Sunoco LP Announces Fourth Quarter and Full Year 2019
Financial and Operating Results
- Generated full year 2019 net income of $313 million
- Full year 2019 Adjusted EBITDA of $665 million exceeded guidance
- Sold record fuel volumes of 8.2 billion gallons at 10.1 cents per gallon for the full year 2019
- Decreased operating expenses 13% for the full year 2019
DALLAS, Feb. 19, 2020 /PRNewswire/ -- Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported
nancial and operating results for the three- and twelve-month periods ended December 31, 2019.
For the three months ended December 31, 2019, net income was $83 million versus a net loss of $72 million in the
fourth quarter of 2018.
Adjusted EBITDA(1) for the quarter totaled $168 million compared with $180 million in the fourth quarter of 2018.
Distributable Cash Flow, as adjusted(1), for the quarter was $120 million, compared to $114 million a year ago.
For the twelve months ended December 31, 2019, net income was $313 million versus a net loss of $207 million in
2018.
Adjusted EBITDA(1) for the full year 2019 totaled $665 million, up 4% from $638 million a year ago. This year-over-
year increase reects a 4% increase in gallons to a record high 8.2 billion, an increase in lease gross prot and a
13% decline in operating expenses(2).
Distributable Cash Flow, as adjusted(1), for 2019 was $453 million, compared to $455 million a year ago.
Recent Accomplishments and Other Developments
Sold 2.1 billion gallons in the fourth quarter, up 3% from the fourth quarter of 2018. For the full year 2019,
SUN sold a record 8.2 billion gallons, up 4% from a year ago. On a weighted-average basis, fuel margin for all
gallons sold was 9.9 cents per gallon for the fourth quarter and 10.1 cents per gallon for the full year 2019.
Reported current quarter cash coverage of 1.39 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 4.61
times at the end of the fourth quarter.
Remained cost disciplined, with operating expenses(2) of $501 million for the full year 2019 and $119 million
in the fourth quarter, down 13% and 20% year over year, respectively.
Distribution
1
On January 27, 2020, the Board of Directors of SUN's general partner declared a distribution for the fourth 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 February 19, 2020 to common unitholders of record on February 7, 2020.
Liquidity
At December 31, 2019, SUN had borrowings of $162 million against its revolving line of credit and other long-term
debt of $2.9 billion.
Capital Spending and Other Investments
SUN's gross capital expenditures for the fourth quarter were $45 million, which included $28 million for growth
capital and $17 million for maintenance capital.
SUN spent $116 million on growth capital for the full year 2019, including $8million of growth capital toward the
J.C. Nolan joint venture with Energy Transfer. With an additional $45 million investment on the J.C. Nolan joint
venture, SUN's total investment in 2019 was $161 million.
SUN spent $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) Operating expenses include general and administrative, other operating and lease expenses.
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, February 20, 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 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).
