Sunoco LP Announces Second Quarter Financial and Operating Results
DALLAS, Aug. 7, 2019 /PRNewswire/ -- Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported
nancial and operating results for the three-month period ended June 30, 2019.
Net income for the quarter was $55 million versus net income of $68 million in the second quarter of 2018.
Adjusted EBITDA(1) totaled $152 million compared with $140 million in the second 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 $101 million, compared to $106 million a year ago. This year-over-
year decrease reects higher Adjusted EBITDA oset by higher interest expense and maintenance capital
expenditures.
Net income, Adjusted EBITDA and Distributable Cash Flow, as adjusted, included a one-time expense of
approximately $8 million related to a reserve for an open contractual dispute.
Recent Accomplishments and Other Developments
Sold a record high 2.05 billion gallons in the second quarter, up 4% from the second quarter of 2018. On a
weighted-average basis, fuel margin for all gallons sold was 9.1 cents per gallon, or 9.4 cents per gallon
excluding the one-time expense of approximately $8 million this quarter.
Reported current quarter cash coverage of 1.17 times and trailing twelve months coverage of 1.35 times.
Excluding the one-time expense of approximately $8 million this quarter, SUN's distribution coverage ratio
for the second quarter was 1.26 times and trailing twelve months coverage was 1.37 times. SUN's leverage
ratio of net debt to Adjusted EBITDA, calculated in accordance with its credit facility, was 4.20 times at the
end of the second quarter(2).
Closed on the joint venture with Energy Transfer LP (NYSE: ET) ("Energy Transfer") on a diesel fuel pipeline to
West Texas. 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
1
capacity of 30,000 barrels per day and was successfully commissioned in August 2019. SUN expects its cash
investment to be approximately $50 million.
Distribution
On July 25, 2019, the Board of Directors of SUN's general partner declared a distribution for the second 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 August 14, 2019 to common unitholders of record on August 6, 2019.
Liquidity
At June 30, SUN had borrowings of $117 million against its revolving line of credit and other long-term debt of
$2.9 billion. In the second quarter of 2019, SUN did not issue any common units through its at-the-market
equity program.
Capital Spending
SUN's gross capital expenditures for the second quarter were $31 million, which included $25 million for growth
capital and $6 million for maintenance capital.
Excluding acquisitions, SUN expects to spend at least $100 million on growth capital, including approximately
$5 million of growth capital toward the pipeline joint venture with Energy Transfer, and 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) Excluding the one-time expense of approximately $8 million this quarter, SUN's leverage ratio of net debt to Adjusted EBITDA, calculated
in accordance with SUN's credit facility, was 4.16 times at the end of the second quarter.
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, August 8, at 9:30 a.m. CT (10:30 a.m. ET) to
discuss second 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
2
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 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:
3
Alexis Daniel, Manager – Communications
(214) 981-0739, alexis.daniel@sunoco.com
– Financial Schedules Follow –
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30,
2019
December 31,
2018
(in millions, except units)
Assets
Current assets:
Cash and cash equivalents
$ 36
$ 56
Accounts receivable, net
573
374
Receivables from aliates
2
37
Inventories, net
410
374
Other current assets
77
64
Total current assets
1,098
905
Property and equipment
2,074
2,133
Accumulated depreciation
(635)
(587)
Property and equipment, net
1,439
1,546
Other assets:
Lease right-of-use assets, net
536
Goodwill
1,558
1,559
Intangible assets 914 915
4
Accumulated amortization
(235)
(207)
Intangible assets, net
679
708
Other non-current assets
160
161
Total assets
$ 5,470
$ 4,879
Liabilities and equity
Current liabilities:
Accounts payable
$ 530
$ 412
Accounts payable to aliates
24
149
Accrued expenses and other current liabilities
306
299
Operating lease current liabilities
21
Current maturities of long-term debt
6
5
Total current liabilities
887
865
Operating lease non-current liabilities
520
Revolving line of credit
117
700
Long-term debt, net
2,878
2,280
Advances from aliates
80
24
Deferred tax liability
90
103
Other non-current liabilities
119
123
Total liabilities
4,691
4,095
Commitments and contingencies
Equity:
Limited partners:
Common unitholders
 (82,749,333 units issued and outstanding as of June 30, 2019 and 82,665,057 units issued and
