Sunoco LP Announces First Quarter 2021 Financial and
Operating Results and Development of Rened Products
Terminal in Brownsville, Texas
- Reports solid rst quarter results generating net income of $154 million, Adjusted EBITDA(1) of $157 million and
Distributable Cash Flow, as adjusted(1) of $108 million
- Rearms full-year 2021 Adjusted EBITDA(1)(2) guidance of $725 to $765 million
- Expands midstream footprint with development of a rened products terminal in Brownsville, Texas
DALLAS, May 6, 2021 /PRNewswire/ --Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported nancial
and operating results for the three-month period ended March 31, 2021.
The Partnership's solid rst quarter results demonstrate the durability of its business and management's capacity
to navigate dicult operating conditions as SUN faced the combined challenges in the quarter from persistently
rising commodity prices, ongoing impacts of COVID-19, and the eects of Winter Storm Uri.
For the three months ended March 31, 2021, net income was $154 million versus a net loss of $128 million in the
rst quarter of 2020.
Adjusted EBITDA(1) for the quarter was $157 million compared with $209 million in the rst quarter of 2020. The
decline in Adjusted EBITDA(1) reects lower reported fuel volume and margins partially oset by a decline in total
operating expenses(3).
Distributable Cash Flow, as adjusted(1), for the quarter was $108 million, compared to $159 million a year ago.
Volumes and Margins
The Partnership sold 1.76 billion gallons of fuel in the rst quarter of 2021 versus 1.90 billion in the rst quarter of
2020,a 7.5% decline. Fuel margin for all gallons sold was 10.3 cents per gallon for the quarter compared to 13.1
cents per gallon a year ago. Fuel margin for the rst quarter of 2021 included an $18.5 million annual make-up
payment under the fuel supply agreement with 7-Eleven, Inc. versus a $12.8 million annual make-up payment in
rst quarter of 2020. SUN expects volumes to continue to improve through the remainder of the year with
increased economic activity.
Brownsville, Texas Rened Products Terminal
During the quarter, the Partnership advanced its midstream diversication strategy with the development of a
rened products terminal at the Port of Brownsville. The greeneld terminal, with 560,000 barrels of storage, will
provide supply exibility to SUN's existing fuel distribution business in South Texas, and position SUN to sell into
the growing fuels export market to Mexico. SUN expects the terminal to be in service by the second quarter of
2022 with a total investment of approximately $55 million of which approximately $40 million will be invested in
2021.
Distribution and Coverage
On April 22, 2021, the Board of Directors of SUN's general partner declared a distribution for the rst quarter of
2021 of $0.8255 per unit, or $3.3020 per unit on an annualized basis. The distribution will be paid on May 19,
2021 to common unitholders of record on May 11, 2021. SUN's current quarter cash coverage was 1.25times and
trailing twelve months coverage was 1.35times.
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Liquidity and Leverage
At March 31, 2021, SUN had $381 million of borrowings against its revolving credit facility and other long-term
debt of $2.7 billion. The Partnership maintained ample liquidity of approximately $1.1billion at the end of the
quarter under its $1.5 billion revolving credit facility that matures in July 2023. SUN's leverage ratio of net debt to
Adjusted EBITDA(1), calculated in accordance with its credit facility, was 4.42times at the end of the rst quarter
compared to 4.39 times at the end of the rst quarter of 2020.
Capital Spending
SUN's total capital expenditures for the rst quarter were $18 million, which included $13 million for growth
capital and $5 million for maintenance capital. For the full-year 2021, SUN continues to expect maintenance
capital expenditures of approximately $45 million. With the addition of $40 million for the Brownsville terminal,
SUN now expects 2021 growth capital expenditures of $150 million, compared to prior guidance of at least $120
million.
2021 Business Outlook Rearmed
The Partnership continues to expect full-year 2021 Adjusted EBITDA(1)(2) of $725 to $765 million. SUN expects
2021 fuel volumes of 7.25 to 7.75 billion gallons, fuel margins of 11.0 to 12.0 cents per gallon, and operating
expenses(3) of $440 to $450 million.
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) A reconciliation of non-GAAP forward looking information to corresponding GAAP measures cannot be provided without
unreasonable eorts due to the inherent diculty in quantifying certain amounts due to a variety of factors, including the
unpredictability of commodity price movements and future charges or reversals outside the normal course of business
which may be signicant.
(3) Operating expenses include general and administrative, other operating and lease expenses.
