner’s interest

     (10,672     (12,988     (20,755     (25,517
                                

Limited Partners’ interest in Net Income

   $ 40,227      $ 53,655      $ 73,226      $ 122,032   
                                

Net Income per Limited Partner unit:

        

Basic

   $ 1.30      $ 1.76      $ 2.36      $ 4.12   
                                

Diluted

   $ 1.29      $ 1.74      $ 2.35      $ 4.09   
                                

Weighted Average Limited Partners’

        

units outstanding:

        

Basic

     31,050,602        30,551,349        31,034,160        29,628,856   
                                

Diluted

     31,215,638        30,756,024        31,212,572        29,829,994   
                                

Capital Expenditure Data:

        

Maintenance capital expenditures

   $ 9,908      $ 6,372      $ 14,278      $ 9,022   

Expansion capital expenditures

     39,583        30,281        61,897        61,377   
                                

Total

   $ 49,491      $ 36,653      $ 76,175      $ 70,399   
                                

 

     June 30,
2010
   December 31,
2009

Balance Sheet Data (at period end):

     

Cash and cash equivalents

   $ 2,000    $ 2,000

Total Debt

     1,213,262      868,424

Total Partners’ Capital

     663,911      861,614


Sunoco Logistics Partners L.P.

Earnings Contribution by Business Segment

(in thousands, unaudited)

 

     Three Months Ended
June 30,
   Six Months Ended
June 30,
     2010    2009    2010    2009

Refined Products Pipeline System:

           

Sales and other operating revenue

   $ 31,440    $ 31,216    $ 60,573    $ 62,616

Other income

     3,584      3,030      5,860      5,347
                           

Total revenues

     35,024      34,246      66,433      67,963

Operating expenses

     13,442      15,349      26,649      29,322

Depreciation and amortization

     3,572      3,182      7,526      6,392

Selling, general and administrative expenses

     5,345      5,145      12,046      11,087
                           

Operating income

   $ 12,665    $ 10,570    $ 20,212    $ 21,162
                           

Terminal Facilities:

           

Sales and other operating revenue

   $ 58,526    $ 46,904    $ 113,526    $ 93,191

Other income

     671      1,391      766      1,392
                           

Total revenues

     59,197      48,295      114,292      94,583

Cost of products sold and operating expenses

     21,176      17,613      41,201      32,724

Depreciation and amortization

     5,381      4,613      11,297      9,338

Selling, general and administrative expenses

     4,793      4,878      11,396      10,086
                           

Operating income

   $ 27,847    $ 21,191    $ 50,398    $ 42,435
                           

Crude Oil Pipeline System:

           

Sales and other operating revenue

   $ 1,938,905    $ 1,204,577    $ 3,535,280    $ 2,164,923

Other income

     5,135      3,353      10,527      5,800
                           

Total revenues

     1,944,040      1,207,930      3,545,807      2,170,723

Cost of products sold and operating expenses

     1,904,502      1,151,832      3,465,977      2,046,442

Depreciation and amortization

     4,996      3,713      9,646      7,358

Selling, general and administrative expenses

     5,446      5,819      12,728      11,743
                           

Operating income

   $ 29,096    $ 46,566    $ 57,456    $ 105,180
                           


Sunoco Logistics Partners L.P.

Operating Highlights

(unaudited)

 

     Three Months Ended
June 30,
   Six Months Ended
June 30,
     2010    2009    2010    2009

Refined Products Pipeline System: (1)

           

Total shipments (barrel miles per day) (2)

   51,666,714    58,066,789    51,680,780    58,805,197

Revenue per barrel mile (cents)

   0.669    0.591    0.648    0.586

Terminal Facilities:

           

Terminal throughput (bpd):

           

Refined products terminals (3)

   487,401    463,611    473,038    461,831

Nederland terminal

   683,698    646,368    704,704    649,501

Refinery terminals (4)

   471,164    599,503    484,398    591,179

Crude Oil Pipeline System: (1)(5)

           

Crude oil pipeline throughput (bpd)

   905,997    670,133    871,760    667,156

Crude oil purchases at wellhead (bpd)

   190,893    181,496    187,711    186,302

Gross margin per barrel of pipeline throughput (cents) (6)

   35.7    80.4    37.8    92.0

 

(1)

Excludes amounts attributable to equity ownership interests in the corporate joint ventures.

