Sunoco LP Announces 3Q 2014 Financial and
Operating Results, Updates Recent Developments
11/5/2014
-3Q distribution increased 5% versus 2Q, 16.4% versus 3Q 2013 levels
-Gallons sold increased 17% versus 3Q 2013 volumes
-Equity and bank financings significantly expand capacity for growth
-Pending and completed acquisitions expected to significantly increase Partnership's EBITDA(1) and
distributable cash flow(1)
Conference Call Scheduled for 10:00 a.m. ET (9:00 a.m. CT) on November 6
HOUSTON, Nov. 5, 2014 /PRNewswire/ -- Sunoco LP (NYSE: SUN) (the "Partnership"), formerly Susser
Petroleum Partners LP, today announced financial and operating results for the three and nine months ended
September 30, 2014 and provided an update on recent developments.
Reported net income for the quarter was $1.0 million, or $0.04 per diluted unit, compared with $9.6 million, or
$0.43 per diluted unit, in the third quarter of 2013. Reported net income includes the impact of $5.1 million, or
$0.23 per diluted unit, in charges related to the merger with Energy Transfer Partners, L.P. (NYSE: ETP), other
acquisition activity and revolving credit facility refinancing.
Adjusted EBITDA
(1)
totaled $14.0 million, and distributable cash flow
(1)
was $11.8 million, versus $13.8
million and $12.7 million, respectively, for the prior-year period. Negatively impacting both Adjusted
EBITDA and distributable cash flow are $3.0 million in cash and non-cash charges, a portion of which stem
from the Partnership's adoption of the last-in first-out inventory method for fuel on September 1, 2014. The
charges impacting net income, Adjusted EBITDA and distributable cash flow are further detailed at the end of
this news release.
Revenue in the third quarter was $1.3 billion, an 11.8 percent increase compared to $1.2 billion in the
comparable period last year. The increase was the result of a 17.2 percent increase in gallons sold and an 83.8
percent increase in rental income, partly offset by a 14-cent-per-gallon decrease in the average selling price per
gallon.
Gross profit for the latest quarter totaled $21.9 million, a 19.0 percent increase compared to $18.4 million in
the third quarter of 2013. On a weighted average basis, fuel margin for all gallons sold increased slightly to 3.8
cents per gallon, compared to 3.7 cents per gallon a year earlier, excluding the impact of fuel inventory
valuation adjustments.
Affiliate customers at September 30 included 645 Stripes® and Sac-N-Pac™ convenience stores operated by a
subsidiary of our parent company, ETP, as well as sales of motor fuel to ETP for resale under consignment
arrangements at approximately 85 independently operated convenience stores. Motor fuel gallons sold to
affiliates during the third quarter increased 12.7 percent from a year ago to 302.7 million gallons. Gross profit
on these gallons totaled $9.2 million, or 3.0 cents per gallon, versus $8.1 million, or 3.0 cents per gallon, in
same period last year.
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Third-party customers included 516 independent dealers under long-term fuel supply agreements, 22
independently operated consignment locations and over 1,900 other commercial customers. Total gallons sold
to third parties increased year-over-year by 26.5 percent to 165.6 million gallons. Gross profit on these gallons
was $8.9 million excluding a $2.1 million non-cash fuel valuation adjustment, or 5.3 cents per gallon,
compared to $6.8 million, or 5.2 cents per gallon, in the prior-year period.
"The Partnership delivered a strong 19 percent increase in gross profit and a 17 percent increase in gallons sold
during the third quarter," said Bob Owens, Sunoco LP President and Chief Executive Officer. "This solid 3Q
performance allowed us to increase our distribution to unitholders by 5 percent quarter over quarter.
"More importantly, during the third quarter we set the stage for what we expect to be the start of an aggressive
growth campaign for Sunoco LP, with the first drop-down on October 1, 2014, of the Mid-Atlantic
Convenience Store assets from ETP to SUN, our agreement to acquire the Aloha Petroleum wholesale and
retail business in Hawaii, and new equity and bank financings totaling more than $1.6 billion to help finance
that growth and strengthen our balance sheet. The MACS and Aloha transactions combined approximately
triple Sunoco LP's EBITDA
(1)
.