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, May 6, at 9:00 a.m. CT (10:00 a.m. ET) to discuss
results and recent developments. To participate, dial 877-407-6184(toll free) or 201-389-0877approximately 10
minutes before the scheduled start time 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 Webcasts 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 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
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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
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, Strategy and Growth
(214) 840-5553, derek.rabe@sunoco.com
Media:
Alexis Daniel, Manager – Communications
(214) 981-0739, alexis.daniel@sunoco.com
– Financial Schedules Follow –
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(unaudited)
March 31,
2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents
$ 95
$ 97
Accounts receivable, net
410
295
Receivables from aliates
11
11
3
Inventories, net
430
382
Other current assets
54
62
Total current assets 1,000
847
Property and equipment 2,235
2,231
Accumulated depreciation (838)
(806)
Property and equipment, net
1,397
1,425
Other assets:
Finance lease right-of-use assets, net
13
3
Operating lease right-of-use assets, net
526
536
Goodwill
1,564
1,564
Intangible assets
894
894
Accumulated amortization
(320)
(306)
Intangible assets, net
574
588
Other noncurrent assets
172
168
Investment in unconsolidated aliate
134
136
Total assets
$ 5,380
$ 5,267
Liabilities and equity
Current liabilities:
Accounts payable
$ 427
$ 267
Accounts payable to aliates
62
79
Accrued expenses and other current liabilities
239
282
Operating lease current liabilities
19
19
Current maturities of long-term debt
7
6
Total current liabilities 754
653
Operating lease noncurrent liabilities 528
538
Revolving line of credit 381
Long-term debt, net 2,680
3,106
Advances from aliates 130
125
Deferred tax liability 103
104
Other noncurrent liabilities 106
109
Total liabilities 4,682
4,635
Commitments and contingencies
Equity:
Limited partners:
Common unitholders
(83,349,233 units issued and outstanding as of March 31, 2021 and
83,333,631 units issued and outstanding as of December 31, 2020)
698
632
Class C unitholders - held by subsidiaries
(16 410 780 i i d d di f M h 31 2021 d
4
(16,410,780 units issued and outstanding as of March 31, 2021 and
December 31, 2020)
Total equity 698
632
Total liabilities and equity
$ 5,380
$ 5,267
SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Dollars in millions, except per unit data)
(unaudited)
Three Months Ended March 31,
2021
2020
Revenues:
Motor fuel sales
$ 3,363
$ 3,166
Non motor fuel sales
73
71
Lease income
35
35
Total revenues 3,471
3,272
Cost of sales and operating expenses:
Cost of sales
3,120
3,164
General and administrative
24
34
Other operating
61
95
Lease expense
15
14
Loss on disposal of assets
2
Depreciation, amortization and accretion
47
45
Total cost of sales and operating expenses 3,267
3,354
Operating income (loss) 204
(82)
Other income (expense):
Interest expense, net
(41)
(44)
Equity in earnings of unconsolidated aliate
1
1
Loss on extinguishment of debt
(7)
Income (loss) before income taxes 157
(125)
Income tax expense
3
3
Net income (loss) and comprehensive income (loss)
$ 154
$ (128)
Net income (loss) per common unit:
5
Basic
$ 1.61
$ (1.78)
Diluted
$ 1.60
$ (1.78)
Weighted average common units outstanding:
Basic
83,342,828
83,013,768
Diluted
84,141,261
83,013,768
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, 2021 and 2020 and have been derived from our historical consolidated nancial
statements.
Three Months Ended March 31,
2021
2020
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
$ 3,252
$ 111
$ 3,363
$ 3,039
$ 127
$ 3,166
Non motor fuel sales
14
59
73
11
60
71
Lease income
33
2
35
30
5
35
Total revenues $ 3,299
$ 172
$ 3,471
$ 3,080
$ 192
$ 3,272
Gross prot (1):
Motor fuel sales
$ 273
$ 8
$ 281
$ (6)
$ 27
$ 21
Non motor fuel sales
11
24
35
11
41
52
Lease
33
2
35
30
5
35
Total gross prot $ 317
$ 34
$ 351
$ 35
$ 73
$ 108
Net income (loss) and comprehensive income (loss) $ 162
$ (8)
$ 154
$ (157)
$ 29
$ (128)
Adjusted EBITDA (2) $ 153
$ 4
$ 157
$ 160
$ 49
$ 209
Operating Data:
Total motor fuel gallons sold 1,756 1,898
6
Motor fuel gross prot cents per gallon (3)
10.3 ¢
13.1 ¢
The following table presents a reconciliation of Adjusted EBITDA to net income and Adjusted EBITDA to
Distributable Cash Flow, as adjusted, for the three months ended March 31, 2021 and 2020:
Three Months Ended March 31,
2021
2020
(in millions)
Adjusted EBITDA
Fuel distribution and marketing
$ 153
$ 160
All other
4
49
Total Adjusted EBITDA
157
209
Depreciation, amortization and accretion
(47)
(45)
Interest expense, net
(41)
(44)
Non-cash unit-based compensation expense
(4)
(4)
Loss on disposal of assets
(2)
Loss on extinguishment of debt
(7)
Unrealized gain (loss) on commodity derivatives
5
(6)
Inventory adjustments
100
(227)
Equity in earnings of unconsolidated aliate
1
1
Adjusted EBITDA related to unconsolidated aliate
(2)
(2)
Other non-cash adjustments
(5)
(5)
Income tax expense
(3)
(3)
Net income (loss) and comprehensive income (loss)
$ 154
$ (128)
Adjusted EBITDA (2) $ 157
$ 209
Adjusted EBITDA related to unconsolidated aliate
(2)
(2)
Distributable cash ow from unconsolidated aliate
2
2
Cash interest expense
40
43
Current income tax expense
4
2
Maintenance capital expenditures
5
5
Distributable Cash Flow 108
159
Transaction-related expenses
Distributable Cash Flow, as adjusted (2)
$ 108
$ 159
Distributions to Partners:
7
Limited Partners $ 69
$ 69
General Partners 18
18
Total distributions to be paid to partners
$ 87
$ 87
Common Units outstanding - end of period 83.3
83.0
Distribution coverage ratio (4)
1.25x
1.84x
___________________________
(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, 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 senior notes;
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
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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. Inventory adjustments that are
excluded from the calculation of Adjusted EBITDA represent changes in lower of cost or market reserves on the
Partnership's inventory. These amounts are unrealized valuation adjustments applied to fuel volumes remaining
in inventory at the end of the period.
(3) 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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