Sunoco LP Announces 4Q and Full Year 2015 Financial and Operating Results

Feb 24, 2016

- Distribution increased 7.5 percent versus 3Q 2015, 33.6 percent versus 4Q 2014 levels
- A record 40 new Stripes stores opened in 2015, 10 currently under construction
- Completed dropdown acquisitions have significantly increased Partnership's EBITDA and distributable cash flow
- Final dropdown of the remaining wholesale fuel and retail marketing assets from ETP expected to close in March 2016
Conference Call Scheduled for 9:00 a.m. CT (10:00 a.m. ET) on Thursday, February 25

HOUSTON, Feb. 24, 2016 /PRNewswire/ -- Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today announced financial and operating results for the three- and twelve-month periods ended December 31, 2015. 

Adjusted EBITDA (1) attributable to partners for the quarter totaled $112.2 million, compared with $65.5 million in the fourth quarter of 2014.  The favorable year-over-year comparison primarily reflects the acquisitions of 31.58 percent of Sunoco, LLC in April and Susser Holdings Corp. in July, both of which were acquired from SUN's affiliate, Energy Transfer Partners, L.P. (NYSE: ETP).  All fourth quarter 2014 and full year 2014 figures and comparisons represent as previously reported results for the fourth quarter and full year 2014 and do not reflect any retrospective adjustments for the Sunoco LLC and Susser Holdings acquisitions which were accounted for as transactions between entities under common control.

Distributable cash flow (1) attributable to partners, as adjusted, for the quarter was $90.1 million, compared to $51.1 million a year earlier, and distributable cash flow per common unit was $1.03

Revenue was $3.7 billion for the quarter, up 184.6 percent compared to $1.3 billion in the fourth quarter of 2014. The increase was the result of the contribution of merchandise and retail fuel sales from the Susser's Stripes® convenience store chain and the wholesale fuel distribution sales and rental income from SUN's interest in Sunoco, LLC on a consolidated basis, partly offset by the impact of a 37-cent per gallon decrease in the average selling price of fuel.

Total gross profit was $333.2 million for the quarter, compared to $93.2 million in the fourth quarter of 2014.  Key drivers of the increase were the contribution from the previously mentioned acquisitions, which resulted in higher-margin retail fuel gallons and merchandise being added to the overall sales mix.

Net income attributable to partners was $7.8 million for the quarter, or ($0.13) per diluted unit, versus $30.1 million, or $0.83 per diluted unit, in the fourth quarter of last year.

On a weighted-average basis, excluding non-controlling interest, fuel margin for all gallons sold in the fourth quarter increased to 15.1 cents per gallon, compared to 13.0 cents per gallon a year ago.  The margin increase was driven by the addition of higher-margin retail gallons sold at Stripes, which were partly offset by the wholesale gallons sold through Sunoco, LLC.

Adjusted EBITDA attributable to partners from the wholesale segment was $57.9 million in the fourth quarter.  Excluding the non-controlling interest, total wholesale gallons sold in the fourth quarter were 651.8 million, compared with 546.4 million in the fourth quarter of 2014, an increase of 19.3 percent.  This includes gallons sold to affiliate-operated convenience stores, consignment stores and third-party customers, including independent dealers, fuel distributors and commercial customers.

As a result of the Susser acquisition, which converted affiliate volumes to retail volumes, motor fuel gallons sold to affiliates decreased 72.5 percent from a year ago to 84.0 million gallons during the fourth quarter of 2015, excluding the non-controlling interest.  Affiliate customers for the quarter included Sunoco R&M retail fuel and convenience store sites operated by a subsidiary of ETP. All affiliate gallons are sold to Sunoco's retail fuel and convenience stores at a fixed margin of 4.0 cents per gallon.

