Sunoco LP Announces First Quarter 2020 Financial and
Operating Results
DALLAS, May 11, 2020 /PRNewswire/ --Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported
nancial and operating results for the three-month period ended March 31, 2020.
"Our employees have been working on the front lines to continue to serve our country, communities and
customers," said Joe Kim, CEO of Sunoco LP. "Our best wishes go out to those aected by COVID-19 and I would
like to personally thank our employees and fuel distribution partners for their dedication during this
unprecedented time. We have built a resilient business model to withstand various headwinds. We started the
year on solid footing and delivered strong rst quarter results even with the onset of the pandemic in March. We
will continue to take proactive steps to manage through the crisis and ensure a stable, long-term future for
Sunoco."
Financial and Operational Highlights
For the three months ended March 31, 2020, net loss was $128 million versus a net income of $109 million in the
rst quarter of 2019. The net loss includes approximately $227 million of non-cash inventory adjustments
resulting from the decline in the price of RBOB.
Adjusted EBITDA(1) for the quarter totaled $209 million compared with $153 million in the rst quarter of 2019.
This year-over-year increase reects higher reported fuel margins of 13.1 cents per gallon driven by a decline in
the price of RBOB and the receipt of a $13 million annual make-up payment under the fuel supply agreement with
7-Eleven, Inc. Adjusted EBITDA also included an increase in non motor fuel sales gross prot related to an $18
million favorable legal settlement and an increase in other operating expense related to current expected credit
losses of approximately $16 million.
Distributable Cash Flow, as adjusted(1), for the quarter was $159 million, compared to $99 million a year ago.
The Partnership sold 1.9 billion gallons in the rst quarter, down 2% from the rst quarter of 2019. On a
weighted-average basis, fuel margin for all gallons sold was 13.1 cents per gallon for the rst quarter compared to
9.9 cents per gallon a year ago.
Distribution and Coverage
On April 2, 2020, the Board of Directors of SUN's general partner declared a distribution for the rst quarter of
2020 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. The distribution will be
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paid on May 19, 2020 to common unitholders of record on May 7, 2020. Current quarter cash coverage was 1.84
times and trailing twelve months coverage was 1.49 times.
Liquidity and Leverage
At March 31, 2020, SUN had borrowings of $265 million against its revolving credit facility and other long-term
debt of $2.9 billion. The Partnership maintained ample liquidity of $1.2 billion at the end of the quarter under its
$1.5 billion revolving credit facility that matures in July 2023 and has no debt maturities prior to 2023. SUN's
leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with its credit facility, was 4.39 times at the
end of the rst quarter.
Capital Spending
SUN's gross capital expenditures for the rst quarter were $41 million, which included $36 million for growth
capital and $5 million for maintenance capital.
2020 Business Outlook
The Partnership revised its 2020 capital guidance by reducing full year growth capital expenditures to
approximately $75 million and maintenance capital expenditures to $30 million. SUN also began eorts in the
second quarter to reduce total operating expenses(2) by $55 to $70 million over the remainder of the year. SUN
lowered 2020 full year operating expense guidance to a range of $460 to $475 million. The combination of
unprecedented declines in fuel demand and a volatile commodity price environment will aect the Partnership's
outlook for full year 2020 fuel volumes and margins. As a result, SUN is withdrawing its previous guidance on
2020 fuel volume, margin and adjusted EBITDA.
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 Tuesday, May 12, at 8:00 a.m. CT (9:00 a.m. ET) to discuss
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
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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 news 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. In addition to the risks and uncertainties previously disclosed, the Partnership has also been, or
may in the future be, impacted by new or heightened risks related to the COVID-19 pandemic and the recent
sharp decline in commodity prices, and we cannot predict the length and ultimate impact of those risks. 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
(Dollars in millions)
(unaudited)
March 31,
2020
December 31,
2019
Assets
Current assets:
Cash and cash equivalents
$ 31
$ 21
Accounts receivable, net
162
399
Receivables from aliates
11
12
Inventories, net
182
419
Other current assets
83
73
Total current assets
469
924
Property and equipment
2,170
2,134
Accumulated depreciation
(720)
(692)
Property and equipment, net
1,450
1,442
Other assets:
Finance lease right-of-use assets, net
27
29
Operating lease right-of-use assets, net
