Delaware | 30-0740483 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
8111 Westchester Drive, Suite 400 Dallas, TX 75225 (Address of principal executive offices, including zip codes) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Exhibit Description | ||
99.1 |
SUNOCO LP | ||
By: | Sunoco GP LLC, its general partner | |
Date: August 8, 2018 | By: | /s/ Camilla A. Harris |
Camilla A. Harris | ||
Vice President, Controller and Principal Accounting Officer |
![]() | News Release |
• | Generated second quarter Net Income of $68 million, Adjusted EBITDA(1) of $140 million and Distributable Cash Flow(1), as adjusted, of $106 million |
◦ | Net income and Adjusted EBITDA results include approximately $7 million of transaction costs |
• | Current quarter cash coverage of 1.24 times and trailing twelve months coverage of 1.14 times with leverage of 4.52 times at the end of the second quarter |
• | Completed the acquisitions of the wholesale fuel distribution businesses of Sandford Oil in August and Superior Plus Corporation in April |
◦ | Both acquisitions are immediately accretive to Distributable Cash Flow, as adjusted |
• | Amended and extended $1.5 billion revolving credit facility |
• | Completed the acquisition of the wholesale fuels business of Sandford Oil for approximately $66 million plus working capital adjustments. The acquired business distributes approximately 115 million gallons of fuel annually to exploration, drilling and oil field services customers, primarily in Central and West Texas and Oklahoma. The transaction closed on August 1, 2018. |
• | Completed the previously announced acquisition of the wholesale fuels business and terminal assets from Superior Plus Corporation for approximately $40 million plus working capital adjustments. The wholesale fuels business sells approximately 200 million gallons of fuel annually through multiple channels, and the acquired terminals have a combined 17 tanks with 429 thousand barrels of storage capacity. The transaction closed on April 25, 2018. |
• | Amended and extended the $1.5 billion revolving credit facility. The revolving credit facility size remains at $1.5 billion, and includes an accordion feature that provides flexibility to increase the facility up to $750 million, subject to additional lender commitments. The facility matures in July 2023. Outstanding borrowings under the facility bear interest, at SUN’s option, at either the base rate plus a margin ranging from 0.25% to 1.25% or LIBOR plus a margin ranging from 1.25% to 2.25%. |
(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. |
June 30, 2018 | December 31, 2017 | |||||||
(in millions, except units) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 19 | $ | 28 | ||||
Accounts receivable, net | 529 | 541 | ||||||
Receivables from affiliates | 163 | 155 | ||||||
Inventories, net | 456 | 426 | ||||||
Other current assets | 62 | 81 | ||||||
Assets held for sale | 6 | 3,313 | ||||||
Total current assets | 1,235 | 4,544 | ||||||
Property and equipment, net | 1,520 | 1,557 | ||||||
Other assets: | ||||||||
Goodwill | 1,469 | 1,430 | ||||||
Intangible assets, net | 659 | 768 | ||||||
Other noncurrent assets | 123 | 45 | ||||||
Total assets | $ | 5,006 | $ | 8,344 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 439 | $ | 559 | ||||
Accounts payable to affiliates | 167 | 206 | ||||||
Accrued expenses and other current liabilities | 544 | 368 | ||||||
Current maturities of long-term debt | 5 | 6 | ||||||
