e8vk
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): January 25, 2006
SUNOCO LOGISTICS PARTNERS L.P.
(Exact name of registrant as specified in its charter)
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Delaware
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1-31219
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23-3096839 |
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(State or other jurisdiction
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(Commission
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(IRS employer |
of incorporation)
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file number)
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identification no.) |
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Mellon Bank Center, 1735 Market Street, Philadelphia, PA
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19103-7583 |
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(Address of principal executive offices)
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(Zip Code) |
866-248-4344
Registrants telephone number, including area code
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 2.02. Results of Operations and Financial Condition.
The press release announcing the financial results for Sunoco Logistics Partners L.P.s (the
Partnership) 2005 fourth quarter is attached as Exhibit 99.1 and is incorporated herein by
reference.
The information in this report, being furnished pursuant to Item 2.02 and 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 7.01. Regulation FD Disclosure.
On January 24, 2006, the Partnership issued a press release announcing its financial results for
the fourth quarter 2005. Additional information concerning the Partnerships fourth quarter
earnings was presented to investors in a teleconference call January 25, 2006. A copy of the slide
presentation is attached as Exhibit 99.2 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibit
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99.1 |
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Press release dated January 24, 2006. |
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99.2 |
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Slide presentation given January 25, 2006 during investor teleconference. |
Forward-Looking Statement
Statements contained in the exhibits to this report that state the Partnerships or its
managements expectations or predictions of the future are forward-looking statements. The
Partnerships 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.
2 of 6
SIGNATURES
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 hereunto duly authorized.
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SUNOCO LOGISTICS PARTNERS L.P. |
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By: Sunoco Partners LLC, its General Partner |
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(Registrant) |
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Date January 25, 2006 |
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/s/ Jennifer L. Andrews |
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Jennifer L. Andrews |
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Comptroller |
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(Principal Accounting Officer) |
3 of 6
EXHIBIT INDEX
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Exhibit |
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Number |
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Exhibit |
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Exhibit 99.1
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Press Release dated January 24, 2006 |
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Exhibit 99.2
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Slide presentation given January 25, 2006 during investor teleconference. |
4 of 6
exv99w1
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News
Release
Sunoco Logistics Partners L.P.
1735 Market Street
Philadelphia, Pa. 19103-7583 |
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For further information contact:
Jerry Davis (media) 215-977-6298
Colin Oerton (investors) 866-248-4344
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For release: 4:30 p.m. January 24, 2006 |
No. 3
SUNOCO LOGISTICS PARTNERS L.P. REPORTS FOURTH QUARTER AND YEAR-END
RESULTS AND DECLARES INCREASED FOURTH QUARTER DISTRIBUTION
PHILADELPHIA,
January 24, 2006 Sunoco Logistics Partners L.P. (NYSE: SXL) today announced
net income for the fourth quarter ended December 31, 2005 of $15.0 million, or $0.56 per limited
partner unit on a diluted basis, compared to $14.7 million for the fourth quarter of 2004, or $0.57
per limited partner unit on a diluted basis. Higher pipeline volumes in the Western pipeline
system, including volumes from a Texas crude oil pipeline system acquired in August 2005, and
higher terminal revenues were partially offset by lower lease acquisition results and a reduction
in net income of approximately $5.7 million related to unusual events. The $5.7 million consists
of $3.0 million related to the impact of Hurricane Rita on the Nederland Terminal and the Western
Pipeline System, higher insurance costs related to a $1.3 million special assessment by one of the
Partnerships insurers as a result of Hurricane Rita, and $1.4 million of costs related to
relocation of the Western area headquarters from Tulsa to Houston, which will be completed in the
first quarter of 2006.
