Sunoco LP Announces Third Quarter Financial and Operating Results
Conference Call Scheduled for 9:30 a.m. CT (10:30 a.m. ET) on Thursday, November 8
DALLAS, Nov. 7, 2018 /PRNewswire/ -- 
Current quarter cash coverage of 1.73 times and trailing twelve months coverage of 1.24 times with leverage
of 4.27 times at the end of the third quarter
Net income of $112 million
Adjusted EBITDA(1) of $208 million
Distributable Cash Flow(1), as adjusted, of $149 million
Completed the acquisition of BRENCO Marketing Corporation's fuel distribution business in October for
approximately $24 million plus working capital adjustments
The acquisition is accretive to Distributable Cash Flow in year one
Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today announced nancial and operating results for the
three-month period ended September 30, 2018.
Revenue totaled $4.8 billion, an increase of 55 percent, compared to $3.1 billion in the third quarter of 2017.
The increase was the result of the average selling price of fuel being higher than last year and the benet of the
fuel distribution contract with 7-Eleven, Inc.
Total gross prot increased to $333 million, compared to $316 million in the third quarter of 2017, as a result
ofhigher motor fuel gross prots and a one-time cash benet of approximately $25 million related to a
settlement with a fuel supplier.
Income from continuing operations was $114 million versus $121 million in the third quarter of 2017.
Loss from discontinued operations, net of income taxes, was $2 million versus income from discontinued
operations, net of income taxes, of $17 million in the third quarter of 2017.
Net income was $112 million, or $1.12 per diluted unit, versus $138 million, or $1.08 per diluted unit, in the third
quarter of 2017.
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Adjusted EBITDA for the quarter totaled $208 million compared with $199 million in the third quarter of 2017.
Adjusted EBITDA included $2 million of transaction-related expenses and the one-time cash benet of
approximately $25 million.
Distributable Cash Flow, as adjusted, was $149 million, compared to $132 million a year ago. This year-over-year
increase reects higher Adjusted EBITDA and lower cash interest expense oset by a higher current tax
expense.
Total gallons sold were 2.0 billion, at from a year ago. On a weighted-average basis, fuel margin for all gallons
sold was 12.7 cents per gallon, or 11.4 cents per gallon excluding the one-time cash benet of approximately
$25 million this quarter.
SUN's segment results and other supplementary data are provided after the nancial tables below.
Distribution
On October 26, 2018, the Board of Directors of SUN's general partner declared a distribution for the third
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 November 14, 2018 to common unitholders of record on November 6, 2018.
SUN's distribution coverage ratio for the third quarter was 1.73 times. The distribution coverage ratio on a
trailing 12-month basis was 1.24 times.
Excluding the one-time cash benet of approximately $25 million this quarter, SUN's distribution coverage ratio
for the third quarter was 1.44 times.
Liquidity
At September 30, SUN had borrowings of $493 million against its revolving line of credit and other long-term
debt of $2.3 billion. In the third quarter of 2018, SUN did not issue any common units through its at-the-market
equity program. The leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with SUN's credit
facility, was 4.27 times at the end of the third quarter (2). 
(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.
(2) Excluding the one-time cash benet of approximately $25 million this quarter, SUN's leverage ratio of net debt to Adjusted EBITDA,
l l d i d i h SUN' di f ili 4 44 i h d f h hi d
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calculated in accordance with SUN's credit facility, was 4.44 times at the end of the third quarter.
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, November 8, at 9:30 a.m. CT (10:30 a.m. ET) to
discuss third 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.
Sunoco LP (NYSE: SUN) is a master limited partnership that distributes motor fuel to approximately 10,000
convenience stores, independent dealers, commercial customers and distributors located in more than 30
states. SUN's general partner is owned by Energy Transfer Operating, L.P., a subsidiary of Energy Transfer LP
(NYSE: ET).
