Sunoco LP Announces First Quarter Financial and Operating Results
DALLAS, May 8, 2019 /PRNewswire/ --Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported
nancial and operating results for the three-month period ended March 31, 2019.
Net income was $109 million versus net loss of $315 million in the rst quarter of 2018. Results include a non-
cash $47 million write-down on assets held for sale oset by$93 million of non-cash inventory adjustments.
Adjusted EBITDA(1) totaled $153 million compared with $109 million in the rst quarter of 2018. Results were
supported by an increase in the Partnership's fuel volumes and lower operating expenses.
Distributable Cash Flow, as adjusted(1), was $99 million, compared to $85 million a year ago. This year-over-
year increase reects higher Adjusted EBITDA partially oset by higher cash interest expense and current
income tax expense.
Recent Accomplishments and Other Developments
Reported current quarter cash coverage of 1.15 times and trailing twelve months coverage of 1.36 times.
SUN's leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with its credit facility, was 4.24
times at the end of the rst quarter.
Closed the private oering of $600 million in aggregate principal amount of 6.000% senior notes due 2027
on March 14, 2019. Net proceeds from this oering were used to repay a portion of the outstanding
borrowings under SUN's existing $1.5 billion revolving credit facility.
Signed a non-binding letter of intent to enter into a joint venture on a diesel fuel pipeline to West Texas.
Energy Transfer LP (NYSE: ET) ("Energy Transfer") will operate the pipeline for the joint venture, which will
transport diesel fuel from Hebert, Texas to a terminal in the Midland, Texas area. The pipeline is expected to
have an initial capacity of 30,000 barrels per day and is anticipated to be in service before the end of 2019.
On April 25, 2019, the Board of Directors of SUN's general partner declared a distribution for the rst quarter of
2019 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. The distribution will be
paid on May 15, 2019 to common unitholders of record on May 7, 2019.
At March 31, SUN had borrowings of $150 million against its revolving line of credit and other long-term debt of
$2.9 billion. In the rst quarter of 2019, SUN did not issue any common units through its at-the-market equity
Capital Spending
SUN's gross capital expenditures for the rst quarter were $26 million, which included $22 million for growth
capital and $4 million for maintenance capital.
Excluding acquisitions and expected capital commitment to the pipeline joint venture with Energy Transfer,
SUN expects to spend approximately $90 million on growth capital and approximately $45 million on
maintenance capital for the full year 2019.
SUN's segment results and other supplementary data are provided after the nancial tables below.
(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
Sunoco LP management will hold a conference call on Thursday, May 9, 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
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
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.
Scott Grischow, Vice President – Investor Relations and Treasury
(214) 840-5660,
Derek Rabe, CFA, Manager – Investor Relations, Growth and Strategy
(214) 840-5553,
Alyson Gomez, Director – Communications
(214) 840-5641,
– Financial Schedules Follow –
March 31,
December 31,
(in millions, except units)
Current assets:
Cash and cash equivalents $ 23 $ 56
Accounts receivable, net 490 374
Receivables from aliates 2 37
Inventories, net 392 374
Other current assets 75 64
Assets held for sale 28
Total current assets 1,010 905
Property and equipment 2,066 2,133
Accumulated depreciation (604) (587)
Property and equipment, net 1,462 1,546
Other assets:
Lease right-of-use assets, net 542
Goodwill 1,560 1,559
Intangible assets 915 915
Accumulated amortization (221) (207)
Intangible assets, net 694 708
Other non-current assets 155 161
Total assets
$ 5,423 $ 4,879
Liabilities and equity
Current liabilities:
Accounts payable $ 482 $ 412
Accounts payable to aliates 30 149
Accrued expenses and other current liabilities 225 299
Operating lease current liabilities 24
Current maturities of long-term debt 6 5
Total current liabilities 767 865
Operating lease non-current liabilities 527
Revolving line of credit 150 700
Long-term debt, net 2,879 2,280
Advances from aliates 81 24
Deferred tax liability 90 103
Other non-current liabilities 120 123
Total liabilities 4,614 4,095
Commitments and contingencies (Note 12)
Limited partners:
Common unitholders
 (82,725,202 units issued and outstanding as of March 31, 2019 and 82,665,057 units issued and
outstanding as of December 31, 2018) 809 784
Class C unitholders - held by subsidiaries
(16,410,780 units issued and outstanding as of March 31, 2019 and December 31, 2018)
Total equity 809 784
Total liabilities and equity
$ 5,423 $ 4,879
Three Months Ended March 31,
(in millions, except unit and per unit amounts)
Motor fuel sales
$ 3,583 $ 3,551
Non motor fuel sales
74 176
Lease income
35 22
Total revenues 3,692 3,749
Cost of sales and operating expenses:
Cost of sales
3,322 3,453
General and administrative
27 35
Other operating
84 98
Lease expense
14 15
Loss on disposal of assets and impairment charges
48 3
Depreciation, amortization and accretion
45 49
Total cost of sales and operating expenses 3,540 3,653
Operating income
152 96
Other expenses:
Interest expense, net 42 34
Loss on extinguishment of debt and other 3 109
Income (loss) from continuing operations before income taxes 107 (47)
Income tax expense (benet) (2) 31
Income (loss) from continuing operations 109 (78)
Loss from discontinued operations, net of income taxes (237)
Net income (loss) and comprehensive income (loss) $ 109 $ (315)
Net income (loss) per common unit - basic:
Continuing operations - common units
$ 1.08 $ (1.11)
Discontinued operations - common units
0.00 (2.63)
Net income (loss) - common units
$ 1.08 $ (3.74)
Net income (loss) per common unit - diluted:
Continuing operations - common units
$ 1.07 $ (1.11)
Discontinued operations - common units
0.00 (2.63)
Net income (loss) - common units
$ 1.07 $ (3.74)
Weighted average limited partner units outstanding:
Common units - basic
82,711,188 89,753,950
Common units - diluted
83,380,167 90,271,751
Cash distributions 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. Our nancial
statements reect two reportable segments, fuel distribution & marketing and all other.
