Sunoco LP Announces First Quarter Financial and Operating Results
DALLAS, May 9, 2018 /PRNewswire/ --
Executed business transformation
Closed on divestiture of company-operated sites to 7-Eleven, Inc. with 15-year take-or-pay fuel
distribution contract
Converted 207 West Texas company-operated sites to commission agent channel
Completed renancing and equity repurchase initiatives
Current quarter cash coverage of 1.00 times and trailing twelve months coverage of 1.22 times with leverage
of 3.82 times at the end of the rst quarter of 2018
Generated rst quarter Net Loss of $315 million, Adjusted EBITDA(1) of $109 million and
Distributable Cash Flow(1), as adjusted, of $85 million
Utilized scale to grow fuel distribution and logistics business
In April 2018, SUN acquired 26 retail sites from 7-Eleven and converted into commission agent
channel
In April 2018, SUN acquired the wholesale fuel distribution business and terminal assets from
Superior Plus Corporation
Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today announced nancial and operating results for the
three-month period ended March 31, 2018.
Revenue totaled $3.7 billion, an increase of 33.5 percent, compared to $2.8 billion in the rst quarter of 2017.
The increase was the result of the average selling price of fuel being higher than last year.
Total gross prot increased to $296 million, compared to $256 million in the rst quarter of 2017, as a result
ofhigher motor fuel gross prots.
Loss from continuing operations was $78 million, including a $109 million loss on extinguishment of debt and
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other, versus income of $12 million in the rst quarter of 2017. 
Loss from discontinued operations, net of income taxes, was $237 million versus a loss from discontinued
operations, net of income taxes, of $11 million in the rst quarter of 2017.
Net loss was $315 million, or ($3.74) per diluted unit, versus a net income of $1 million, or ($0.22) per diluted
unit, in the rst quarter of 2017.
Adjusted EBITDA for the quarter totaled $109 million, compared with $155 million in the rst quarter of 2017.
Distributable Cash Flow, as adjusted, was $85 million, compared to $77 million a year ago. This year-over-year
increase reects lower cash interest expense and a decrease in maintenance capital spend.
On a weighted-average basis, fuel margin for all gallons sold was 10.5 cents per gallon, compared to 14.5 cents
per gallon in the rst quarter of 2017. The 4.0 cent per gallon decrease was attributable to a shift in volumes
away from the retail segment to the wholesale segment and the adoption of revenue recognition.
Net loss for the wholesale segment was $58 million compared to net income of $38 million a year ago. Adjusted
EBITDA was $80 million, versus $91 million in the rst quarter of last year. Total wholesale gallons sold were
1,612 million, compared to 1,313 million in the rst quarter of 2017, an increase of 22.8 percent. The
Partnership earned 8.4 cents per gallon on these volumes, compared to 10.6 cents per gallon a year earlier.
Net loss for the retail segment was $257 million compared to a net loss of $37 million a year ago. Adjusted
EBITDA was $29 million, versus $64 million in the rst quarter of last year. Total retail gallons sold were 245
million, down from 595 million gallons a year ago as volumes migrated to the wholesale segment. The
Partnership earned 24.4 cents per gallon on these volumes, compared to 23.1 cents per gallon a year earlier.
SUN's recent accomplishments include the following:
Closed the strategic divestiture of company-operated sites in the continental United States to 7-Eleven, Inc.
on January 23, 2018 for gross proceeds of approximately $3.2 billion
Completed the following renancing and equity repurchase initiatives:
Closed the private oering of $2.2 billion of new senior notes on January 23, 2018, comprised of $1.0
billion in aggregate principal amount of 4.875% senior notes due 2023, $800 million in aggregate
principal amount of 5.500% senior notes due 2026 and $400 million in aggregate principal amount of
5.875% senior notes due 2028. Proceeds from this oering were used to redeem in full amounts
owed under existing senior notes
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Repaid in full and terminated the term loan agreement and paid down all outstanding amounts
owed under the revolving credit facility
Redeemed $300 million of Series A Preferred Units held by Energy Transfer Equity for an aggregate
redemption amount of approximately $313 million
Repurchased 17,286,859 Sunoco common units owned by Energy Transfer Partners for aggregate
cash consideration of approximately $540 million at a 10-day volume weighted average price of
$31.2376 per unit
Following the conversion of sites to the commission agent channel through April 2018, SUN operates 21
company-operated sites along the New Jersey turnpike and 54 retail sites in Hawaii.
