Sunoco LP Announces Third Quarter 2019 Financial and Operating
Results
DALLAS, Nov. 6, 2019 /PRNewswire/ --Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported
nancial and operating results for the three-month period ended September 30, 2019.
Net income for the quarter was $66million versus net income of $112 million in the third quarter of 2018.
Adjusted EBITDA(1) totaled $192 million compared with $208 million in the third quarter of 2018. Distributable
Cash Flow, as adjusted(1), was $133 million, compared to $149 million a year ago. Net income, Adjusted EBITDA
and Distributable Cash Flow, as adjusted, in 2018 included a one-time cash benet of approximately $25 million
related to a settlement with a fuel supplier. Excluding the 2018 one-time cash benet, the year-over-year
increase in Adjusted EBITDA and Distributable Cash Flow was supported by growth in the Partnership's fuel
volumes to a record high 2.11 billion gallons combined with lower operating expenses(2).
Recent Accomplishments and Other Developments
Sold a record high 2.11 billion gallons in the third quarter, up 5% from the third quarter of 2018. On a
weighted-average basis, fuel margin for all gallons sold was 11.6 cents per gallon.
Reported current quarter cash coverage of 1.55 times and trailing twelve months coverage of 1.30 times.
SUN's leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with its credit facility, was 4.51
times at the end of the third quarter.
Commissioned the J.C. Nolan diesel pipeline and completed the rst deliveries in early August. The joint
venture will continue to benet Sunoco LP's nancial results while also further diversifying operations
outside of fuel distribution.
Remained cost disciplined, with operating expenses(2) of $134 million in the third quarter, down 4% from
the third quarter of 2018.
Distribution
On October 25, 2019, the Board of Directors of SUN's general partner declared a distribution for the third
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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 November 19, 2019 to common unitholders of record on November 5, 2019.
Liquidity
At September 30, 2019, SUN had borrowings of $154million against its revolving line of credit and other long-
term debt of $2.9 billion. In the third quarter of 2019, SUN did not issue any common units through its at-the-
market equity program.
Capital Spending and Other Investments
SUN's gross capital expenditures for the third quarter were $46 million, which included $33 million for growth
capital and $13million for maintenance capital.
Excluding acquisitions, SUN expects to spend at least $115 million on growth capital for the full year 2019,
including approximately $10 million of growth capital toward the pipeline joint venture with Energy Transfer.
With an additional $45 million investment on the pipeline joint venture, SUN expects total investment in 2019
to be approximately $160 million.
SUN expects to spend approximately $40 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.
(2) Operating expenses include general and administrative, other operating and lease expenses.
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, November 7, 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.
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Sunoco LP (NYSE: SUN)is a master limited partnership with core operations that include the distribution
of motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers and
distributors located in more than 30 states as well as rened product transportation and terminalling assets.
SUN's general partner is owned by Energy Transfer Operating, L.P., a wholly owned 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, Vice President – Investor Relations and Treasury
(214) 840-5660, scott.grischow@sunoco.com
Derek Rabe, CFA, Manager – Investor Relations, Growth and Strategy
(214) 840-5553, derek.rabe@sunoco.com
Media:
Alexis Daniel, Manager – Communications
(214) 981-0739, alexis.daniel@sunoco.com
– Financial Schedules Follow –
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SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30,
2019
December 31,
2018
(in millions, except units)
Assets
Current assets:
Cash and cash equivalents $ 13
$ 56
Accounts receivable, net 450
374
Receivables from aliates 4
37
Inventories, net 422
374
Other current assets 86
64
Total current assets 975
905
Property and equipment 2,101
2,133
Accumulated depreciation (663)
(587)
Property and equipment, net 1,438
1,546
Other assets:
Lease right-of-use assets, net 572
Goodwill 1,557
1,559
Intangible assets 915
915
Accumulated amortization (249)
(207)
Intangible assets, net 666
708
Other non-current assets 177
161
Investment in unconsolidated aliate 112
Total assets
$ 5,497 $ 4,879
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Liabilities and equity
Current liabilities:
Accounts payable $ 456
$ 412
Accounts payable to aliates 70
149
Accrued expenses and other current liabilities 243
299
Operating lease current liabilities 21
Current maturities of long-term debt 13
5
Total current liabilities 803
865
Operating lease non-current liabilities 521
Revolving line of credit 154
700
Long-term debt, net 2,906
2,280
Advances from aliates 141
24
Deferred tax liability 93
103
Other non-current liabilities 117
123
Total liabilities 4,735
4,095
Commitments and contingencies
Equity:
Limited partners:
Common unitholders (82,750,201 units issued and outstanding as of September 30, 2019 and
82,665,057 units issued and outstanding as of December 31, 2018) 762
784
Class C unitholders - held by subsidiaries (16,410,780 units issued and outstanding as of
September 30, 2019 and December 31, 2018)
Total equity 762
784
Total liabilities and equity
$ 5,497
$ 4,879
SUNOCO LP
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2019
2018
2019
2018
(in millions, except unit and per unit amounts)
Revenues:
Motor fuel sales
$ 4,225
$ 4,662
$ 12,174
$ 12,720
Non motor fuel sales
69
64
217
306
Lease income
37
35
107
91
Total revenues 4,331
4,761
12,498
13,117
Cost of sales and operating expenses:
Cost of sales
4,039
4,428
11,567
12,178
General and administrative
40
34
101
103
Other operating
79
86
236
270
Lease expense
15
20
45
54
Loss (gain) on disposal of assets and impairment charges
(4)
(8)
46
(3)
Depreciation, amortization and accretion
45
42
137
132
Total cost of sales and operating expenses 4,214
4,602
12,132
12,734
Operating income
117
159
366
383
Other expenses:
Interest expense, net 45
35
130
105
Loss on extinguishment of debt and other, net
(3)
109
Income from continuing operations before income taxes 72
124
239
169
Income tax expense 6
10
9
39
Income from continuing operations 66
114
230
130
Loss from discontinued operations, net of income taxes
(2)
(265)
Net income (loss) and comprehensive income (loss) $ 66 $ 112 $ 230 $ (135)
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Net income (loss) per common unit - basic:
Continuing operations - common units
$ 0.57
$ 1.16
$ 2.09
$ 0.84
Discontinued operations - common units
0.00
(0.03)
0.00
(3.12)
Net income (loss) - common units
$ 0.57
$ 1.13
$ 2.09
$ (2.28)
Net income (loss) per common unit - diluted:
Continuing operations - common units
$ 0.57
$ 1.15
$ 2.07
$ 0.83
Discontinued operations - common units
0.00
(0.03)
0.00
(3.12)
Net income (loss) - common units
$ 0.57
$ 1.12
$ 2.07
$ (2.29)
Weighted average limited partner units outstanding:
Common units - basic
82,749,644
82,506,279
82,734,526
84,891,853
Common units - diluted
83,649,898
83,084,713
83,512,121
85,373,976
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 and Marketing and All Other.