"We expect to further our expansion in 2015 as our parent, ETP, begins to drop down the high quality assets of
Sunoco Inc. and Susser Holdings. We expect to grow not only through asset dropdowns from our parent, but
also through organic expansion of the Partnership and of the legacy Sunoco and Stripes businesses, as well as
through opportunistic acquisitions like Aloha that make sense strategically and financially.
"In late October we were proud to return the SUN ticker symbol to the New York Stock Exchange, where it
traded for nearly 87 years until Sunoco Inc. was purchased by ETP. In mid-October, we installed our first
Sunoco fuel sign over a newly constructed Stripes convenience store north of Houston, and we look forward to
continuing the rollout of our iconic fuel brand across Stripes' high-growth markets," Owens said.
YTD 2014 Compared to YTD 2013
Revenue for the first nine months of 2014 totaled $3.9 billion, a 15.4 percent increase compared to the first
nine months of 2013. Gross profit for this period increased 30.1 percent year-over-year to $66.2 million. Total
gallons of motor fuel sold to affiliates increased by 11.5 percent to 873.7 million gallons, and gallons sold to
third parties increased by 31.8 percent to 489.8 million. On a weighted average basis, fuel margin for all
gallons sold increased to 3.8 cents per gallon for the first nine months of 2014 from the 3.6 cents per gallon in
the comparable 2013 period. Adjusted EBITDA was $45.2 million, compared to $37.8 million for the 2013
period, and distributable cash flow was $39.5 million, versus $35.0 million for the first nine months of last
year.
Distribution Increase
The Board of Directors of SUN's general partner has declared a quarterly distribution for the third quarter of
2014 of $0.5457 per unit, which corresponds to $2.18 per unit on an annualized basis. This represents a 5.0
percent increase compared to the distribution for the second quarter of 2014 and a 16.4 percent increase
compared with the third quarter of 2013. The Partnership will pay a total distribution of approximately $18.8
million, including $6.5 million on approximately 12 million recently-issued units, and a $0.3 million incentive
distribution rights payment to ETP.
The distribution will be paid on November 28, 2014 to unitholders of record on November 18, 2014.
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Immediately prior to the distribution, there are expected to be approximately 34.0 million units outstanding,
including all of the Partnership's common and subordinated units.
Name and Ticker Change
Effective with the beginning of trading on the New York Stock Exchange on October 27, 2014, the Partnership
changed its name from Susser Petroleum Partners LP to Sunoco LP and its ticker symbol from SUSP to SUN.
Additionally, SUN's general partner, Susser Petroleum Partners GP LLC, also changed its name to Sunoco GP
LLC. No action is required by unitholders as a result of these changes.
Completion of ETP's Acquisition of SUN's General Partner
On August 29, 2014, ETP completed its acquisition of Susser Holdings Corporation, the owner of Sunoco LP's
general partner. As a result of this transaction, a subsidiary of ETP now owns 100 percent of the general
partner of Sunoco LP, along with 100 percent of the incentive distribution rights. ETP currently owns a 44.2
percent limited partner interest in SUN.
MACS Acquisition
On October 1, 2014, Sunoco LP acquired Mid-Atlantic Convenience Stores, LLC ("MACS") from its parent,
ETP, for approximately $768 million. SUN issued approximately 4 million new SUN common units to ETP
and paid $556 million of cash. MACS includes approximately 110 company-operated convenience stores and
200 dealer-operated and consignment sites in Virginia, Maryland, Tennessee and Georgia offering Sunoco,
Exxon, Mobil and Shell branded motor fuel.
Aloha Acquisition
Sunoco LP agreed to acquire Honolulu-based Aloha Petroleum Ltd., the largest independent gasoline marketer
and one of the largest convenience store operators in Hawaii. The transaction includes six fuel storage
terminals and a wholesale fuel distribution network that markets to approximately 100 company- or dealer-
operated stores. The base purchase price is $240 million, subject to a post-closing earn-out, closing
adjustments and before transaction expenses. The acquisition is expected to close by year-end.