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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:
Alexis Daniel, Manager – Communications
(214) 981-0739, alexis.daniel@sunoco.com
– Financial Schedules Follow –
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
December 31,
2019
December 31,
2018
3
2019
2018
Assets
Current assets:
Cash and cash equivalents $ 21
$ 56
Accounts receivable, net 399
374
Receivables from aliates 12
37
Inventories, net 419
374
Other current assets 73
64
Total current assets 924
905
Property and equipment 2,134
2,133
Accumulated depreciation (692)
(587)
Property and equipment, net 1,442
1,546
Other assets:
Finance lease right-of-use assets, net 29
Operating lease right-of-use assets, net 533
Goodwill 1,555
1,559
Intangible assets, net 646
708
Other noncurrent assets 188
161
Investment in unconsolidated aliate 121
Total assets
$ 5,438
$ 4,879
Liabilities and equity
Current liabilities:
Accounts payable $ 445
$ 412
Accounts payable to aliates 49
149
Accrued expenses and other current liabilities 219
299
Operating lease current liabilities 20
Current maturities of long-term debt 11
5
Total current liabilities 744
865
Operating lease non-current liabilities 530
4
Revolving line of credit 162
700
Long-term debt, net 2,898
2,280
Advances from aliates 140
24
Deferred tax liability 109
103
Other noncurrent liabilities 97
123
Total liabilities 4,680
4,095
Commitments and contingencies
Equity:
Limited partners:
Common unitholders
 (82,985,941 units issued and outstanding as of December 31, 2019 and
 82,665,057 units issued and outstanding as of December 31, 2018) 758
784
Class C unitholders - held by subsidiary
 (16,410,780 units issued and outstanding as of December 31, 2019 and
 December 31, 2018)
Total equity 758
784
Total liabilities and equity
$ 5,438
$ 4,879
SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
Three Months Ended
December 31,
Year Ended December 31,
2019
2018
2019
2018
(dollars in millions, except unit and per unit amounts)
Revenues:
Motor fuel sales $ 4,002
$ 3,784
$ 16,176
$ 16,504
Non motor fuel sales 61 54 278 360
5
Lease income 35
39
142
130
Total revenues 4,098
3,877
16,596
16,994
Cost of sales and operating expenses:
Cost of sales 3,813
3,694
15,380
15,872
General and administrative 35
38
136
141
Other operating 68
93
304
363
Lease expense 16
18
61
72
Loss on disposal of assets and impairment charges 22
22
68
19
Depreciation, amortization and accretion 46
50
183
182
Total cost of sales and operating expenses 4,000
3,915
16,132
16,649
Operating income (loss) 98
(38)
464
345
Other expenses (income):
Interest expense, net 43
39
173
144
Other expense (income), net
(3)
Equity in earnings of unconsolidated aliate (2)
(2)
Loss on extinguishment of debt and other, net
109
Income (loss) from continuing operations before
income taxes 57
(77)
296
92
Income tax expense (benet) (26)
(5)
(17)
34
Income (loss) from continuing operations 83
(72)
313
58
Loss from discontinued operations, net of income taxes
(265)
Net income (loss) and comprehensive income
(loss)
$ 83
$ (72)
$ 313
$ (207)
Net income (loss) per common unit - basic:
Continuing operations $ 0.76
$ (1.11)
$ 2.84
$ (0.25)
Discontinued operations
(3.14)
Net income (loss) $ 0.76
$ (1.11)
$ 2.84
$ (3.39)
Net income (loss) per common unit - diluted:
Continuing operations $ 0.75 $ (1.11) $ 2.82 $ (0.25)
6
Discontinued operations
(3.14)
Net income (loss) $ 0.75
$ (1.11)
$ 2.82
$ (3.39)
Weighted average limited partner units
outstanding:
Common units - basic 82,813,411
82,543,312
82,755,520
84,299,893
Common units - diluted 83,713,959
83,226,399
83,551,962
84,820,570
Cash distribution per unit $ 0.8255
$ 0.8255
$ 3.3020
$ 3.3020
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 by segment and accompanying footnotes set forth below are presented for the three
months and years ended December 31, 2019 and 2018 and have been derived from our historical consolidated
nancial statements.
