Delaware | 1-31219 | 23-3096839 | ||
(State or other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) |
1818 Market Street, Suite 1500, Philadelphia, PA | 19103 | |
(Address of principal executive offices) | (Zip Code) |
¨ | 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. |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. | Exhibit | ||
99.1 | Press release dated August 5, 2015. |
SUNOCO LOGISTICS PARTNERS L.P. | ||
By: | Sunoco Partners LLC, its General Partner | |
By: | /s/ PETER J. GVAZDAUSKAS | |
Peter J. Gvazdauskas Chief Financial Officer and Treasurer |
Exhibit No. | Exhibit | ||
99.1 | Press release dated August 5, 2015. |
News Release | ||
Sunoco Logistics Partners L.P. | ||
1818 Market Street | ||
Philadelphia, PA 19103 | ||
For further information contact: | For release: Immediately | |
Jeffrey Shields (media) 215-977-6056 | ||
Peter Gvazdauskas (investors) 215-977-6322 |
• | Distributable Cash Flow of $264 million for the second quarter 2015 |
• | Twenty percent distribution increase to $1.75 (annualized) compared to the second quarter 2014 |
• | Blue bar ratable earnings increased approximately 30 percent year over year |
• | Distribution coverage ratio of 1.47x for the quarter ended June 30, 2015 |
• | Ended the quarter with a Debt-to-Adjusted EBITDA ratio of 3.3x calculated in accordance with our credit agreement |
• | Commenced operations on the Permian Express 2 pipeline project in July 2015 |
• | Announced a 30 percent interest in the Bayou Bridge pipeline project |
• | Planning to conduct an open season for Mariner East 2 Expansion project |
Three Months Ended June 30, | ||||||||||||
2015 | 2014 | Variance | ||||||||||
(in millions) | ||||||||||||
Crude Oil Pipelines | $ | 89 | $ | 104 | $ | (15 | ) | |||||
Crude Oil Acquisition and Marketing | 41 | 53 | (12 | ) | ||||||||
Terminal Facilities | 140 | 97 | 43 | |||||||||
Products Pipelines | 56 | 26 | 30 | |||||||||
Adjusted earnings before interest, taxes, depreciation and amortization expense ("Adjusted EBITDA") (1) | $ | 326 | $ | 280 | $ | 46 |
(1) | For a detailed definition of the components included within Adjusted EBITDA, see the Non-GAAP Financial Measures table for a reconciliation to the applicable generally accepted accounting principles ("GAAP") metric. |
Six Months Ended June 30, | ||||||||
2015 | 2014 | |||||||
(in millions) | ||||||||
Expansion | $ | 909 | $ | 1,108 | ||||
Maintenance | 31 | 31 | ||||||
Acquisitions | 131 | 80 | ||||||
Investment in joint venture interests | — | 42 | ||||||
Total | $ | 1,071 | $ | 1,261 |
Three Months Ended June 30, | ||||||||||||
2015 | 2014 | Variance | ||||||||||
(in millions, except per unit amounts) | ||||||||||||
Income Statement: | ||||||||||||
Sales and other operating revenue | $ | 3,202 | $ | 4,821 | $ | (1,619 | ) | |||||
Cost of products sold | 2,821 | 4,517 | (1,696 | ) | ||||||||
Operating expenses (1) | 55 | 28 | 27 | |||||||||
Selling, general and administrative expenses (1) | 25 | 22 | 3 | |||||||||
Depreciation and amortization expense | 94 | 74 | 20 | |||||||||
Impairment charge and other matters | (100 | ) | — | (100 | ) | |||||||
Total Costs and Expenses | 2,895 | 4,641 | (1,746 | ) | ||||||||
Operating Income | 307 | 180 | 127 | |||||||||
Interest cost and debt expense, net | (52 | ) | (37 | ) | (15 | ) | ||||||
Capitalized interest | 21 | 16 | 5 | |||||||||
Other income | 6 | 7 | (1 | ) | ||||||||
Income Before Provision for Income Taxes | 282 | 166 | 116 | |||||||||
Provision for income taxes | (5 | ) | (8 | ) | 3 | |||||||
Net Income | 277 | 158 | 119 | |||||||||
Less: Net Income attributable to noncontrolling interests | — | (2 | ) | 2 | ||||||||
Less: Net Income attributable to redeemable noncontrolling interests | (1 | ) | — | (1 | ) | |||||||
Net Income Attributable to Partners | $ | 276 | $ | 156 | $ | 120 | ||||||
Calculation of Limited Partners' interest: | ||||||||||||
Net Income attributable to Partners | $ | 276 | $ | 156 | $ | 120 | ||||||
Less: General Partner's interest | (71 | ) | (44 | ) | (27 | ) | ||||||