(2)

Represents total average daily pipeline throughput multiplied by the number of miles of pipeline through which each barrel has been shipped.

(3)

Includes results from the Partnership’s purchase of a refined products terminal in Romulus, MI from the acquisition date.

(4)

Consists of the Partnership’s Fort Mifflin Terminal Complex, the Marcus Hook Tank Farm and the Eagle Point Dock.

(5)

Includes results from the Partnership’s purchase of the Excel pipeline from the acquisition date.

(6)

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.


Sunoco Logistics Partners L.P.

Non-GAAP Financial Measures

(in thousands, unaudited)

 

Distributable Cash Flow (“DCF”)    Three Months
Ended

June 30, 2010
    Three Months
Ended
June 30, 2009
    Six Months
Ended
June 30, 2010
    Six Months
Ended
June 30, 2009
 

Net Income

   $ 50,899      $ 66,643      $ 93,981      $ 147,549   

Add: Interest expense, net

     18,709        11,684        34,085        21,228   

Add: Depreciation and amortization

     13,949        11,508        28,469        23,088   
                                

EBITDA

     83,557        89,835        156,535        191,865   

Less: Interest expense, net

     (18,709     (11,684     (34,085     (21,228

Less: Maintenance capital expenditures

     (9,908     (6,372     (14,278     (9,022
                                

Distributable cash flow

   $ 54,940      $ 71,779      $ 108,172      $ 161,615   
                                

 

Earnings before interest, taxes, depreciation

and amortization (“EBITDA”)

   Twelve Months
Ended

June 30, 2010
 

Net Income

   $ 196,794   

Add: Interest costs and debt expense

     61,370   

Less: Capitalized interest

     (3,831

Add: Depreciation and amortization

     53,401   
        

EBITDA

   $ 307,734   
        

Total Debt as of June 30, 2010

   $ 1,213,262   

Total Debt to EBITDA Ratio

     3.9   


An investor call with management regarding our second quarter results is scheduled for Wednesday morning, July 28 at 8:30 am EDT. Those wishing to listen can access the call by dialing (USA toll free) 1-888-889-4599; International (USA toll) 1-312-470-0130 and request “Sunoco Logistics Partners Earnings Call, Conference Code - - Sunoco Logistics”. This event may also be accessed by a webcast, which will be available at 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 1-800-774-9258. International callers should dial 1-402-220-2063.

Sunoco Logistics Partners L.P. (NYSE: SXL), headquartered in Philadelphia, is a master limited partnership formed to acquire, own and operate refined products and crude oil pipelines and terminal facilities. The Refined Products Pipeline System consists of approximately 2,200 miles of refined products pipelines located in the northeast, midwest and southwest United States and equity interests in four refined products pipelines. The Terminal Facilities consist of approximately 10 million shell barrels of refined products terminal capacity and approximately 23 million shell barrels of crude oil terminal capacity (including approximately 20 million shell barrels of capacity at the Nederland Terminal on the Gulf Coast of Texas). The Crude Oil Pipeline System consists of approximately 3,850 miles of crude oil pipelines, located principally in Oklahoma and Texas, and equity interests in two crude oil pipelines.

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 5, 2010. The Partnership undertakes no obligation to update any forward-looking statements in this release, whether as a result of new information or future events.

- END -

Slide Presentation
Second Quarter 2010
Earnings Conference Call
July 28, 2010
Sunoco Logistics Partners L.P.
Exhibit 99.2


Forward-Looking Statement
You should review this slide presentation in conjunction with the second quarter 2010 earnings
conference call for Sunoco Logistics Partners L.P., held on July
28 at 8:30 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)
1-888-889-4599.  International callers should dial 1-312-470-0130.  Please enter Conference ID “Sunoco
Logistics”.
2
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 1-800-774-9258. 
International callers should dial 1-402-220-2063.
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-Q, filed with
the Securities and Exchange Commission in May 2010.  We undertake no obligation to update publicly any
forward-looking statements whether as a result of new information or future events.


