Sunoco LP Announces Fourth Quarter and Full Year Financial and
Operating Results
DALLAS, Feb. 20, 2019 /PRNewswire/ --Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported
nancial and operating results for the three- and twelve-month period ended December 31, 2018.
For the three months ended December 31, 2018, net loss was $72 million versus net income of $232 million in
the fourth quarter of 2017. The net loss includes approximately $135 million of non-cash inventory
adjustments.
Adjusted EBITDA(1) for the three months ended December 31, 2018 totaled $180 million compared with $158
million in the fourth quarter of 2017. Results were supported by an increase in the Partnership's fuel volumes
and strong wholesale fuel margins.
Distributable Cash Flow, as adjusted(1), for the quarter was $114 million, compared to $106 million a year ago.
This year-over-year increase reects higher Adjusted EBITDA and lower cash interest expense oset by higher
current tax expense and maintenance capital expenditures.
Recent Accomplishments and Other Developments
Reported current quarter cash coverage of 1.33 times and trailing twelve months coverage of 1.32 times.
SUN's leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with its credit facility, was 4.16
times at the end of the fourth quarter.
Completed the acquisition of BRENCO Marketing Corporation's fuel distribution business for approximately
$24 million plus working capital adjustments. The transaction closed on October 16, 2018.
Completed the acquisition of the rened products terminalling business from American Midstream
Partners, LP for approximately $125 million plus working capital adjustments. The transaction closed on
December 20, 2018.
Completed the acquisition of the wholesale fuel distribution business from Schmitt Sales, Inc. and acquired
certain convenience store locations from Speedway LLC for approximately $50 million plus working capital
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adjustments. The Schmitt Sales transaction closed on December 18, 2018 and the Speedway acquisition
closed on January 29, 2019.
Executed a denitive asset purchase agreement with Attis Industries Inc. in January 2019 for the sale of
Sunoco's ethanol plant, including the grain malting operation, in Fulton, New York for total consideration of
$20 million in cash plus working capital adjustments.
Distribution
On January 25, 2019, the Board of Directors of SUN's general partner declared a distribution for the fourth
quarter of 2018 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. The
distribution was paid on February 14, 2019 to common unitholders of record on February 6, 2019.
Liquidity
At December 31, SUN had borrowings of $700 million against its revolving line of credit and other long-term
debt of $2.3 billion. In the fourth quarter of 2018, SUN did not issue any common units through its at-the-
market equity program.
Capital Spending
SUN's gross capital expenditures for the fourth quarter were $41 million, which included $26 million for growth
capital and $15 million for maintenance capital.
Gross capital expenditures for the full year 2018 were $103 million, which included $72 million for growth
capital and $31 million for maintenance capital.
Excluding acquisitions, 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
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Sunoco LP management will hold a conference call on Thursday, February 21, at 9:30 a.m. CT (10:30 a.m. ET) to
discuss fourth 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, 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
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Media:
Alyson Gomez, Director – Communications
(214) 840-5641, alyson.gomez@sunoco.com
– Financial Schedules Follow –
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
December 31,
2018
December 31,
2017
(in millions, except units)
Assets
Current assets:
Cash and cash equivalents $ 56 $ 28
Accounts receivable, net 374 541
Receivables from aliates 37 155
Inventories, net 374 426
Other current assets 64 81
Assets held for sale 3,313
Total current assets 905 4,544
Property and equipment, net 1,546 1,557
Other assets:
Goodwill 1,559 1,430
Intangible assets, net 708 768