For the twelve months ended December 31, 2005, net income was $63.2 million, a 10.7 percent
increase over the $57.0 million of net income for the twelve months ended December 31, 2004. The
increase was due principally to higher pipeline volumes in the Western pipeline system, and higher
refined product terminal volumes due in part to a full years results in 2005 from the
Partnerships 2004 acquisitions, partially offset by lower lease acquisition results and a $9.8
million reduction in net income due to unusual events. The $9.8 million consists of $5.3 million
from the impact of Hurricane Rita, higher insurance costs related to $2.5 million in special
assessments by one of the Partnerships insurers as a result of Hurricanes Rita and Katrina, and
$2.0 million of Western area headquarters relocation costs.
Sunoco Partners LLC, the general partner of Sunoco Logistics Partners L.P., also declared an
increased cash distribution for the fourth quarter 2005 of $0.7125 per common and subordinated
partnership unit ($2.85 annualized) payable February 14, 2006 to unitholders of record on
February 8, 2006, an increase of $0.0375 per partnership unit
over the preceding quarter ($0.15 annualized increase).
During the quarter, construction was completed on the new pipeline connecting the recently
acquired Corsicana to Wichita Falls pipeline to the West Texas Gulf pipeline, said Deborah M.
Fretz, President and Chief Executive Officer. This is our largest project to date and it will
provide additional strength to our crude oil investment platform which originates at the Nederland,
Texas terminal. The
project
caps a year characterized by strong operations and unusual events
hurricanes and an
office relocation.
Key
factors in looking forward are the strong ratable cash flows of the operations
combined with the growth provided by organic growth projects and acquisitions. Two recently
announced acquisitions an interest in the Mesa Pipe Line system purchased in December 2005 and
the Millennium and Kilgore pipeline systems located in Texas, expected to close early in the second
quarter 2006 will further enhance our crude oil investment
platform. The 2006 2007 organic
growth program of $99 million invested in various expansion
projects is expected to generate an
additional $28 million of pre-financing cash flows by the end of 2007. We are excited about the
growth opportunities we see for the business.
The $28 million of pre-financing cash flows associated with the Partnerships organic growth
projects consist of $37 million of revenues less $9 million in direct operating costs.
These costs do not include indirect costs or the costs of debt or equity financing.
Segmented Fourth Quarter Results
Eastern Pipeline System
Operating income for the Eastern Pipeline System decreased to $7.8 million for the fourth
quarter 2005 from $9.6 million for the fourth quarter 2004. This decrease was primarily due to a
$1.7 million increase in operating expenses and a $0.4 million decrease in total revenues. Total
revenues decreased $0.4 million due to a decline in total shipments, partially offset by an
increase in revenue per barrel mile. Operating expenses increased from $11.1 million in the fourth
quarter 2004 to $12.8 million for the fourth quarter 2005 due mainly to increased pipeline
maintenance activity. The Partnership has completed most of the initial repairs required under the
extensive pipeline integrity management program it implemented in 2002 as a result of Department of
Transportation requirements, and therefore expects its repair costs associated with pipeline
maintenance to decrease beginning in 2006.
Terminal Facilities
The Terminal Facilities business segment had operating income of $9.0 million for the fourth
quarter 2005, an increase of $0.9 million from $8.1 million for the prior years fourth quarter.
Operating income increased due to a $1.8 million increase in revenues, partially offset by a $0.9
million increase in selling, general and administrative expenses. Revenues increased by $1.8
million due principally to higher revenues at the Nederland Terminal despite the adverse impact of
Hurricane Rita, as well as higher volumes at the Partnerships refined product and refinery
terminals. Selling, general and administrative expenses increased by $0.9 million as compared to
the prior years fourth quarter period, to $4.2 million for the fourth quarter 2005 due mainly to
the allocation of a portion of the special insurance assessment described above.