Q2 2010 Assessment
Increased total distribution to $1.14 ($4.56 annualized) per
unit, a 9.6 percent increase over the prior year’s distribution
Represents the twenty-first consecutive distribution
increase
Net income for the first quarter of 2010 was $51 million
compared to $67 million in the prior year
Distributable cash flow of $55 million for the quarter
Excluding a crude contango investment at quarter end,
Adjusted Total Debt to EBITDA ratio of 3.7x
3


Crude Oil Contango
No contango income was
booked in the first half of
2010
Currently approximately
$14MM of prior period
inventory profits are yet to
be realized due to inventory
accounting
Widened contango market
structure expected to
provide strong earnings in
the second half of the year
4
Backwardation
Contango
WTI NYMEX Month 2 vs. Month 1
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Month
2008
2009
2010
-2
-1
0
1
2
3
4
5


YTD 2010 Operating Performance
Lower market related profit opportunities partially offset by:
Improved operating performance in the Terminal Facilities
Organic capital program at Nederland facility
Expanded services at refined products terminals
Increased crude oil pipeline volumes
Contribution from 2009 acquisitions and organic projects
Through the first half of 2010, operating performance as expected
Distribution decisions exclude market related activities
Will take advantage of market related opportunities when
available
5


Q2 2010 Financial Highlights
($ in millions, unaudited)
6
Three Months Ended
Six Months Ended
June 30,
June 30,
2010
2009
2010
2009
Sales and other operating revenue
2,028.9
$  
1,282.7
$  
3,709.4
$  
2,320.7
$  
Other income
9.4
             
7.8
             
17.2
          
12.5
          
Total revenues
2,038.3
     
1,290.5
     
3,726.5
     
2,333.2
     
Cost of products sold and operating expenses
1,939.1
     
1,184.8
     
3,533.8
     
2,108.5
     
Depreciation and amortization
13.9
          
11.5
          
28.5
          
23.1
          
Selling, general and administrative expenses
15.6
          
15.9
          
36.2
          
32.9
          
Total costs and expenses
1,968.6
     
1,212.2
     
3,598.5
     
2,164.5
     
Operating income
69.6
          
78.3
          
128.0
        
168.7
        
Interest cost and debt expense, net
19.9
          
12.7
          
36.0
          
23.7
          
Capitalized interest
(1.2)
           
(1.0)
           
(2.0)
           
(2.5)
           
Net Income
50.9
$        
66.6
$        
94.0
$        
147.5
$      


Q2 2010 Financial Highlights
7
(amounts in millions, except unit and per unit amounts, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2010
2009
2010
2009
Calculation of Limited Partners' interest:
Net Income
50.9
$      
66.6
$      
94.0
$      
147.5
$    
Less: General Partner's interest
(10.7)
       
(13.0)
       
(20.8)
       
(25.5)
       
Limited Partners' interest in Net Income
40.2
$      
53.6
$      
73.2
$      
122.0
$    
Net Income per Limited Partner unit:
Basic
1.30
$      
1.76
$      
2.36
$      
4.12
$      
Diluted
1.29
$      
1.74
$      
2.35
$      
4.09
$      
Weighted Average Limited Partners' units
outstanding (in thousands):
Basic
31,051
    
30,551
    
31,034
    
29,629
    
Diluted
31,216
    
30,756
    
31,213
    
29,830
    


Q2 2010 Financial Highlights
(1)
    
Excludes amounts attributable to equity ownership interests in the corporate joint ventures.
(2)
    
Represents total average daily pipeline throughput multiplied by the number of miles of pipeline through which each barrel has been shipped.
(3)
    
Includes results from the Parternship's purchase of a refined products terminal in Romulus, MI from the acquisition date.
(4)
    
Consists of the Partnership's Fort Mifflin Terminal Complex, the Marcus Hook Tank Far and the Eagle Point Dock.
(5)
    
