Sunoco Logistics 1Q14 Analyst PowerPoint Presentation

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The PowerPoint slide deck from the Sunoco Logistics first quarter 2014 analyst call. On pages 9 & 10 are maps showing Mariner East 1 & 2 and Mariner West. Page 11 contains some quick facts about the Marcus Hook refinery and Sunoco Logsitics' plans for NGLs going to Marcus Hook.

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Sunoco Logistics 1Q14 Analyst PowerPoint Presentation

  1. 1. Sunoco Logistics Partners L.P. First Quarter 2014 Earnings Conference CallEarnings Conference Call May 7, 2014
  2. 2. Forward-Looking Statements You should review this slide presentation in conjunction with the first quarter 2014 earningsYou should review this slide presentation in conjunction with the first quarter 2014 earnings conference call for Sunoco Logistics Partners L.P., held on May 7, 2014 at 8:30 a.m. ET (7:30 a.m. CT). You may listen to the audio portion of the conference call on our website at www.sunocologistics.com or by dialing (USA toll-free) 1-800-369-2171. International callers should dial 1-517-308-9315. Please enter Conference ID “Sunoco Logistics.” Audio replays of the conference call will be available for two k ft th f ll b i i i t l h f ll i th l ti f th llweeks after the conference call beginning approximately one hour following the completion of the call. To access the replay, dial 1-800-839-1156. International callers should dial 1-402-998-0972. During the call, those statements we make that are not historical facts are forward-looking statements. These forward-looking statements are not guarantees of future performance. Although we believe the assumptions underlying these statements are reasonable, investors are cautioned thatp y g such forward-looking statements involve risks and uncertainties that may affect our business and cause actual results to differ materially from those discussed during the conference call or in the slide presentation. Such risks and uncertainties include economic, business, competitive and/or regulatory factors affecting our business, as well as uncertainties related to the outcomes of any pending or future litigation. Sunoco Logistics Partners L.P. has included in its Annual Report on Form 10-K forg g p the year ended December 31, 2013, and in its subsequent SEC filings, cautionary language identifying important risk factors (though not necessarily all such factors) that could cause future outcomes to differ materially from those set forth in the forward-looking statements. For more information about these risk factors, see our SEC filings, available on our website at www.sunocologistics.com. We expressly disclaim any obligation to update or alter these forward-looking statements, whether as ap y y g p g , result of new information, future events or otherwise. This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the slides at the end of the presentation. You should consider carefully the comparable GAAP measures and the reconciliations to those measures provided in thiscarefully the comparable GAAP measures and the reconciliations to those measures provided in this presentation. 2
  3. 3. 1Q Highlights Di t ib ti Distributions: 8th consecutive quarter over quarter increase of at least 5% • 36th consecutive increase overall • Guidance ~5% quarter over quarter increases in 2014 1Q increase: $2.65/unit to $2.78/unit (annualized) 21% increase over 1Q13 distribution of $2.29/unit (annualized)  Capital: 2013 i it l f $965 illi2013 organic capital of $965 million 2014 updated organic capital guidance of ~ $1.7 billion 2014 maintenance capital guidance of ~ $70 million2014 maintenance capital guidance of $70 million  Financing: Successfully completed $1.0 billion of debt financing in Aprily p g p Established a $250 million at-the-market (ATM) equity program 3
  4. 4. 8 Consecutive Quarters of at Least 5% Distribution Growth  Guidance ~5% quarter over quarter increases in 2014 4
  5. 5. Major Organic Projects  11 Successful Open Seasons: 3 West Texas Crude expansion projects (crude oil) Permian Express 1 (crude oil)Permian Express 1 (crude oil) Permian Express 2 (crude oil) Eaglebine Express (crude oil) Granite Wash Extension (crude oil) Allegheny Access (refined products) Mariner West (natural gas liquids)Mariner West (natural gas liquids) Mariner East 1 (natural gas liquids) Mariner South (natural gas liquids)  Actively developing: Mariner East 2 (natural gas liquids)* * Open Season Launched 5