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
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(214) 840-5660, scott.grischow@sunoco.com
Derek Rabe, CFA, Manager – Investor Relations, Growth and Strategy
(214) 840-5553, derek.rabe@sunoco.com
Media:
Alyson Gomez, Director – Communications
(214) 840-5641, alyson.gomez@sunoco.com
– Financial Schedules Follow –
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30,
2018
December 31,
2017
(in millions, except units)
Assets
Current assets:
Cash and cash equivalents $ 15 $ 28
Accounts receivable, net 627 541
Receivables from aliates 134 155
Inventories, net 469 426
Other current assets 80 81
Assets held for sale 6 3,313
Total current assets 1,331 4,544
Property and equipment, net 1,494 1,557
Other assets:
Goodwill 1,534 1,430
Intangible assets, net 655 768
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Other noncurrent assets 134 45
Total assets
$ 5,148 $ 8,344
Liabilities and equity
Current liabilities:
Accounts payable $ 551 $ 559
Accounts payable to aliates 160 206
Accrued expenses and other current liabilities 370 368
Current maturities of long-term debt 5 6
Liabilities associated with assets held for sale 75
Total current liabilities 1,086 1,214
Revolving line of credit 493 765
Long-term debt, net 2,281 3,519
Advances from aliates 85 85
Deferred tax liability 118 389
Other noncurrent liabilities 140 125
Total liabilities 4,203 6,097
Commitments and contingencies (Note 14)
Equity:
Limited partners:
Series A Preferred unitholder - aliated (no units issued and outstanding as of September 30,
2018 and 12,000,000 units issued and outstanding as of December 31, 2017) 300
Common unitholders (82,513,643 units issued and outstanding as of September 30, 2018 and
99,667,999 units issued and outstanding as of December 31, 2017) 945 1,947
Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of
September 30, 2018 and December 31, 2017)
Total equity 945 2,247
Total liabilities and equity
$ 5,148 $ 8,344
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SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2018
2017 2018
2017
(in millions, except unit and per unit amounts)
Revenues:
Motor fuel sales
$ 4,662 $ 2,849 $ 12,720 $ 8,152
Rental income
35 22 91 66
Other
64 193 306 546
Total revenues 4,761 3,064 13,117 8,764
Cost of sales:
Motor fuel cost of sales
4,415 2,646 12,041 7,636
Other
13 102 137 297
Total cost of sales 4,428 2,748 12,178 7,933
Gross prot
333 316 939 831
Operating expenses:
General and administrative
34 30 103 98
Other operating
86 96 270 281
Rent
20 20 54 62
Loss (gain) on disposal of assets and impairment charges
(8) 8 (3) 102
Depreciation, amortization and accretion
42 34 132 124
Total operating expenses 174 188 556 667
Operating income
159 128 383 164
Other expenses:
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Interest expense, net 35 51 105 163
Loss on extinguishment of debt and other 109
Income from continuing operations before income taxes 124 77 169 1
Income tax expense (benet) 10 (44) 39 (103)
Income from continuing operations 114 121 130 104
Income (loss) from discontinued operations, net of income taxes (2) 17 (265) (187)
Net income (loss) and comprehensive income (loss) $ 112 $ 138 $ (135) $ (83)
Net income (loss) per limited partner unit - basic:
Continuing operations - common units
$ 1.16 $ 0.92 $ 0.84 $ 0.22
Discontinued operations - common units
(0.03) 0.17 (3.12) (1.90)
Net income (loss) - common units
$ 1.13 $ 1.09 $ (2.28) $ (1.68)
Net income (loss) per limited partner unit - diluted:
Continuing operations - common units
$ 1.15 $ 0.91 $ 0.83 $ 0.22
Discontinued operations - common units
(0.03) 0.17 (3.12) (1.90)
Net income (loss) - common units
$ 1.12 $ 1.08 $ (2.29) $ (1.68)
Weighted average limited partner units
outstanding:
Common units - basic
82,506,279 99,469,643 84,891,853 99,185,042
Common units - diluted
83,084,713 100,117,016 85,373,976 99,581,626
Cash distributions per unit
$ 0.8255 $ 0.8255 $ 2.4765 $ 2.4765
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.
Our nancial statements reect two reportable segments, fuel distribution & marketing and all other. After the
Retail Divestment and the conversion of 207 retail sites to commission agent sites, the Partnership has
renamed the former Wholesale segment to Fuel Distribution and Marketing and the former Retail segment is
renamed to All Other.