Liabilities associated with assets held for sale | — | 75 | ||||||
Total current liabilities | 1,155 | 1,214 | ||||||
Revolving line of credit | 320 | 765 | ||||||
Long-term debt, net | 2,282 | 3,519 | ||||||
Advances from affiliates | 85 | 85 | ||||||
Deferred tax liability | 112 | 389 | ||||||
Other noncurrent liabilities | 136 | 125 | ||||||
Total liabilities | 4,090 | 6,097 | ||||||
Commitments and contingencies (Note 14) | ||||||||
Equity: | ||||||||
Limited partners: | ||||||||
Series A Preferred unitholder - affiliated (no units issued and outstanding as of June 30, 2018 and 12,000,000 units issued and outstanding as of December 31, 2017) | — | 300 | ||||||
Common unitholders (82,498,849 units issued and outstanding as of June 30, 2018 and 99,667,999 units issued and outstanding as of December 31, 2017) | 916 | 1,947 | ||||||
Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of June 30, 2018 and December 31, 2017) | — | — | ||||||
Total equity | 916 | 2,247 | ||||||
Total liabilities and equity | $ | 5,006 | $ | 8,344 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions, except unit and per unit amounts) | |||||||||||||||
Revenues: | |||||||||||||||
Motor fuel sales | $ | 4,507 | $ | 2,685 | $ | 8,058 | $ | 5,303 | |||||||
Rental income | 34 | 22 | 56 | 44 | |||||||||||
Other | 66 | 185 | 242 | 353 | |||||||||||
Total revenues | 4,607 | 2,892 | 8,356 | 5,700 | |||||||||||
Cost of sales: | |||||||||||||||
Motor fuel cost of sales | 4,280 | 2,530 | 7,626 | 4,990 | |||||||||||
Other | 17 | 103 | 124 | 195 | |||||||||||
Total cost of sales | 4,297 | 2,633 | 7,750 | 5,185 | |||||||||||
Gross profit | 310 | 259 | 606 | 515 | |||||||||||
Operating expenses: | |||||||||||||||
General and administrative | 34 | 36 | 69 | 68 | |||||||||||
Other operating | 86 | 93 | 184 | 185 | |||||||||||
Rent | 19 | 22 | 34 | 42 | |||||||||||
Loss on disposal of assets and impairment charges | 2 | 92 | 5 | 94 | |||||||||||
Depreciation, amortization and accretion | 41 | 36 | 90 | 90 | |||||||||||
Total operating expenses | 182 | 279 | 382 | 479 | |||||||||||
Operating income (loss) | 128 | (20 | ) | 224 | 36 | ||||||||||
Other expenses: | |||||||||||||||
Interest expense, net | 36 | 54 | 70 | 112 | |||||||||||
Loss on extinguishment of debt and other | — | — | 109 | — | |||||||||||
Income (loss) from continuing operations before income taxes | 92 | (74 | ) | 45 | (76 | ) | |||||||||
Income tax expense (benefit) | (2 | ) | (45 | ) | 29 | (59 | ) | ||||||||
Income (loss) from continuing operations | 94 | (29 | ) | 16 | (17 | ) | |||||||||
Loss from discontinued operations, net of income taxes | (26 | ) | (193 | ) | (263 | ) | (204 | ) | |||||||
Net income (loss) and comprehensive income (loss) | $ | 68 | $ | (222 | ) | $ | (247 | ) | $ | (221 | ) | ||||
Net income (loss) per limited partner unit - basic: | |||||||||||||||
Continuing operations - common units | $ | 0.91 | $ | (0.58 | ) | $ | (0.29 | ) | $ | (0.70 | ) | ||||
Discontinued operations - common units | (0.32 | ) | (1.94 | ) | (3.05 | ) | (2.07 | ) | |||||||
Net income (loss) - common units | $ | 0.59 | $ | (2.52 | ) | $ | (3.34 | ) | $ | (2.77 | ) | ||||
Net income (loss) per limited partner unit - diluted: | |||||||||||||||
Continuing operations - common units | $ | 0.90 | $ | (0.59 | ) | $ | (0.29 | ) | $ | (0.70 | ) | ||||
Discontinued operations - common units | (0.32 | ) | (1.94 | ) | (3.05 | ) | (2.07 | ) | |||||||
Net income (loss) - common units | $ | 0.58 | $ | (2.53 | ) | $ | (3.34 | ) | $ | (2.77 | ) | ||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common units - basic | 82,494,976 | 99,466,424 | 86,104,411 | 99,040,383 | |||||||||||