  6. 6. Scheduled Project Start-up Note: Nederland Access start-up dependent upon Pegasus 6
  7. 7. Organic Capital 1,800 2,100 1,500 1,800 ($MM) 900 1,200 Investment 600 0 300 2009 2010 2011 2012 2013 2014P2009 2010 2011 2012 2013 2014P Organic Capital 7
  8. 8. Crude Projects Granite Wash Extension Granite Wash Crude to multiple markets P i E 1 West Texas Crude Expansions Permian Express 1 Permian Crude to Nederland Expansions Permian Crude to multiple markets Permian Express 2 Permian Crude to multiple markets Eaglebine Express Eaglebine / Woodbine Crude to Nederland 8
  9. 9. Mariner Franchise Mariner East 1 Ethane / Propane from Houston to Marcus Hook Mariner West Ethane from Houston to Sarnia Mariner South Mariner East 2Mariner South Propane / Butane from Mont Belvieu to Nederland Mariner East 2 NGLs from Shales to Marcus Hook 9
  10. 10. Mariner West & East – Comprehensive Marcellus Solution Mariner West Ethane from Houston to Sarnia Mariner East 1 Ethane / Propane from Houston to Marcus HookEthane from Houston to Sarnia Ethane / Propane from Houston to Marcus Hook Mariner East 2 NGLs from Shales to Marcus Hook 10
  11. 11. Marcus Hook – Natural Gas Liquids  Acquired from Sunoco, Inc. – $60MM  Continued commitment to growth in natural gas liquids  Anchors Mariner East  Located near the Marcellus and Utica Located near the Marcellus and Utica shales, the site offers many features:  Five underground caverns for storing NGLs D b h il k Deep water berths, rail access, truck capability and advantageous pipeline infrastructure  A northeast NGL hub, capable of handling a broad array of NGLs and located <300 miles from the Marcellus, is very attractive to producers as well as local and overseas consumers. 11
  12. 12. Allegheny Access – Refined Products Allegheny AccessAllegheny Access Ohio Products to Pittsburgh 12
  13. 13. APPENDIX
  14. 14. SXL Q1 2014 Financial Highlights (amounts in millions) Three Months Ended March 31, 2014 2013 Sales and other operating revenue 4,477$ 3,512$ Cost of products sold 4,210 3,224 Operating expenses 34 26 Selling general and administrative expenses 37 33Selling, general and administrative expenses 37 33 Depreciation and amortization expense 69 64 Total costs and expenses 4,350 3,347 Operating income 127 165 I t t t d d bt t (26) (24)Interest cost and debt expense, net (26) (24) Capitalized interest 10 5 Other income 4 2 Income before provision for income taxes 115 148 Provision for income taxes (5) (6) Net Income 110 142 Net income attributable to noncontrolling interests (3) (2) Net Income attributable to Sunoco 14 Logistics Partners L.P. 107$ 140$
  15. 15. SXL Q1 2014 Financial Highlights (amounts in millions, except per unit amounts) Three Months Ended March 31, 2014 20132014 2013 Calculation of Limited Partners' interest: Net Income attributable to Sunoco Logistics Partners L.P. 107$ 140$ Less: General Partner's interest (38) (27) Li it d P t ' i t t i N t I 69$ 113$Limited Partners' interest in Net Income 69$ 113$ Net Income per Limited Partner unit:p Basic 0.66$ 1.09$ Diluted 0.66$ 1.09$ Weighted Average Limited Partners' units outstanding: Basic 104.0 103.8 Diluted 104 5 104 1Diluted 104.5 104.1 15
  16. 16. SXL Q1 2014 Financial Highlights ( i illi )(amounts in millions) Three Months Ended March 31, 2014 2013 Capital Expenditures:p p Expansion 465$ 136$ Maintenance 18 4 Investment in joint venture interests 42 -Investment in joint venture interests 42 Total 525$ 140$ 16
  17. 17. SXL Q1 2014 Financial Highlights ( i illi )(amounts in millions) March 31, December 31, 2014 2013 Balance Sheet Data: Cash and cash equivalents 140$ 39$Cash and cash equivalents 140$ 39$ Advances to affiliated companies 14$ 239$ Revolving credit facilities (1) 985$ 235$Revolving credit facilities ( ) 985$ 235$ Senior Notes 1,975 2,150 Unamortized fair value adjustments (2) 116 120 Unamortized bond discount (3) (2) Total debt 3 073$ 2 503$Total debt 3,073$ 2,503$ Equity: Sunoco Logistics Partners L.P. Equity 6,207$ 6,204$ N t lli i t t 122 121Noncontrolling interests 122 121 Total Equity 6,329$ 6,325$ (1) In April 2014, the Partnership repaid the outstanding balance under its $1.50 billion credit facility using proceeds from the April 2014 senior notes offering. 17 (2) In connection with the application of push-down accounting, the Partnership’s senior notes were adjusted to fair value upon the closing of the acquisition of the Partnership’s general partner by Energy Transfer Partners, L.P. on October 5, 2012.
