The slide presentation used at the Analyst Day presetation at the Ritz-Carlton in Dallas. The slides contain information about the Mariner East 1 & 2 pipelines and Sunoco's estimates of when those projects will be operational.
2. Forward-Looking Statements
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 that such forward-looking statements involve risks and
uncertainties that may affect our business and cause actual results to differ materially
from those discussed in this 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 for the
year ended December 31, 2013 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 a 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 appendix
to this presentation. You should consider carefully the comparable GAAP measures
and the reconciliations to those measures provided in this presentation. 2
3. Agenda
Sunoco Logistics Overview p. 4
Crude Market Summary p. 15
Crude Projects p. 22
Refined Products Projects p. 25
NGL Market Summary p. 27
NGL Projects p. 30
Mariner East 2
PDH Overview
Summary p. 48
Appendix p. 52
7. Energy Transfer Family of Companies
ENERGY TRANSFER EQUITY, L.P.
LP Interest, GP Interest, IDRs, Class H Units(1) LP Interest, GP Interest, IDRs
LP Interest, GP Interest, IDRs
Gathering and
Processing
Contract
Compression
& Treating
Lone Star
NGL
70% ETP Interest 30% RGP Interest
(1) Class H Units track 50% of the SXL GP and IDR economics
(2) Previously called Susser Petroleum Partners ("Susser") and traded under the ticker symbol SUSP on NYSE
7
SUNOCO LP(2)
(NYSE: SUN)
Crude Oil
Pipelines
Crude Oil
Acquisition &
Marketing
Terminal
Facilities
NGL / Refined
Product
Pipelines
(NYSE: ETE)
ENERGY TRANSFER
PARTNERS, L.P.
(NYSE: ETP)
REGENCY ENERGY
PARTNERS LP
SUNOCO LOGISTICS (NYSE: RGP)
PARTNERS L.P.
Intrastate (NYSE: SXL)
Transportation
and Storage
Interstate
Transportation
and Storage
Midstream
Sunoco, Inc.
Retail
Marketing
NGL
Transportation
and Services
Retail
Operations
Joint
Ventures
LP Interest, GP Interest, IDRs
8. Recent Highlights
3Q14 Results:
– EBITDA $246MM… 2nd biggest quarter ever
– 10th consecutive 5% quarter-over-quarter distribution increase
2 Additional Successful Open Seasons:
– Mariner East 2
– Permian Longview & Louisiana Extension
September 2014 YTD Organic Growth Capital of $1.8B:
– Updated guidance for 2014 at ~$2.5B
– New guidance for 2015 at ~$2B… on committed projects only
8
10. Adjusted EBITDA: Ratable and Market Related
Maximize asset base by
taking advantage of
market opportunities
Distributions based on
ratable cash
Market related cash flow
increases coverage ratio
10
1,200
1,000
800
600
400
200
-
2010 2011 2012 2013 LTM*
Adjusted EBITDA ($MM)
Ratable Market Related
399
573
810
871
944
*LTM = last twelve months ended September 30, 2014
11. 10 Consecutive Quarters of 5% Distribution Growth
Guidance ~5% quarter over quarter increases in 2014
Note: Values adjusted for the two-for-one unit split completed on June 12, 2014 11
12. Major Organic Projects
13 Successful Open Seasons:
3 West Texas Crude expansion projects (crude oil)
Permian Express 1 (crude oil)
Permian Express 2 (crude oil)
Eaglebine Express (crude oil)
Granite Wash Extension (crude oil)
Permian Longview & Louisiana Extension (crude oil)
Allegheny Access (refined products)
Mariner West (natural gas liquids)
Mariner East 1 (natural gas liquids)
Mariner East 2 (natural gas liquids)
Mariner South (natural gas liquids)
Actively developing:
Delaware Basin Extension (crude oil)
12
14. Acquisitions
600
500
400
300
200
100
0
2010 2011 2012 2013 2014*
Investment ($MM)
Acquisition Capital
*SXL does not comment on future acquisitions
*Includes the acquisition of an additional 3.9% interest in Explorer Pipeline for $42MM 14
31. Mariner Franchise
Mariner West
Ethane from Houston to Sarnia
4Q 2013
Mariner South
Propane / Butane from Mont Belvieu to Nederland
End of 2014*
Mariner East 1
Ethane / Propane from Houston to Marcus Hook
4Q 2014*
Mariner East 2
NGLs from Shales to Marcus Hook
4Q 2016*
Committed Fee-based Income