Financings
Revolving Credit Facility: Concurrent with the signing of the definitive agreements governing the acquisitions
of MACS and Aloha Petroleum, the Partnership also announced on September 25, 2014, that it had entered into
a new $1.25 billion revolving credit facility with a syndicate of banks. The new facility was used to repay
outstanding amounts under its previous $400 million revolver, to provide short-term financing for the
completed and pending asset purchases and for general partnership purposes. At September 30, 2014, SUN
had borrowings against its revolving line of credit of $270 million and $10.9 million in standby letters of credit,
leaving unused availability of $969.1 million. On October 1, 2014, an additional $556 million was drawn on
the revolver to fund the cash portion of the MACS acquisition.
Equity Offering: On October 21, 2014, the Partnership issued 8 million new common units in a public offering
at a price of $46.25 per unit. Net proceeds of approximately $359 million were used to pay down the revolver
and for general corporate purposes.
Sale-leasebacks: SUN completed sale-leaseback transactions for eight Stripes convenience stores during the
Page 3
third quarter, and four more to date in the fourth quarter, bringing the year-to-date total to 25.
New Dealers
Six new contracted dealer sites were added in the third quarter, and seven sites were discontinued for a total of
538 third-party dealer and consignment locations supplied by SUN as of September 30, 2014, in addition to the
85 consignment sites supplied by a subsidiary of our parent company, ETP. Year to date, SUN has acquired or
added 44 dealer sites and discontinued 12, and expects to add an additional 5 to 15 dealers during the fourth
quarter in addition to the dealers and company-operated sites being acquired with the MACS and Aloha
acquisitions.
Capital Spending
Including the Stripes store purchases, SUN's gross capital expenditures for the third quarter were $38.4 million,
which included $38.2 million for growth capital and $0.2 million for maintenance capital. Excluding the
acquisition of MACS and Aloha, the Partnership expects to spend approximately $2 million to $5 million for
maintenance capital for full year 2014, and approximately $150 million to $170 million on expansion capital.
Included in growth capex is the purchase of 28 to 33 new Stripes stores that will be leased back to Stripes.
_______________________
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 for the periods presented.
Third Quarter Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, November 6, at 10:00 a.m. ET (9:00 a.m.
CT) to discuss third quarter results and recent Partnership developments. To participate, dial 719-457-2652
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. A telephone replay will be available through November
13, by calling 719-457-0820 and using the access code 7733057.
Sunoco LP has posted a new Investor Update presentation to its website. Visit the Investor Relations section of
our website at www.SunocoLP.com under Events & Presentations.
About Sunoco LP
Sunoco LP (NYSE: SUN) is a master limited partnership (MLP) that primarily distributes motor fuel to
convenience stores, independent dealers, commercial customers and distributors. SUN also operates more than
100 convenience stores and retail fuel sites. SUN's general partner is a wholly-owned subsidiary of ETP.
While primarily engaged in natural gas, natural gas liquids, crude oil and refined products transportation, ETP
also operates a retail business with a network of more than 5,500 company- or independently-operated retail
fuel outlets and convenience stores through its wholly owned subsidiaries, Sunoco, Inc. and Stripes LLC. For
more information, visit the Sunoco LP website at www.SunocoLP.com.