  18. 18. SXL Non-GAAP Financial Measures ( i illi )(amounts in millions) Three Months Ended March 31, 2014 2013 142$110$Net Income Interest expense, net 16 19 Depreciation and amortization expense 69 64 Provision for income taxes 5 6 Non-cash compensation expense 5 4 Unrealized gains on commodity risk management activities (1) (3) 142$110$Net Income Unrealized gains on commodity risk management activities (1) (3) Proportionate share of unconsolidated affiliates' interest, depreciation and provision for income taxes 4 4 Adjusted EBITDA (1) 208 236 Interest expense, net (16) (19)p ( ) ( ) Provision for income taxes (5) (6) Amortization of fair value adjustments on long-term debt (4) (6) Distributions versus Adjusted EBITDA of unconsolidated affiliates (6) (3) Maintenance capital expenditures (18) (4) Distributable Cash Flow attributable to noncontrolling interests (4) (3) (1) Management of the Partnership believes 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 Distributable Cash Flow attributable to noncontrolling interests (4) (3) Contributions attributable to acquisition from affiliate 3 - Distributable Cash Flow (1) 158$ 195$ 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 alternatives 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. 18
  19. 19. SXL Crude Oil Pipelines (financial amounts in millions) Three Months Ended March 31, 2014 2013 Financial Highlights Sales and other operating revenue 131$ 95$ Adjusted EBITDA 93$ 61$ Operating Highlights Pipeline throughput (thousands of bpd) 2,041 1,582 Pipeline revenue per barrel (cents) 71.6 67.0 19 (1) Amounts exclude earnings attributable to noncontrolling interests.
  20. 20. SXL Crude Oil Acquisition and Marketing (financial amounts in millions) Three Months Ended March 31, 2014 2013 Financial Highlights Sales and other operating revenue 4,094$ 3,259$p g Adjusted EBITDA 12$ 112$ Operating Highlights Crude oil purchases (thousands of bpd) 840 750p ( p ) Gross margin per barrel purchased (cents) (1) 21.1 172.0 Average crude oil price (per barrel) $98.61 $94.34 20 (1) Represents total segment sales and other operating revenue less cost of products sold and operating expenses, divided by total crude oil purchases.
  21. 21. SXL Terminal Facilities (financial amounts in millions) Three Months Ended March 31, 2014 2013 Financial Highlights Sales and other operating revenue 287$ 183$Sales and other operating revenue 287$ 183$ Adjusted EBITDA 86$ 54$ Operating Highlights Terminal throughput (thousands of bpd):Terminal throughput (thousands of bpd): Refined products terminals 413 414 Nederland terminal 1,322 850 Refinery terminals 226 325 21 Refinery terminals 226 325
  22. 22. SXL Refined Products Pipelines (financial amounts in millions) 2014 2013 March 31, Three Months Ended 2014 2013 Financial Highlights S l d th ti 41$ 30$Sales and other operating revenue 41$ 30$ Adjusted EBITDA 17$ 9$ Operating Highlights (1) Pipeline throughput (thousands of bpd) 521 522 Pipeline revenue per barrel (cents) 88.3 62.9 22 (1) Amounts exclude earnings attributable to noncontrolling interests. (2) Excludes amounts attributable to equity interests which are not consolidated.