*Expected Start-up 31
32. Mariner South – Natural Gas Liquids
32
Lone Star
Fractionators
Committed Fee-based Income
SXL
Terminal
Mariner South
Propane / Butane from Mont Belvieu to Nederland
End of 2014*
*Expected Start-up
35. Mariner West and East – Natural Gas Liquids
Mariner West
Ethane from Houston to Sarnia
4Q 2013
Mariner East 1
E/P from Houston to Marcus Hook
End of year 2014*
35
Mariner East 2
NGLs to Marcus Hook
4Q 2016*
Committed Fee-based Income
*Expected Start-up
37. Mariner East
37
Connecting to 4 Fractionator
Origin Locations in the Basin
275,000 B/D Initial Capacity
345,000 B/D including ME 1
World-Class NGL Facility at
Marcus Hook Industrial Complex
37
43. Global Propylene Supply and Demand
- Global Propylene market is
expected to grow by 33MM
Metric Tons by 2020
- Lighter feed to crackers
- PDH is a preferred choice
43
45. Why PDH in Marcus Hook?
Perfect location for local demand
Better logistics
Perfect location for propylene export to North West Europe
Advantaged shipping and logistics costs
Delivered cash cost competitive with international markets
Perfect location for Petrochemical Project
Existing infrastructure, Lower CAPEX, Optimized schedule
Plenty of dock capacity, uncrowded ship channel
Government support for MHIC industrial redevelopment
ME 2 assures long term, reliable propane supply
45
49. Key SXL Takeaways – Recent History
49
Strategic Focus on Crude and Natural Gas Liquids
First Mover…
First West Texas crude projects on line since the shale boom
First Marcellus ethane pipeline on line
First waterborne propane exports from the Northeast
First waterborne ethane export project (Mid-2015 with ME1)
Robust Organic Program
13 Successful Open Seasons since 2011
~ $ 2.5 B Organic Capital Plan in 2014 (~ $ 4 B last 4 years)
~ $ 1 B in M&A over last five years
Commitment to Rewarding our Owners
10 consecutive quarters of 5 % distribution growth
5 year unit price growth over 400 %
51. Key SXL Takeaways – Going Forward
51
Commitment to Growth
14th Open Season in progress
New phase of growth in processing at Marcus Hook
Opportunities within the Energy Transfer family
M&A - Actively looking for right, strategic opportunities
Commitment to Rewarding our Owners
Competitive, sustainable distribution growth
Commitment to Investment Grade credit rating
Excellent balance sheet
• Long-term target of 3.5x to 4.0x Debt to Adjusted EBITDA
Balance Debt and Equity issuance to maintain rating
• $1.5B revolver for liquidity
53. SXL Non-GAAP Financial Measures
2010 2011 2012 2013 LTM*
348 322 531 474 530
($MM)
Interest expense, net 73 89 79 77 70
Depreciation and amortization expense 64 86 139 265 289
Impairment charge 3 31 9 - -
Provision for income taxes 8 25 32 30 28
Non-cash compensation expense 5 6 8 14 16
Unrealized losses / (gains) on commodity risk management activities 2 (2) 3 (1) (3)
Proportionate share of unconsolidated affiliates' interest, depreciation
and provision for income taxes 24 16 21 20 21
Adjustments to commodity hedges resulting from "push-down" accounting - - (12) - -
Amortization of excess joint venture investment - - - 2 3
Non-cash accrued liability adjustment - - - (10) ( 10)
Gain on investments in affiliates (128) - - - -
Adjusted EBITDA(1) 399 573 810 871 944
Interest expense, net (73) (89) (79) (77) ( 70)
Provision for income taxes(2) (8) (27) (34) (24) ( 31)
Amortization of fair value adjustments on long-term debt - - (6) (23) ( 17)
Distributions versus Adjusted EBITDA of unconsolidated affiliates (36) (17) (28) (27) ( 32)
Maintenance capital expenditures (37) (42) (50) (53) ( 63)
Distributable Cash Flow attributable to noncontrolling interests (3) (10) (11) (16) ( 13)
Acquisition costs reimbursement - - - 9 12
Distributable Cash Flow (DCF)(1) 242 388 602 660 730
(1)
(2)
Twelve Months Ended December 31,
Net Income
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 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. Historical amounts presented have
been recast to conform to current period.