Common units - diluted | 82,947,669 | 99,900,007 | 86,569,372 | 99,306,045 | |||||||||||
Cash distributions per unit | $ | 0.8255 | $ | 0.8255 | $ | 1.6510 | $ | 1.6510 |
For the Three Months Ended June 30, | ||||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||
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 | $ | 4,304 | $ | 203 | $ | 4,507 | $ | 2,287 | $ | 398 | $ | 2,685 | ||||||||||||
Rental income | 31 | 3 | 34 | 19 | 3 | 22 | ||||||||||||||||||
Other | 15 | 51 | 66 | 12 | 173 | 185 | ||||||||||||||||||
Total revenues | $ | 4,350 | $ | 257 | $ | 4,607 | $ | 2,318 | $ | 574 | $ | 2,892 | ||||||||||||
Gross profit: | ||||||||||||||||||||||||
Motor fuel sales | $ | 204 | $ | 23 | $ | 227 | $ | 102 | $ | 53 | $ | 155 | ||||||||||||
Rental | 31 | 3 | 34 | 19 | 3 | 22 | ||||||||||||||||||
Other | 18 | 31 | 49 | 8 | 74 | 82 | ||||||||||||||||||
Total gross profit | $ | 253 | $ | 57 | $ | 310 | $ | 129 | $ | 130 | $ | 259 | ||||||||||||
Income (loss) from continuing operations | 101 | (7 | ) | 94 | 5 | (34 | ) | (29 | ) | |||||||||||||||
Loss from discontinued operations, net of taxes | — | (26 | ) | (26 | ) | — | (193 | ) | (193 | ) | ||||||||||||||
Net income (loss) and comprehensive income (loss) | $ | 101 | $ | (33 | ) | $ | 68 | $ | 5 | $ | (227 | ) | $ | (222 | ) | |||||||||
Adjusted EBITDA (2) | $ | 132 | $ | 8 | $ | 140 | $ | 93 | $ | 127 | $ | 220 | ||||||||||||
Distributable Cash Flow, as adjusted (2) | $ | 106 | $ | 158 | ||||||||||||||||||||
Operating Data: | ||||||||||||||||||||||||
Motor fuel gallons sold (3) | 1,977 | 2,024 | ||||||||||||||||||||||
Motor fuel gross profit cents per gallon (1) (3) | 9.9 | ¢ | 16.2 | ¢ |
Three Months Ended June 30, | |||||||||||
2018 | 2017 | Change | |||||||||
(in millions) | |||||||||||
Segment Adjusted EBITDA | |||||||||||
Fuel distribution and marketing | $ | 132 | $ | 93 | $ | 39 | |||||
All other | 8 | 127 | (119 | ) | |||||||
Total | 140 | 220 | (80 | ) | |||||||
Depreciation, amortization and accretion (3) | (41 | ) | (39 | ) | (2 | ) | |||||
Interest expense, net (3) | (36 | ) | (58 | ) | 22 | ||||||
Non-cash compensation expense (3) | (3 | ) | (5 | ) | 2 | ||||||
Loss on disposal of assets and impairment charges (3) | (40 | ) | (326 | ) | 286 | ||||||
Unrealized loss on commodity derivatives (3) | — | (5 | ) | 5 | |||||||
Inventory fair value adjustments (3) | 32 | (32 | ) | 64 | |||||||
Other non-cash adjustments | (3 | ) | — | (3 | ) | ||||||
Income (loss) before income tax (expense) benefit (3) | 49 | (245 | ) | 294 | |||||||
Income tax benefit (3) | 19 | 23 | (4 | ) | |||||||
Net income (loss) and comprehensive income (loss) | $ | 68 | $ | (222 | ) | $ | 290 | ||||
Adjusted EBITDA | 140 | 220 | (80 | ) | |||||||
Cash interest expense (3) | 34 | 53 | (19 | ) | |||||||
Current income tax expense (benefit) (3) | (5 | ) | 2 | (7 | ) | ||||||
Transaction-related income taxes (4) | 10 | — | 10 | ||||||||
Maintenance capital expenditures (3) | 2 | 7 | (5 | ) | |||||||
Distributable Cash Flow | $ | 99 | $ | 158 | $ | (59 | ) | ||||
Transaction-related expenses (3) | 7 | 8 | (1 | ) | |||||||
Series A Preferred distribution | — | (8 | ) | 8 | |||||||
Distributable Cash Flow, as adjusted | $ | 106 | $ | 158 | $ | (52 | ) |
• | 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. |
• | 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. |
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