Limited Partners' interest in Net Income | $ | 205 | $ | 112 | $ | 93 | ||||||
Net Income per Limited Partner unit: | ||||||||||||
Basic | $ | 0.83 | $ | 0.54 | ||||||||
Diluted | $ | 0.83 | $ | 0.53 | ||||||||
Weighted Average Limited Partners' units outstanding: | ||||||||||||
Basic | 246.7 | 208.4 | ||||||||||
Diluted | 247.5 | 209.6 |
(1) | During the fourth quarter 2014, we adjusted our presentation of certain operating expenses and selling, general and administrative expenses to conform to the presentation utilized by ETP. These changes did not impact our net income. Prior period amounts have been recast to conform to current presentation. |
Six Months Ended June 30, | ||||||||||||
2015 | 2014 | Variance | ||||||||||
(in millions, except per unit amounts) | ||||||||||||
Income Statement: | ||||||||||||
Sales and other operating revenue | $ | 5,774 | $ | 9,298 | $ | (3,524 | ) | |||||
Cost of products sold | 5,130 | 8,727 | (3,597 | ) | ||||||||
Operating expenses (1) | 104 | 69 | 35 | |||||||||
Selling, general and administrative expenses (1) | 50 | 52 | (2 | ) | ||||||||
Depreciation and amortization expense | 176 | 143 | 33 | |||||||||
Impairment charge and other matters | (59 | ) | — | (59 | ) | |||||||
Total Costs and Expenses | 5,401 | 8,991 | (3,590 | ) | ||||||||
Operating Income | 373 | 307 | 66 | |||||||||
Interest cost and debt expense, net | (102 | ) | (63 | ) | (39 | ) | ||||||
Capitalized interest | 42 | 26 | 16 | |||||||||
Other income | 12 | 11 | 1 | |||||||||
Income Before Provision for Income Taxes | 325 | 281 | 44 | |||||||||
Provision for income taxes | (11 | ) | (13 | ) | 2 | |||||||
Net Income | 314 | 268 | 46 | |||||||||
Less: Net Income attributable to noncontrolling interests | (1 | ) | (5 | ) | 4 | |||||||
Less: Net Income attributable to redeemable noncontrolling interests | (1 | ) | — | (1 | ) | |||||||
Net Income Attributable to Partners | $ | 312 | $ | 263 | $ | 49 | ||||||
Calculation of Limited Partners' interest: | ||||||||||||
Net Income attributable to Partners | $ | 312 | $ | 263 | $ | 49 | ||||||
Less: General Partner's interest | (131 | ) | (82 | ) | (49 | ) | ||||||
Limited Partners' interest in Net Income | $ | 181 | $ | 181 | $ | — | ||||||
Net Income per Limited Partner unit: | ||||||||||||
Basic | $ | 0.76 | $ | 0.87 | ||||||||
Diluted | $ | 0.75 | $ | 0.86 | ||||||||
Weighted Average Limited Partners' units outstanding: | ||||||||||||
Basic | 238.9 | 208.2 | ||||||||||
Diluted | 239.8 | 209.3 |
(1) | During the fourth quarter 2014, we adjusted our presentation of certain operating expenses and selling, general and administrative expenses to conform to the presentation utilized by ETP. These changes did not impact our net income. Prior period amounts have been recast to conform to current presentation. |
June 30, 2015 | December 31, 2014 | |||||||
(in millions) | ||||||||
Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 58 | $ | 101 | ||||
Revolving credit facilities | $ | 550 | $ | 185 | ||||
Senior Notes | 3,975 | 3,975 | ||||||
Unamortized fair value adjustments (1) | 100 | 106 | ||||||
Unamortized bond discount | (6 | ) | (6 | ) | ||||
Total Debt | $ | 4,619 | $ | 4,260 | ||||
Sunoco Logistics Partners L.P. equity | $ | 7,592 | $ | 6,678 | ||||
Noncontrolling interests | 35 | 60 | ||||||
Total Equity | $ | 7,627 | $ | 6,738 |
(1) | Represents fair value adjustments on our senior notes resulting from the application of push-down accounting in connection with the acquisition of our general partner by Energy Transfer Partners, L.P. on October 5, 2012. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Sales and other operating revenue | ||||||||||||||||
Crude Oil Pipelines | $ | 135 | $ | 138 | $ | 270 | $ | 269 | ||||||||
Crude Oil Acquisition and Marketing | 2,680 | 4,432 | 4,888 | 8,526 | ||||||||||||
Terminal Facilities | 393 | 283 | 637 | 570 | ||||||||||||
Products Pipelines | 77 | 40 | 140 | 81 | ||||||||||||
Intersegment eliminations | (83 | ) | (72 | ) | (161 | ) | (148 | ) | ||||||||
Total sales and other operating revenue | $ | 3,202 | $ | 4,821 | $ | 5,774 | $ | 9,298 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Adjusted EBITDA | ||||||||||||||||