Other third-party wholesale fuel volumes, excluding non-controlling interest, increased from a year ago by 135.1 percent to 567.7 million gallons related to the acquisition of 31.58 percent of Sunoco, LLC.  Gross profit on these gallons was 12.1 cents per gallon, compared to 17.6 cents per gallon a year earlier, driven by a change in customer mix related to the acquisition of the interest in Sunoco, LLC

Adjusted EBITDA attributable to partners related to the retail segment was $54.3 million in the fourth quarter.  Total retail gallons sold increased by 488.0 percent to 354.0 million gallons as a result of the acquisition of Susser. The Partnership earned 22.4 cents per gallon on these volumes, compared to 44.5 cents per gallon a year earlier.  The addition of lower-margin retail volumes at Stripes drove most of this decrease.

Merchandise sales increased by 918.8 percent to $400.4 million from a year ago and contributed $132.7 million of gross profit, reflecting the contribution from the Stripes stores.   

Retail gallons sold by Stripes locations during the fourth quarter totaled 291.4 million gallons.  Gross profit on these gallons was $52.0 million, or 17.9 cents per gallon.  Merchandise sales from these locations totaled $343.6 million and contributed $118.9 million of gross profit.  On a same-store sales basis, Stripes store merchandise sales decreased by 1.1 percent and fuel sales declined 4.9 percent, primarily reflecting lower year-over-year activity in oil patch markets in South and West Texas.  Excluding markets that are directly impacted by oil drilling activity declines, the Stripes business achieved a 4.0 percent increase in merchandise sales and a 0.6 percent decrease in fuel sales volumes on a same-store basis.  As of December 31, SUN operated 725 convenience stores and retail fuel outlets in Texas, New Mexico and Oklahoma primarily under its Stripes brand.

SUN also operates approximately 175 convenience stores and fuel outlets in Georgia, Tennessee, Virginia, Maryland and Hawaii, primarily under the MACS, Tigermarket and Aloha Island Mart brands. On a same store sale basis, these stores saw growth of 12.5 percent in merchandise sales and a 0.9 percent decline in fuel gallons for the quarter. 

SUN's other recent accomplishments include the following:

  • In November, SUN announced the dropdown of the remaining wholesale fuel and retail marketing assets from ETP for approximately $2.226 billion.  The transaction is expected to close in March 2016.  A significant portion of the consideration for the transaction will be provided by a $2.035 billion term loan due October 2019, which was fully underwritten by Credit Suisse, Bank of America Merrill Lynch, Compass Bank, Mizuho Bank and Toronto Dominion. The terms of the term loan will substantially mirror SUN's existing $1.5 billion revolving credit facility.
  • In conjunction with the dropdown, a group of private investors and Energy Transfer Equity, L.P. (NYSE: ETE) committed to purchase $750 million of SUN common units in an unregistered private placement at a gross price of $31.00 per unit, prior to adjustments.  The private placement closed and funded in December, with the exception of ETE's portion, which will fund at the closing of the dropdown transaction.  The proceeds of the private placement were used to repay borrowing under SUN's revolving credit facility and for general partnership purposes.
  • On December 16, a wholly owned subsidiary of SUN completed the acquisition of a wholesale fuel distribution business serving the Northeastern United States from Alta East Inc. for $57 million plus the value of inventory on hand at closing. 

SUN's segment results and other supplementary data are provided after the financial tables shown below.

FY 2015 Compared to FY 2014

Revenue for the full year 2015 totaled $16.9 billion, a 213.0 percent increase compared to full year 2014.  Gross profit for this period increased 752.8 percent year-over-year to $1.5 billion.

Total motor fuel volumes sold to affiliates, excluding the non-controlling interest, decreased by 70.6 percent to 346.4 million gallons as a result of the Susser acquisition, which converted affiliate volumes to retail volumes. Wholesale gallons sold to third parties, excluding the non-controlling interest, increased by 214.2 percent to 2.4 billion gallons. Retail gallons sold increased by 1,595.8 percent to 1.4 billion gallons.  On a weighted-average basis, fuel margin for all gallons sold, excluding the non-controlling interest, increased to 15.1 cents per gallon for the full year 2015, versus 7.0 cents per gallon in the full year 2014.