Forward-Looking Statements
This news release contains "forward-looking statements" which may describe Sunoco LP's ("SUN") objectives,
Page 4
expected results of operations, targets, plans, strategies, costs, anticipated capital expenditures, potential
acquisitions, new store openings and/or new dealer locations, management's expectations, beliefs or goals
regarding proposed transactions between ETP and SUN or SUN's acquisition of Aloha Petroleum, the expected
timing of those transactions and the future financial and/or operating impact of those transactions, including the
anticipated integration process and any related benefits, opportunities or synergies. These statements are based
on current plans, expectations and projections and involve a number of risks and uncertainties that could cause
actual results and events to vary materially, including but not limited to: execution, integration, environmental
and other risks related to acquisitions (including drop-downs) and our overall acquisition strategy; competitive
pressures from convenience stores, gasoline stations, other non-traditional retailers and other wholesale fuel
distributors located in SUN's markets; dangers inherent in storing and transporting motor fuel; SUN's ability to
renew or renegotiate long-term distribution contracts with customers; changes in the price of and demand for
motor fuel; changing consumer preferences for alternative fuel sources or improvement in fuel efficiency;
competition in the wholesale motor fuel distribution industry; seasonal trends; severe or unfavorable weather
conditions; increased costs; SUN's ability to make and integrate acquisitions; environmental laws and
regulations; dangers inherent in the storage of motor fuel; reliance on suppliers to provide trade credit terms to
adequately fund ongoing operations; acts of war and terrorism; dependence on information technology systems;
SUN's and ETP's ability to consummate any proposed transactions, or to satisfy the conditions precedent to the
consummation of such transactions; successful development and execution of integration plans; ability to
realize anticipated synergies or cost-savings and the potential impact of the transactions on employee, supplier,
customer and competitor relationships; and other unforeseen factors. For a full discussion of these and other
risks and uncertainties, refer to the "Risk Factors" section of SUN's and ETP's most recently filed annual
reports on Form 10-K and current report on Form 8-K/A filed October 21, 2014. These forward-looking
statements are based on and include our estimates as of the date hereof. Subsequent events and market
developments could cause our estimates to change. While we may elect to update these forward-looking
statements at some point in the future, we specifically disclaim any obligation to do so, even if new information
becomes available, except as may be required by applicable law.
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.
Financial Schedules Follow
Contacts
Investors:
Clare McGrory, Senior VP, Finance and Investor Relations
(610) 833-3400, cpmcgrory@sunocoinc.com
Anne Pearson
Dennard-Lascar Associates
(210) 408-6321, apearson@dennardlascar.com
Media:
Page 5
Jeff Shields, Communications Manager
(215) 977-6056, jpshields@sunocoinc.com
Jessica Davila-Burnett, Public Relations Director
(361) 654-4882, jessica.davila-burnett@susser.com
Sunoco LP
Consolidated Statements of Operations and Comprehensive Income (Loss)
Unaudited
Predecessor Successor
Three Months Ended
September 30,
2013
July 1, 2014
through August
31, 2014
September 1,
2014 through
September 30,
2014
(in thousands, except unit and per unit amounts)
Revenues:
Motor fuel sales to third parties $ 386,977 $ 323,281 $ 146,936
Motor fuel sales to affiliates 775,769 571,755 256,110
Rental income 2,820 3,424 1,760
Other income 1,231 1,117 539
Total revenues 1,166,797 899,577 405,345
Cost of sales:
Motor fuel cost of sales to third parties 380,186 317,172 146,279
Motor fuel cost of sales to affiliates 767,657 565,494 253,212
Other 551 553 307
Total cost of sales 1,148,394 883,219 399,798
Gross profit 18,403 16,358 5,547
Operating expenses:
General and administrative 4,329 6,833 2,608
Other operating 606 1,169 875
Rent 261 196 87
Loss (gain) on disposal of assets 112 (3)
Depreciation, amortization and accretion 2,432 3,798 1,633
Total operating expenses 7,740 11,993 5,203