Crude Oil Pipelines | $ | 89 | $ | 104 | $ | 184 | $ | 197 | ||||||||
Crude Oil Acquisition and Marketing | 41 | 53 | 72 | 65 | ||||||||||||
Terminal Facilities | 140 | 97 | 192 | 183 | ||||||||||||
Products Pipelines | 56 | 26 | 99 | 43 | ||||||||||||
Total Adjusted EBITDA | $ | 326 | $ | 280 | $ | 547 | $ | 488 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Highlights | ||||||||||||||||
Crude Oil Pipelines: (1) | ||||||||||||||||
Pipeline throughput (thousands of barrels per day ("bpd")) | 2,174 | 2,130 | 2,149 | 2,086 | ||||||||||||
Pipeline revenue per barrel (cents) | 68.1 | 71.2 | 69.4 | 71.4 | ||||||||||||
Crude Oil Acquisition and Marketing: | ||||||||||||||||
Crude oil purchases (thousands of bpd) | 925 | 854 | 912 | 847 | ||||||||||||
Gross profit per barrel purchased (cents) (2) | 54.2 | 76.3 | 50.2 | 51.4 | ||||||||||||
Average crude oil price (per barrel) | $ | 57.96 | $ | 102.98 | $ | 53.29 | $ | 100.81 | ||||||||
Terminal Facilities: | ||||||||||||||||
Terminal throughput (thousands of bpd): | ||||||||||||||||
Refined products terminals | 425 | 420 | 424 | 416 | ||||||||||||
Nederland terminal | 1,311 | 1,216 | 1,305 | 1,269 | ||||||||||||
Refinery terminals | 281 | 345 | 229 | 286 | ||||||||||||
Products Pipelines: (1) (3) | ||||||||||||||||
Pipeline throughput (thousands of bpd) | 686 | 497 | 638 | 477 | ||||||||||||
Pipeline revenue per barrel (cents) | 124.5 | 88.2 | 121.9 | 94.2 |
(1) | Excludes amounts attributable to equity interests which are not consolidated. |
(2) | Represents total segment sales and other operating revenue, less cost of products sold and operating expenses, divided by total crude oil purchases. |
(3) | Prior period throughput volumes have been recast to exclude certain pipeline movements which result in revenues that are not material. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Net Income | $ | 277 | $ | 158 | $ | 314 | $ | 268 | ||||||||
Interest expense, net | 31 | 21 | 60 | 37 | ||||||||||||
Depreciation and amortization expense | 94 | 74 | 176 | 143 | ||||||||||||
Provision for income taxes | 5 | 8 | 11 | 13 | ||||||||||||
Non-cash compensation expense | 4 | 3 | 8 | 8 | ||||||||||||
Unrealized (gains) losses on commodity risk management activities | 8 | 8 | 23 | 7 | ||||||||||||
Amortization of excess investment in joint venture interests | — | 1 | 1 | 1 | ||||||||||||
Proportionate share of unconsolidated affiliates’ interest, depreciation and provision for income taxes | 7 | 7 | 13 | 11 | ||||||||||||
Non-cash inventory adjustments | (100 | ) | — | (59 | ) | — | ||||||||||
Adjusted EBITDA (1) | 326 | 280 | 547 | 488 | ||||||||||||
Interest expense, net | (31 | ) | (21 | ) | (60 | ) | (37 | ) | ||||||||
Provision for current income taxes (2) | (6 | ) | (9 | ) | (14 | ) | (16 | ) | ||||||||
Amortization of fair value adjustments on long-term debt | (3 | ) | (4 | ) | (6 | ) | (8 | ) | ||||||||
Distributions versus Adjusted EBITDA of unconsolidated affiliates | (8 | ) | (10 | ) | (16 | ) | (16 | ) | ||||||||
Maintenance capital expenditures | (16 | ) | (13 | ) | (31 | ) | (31 | ) | ||||||||
Distributable cash flow attributable to noncontrolling interests (2) | (1 | ) | (4 | ) | (2 | ) | (7 | ) | ||||||||
Contributions attributable to acquisition from affiliate | 3 | 3 | 6 | 6 | ||||||||||||
Distributable Cash Flow (1) (2) | $ | 264 | $ | 222 | $ | 424 | $ | 379 |
(1) | Our management believes that Adjusted EBITDA and distributable cash flow information enhances an investor’s understanding of a business’s 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 GAAP and may not be comparable to other similarly titled measures of other businesses. |
(2) | During the third quarter 2014, we changed our definition of distributable cash flow to conform to the presentation utilized by ETP. This change did not have a material impact on our distributable cash flows. Prior period amounts have been recast to conform to current presentation. |
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