For the Three Months Ended December31,
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
$ 3,846
$ 156
$ 4,002
$ 3,606
$ 178
$ 3,784
Non motor fuel
sales
13
48
61
7
47
54
Lease income
37
(2)
35
36
3
39
Total revenues
$ 3,896
$ 202
$ 4,098
$ 3,649
$ 228
$ 3,877
Gross prot (1):
7
Motor fuel sales
$ 193
$ 20
$ 213
$ 86
$ 31
$ 117
Non motor fuel
sales
13
24
37
5
22
27
Lease
37
(2)
35
36
3
39
Total gross prot
$ 243
$ 42
$ 285
$ 127
$ 56
$ 183
Net income (loss)
and comprehensive
income (loss) from
continuing
operations
57
26
83
(52)
(20)
(72)
Loss from
discontinued
operations, net of
taxes
Net income (loss)
and
comprehensive
income (loss)
$ 57
$ 26
$ 83
$ (52)
$ (20)
$ (72)
Adjusted EBITDA (2)
$ 147
$ 21
$ 168
$ 159
$ 21
$ 180
Operating data:
Motor fuel gallons
sold (3)
2,087
2,021
Motor fuel gross
prot cents per
gallon (3) (4)
9.9 ¢
12.4 ¢
Year Ended December 31,
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 $ 15,522 $ 654 $ 16,176 $ 15,466 $ 1,038 $ 16,504
8
Non motor fuel
sales
62
216
278
48
312
360
Lease income
131
11
142
118
12
130
Total revenues
$ 15,715
$ 881
$ 16,596
$ 15,632
$ 1,362
$ 16,994
Gross prot
(1):
Motor fuel sales
$ 817
$ 89
$ 906
$ 673
$ 123
$ 796
Non motor fuel
sales
53
115
168
40
156
196
Lease
131
11
142
118
12
130
Total gross prot
$ 1,001
$ 215
$ 1,216
$ 831
$ 291
$ 1,122
Net income (loss)
and
comprehensive
income (loss)
from continuing
operations
290
23
313
80
(22)
58
Loss from
discontinued
operations, net
of taxes
(265)
(265)
Net income
(loss) and
comprehensive
income (loss)
$ 290
$ 23
$ 313
$ 80
$ (287)
$ (207)
Adjusted EBITDA
(2)
$ 545
$ 120
$ 665
$ 554
$ 84
$ 638
Operating
data:
Motor fuel
gallons sold (3)
8,193
7,859
Motor fuel gross
prot cents per
gallon (3) (4)
10.1 ¢
11.4 ¢
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 and years ended December 31, 2019 and 2018:
Three Months Ended
D b 31
Year Ended
D b 31
9
December 31,
December 31,
2019
2018
2019
2018
(in millions)
(in millions)
Adjusted EBITDA:
Fuel Distribution and Marketing
$ 147
$ 159
$ 545
$ 554
All Other
21
21
120
84
Total Adjusted EBITDA
168
180
665
638
Depreciation, amortization and accretion
(46)
(50)
(183)
(182)
Interest expense, net (3)
(43)
(39)
(173)
(146)
Non-cash unit-based compensation expense (3)
(3)
(2)
(13)
(12)
Loss on disposal of assets and impairment charges (3)
(22)
(22)
(68)
(80)
Loss on extinguishment of debt and other, net
(129)
Unrealized gain (loss) on commodity derivatives (3)
1
(5)
5
(6)
Inventory adjustments (3)
8
(135)
79
(84)
Equity in earnings of unconsolidated aliate
2
2
Adjusted EBITDA related to unconsolidated aliate
(3)
(4)
Other non-cash adjustments
(5)
(4)
(14)
(14)
Income tax (expense) benet (3)
26
5
17
(192)
Net income (loss) and comprehensive income (loss)
$ 83
$ (72)
$ 313
$ (207)
Adjusted EBITDA (2)
$ 168
$ 180
$ 665
$ 638
Adjusted EBITDA related to unconsolidated aliate
3
4
Distributable cash ow from unconsolidated aliate
(3)
(4)
Cash interest expense (3)
41
39
166
142
Income tax expense (benet), current (3)
(41)
11
(22)
489
Transaction-related income taxes (5)
31
31
(470)
Maintenance capital expenditures (3)
17
15
40
31
Distributable Cash Flow
120
115
450
446
Transaction-related expense (3)
(1)
3
11
Series A Preferred distribution (2)
10
Distributable Cash Flow, as adjusted (2)
$ 120
$ 114
$ 453
$ 455
Distributions to Partners:
Limited Partners
$ 69
$ 68
$ 273
$ 272
General Partners
18
18
72
70
Total distributions to be paid to partners
$ 87
$ 86
$ 345
$ 342
Common Units outstanding - end of period
83.0
82.7
83.0
82.7
Distribution coverage ratio (6)
1.39
1.33
1.32
1.32
(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;
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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 amounts from discontinued operations for the year ended December 31, 2018.
(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.
(6) 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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