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

      Conference Call Scheduled for 9:30 a.m. CT (10:30 a.m. ET) on Thursday, February 22

      Sunoco LP logo

      News provided by

      Sunoco LP

      Feb 21, 2018, 06:38 ET

      Share this article

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      DALLAS, Feb. 21, 2018 /PRNewswire/ --

      • Closed on strategic divestiture of convenience stores to 7-Eleven, Inc. and completed refinancing and equity repurchase initiatives
        • Reduced debt by over $2 billion
        • Refinanced $2.2 billion of senior notes
        • Repurchased over 17 million common limited partner units
        • Redeemed $300 million of Series A Preferred units
      • Maintained quarterly distribution of 82.55 cents and reported current quarter cash coverage of 1.03 times
        • Cash coverage of 1.15 times for the trailing twelve months
      • Generated fourth quarter Net Income of $232 million, Adjusted EBITDA(1) of $158 million and Distributable Cash Flow(1), as adjusted, of $106 million
        • Net income and Adjusted EBITDA results include approximately $25 million of transaction costs related to the retail divestiture

      Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today announced financial and operating results for the three- and twelve-month period ended December 31, 2017.

      Revenue totaled $3.0 billion, an increase of 4.8 percent, compared to $2.8 billion in the fourth quarter of 2016. The increase was the result of the average selling price of fuel being 25 cents per gallon higher than last year.

      Total gross profit decreased to $277 million, compared to $296 million in the fourth quarter of 2016, as a result of lower motor fuel gross profits.

      Income from continuing operations was $221 million, including $17 million of intangible impairment charges, versus a loss of $122 million in the fourth quarter of 2016, which included $227 million of goodwill impairment charges.  

      Income from discontinued operations, net of income taxes, was $11 million, including $23 million of goodwill impairment charges, versus a loss from discontinued operations, net of income taxes, of $463 million in the fourth quarter of 2016, which included $446 million of goodwill and intangibles impairment charges.

      Net income was $232 million, or $2.01 per diluted unit, versus a net loss of $585 million, or ($6.32) per diluted unit, in the fourth quarter of 2016.

      Adjusted EBITDA for the quarter totaled $158 million, compared with $154 million in the fourth quarter of 2016.

      Distributable Cash Flow, as adjusted, was $106 million, compared to $63 million a year ago.  This year-over-year increase reflects higher Adjusted EBITDA, decreased maintenance capital spend and a cash tax benefit compared to a cash tax expense a year ago.

      On a weighted-average basis, fuel margin for all gallons sold was 15.3 cents per gallon, compared to 14.3 cents per gallon in the fourth quarter of 2016.  The 1.0 cent per gallon increase was attributable to higher margins in the wholesale segment.

      Net income for the wholesale segment was $47 million compared to $63 million a year ago.  Adjusted EBITDA was $90 million, versus $78 million in the fourth quarter of last year.  Total wholesale gallons sold were 1,346 million, compared to 1,359 million in the fourth quarter of 2016, a decrease of 1.0 percent.  The Partnership earned 11.1 cents per gallon on these volumes, compared to 9.0 cents per gallon a year earlier.

      Net income for the retail segment was $185 million compared to a net loss of $648 million a year ago.  Adjusted EBITDA was $68 million, versus $76 million in the fourth quarter of last year.  Total retail gallons sold were flat with a year ago at 626 million gallons.  The Partnership earned 24.2 cents per gallon on these volumes, compared to 25.7 cents per gallon a year earlier.

      Total merchandise sales increased by 0.5 percent from a year ago to $568 million(2), reflecting an increase in merchandise and restaurant sales across the Texas oil producing regions.  Merchandise sales contributed $173 million of gross profit(3) with a retail merchandise margin of 30.6 percent, an increase of 0.7 percentage points from the fourth quarter of 2016.

      Same-store merchandise sales decreased by 0.8 percent and same store gallons decreased by 1.4 percent during the fourth quarter, reflecting weakness across the East Coast.  In the Texas oil producing regions, same-store merchandise sales increased by 11.2 percent, and same-store gallons increased 4.8 percent.

