Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Energy Transfer Operating, L.P. | d8k.htm |
| EX-99.1 - PRESS RELEASE - Energy Transfer Operating, L.P. | dex991.htm |
 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 |