During the third quarter 2014, we changed our definition of distributable cash flow to conform to the presentation utilized by Energy Transfer Partners,
L.P., the controlling member of our general partner. This change did not have a material impact on our distributable cash flows. Prior period amounts
have been recast to conform to current presentation.
*LTM = Last Twelve Months, period ended September 30, 2014 53
54. 2010 2011 2012 2013 LTM*
Historical Financial Results
($MM)
Crude Oil Pipelines 156 2 07 275 3 49 394
Crude Oil Acquisition & Marketing 39 148 239 2 33 164
Terminal Facilities 127 1 49 225 2 33 306
Refined Products Pipelines 77 69 71 56 80
Total Adjusted EBITDA 399 5 73 810 8 71 944
Interest expense, net ( 73) (89) (79) (77) (70)
Provision for income taxes(1) ( 8) (27) (34) (24) (31)
Maintenance Capital Expenditures ( 37) (42) (50) (53) (63)
Amortization of fair value adjustment on long-term debt - - ( 6) (23) (17)
Distributions versus adjusted EBITDA of unconsolidated affiliates ( 36) (17) (28) (27) (32)
Distributable cash flow attributable to noncontrolling interests ( 3) (10) (11) (16) (13)
Acquisition costs reimbursement - - - 9 12
Distributable Cash Flow (DCF) 242 3 88 602 6 60 730
Expansion Capital(2) 1 46 1 71 324 9 65 2,207
Total Distribution (accrual basis) 1 93 2 14 277 3 78 468
Distribution Coverage Ratio 1.3x 1.8x 2.2x 1.7x 1.6x
(1) During the third quarter 2014, we changed our definition of distributable cash flow to conform to the presentation utilized by Energy Transfer Partners, L.P., the controlling
54
member of our general partner. This change did not have a material impact on our distributable cash flows. Prior period amounts have been recast to conform to current
presentation.
(2) Excludes major acquisitions
*LTM = Last Twelve Months, period ended September 30, 2014
56. Crude Oil Pipeline System
42% of total EBITDA for the twelve months ended September 30, 2014
Approximately 5,300 miles of crude oil trunk lines located in the Southwest and
Midwest U.S.
Approximately 500 miles of gathering lines
60.3% controlling interest in West Texas Gulf Pipeline, approximately 600-mile
crude oil pipeline
91.0% controlling interest in Mid-Valley Pipeline, approximately 1,000-mile
crude oil pipeline
56
57. Crude Oil Acquisition and Marketing
17% of total EBITDA for the twelve months ended September 30, 2014
Crude truck fleet of over 300 trucks
Purchase crude oil at the wellhead from producers and in bulk from aggregators
at major pipeline interconnections and trading locations
Buying and selling crude oil of different grades, at different locations in order to
maximize value
Marketing crude oil to major integrated oil companies, independent refiners and
resellers through various types of sale and exchange transactions
Wellhead volumes of approximately 400,000 barrels per day from approximately
3,000 producers who operate approximately 60 thousand active leases
Storing inventory during contango market conditions – maintain balanced book
to mitigate commodity risk
Transporting crude oil on our pipelines and trucks or when necessary or cost
effective, pipelines or trucks owned and operated by third parties
57
58. Terminal Facilities
32% of total EBITDA for the twelve months ended September 30, 2014
Nederland, TX Crude Oil Terminal - One of the largest onshore crude facilities in U.S.