  23. 23. SXL Key Financial and Operating Statistics 2010 2011 Total Total 1st 2nd 3rd 4th Total 1st 2nd 3rd 4th Total 1st Total Financial highlights (in millions) 2012 2013 2014 Sales and other operating revenue Crude Oil Pipelines 221$ 319$ 80$ 100$ 108$ 110$ 398$ 95$ 122$ 139$ 139$ 495$ 131$ 131$ Crude Oil Acquisition and Marketing 7,282 10,163 3,192 3,056 3,010 2,888 12,146 3,259 4,047 4,244 3,968 15,518 4,094 4,094 Terminal Facilities 287 435 135 170 101 206 612 183 176 177 215 751 287 287 Refined Products Pipelines 120 130 31 32 33 35 131 30 32 34 34 130 41 41 Intersegment eliminations (102) (142) (37) (45) (45) (50) (177) (55) (66) (66) (68) (255) (76) (76) Total sales and other operating revenue 7,808$ 10,905$ 3,401$ 3,313$ 3,207$ 3,189$ 13,110$ 3,512$ 4,311$ 4,528$ 4,288$ 16,639$ 4,477$ 4,477$ Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) Crude Oil Pipelines 156$ 207$ 60$ 70$ 73$ 72$ 275$ 61$ 88$ 98$ 102$ 349$ 93$ 93$ Crude Oil Acquisition and Marketing 39 148 47 57 54 81 239 112 70 18 33 233 12 12 Terminal Facilities 127 149 47 74 52 52 225 54 70 47 62 233 86 86 Refined Products Pipelines 77 69 15 17 25 14 71 9 16 18 13 56 17 17 Total Adjusted EBITDA 399$ 573$ 169$ 218$ 204$ 219$ 810$ 236$ 244$ 181$ 210$ 871$ 208$ 208$ Operating highlights Crude Oil Pipelines Pipeline throughput (thousands of barrels per day "bpd") 1 183 1 587 1 467 1 571 1 601 1 584 1 556 1 582 1 890 1 976 2 009 1 866 2 041 2 041Pipeline throughput (thousands of barrels per day "bpd") 1,183 1,587 1,467 1,571 1,601 1,584 1,556 1,582 1,890 1,976 2,009 1,866 2,041 2,041 Pipeline revenue per barrel (cents) 50.7 55.0 59.6 70.0 73.6 75.6 69.9 67.0 70.8 76.3 75.2 72.7 71.6 71.6 Crude Oil Acquisition and Marketing Crude oil purchases (thousands of bpd) 638 663 631 700 692 669 673 750 796 716 734 749 840 840 Gross margin per barrel purchased (cents) (1) 21.0 66.0 89.5 97.1 91.5 138.0 104.1 172.0 101.8 33.9 55.9 91.4 21.1 21.1 Average crude oil price (per barrel) 79.55$ 95.14$ 102.94$ 93.50$ 92.19$ 88.20$ 94.19$ 94.34$ 94.23$ 105.82$ 97.50$ 98.00$ 98.61$ 98.61$ Terminal Facilities (thousands of bpd) Refined products terminals throughput 488 492 487 515 495 451 487 414 454 432 422 431 413 413 Nederland terminal throughput 729 757 697 690 721 787 724 850 932 968 977 932 1,322 1,322Nederland terminal throughput 729 757 697 690 721 787 724 850 932 968 977 932 1,322 1,322 Refinery terminals throughput 465 443 383 345 381 411 380 325 444 495 324 397 226 226 Refined Products Pipelines (2) Pipeline throughput (thousands of bpd) 468 522 528 591 576 601 582 522 599 577 586 571 521 521 Pipeline revenue per barrel (cents) 70.0 68.3 65.1 59.5 62.2 63.0 61.6 62.9 59.1 64.3 63.9 62.5 88.3 88.3 23
