Sunoco LP Announces Fourth Quarter and Full Year 2019 Financial and Operating Results
DALLAS, Feb. 19, 2020 /PRNewswire/ -- 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.
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 -
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(unaudited)
December 31, December 31,
2019 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 758 784
(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)
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 Year Ended December 31,
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
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 All Total Fuel All Total
Distribution Other Distribution Other
and and
Marketing Marketing
(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)
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 profit
cents per gallon (3) (4) 9.9 ¢ 12.4 ¢
Year Ended December 31,
2019 2018
Fuel All Total Fuel All Total
Distribution Other Distribution Other
and and
Marketing Marketing
(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 ¢
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 Year Ended
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 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
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
-- 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.
(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.
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SOURCE Sunoco LP