Income from operations 10,663 4,365 344
Interest expense, net (921) (1,491) (2,080)
Income (loss) before income taxes 9,742 2,874 (1,736)
Income tax expense (145) (91) (20)
Net income (loss) and comprehensive income (loss)
$ 9,597 $ 2,783 $ (1,756)
Net income (loss) per limited partner unit:
Common (basic) $ 0.44 $ 0.13 $ (0.09)
Common (diluted) $ 0.43 $ 0.13 $ (0.09)
Subordinated (basic and diluted) $ 0.44 $ 0.13 $ (0.09)
Weighted average limited partner units outstanding:
Common units - public 10,927,611 10,957,974 10,974,491
Common units - affiliated 36,060 79,308 79,308
Subordinated units - affiliated 10,939,436 10,939,436 10,939,436
Cash distribution per unit $ 0.4687 $ $ 0.5457
Sunoco LP
Consolidated Statements of Operations and Comprehensive Income (Loss)
Unaudited
Predecessor Successor
Nine Months
Ended September
30, 2013
January 1, 2014
through
August 31, 2014
September 1,
2014 through
September 30, 2014
(in thousands, except unit and per unit amounts)
Revenues:
Page 6
Motor fuel sales to third parties $ 1,109,849 $ 1,275,422 $ 146,936
Motor fuel sales to affiliates 2,257,800 2,200,394 256,110
Rental income 6,725 11,690 1,760
Other income 3,737 4,683 539
Total revenues 3,378,111 3,492,189 405,345
Cost of sales:
Motor fuel cost of sales to third parties 1,091,183 1,252,141 146,279
Motor fuel cost of sales to affiliates 2,234,336 2,177,028 253,212
Other 1,677 2,339 307
Total cost of sales 3,327,196 3,431,508 399,798
Gross profit 50,915 60,681 5,547
Operating expenses:
General and administrative 11,877 17,075 2,608
Other operating 1,805 4,964 875
Rent 765 729 87
Loss (gain) on disposal of assets 206 (39)
Depreciation, amortization and accretion 6,090 10,457 1,633
Total operating expenses 20,743 33,186 5,203
Income from operations 30,172 27,495 344
Interest expense, net (2,370) (4,767) (2,080)
Income (loss) before income taxes 27,802 22,728 (1,736)
Income tax expense (298) (218) (20)
Net income (loss) and comprehensive income (loss)
$ 27,504 $ 22,510 $ (1,756)
Net income (loss) per limited partner unit:
Common (basic) $ 1.26 $ 1.02 $ (0.09)
Common (diluted) $ 1.25 $ 1.02 $ (0.09)
Subordinated (basic and diluted) $ 1.26 $ 1.02 $ (0.09)
Weighted average limited partner units outstanding:
Common units - public 10,925,870 10,944,309 10,974,491
Common units - affiliated 21,644 79,308 79,308
Subordinated units - affiliated 10,939,436 10,939,436 10,939,436
Cash distribution per unit $ 1.3590 $ 1.0218 $ 0.5457
Sunoco LP
Consolidated Balance Sheets
Predecessor Successor
December 31,
2013
September 30,
2014
unaudited
(in thousands, except units)
Assets
Current assets:
Cash and cash equivalents $ 8,150 $ 10,601
Accounts receivable, net of allowance for doubtful accounts of $323 at December 31, 2013, and $491 at September 30,
2014 69,005 69,484
Receivables from affiliates 49,879 47,597
Inventories, net 11,122 27,051
Other current assets 66 2,123
Total current assets 138,222 156,856
Property and equipment, net 180,127 284,804
Other assets:
Marketable securities 25,952
Goodwill 22,823 613,722
Intangible assets, net 22,772 244,210
Other noncurrent assets 188 221
Total assets
$ 390,084 $ 1,299,813
Liabilities and equity
Current liabilities:
Accounts payable $ 110,432 $ 115,477
Accounts payable to affiliates 5,858
Accrued expenses and other current liabilities 11,427 13,024
Current maturities of long-term debt 525 529
Total current liabilities 122,384 134,888
Revolving line of credit 156,210 270,000
Long-term debt 29,416 3,030
Page 7
Deferred tax liability, long-term portion 222 1,108
Other noncurrent liabilities 2,159 2,061
Total liabilities 310,391 411,087
Commitments and contingencies:
Partners' equity:
Limited partners:
Common unitholders - public (10,936,352 units issued and outstanding at December 31, 2013 and 10,974,491 units
issued and outstanding at September 30, 2014) 210,269 613,951
Common unitholders - affiliated (79,308 units issued and outstanding at December 31, 2013 and at September 30,
2014) 1,562 4,413
Subordinated unitholders - affiliated (10,939,436 units issued and outstanding at December 31, 2013 and September
30, 2014) (132,138) 270,362
Total equity 79,693 888,726
Total liabilities and equity
$ 390,084 $ 1,299,813
Key Operating Metrics
The following table sets forth, for the periods indicated, information concerning key measures we rely on to
gauge our operating performance. 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.