SUN's segment results and other supplementary data are provided after the nancial tables below.
Distribution
On April 26, 2018, the Board of Directors of SUN's general partner declared a distribution for the rst quarter of
2018 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. The distribution will be
paid on May 15, 2018 to common unitholders of record on May 7, 2018.
SUN's distribution coverage ratio for the rst quarter was 1.00 times. The distribution coverage ratio on a
trailing 12-month basis was 1.22 times.
Liquidity
At March 31, SUN had no borrowings against its revolving line of credit and other long-term debt of $2.3 billion.
In the rst quarter of 2018, SUN did not issue any common units through its at-the-market equity program. The
leverage ratio of debt to Adjusted EBITDA, calculated in accordance with SUN's credit facility, was 3.82 times at
the end of the rst quarter. 
(1) Adjusted EBITDA and Distributable Cash Flow, as adjusted, are non-GAAP nancial 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, as adjusted, and a
reconciliation to net income.
Earnings Conference Call
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Sunoco LP management will hold a conference call on Thursday, May 10, at 9:30 a.m. CT (10:30 a.m. ET) to
discuss rst quarter results and recent developments. To participate, dial 877-407-6184 (toll free) or 201-389-
0877 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. An investor presentation accompanying the earnings call
will be available in the Investor Relations section of Sunoco's website at www.SunocoLP.com under Events and
Presentations.
Sunoco LP (NYSE: SUN) is a master limited partnership that distributes motor fuel to approximately 9,200
convenience stores, independent dealers, commercial customers and distributors located in more than 30
states. SUN's general partner is owned by Energy Transfer Equity, L.P. (NYSE: ETE).
Forward-Looking Statements
This press release may include certain statements concerning expectations for the future that are forward-
looking statements as dened by federal law. Such forward-looking statements are subject to a variety of
known and unknown risks, uncertainties, and other factors that are dicult to predict and many of which are
beyond management's control. An extensive list of factors that can aect future results are discussed in the
Partnership's Annual Report on Form 10-K and other documents led from time to time with the Securities and
Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking
statement to reect new information or events.
The information contained in this press release is available on our website at www.SunocoLP.com
Qualied Notice
This release is intended to be a qualied 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 eectively 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
eective tax rate.
Contacts
Investors:
Scott Grischow, Senior Director – Investor Relations and Treasury
(214) 840-5660, scott.grischow@sunoco.com
Derek Rabe, CFA, Senior Analyst – Investor Relations and Finance
(214) 840-5553, derek.rabe@sunoco.com
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Media:
Alyson Gomez, Director – Communications
(214) 840-5641, alyson.gomez@sunoco.com
Jeamy Molina, Senior Manager – PR & Communications
(214) 840-5594, jeamy.molina@sunoco.com
– Financial Schedules Follow –
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
March 31,
2018
December 31,
2017
(in millions, except units)
Assets
Current assets:
Cash and cash equivalents $ 98 $ 28
Accounts receivable, net 451 541
Receivables from aliates 160 155
Inventories, net 434 426
Other current assets 71 81
Assets held for sale 6 3,313
Total current assets 1,220 4,544
Property and equipment, net 1,522 1,557
Other assets:
Goodwill 1,430 1,430
Intangible assets, net 656 768
Other noncurrent assets 91 45
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Total assets
$ 4,919 $ 8,344
Liabilities and equity
Current liabilities:
Accounts payable $ 416 $ 559
Accounts payable to aliates 178 206
Accrued expenses and other current liabilities 759 368
Current maturities of long-term debt 5 6
Liabilities associated with assets held for sale 75
Total current liabilities 1,358 1,214
Revolving line of credit 765
Long-term debt, net 2,283 3,519
Advances from aliates 85 85
Deferred tax liability 124 389
Other noncurrent liabilities 137 125
Total liabilities 3,987 6,097
Commitments and contingencies (Note 14)
Equity:
Limited partners:
Series A Preferred unitholder - aliated (no units issued and outstanding as of March 31, 2018
and12,000,000 units issued and outstanding as of December 31, 2017) 300
Common unitholders (82,492,008 units issued and outstanding as of March 31, 2018 and 99,667,999
units issued and outstanding as of December 31, 2017) 932 1,947
Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of March 31, 2018
and December 31, 2017)
Total equity 932 2,247
Total liabilities and equity
$ 4,919 $ 8,344
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SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
For the Three Months Ended March 31,
2018
2017
(in millions, except unit and per unit amounts)
Revenues:
Retail motor fuel $ 445 $ 353
Wholesale motor fuel sales to third parties 3,094 2,244
Wholesale motor fuel sales to aliates 12 21
Merchandise 135 131
Rental income 22 22
Other 41 37
Total revenues 3,749 2,808
Cost of sales:
Retail motor fuel cost of sales 401 317
Wholesale motor fuel cost of sales 2,945 2,143
Merchandise cost of sales 93 88
Other 14 4
Total cost of sales 3,453 2,552
Gross prot
296 256
Operating expenses:
General and administrative 35 32
Other operating 98 92
Rent 15 20
Loss on disposal of assets 3 2
Depreciation, amortization and accretion 49 54
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Total operating expenses 200 200
Operating income
96 56
Other expenses:
Interest expense, net 34 58
Loss on extinguishment of debt and other 109
Loss from continuing operations before income taxes (47) (2)
Income tax expense (benet) 31 (14)
Income (loss) from continuing operations (78) 12
Loss from discontinued operations, net of income taxes (237) (11)
Net income (loss) and comprehensive income (loss) $ (315) $ 1
Net loss per limited partner unit - basic:
Continuing operations - common units $ (1.11) $ (0.11)
Discontinued operations - common units (2.63) (0.11)
Net loss - common units $ (3.74) $ (0.22)
Net loss per limited partner unit - diluted:
Continuing operations - common units $ (1.11) $ (0.11)
Discontinued operations - common units (2.63) (0.11)
Net loss - common units $ (3.74) $ (0.22)
Weighted average limited partner units outstanding:
Common units - basic 89,753,950 98,609,608
Common units - diluted 90,271,751 98,715,958
Cash distribution per unit
$ 0.8255 $ 0.8255
Key Operating Metrics
The following information is intended to provide investors with a reasonable basis for assessing our historical
operations but should not serve as the only criteria for predicting our future performance. We operate our
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business in two primary operating divisions, wholesale and retail, both of which are included as reportable
segments.
Key operating metrics set forth below are presented as of and for the three months ended March 31, 2018 and
2017 and have been derived from our historical consolidated nancial statements.
The accompanying footnotes to the following two key operating metrics tables can be found immediately
preceding our capital spending discussion.
