Sunoco Logistics Reports Record Earnings for the First Quarter 2013

  Sunoco Logistics Reports Record Earnings for the First Quarter 2013

Business Wire

PHILADELPHIA -- May 8, 2013

Sunoco Logistics Partners L.P. (NYSE: SXL) (the “Partnership”) today announced
its results for the first quarter ended March 31, 2013. Adjusted EBITDA for
the three months ended March 31, 2013 increased $67 million to $236 million
compared to the first quarter 2012. Net income attributable to partners for
the first quarter 2013 was $140 million ($1.09 per limited partner unit
diluted), compared with $95 million ($0.77 per limited partner unit diluted)
for the first quarter 2012. Additional highlights include:

  *Record distributable cash flow of $195 million
  *Ended the quarter with a Debt to Adjusted EBITDA ratio of 2.5x
  *2^nd consecutive five percent quarterly distribution increase; 34 percent
    distribution increase compared to the first quarter 2012
  *Acquired the Marcus Hook facility from Sunoco for $60 million in April
    2013
  *Received sufficient commitments for the Mariner South project
  *Actively developing a crude oil project in the Eaglebine shale region

“The first quarter was a record financially for our Partnership,” said Michael
J. Hennigan, president and chief executive officer. “We reached new quarterly
highs in both Adjusted EBITDA and distributable cash flow. We were pleased
that market conditions were favorable for our business.”

Speaking on the Marcus Hook facility purchase, Hennigan said, “The purchase of
the Marcus Hook facility demonstrates Sunoco Logistics’ continued commitment
to pursue opportunistic growth in natural gas liquids (NGLs). Marcus Hook has
the deep water berths, rail access, truck capability and pipeline
infrastructure to rival existing facilities. In addition, Marcus Hook has the
unique feature of five underground caverns to store NGLs on the East Coast. As
development of the shale plays in Pennsylvania and neighboring states continue
to grow, we plan to create a world class natural gas liquids hub near the
Marcellus and Utica shales.”

In regard to the success of Mariner South, Hennigan said, “Mariner South is
our first example of working together with the Energy Transfer family to
optimize our assets and generate opportunities. The project would originate at
the Lone Star fractionation facility at Mont Belvieu and connect to a Sunoco
Logistics line that runs to our Nederland terminal. Mariner South creates a
first-rate Gulf Coast NGL operation in response to the continued growth of NGL
production.”

On the Partnership’s newly announced crude oil project, Hennigan said, “We are
pleased to announce the Eaglebine Express. This pipeline would help producers
in the growing Eaglebine and Woodbine shale regions deliver their crude oil to
key markets along the Gulf Coast. We expect to launch the open season for
Eaglebine Express soon.”

DETAILS OF FIRST QUARTER SEGMENT ADJUSTED EBITDA

                                                    
                                                      Three Months Ended
                                                      March 31,
                                                      2013   2012   Variance
                                                      (in millions)
Crude Oil Pipelines                                   $ 61    $ 60    $  1
Crude Oil Acquisition and Marketing                     112     47       65
Terminal Facilities                                     54      47       7
Refined Products Pipelines                             9      15      (6  )
Adjusted earnings before interest, taxes,
depreciation and amortization expense ("Adjusted      $ 236   $ 169   $  67  
EBITDA") ^(1)
                                                                      

^(1) The Partnership's definition of Adjusted EBITDA was revised beginning in
the fourth quarter 2012. Prior period results have been recast to conform to
the current presentation. 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 principle
("GAAP") metric.

Crude Oil Pipelines

Adjusted EBITDA for the first quarter 2013 increased $1 million compared to
the prior year period due primarily to higher throughput volumes and pipeline
tariffs which benefitted from the Partnership’s expansion projects and strong
demand for West Texas crude oil. These improvements were largely offset by
higher operating expenses which included lower pipeline operating gains and
increased environmental remediation expenses.

Crude Oil Acquisition and Marketing

Adjusted EBITDA for the first quarter 2013 increased $65 million compared to
the prior year period due primarily to expanded crude oil volumes and margins
which were the result of an expansion in our crude oil trucking fleet and
market related opportunities in West Texas.

Terminal Facilities

Adjusted EBITDA for the first quarter 2013 increased $7 million compared to
the prior year period. Results for the first quarter 2012 included a $6
million non-recurring gain recognized in connection with the sale of the Big
Sandy terminal and pipeline assets. Excluding this item, Adjusted EBITDA
increased $13 million due primarily to increased operating results from the
Partnership’s refined products acquisition and marketing activities and
improved results from the Partnership’s Eagle Point and Nederland terminals.
Partially offsetting these improvements were volume reductions at the
Partnership’s refinery terminals which were negatively impacted by turnaround
activity during the first quarter 2013 and volume reductions at the
Partnership’s refined products terminals.

Refined Products Pipelines

Adjusted EBITDA for the first quarter 2013 decreased $6 million compared to
the prior year period. Results for the first quarter 2012 included a $5
million non-recurring gain recognized in connection with the sale of the Big
Sandy terminal and pipeline assets. Excluding this item, Adjusted EBITDA
decreased $1 million due primarily to lower volumes resulting from turnaround
activity at the Philadelphia refinery and capital work in connection with the
Mariner West project. These factors were largely offset by higher
contributions from our joint-venture interests and the Inland pipeline.

