Sunoco LP Announces Third Quarter 2020 Financial and
Operating Results
- Generated Net Income of $100 million, Adjusted EBITDA(1) of $189 million and Distributable Cash Flow(1), as
adjusted of $139 million
- Current quarter cash coverage of 1.61 times and trailing twelve months coverage of 1.56 times with leverage of
3.93 times at the end of the third quarter
- Expects full year 2020 Adjusted EBITDA to be at or above $740 million
DALLAS, Nov. 4, 2020 /PRNewswire/ -- Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today reported
nancial and operating results for the three-month period ended September 30, 2020.
Financial and Operational Highlights
For the three months ended September 30, 2020, net income was $100 million versus net income of $66 million in
the third quarter of 2019.
Adjusted EBITDA(1) for the quarter totaled $189 million compared with $192 million in the third quarter of 2019.
This year-over-year decrease reects lower volumes mostly oset by higher reported fuel margins of 12.1cents
per gallon and lower total operating expenses of $112 million as a result of cost reduction measures.
Distributable Cash Flow, as adjusted(1), for the quarter was $139 million, compared to $133 million a year ago.
The Partnership sold 1.9 billion gallons in the third quarter, down 12% from the third quarter of 2019. On a
weighted-average basis, fuel margin for all gallons sold was 12.1 cents per gallon for the third quarter compared
to 11.6 cents per gallon a year ago.
Distribution and Coverage
On October 26, 2020, the Board of Directors of SUN's general partner declared a distribution for the third 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 November 19, 2020 to common unitholders of record on November 6, 2020. Current quarter cash
coverage was 1.61times and trailing twelve months coverage was 1.56times.
Liquidity and Leverage
At September 30, 2020, SUN had borrowings of $87 million against its revolving credit facility and other long-term
debt of $2.9 billion. The Partnership maintained ample liquidity of $1.4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 3.93times at the
end of the third quarter compared to 4.51 times at the end of the third quarter of 2019.
Capital Spending
SUN's gross capital expenditures for the third quarter were $20 million, which included $14 million for growth
capital and $6 million for maintenance capital.
2020 Business Outlook
The Partnership expects full year 2020 adjusted EBITDA to be at or above $740 million. SUN expects 2020 growth
capital expenditures of at least $75 million, maintenance capital expenditures of $30 million and operating
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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.
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, November 5, 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
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
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(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)
September 30,
2020
December 31,
2019
Assets
Current assets:
Cash and cash equivalents
$ 63
$ 21
Accounts receivable, net
252
399
Receivables from aliates
6
12
Inventories, net
327
419
Other current assets
39
73
Total current assets 687
924
Property and equipment 2,192
2,134
Accumulated depreciation (776)
(692)
Property and equipment, net
1,416
1,442
Other assets:
Finance lease right-of-use assets, net
3
29
Operating lease right-of-use assets, net
527
533
Goodwill
1,555
1,555
Intangible assets
900
906
Accumulated amortization
(298)
(260)
Intangible assets, net
602
646
196 188
3
Other noncurrent assets
Investment in unconsolidated aliate
137
121
Total assets
$ 5,123
$ 5,438
Liabilities and equity
Current liabilities:
Accounts payable
$ 286
$ 445
Accounts payable to aliates
124
49
Accrued expenses and other current liabilities
225
219
Operating lease current liabilities
19
20
Current maturities of long-term debt
6
11
Total current liabilities 660
744
Operating lease noncurrent liabilities 528
530
Revolving line of credit 87
162
Long-term debt, net 2,877
2,898
Advances from aliates 135
140
Deferred tax liability 96
109
Other noncurrent liabilities 105
97
Total liabilities 4,488