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Key operating metrics set forth below are presented as of and for the three months ended September 30, 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 September 30,
2018 2017
Fuel
Distribution
and Marketing All Other Total
Fuel
Distribution
and Marketing All Other Total
(dollars and gallons in millions, except gross prot per gallon)
Revenues:
Motor fuel sales
$ 4,450 $ 212 $ 4,662 $ 2,435 $ 414 $ 2,849
Rental income
32 3 35 19 3 22
Other
12 52 64 13 180 193
Total revenues $ 4,494 $ 267 $ 4,761 $ 2,467 $ 597 $ 3,064
Gross prot:
Motor fuel sales
$ 222 $ 25 $ 247 $ 158 $ 45 $ 203
Rental
32 3 35 19 3 22
Other
7 44 51 13 78 91
Total gross prot $ 261 $ 72 $ 333 $ 190 $ 126 $ 316
Income from continuing
operations 89 25 114 69 52 121
Income (loss) from
discontinued operations, net of
taxes (2) (2) 17 17
Net income and
comprehensive income $ 89 $ 23 $ 112 $ 69 $ 69 $ 138
Adjusted EBITDA (2) $ 183 $ 25 $ 208 $ 64 $ 135 $ 199
Distributable Cash Flow, as
adjusted (2) $ 149 $ 132
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Operating Data:
Motor fuel gallons sold (3) 2,004 2,044
Motor fuel gross prot cents
per gallon (1) (3) 12.7 ¢ 14.9 ¢
The following table presents a reconciliation of Adjusted EBITDA to net income (loss) and Adjusted EBITDA to
Distributable Cash Flow, as adjusted:
Three Months Ended September 30,
2018 2017 Change
(in millions)
Segment Adjusted EBITDA
Fuel distribution and marketing $ 183 $ 64 $ 119
All other 25 135 (110)
Total 208 199 9
Depreciation, amortization and accretion (3) (42) (29) (13)
Interest expense, net (3) (35) (64) 29
Non-cash compensation expense (3) (4) (9) 5
Gain (loss) on disposal of assets and impairment charges (3) 8 (34) 42
Unrealized loss on commodity derivatives (3) 6 (6)
Inventory fair value adjustments (3) (7) 55 (62)
Other non-cash adjustments (4) (4)
Income before income tax (expense) benet (3)
124 124
Income tax (expense) benet (3) (12) 14 (26)
Net income and comprehensive income $ 112 $ 138 $ (26)
Adjusted EBITDA
208 199 9
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Cash interest expense (3) 34 59 (25)
Current income tax expense (3) 16 5 11
Maintenance capital expenditures (3) 11 10 1
Distributable Cash Flow
$ 147 $ 125 $ 22
Transaction-related expenses (3) 2 14 (12)
Series A Preferred distribution (7) 7
Distributable Cash Flow, as adjusted $ 149 $ 132 $ 17
_______________________________
(1) Includes other non-cash adjustments and excludes the impact of inventory fair value adjustments consistent with the denition of
Adjusted EBITDA.
(2) Adjusted EBITDA is dened as earnings before net interest expense, income taxes, depreciation, amortization and accretion expense,
allocated non-cash compensation expense, unrealized gains and losses on commodity derivatives and inventory fair value adjustments, and
certain other operating expenses reected in net income that we do not believe are indicative of ongoing core operations, such as gain or loss
on disposal of assets and non-cash impairment charges. We dene Distributable Cash Flow, as adjusted, as Adjusted EBITDA less cash interest
expense, including the accrual of interest expense related to our long-term debt which is paid on a semi-annual basis, Series A Preferred
distribution, current income tax expense, maintenance capital expenditures and other non-cash adjustments.
We believe Adjusted EBITDA and Distributable Cash Flow, as adjusted, 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
• Distributable Cash Flow, as adjusted, 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.
Adjusted EBITDA and Distributable Cash Flow, as adjusted, 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. Adjusted EBITDA and
Distributable Cash Flow, as adjusted, 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 Adjusted EBITDA does not reect cash requirements for such replacements; and
• as not all companies use identical calculations, our presentation of Adjusted EBITDA and Distributable Cash Flow, as adjusted, may not be
bl i il l i l d f h i
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comparable to similarly titled measures of other companies.
(3) Includes amounts from discontinued operations.
Capital Spending
SUN's gross capital expenditures for the third quarter were $30 million, which included $19 million for growth
capital and $11 million for maintenance capital.
Excluding acquisitions, SUN expects to spend approximately $65 million on growth capital and approximately
$30 million on maintenance capital for the full year 2018.
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SOURCE Sunoco LP
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