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Sunoco Logistics Increases Distribution 10 Percent Quarter Over Quarter And Reports Earnings For The Third Quarter 2012

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 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2012, and in the Partnership’s subsequent Form 10-Q and Form 8-K filings. The Partnership undertakes no obligation to update any forward-looking statements in this release, whether as a result of new information or future events.

Sunoco Logistics Partners L.P.
Financial Highlights
(unaudited)
   
Three Months Ended
September 30,
  2012       2011   Variance
(in millions)
Income Statement:
Sales and other operating revenue $ 3,207 $ 2,847 $ 360
Other income   11     3     8  
Total revenues 3,218 2,850 368
Cost of products sold and operating expenses 2,997 2,675 322
Depreciation and amortization expense 26 24 2
Selling, general and administrative expenses   30     23     7  
Total costs and expenses 3,053 2,722 331
 
Operating Income 165 128 37
Interest cost and debt expense, net 24 26 (2 )
Capitalized interest   (4 )   (2 )   (2 )
Income Before Provision for Income Taxes 145 104 41
 
Provision for income taxes   8     7     1  
Net Income 137 97 40
Less: Net Income attributable to noncontrolling interests   3     2     1  
Net Income Attributable to Partners $ 134   $ 95   $ 39  
 
Calculation of Limited Partners' interest:
Net Income attributable to Partners $ 134 $ 95 $ 39
Less: General Partner's interest   (21 )   (14 )   (7 )
Limited Partners' interest in Net Income (1) $ 113   $ 81   $ 32  
 
Net Income per Limited Partner unit:
Basic $ 1.09 $ 0.78
 
Diluted $ 1.09 $ 0.78
 
Weighted Average Limited Partners' units outstanding:
Basic 103.6 103.3
 
Diluted 103.9 103.7
 
(1)   Includes interest in net income attributable to Class A units, which were converted to common units in July 2012.
 
Sunoco Logistics Partners L.P.
Financial Highlights
(unaudited)
   
Nine Months Ended
September 30,
  2012       2011   Variance
(in millions)
Income Statement:
Sales and other operating revenue $ 9,921 $ 7,529 $ 2,392
Other income 18 9 9
Gain on divestment and related matters   11     -     11  
Total revenues 9,950 7,538 2,412
Cost of products sold and operating expenses 9,311 7,086 2,225
Depreciation and amortization expense 76 61 15
Impairment charge and related matters (1 ) - (1 )
Selling, general and administrative expenses   86     67     19  
Total costs and expenses 9,472 7,214 2,258
 
Operating Income 478 324 154
Interest cost and debt expense, net 73 68 5
Capitalized interest   (8 )   (5 )   (3 )
Income Before Provision for Income Taxes 413 261 152
 
Provision for income taxes   24     18     6  
Net Income 389 243 146
Less: Net Income attributable to noncontrolling interests   8     6     2  
Net Income Attributable to Partners $ 381   $ 237   $ 144  
 
Calculation of Limited Partners' interest:
Net Income attributable to Partners $ 381 $ 237 $ 144
Less: General Partner's interest   (55 )   (40 )   (15 )
Limited Partners' interest in Net Income (1) $ 326   $ 197   $ 129  
 
Net Income per Limited Partner unit:
Basic $ 3.15 $ 1.96
 
Diluted $ 3.14 $ 1.95
 
Weighted Average Limited Partners' units outstanding:
Basic 103.5 100.7
 
Diluted 103.9 101.1
 
(1)   Includes interest in net income attributable to Class A units, which were converted to common units in July 2012.
 
Sunoco Logistics Partners L.P.
Financial Highlights
(unaudited)
   
September 30, December 31,
2012 2011
(in millions)
Balance Sheet Data:
 
Cash and cash equivalents $ 2 $ 5
 
Revolving credit facilities (1) $ 179 $ -
Senior Notes (net of discounts)   1,448   1,698
Total Debt $ 1,627 $ 1,698
 
Sunoco Logistics Partners L.P. Partners' equity $ 1,278 $ 1,096
Noncontrolling interests   101   98
Total Equity $ 1,379 $ 1,194
 

(1)

 

As of September 30, 2012, the Partnership had available borrowing capacity of $406 million under its revolving credit facilities, which includes $26 million of available borrowing capacity from West Texas Gulf's revolving credit facility.