The key operating metrics presented below for the three and nine months ended September 30, 2014, are the
combined results of operations for the Partnership for the predecessor period ended August 31, 2014, and the
successor period from September 1, 2014 through September 30, 2014. Please refer to the Consolidated
Statements of Operations and Comprehensive Income (Loss) for the results for the respective periods.
Three Months Ended Nine Months Ended
September 30,
2013
September 30,
2014
September 30,
2013
September 30,
2014
(in thousands, except for selling price and gross profit per gallon)
Revenues:
Motor fuel sales to third parties (1) $ 386,977 $ 470,217 $ 1,109,849 $ 1,422,358
Motor fuel sales to affiliates 775,769 827,865 2,257,800 2,456,504
Rental income 2,820 5,184 6,725 13,450
Other income 1,231 1,656 3,737 5,222
Total revenue (1) 1,166,797 1,304,922 3,378,111 3,897,534
Gross profit:
Motor fuel gross profit to third parties (2) 6,791 6,766 18,666 23,938
Motor fuel gross profit to affiliates 8,112 9,159 23,464 26,264
Rental income 2,820 5,184 6,725 13,450
Other 680 796 2,060 2,576
Total gross profit $ 18,403 $ 21,905 $ 50,915 $ 66,228
Net income $ 9,597 $ 1,027 $ 27,504 $ 20,754
Adjusted EBITDA (3) $ 13,753 $ 13,955 $ 37,819 $ 45,192
Distributable cash flow (3) $ 12,693 $ 11,804 $ 35,032 $ 39,494
Operating Data:
Total motor fuel gallons sold:
Third-party 130,959 165,618 371,732 489,787
Affiliated 268,565 302,734 783,715 873,747
Average wholesale selling price per gallon $ 2.91 $ 2.77 $ 2.91 $ 2.84
Motor fuel gross profit (cents per gallon):
Third-party (2) 5.2¢ 5.3¢ 5.0¢ 5.3¢
Affiliated 3.0¢ 3.0¢ 3.0¢ 3.0¢
Volume-weighted average for all gallons 3.7¢ 3.8¢ 3.6¢ 3.8¢
(1) In December 2013, we revised our presentation of fuel taxes on motor fuel sales at our consignment locations to present such fuel taxes gross in motor fuel
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sales. Prior years' motor fuel sales have been adjusted to reflect this revision which also affects average wholesale selling price.
(2) Fuel gross profit to third parties includes a $2.1 million non-cash fuel valuation adjustment charge in the third quarter and nine months ended September
30, 2014. This charge is excluded from the calculation of cents per gallon gross profit.
(3) We define EBITDA as net income before net interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA further
adjusts EBITDA to reflect certain other non-recurring and non-cash items. We define distributable cash flow as Adjusted EBITDA less cash interest
expense, cash state franchise tax expense, maintenance capital expenditures, and other non-cash adjustments. EBITDA, Adjusted EBITDA and
distributable cash flow are not financial measures calculated in accordance with GAAP.
We believe EBITDA, Adjusted EBITDA and distributable cash flow 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 financial performance,
ability to make distributions to our unitholders and debt service capabilities;
they are used by our management for internal planning purposes, including aspects of our consolidated
operating budget, and capital expenditures; and
distributable cash flow provides useful information to investors as it is a widely accepted financial
indicator used by investors to compare partnership performance, as it provides investors an enhanced
perspective of the operating performance of our assets and the cash our business is generating.
EBITDA, Adjusted EBITDA and distributable cash flow 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 flows from
operating activities as a measure of liquidity. EBITDA, Adjusted EBITDA and distributable cash flow 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 reflect our total cash expenditures, or future requirements, for capital expenditures or
contractual commitments;
they do not reflect changes in, or cash requirements for, working capital;
they do not reflect interest expense, or the cash requirements necessary to service interest or principal
payments on our revolving credit facility or term loans;
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized
will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash
requirements for such replacements; and
because not all companies use identical calculations, our presentation of EBITDA, Adjusted EBITDA
and distributable cash flow may not be comparable to similarly titled measures of other companies.