22 million barrel capacity currently
Eagle Point, NJ Crude Oil and Refined Products Terminal
5 million barrel capacity for crude oil and refined product storage
Pipeline and rail connections with import/export capabilities
Marcus Hook Industrial Complex
Pipeline, rail and trucking connections with import/export capabilities
5 million barrel capacity for refined product and NGL storage
• Includes five underground NGL storage caverns
Refinery Terminal Facilities with combined 5 million barrel capacity
Serve Philadelphia area refineries
39 active Refined Products Marketing Terminals located in 11 states with a combined
capacity of 8 million barrels
Inkster, MI LPG Terminal with a capacity of approximately 1 million barrels
Total terminal capacity of approximately 46 million barrels
Patented technology to blend butane into gasoline
58
59. Refined Products Pipeline System
9% of total EBITDA for the twelve months ended September 30, 2014
Refined products pipeline system (approximately 2,300 miles), located in the
Northeast, Midwest and Southwest U.S.
Equity interest in four product pipelines
Explorer (13.3%)
West Shore (17.1%)
Wolverine (31.5%)
Yellowstone (14.0%)
83.8% controlling interest in Inland Pipeline, an approximately 350-mile refined
products pipeline system
59
60. Distribution History
$2.00
$1.53
$1.50
$1.00
$0.50
$0.00
2009 2010 2011 2012 2013 CAD*
Average Annual
Distribution
(per LP unit)
10 consecutive
quarter over quarter
distribution increases
of 5%
38 consecutive
quarterly distribution
increases
Current annualized
distribution of $1.53
Distribution
Coverage 1.5x 1.3x 1.8x 2.2x 1.7x
LP/GP
Split (%)
50/50
63/37
85/15
98/2
60
$1.06
$0.38
$0.33
*CAD: Current Annualized Distribution @ $1.53 per LP Unit
Note: Values adjusted for the two-for-one unit split completed on June 12, 2014
61. $1.5 Billion Revolving Credit Facility
($MM)
61
$100MM Lenders $40.5MM Lenders
Citibank(1) $100.0 Bank of Nova Scotia $40.5
Barclays Bank 100.0 BNP Paribas 40.5
Bank of Tokyo-Mitsubishi UFJ 100.0 Comerica Bank 40.5
PNC Bank(2) 100.0 Deutsche Bank 40.5
TD Bank 100.0 DNB Capital 40.5
Wells Fargo Bank 100.0 Goldman Sachs Bank 40.5
Subtotal $600.0 Morgan Stanley Senior Funding 40.5
SunTrust Bank 40.5
Subtotal $324.0
$64MM Lenders
Bank of America $64.0
Compass Bank 64.0
Credit Suisse 64.0
JPMorgan Chase Bank 64.0
Mizuho Bank 64.0
Royal Bank of Canada 64.0 Lender
Royal Bank of Scotland 64.0 $100.0MM Lenders Total $600.0
UBS 64.0 $64.0MM Lenders Total 576.0
US Bank 64.0 $40.5MM Lenders Total 324.0
Subtotal $576.0 Total $1,500.0
(1) Citibank is the administrative agent for the $1.5 billion revolver
(2) PNC Bank is administrative agent and sole lender on a separate $35MM West Texas Gulf revolver
$1.5B Facility
Allocation
Facility
Allocation
Facility
Allocation
Facility
Allocation
62. Debt to Adjusted EBITDA
($MM) December 31,
2009 2010 2011 2012 2013
Debt to Adjusted EBITDA Ratio
Total Debt 868 1,229 1,698 1,732 2,503
Less: Unamortized FV adjustments, net(1) - - - 143 120
868 1,229 1,698 1,589 2,383
Adjusted EBITDA (trailing 12 months) 372 399 573 810 871
Debt to Adjusted EBITDA Ratio 2.3x 3.1x 3.0x 2.0x 2.7x
(1) In accordance with purchase accounting guidance, the Partnership's Senior Notes were adjusted to fair value (“FV”)
upon the closing of Energy Transfer's acquisition of the Partnership's general partner in October 2012.