      SUN's recent accomplishments include the following:

      • Closed the strategic divestiture of convenience stores in the continental United States to 7-Eleven, Inc. on January 23, 2018 for gross proceeds of approximately $3.2 billion
      • Completed the following refinancing and equity repurchase initiatives:
        • Closed the private offering of $2.2 billion of new senior notes on January 23, 2018, comprised of $1.0 billion in aggregate principal amount of 4.875% senior notes due 2023, $800 million in aggregate principal amount of 5.500% senior notes due 2026 and $400 million in aggregate principal amount of 5.875% senior notes due 2028.  Proceeds from this offering were used to redeem in full amounts owed under existing senior notes
        • Repaid in full and terminated the term loan agreement and paid down all outstanding amounts owed under the revolving credit facility
        • Redeemed $300 million of Series A Preferred Units held by Energy Transfer Equity for an aggregate redemption amount of approximately $313 million
        • Repurchased 17,286,859 Sunoco common units owned by Energy Transfer Partners for aggregate cash consideration of approximately $540 million at a 10-day volume weighted average price of $31.2376 per unit
      • Entered into a commission agent arrangement for the 207 West Texas sites on December 5, 2017 with conversion expected to occur in the first quarter of 2018

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

      FY 2017 Compared to FY 2016

      Revenue for the full year 2017 totaled $11.7 billion, a 17.4 percent increase compared to full year 2016.  Gross profit for this period decreased 4.2 percent year-over-year to $1.1 billion.

      Income from continuing operations was $326 million for the full year 2017 compared to $56 million in 2016. General and administrative expenses decreased $15 million from 2016 to $140 million.  Other operating expenses increased $1 million from 2016 to $375 million and rent expenses were flat at $81 million.

      Loss from discontinued operations, net of income taxes, was $177 million compared to a loss from discontinued operations, net of income taxes, of $462 million in the full year 2016.

      Net income attributable to partners for the full year 2017 totaled $149 million compared to a net loss attributable to partners of $406 million a year ago. Adjusted EBITDA attributable to partners was $732 million, compared to $665 million for the 2016 period, and distributable cash flow, as adjusted was $473 million, versus $390 million for 2016.

      Wholesale gallons sold to third parties increased by 2.5 percent to 5.4 billion gallons. Retail gallons sold increased by 0.4 percent to 2.5 billion gallons.  On a weighted-average basis, fuel margin for all gallons sold increased to 15.2 cents per gallon for the full year 2017, versus 14.4 cents per gallon in the full year 2016.

      Total merchandise sales increased by 2.7 percent from full year 2016 to $2.3 billion(4).  Merchandise sales contributed $737 million of gross profit(5) with a retail merchandise margin of 31.6 percent, 0.1 percent increase from full year 2016.

      Distribution

      On January 24, 2018, the Board of Directors of SUN's general partner declared a distribution for the fourth quarter of 2017 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis.  The distribution was paid on February 14 to unitholders of record on February 6.

      SUN's distribution coverage ratio for the fourth quarter was 1.03 times. The distribution coverage ratio on a trailing 12-month basis was 1.15 times.

      Liquidity

      At December 31, SUN had borrowings against its revolving line of credit of $765 million and other long-term debt of $3.6 billion.  Availability on the revolving credit facility after borrowings and letters of credit commitments was $726 million.  In the fourth quarter of 2017, SUN did not issue any common units through its at-the-market equity program.  The leverage ratio of debt to Adjusted EBITDA, calculated in accordance with SUN's credit facility, was 5.58 times at the end of the fourth quarter.  

      (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)

      Includes $426 million in merchandise sales from discontinued operations.

      (3)

      Includes $128 million in merchandise gross profit from discontinued operations.

      (4)

      Includes $1.8 billion in merchandise sales from discontinued operations.

      (5)

      Includes $552 million in merchandise gross profit from discontinued operations.

      Earnings Conference Call

      Sunoco LP management will hold a conference call on Thursday, February 22, 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 (NYSE: SUN) is a master limited partnership that distributes motor fuel to approximately 9,200 convenience stores, independent dealers, commercial customers and distributors located in more than 30 states. SUN's general partner is owned by Energy Transfer Equity, L.P. (NYSE: ETE). 

