DALLAS, Nov. 6, 2019 /PRNewswire/— Sunoco LP (NYSE: SUN) (“SUN” or the “Partnership”) today reported financial and operating results for the three-month period ended September 30, 2019.

Net income for the quarter was $66 million versus net income of $112 million in the third quarter of 2018. 

Adjusted EBITDA(1) totaled $192 million compared with $208 million in the third quarter of 2018.  Distributable Cash Flow, as adjusted(1), was $133 million, compared to $149 million a year ago.   Net income, Adjusted EBITDA and Distributable Cash Flow, as adjusted, in 2018 included a one-time cash benefit of approximately $25 million related to a settlement with a fuel supplier.  Excluding the 2018 one-time cash benefit, the year-over-year increase in Adjusted EBITDA and Distributable Cash Flow was supported by growth in the Partnership’s fuel volumes to a record high 2.11 billion gallons combined with lower operating expenses(2).

Recent Accomplishments and Other Developments

  • Sold a record high 2.11 billion gallons in the third quarter, up 5% from the third quarter of 2018. On a weighted-average basis, fuel margin for all gallons sold was 11.6 cents per gallon.
  • Reported current quarter cash coverage of 1.55 times and trailing twelve months coverage of 1.30 times. SUN’s leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with its credit facility, was 4.51 times at the end of the third quarter.
  • Commissioned the J.C. Nolan diesel pipeline and completed the first deliveries in early August. The joint venture will continue to benefit Sunoco LP’s financial results while also further diversifying operations outside of fuel distribution.
  • Remained cost disciplined, with operating expenses(2) of $134 million in the third quarter, down 4% from the third quarter of 2018.

Distribution

On October 25, 2019, the Board of Directors of SUN’s general partner declared a distribution for the third 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 November 19, 2019 to common unitholders of record on November 5, 2019.

Liquidity

At September 30, 2019, SUN had borrowings of $154 million against its revolving line of credit and other long-term debt of $2.9 billion.  In the third quarter of 2019, SUN did not issue any common units through its at-the-market equity program. 

Capital Spending and Other Investments

SUN’s gross capital expenditures for the third quarter were $46 million, which included $33 million for growth capital and $13 million for maintenance capital. 

Excluding acquisitions, SUN expects to spend at least $115 million on growth capital for the full year 2019, including approximately $10 million of growth capital toward the pipeline joint venture with Energy Transfer.  With an additional $45 million investment on the pipeline joint venture, SUN expects total investment in 2019 to be approximately $160 million

SUN expects to spend approximately $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, November 7, at 9:30 a.m. CT (10:30 a.m. ET) to discuss third quarter 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 –

SUNOCO LP

CONSOLIDATED BALANCE SHEETS

(unaudited)



September 30,
2019


December 31,
2018


(in millions, except units)

Assets




Current assets:




Cash and cash equivalents

$

13



$

56


Accounts receivable, net

450



374


Receivables from affiliates

4



37


Inventories, net

422



374


Other current assets

86



64


Total current assets

975



905






Property and equipment

2,101



2,133


Accumulated depreciation

(663)



(587)


Property and equipment, net

1,438



1,546


Other assets:




Lease right-of-use assets, net

572




Goodwill

1,557



1,559






Intangible assets

915



915


Accumulated amortization

(249)



(207)


Intangible assets, net

666



708


Other non-current assets

177



161


Investment in unconsolidated affiliate

112




Total assets

$

5,497



$

4,879


Liabilities and equity




Current liabilities:




Accounts payable

$

456



$

412


Accounts payable to affiliates

70



149


Accrued expenses and other current liabilities

243



299


Operating lease current liabilities

21




Current maturities of long-term debt

13



5


Total current liabilities

803



865


Operating lease non-current liabilities

521




Revolving line of credit

154



700


Long-term debt, net

2,906



2,280


Advances from affiliates

141



24


Deferred tax liability

93



103


Other non-current liabilities

117



123


Total liabilities

4,735



4,095


Commitments and contingencies




Equity:




Limited partners:




Common unitholders (82,750,201 units issued and outstanding as of September 30, 2019 and 82,665,057 units issued and outstanding as of December 31, 2018)

762



784


Class C unitholders - held by subsidiaries (16,410,780 units issued and outstanding as of September 30, 2019 and December 31, 2018)




Total equity

762



784


Total liabilities and equity

$

5,497



$

4,879


 

SUNOCO LP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2019


2018


2019


2018


(in millions, except unit and per unit amounts)

Revenues:








Motor fuel sales

$

4,225



$

4,662



$

12,174



$

12,720


Non motor fuel sales

69



64



217



306


Lease income

37



35



107



91


Total revenues

4,331



4,761



12,498



13,117


Cost of sales and operating expenses:








Cost of sales

4,039



4,428



11,567



12,178


General and administrative

40



34



101



103


Other operating

79



86



236



270


Lease expense

15



20



45



54


Loss (gain) on disposal of assets and impairment charges

(4)



(8)



46



(3)


Depreciation, amortization and accretion

45



42



137



132


Total cost of sales and operating expenses

4,214



4,602



12,132



12,734


Operating income

117



159



366



383


Other expenses:








Interest expense, net

45



35



130



105


Loss on extinguishment of debt and other, net





(3)



109


Income from continuing operations before income taxes

72



124



239



169


Income tax expense

6



10



9



39


Income from continuing operations

66



114



230



130


Loss from discontinued operations, net of income taxes



(2)





(265)


Net income (loss) and comprehensive income (loss)

$

66



$

112



$

230



$

(135)










Net income (loss) per common unit - basic:








Continuing operations - common units

$

0.57



$

1.16



$

2.09



$

0.84


Discontinued operations - common units

0.00



(0.03)



0.00



(3.12)


Net income (loss) - common units

$

0.57



$

1.13



$

2.09



$

(2.28)


Net income (loss) per common unit - diluted:








Continuing operations - common units

$

0.57



$

1.15



$

2.07



$

0.83


Discontinued operations - common units

0.00



(0.03)



0.00



(3.12)


Net income (loss) - common units

$

0.57



$

1.12



$

2.07



$

(2.29)


Weighted average limited partner units outstanding:








Common units - basic

82,749,644



82,506,279



82,734,526



84,891,853


Common units - diluted

83,649,898



83,084,713



83,512,121



85,373,976










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. Our financial statements reflect two reportable segments, Fuel Distribution and Marketing and All Other.

The key operating metrics and accompanying footnotes set forth below are presented for the three months ended September 30, 2019 and 2018 and have been derived from our historical consolidated financial statements.


Three Months Ended September 30,


2019



2018


Fuel
Distribution
and
Marketing


All Other


Total



Fu

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