537
533
Goodwill
1,555
1,555
Intangible assets
905
906
Accumulated amortization
(274)
(260)
Intangible assets, net
631
646
Other noncurrent assets 173 188
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Investment in unconsolidated aliate
135
121
Total assets
$ 4,977
$ 5,438
Liabilities and equity
Current liabilities:
Accounts payable
$ 162
$ 445
Accounts payable to aliates
27
49
Accrued expenses and other current liabilities
171
219
Operating lease current liabilities
20
20
Current maturities of long-term debt
12
11
Total current liabilities
392
744
Operating lease noncurrent liabilities
535
530
Revolving line of credit
265
162
Long-term debt, net
2,896
2,898
Advances from aliates
139
140
Deferred tax liability
109
109
Other noncurrent liabilities
95
97
Total liabilities
4,431
4,680
Equity:
Limited partners:
Common unitholders
 (83,017,163 units issued and outstanding as of March 31, 2020 and
 82,985,941 units issued and outstanding as of December 31, 2019)
546
758
Class C unitholders - held by subsidiaries
 (16,410,780 units issued and outstanding as of March 31, 2020 and
 December 31, 2019)
Total equity
546
758
Total liabilities and equity
$ 4,977
$ 5,438
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SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Dollars in millions, except per unit data)
(unaudited)
Three Months Ended March 31,
2020
2019
Revenues:
Motor fuel sales
$ 3,166
$ 3,583
Non motor fuel sales
71
74
Lease income
35
35
Total revenues
3,272
3,692
Cost of sales and operating expenses:
Cost of sales
3,164
3,322
General and administrative
34
27
Other operating
95
84
Lease expense
14
14
Loss on disposal of assets and impairment charges
2
48
Depreciation, amortization and accretion
45
45
Total cost of sales and operating expenses
3,354
3,540
Operating income (loss)
(82)
152
Other income (expense):
Interest expense, net
(44)
(42)
Other income (expense), net
(3)
Equity in earnings of unconsolidated aliate
1
Income (loss) before income taxes
(125)
107
Income tax expense (benet)
3
(2)
Net income (loss) and comprehensive income (loss)
$ (128)
$ 109
Net income (loss) per common unit:
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Common units - basic
$ (1.78)
$ 1.08
Common units - diluted
$ (1.78)
$ 1.07
Weighted average common units outstanding:
Common units - basic
83,013,768
82,711,188
Common units - diluted
83,013,768
83,380,167
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.
The key operating metrics by segment and accompanying footnotes set forth below are presented for the three
months ended March 31, 2020 and 2019 and have been derived from our historical consolidated nancial
statements.
Three Months Ended March 31,
2020
2019
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
$ 3,039
$ 127
$ 3,166
$ 3,442
$ 141
$ 3,583
Non motor fuel
sales
11
60
71
19
55
74
Lease income
30
5
35
32
3
35
Total revenues $ 3,080
$ 192
$ 3,272
$ 3,493
$ 199
$ 3,692
Gross prot (1):
$ (6) $ 27 $ 21 $ 258 $ 27 $ 285
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Motor fuel sales
Non motor fuel
sales
11
41
52
17
33
50
Lease
30
5
35
32
3
35
Total gross prot $ 35
$ 73
$ 108
$ 307
$ 63
$ 370
Net income (loss)
and comprehensive
income (loss) $ (157)
$ 29
$ (128)
$ 137
$ (28)
$ 109
Adjusted EBITDA (2) $ 160
$ 49
$ 209
$ 118
$ 35
$ 153
Operating Data:
Total motor fuel
gallons sold
1,898
1,941
Motor fuel gross
prot cents per
gallon (3)
13.1 ¢
9.9 ¢
The following table presents a reconciliation of Adjusted EBITDA to net income (loss) and Adjusted EBITDA to
Distributable Cash Flow, as adjusted, for the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
2020
2019
(in millions)
Adjusted EBITDA:
Fuel distribution and marketing $ 160
$ 118
All other 49
35
Total Adjusted EBITDA 209
153
Depreciation, amortization and accretion (45)
(45)
Interest expense, net (44)
(42)
Non-cash unit-based compensation expense (4)
(3)
Loss on disposal of assets and impairment charges (2)
(48)
Unrealized gain (loss) on commodity derivatives (6)
6
Inventory adjustments (227)
93
Equity in earnings of unconsolidated aliate 1
8
Adjusted EBITDA related to unconsolidated aliate (2)
Other non-cash adjustments (5)
(7)
Income tax (expense) benet (3)
2
Net income (loss) and comprehensive income (loss)
$ (128)
$ 109
Adjusted EBITDA (2) $ 209
$ 153
Adjusted EBITDA related to unconsolidated aliate 2
Distributable cash ow from unconsolidated aliate (2)
Cash interest expense 43
40
Current income tax expense 2
12
Maintenance capital expenditures 5
4
Distributable Cash Flow 159
97
Transaction-related expenses
2
Distributable Cash Flow, as adjusted (2)
$ 159
$ 99
Distributions to Partners:
Limited Partners $ 69
$ 68
General Partners 18
18
Total distributions to be paid to partners
$ 87
$ 86
Common Units outstanding - end of period 83.0
82.7
Distribution coverage ratio (4)
1.84x
1.15x
____________________
(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:
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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.
(4) 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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