      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, Senior Director – Investor Relations and Treasury
      (214) 840-5660, [email protected]

      Derek Rabe, CFA, Senior Analyst – Investor Relations and Finance
      (214) 840-5553, [email protected]

      Media:

      Alyson Gomez, Director – Communications
      (214) 840-5641, [email protected]

      Jeamy Molina, Senior Manager – PR & Communications
      (214) 840-5594, [email protected]

      – Financial Schedules Follow –

      SUNOCO LP

      CONSOLIDATED BALANCE SHEETS

      (unaudited)



      December 31,
      2017


      December 31,
       2016


      (in millions, except units)

      Assets




      Current assets:




      Cash and cash equivalents

      $

      28



      $

      103


      Accounts receivable, net

      541



      539


      Receivables from affiliates

      155



      3


      Inventories, net

      426



      423


      Other current assets

      81



      73


      Assets held for sale

      3,313



      177


      Total current assets

      4,544



      1,318


      Property and equipment, net

      1,557



      1,584


      Other assets:




      Goodwill

      1,430



      1,550


      Intangible assets, net

      768



      775


      Other noncurrent assets

      45



      63


      Assets held for sale

      —



      3,411


      Total assets

      $

      8,344



      $

      8,701


      Liabilities and equity




      Current liabilities:




      Accounts payable

      $

      559



      $

      616


      Accounts payable to affiliates

      206



      109


      Accrued expenses and other current liabilities

      368



      372


      Current maturities of long-term debt

      6



      5


      Liabilities associated with assets held for sale

      75



      —


      Total current liabilities

      1,214



      1,102


      Revolving line of credit

      765



      1,000


      Long-term debt, net

      3,519



      3,509


      Advances from affiliates

      85



      87


      Deferred tax liability

      389



      643


      Other noncurrent liabilities

      125



      116


      Liabilities associated with assets held for sale

      —



      48


      Total liabilities

      6,097



      6,505


      Commitments and contingencies (Note 13)




      Equity:




      Limited partners:




      Series A Preferred unitholders - affiliated (12,000,000 units issued and outstanding as of December 31, 2017 and no units issued and outstanding as of December 31, 2016)

      300



      —


      Common unitholders (99,667,999 units issued and outstanding as of December 31, 2017 and 98,181,046 units issued and outstanding as of December 31, 2016)

      1,947



      2,196


      Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of December 31, 2017 and December 31, 2016)

      —



      —


      Total equity

      2,247



      2,196


      Total liabilities and equity

      $

      8,344



      $

      8,701



      SUNOCO LP

      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

      (unaudited)



      Year Ended December 31,


      2017


      2016


      2015


      (dollars in millions, except unit and per unit amounts)

      Revenues:






      Retail motor fuel

      $

      1,577



      $

      1,338



      $

      1,540


      Wholesale motor fuel sales to third parties

      9,278



      7,812



      10,104


      Wholesale motor fuel sales to affiliates

      55



      62



      20


      Merchandise

      571



      541



      544


      Rental income

      89



      88



      81


      Other

      153



      145



      141


      Total revenues

      11,723



      9,986



      12,430


      Cost of sales:






      Retail motor fuel cost of sales

      1,420



      1,175



      1,340


      Wholesale motor fuel cost of sales

      8,798



      7,278



      9,740


      Merchandise cost of sales

      386



      363



      365


      Other

      11



      14



      5


      Total cost of sales

      10,615



      8,830



      11,450


      Gross profit

      1,108



      1,156



      980


      Operating expenses:






      General and administrative

      140



      155



      126


      Other operating

      375



      374



      372


      Rent

      81



      81



      79


      Loss on disposal of assets and impairment charge

      114



      225



      1


      Depreciation, amortization and accretion

      169



      176



      150


      Total operating expenses

      879



      1,011



      728


      Operating income

      229



      145



      252


      Interest expense, net

      209



      161



      67


      Income (loss) from continuing operations before income taxes

      20



      (16)



      185


      Income tax expense (benefit)

      (306)



      (72)



      29


      Income from continuing operations

      326



      56



      156


      Income (loss) from discontinued operations, net of income taxes

      (177)



      (462)



      38


      Net income (loss) and comprehensive income (loss)

      149



      (406)



      194


      Less: Net income and comprehensive income attributable to noncontrolling interest

