Sunoco LP Announces Second Quarter 2020 Financial and
Operating Results
- Generated Net Income of $157 million, Adjusted EBITDA(1) of $182 million and Distributable Cash Flow(1), as
adjusted of $122 million
- Current quarter cash coverage of 1.41 times and trailing twelve months coverage of 1.55 times with leverage of
4.07 times at the end of the second quarter
- Expects full year 2020 Adjusted EBITDA to be above $700 million, ahead of original 2020 guidance
DALLAS, Aug. 5, 2020 /PRNewswire/ -- Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported nancial
and operating results for the three-month period ended June 30, 2020.
Financial and Operational Highlights
For the three months ended June 30, 2020, net income was $157 million versus a net income of $55 million in the
second quarter of 2019. The net income in the second quarter of 2020 includes the benet of $90 million of non-
cash inventory adjustments resulting from the increase in the price of RBOB.
Adjusted EBITDA(1) for the quarter totaled $182 million compared with $152 million in the second quarter of
2019. This year-over-year increase reects higher reported fuel margins of 13.5cents per gallon and lower total
operating expenses of $97 million as a result of cost reduction measures. 
Distributable Cash Flow, as adjusted(1), for the quarter was $122 million, compared to $101 million a year ago.
The Partnership sold 1.5 billion gallons in the second quarter, down 26.3% from the second quarter of 2019. On a
weighted-average basis, fuel margin for all gallons sold was 13.5 cents per gallon for the second quarter
compared to 9.1 cents per gallon a year ago.
Distribution and Coverage
On July 28, 2020, the Board of Directors of SUN's general partner declared a distribution for the second quarter of
2020 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. The distribution will be
paid on August 19, 2020 to common unitholders of record on August 7, 2020. Current quarter cash coverage was
1.41times and trailing twelve months coverage was 1.55times.
Liquidity and Leverage
At June 30, 2020, SUN had borrowings of $158 million against its revolving credit facility and other long-term debt
of $2.9 billion. The Partnership maintained ample liquidity of $1.3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 4.07times at the end of
the second quarter.
Capital Spending
SUN's gross capital expenditures for the second quarter were $18 million, which included $14 million for growth
capital and $4 million for maintenance capital.
2020 Business Outlook
The Partnership expects full year 2020 adjusted EBITDA to be above $700 million. SUN maintains its previously
issued guidance for 2020 growth capital expenditures of approximately $75 million, maintenance capital
expenditures of $30 million and operating expenses(2) in a range of $460 to $475 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) Operating expenses include general and administrative, other operating and lease expenses.
1
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, August 6, 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 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 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, 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)
June 30,
2020
December 31,
2019
Assets
Current assets:
Cash and cash equivalents $ 33 $ 21
2
Accounts receivable, net 270
399
Receivables from aliates 6
12
Inventories, net 283
419
Other current assets 50
73
Total current assets 642
924
Property and equipment 2,188
2,134
Accumulated depreciation (749)
(692)
Property and equipment, net 1,439
1,442
Other assets:
Finance lease right-of-use assets, net 26
29
Operating lease right-of-use assets, net 522
533
Goodwill 1,555
1,555
Intangible assets 906
906
Accumulated amortization (289)
(260)
Intangible assets, net 617
646
Other noncurrent assets 184
188
Investment in unconsolidated aliate 136
121
Total assets
$ 5,121
$ 5,438
Liabilities and equity
Current liabilities:
Accounts payable $ 296
$ 445
Accounts payable to aliates 29
49
Accrued expenses and other current liabilities 242
219
Operating lease current liabilities 19
20
Current maturities of long-term debt 12
11
Total current liabilities 598
744
Operating lease noncurrent liabilities 524
530
Revolving line of credit 158
162
Long-term debt, net 2,894