Other noncurrent assets 161 45
Total assets
$ 4,879 $ 8,344
Liabilities and equity
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Current liabilities:
Accounts payable $ 412 $ 559
Accounts payable to aliates 149 206
Accrued expenses and other current liabilities 299 368
Current maturities of long-term debt 5 6
Liabilities associated with assets held for sale 75
Total current liabilities 865 1,214
Revolving line of credit 700 765
Long-term debt, net 2,280 3,519
Advances from aliates 24 85
Deferred tax liability 103 389
Other noncurrent liabilities 123 125
Total liabilities 4,095 6,097
Commitments and contingencies
Equity:
Limited partners:
Series A Preferred unitholders - aliated (no units issued and outstanding as of December 31, 2018
and 12,000,000 units issued and outstanding as of December 31, 2017) 300
Common unitholders (82,665,057 units issued and outstanding as of December 31, 2018 and
99,667,999 units issued and outstanding as of December 31, 2017) 784 1,947
Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of December 31,
2018 and December 31, 2017)
Total equity 784 2,247
Total liabilities and equity
$ 4,879 $ 8,344
SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
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(unaudited)
Three Months Ended
December 31, Year Ended December 31,
2018 2017 2018 2017
(dollars in millions, except unit and per unit amounts)
Revenues:
Motor fuel sales $ 3,784 $ 2,758 $ 16,504 $ 10,910
Rental income 39 22 130 89
Other 54 179 360 724
Total revenues 3,877 2,959 16,994 11,723
Cost of sales and operating expenses:
Cost of sales 3,694 2,682 15,872 10,615
General and administrative 38 42 141 140
Other operating 93 94 363 375
Rent 18 19 72 81
Loss on disposal of assets and impairment charges 22 12 19 114
Depreciation, amortization and accretion 50 45 182 169
Total cost of sales and operating expenses 3,915 2,894 16,649 11,494
Operating income (loss)
(38) 65 345 229
Interest expense, net 39 46 144 209
Loss on extinguishment of debt and other 109
Income (loss) from continuing operations before income taxes (77) 19 92 20
Income tax expense (benet) (5) (202) 34 (306)
Income (loss) from continuing operations (72) 221 58 326
Income (loss) from discontinued operations, net of income taxes 11 (265) (177)
Net income (loss) and comprehensive income (loss) $ (72) $ 232 $ (207) $ 149
Net income (loss) per common unit - basic:
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Continuing operations $ (1.11) $ 1.91 $ (0.25) $ 2.13
Discontinued operations 0.11 (3.14) (1.78)
Net income (loss) $ (1.11) $ 2.02 $ (3.39) $ 0.35
Net income (loss) per common unit - diluted:
Continuing operations $ (1.11) $ 1.90 $ (0.25) $ 2.12
Discontinued operations 0.11 (3.14) (1.78)
Net income (loss) $ (1.11) $ 2.01 $ (3.39) $ 0.34
Weighted average limited partner units outstanding:
Common units - basic 82,543,312 99,522,581 84,299,893 99,270,120
Common units - diluted 83,226,399 100,177,114 84,820,570 99,728,354
Cash distribution per unit
$ 0.8255 $ 0.8255 $ 3.30 $ 3.30
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.
Key operating metrics set forth below are presented for the years and three months ended December31, 2018
and 2017 and have been derived from our historical consolidated nancial statements.
The accompanying footnotes to the following four key operating metrics tables can be found immediately
preceding our capital spending discussion.
Year Ended December 31,
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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
$ 15,466 $ 1,038 $ 16,504 $ 9,333 $ 1,577 $ 10,910
Rental income
118 12 130 77 12 89
Other
48 312 360 50 674 724
Total revenues $ 15,632 $ 1,362 $ 16,994 $ 9,460 $ 2,263 $ 11,723
Gross prot (1):
Motor fuel
$ 673 $ 123 $ 796 $ 535 $ 157 $ 692
Rental
118 12 130 77 12 89
Other
40 156 196 39 288 327
Total gross prot $ 831 $ 291 $ 1,122 $ 651 $ 457 $ 1,108
Income (loss) from continuing
operations 80 (22) 58 167 159 326
Loss from discontinued operations,
net of taxes (265) (265) (177) (177)
Net income (loss) and
comprehensive income (loss) $ 80 $ (287) $ (207) $ 167 $ (18) $ 149
Adjusted EBITDA (2) $ 554 $ 84 $ 638 $ 346 $ 386 $ 732
Distributable Cash Flow, as adjusted
(2) $ 455 $ 473
