DALLAS, Nov. 7, 2018 /PRNewswire/ --
- Current quarter cash coverage of 1.73 times and trailing twelve months coverage of 1.24 times with leverage of 4.27 times at the end of the third quarter
- Net income of $112 million
- Adjusted EBITDA(1) of $208 million
- Distributable Cash Flow(1), as adjusted, of $149 million
- Completed the acquisition of BRENCO Marketing Corporation's fuel distribution business in October for approximately $24 million plus working capital adjustments
- The acquisition is accretive to Distributable Cash Flow in year one
Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today announced financial and operating results for the three-month period ended September 30, 2018.
Revenue totaled $4.8 billion, an increase of 55 percent, compared to $3.1 billion in the third quarter of 2017. The increase was the result of the average selling price of fuel being higher than last year and the benefit of the fuel distribution contract with 7-Eleven, Inc.
Total gross profit increased to $333 million, compared to $316 million in the third quarter of 2017, as a result of higher motor fuel gross profits and a one-time cash benefit of approximately $25 million related to a settlement with a fuel supplier.
Income from continuing operations was $114 million versus $121 million in the third quarter of 2017.
Loss from discontinued operations, net of income taxes, was $2 million versus income from discontinued operations, net of income taxes, of $17 million in the third quarter of 2017.
Net income was $112 million, or $1.12 per diluted unit, versus $138 million, or $1.08 per diluted unit, in the third quarter of 2017.
Adjusted EBITDA for the quarter totaled $208 million compared with $199 million in the third quarter of 2017. Adjusted EBITDA included $2 million of transaction-related expenses and the one-time cash benefit of approximately $25 million.
Distributable Cash Flow, as adjusted, was $149 million, compared to $132 million a year ago. This year-over-year increase reflects higher Adjusted EBITDA and lower cash interest expense offset by a higher current tax expense.
Total gallons sold were 2.0 billion, flat from a year ago. On a weighted-average basis, fuel margin for all gallons sold was 12.7 cents per gallon, or 11.4 cents per gallon excluding the one-time cash benefit of approximately $25 million this quarter.
SUN's segment results and other supplementary data are provided after the financial tables below.
Distribution
On October 26, 2018, the Board of Directors of SUN's general partner declared a distribution for the third quarter of 2018 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. The distribution will be paid on November 14, 2018 to common unitholders of record on November 6, 2018.
SUN's distribution coverage ratio for the third quarter was 1.73 times. The distribution coverage ratio on a trailing 12-month basis was 1.24 times.
Excluding the one-time cash benefit of approximately $25 million this quarter, SUN's distribution coverage ratio for the third quarter was 1.44 times.
Liquidity
At September 30, SUN had borrowings of $493 million against its revolving line of credit and other long-term debt of $2.3 billion. In the third quarter of 2018, SUN did not issue any common units through its at-the-market equity program. The leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with SUN's credit facility, was 4.27 times at the end of the third quarter (2).
(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) | Excluding the one-time cash benefit of approximately $25 million this quarter, SUN's leverage ratio of net debt to Adjusted EBITDA, calculated in accordance with SUN's credit facility, was 4.44 times at the end of the third quarter. |
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, November 8, 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 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 (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, Senior Director – Investor Relations and Treasury
(214) 840-5660, [email protected]
Derek Rabe, CFA, Manager – Investor Relations, Growth and Strategy
(214) 840-5553, [email protected]
Media:
Alyson Gomez, Director – Communications
(214) 840-5641, [email protected]
– Financial Schedules Follow –
SUNOCO LP | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(unaudited) | ||||||||
September 30, | December 31, | |||||||
(in millions, except units) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 15 | $ | 28 | ||||
Accounts receivable, net | 627 | 541 | ||||||
Receivables from affiliates | 134 | 155 | ||||||
Inventories, net | 469 | 426 | ||||||
Other current assets | 80 | 81 | ||||||
Assets held for sale | 6 | 3,313 | ||||||
Total current assets | 1,331 | 4,544 | ||||||
Property and equipment, net | 1,494 | 1,557 | ||||||
Other assets: | ||||||||
Goodwill | 1,534 | 1,430 | ||||||
Intangible assets, net | 655 | 768 | ||||||
Other noncurrent assets | 134 | 45 | ||||||
Total assets | $ | 5,148 | $ | 8,344 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 551 | $ | 559 | ||||
Accounts payable to affiliates | 160 | 206 | ||||||
Accrued expenses and other current liabilities | 370 | 368 | ||||||
Current maturities of long-term debt | 5 | 6 | ||||||
Liabilities associated with assets held for sale | — | 75 | ||||||
Total current liabilities | 1,086 | 1,214 | ||||||
Revolving line of credit | 493 | 765 | ||||||
Long-term debt, net | 2,281 | 3,519 | ||||||
Advances from affiliates | 85 | 85 | ||||||
Deferred tax liability | 118 | 389 | ||||||
Other noncurrent liabilities | 140 | 125 | ||||||
Total liabilities | 4,203 | 6,097 | ||||||
Commitments and contingencies (Note 14) | ||||||||
Equity: | ||||||||
Limited partners: | ||||||||
Series A Preferred unitholder - affiliated (no units issued and outstanding as of September 30, 2018 and 12,000,000 units issued and outstanding as of December 31, 2017) | — | 300 | ||||||
Common unitholders (82,513,643 units issued and outstanding as of September 30, 2018 and 99,667,999 units issued and outstanding as of December 31, 2017) | 945 | 1,947 | ||||||
Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of September 30, 2018 and December 31, 2017) | — | — | ||||||
Total equity | 945 | 2,247 | ||||||
Total liabilities and equity | $ | 5,148 | $ | 8,344 | ||||