Net income attributable to partners for the full year 2015 totaled $87.2 million, a 53.8 percent increase compared to full year 2014. Adjusted EBITDA attributable to partners was $444.1 million, compared to $122.3 million for the 2014 period, and distributable cash flow, as adjusted was $272.2 million, versus $92.5 million for 2014.

Distribution Increase

On January 26, the Board of Directors of SUN's general partner declared a distribution for the fourth quarter of 2015 of $0.8013 per unit, which corresponds to $3.2052 per unit on an annualized basis.  This represents a 7.5 percent increase compared to the distribution for the third quarter of 2015 and a 33.6 percent increase compared with the fourth quarter of 2014. This is the Partnership's 11th consecutive quarterly increase. The distribution was paid on February 16 to unitholders of record on February 5.

SUN achieved a 1.04 times distribution coverage ratio for the fourth quarter. The coverage ratio was negatively impacted by the private placement completed in December.  SUN achieved a 1.37 times coverage ratio for the 12 months ended December 31, 2015.

Liquidity

At December 31, 2015, SUN had borrowings against its $1.5 billion revolving credit facility of $450.0 million and $22.5 million in standby letters of credit, leaving unused availability of $1,027.5 million.  Net debt to Adjusted EBITDA, pro forma for the 31.58 percent of Sunoco, LLC and Susser Holdings Corp. acquisitions, was 4.1 times at year-end.

 (1)     

Adjusted EBITDA and distributable cash flow are non-GAAP financial measures of performance that have limitations and should not be considered as a substitute for net income. Please refer to the discussion and tables under "Reconciliations of Non-GAAP Measures" later in this news release for a discussion of our use of Adjusted EBITDA and distributable cash flow, and a reconciliation to net income.

 

Earnings Conference Call

Sunoco LP management will hold a conference call on Thursday, February 25, at 9:00 a.m. CT (10:00 a.m. ET) to discuss fourth quarter and full year results and recent developments.  To participate, dial 412-902-0003 approximately 10 minutes early and ask for the Sunoco LP conference call. The call will also be accessible live and for later replay via webcast in the Investor Relations section of Sunoco's website at www.SunocoLP.com under Events and Presentations. 

About Sunoco LP

Sunoco LP (NYSE: SUN) is a master limited partnership that operates approximately 900 convenience stores and retail fuel sites and distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors located in more than 30 states at approximately 6,800 sites, both directly and through our 31.58 percent interest in Sunoco, LLC, owned in partnership with Energy Transfer Partners, L.P. (NYSE: ETP). Our parent -- Energy Transfer Equity (NYSE: ETE) -- owns SUN's general partner and incentive distribution rights.  ETP owns a 36.4% limited partner interest. For more information, visit the Sunoco LP website at www.SunocoLP.com

Forward-Looking Statements

This press release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management's control. An extensive list of factors that can affect future results are discussed in the Partnership's Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

The information contained in this press release is available on our website at www.SunocoLP.com

Qualified Notice

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

Contacts

Investors:

Scott Grischow, Director of Investor Relations and Treasury
(361) 884-2463, scott.grischow@sunoco.com

Anne Pearson
Dennard-Lascar Associates
(210) 408-6321, apearson@dennardlascar.com

Media:

Jeff Shields, Communications Manager
(215) 977-6056, jpshields@sunocoinc.com

- Financial Schedules Follow –

 

Sunoco LP
Consolidated Balance Sheets
(unaudited)










December 31,

2014



December 31,

2015




(in thousands, except units)


Assets









Current assets:









Cash and cash equivalents


$

125,426



$

61,783


Advances from affiliates



396,376




234,509


Accounts receivable, net



257,065




259,993


Receivables from affiliates



4,941




8,074


Inventories, net



440,294




416,504


Other current assets



60,178




33,288


Total current assets



1,284,280




1,014,151


Property and equipment, net



2,081,126




2,397,266


Other assets:









Goodwill



1,854,436




1,821,864


Intangible assets, net



893,455




965,904


Other noncurrent assets



35,568




48,398


Total assets


$

6,148,865



$

6,247,583


Liabilities and equity









Current liabilities:









Accounts payable


$

383,496



$

401,231


Accounts payable to affiliates



56,969




14,988


Accrued expenses and other current liabilities



291,047




254,298


Current maturities of long-term debt



13,772




5,084


Total current liabilities



745,284




675,601


Revolving line of credit



683,378




450,000


Long-term debt, net



408,826




1,502,531


Deferred tax liability



378,953




431,327


Other noncurrent liabilities



89,268




93,709


Total liabilities



2,305,709




3,153,168


Commitments and contingencies:









Partners' capital:









Limited partner interest:









Common unitholders - public (20,036,329 units issued and outstanding as of December 31, 2014 and 49,588,960 units issued and outstanding as of December 31, 2015)



874,688




1,768,890


Common unitholders - affiliated (4,062,848 units issued and outstanding as of December 31, 2014 and 37,776,746 units issued and outstanding as of December 31, 2015)



27,459




1,305,350


Subordinated unitholders - affiliated (10,939,436 units issued and outstanding as of December 31, 2014 and no units issued or outstanding as of December 31, 2015)







Class A unitholders - held by subsidiary (no units issued or outstanding as of December 31, 2014 and 11,018,744 units issued and outstanding as of December 31, 2015)







Total partners' capital



902,147




3,074,240


Predecessor equity



2,946,653





Noncontrolling interest



(5,644)




20,175


Total equity



3,843,156




3,094,415


Total liabilities and equity


$

6,148,865



$

6,247,583


 

Sunoco LP
Consolidated Statements of Operations and Comprehensive Income
(unaudited)










Predecessor



Successor




Year ended

December 31,

2013



January 1, 2014

through

August 31, 2014



September 1, 2014 through

December 31, 2014



Year ended

December 31,

2015




(dollars in thousands, except unit and per unit amounts)


Revenues:

















Retail motor fuel sales


$



$


$

1,298,804



$

3,247,545


Wholesale motor fuel sales to third parties



1,502,786




1,275,422


4,235,415




10,104,193


Wholesale motor fuel sales to affiliates



2,974,122




2,200,394


772,338




1,832,606


Merchandise sales







472,604




1,595,674


Rental income



10,060




11,690


21,642




71,730


Other



5,611




4,683


24,556




83,599


Total revenues



4,492,579




3,492,189


6,825,359




16,935,347


Cost of sales:















Retail motor fuel cost of sales







1,159,974




2,916,569


Wholesale motor fuel cost of sales



4,419,004




3,429,169


4,962,227




11,486,480


Merchandise cost of sales







320,282




1,068,933


Other



2,611




2,339


1,792




5,201


Total cost of sales



4,421,615




3,431,508


6,444,275




15,477,183


Gross profit



70,964




60,681


381,084




1,458,164


Operating expenses:















General and administrative



16,814




17,075



46,280




166,689


Other operating



3,187




4,964



225,905




677,207


Rent



1,014




729



28,451




92,949


Loss (gain) on disposal of assets and impairment charge



324




(39)



(394)




2,050


Depreciation, amortization and accretion



8,687




10,457



60,335




201,019


Total operating expenses



30,026




33,186



360,577




1,139,914


Income (loss) from operations



40,938




27,495



20,507




318,250


Interest expense, net



(3,471)




(4,767)



(10,935)




(87,575)


Income (loss) before income taxes



37,467




22,728



9,572




230,675


Income tax expense



(440)




(218)



(69,677)




(47,070)


Net income (loss) and comprehensive income (loss)



37,027




22,510



(60,105)




183,605


Less: Net income and comprehensive income attributable to noncontrolling interest








1,043




53,783


Less: Preacquisition income (loss) allocated to general partner








(95,381)




42,584


Net income and comprehensive income attributable to partners


$

37,027



$

22,510


$

34,233



$

87,238


Net income per limited partner unit:
