  24. 24. SXL Key Financial and Operating Statistics 2010 2011 Total Total 1st 2nd 3rd 4th Total 1st 2nd 3rd 4th Total 1st Total Reconciliation of Segment Operating Income to Net Income Attributable to Sunoco Logistics Partners L.P. (in millions) Operating income: Crude Oil Pipelines 113$ 181$ 52$ 63$ 67$ 49$ 231$ 38$ 65$ 74$ 80$ 257$ 68$ 68$ Crude Oil Acquisition and Marketing 36 137 34 52 48 69 203 100 57 5 22 184 (1) (1) 2012 2013 2014 Terminal Facilities 94 85 37 60 39 44 180 31 46 27 27 131 60 60 Refined Products Pipelines 28 20 4 4 - (3) 5 (4) (3) (2) (3) (12) - - Total segment operating income 271 423 127 179 154 159 619 165 165 104 126 560 127 127 Interest expense, net (73) (89) (24) (21) (20) (14) (79) (19) (17) (22) (19) (77) (16) (16) Gain on investments in affiliates 128 - - - - - - - - - - - - - Other income 30 13 2 5 11 5 23 2 7 7 5 21 4 4 Provision for income taxes (8) (25) (8) (8) (8) (8) (32) (6) (9) (8) (7) (30) (5) (5) Net income 348 322 97 155 137 142 531 142 146 81 105 474 110 110 Net income attributable to noncontrolling interests (2) (9) (2) (3) (3) (3) (11) (2) (3) (3) (3) (11) (3) (3) Net income attributable to Partners 346$ 313$ 95$ 152$ 134$ 139$ 520$ 140$ 143$ 78$ 102$ 463$ 107$ 107$ Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow (in millions) Net income 348$ 322$ 97$ 155$ 137$ 142$ 531$ 142$ 146$ 81$ 105$ 474$ 110$ 110$ Add: Interest expense, net 73 89 24 21 20 14 79 19 17 22 19 77 16 16 Add: Depreciation and amortization expense 64 86 25 25 26 63 139 64 64 68 69 265 69 69 Add: Impairment charge 3 31 9 - - - 9 - - - - - - - Add: Provision for income taxes 8 25 8 8 8 8 32 6 9 8 7 30 5 5 Add: Non-cash compensation expense 5 6 3 2 1 2 8 4 2 4 4 14 5 5 Add: Unrealized (gain)/losses on commodity risk management activities 2 (2) - 3 3 (3) 3 (3) (1) (8) 11 (1) (1) (1) Add: Amortization of excess joint venture investment - - - - - - - - 1 - 1 2 - -Add: Amortization of excess joint venture investment 1 1 2 Add: Proportionate share of unconsolidated affiliates interest, depreciation and provision for income taxes 24 16 3 4 9 5 21 4 6 6 4 20 4 4 Less: Adjustments to commodity hedges resulting from "push-down" accounting - - - - - (12) (12) - - - - - - - Less: Non-cash accrued liability adjustment - - - - - - - - - - (10) (10) - - Less: Gain on investments in affiliates (128) - - - - - - - - - - - - - Adjusted EBITDA 399 573 169 218 204 219 810 236 244 181 210 871 208 208 Less: Interest expense, net (73) (89) (24) (21) (20) (14) (79) (19) (17) (22) (19) (77) (16) (16) Less: Provision for income taxes (8) (25) (8) (8) (8) (8) (32) (6) (9) (8) (7) (30) (5) (5) Less: Amortization of fair value adjustments on long-term debt - - - - - (6) (6) (6) (6) (5) (6) (23) (4) (4) Less: Distributions versus Adjusted EBITDA of unconsolidated affiliates (36) (17) (3) (6) (16) (3) (28) (3) (8) (10) (6) (27) (6) (6) Less: Maintenance capital expenditures (37) (42) (7) (11) (11) (21) (50) (4) (18) (15) (16) (53) (18) (18) Less: Distributable cash flow attributable to noncontrolling interests (3) (10) (3) (3) (3) (2) (11) (3) (5) (3) (4) (15) (4) (4) Add: Acquisition costs reimbursement - - - - - - - - 3 3 3 9 3 3 Distributable Cash Flow 242$ 390$ 124$ 169$ 146$ 165$ 604$ 195$ 184$ 121$ 155$ 655$ 158$ 158$ (1) (2) Represents total segment sales and other operating revenue minus cost of products sold and operating expenses divided by total crude purchases. Excludes amounts attributable to equity ownership interests which are not consolidated. 24 q y p

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