      —



      —



      4


      Less: Preacquisition income allocated to general partner

      —



      —



      103


      Net income (loss) and comprehensive income (loss) attributable to partners

      $

      149



      $

      (406)



      $

      87




      Year Ended December 31,
       2017


      Year Ended December 31,
       2016


      Year Ended December 31,
       2015


      (dollars in millions, except unit and per unit amounts)

      Net income (loss) per limited partner unit - basic:






      Continuing operations - common units

      $

      2.13



      $

      (0.32)



      $

      0.91


      Discontinued operations - common units

      (1.78)



      (4.94)



      0.20


      Net income (loss) - common units

      $

      0.35



      $

      (5.26)



      $

      1.11








      Continuing operations - subordinated units

      $

      —



      $

      —



      $

      1.17


      Discontinued operations - subordinated units

      —



      —



      0.23


      Net income - subordinated units

      $

      —



      $

      —



      $

      1.40








      Net income (loss) per limited partner unit - diluted:






      Continuing operations - common units

      $

      2.12



      $

      (0.32)



      $

      0.91


      Discontinued operations - common units

      (1.78)



      (4.94)



      0.20


      Net income (loss) - common units

      $

      0.34



      $

      (5.26)



      $

      1.11








      Continuing operations - subordinated units

      $

      —



      $

      —



      $

      1.17


      Discontinued operations - subordinated units

      —



      —



      0.23


      Net income - subordinated units

      $

      —



      $

      —



      $

      1.40








      Weighted average limited partner units outstanding:






      Common units - basic

      99,270,120



      93,575,530



      40,253,913


      Common units - diluted

      99,728,354



      93,603,835



      40,275,651


      Subordinated units - affiliated (basic and diluted)

      —



      —



      10,010,333








      Cash distribution per unit

      $

      3.30



      $

      3.29



      $

      2.89


      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. We operate our business in two primary operating segments, wholesale and retail, both of which are included as reportable segments.

      Key operating metrics set forth below are presented as of and for the years and three months ended December 31, 2017 and 2016 and have been derived from our historical consolidated financial statements.

      The accompanying footnotes to the following four key operating metrics tables can be found immediately preceding our capital spending discussion.


      Year Ended December 31,


      2017



      2016


      Wholesale


      Retail


      Total



      Wholesale


      Retail


      Total


      (dollars and gallons in millions, except gross profit per gallon)

      Revenues:













      Retail motor fuel

      $

      —



      $

      1,577



      $

      1,577




      $

      —



      $

      1,338



      $

      1,338


      Wholesale motor fuel sales to third parties

      9,278



      —



      9,278




      7,812



      —



      7,812


      Wholesale motor fuel sale to affiliates

      55



      —



      55




      62



      —



      62


      Merchandise

      —



      571



      571




      —



      541



      541


      Rental income

      77



      12



      89




      76



      12



      88


      Other

      50



      103



      153




      45



      100



      145


      Total revenues

      $

      9,460



      $

      2,263



      $

      11,723




      $

      7,995



      $

      1,991



      $

      9,986


      Gross profit:













      Retail motor fuel

      $

      —



      $

      157



      $

      157




      $

      —



      $

      163



      $

      163


      Wholesale motor fuel

      535



      —



      535




      596



      —



      596


      Merchandise

      —



      185



      185




      —



      178



      178


      Rental and other

      116



      115



      231




      110



      109



      219


      Total gross profit

      $

      651



      $

      457



      $

      1,108




      $

      706



      $

      450



      $

      1,156


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

      167



      159



      326




      252



      (196)



      56


      Net loss and comprehensive loss from discontinued operations

      —



      (177)



      (177)




      —



      (462)



      (462)


      Net income (loss) and comprehensive income (loss)

      $

      167



      $

      (18)



      $

      149




      $

      252



      $

      (658)



      $

      (406)


      Net income (loss) and comprehensive income (loss) attributable to limited partners

      $

      167



      $

      (18)



      $

      149




      $

      252



      $

      (658)



      $

      (406)


      Adjusted EBITDA attributable to partners (2)

      $

      346



      $

      386



      $

      732




      $

      320



      $

      345



      $

      665


      Distributable cash flow attributable to partners, as adjusted (2)