Western Pipeline System
Operating income for the Western Pipeline System increased $0.5 million to $2.7 million for
the fourth quarter 2005 from $2.2 million for the fourth quarter 2004. The increase was primarily
the result of higher pipeline volumes, including the results from the August 2005 Texas crude oil
pipeline system acquisition, and higher throughput on the Nederland to Longview, Texas pipeline,
partially offset by lower lease acquisition results. Total revenues and cost of products sold and
operating expenses increased in the
fourth quarter 2005 compared with the prior years quarter due principally to an increase in
the price of crude oil. The average price of West Texas Intermediate crude oil at Cushing,
Oklahoma, increased to an average price of $60.04 per barrel for the fourth quarter 2005 from
$48.27 per barrel for the fourth quarter 2004. Depreciation and amortization increased by $1.5
million due principally to the August 2005 Texas crude oil pipeline acquisition. Selling, general
and administrative expenses increased $1.6 million due to $1.4 million of costs related to the
Western area headquarters relocation from Tulsa to Houston and the allocation of a portion of the
special insurance assessment described above. Management anticipates incurring an additional $3.0
million in expenses related to the relocation in the first quarter of 2006.
Segmented Twelve Month Results
Eastern Pipeline System
Operating income for the Eastern Pipeline System decreased to $32.3 million for the twelve
months ended December 31, 2005 from $34.3 million for the prior year. Total revenues decreased to
$108.4 million for the year ended December 31, 2005 from $109.1 million for the prior year due
mainly to lower shipments on the Marysville to Toledo crude oil pipeline caused by production
issues at two third-party Canadian synthetic crude oil plants during the first three quarters of
2005, partially offset by a full years results in 2005 from the acquisition of an additional
one-third interest in the Harbor pipeline in June 2004. Operating expenses increased from $45.8
million in 2004, to $47.0 million for 2005 due mainly to higher pipeline maintenance activity. As
discussed above, the Partnership expects its repair costs associated with pipeline maintenance to
decrease beginning in 2006. Selling, general and administrative expenses increased due mainly to
the allocation of a portion of the special insurance assessments described above.
Terminal Facilities
The Terminal Facilities business segment had operating income of $35.8 million for the twelve
months ended December 31, 2005, an increase of $3.0 million from $32.8 million for the prior years
corresponding period. Total revenues increased $7.8 million from the prior year to $113.8 million
for 2005 due to a full years results in 2005 from the acquisitions of the Eagle Point terminal
assets located in Westville, New Jersey in March 2004, two refined product terminals located in
Baltimore, Maryland and Manassas, Virginia in April 2004 and the Columbus, Ohio refined products
terminal in November 2004, as well as higher revenues at the Nederland Terminal despite the adverse
impact of Hurricane Rita. Operating expenses increased $3.6 million from the prior year to $48.6
million for 2005 due mainly to the acquired assets and costs associated with Hurricane Rita.
Selling, general and administrative expenses increased from $13.1 million in 2004 to $14.4 million
in 2005 due mainly to the allocation of a portion of the special insurance assessments described
above.
Western Pipeline System
Operating income for the Western Pipeline System increased $4.9 million to $15.2 million for
the twelve months ended December 31, 2005 from $10.3 million for the corresponding prior year
period. The increase was primarily the result of higher crude oil pipeline volumes, partially
offset by costs related to the Western area headquarters relocation from Tulsa to Houston and
Hurricane Rita, and lower lease acquisition results. The increase in pipeline volumes was a result
of the Texas crude oil pipeline acquisition, and higher volumes on the Nederland to Longview, Texas
pipeline. Total revenues and cost of products sold and operating expenses increased in 2005
compared with the prior year due principally to an increase in the price of crude oil. The average
price of West Texas Intermediate crude oil at Cushing,
Oklahoma, increased to an average price of $56.61 per barrel for 2005 from $41.43 per barrel for 2004. Depreciation and amortization increased by $2.5 million due principally to the August 2005
Texas crude oil pipeline acquisition. Selling, general and administrative expenses increased due
to the allocation of a portion of the special insurance assessments described above and $2.0
million of costs related to the Western area headquarters relocation from Tulsa to Houston.
Other Analysis
Financing Costs
Net interest expense was relatively unchanged for the twelve months ended December 31, 2005,
compared to the prior years period. Increased borrowings under the Partnerships Credit Facility
and higher interest rates on the revolving credit facility were offset by capitalized interest.
