Sunoco LP Announces 4Q and Full Year 2015 Financial and Operating Results
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, February 24, 2016 - 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 SUNs 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
Sunocos 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 ETEs 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 Partnerships 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)
$
$
$
1,298,804
$
3,247,545
1,502,786
1,275,422
4,235,415
10,104,193
2,974,122
2,200,394
772,338
1,832,606
472,604
1,595,674
10,060
11,690
21,642
71,730
5,611
4,683
24,556
83,599
4,492,579
3,492,189
6,825,359
16,935,347
1,159,974
2,916,569
4,419,004
3,429,169
4,962,227
11,486,480
320,282
1,068,933
2,611
2,339
1,792
5,201
4,421,615
3,431,508
6,444,275
15,477,183
70,964
60,681
381,084
1,458,164
16,814
17,075
46,280