SUN

SUNOCO LP

Energy | Mid Cap

$1.60

EPS Forecast

$6,452

Revenue Forecast

The company already released most recent quarter's earnings. We will publish our AI's next quarter's forecast around 2024-12-31
EX-99.1 2 ex991suner20200219.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

sunocolpa04.jpg
News Release
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, February 19, 2020 - Sunoco LP (NYSE: SUN) (“SUN” or the “Partnership”) today reported financial 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 reflects a 4% increase in gallons to a record high 8.2 billion, an increase in lease gross profit 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
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.

1

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 financial tables below.
(1)
Adjusted EBITDA and Distributable Cash Flow, as adjusted, are non-GAAP financial 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 refined 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 press release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the Partnership’s Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.
The information contained in this press release is available on our website at www.SunocoLP.com
Qualified Notice
This release is intended to be a qualified 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 effectively 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 effective 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 -


2

SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
 
December 31,
2019
 
December 31,
2018
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
21

 
$
56

Accounts receivable, net
399

 
374

Receivables from affiliates
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 affiliate
121

 
—

Total assets
$
5,438

 
$
4,879

Liabilities and equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
445

 
$
412

Accounts payable to affiliates
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

 
—

Revolving line of credit
162

 
700

Long-term debt, net
2,898

 
2,280

Advances from affiliates
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



3

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

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 affiliate
(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 (benefit)
(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
)
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



4

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 financial statements reflect 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 financial 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 profit 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 profit (1):
 
 
 
 
 
 
 
 
 
 
 
 
 
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 profit
 
$
243

 
$
42

 
$
285

 
 
$
127

 
$
56

 
$
183

Net income (loss) and comprehensive income (loss) from continuing operations
 
57

 
26

 
83

 
 
(52
)
 
(20
)
 
(72
)
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 profit cents per gallon (3) (4)
 
 
 
 
 

9.9
¢
 
 
 
 
 
 

12.4
¢

5

 
 
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 profit per gallon)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Motor fuel sales
 
$
15,522

 
$
654

 
$
16,176

 
 
$
15,466

 
$
1,038

 
$
16,504

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 profit (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 profit
 
$
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 profit cents per gallon (3) (4)
 
 
 
 
 

10.1
¢
 
 
 
 
 
 

11.4
¢


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 and years ended December 31, 2019 and 2018:
 
 
Three Months Ended December 31,
 
 
Year Ended
 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 affiliate
 
2

 
—

 
 
2

 
—

Adjusted EBITDA related to unconsolidated affiliate
 
(3
)
 
—

 
 
(4
)
 
—

Other non-cash adjustments
 
(5
)
 
(4
)
 
 
(14
)
 
(14
)
Income tax (expense) benefit (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 affiliate
 
3

 
—

 
 
4

 
—

Distributable cash flow from unconsolidated affiliate
 
(3
)
 
—

 
 
(4
)
 
—

Cash interest expense (3)
 
41

 
39

 
 
166

 
142

Income tax expense (benefit), 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
)
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 defined 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 reflected 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 define 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 financial performance, ability to make distributions

7

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 financial 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 flows 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 reflect our total cash expenditures, or future requirements for capital expenditures or contractual commitments;
•they do not reflect changes in, or cash requirements for, working capital;
•
they do not reflect 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 reflect 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 reflects amounts for the unconsolidated affiliate based on the same recognition and measurement methods used to record equity in earnings of unconsolidated affiliate. Adjusted EBITDA related to unconsolidated affiliate excludes the same items with respect to the unconsolidated affiliate 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 affiliate, such exclusion should not be understood to imply that we have control over the operations and resulting revenues and expenses of such affiliate. We do not control our unconsolidated affiliate; therefore, we do not control the earnings or cash flows of such affiliate. The use of Adjusted EBITDA or Adjusted EBITDA related to unconsolidated affiliate 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 definition 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.


8