Total debt outstanding at December 31, 2005 of $355.6 million consists of $249.0 million of the
Senior Notes and $106.6 million of borrowings under the Partnerships credit facility. The
Partnership increased the borrowings under its credit facility by $23.6 million during the fourth
quarter 2005 to fund construction of a 20-mile Texas crude oil pipeline and the purchase of an
interest in the Mesa Pipe Line System.
Capital Expenditures
Maintenance capital expenditures increased $0.4 million to $31.2 million for the twelve months
ended December 31, 2005 compared to the prior year due primarily to higher pipeline integrity
management maintenance activity in 2005. Also included in maintenance capital expenditures in 2005
is $2.7 million associated with the Western area headquarters move from Tulsa to Houston.
Management anticipates maintenance capital expenditures to be approximately $27 million, including
approximately $2 million associated with the Western area headquarters move, for the year ended
December 31, 2006.
Expansion capital expenditures in the fourth quarter of 2005 include construction of a new
20-mile pipeline to connect the Texas crude oil pipeline acquired in August 2005 to the West Texas
Gulf Pipe Line, construction at Nederland of two new crude oil storage tanks with total capacity of
approximately 1.1 million barrels, installation of ethanol blending facilities at a number of
refined product terminals, and the acquisition of an interest in the Mesa Pipe Line system,
acquired in December 2005. Expansion capital expenditures in the twelve months ended December 31,
2005 also include the acquisition of the Texas crude oil pipeline system and storage facilities.
Expansion capital expenditures for the twelve months ended December 31, 2004 consist of the
acquisitions of the Eagle Point terminal assets in Westville, New Jersey, three refined product
terminals in Baltimore, Maryland; Manassas, Virginia; and Columbus, Ohio, and an additional
one-third interest in the Harbor pipeline system.
Reimbursements Under Agreements with Sunoco
Under agreements with Sunoco, the
Partnership received reimbursement of $8.0 million and $7.0
million for the twelve months ended December 31, 2005 and 2004, respectively, for certain
maintenance capital expenditures and operating expenses incurred during the respective periods.
The reimbursements of these amounts were recorded by the Partnership as capital contributions.
Sunoco Logistics Partners L.P.
Financial Highlights
(in thousands, except units and per unit amounts)
(unaudited)
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Three Months Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2005 |
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2004 |
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2005 |
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2004 |
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Income Statement |
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Sales and other operating revenue |
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$ |
1,143,671 |
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$ |
1,031,795 |
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$ |
4,482,612 |
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$ |
3,451,285 |
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Other income |
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2,541 |
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2,883 |
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14,295 |
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13,932 |
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Total Revenues |
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1,146,212 |
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1,034,678 |
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4,496,907 |
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3,465,217 |
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Cost of products sold and operating expenses |
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1,102,645 |
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994,308 |
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4,326,713 |
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3,307,480 |
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Depreciation and amortization |
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9,438 |
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8,354 |
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33,838 |
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31,933 |
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Selling, general and administrative expenses |
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14,619 |
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12,156 |
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53,048 |
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48,449 |
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Total costs and expenses |
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1,126,702 |
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1,014,818 |
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4,413,599 |
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3,387,862 |
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Operating income |
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19,510 |
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19,860 |
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83,308 |
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77,355 |
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Net interest expense |
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4,523 |
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|
5,194 |
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20,162 |
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20,324 |
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Net Income |
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$ |
14,987 |
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$ |
14,666 |
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$ |
63,146 |
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$ |
57,031 |
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Calculation of Limited Partners interest: |
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Net Income |
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$ |
14,987 |
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$ |
14,666 |
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$ |
63,146 |
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$ |
57,031 |
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Less: General Partners interest |