Financing Update

Net interest expense decreased $5 million to $19 million for the first quarter
2013 compared to the prior year period. The current period includes $6 million
related to the non-cash amortization of the fair value adjustments recorded on
the Partnership’s long-term debt. Excluding this amount, net interest expense
increased $1 million compared to the prior year period. Higher interest
expense associated with the Partnership’s $700 million senior notes offering
in January 2013 was largely offset by higher capitalized interest associated
with the Partnership’s expansion capital program and lower interest expense
driven by the repayment of $250 million of senior notes in February 2012. At
March 31, 2013, the Partnership’s total debt balance was $2.18 billion,
excluding $137 million of unamortized fair value adjustments.

CAPITAL EXPENDITURES

                                 
                                   Three Months Ended
                                   March 31,
                                   2013       2012
                                   (in millions)
                                               
Maintenance capital expenditures   $   4       $  7
Expansion capital expenditures        136       43
Total                              $   140     $  50
                                               

The Partnership’s expansion capital spending for the three months ended March
31, 2013 included projects to invest in the Partnership’s crude oil
infrastructure by increasing its pipeline capabilities through previously
announced expansion capital projects in West Texas, expand upon refined
products acquisition and marketing services, upgrade the service capabilities
at the Eagle Point and Nederland terminals and invest in the previously
announced Mariner and Allegheny Access projects. The Partnership expects to
invest approximately $700 million in expansion capital during 2013, excluding
major acquisitions, which will be funded by the $700 million senior notes
offering in January 2013. Maintenance capital spending is estimated to be
approximately $65 million in 2013.

INVESTOR CALL

The Partnership will host a conference call regarding first quarter results on
Thursday, May 9, 2013 at 8:30am ET (7:30am CT). Those wishing to listen can
access the call by dialing (USA toll free) 1-800-369-2171; International (USA
toll) 1-517-308-9315 and request “Sunoco Logistics Partners Earnings Call,
Conference Code: Sunoco Logistics.” 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. 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 1-888-568-0502. International callers
should dial 1-402-530-7992.

ABOUT SUNOCO LOGISTICS

Sunoco Logistics Partners L.P. (NYSE: SXL), headquartered in Philadelphia, is
a master limited partnership that owns and operates a logistics business
consisting of a geographically diverse portfolio of complementary crude oil
and refined products pipeline, terminalling, and acquisition and marketing
assets. SXL’s general partner is owned by Energy Transfer Partners, L.P.
(NYSE: ETP). For more information, visit the Sunoco Logistics Partners L.P.
web site at www.sunocologistics.com.

This release is intended to be a qualified notice under Treasury Regulation
Section 1.1446-4(b). Brokers and nominees should treat one hundred percent
(100%) of distributions by Sunoco Logistics Partners L.P. to non-U.S.
investors as being attributable to income that is effectively connected with a
United States trade or business. Accordingly, distributions by Sunoco
Logistics Partners L.P. to non-U.S. investors are subject to federal income
tax withholding at the highest applicable effective tax rate.

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 March
1, 2013, and in the Partnership’s subsequent 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
                              March 31,
                                  2013             2012        Variance
                              (in millions, except units and per unit amounts)
Income Statement:
Sales and other operating     $    3,512           $   3,401        $  111
revenue
Gain on divestments and           -                 11            (11  )
related matters
Total revenues                     3,512               3,412           100
Cost of products sold              3,226               3,194           32
Operating expenses                 24                  31              (7   )
Selling, general and               33                  26              7
administrative expenses
Depreciation and                   64                  25              39
amortization expense
Impairment charge and             -                 9             (9   )
related matters
Total costs and expenses           3,347               3,285           62
                                                                    
Operating Income                   165                 127             38
Interest cost and debt             24                  26              (2   )
expense, net
Capitalized interest               (5      )           (2     )        (3   )
Other income                      (2      )          (2     )       -    
Income Before Provision for        148                 105             43
Income Taxes
                                                                    
Provision for income taxes        6                 8             (2   )
Net Income                         142                 97              45
Less: Net Income
attributable to                   (2      )          (2     )       -    
noncontrolling interests
Net Income attributable to    $    140            $   95          $  45   
Partners
                                                                    
Calculation of Limited
Partners' interest:
Net Income attributable to    $    140             $   95           $  45
Partners
Less: General Partner's           (27     )          (15    )       (12  )
interest
Limited Partners' interest    $    113            $   80          $  33   
in Net Income ^(1)
                                                                    
Net Income per Limited
Partner unit:
Basic                         $    1.09           $   0.77   
                                                                    
Diluted                       $    1.09           $   0.77   
                                                                    
Weighted Average Limited
Partners' units
outstanding:
Basic                             103.8             103.5  
                                                                    
Diluted                           104.1             103.9  


^(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)
                                                                            
                                                      March 31,   December 31,
                                                       2013       2012   
                                                      (in millions)
Balance Sheet Data:
                                                                            