The following tables present a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and
distributable cash flow:
Predecessor Successor
Three Months
Ended September
30, 2013
July 1, 2014
through
August 31, 2014
September 1,
2014 through
September 30,
2014
Combined
Results for the
Three Months
Ended September
30, 2014
(in thousands)
Net income (loss) $ 9,597 $ 2,783 $ (1,756) $ 1,027
Depreciation, amortization and accretion 2,432 3,798 1,633 5,431
Interest expense, net 921 1,491 2,080 3,571
Income tax expense 145 91 20 111
EBITDA 13,095 8,163 1,977 10,140
Non-cash unit based compensation 546 3,208 610 3,818
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Loss (gain) on disposal of assets and impairment charge 112 (3) (3)
Adjusted EBITDA $ 13,753 $ 11,368 $ 2,587 $ 13,955
Cash interest expense 825 1,404 474 1,878
State franchise tax expense (cash) 24 80 19 99
Maintenance capital expenditures 211 187 (13) 174
Distributable cash flow
$ 12,693 $ 9,697 $ 2,107 $ 11,804
Predecessor Successor
Nine Months
Ended September
30, 2013
January 1, 2014
through
August 31, 2014
September 1, 2014
through
September 30, 2014
Combined
Results for the
Nine Months
Ended September
30, 2014
(in thousands)
Net income (loss) $ 27,504 $ 22,510 $ (1,756) $ 20,754
Depreciation, amortization and accretion 6,090 10,457 1,633 12,090
Interest expense, net 2,370 4,767 2,080 6,847
Income tax expense 298 218 20 238
EBITDA 36,262 37,952 1,977 39,929
Non-cash unit based compensation 1,351 4,692 610 5,302
Loss (gain) on disposal of assets and impairment charge 206 (39) (39)
Adjusted EBITDA $ 37,819 $ 42,605 $ 2,587 $ 45,192
Cash interest expense 2,084 4,454 474 4,928
State franchise tax expense (cash) 165 253 19 272
Maintenance capital expenditures 538 511 (13) 498
Distributable cash flow
$ 35,032 $ 37,387 $ 2,107 $ 39,494
Supplemental Information - Impact of Unusual Items
(1)
(in thousands)
Three Months Ended
September 30, 2013 September 30, 2014
Net Income
Adjusted
EBITDA
Distributable Cash
Flow Net Income
Adjusted
EBITDA
Distributable Cash
Flow
As Reported $ 9,597 $ 13,753 $ 12,693 $ 1,027 $ 13,955 $ 11,804
September 2014 revolver
refinancing 1,606
Cash acquisition costs 248 248 248 688 688 688
Accelerated stock compensation 2,799
Fuel valuation adjustments 707 707 2,317 2,317
As Adjusted
$ 9,845 $ 14,708 $ 13,648 $ 6,120 $ 16,960 $ 14,809
Nine Months Ended
September 30, 2013 September 30, 2014
Net Income
Adjusted
EBITDA
Distributable Cash
Flow Net Income
Adjusted
EBITDA
Distributable Cash
Flow
As Reported $ 27,504 $ 37,819 $ 35,032 $ 20,754 $ 45,192 $ 39,494
September 2014 revolver
refinancing 1,606
Cash acquisition costs 248 248 248 690 690 690
Accelerated stock compensation 2,799
Fuel valuation adjustments 380 380 1,810 1,810
As Adjusted
$ 27,752 $ 38,447 $ 35,660 $ 25,849 $ 47,692 $ 41,994
____________________
(1) Adjustments reflect the following:
• Non-cash interest expense related to write-off of unamortized loan costs on old revolver.
• Cash legal and professional fees related to MACS, Aloha and Gainesville Fuel acquisitions; payroll taxes related to accelerated unit compensation.
• Non-cash accelerated unit compensation expense related to ETP merger.
• Non-cash LIFO valuation adjustments and unrealized losses (gains) on commodity risk management activities. These items are added back in ETP's
definition of Adjusted EBITDA and distributable cash flow, which we have not yet adopted. The Partnership adopted the LIFO accounting policy for fuel
inventory in September 2014.
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SOURCE Sunoco LP
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