Includes results from the Partnership's purchase of the Excel pipeline from the acquisition date.
     (6)
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.
8
Three Months Ended
Six Months Ended
June 30,
June 30,
2010
2009
2010
2009
Operating income
($ in millions, unaudited)
Refined Products Pipeline System
12.7
$         
10.6
$         
20.2
$         
21.2
$         
Terminal Facilities
27.8
21.2
50.4
42.4
Crude Oil Pipeline System
29.1
46.6
57.5
105.2
Operating highlights
(unaudited)
Refined Products Pipeline System:
Total shipments (barrel miles per day)
51,666,714
58,066,789
51,680,780
58,805,197
Revenue per barrel mile (cents)
0.669
0.591
0.648
0.586
Terminal Facilities:
Refined products terminals throughput (bpd)
487,401
463,611
473,038
461,831
Nederland terminal throughput (bpd)
683,698
646,368
704,704
649,501
Refinery terminals throughput (bpd)
471,164
599,503
484,398
591,179
Crude Oil Pipeline System:
Crude oil pipeline throughput (bpd)
905,997
670,133
871,760
667,156
Crude oil purchases at wellhead (bpd)
190,893
181,496
187,711
186,302
Gross margin per barrel of pipeline throughput (cents)
35.7
80.4
37.8
92.0
(6)
(1)(5)
(4)
(3)
(2)
(1)


Q2 2010 Financial Highlights
9
Three Months Ended
Six Months Ended
June 30,
June 30,
2010
2009
2010
2009
Capital Expenditure Data:
Maintenance capital expenditures
9.9
$         
6.4
$         
14.3
$       
9.0
$         
Expansion capital expenditures
39.6
         
30.3
         
61.9
         
61.4
         
Total
49.5
$       
36.7
$       
76.2
$       
70.4
$       
June 30,
December 31,
2010
2009
Balance Sheet Data (at period end):
Cash and cash equivalents
2.0
$         
2.0
$         
Total debt
1,213.3
    
868.4
       
Total Partners' Capital
663.9
       
861.6
       
($ in millions, unaudited)


Q2 2010 Financing Update
10
($ in thousands, unaudited)
Balance as of:
June 30, 2010
December 31, 2009
Revolving Credit Facilities
(1)
:
$62.5 million -
due September 2011
31,250
$                     
31,250
$                     
$395 million -
due November 2012
84,000
237,722
Senior Notes:
7.25% Senior Notes -
due 2012
250,000
250,000
8.75% Senior Notes -
due 2014
175,000
175,000
6.125% Senior Notes -
due 2016
175,000
175,000
5.50% Senior Notes -
due 2020
250,000
-
6.85% Senior Notes -
due 2040
250,000
-
Less: unamortized bond discount
(1,988)
(548)
Total Debt
1,213,262
$                
868,424
$                   
(1)
As of June 30, 2010, the Partnership has unutilized borrowing capacity of $342.2 million
under its revolving credit facilities.


Non-GAAP Financial Measures
($ in millions, unaudited)
11
Three Months Ended June 30,
Six Months Ended June 30,
2010
2009
2010
2009
Net Income
50.9
$             
66.7
$             
94.0
$             
147.5
$          
Interest expense, net
18.7
              
11.7
              
34.1
              
21.2
              
Depreciation and amortization
13.9
              
11.5
              
28.5
              
23.1
              
EBITDA
(1)
83.5
              
89.9
              
156.6
             
191.8
             
Interest expense, net
(18.7)
             
(11.7)
             
(34.1)
             
(21.2)
             
Maintenance capital expenditures
(9.9)
               
(6.4)
               
(14.3)
             
(9.0)
               
Distributable cash flow ("DCF")
(1)
54.9
$             
71.8
$             
108.2
$          
161.6
$          
(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


Non-GAAP Financial Measures
($ in millions, unaudited)
12
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 June 30,
2010
Net Income
196.8
$             
Add: Interest costs and debt expense, net
61.3
Less: Capitalized interest
(3.8)
Add: Depreciation and amortization
53.4
EBITDA
307.7
$             
Total Debt as of June 30, 2010
1,213
$             
Less: Contango
investment under $395 million
revolving credit facility
(84)
Adjusted Total Debt as of June 30, 2010
1,129
$             
Adjusted Debt to EBITDA Ratio
3.7


2010 Growth Announcements
Exercise Rights to Acquire Additional Joint Venture Interests—Close within 30 days
Joint venture assets great complement to Sunoco Logistics asset base
Project Mariner with MarkWest
Practical solution of transporting ethane from Marcellus Shale to Gulf Coast market
Excellent growth potential for fee based income
Butane Blending Business—Closed July 1
Enhances terminal service offerings
Tremendous growth potential: actively working to increase installations at key
terminals and third-party locations
Nederland Tank Expansion
Two additional tanks to bring capacity to 22 MMB
13