Operating Data:
Total motor fuel gallons sold (3) 7,859 7,947
Motor fuel gross prot cents per
gallon (3) (4) 11.4 ¢ 15.2 ¢
The following table presents a reconciliation of Adjusted EBITDA to net income (loss), and Adjusted EBITDA to
Distributable Cash Flow, as adjusted:
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Year Ended December 31,
2018 2017 Change
(in millions)
Segment Adjusted EBITDA
Fuel distribution and marketing $ 554 $ 346 $ 208
All other 84 386 (302)
Total 638 732 (94)
Depreciation, amortization and accretion (3) (182) (203) 21
Interest expense, net (3) (146) (245) 99
Non-cash compensation expense (3) (12) (24) 12
Loss on disposal of assets and impairment charges (3) (80) (400) 320
Loss on extinguishment of debt and other (3) (129) (129)
Unrealized gain (loss) on commodity derivatives (3) (6) 3 (9)
Inventory adjustments (3) (84) 28 (112)
Other non-cash adjustments (14) (14)
Income (loss) before income tax (expense) benet (3)
(15) (109) 94
Income tax (expense) benet (3) (192) 258 (450)
Net income (loss) and comprehensive income (loss) $ (207) $ 149 $ (356)
Adjusted EBITDA
$ 638 $ 732 $ (94)
Cash interest expense (3) 142 231 (89)
Current income tax expense (3) 489 4 485
Transaction-related income taxes (5) (470) (470)
Maintenance capital expenditures (3) 31 48 (17)
Distributable Cash Flow
446 449 (3)
Transaction-related expenses (3) 11 47 (36)
Series A Preferred distribution (2) (23) 21
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Distributable Cash Flow, as adjusted $ 455 $ 473 $ (18)
The following table sets forth, for the periods indicated, information concerning key measures we rely on to
gauge our operating performance:
Three Months Ended December 31,
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
$ 3,606 $ 178 $ 3,784 $ 2,344 $ 414 $ 2,758
Rental income
36 3 39 19 3 22
Other
7 47 54 12 167 179
Total revenues $ 3,649 $ 228 $ 3,877 $ 2,375 $ 584 $ 2,959
Gross prot (1):
Motor fuel
$ 86 $ 31 $ 117 $ 151 $ 25 $ 176
Rental
36 3 39 19 3 22
Other
5 22 27 10 69 79
Total gross prot $ 127 $ 56 $ 183 $ 180 $ 97 $ 277
Income (loss) from continuing
operations (52) (20) (72) 47 174 221
Income from discontinued operations,
net of taxes 11 11
Net income (loss) and comprehensive
income (loss) $ (52) $ (20) $ (72) $ 47 $ 185 $ 232
Adjusted EBITDA (2) $ 159 $ 21 $ 180 $ 90 $ 68 $ 158
Distributable Cash Flow, as adjusted (2) $ 114 $ 106
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Operating Data:
Total motor fuel gallons sold (3) 2,021 1,972
Motor fuel gross prot cents per gallon
(3) (4) 12.4 ¢ 15.3 ¢
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
December 31,
2018 2017 Change
(in millions)
Segment Adjusted EBITDA
Fuel distribution and marketing $ 159 $ 90 $ 69
All other 21 68 (47)
Total 180 158 22
Depreciation, amortization and accretion (3) (50) (48) (2)
Interest expense, net (3) (39) (61) 22
Non-cash compensation expense (3) (2) (6) 4
Loss on disposal of assets and impairment charges (3) (22) (33) 11
Unrealized loss on commodity derivatives (3) (5) (2) (3)
Inventory adjustments (3) (135) 20 (155)
Other non-cash adjustments (4) (4)
Income (loss) before income tax (expense) benet (3)
(77) 28 (105)
Income tax (expense) benet (3) 5 204 (199)
Net income (loss) and comprehensive income (loss) $ (72) $ 232 $ (304)
Adjusted EBITDA
$ 180 $ 158 $ 22
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Cash interest expense (3) 39 59 (20)
Current income tax expense (3) 11 (3) 14
Maintenance capital expenditures (3) 15 13 2
Distributable Cash Flow
115 89 26
Transaction-related expenses (3) (1) 25 (26)
Series A Preferred distribution (8) 8
Distributable Cash Flow, as adjusted $ 114 $ 106 $ 8
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(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.
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(3) Includes amounts from discontinued operations.
(4) Includes other non-cash adjustments and excludes the impact of inventory adjustments consistent with the denition of Adjusted
EBITDA.
(5) Transaction-related income taxes primarily related to the 7-Eleven Transaction.
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SOURCE Sunoco LP
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