62
63. Capitalization
($MM) As of 9/30/14
Debt
Senior Notes, net 2 ,975 fixed
Unamortized fair value adjustments, net(1) 105
$1.5 B SXL Revolver (matures November 2018)(2) 5 25 floating
$35 MM WTG Revolver (matures April 2015) 3 5 floating
Total Debt(1) 3,640
Equity
Limited Partners 5,966
General Partner 9 28
Total Partners’ Capital 6,894
Non-Controlling Interest 124
Total Equity 7,018
Rating: BBB / Baa3 / BBB (S&P, Moody’s, Fitch), stable outlook
(1) In accordance with purchase accounting, the Partnership's Senior Notes were accounted for at fair value upon the closing of Energy
Transfer's acquisition of the Partnership's general partner. At 09/30/2014, there was $105 MM of net unamortized fair value adjustments.
(2) New $1.5 billion revolver closed in November 2013, replaced the existing SXL revolvers.
63
64. Debt Maturity Schedule at 9/30/2014
($MM)
6.13% 5.50% 4.65% 3.45% 4.25% 6.85% 6.10% 4.95% 5.30%
Note: Excludes borrowings under the revolvers
64
65. Acquisition History ($1.5B Since IPO)
November 2002 Joint-venture interests in 3 refined product pipelines from Unocal, for $54MM
Wolverine (31.5%), West Shore (9.2%), and Yellowstone (14.0%)
November 2002 43.8% joint-venture interest from Sunoco/Unocal in West Texas Gulf crude pipeline for $11MM
September 2003 Additional joint-venture interest in West Shore for $4MM increasing ownership
interest from 9.2% to 12.3%
March 2004 Logistics assets of Eagle Point refinery from Sunoco, Inc. for $20MM
April 2004 Baltimore, MD and Manassas, VA refined product terminal facilities from ConocoPhillips for $12MM
June 2004 Additional 1/3rd joint-venture interest in Harbor Pipeline from El Paso for $7MM, increasing ownership
interest to 2/3rds
November 2004 Columbus, OH refined product terminal facilities from Certified Oil for $8MM
August 2005 Texas crude oil pipeline system from ExxonMobil for $100MM
December 2005
March 2006
37% joint-venture interest in Mesa crude oil pipeline system from Sunoco/Chevron for $7MM
Texas crude oil pipeline system from Black Hills for $41MM
Texas crude oil pipeline system from Alon for $68MM
August 2006
June 2007
November 2008
55.3% joint-venture interest in Mid-Valley crude oil pipeline from Sunoco, Inc. for $65MM
50% joint-venture interest in a refined products terminal in Syracuse, NY from ExxonMobil for $13MM
Texas refined products pipeline system and terminal facilities from ExxonMobil for $186MM
65
66. Acquisition History ($1.5B Since IPO), Continued
September 2009 Oklahoma crude oil pipeline from Excel Pipeline LLC and Romulus, MI refined products terminal facility
from R.K.A. Petroleum LLC for an aggregate $50MM
July 2010 Butane blending business from Texon L.P. for $152MM including inventory
Additional joint-venture interest in West Shore from BP for $7MM increasing ownership
interest from 12.3% to 17.1%
Additional joint-venture interest in Mid-Valley from BP for $58MM increasing ownership
interest from 55.3% to 91.0%
August 2010 Additional joint-venture interest in West Texas Gulf from BP for $27MM increasing ownership
interest from 43.8% to 60.3%
May 2011 83.8% controlling joint-venture interest in Inland refined products pipeline for $99MM
July 2011 Eagle Point Tank Farm from Sunoco, Inc. for $100MM in deferred distribution units
August 2011 Crude Oil Acquisition and Marketing business from Texon L.P. for $222MM including inventory
East Boston products terminal and pipeline from ConocoPhillips for $73MM including inventory
April 2013
March 2014
May 2014
Marcus Hook Industrial Complex from Sunoco, Inc. for $60MM
Additional joint-venture interest in Explorer Pipeline from Chevron for $42MM increasing ownership
interest from 9.4% to 13.3%
Crude Oil Acquisition and Marketing business from EDF for $80MM including inventory
66