4,680
Commitments and contingencies
Equity:
Limited partners:
Common unitholders
 (83,089,063 units issued and outstanding as of September30, 2020 and
 82,985,941 units issued and outstanding as of December31, 2019)
635
758
Class C unitholders - held by subsidiaries
 (16,410,780 units issued and outstanding as of September30, 2020 and
 December31, 2019)
Total equity 635
758
Total liabilities and equity
$ 5,123
$ 5,438
SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in millions, except per unit data)
(unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2020 2019 2020 2019
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Revenues:
Motor fuel sales
$ 2,711
$ 4,225
$ 7,869
$ 12,174
Non motor fuel sales
60
69
185
217
Lease income
34
37
103
107
Total revenues 2,805
4,331
8,157
12,498
Cost of sales and operating expenses:
Cost of sales
2,497
4,039
7,383
11,567
General and administrative
28
40
87
101
Other operating
68
79
219
236
Lease expense
16
15
46
45
Loss (gain) on disposal of assets and impairment charges
(1)
(4)
7
46
Depreciation, amortization and accretion
50
45
142
137
Total cost of sales and operating expenses 2,658
4,214
7,884
12,132
Operating income 147
117
273
366
Other income (expense):
Interest expense, net
(43)
(45)
(131)
(130)
Other income (expense), net
3
Equity in earnings of unconsolidated aliate
1
3
Income before income taxes 105
72
145
239
Income tax expense
5
6
16
9
Net income and comprehensive income
$ 100
$ 66
$ 129
$ 230
Net income per common unit:
Common units - basic
$ 0.97
$ 0.57
$ 0.85
$ 2.09
Common units - diluted
$ 0.96
$ 0.57
$ 0.84
$ 2.07
Weighted average common units outstanding:
Common units - basic
83,056,365
82,749,644
83,033,556
82,734,526
Common units - diluted
83,770,034
83,649,898
83,668,835
83,512,121
Cash distributions per unit $ 0.8255
$ 0.8255
$ 2.4765
$ 2.4765
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 September 30, 2020 and 2019 and have been derived from our historical consolidated nancial
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statements.
Three Months Ended September 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
$ 2,600
$ 111
$ 2,711
$ 4,041
$ 184
$ 4,225
Non motor fuel sales
14
46
60
14
55
69
Lease income
30
4
34
31
6
37
Total revenues $ 2,644
$ 161
$ 2,805
$ 4,086
$ 245
$ 4,331
Gross prot (1):
Motor fuel sales
$ 224
$ 13
$ 237
$ 195
$ 22
$ 217
Non motor fuel sales
11
26
37
10
28
38
Lease
30
4
34
31
6
37
Total gross prot $ 265
$ 43
$ 308
$ 236
$ 56
$ 292
Net income (loss) and comprehensive income (loss) $ 107
$ (7)
$ 100
$ 57
$ 9
$ 66
Adjusted EBITDA (2) $ 177
$ 12
$ 189
$ 161
$ 31
$ 192
Operating Data:
Total motor fuel gallons sold
1,853
2,110
Motor fuel gross prot cents per gallon (3)
12.1 ¢
11.6 ¢
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 September 30, 2020 and 2019:
Three Months Ended September 30,
2020
2019
(in millions)
Adjusted EBITDA
Fuel distribution and marketing
$ 177
$ 161
12 31
6
All other
Total Adjusted EBITDA
189
192
Depreciation, amortization and accretion
(50)
(45)
Interest expense, net
(43)
(45)
Non-cash unit-based compensation expense
(4)
(4)
Gain on disposal of assets and impairment charges
1
4
Unrealized gain on commodity derivatives
6
1
Inventory adjustments
11
(26)
Equity in earnings of unconsolidated aliate
1
Adjusted EBITDA related to unconsolidated aliate
(2)
(1)
Other non-cash adjustments
(4)
(4)
Income tax expense
(5)
(6)
Net income and comprehensive income
$ 100
$ 66
Adjusted EBITDA (2) $ 189
$ 192
Adjusted EBITDA related to unconsolidated aliate
2
1
Distributable cash ow from unconsolidated aliate
(2)
(1)
Cash interest expense
41
43
Current income tax expense
3
3
Maintenance capital expenditures
6
13
Distributable Cash Flow 139
133
Transaction-related expenses
Distributable Cash Flow, as adjusted (2)
$ 139
$ 133
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 83.1
82.8
Distribution coverage ratio (4)
1.61x
1.55x
___________________________
(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.
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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) 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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