      $

      473








      $

      390


      Operating Data:













      Total motor fuel gallons sold:













      Retail (3)



      2,526



      2,526






      2,517



      2,517


      Wholesale

      5,421





      5,421




      5,288





      5,288


      Motor fuel gross profit cents per gallon (1):













      Retail (3)



      25.5¢



      25.5¢






      24.0¢



      24.0¢


      Wholesale

      10.5¢





      10.5¢




      9.8¢





      9.8¢


      Volume-weighted average for all gallons (3)





      15.2¢








      14.4¢


      Retail merchandise margin (3)



      31.6

      %







      31.5

      %



      The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable cash flow:


      Year Ended December 31,


      2017



      2016


      Wholesale


      Retail


      Total



      Wholesale


      Retail


      Total


      (in millions)

      Net income (loss) and comprehensive income (loss)

      $

      167



      $

      (18)



      $

      149




      $

      252



      $

      (658)



      $

      (406)


      Depreciation, amortization and accretion (3)

      118



      85



      203




      94



      225



      319


      Interest expense, net (3)

      88



      157



      245




      59



      130



      189


      Income tax expense (benefit) (3)

      (10)



      (248)



      (258)




      5



      (36)



      (31)


      EBITDA

      $

      363



      $

      (24)



      $

      339




      $

      410



      $

      (339)



      $

      71


      Non-cash compensation expense (3)

      2



      22



      24




      6



      7



      13


      Loss (gain) on disposal of assets & impairment charge (3)

      8



      392



      400




      (3)



      683



      680


      Unrealized (gains) losses on commodity derivatives (3)

      (3)



      —



      (3)




      5



      —



      5


      Inventory adjustments (3)

      (24)



      (4)



      (28)




      (98)



      (6)



      (104)


      Adjusted EBITDA attributable to partners

      $

      346



      $

      386



      $

      732




      $

      320



      $

      345



      $

      665


      Cash interest expense (3)





      231








      178


      Current income tax expense (3)





      4








      —


      Maintenance capital expenditures (3)





      48








      106


      Distributable cash flow attributable to partners





      $

      449








      $

      381


      Transaction-related expenses (3)





      47








      9


      Series A Preferred distribution





      (23)








      —


      Distributable cash flow attributable to partners, as adjusted





      $

      473








      $

      390



      The following table sets forth, for the periods indicated, information concerning key measures we rely on to gauge our operating performance:


      Three Months Ended December 31,


      2017



      2016


      Wholesale


      Retail


      Total



      Wholesale


      Retail


      Total


      (dollars and gallons in millions, except motor fuel pricing and gross profit per gallon)

      Revenues:













      Retail motor fuel

      $

      —



      $

      414



      $

      414




      $

      —



      $

      350



      $

      350


      Wholesale motor fuel sales to third parties

      2,334



      —



      2,334




      2,267



      —



      2,267


      Wholesale motor fuel sale to affiliates

      10



      —



      10




      17



      —



      17


      Merchandise

      —



      142



      142




      —



      133



      133


      Rental income

      19



      3



      22




      19



      3



      22


      Other

      12



      25



      37




      15



      20



      35


      Total revenues

      $

      2,375



      $

      584



      $

      2,959




      $

      2,318



      $

      506



      $

      2,824


      Gross profit:













      Retail motor fuel

      $

      —



      $

      25



      $

      25




      $

      —



      $

      37



      $

      37


      Wholesale motor fuel

      151



      —



      151




      160



      —



      160


      Merchandise

      —



      45



      45




      —



      44



      44


      Rental and other

      29



      27



      56




      31



      24



      55


      Total gross profit

      $

      180



      $

      97



      $

      277




      $

      191



      $

      105



      $

      296


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

      47



      174



      221




      63



      (185)



      (122)


      Net income (loss) and comprehensive income (loss) from discontinued operations

      —



      11



      11




      —



      (463)



      (463)


      Net income (loss) and comprehensive income (loss)

      $

      47



      $

      185



      $

      232




      $

      63



      $

      (648)



      $

      (585)


      Net income (loss) and comprehensive income (loss) attributable to limited partners

      $

      47



      $

      185



      $

      232




      $

      63



      $

      (648)