The key operating metrics and accompanying footnotes set forth below are presented for the three months
ended March 31, 2019 and 2018 and have been derived from our historical consolidated nancial statements.
Three Months Ended March 31,
2019 2018
Marketing All Other Total
Marketing All Other Total
(dollars and gallons in millions, except gross prot per gallon)
Motor fuel sales
$ 3,442 $ 141 $ 3,583 $ 3,106 $ 445 $ 3,551
Non motor fuel sales
19 55 74 14 162 176
Lease income
32 3 35 19 3 22
Total revenues $ 3,493 $ 199 $ 3,692 $ 3,139 $ 610 $ 3,749
Gross prot (1):
Motor fuel sales
$ 258 $ 27 $ 285 $ 161 $ 44 $ 205
Non motor fuel sales
17 33 50 10 59 69
32 3 35 19 3 22
Total gross prot $ 307 $ 63 $ 370 $ 190 $ 106 $ 296
Income (loss) from continuing
operations 137 (28) 109 (58) (20) (78)
Loss from discontinued operations,
net of taxes (237) (237)
Net income (loss) and comprehensive
income (loss) $ 137 $ (28) $ 109 $ (58) $ (257) $ (315)
Adjusted EBITDA (2) $ 118 $ 35 $ 153 $ 80 $ 29 $ 109
Distributable Cash Flow, as adjusted
(2) $ 99 $ 85
Operating Data:
Total motor fuel gallons sold (3) 1,941 1,857
Motor fuel gross prot cents per
gallon (3) (4) 9.9 ¢ 10.5 ¢
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 March 31,
2018 Change
(in millions)
Segment Adjusted EBITDA
Fuel distribution and marketing $ 118 $ 80 $ 38
All other 35 29 6
Total 153 109 44
Depreciation, amortization and accretion (3) (45) (49) 4
Interest expense, net (3) (42) (36) (6)
Non-cash compensation expense (3) (3) (3)
Loss on disposal of assets and impairment charges (3) (48) (26) (22)
Loss on extinguishment of debt and other (3) (3) (129) 126
Unrealized gain on commodity derivatives (3) 6 6
Inventory adjustments (3) 93 26 67
Other non-cash adjustments (4) (3) (1)
Income (loss) before income tax expense (3)
107 (111) 218
Income tax benet (expense) (3) 2 (204) 206
Net income (loss) and comprehensive income (loss) $ 109 $ (315) $ 424
Adjusted EBITDA
153 109 44
Cash interest expense (3) 40 34 6
Current income tax expense (3) 12 468 (456)
Transaction-related income taxes (5) (480) 480
Maintenance capital expenditures (3) 4 3 1
Distributable Cash Flow
$ 97 $ 84 $ 13
Transaction-related expenses (3) 2 3 (1)
Series A Preferred distribution (2) 2
Distributable Cash Flow, as adjusted $ 99 $ 85 $ 14
Distributions to Partners:
Limited Partners $ 68 $ 68
General Partner 18 18
Total distributions to be paid to partners
$ 86 $ 86
Common Units outstanding – end of period
82.7 82.5
Distribution coverage ratio (6)
1.15x 1.00x
(1)    Excludes depreciation, amortization and accretion.
(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 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
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
comparable to similarly titled measures of other companies.
(3) Includes amounts from discontinued operations for the three months ended March 31, 2018.
(4) Includes other non-cash adjustments and excludes the impact of inventory adjustments consistent with the denition of Adjusted
(5) Transaction-related income taxes primarily related to the 7-Eleven Transaction.
(6) The distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to partners, as adjusted, divided by
distributions expected to be paid to partners of Sunoco LP in respect of such a period.
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