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(539 |
) |
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(884 |
) |
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(3,270 |
) |
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(2,828 |
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Limited Partners interest in Net Income |
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$ |
14,448 |
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$ |
13,782 |
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$ |
59,876 |
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$ |
54,203 |
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Net Income per Limited Partner unit |
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Basic |
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$ |
0.56 |
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$ |
0.57 |
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$ |
2.42 |
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$ |
2.29 |
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Diluted |
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$ |
0.56 |
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$ |
0.57 |
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$ |
2.40 |
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$ |
2.27 |
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Weighted average Limited Partners units
outstanding: |
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Basic |
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25,769,043 |
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23,988,734 |
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24,783,852 |
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|
23,666,211 |
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|
|
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Diluted |
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|
25,932,936 |
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|
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24,267,505 |
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|
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24,953,713 |
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|
|
23,907,151 |
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Capital Expenditure Data: |
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Maintenance capital expenditures |
|
$ |
12,570 |
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$ |
14,249 |
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$ |
31,194 |
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$ |
30,829 |
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Expansion capital expenditures |
|
|
35,333 |
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|
|
15,967 |
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|
|
151,313 |
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|
|
64,754 |
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Total |
|
$ |
47,903 |
|
|
$ |
30,216 |
|
|
$ |
182,507 |
|
|
$ |
95,583 |
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|
|
|
|
|
|
|
|
|
|
|
December 31, |
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December 31, |
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2005 |
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|
2004 |
|
Balance Sheet Data (at period end): |
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Cash and cash equivalents |
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$ |
21,645 |
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$ |
52,660 |
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Total debt |
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|
355,573 |
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|
|
313,305 |
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Total Partners capital |
|
|
524,848 |
|
|
|
460,594 |
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Sunoco Logistics Partners L.P.
Earnings Contribution by Business Segment
(in thousands, unaudited)
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Three Months Ended |
|
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Twelve Months Ended |
|
|
|
December 31, |
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December 31, |
|
|
|
2005 |
|
|
2004 |
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|
2005 |
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2004 |
|
Eastern Pipeline System: |
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|
|
|
|
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|
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Sales and other operating revenue |
|
$ |
25,367 |
|
|
$ |
25,951 |
|
|
$ |
96,666 |
|
|
$ |
97,439 |
|
Other income |
|
|
2,277 |
|
|
|
2,110 |
|
|
|
11,773 |
|
|
|
11,701 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
|
27,644 |
|
|
|
28,061 |
|
|
|
108,439 |
|
|
|
109,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
12,760 |
|
|
|
11,095 |
|
|
|
47,046 |
|
|
|
45,769 |
|
Depreciation and amortization |
|
|
2,687 |
|
|
|
2,882 |
|
|
|
10,509 |
|
|
|
11,005 |
|
Selling, general and administrative expenses |
|
|
4,418 |
|
|
|
4,493 |
|
|
|
18,560 |
|
|
|
18,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
7,779 |
|
|
$ |
9,591 |
|
|
$ |
32,324 |
|
|
$ |
34,289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminal Facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
$ |
29,548 |
|
|
$ |
27,776 |
|
|
$ |
113,844 |
|
|
$ |
105,968 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
12,574 |
|
|
|
12,417 |
|
|
|
48,571 |
|
|
|
45,011 |
|
Depreciation and amortization |
|
|
3,780 |
|
|
|
4,008 |
|
|
|
15,054 |
|
|
|
15,115 |
|
Selling, general and administrative expenses |
|
|
4,196 |
|
|
|
3,272 |
|
|
|
14,429 |
|
|
|
13,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
8,998 |
|
|
$ |
8,079 |
|
|
$ |
35,790 |
|
|
$ |
32,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Pipeline System: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenue |
|
$ |
1,088,758 |
|
|
$ |
978,071 |
|
|
$ |
4,272,181 |
|
|
$ |
3,247,894 |
|
Other income |
|
|
262 |
|
|
|
770 |
|
|
|
2,443 |
|
|
|
2,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues |
|
|
1,089,020 |
|
|
|
978,841 |
|
|
|
4,274,624 |
|
|
|
3,250,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products sold and operating expenses |
|
|
1,077,311 |
|
|
|
970,796 |
|
|
|
4,231,096 |
|
|
|
3,216,700 |
|
Depreciation and amortization |
|
|
2,971 |
|
|
|
1,464 |
|
|
|
8,275 |
|
|
|
5,813 |
|
Selling, general and administrative expenses |
|
|
6,005 |
|
|
|
4,391 |
|
|
|
20,059 |
|
|
|
17,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
2,733 |
|
|
$ |
2,190 |
|
|
$ |
15,194 |
|
|
$ |
10,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sunoco Logistics Partners L.P.