Common - basic and diluted


$

1.69



$

1.02


$

0.85



$

1.11


Subordinated - basic and diluted


$

1.69



$

1.02


$

0.85



$

1.40


















Weighted average limited partner units outstanding:
















Common units - public (basic)



10,884,950




10,944,309



20,493,065




24,550,388


Common units - public (diluted)



10,906,794




10,969,437



20,499,447




24,572,126


Common units - affiliated (basic and diluted)



79,308




79,308



79,308




15,703,525


Subordinated units - affiliated (basic and diluted)



10,939,436




10,939,436



10,939,436




10,010,333


















Cash distribution per unit


$

1.84



$

1.02


$

1.15



$

2.89


 

Key Operating Metrics

The following tables set forth key operating metrics as of and for the periods indicated and have been derived from our audited historical consolidated financial statements. For the year ended December 31, 2014, we have combined the Predecessor Period and the Successor Period and presented the unaudited financial data on a combined basis for comparative purposes. This combination does not comply with generally accepted accounting principles or the rules for unaudited pro forma presentation, but is presented because we believe it provides the most meaningful comparison of our financial results. The impact from "push down" accounting related to the ETP Merger resulted in a $4.1 million decrease in depreciation expense, offset by a $3.9 million increase in amortization expense.

The accompanying footnotes to the following four key operating metrics tables can be found immediately preceeding our pro forma results of operations table.



Year Ended December 31,



2013



2014



2015




Total



Wholesale (2)



Retail (2)



Total (1)



Wholesale



Retail



Total




(dollars and gallons in thousands, except motor fuel pricing and gross profit per gallon)

Revenues:





























Retail motor fuel sales


$


$



$

1,298,804



$

1,298,804


$



$

3,247,545



$

3,247,545



Wholesale motor fuel sales to third parties



1,502,786



5,510,837







5,510,837



10,104,193







10,104,193



Wholesale motor fuel sales to affiliates



2,974,122



2,972,732







2,972,732



1,832,606







1,832,606



Merchandise sales








472,604




472,604






1,595,674




1,595,674



Rental income



10,060



26,459




6,873




33,332



51,599




20,131




71,730



Other income



5,611



2,215




27,024




29,239



27,674




55,925




83,599



Total revenues


$

4,492,579


$

8,512,243



$

1,805,305



$

10,317,548


$

12,016,072



$

4,919,275



$

16,935,347



Gross profit:




























Retail motor fuel


$


$



$

138,830



$

138,830


$



$

330,976



$

330,976



Wholesale motor fuel



57,904



92,173







92,173



450,319







450,319



Merchandise








152,322




152,322






526,741




526,741



Rental and other



13,060



34,002




24,438




58,440



74,339




75,789




150,128



Total gross profit


$

70,964


$

126,175



$

315,590



$

441,765


$

524,658



$

933,506



$

1,458,164



Net income attributable to limited partners (6)


$

37,027


$

85,850



$

(29,107)



$

56,743


$

38,440



$

48,798



$

87,238



Adjusted EBITDA attributable to partners (6,7)


$

51,884


$

136,646



$

114,418



$

251,064


$

192,099



$

251,990



$

444,089



Distributable cash flow attributable to partners, as adjusted (6,7)


$

47,678










$

98,658










$

272,232



Operating Data:




























Total motor fuel gallons sold:




























Retail










441,377




441,377







1,414,326




1,414,326



Wholesale (3)



517,775



2,180,320








2,180,320



5,131,417








5,131,417



Wholesale contract affiliated (4)



1,053,259



1,122,664








1,122,664



1,096,807








1,096,807



Motor fuel gross profit cents per gallon (5):




























Retail










35.2¢




35.2¢







23.9¢




23.9¢



Wholesale (3)


5.1¢



10.6¢








10.6¢



9.4¢








9.4¢



Wholesale contract affiliated (4)


3.0¢



3.3¢








3.3¢



4.0¢








4.0¢



Volume-weighted average for all gallons


3.7¢











11.3¢











11.3¢



Retail merchandise margin










32.2%











33.0%












The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable cash flow:









Year Ended December 31,





2013



2014



2015




Total



Wholesale (2)



Retail (2)



Total (1)


Wholesale



Retail



Total




(in thousands)



Net income (loss) and comprehensive income (loss)


$

37,027



$

(86,571)



$

48,976



$

(37,595)



$

134,333



$

49,272



$

183,605


Depreciation, amortization, and accretion



8,687



34,971




35,821




70,792



67,780




133,239




201,019


Interest expense, net



3,471



7,362




8,340




15,702



54,296




33,279




87,575


Income tax expense



440



67,978




1,917




69,895



4,321




42,749




47,070


EBITDA



49,625



23,740




95,054




118,794



260,730




258,539




519,269


Non-cash compensation expense



1,935



5,119




3,798




8,917



4,016




1,687




5,703


Loss (gain) on disposal of assets & impairment charge



324



(309)




(124)




(433)



1,440




610




2,050


Unrealized (gains) losses on commodity derivatives





(1,166)







(1,166)



1,848







1,848


Inventory fair value adjustments (9)





176,710




16,733




193,443



77,849




6,981




84,830


Adjusted EBITDA



51,884



204,094




115,461




319,555



345,883




267,817




613,700


Adjusted EBITDA attributable to noncontrolling interest





67,448




1,043




68,491



153,783




15,827




169,610


Adjusted EBITDA attributable to partners



51,884



136,646




114,418




251,064



192,100




251,990




444,090


Cash interest expense (8)



3,090











12,029











76,213


Income tax expense (current)



302











3,275











(18,353


Maintenance capital expenditures



814











5,196











34,559


Preacquisition earnings













138,076











85,556


Distributable cash flow attributable to partners


$

47,678










$

92,488










$

266,115


Transaction-related expenses













6,170











6,118


Distributable cash flow attributable to partners, as adjusted


$

47,678










$

98,658










$

272,233


 

The following tables set forth key operating metrics as of and for the periods indicated and have been derived from our audited historical consolidated financial statements. For the three months ended December 31, 2014, the figures represent as previously reported results and do not reflect retrospective adjustments for the Sunoco LLC and Susser Holdings acquisitions which were accounted for as transactions between entities under common control.



Three Months Ended December 31,





2014



2015





Total (10)



Wholesale



Retail



Total





(dollars and gallons in thousands, except motor fuel pricing and gross profit per gallon)



Revenues:


















Retail motor fuel sales


$

168,000



$



$

709,050



$

709,050



Wholesale motor fuel sales to third parties



500,215




2,082,452







2,082,452



Wholesale motor fuel sales to affiliates



617,732




441,460







441,460



Merchandise sales



39,277







400,367




400,367



Rental income







17,273




256




17,529



Other income



16,398




9,796




13,972




23,768



Total revenues


$

1,341,622



$

2,550,981



$

1,123,645



$

3,674,626



Gross profit:


















Retail motor fuel


$

24,786



$



$

74,174



$

74,174



Wholesale motor fuel



42,783




86,539







86,539



Merchandise



10,213







132,665




132,665



Rental and other



15,402




25,750




14,090




39,840



Total gross profit


$

93,184



$

112,289



$

220,929



$

333,218



Net income attributable to limited partners (6)


$

30,111



$

418



$

7,337



$

7,755



Adjusted EBITDA attributable to partners (6,7,11)


$

65,486



$

57,924



$

54,252



$

112,176



Distributable cash flow attributable to partners, as adjusted (6,7)


$

51,114











$

90,109



Operating Data:


















Total motor fuel gallons sold:


















Retail



60,247








354,028




354,028



Wholesale (3)



241,516




1,241,019








1,241,019



Wholesale contract affiliated (4)



304,872




266,006








266,006



Motor fuel gross profit cents per gallon (5):


















Retail


44.5¢








22.4¢




22.4¢



Wholesale (3)


17.6¢




9.8¢








9.8¢



Wholesale contract affiliated (4)