2,898
Advances from aliates 138
140
Deferred tax liability 94
109
Other noncurrent liabilities 97
97
Total liabilities 4,503
4,680
Commitments and contingencies
Equity:
Limited partners:
Common unitholders
 (83,040,781 units issued and outstanding as of June 30, 2020 and
 82,985,941 units issued and outstanding as of December 31, 2019) 618
758
Class C unitholders - held by subsidiaries
 (16,410,780 units issued and outstanding as of June 30, 2020 and
 December 31, 2019)
Total equity 618
758
Total liabilities and equity
$ 5,121
$ 5,438
3
SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in millions, except per unit data)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Revenues:
Motor fuel sales
$ 1,992
$ 4,366
$ 5,158
$ 7,949
Non motor fuel sales
54
74
125
148
Lease income
34
35
69
70
Total revenues 2,080
4,475
5,352
8,167
Cost of sales and operating expenses:
Cost of sales
1,722
4,206
4,886
7,528
General and administrative
25
34
59
61
Other operating
56
73
151
157
Lease expense
16
16
30
30
Loss on disposal of assets and impairment charges
6
2
8
50
Depreciation, amortization and accretion
47
47
92
92
Total cost of sales and operating expenses 1,872
4,378
5,226
7,918
Operating income 208
97
126
249
Other income (expense):
Interest expense, net (44)
(43)
(88)
(85)
Other income (expense), net
6
3
Equity in earnings of unconsolidated aliate 1
2
Income before income taxes 165
60
40
167
Income tax expense 8
5
11
3
Net income and comprehensive income
$ 157
$ 55
$ 29
$ 164
Net income (loss) per common unit:
Common units - basic
$ 1.65
$ 0.44
$ (0.12)
$ 1.51
Common units - diluted
$ 1.64
$ 0.43
$ (0.12)
$ 1.50
Weighted average common units outstanding:
Common units - basic
83,030,286
82,742,323
83,022,027
82,726,842
Common units - diluted
83,598,730
83,509,987
83,022,027
83,455,021
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.
The key operating metrics by segment and accompanying footnotes set forth below are presented for the three
months ended June 30, 2020 and 2019 and have been derived from our historical consolidated nancial
4
statements.
Three Months Ended June 30,
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
$ 1,930
$ 62
$ 1,992
$ 4,193
$ 173
$ 4,366
Non motor fuel sales
20
34
54
16
58
74
Lease income
29
5
34
31
4
35
Total revenues $ 1,979
$ 101
$ 2,080
$ 4,240
$ 235
$ 4,475
Gross prot (1):
Motor fuel sales
$ 275
$ 19
$ 294
$ 171
$ 19
$ 190
Non motor fuel sales
13
17
30
13
31
44
Lease
29
5
34
31
4
35
Total gross prot $ 317
$ 41
$ 358
$ 215
$ 54
$ 269
Net income (loss) and comprehensive income (loss) $ 161
$ (4)
$ 157
$ 39
$ 16
$ 55
Adjusted EBITDA (2) $ 160
$ 22
$ 182
$ 119
$ 33
$ 152
Operating Data:
Total motor fuel gallons sold
1,515
2,054
Motor fuel gross prot cents per gallon (3)
13.5 ¢
9.1 ¢
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 June 30, 2020 and 2019:
Three Months Ended June 30,
2020
2019
(in millions)
Adjusted EBITDA
Fuel distribution and marketing $ 160
$ 119
All other 22
33
Total Adjusted EBITDA 182
152
Depreciation, amortization and accretion (47)
(47)
Interest expense, net (44)
(43)
Non-cash unit-based compensation expense (3)
(3)
Loss on disposal of assets and impairment charges (6)
(2)
Unrealized loss on commodity derivatives
(3)
Inventory adjustments 90
4
Equity in earnings of unconsolidated aliate 1
Adjusted EBITDA related to unconsolidated aliate (3)
5
Other non-cash adjustments (5)
2
Income tax expense (8)
(5)
Net income and comprehensive income
$ 157
$ 55
Adjusted EBITDA (2) $ 182
$ 152
Adjusted EBITDA related to unconsolidated aliate 3
Distributable cash ow from unconsolidated aliate (3)
Cash interest expense 42
41
Current income tax expense 14
4
Maintenance capital expenditures 4
6
Distributable Cash Flow 122
101
Transaction-related expenses
Distributable Cash Flow, as adjusted (2)
$ 122
$ 101
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)
1.41x
1.17x
___________________________
(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
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. 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) 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.
6
View original content to download multimedia:http://www.prnewswire.com/news-releases/sunoco-lp-
announces-second-quarter-2020-nancial-and-operating-results-301106935.html
SOURCE Sunoco LP
7