outstanding as of December 31, 2018)
779
784
Class C unitholders - held by subsidiaries
 (16,410,780 units issued and outstanding as of June 30, 2019 and December 31, 2018)
Total equity
779
784
Total liabilities and equity
$ 5,470
$ 4,879
5
SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
Three Months Ended June
30,
Six Months Ended June 30,
2019
2018
2019
2018
(in millions, except unit and per unit amounts)
Revenues:
Motor fuel sales
$ 4,366
$ 4,507
$ 7,949
$ 8,058
Non motor fuel sales
74
66
148
242
Lease income
35
34
70
56
Total revenues 4,475
4,607
8,167
8,356
Cost of sales and operating expenses:
Cost of sales
4,206
4,297
7,528
7,750
General and administrative
34
34
61
69
Other operating
73
86
157
184
Lease expense
16
19
30
34
Loss on disposal of assets and impairment charges
2
2
50
5
Depreciation, amortization and accretion
47
41
92
90
Total cost of sales and operating expenses 4,378
4,479
7,918
8,132
Operating income
97
128
249
224
Other expenses:
Interest expense, net 43 36 85 70
6
Loss on extinguishment of debt and other, net (6)
(3)
109
Income from continuing operations before income taxes 60
92
167
45
Income tax expense (benet) 5
(2)
3
29
Income from continuing operations 55
94
164
16
Loss from discontinued operations, net of income taxes
(26)
(263)
Net income (loss) and comprehensive income (loss) $ 55
$ 68
$ 164
$ (247)
Net income (loss) per common unit - basic:
Continuing operations - common units
$ 0.44
$ 0.91
$ 1.51
$ (0.29)
Discontinued operations - common units
0.00
(0.32)
0.00
(3.05)
Net income (loss) - common units
$ 0.44
$ 0.59
$ 1.51
$ (3.34)
Net income (loss) per common unit - diluted:
Continuing operations - common units
$ 0.43
$ 0.90
$ 1.50
$ (0.29)
Discontinued operations - common units
0.00
(0.32)
0.00
(3.05)
Net income (loss) - common units
$ 0.43
$ 0.58
$ 1.50
$ (3.34)
Weighted average limited partner units
outstanding:
Common units - basic
82,742,323
82,494,976
82,726,842
86,104,411
Common units - diluted
83,509,987
82,947,669
83,455,021
86,569,372
Cash distributions per unit
$ 0.8255
$ 0.8255
$ 1.6510
$ 1.6510
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 June 30, 2019 and 2018 and have been derived from our historical consolidated nancial statements.
7
Three Months Ended June 30,
2019
2018
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
$ 4,193
$ 173
$ 4,366
$ 4,304
$ 203
$ 4,507
Non motor fuel sales
16
58
74
15
51
66
Lease income
31
4
35
31
3
34
Total revenues $ 4,240
$ 235
$ 4,475
$ 4,350
$ 257
$ 4,607
Gross prot (1):
Motor fuel sales
$ 171
$ 19
$ 190
$ 204
$ 23
$ 227
Non motor fuel sales
13
31
44
18
31
49
Lease
31
4
35
31
3
34
Total gross prot $ 215
$ 54
$ 269
$ 253
$ 57
$ 310
Income (loss) from continuing
operations 39
16
55
101
(7)
94
Loss from discontinued operations,
net of taxes
(26)
(26)
Net income (loss) and
comprehensive income (loss) $ 39
$ 16
$ 55
$ 101
$ (33)
$ 68
Adjusted EBITDA (2) $ 119
$ 33
$ 152
$ 132
$ 8
$ 140
Distributable Cash Flow, as adjusted
(2)
$ 101
$ 106
Operating Data:
Motor fuel gallons sold
2,054
1,977
Motor fuel gross prot cents per
gallon (3)
9.1 ¢
9.9 ¢
The following table presents a reconciliation of Adjusted EBITDA to net income, and Adjusted EBITDA to
8
Distributable Cash Flow, as adjusted:
Three Months Ended June 30,
2019
2018
Change
(in millions)
Segment Adjusted EBITDA
Fuel distribution and marketing $ 119
$ 132
$ (13)
All other 33
8
25
Total 152
140
12
Depreciation, amortization and accretion (47)
(41)
(6)
Interest expense, net (43)
(36)
(7)
Non-cash compensation expense (3)
(3)
Loss on disposal of assets and impairment charges (4) (2)
(40)
38
Loss on extinguishment of debt and other, net 6
6
Unrealized loss on commodity derivatives (3)
(3)
Inventory adjustments 4
32
(28)
Other non-cash adjustments (4)
(3)
(1)
Income before income tax (expense) benet (4)
60
49
11
Income tax (expense) benet (4) (5)
19
(24)
Net income and comprehensive income $ 55
$ 68
$ (13)
Adjusted EBITDA
$ 152
$ 140
$ 12
Cash interest expense 41
34
7
Current income tax expense (benet) (4) 4
(5)
9
Transaction-related income taxes
10
(10)
Maintenance capital expenditures 6
2
4
Distributable Cash Flow
101 99 2
9
Transaction-related expenses (4)
7
(7)
Distributable Cash Flow, as adjusted $ 101
$ 106
$ (5)
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 (5)
1.17x
1.24x
(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
10
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 other non-cash adjustments and excludes the impact of inventory adjustments consistent with the denition of Adjusted EBITDA.
(4) Includes amounts from discontinued operations for the three months ended June 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.
View original content to download multimedia:http://www.prnewswire.com/news-releases/sunoco-lp-
announces-second-quarter-nancial-and-operating-results-300898337.html
SOURCE Sunoco LP
11