3.0¢




4.0¢








4.0¢



Volume-weighted average for all gallons


13.0¢












11.4¢



Retail merchandise margin



26.0%








33.1%












The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable cash flow:








Three Months Ended December 31,





2014



2015





Total (10)



Wholesale



Retail



Total





(in thousands)



Net income (loss) and comprehensive income (loss)


$

30,893



$

3,142



$

8,608



$

11,750



Depreciation, amortization, and accretion



12,502




20,017




36,875




56,892



Interest expense, net



6,636




23,073




6,810




29,883



Income tax expense



2,114




3,349




65




3,414



EBITDA



52,145




49,581




52,358




101,939



Non-cash compensation expense



778




1,654




520




2,714



Loss (gain) on disposal of assets & impairment charge



2,670




371




148




519



Unrealized (gains) losses on commodity derivatives



(1,226)




(1,078)







(1,078)



Inventory fair value adjustments (9)



11,119




45,344




5,205




50,549



Adjusted EBITDA



65,486




95,872




58,231




154,103



Adjusted EBITDA attributable to noncontrolling interest






37,948




3,979




41,927



Adjusted EBITDA attributable to partners



65,486




57,924




54,252




112,176



Cash interest expense (8)



6,255












26,577



Income tax expense (current)



3,003












(18,763)



Maintenance capital expenditures



4,332












15,929



Preacquisition earnings (11)



782














Distributable cash flow attributable to partners


$

51,114











$

88,433



Transaction-related expenses














1,676



Distributable cash flow attributable to partners, as adjusted


$

51,114











$

90,109





(1)

Reflects combined results of the Predecessor Period from January 1, 2014 through August 31, 2014, and the Successor Period from September 1, 2014 to December 31, 2014. The impact in the Successor Period from "push down" accounting related to the ETP Merger resulted in a $4.1 million decrease in depreciation expense, offset by a $3.9 million increase in amortization expense.



(2)

Reflects MACS and Sunoco LLC wholesale operations and MACS and Susser retail operations, beginning September 1, 2014.



(3)

Reflects all wholesale transactions excluding those pursuant to the Susser Distribution Contract for January 1, 2014 through August 31, 2014 and the Sunoco Inc. Distribution Contract for all periods presented at set margins as dictated by the agreements.



(4)

Reflects transactions pursuant to the Susser and Sunoco Inc. Distribution Contracts at set margins as dictated by agreements. Susser Distribution Contract included during predecessor period only.



(5)

Excludes the impact of inventory fair value adjustments consistent with the definition of Adjusted EBITDA.



(6)

Excludes the noncontrolling interest results of operations related to our consolidated variable interest entities ("VIEs") and Sunoco LLC.



(7)

We define EBITDA as net income before net interest expense, income tax expense and depreciation, amortization and accretion expense. Adjusted EBITDA further adjusts EBITDA to reflect certain other non-recurring and non-cash items. Effective September 1, 2014, as a result of the ETP Merger and to conform the method by which we measure our business to that of ETP's operations, we define Adjusted EBITDA to also include adjustments for unrealized gains and losses on commodity derivatives and inventory fair value adjustments. We define distributable cash flow as Adjusted EBITDA less cash interest expense, including the accrual of interest expense related to our 2020 and 2023 Senior Notes that is paid on a semi-annual basis, current income tax expense, maintenance capital expenditures, and other non-cash adjustments.




Further adjustments are made to distributable cash flow for certain transaction-related and non-recurring expenses that are included in net income.




We believe EBITDA, Adjusted EBITDA and distributable cash flow are useful to investors in evaluating our operating performance because:




Adjusted EBITDA is used as a performance measure under our revolving credit facility;




securities analysts and other interested parties use such metrics as measures of financial performance, ability to make distributions to our unitholders and debt service capabilities;




our management uses them for internal planning purposes, including aspects of our consolidated operating budget, and capital expenditures; and




distributable cash flow provides useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance, and as it provides investors an enhanced perspective of the operating performance of our assets and the cash our business is generating.