The key operating metrics and accompanying footnotes set forth below are presented for the three months
ended September 30, 2019 and 2018 and have been derived from our historical consolidated nancial
statements.
Three Months Ended September 30,
2019
2018
Fuel
Distribution
and
Marketing All Other Total
Fuel
Distribution
and
Marketing All Other Total
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(dollars and gallons in millions, except gross prot per gallon)
Revenues:
Motor fuel sales
$ 4,041
$ 184
$ 4,225
$ 4,450
$ 212
$ 4,662
Non motor fuel sales
14
55
69
12
52
64
Lease income
31
6
37
32
3
35
Total revenues $ 4,086
$ 245
$ 4,331
$ 4,494
$ 267
$ 4,761
Gross prot (1):
Motor fuel sales
$ 195
$ 22
$ 217
$ 222
$ 25
$ 247
Non motor fuel sales
10
28
38
7
44
51
Lease
31
6
37
32
3
35
Total gross prot $ 236
$ 56
$ 292
$ 261
$ 72
$ 333
Income from continuing operations 57
9
66
89
25
114
Loss from discontinued operations,
net of taxes
(2)
(2)
Net income and comprehensive
income $ 57
$ 9
$ 66
$ 89
$ 23
$ 112
Adjusted EBITDA (2) $ 161
$ 31
$ 192
$ 183
$ 25
$ 208
Operating Data:
Motor fuel gallons sold
2,110
2,004
Motor fuel gross prot cents per
gallon (3)
11.6 ¢
12.7 ¢
The following table presents a reconciliation of Adjusted EBITDA to net income and Adjusted EBITDA to
Distributable Cash Flow, as adjusted:
Three Months Ended September 30,
2019
2018
Change
(in millions)
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Adjusted EBITDA
Fuel distribution and marketing $ 161
$ 183
$ (22)
All other 31
25
6
Total Adjusted EBITDA 192
208
(16)
Depreciation, amortization and accretion (45)
(42)
(3)
Interest expense, net (45)
(35)
(10)
Non-cash compensation expense (4)
(4)
Gain on disposal of assets and impairment charges 4
8
(4)
Unrealized gain on commodity derivatives 1
1
Inventory adjustments (26)
(7)
(19)
Equity in earnings of unconsolidated aliate
Adjusted EBITDA related to unconsolidated aliate (1)
(1)
Other non-cash adjustments (4)
(4)
Income tax expense (4) (6)
(12)
6
Net income and comprehensive income $ 66
$ 112
$ (46)
Adjusted EBITDA
$ 192
$ 208
$ (16)
Adjusted EBITDA related to unconsolidated aliate 1
1
Distributable cash ow from unconsolidated aliate (1)
(1)
Cash interest expense 43
34
9
Current income tax expense (4) 3
16
(13)
Maintenance capital expenditures 13
11
2
Distributable Cash Flow
133
147
(14)
Transaction-related expenses
2
(2)
Distributable Cash Flow, as adjusted (2) $ 133
$ 149
$ (16)
Distributions to Partners:
Limited Partners $ 68
$ 68
General Partner 18
18
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Total distributions to be paid to partners
$ 86
$ 86
Common Units outstanding – end of period 82.8
82.5
Distribution coverage ratio (5)
1.55x
1.73x
___________________________
(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
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
comparable to similarly titled measures of other companies.
Adjusted EBITDA reects amounts for the unconsolidated aliate based on the same recognition and measurement methods used to record
equity in earnings of unconsolidated aliate. Adjusted EBITDA related to unconsolidated aliate excludes the same items with respect to the
unconsolidated aliate as those excluded from the calculation of Adjusted EBITDA, such as interest, taxes, depreciation, depletion,
amortization and other non-cash items. Although these amounts are excluded from Adjusted EBITDA related to unconsolidated aliate, such
exclusion should not be understood to imply that we have control over the operations and resulting revenues and expenses of such aliate.
We do not control our unconsolidated aliate; therefore, we do not control the earnings or cash ows of such aliate. The use of Adjusted
EBITDA or Adjusted EBITDA related to unconsolidated aliate as an analytical tool should be limited accordingly.
(3) Includes other non-cash adjustments and excludes the impact of inventory adjustments consistent with the denition of Adjusted EBITDA.
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(4) Includes amounts from discontinued operations for the three months ended September 30, 2018.
(5) 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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SOURCE Sunoco LP
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