 
Sunoco Logistics Partners L.P.
Selected Financial Data by Business Segment
(unaudited)
           
Three Months Ended Nine Months Ended
September 30, September 30,
  2012     2011   Variance   2012     2011   Variance
(in millions)
Sales and other operating revenue
Crude Oil Pipelines $ 108 $ 81 $ 27 $ 288 $ 233 $ 55
Crude Oil Acquisition and Marketing (1) 3,010 2,671 339 9,258 7,028 2,230
Terminal Facilities (2) 101 94 7 406 279 127
Refined Products Pipelines (3) 33 37 (4 ) 96 93 3
Intersegment eliminations   (45 )   (36 )   (9 )   (127 )   (104 )   (23 )
Total sales and other operating revenue $ 3,207   $ 2,847   $ 360   $ 9,921   $ 7,529   $ 2,392  
 
Operating income
Crude Oil Pipelines $ 67 $ 43 $ 24 $ 183 $ 129 $ 54
Crude Oil Acquisition and Marketing (1) 48 41 7 134 75 59
Terminal Facilities (2) 39 33 6 137 96 41
Refined Products Pipelines (3)   11     11     -     24     24     -  

Total operating income

$ 165   $ 128   $ 37   $ 478   $ 324   $ 154  
 
Depreciation and amortization
Crude Oil Pipelines $ 6 $ 7 $ (1 ) $ 19 $ 19 $ -
Crude Oil Acquisition and Marketing (1) 6 4 2 16 5 11
Terminal Facilities (2) 10 8 2 28 24 4
Refined Products Pipelines (3)   4     5     (1 )   13     13     -  
Total depreciation and amortization $ 26   $ 24   $ 2   $ 76   $ 61   $ 15  
 
Impairment charge and related matters
Crude Oil Acquisition and Marketing $ - $ - $ - $ 8 $ - $ 8
Terminal Facilities (4) - - - (10 ) - (10 )
Refined Products Pipelines   -     -     -     1     -     1  
Total impairment charge and related matters $ -   $ -   $ -   $ (1 ) $ -   $ (1 )
 

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (5)

Crude Oil Pipelines $ 71 $ 48 $ 23 $ 195 $ 142 $ 53
Crude Oil Acquisition and Marketing (1) 54 45 9 158 80 78
Terminal Facilities (2) 49 41 8 165 120 45
Refined Products Pipelines (3)   14     16     (2 )   37     37     -  
Total Adjusted EBITDA $ 188   $ 150   $ 38   $ 555   $ 379   $ 176  
 
Sunoco Logistics Partners L.P.
Selected Financial Data by Business Segment Notes
(unaudited)
 
(1) In August 2011, the Partnership acquired a crude oil acquisition and marketing business from Texon L.P. Results from the acquisition are included from the acquisition date.
 
(2) In July and August 2011, the Partnership acquired the Eagle Point tank farm and related assets and a refined products terminal located in East Boston, Massachusetts, respectively. Results from the acquisitions are included from their respective acquisition dates.
 
(3) In May 2011, the Partnership acquired a controlling financial interest in the Inland refined products pipeline. As a result of the acquisition, Inland became a consolidated subsidiary of the Partnership. Results from the acquisition are included from the acquisition date.
 
(4) In the fourth quarter 2011, the Partnership recognized a $42 million charge for certain crude oil terminal assets expected to be negatively impacted if Sunoco’s Philadelphia refinery was permanently idled. This charge included $11 million for certain regulatory obligations. In the second quarter 2012, the Partnership recognized a $10 million gain on the reversal of certain regulatory obligations. Such expenses were no longer expected to be incurred as the Philadelphia refinery will continue to operate in connection with Sunoco’s joint venture with The Carlyle Group. The gain was included in the Partnership’s Adjusted EBITDA which is consistent with prior period presentation when the obligation was recognized.
 
(5) Amounts exclude earnings attributable to noncontrolling interests.
 