EBITDA, Adjusted EBITDA and distributable cash flow are not recognized terms under GAAP and do not purport to be alternatives to net income (loss) as measures of operating performance or to cash flows from operating activities as a measure of liquidity. EBITDA, Adjusted EBITDA and distributable cash flow have limitations as analytical tools, and one should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations include:




they do not reflect our total cash expenditures, or future requirements for capital expenditures or contractual commitments;




they do not reflect changes in, or cash requirements for, working capital;




they do not reflect interest expense or the cash requirements necessary to service interest or principal payments on our revolving credit facility or term loan;




although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and




as not all companies use identical calculations, our presentation of EBITDA, Adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies.



(8)

Reflects the partnership's cash interest paid less the cash interest paid on our VIE debt of $9.1 million and $2.1 million during the year ended December 31, 2015, and the three months ended December 31, 2015, respectively.



(9)

Due to the change in fuel prices, we recorded a $193.4 million, $84.8 million, $11.1 million and $50.5 million write-down of the value of fuel inventory during the years ended December 31, 2014 and 2015 and the three months ended December 31, 2014 and 2015, respectively.



(10)

For the three months ended December 31, 2014, the figures represent as previously reported results and do not reflect retrospective adjustments for the Sunoco LLC and Susser Holdings acquisitions which were accounted for as transactions between entities under common control.  Additionally, we began presenting key operating metrics by segment beginning as of January 1, 2015.



(11)

Beginning on January 1, 2015, we present Adjusted EBITDA attributable to partners. Previously the impact of noncontrolling interest was adjusted to DCF.

Pro Forma Results of Operations

We have provided below certain supplemental pro forma information for the year ended December 31, 2015. The pro forma information gives effect to the 68.42% noncontrolling interest in Sunoco LLC. Pursuant to our 31.58% membership interest in Sunoco LLC, the Partnership's pro forma information reflects only that equity interest in Sunoco LLC and excludes the 68.42% noncontrolling interest in Sunoco LLC.

Management believes the pro forma presentation is useful to investors because it provides investors comparable operating data to support our Adjusted EBITDA and distributable cash flow attributable to partners.



Three Months ended

December 31, 2015



Year ended

December 31, 2015




Pro Forma




(unaudited)




(in thousands except gross profit per gallon)


Gross profit:









Retail gross profit


$

74,174



$

330,976


Wholesale gross profit



52,332




255,181


Total fuel gross profit


$

126,506



$

586,157


Operating Data:









Motor fuel gallons sold:









Retail



354,028




1,414,326


Wholesale



567,746




2,356,325


Wholesale contract affiliated



84,005




346,372


Total fuel gallons



1,005,779




4,117,023


Motor fuel gross profit cents per gallon (1):









Retail


22.4¢



23.9¢


Wholesale


12.1¢



11.5¢


Wholesale contract affiliated


4.0¢



4.0¢


Volume-weighted average for all gallons


15.1¢



15.1¢




(1)

Excludes impact of inventory fair value adjustments consistent with the definition of Adjusted EBITDA.

 

Capital Spending

SUN's gross capital expenditures, excluding the non-controlling interest, for the fourth quarter were $107.2 million, which included $91.3 million for growth capital and $15.9 million for maintenance capital.  For the full year, SUN invested $232.7 million in growth capital and $34.6 million for maintenance capital. $56.9 million of growth capital was invested in new-to-industry Stripes stores opened between August 1 and December 31, 2015.

We currently expect capital spending for the full year 2016, excluding acquisitions, to be within the following ranges ($ in millions): 

                                                             

Growth

Maintenance





Low

High

Low

High





$390

$420

$100

$110

 

Growth capital spending includes the construction of 35 to 40 new-to-industry sites that SUN anticipates building in 2016.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/sunoco-lp-announces-4q-and-full-year-2015-financial-and-operating-results-300225973.html

SOURCE Sunoco LP

Categories: Press Releases