For the Three Months Ended March 31,
2018 2017
Wholesale Retail Total Wholesale Retail Total
(dollars and gallons in millions, except gross prot per gallon)
Revenues:
Retail motor fuel $ $ 445 $ 445 $ $ 353 $ 353
Wholesale motor fuel sales to third
parties 3,094 3,094 2,244 2,244
Wholesale motor fuel sale to aliates 12 12 21 21
Merchandise 135 135 131 131
Rental income 19 3 22 19 3 22
Other 14 27 41 13 24 37
Total revenues $ 3,139 $ 610 $ 3,749 $ 2,297 $ 511 $ 2,808
Gross prot:
Retail motor fuel $ $ 44 $ 44 $ $ 36 $ 36
Wholesale motor fuel 161 161 122 122
Merchandise 42 42 43 43
Rental and other 29 20 49 28 27 55
Total gross prot $ 190 $ 106 $ 296 $ 150 $ 106 $ 256
Net income (loss) and comprehensive
income (loss) from continuing operations (58) (20) (78) 38 (26) 12
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Net loss and comprehensive loss from
discontinued operations (237) (237) (11) (11)
Net income (loss) and comprehensive
income (loss) $ (58) $ (257) $ (315) $ 38 $ (37) $ 1
Adjusted EBITDA (2) $ 80 $ 29 $ 109 $ 91 $ 64 $ 155
Distributable cash ow, as adjusted (2) $ 85 $ 77
Operating Data:
Total motor fuel gallons sold:
Retail (3) 245 245 595 595
Wholesale 1,612 1,612 1,313 1,313
Motor fuel gross prot cents per gallon (1):
Retail (3) 24.4¢ 24.4¢ 23.1¢ 23.1¢
Wholesale 8.4¢ 8.4¢ 10.6¢ 10.6¢
Volume-weighted average for all gallons (3) 10.5¢ 14.5¢
Retail merchandise margin (3) 29.7 % 31.6 %
The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable cash
ow:
For the Three Months Ended March 31,
2018 2017
Wholesale Retail Total Wholesale Retail Total
(in millions)
Net income (loss) and comprehensive
income (loss)
$ (58) $ (257) $ (315) $ 38 $ (37) $ 1
Depreciation, amortization and accretion (3) 28 21 49 22 65 87
Interest expense, net (3) 19 17 36 20 44 64
Income tax expense (benet) (3) 1 203 204 1 (18) (17)
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EBITDA
$ (10) $ (16) $ (26) $ 81 $ 54 $ 135
Non-cash compensation expense (3) 3 3 0 4 4
Loss on disposal of assets (3) 3 23 26 2 5 7
Loss on extinguishment of debt and other (3) 109 20 129
Unrealized gain on commodity derivatives (3) (5) (5)
Inventory adjustments (3) (25) (1) (26) 13 1 14
Other non-cash adjustments 3 3
Adjusted EBITDA
$ 80 $ 29 $ 109 $ 91 $ 64 $ 155
Cash interest expense (3) 34 60
Current income tax expense (3) 468
Transaction-related income taxes (4) (480)
Maintenance capital expenditures (3) 3 18
Distributable cash ow
$ 84 $ 77
Transaction-related expenses (3) 3
Series A Preferred distribution (2)
Distributable cash ow, as adjusted $ 85 $ 77
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(1) Includes other non-cash adjustments and excludes the impact of inventory fair value adjustments consistent with the denition of
Adjusted EBITDA.
(2) EBITDA is dened as earnings before net interest expense, income taxes, depreciation, amortization and accretion expense. Adjusted
EBITDA further adjusts EBITDA to reect certain other non-recurring and non-cash items. We dene Adjusted EBITDA to also include
adjustments for unrealized gains and losses on commodity derivatives and inventory fair value adjustments. We dene distributable cash ow
as Adjusted EBITDA less cash interest expense, including the accrual of interest expense related to our long-term debt that is paid on a semi-
annual basis, Series A Preferred distribution, current income tax expense, maintenance capital expenditures, and other non-cash adjustments.
Further adjustments are made to distributable cash ow for certain transaction-related and non-recurring expenses that are included in net
income.
We believe EBITDA, Adjusted EBITDA and distributable cash ow 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 nancial 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
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distributable cash ow provides useful information to investors as it is a widely accepted nancial 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 ow 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 ows from operating activities as a measure of liquidity. EBITDA, Adjusted EBITDA and
distributable cash ow 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 reect our total cash expenditures, or future requirements for capital expenditures or contractual commitments;
they do not reect changes in, or cash requirements for, working capital;
they do not reect 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 reect cash requirements for such replacements; and
as not all companies use identical calculations, our presentation of EBITDA, Adjusted EBITDA and distributable cash ow may not be
comparable to similarly titled measures of other companies.
(3)Includes amounts from discontinued operations.
(4) Transaction-related income taxes primarily related to the 7-Eleven Transaction.
Capital Spending
SUN's gross capital expenditures for the rst quarter were $19 million, which included $16 million for growth
capital and $3 million for maintenance capital.
Excluding acquisitions, SUN expects to spend approximately $90 million on growth capital and approximately
$40 million on maintenance capital for the full year 2018.
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SOURCE Sunoco LP
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