Cash and cash equivalents                             $ 2        $  3      
                                                                            
Advances to affiliated companies                      $ 415      $  56     
                                                                            
Revolving credit facilities ^(1)                      $ 33        $  139
Senior Notes, net                                       2,148        1,450
Unamortized fair value adjustments, net ^(2)           137        143    
Total Debt                                            $ 2,318    $  1,732  
                                                                            
Sunoco Logistics Partners L.P. Partners' equity       $ 6,135     $  6,072
Noncontrolling interests                               124        123    
Total Equity                                          $ 6,259    $  6,195  
                                                                            
Debt to Adjusted EBITDA Ratio:
Total Debt                                            $ 2,318
Less: Unamortized fair value adjustments, net^(2)      (137  )
                                                      $ 2,181 
                                                                            
Adjusted EBITDA (Twelve months ended March 31,        $ 877
2013)
Debt to Adjusted EBITDA Ratio                         2.5x


^(1) As of March 31, 2013, the Partnership had available borrowing capacity of
$552 million under its revolving credit facilities, which included $2 million
of available borrowing capacity from West Texas Gulf's revolving credit
facility.

^(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. At March 31, 2013, there was $137 million of
unamortized fair value adjustments remaining. Interest expense for the first
quarter 2013 is net of $6 million of amortization of the fair value
adjustments.

                                               
Sunoco Logistics Partners L.P.
Financial and Operating Statistics
(unaudited)
                                                 
                                                 
                                                 Three Months Ended
                                                 March 31,
                                                  2013     2012   
                                                 (in millions)
Sales and other operating revenue
                                                             
Crude Oil Pipelines                              $ 95        $ 80
Crude Oil Acquisition and Marketing                3,259       3,192
Terminal Facilities                                183         135
Refined Products Pipelines                         30          31
Intersegment eliminations                         (55   )    (37    )
Total sales and other operating revenue          $ 3,512    $ 3,401  
                                                             
                                                 Three Months Ended
                                                 March 31,
                                                  2013      2012   
                                                 (in millions)
Adjusted EBITDA
                                                             
Crude Oil Pipelines                              $ 61        $ 60
Crude Oil Acquisition and Marketing                112         47
Terminal Facilities                                54          47
Refined Products Pipelines                        9         15     
Total Adjusted EBITDA                            $ 236      $ 169    
                                                             
                                                 Three Months Ended
                                                 March 31,
                                                  2013      2012   
Operating Highlights
                                                             
Crude Oil Pipelines:
Pipeline throughput (thousands of bpd)             1,582       1,467
Pipeline revenue per barrel (cents)                67.0        59.6
                                                             
Crude Oil Acquisition and Marketing:
Crude oil purchases (thousands of bpd)             750         631
Gross profit per barrel purchased (cents) ^(1)     172.0       89.5
Average crude oil price (per barrel)             $ 94.34     $ 102.94
                                                             
Terminal Facilities:
Terminal throughput (thousands of bpd):
Refined products terminals                         414         487
Nederland terminal                                 850         697
Refinery terminals                                 325         383
                                                             
Refined Products Pipelines:^(2)
Pipeline throughput (thousands of bpd)             522         528
Pipeline revenue per barrel (cents)                62.9        65.1


Sunoco Logistics Partners L.P.
Financial and Operating Statistics Notes
(unaudited)
     
       Represents total segment sales and other operating revenue less cost of
^(1)   products sold and operating expenses divided by total crude oil
       purchases.
       
^(2)   Excludes amounts attributable to equity interests which are not
       consolidated.

                                                         
Sunoco Logistics Partners L.P.
Non-GAAP Financial Measures
(unaudited)
                                                           
                                                           Three Months Ended
                                                           March 31,
                                                            2013    2012 
                                                           (in millions)
Net Income                                                 $ 142      $ 97
Interest expense, net                                        19         24
Depreciation and amortization expense                        64         25
Impairment charge^(1)                                        -          9
Provision for income taxes                                   6          8
Non-cash compensation expense                                4          3
Unrealized (gains) losses on commodity risk management       (3   )     -
activities
Proportionate share of unconsolidated affiliates'           4        3    
interest, depreciation and provision for income taxes
Adjusted EBITDA^(2)                                          236        169
Interest expense, net                                        (19  )     (24  )
Provision for income taxes                                   (6   )     (8   )
Amortization of fair value adjustments on long-term debt     (6   )     -
Distributions versus Adjusted EBITDA of unconsolidated       (3   )     (3   )
affiliates
Maintenance capital expenditures                             (4   )     (7   )
Distributable cash flow attributable to noncontrolling      (3   )    (3   )
interests
Distributable cash flow^(2)                                $ 195     $ 124  

     
       In the first quarter 2012, the Partnership recognized a non-cash
^(1)   impairment charge related to a cancelled software project for the crude
       oil acquisition and marketing business and a refined products pipeline
       project in Texas.
       
       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
^(2)   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. Historical amounts presented have
       been recast to conform to current period presentation.

Contact:

Sunoco Logistics Partners L.P.
Joseph McGinn (media), 215-977-3237
Peter Gvazdauskas (investors), 215-977-6322
 
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