Operating Highlights
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
Eastern Pipeline System: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shipments (barrel miles per day) (2) |
|
|
60,115,379 |
|
|
|
63,185,669 |
|
|
|
56,906,896 |
|
|
|
59,173,047 |
|
Revenue per barrel mile (cents) |
|
|
0.459 |
|
|
|
0.446 |
|
|
|
0.469 |
|
|
|
0.450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminal Facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terminal throughput (bpd): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refined product terminals |
|
|
400,252 |
|
|
|
388,761 |
|
|
|
389,523 |
|
|
|
340,675 |
|
Nederland terminal |
|
|
466,402 |
|
|
|
473,043 |
|
|
|
457,655 |
|
|
|
487,828 |
|
Refinery terminals (3) |
|
|
721,054 |
|
|
|
691,076 |
|
|
|
702,249 |
|
|
|
685,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Pipeline System: (1) (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil pipeline throughput (bpd) |
|
|
416,097 |
|
|
|
299,612 |
|
|
|
356,129 |
|
|
|
298,797 |
|
Crude oil purchases at wellhead (bpd) |
|
|
178,260 |
|
|
|
187,129 |
|
|
|
186,224 |
|
|
|
186,827 |
|
Gross margin per barrel of pipeline throughput (cents) (5) |
|
|
23.7 |
|
|
|
21.1 |
|
|
|
25.7 |
|
|
|
23.2 |
|
|
|
|
(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) |
|
Consists of the Partnerships Fort Mifflin Terminal Complex, the Marcus Hook Tank Farm and
the Eagle Point Dock. |
|
(4) |
|
Includes results from the Partnerships Texas crude oil pipeline system from the
acquisition date, August 1, 2005. |
|
(5) |
|
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. |
An investor call with management regarding our fourth-quarter results is scheduled for
Wednesday morning, January 25 at 9:00 am EDT. Those wishing to listen can access the call by
dialing (USA toll free) 1-877-297-3442; International (USA toll) 1-706-643-1335 and request Sunoco
Logistics Partners Earnings Call, Conference Code ID#3976340. 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 Partnerships 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#3976340.
Sunoco Logistics Partners L.P. (NYSE: SXL), headquartered in Philadelphia, was formed to
acquire, own and operate substantially all of Sunoco, Inc.s refined product and crude oil
pipelines and terminal facilities. The Eastern Pipeline System consists of approximately 1,900
miles of primarily refined product pipelines 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 8.9 million
barrels of refined product terminal capacity and 19.4 million barrels of crude oil terminal
capacity (including 12.5 million barrels of capacity at the Texas Gulf Coast Nederland Terminal).
The Western Pipeline System consists of approximately 2,640 miles of crude oil pipelines, located
principally in Oklahoma and Texas, a 43.8 percent interest in the West Texas Gulf Pipe Line Company
and a 37.0 percent undivided interest in the Mesa Pipe Line System. For additional information
visit Sunoco Logistics web site at www.sunocologistics.com.
Note: Those statements made in this release that are not historical facts are forward-looking
statements. Although Sunoco Logistics Partners L.P. (the Partnership) 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 Partnerships 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 Partnerships September 30, 2005 Quarterly Report on Form
10-Q filed with the Securities and Exchange Commission on November 3, 2005. 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 -
exv99w2
Fourth Quarter 2005
Earnings Conference Call
January 25, 2006
Sunoco Logistics Partners L.P.
|
Forward-Looking Statement
You should review this slide presentation in conjunction with the fourth quarter 2005 earnings
conference call for Sunoco Logistics Partners L.P., held on January 25, 2006 at 9:00 a.m. EDT. You may
listen to the audio portion of the conference call on this website. An audio recording also will be available
after the call's completion by dialing 1-877-297-3442. International callers should dial 1-706-643-1335.
