Sunoco LP Announces Fourth Quarter and Full Year Financial and Operating Results

DALLAS, Feb. 20, 2019 /PRNewswire/ -- Sunoco LP (SUN) ("SUN" or the "Partnership") today reported financial and operating results for the three- and twelve-month period ended December 31, 2018.

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For the three months ended December 31, 2018, net loss was $72 million versus net income of $232 million in the fourth quarter of 2017.  The net loss includes approximately $135 million of non-cash inventory adjustments.

Adjusted EBITDA⁽¹⁾ for the three months ended December 31, 2018 totaled $180 million compared with $158 million in the fourth quarter of 2017.  Results were supported by an increase in the Partnership's fuel volumes and strong wholesale fuel margins.

Distributable Cash Flow, as adjusted⁽¹⁾, for the quarter was $114 million, compared to $106 million a year ago. This year-over-year increase reflects higher Adjusted EBITDA and lower cash interest expense offset by higher current tax expense and maintenance capital expenditures.

Recent Accomplishments and Other Developments

• Reported current quarter cash coverage of 1.33 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 4.16 times at the end of the fourth quarter.
• Completed the acquisition of BRENCO Marketing Corporation's fuel distribution business for approximately $24 million plus working capital adjustments. The transaction closed on October 16, 2018.
• Completed the acquisition of the refined products terminalling business from American Midstream Partners, LP for approximately $125 million plus working capital adjustments. The transaction closed on December 20, 2018.
• Completed the acquisition of the wholesale fuel distribution business from Schmitt Sales, Inc. and acquired certain convenience store locations from Speedway LLC for approximately $50 million plus working capital adjustments. The Schmitt Sales transaction closed on December 18, 2018 and the Speedway acquisition closed on January 29, 2019.
• Executed a definitive asset purchase agreement with Attis Industries Inc. in January 2019 for the sale of Sunoco's ethanol plant, including the grain malting operation, in Fulton, New York for total consideration of $20 million in cash plus working capital adjustments.

Distribution

On January 25, 2019, the Board of Directors of SUN's general partner declared a distribution for the fourth quarter of 2018 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis.  The distribution was paid on February 14, 2019 to common unitholders of record on February 6, 2019.

Liquidity

At December 31, SUN had borrowings of $700 million against its revolving line of credit and other long-term debt of $2.3 billion.  In the fourth quarter of 2018, SUN did not issue any common units through its at-the-market equity program. 

Capital Spending

SUN's gross capital expenditures for the fourth quarter were $41 million, which included $26 million for growth capital and $15 million for maintenance capital. 

Gross capital expenditures for the full year 2018 were $103 million, which included $72 million for growth capital and $31 million for maintenance capital.

Excluding acquisitions, SUN expects to spend approximately $90 million on growth capital and approximately $45 million on maintenance capital for the full year 2019.

SUN's segment results and other supplementary data are provided after the financial tables below.

Earnings Conference Call

Sunoco LP management will hold a conference call on Thursday, February 21, at 9:30 a.m. CT (10:30 a.m. ET) to discuss fourth 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 (SUN) is a master limited partnership that distributes motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers and distributors located in more than 30 states. SUN's general partner is owned by Energy Transfer Operating, L.P., a subsidiary of Energy Transfer LP (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.

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