      $

      (585)


      Adjusted EBITDA attributable to partners (2)

      $

      90



      $

      68



      $

      158




      $

      78



      $

      76



      $

      154


      Distributable cash flow attributable to partners, as adjusted (2)





      $

      106








      $

      63


      Operating Data:













      Total motor fuel gallons sold:













      Retail (3)



      626



      626






      626



      626


      Wholesale

      1,346





      1,346




      1,359





      1,359


      Motor fuel gross profit cents per gallon (1):













      Retail (3)



      24.2¢



      24.2¢






      25.7¢



      25.7¢


      Wholesale

      11.1¢





      11.1¢




      9.0¢





      9.0¢


      Volume-weighted average for all gallons (3)





      15.3¢








      14.3¢


      Retail merchandise margin (3)



      30.6

      %







      29.9

      %



      The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable cash flow:


      Three Months Ended December 31,


      2017



      2016


      Wholesale


      Retail


      Total



      Wholesale


      Retail


      Total


      (in millions)

      Net income (loss) and comprehensive income (loss)

      $

      47



      $

      185



      $

      232




      $

      63



      $

      (648)



      $

      (585)


      Depreciation, amortization and accretion (3)

      37



      11



      48




      34



      51



      85


      Interest expense, net (3)

      20



      41



      61




      18



      38



      56


      Income tax expense (benefit) (3)

      (9)



      (195)



      (204)




      4



      (43)



      (39)


      EBITDA

      $

      95



      $

      42



      $

      137




      $

      119



      $

      (602)



      $

      (483)


      Non-cash compensation expense (3)

      1



      5



      6




      2



      2



      4


      Loss (gain) on disposal of assets & impairment charge (3)

      8



      25



      33




      (2)



      679



      677


      Unrealized (gains) losses on commodity derivatives (3)

      2



      —



      2




      (4)



      —



      (4)


      Inventory adjustments (3)

      (16)



      (4)



      (20)




      (37)



      (3)



      (40)


      Adjusted EBITDA attributable to partners

      $

      90



      $

      68



      $

      158




      $

      78



      $

      76



      $

      154


      Cash interest expense (3)





      59








      53


      Current income tax expense (benefit) (3)





      (3)








      12


      Maintenance capital expenditures (3)





      13








      33


      Distributable cash flow attributable to partners





      $

      89








      $

      56


      Transaction-related expenses (3)





      25








      7


      Series A Preferred distribution





      (8)








      —


      Distributable cash flow attributable to partners, as adjusted





      $

      106








      $

      63


      ____________________

      (1)

      Excludes the impact of inventory fair value adjustments consistent with the definition of Adjusted EBITDA.

      (2)

      EBITDA is defined as earnings before net interest expense, income taxes, depreciation, amortization and accretion expense. Adjusted EBITDA further adjusts EBITDA to reflect certain other non-recurring and non-cash items. We define Adjusted EBITDA to also include adjustments for unrealized gains and losses on commodity derivatives and inventory fair value adjustments. We define distributable cash flow as Adjusted EBITDA less cash interest expense, including the accrual of interest expense related to our long-term debt that is paid on a semi-annual basis, Series A Preferred distribution, current income tax expense, maintenance capital expenditures, and other non-cash adjustments. Further adjustments are made to distributable cash flow for certain transaction-related and non-recurring expenses that are included in net income.

      We believe EBITDA, Adjusted EBITDA and distributable cash flow 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 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.

      EBITDA, Adjusted EBITDA and distributable cash flow 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. EBITDA, Adjusted EBITDA and distributable cash flow 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 EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and

      •

      as not all companies use identical calculations, our presentation of EBITDA, Adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies.

      (3)

      Includes amounts from discontinued operations.

      Capital Spending

      SUN's gross capital expenditures for the fourth quarter were $38 million, which included $25 million for growth capital and $13 million for maintenance capital. 

      Gross capital expenditures for the full year 2017 were $177 million, which included $129 million for growth capital and $48 million for maintenance capital. 

      Excluding acquisitions, SUN expects to spend approximately $90 million on growth capital and approximately $40 million on maintenance capital for the full year 2018.

      SOURCE Sunoco LP

      Modal title

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