Please enter Conference ID #3976340.
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 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 September 30,
2005 Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 3,
2005. We undertake no obligation to update publicly any forward-looking statements whether as a result of
new information or future events.
2
|
Q4 2005 Milestones
Fourth quarter 2005 net income of $15.0 million or $0.56 per L.P. unit, as compared to $14.7 million
or $0.57 per L.P. unit in the prior year's quarter
Net income adversely impacted by $5.7 million of Hurricane costs and the Western headquarters' move
Hurricane costs of $4.3 million
Houston move costs of $1.4 million
Total Q3 and Q4 2005 unusual costs of $9.8 million
Total increased distribution of $[ ] ($[ ] annualized) per unit to $[ ] ($[ ] annualized), a [ ] percent
increase over the prior quarter's distribution
Tenth distribution increase over the past eleven quarters
[ ] percent increase over prior year's fourth quarter distribution
We announced acquisition of a 29.8% interest in Mesa Pipe Line, bringing our total interest to 37%
Announced acquisition of Texas crude oil pipeline system from Black Hills Energy, Inc. in January 2006
Presented $99 million organic growth program for 2006-2007 period, generating $28 million in pre-
financing cash flows (1)
3
(1) $28 million of pre-financing cash flows associated with the Partnership's organic growth projects consist of $37 million of revenue in excess of $9 million in direct
operating costs. These costs do not include indirect, debt or equity financing costs.
|
Q4 2005 Financial Highlights
($ in millions, unaudited)
4
Three Months Ended
December 31, Three Months Ended
December 31, Three Months Ended
December 31, Year Ended
December 31, Year Ended
December 31, Year Ended
December 31,
2005 2004 2005 2004
Sales and other operating revenue
Other income $ 1,143.7
2.5 $1,031.8
2.9 $ 4,482.6
14.3 $ 3,451.3
13.9
Total Revenues 1,146.2 1,034.7 4,496.9 3,465.2
Cost of products sold and operating expenses
Depreciation and amortization
Selling, general and administrative expenses
Total costs and expenses 1,102.6
9.4
14.6
1,126.7 994.3
8.4
12.2
1,014.8 4,326.7
33.8
53.0
4,413.6 3,307.5
31.9
48.4
3,387.9
Operating income
Net interest expense 19.5
4.5 19.9
5.2 83.3
20.2 77.4
20.3
Net Income $ 15.0 $ 14.7 $ 63.1 $ 57.0
|
Q4 2005 Financial Highlights
5
(amounts in millions, except unit and per unit amounts, unaudited)
Three Months Ended
December 31, Three Months Ended
December 31, Three Months Ended
December 31, Year Ended
December 31, Year Ended
December 31, Year Ended
December 31,
2005 2004 2005 2004
Calculation of Limited Partners' interest:
Net Income
Less: General Partner's interest $ 15.0
(0.5) $ 14.7
(0.9) $ 63.1
(3.3) $ 57.0
(2.8)
Limited Partners' interest in Net Income $ 14.5 $ 13.8 $ 59.9 $ 54.2
Net Income per Limited Partner unit:
Basic $ 0.56 $ 0.57 $ 2.42 $ 2.29
Diluted $ 0.56 $ 0.57 $ 2.40 $ 2.27
Weighted average Limited Partners' units
outstanding (in thousands):
Basic 25,769 23,989 24,784 23,666
Diluted 25,933 24,268 24,954 23,907
|
Eastern Pipeline System
(amounts in millions, unless otherwise noted, unaudited)
6
Three Months Ended
December 31, Three Months Ended
December 31, Three Months Ended
December 31, Year Ended
December 31, Year Ended
December 31, Year Ended
December 31,
2005 2004 2005 2004
Financial Highlights
Sales and other operating revenue
Other income $ 25.4
2.3 $ 26.0
2.1 $ 96.7
11.8 $ 97.4
11.7
Total Revenues 27.6 28.1 108.4 109.1
Operating expenses
Depreciation and amortization
Selling, general and administrative expenses 12.8
2.7
4.4 11.1
2.9
4.5 47.0
10.5
18.6 45.8
11.0
18.0
Operating income $ 7.8 $ 9.6 $ 32.3
$ 34.3
Operating Highlights(1)
Total shipments (mm barrel miles per day) (2)
Revenue per barrel mile (cents) 60.1
0.459 63.2
0.446 56.9
0.469 59.2
0.450
(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.