Sunoco Logistics Partners L.P.
Financial and Operating Statistics
(unaudited)

 

   
Three Months Ended Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
(in millions)
Operating Income
 
Crude Oil Pipelines $ 67 $ 43 $ 183 $ 129
Crude Oil Acquisition and Marketing 48 41 134 75
Terminal Facilities 39 33 137 96
Refined Products Pipelines   11   11   24   24
Total Operating Income $ 165 $ 128 $ 478 $ 324
 
 
 
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Operating Highlights
 
Crude Oil Pipelines:
Pipeline throughput (thousands of bpd) 1,601 1,637 1,546 1,591
Pipeline revenue per barrel (cents) 73.6 54.0 68.0 53.7
 
Crude Oil Acquisition and Marketing: (1)
Crude oil purchases (thousands of bpd) 692 723 674 654
Gross margin per barrel purchased (cents) (2) 83.1 66.3 84.2 47.2
Average crude oil price (per barrel) $ 92.19 $ 89.81 $ 96.20 $ 95.52
 
Terminal Facilities: (3)
Terminal throughput (thousands of bpd):
Refined products terminals 495 497 499 485
Nederland terminal 721 869 703 779
Refinery terminals 381 483 369 422
 
Refined Products Pipelines: (4)(5)
Pipeline throughput (thousands of bpd) 576 605 565 496
Pipeline revenue per barrel (cents) 62.2 66.2 62.2 68.6
 
Sunoco Logistics Partners L.P.
Financial and Operating Statistics Notes
(unaudited)
 
(1) In August 2011, the Partnership acquired a crude oil acquisition and marketing business from Texon L.P. Results from the acquisition are included from the acquisition date.
 
(2) Represents total segment sales and other operating revenue less cost of products sold and operating expenses and depreciation and amortization divided by total crude oil purchases.
 
(3) In July and August 2011, the Partnership acquired the Eagle Point tank farm and related assets and a refined products terminal located in East Boston, Massachusetts, respectively. Volumes and revenues associated with the acquisitions are included from their respective acquisition dates.
 
(4) Excludes amounts attributable to equity interests which are not consolidated.
 
(5) In May 2011, the Partnership acquired a controlling financial interest in the Inland refined products pipeline. As a result of the acquisition, Inland became a consolidated subsidiary of the Partnership. Volumes and revenues associated with the acquisition are included from the acquisition date.
 
Sunoco Logistics Partners L.P.
Non-GAAP Financial Measures
(unaudited)
   
Three Months Ended Nine Months Ended
September 30, September 30,
  2012       2011     2012       2011  
(in millions)
Net Income attributable to Partners $ 134 $ 95 $ 381 $ 237
Add: Interest expense, net 20 24 65 63
Add: Depreciation and amortization 26 24 76 61
Add: Impairment charge (1)(2) - - 9 -
Add: Provision for income taxes   8     7     24     18  
Adjusted EBITDA (3) 188 150 555 379
Less: Interest expense, net (20 ) (24 ) (65 ) (63 )
Less: Maintenance capital expenditures (11 ) (10 ) (29 ) (20 )
Less: Provision for income taxes   (8 )   (7 )   (24 )   (18 )
Distributable cash flow (3) $ 149   $ 109   $ 437   $ 278  
 
(1)   In the first quarter 2012, the Partnership recognized a non-cash impairment charge related to a cancelled software project for the crude oil acquisition and marketing business and a refined products pipeline project in Texas.
 
(2) In the fourth quarter 2011, the Partnership recognized a $42 million charge for certain crude oil terminal assets expected to be negatively impacted if Sunoco’s Philadelphia refinery was permanently idled. This charge included $11 million for certain regulatory obligations. In the second quarter 2012, the Partnership recognized a $10 million gain on the reversal of certain regulatory obligations. Such expenses were no longer expected to be incurred as the Philadelphia refinery will continue to operate in connection with Sunoco’s joint venture with The Carlyle Group. The gain was included in the Partnership’s Adjusted EBITDA which is consistent with prior period presentation when the obligation was recognized.
 
(3) Management of the Partnership believes Adjusted 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. Adjusted 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.




Stock quotes in this article: SXL 

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