|
Terminal Facilities
(amounts in millions, unless otherwise noted, unaudited)
7
Three Months Ended
December 31, Three Months Ended
December 31, Three Months Ended
December 31, Year Ended
December 31, Year Ended
December 31, Year Ended
December 31,
2005 2004 2005 2004
Financial Highlights
Total Revenues $ 29.5 $ 27.8 $ 113.8 $ 106.0
Operating expenses
Depreciation and amortization
Selling, general and administrative expenses
12.6
3.8
4.2
12.4
4.0
3.3
48.6
15.1
14.4
45.0
15.1
13.0
Operating income $ 9.0 $ 8.1 $ 35.8 $ 32.8
Operating Highlights
Terminal throughput (000's bpd)
Refinery terminals(1)
Nederland terminal
Refined product terminals
721.1
466.4
400.3 691.1
473.0
388.8 702.2
457.7
389.5 685.4
487.8
340.7
(1) Consists of the Partnership's Fort Mifflin Terminal Complex, the Marcus Hook Tank Farm and the Eagle Point Dock.
|
Western Pipeline System
8
Excludes amounts attributable to equity ownership interest in the corporate joint venture.
Includes results from the Partnerships' Texas crude oil pipeline system from the acquisition date, August 1, 2005.
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.
(amounts in millions, unless otherwise noted, unaudited) Three Months Ended
December 31, Three Months Ended
December 31, Three Months Ended
December 31, Year Ended
December 31, Year Ended
December 31, Year Ended
December 31,
2005 2004 2005 2004
Financial Highlights
Sales and other operating revenue
Other income $ 1,088.8
0.2 $ 978.1
0.8 $ 4,272.2
2.4 $ 3,247.9
2.2
Total Revenues 1,089.0 978.8 4,274.6 3,250.1
Cost of products sold and operating expenses 1,077.3 970.8 4,231.1 3,216.7
Depreciation and amortization 3.0 1.5 8.3 5.8
Selling, general and administrative expenses 6.0 4.4 20.1 17.3
Operating income $ 2.7 $ 2.2 $ 15.2 $ 10.3
Operating Highlights(1)(2)
Crude oil pipeline throughput (000's bpd) 416.1 299.6 356.1 298.8
Crude oil purchases at wellhead (000's bpd) 178.3 187.1 186.2 186.8
Gross margin per barrel of pipeline throughput (cents)(3) 23.7 21.1 25.7 23.2
|
Q4 2005 Financial Highlights
9
(amounts in millions, unaudited)
Three Months Ended
December 31, Three Months Ended
December 31, Three Months Ended
December 31, Year Ended
December 31, Year Ended
December 31, Year Ended
December 31,
2005 2004 2005 2004
Capital Expenditure Data
Maintenance capital expenditures $ 12.6 $ 14.2 $ 31.2 $ 30.8
Expansion capital expenditures 35.3 16.0 151.3 64.8
Total $ 47.9 $ 30.2 $ 182.5 $ 95.6
Reimbursements Under Agreements with Sunoco
$ 7.2
$ 4.0
$ 8.0
$ 7.0
December 31,
2005
December 31, 2004
Balance Sheet Data (at period end)
Cash and cash equivalents $ 21.6 $ 52.7
Total debt 355.6 313.3
Total Partners' Capital 524.8 460.6
|