- Reports strong first quarter results including net income of
$216 million, Adjusted
EBITDA(1) of $191 million
and Distributable Cash Flow, as adjusted(1) of
$142 million
- Increases full year 2022 Adjusted EBITDA(1)(2)
guidance to between $795 and
$835 million to include recently
completed transmix processing and terminal acquisition in
Huntington, Indiana
- Commenced commercial operations of greenfield terminal in
Brownsville, Texas
- Amended and extended $1.5 billion
revolving credit facility
DALLAS, May 4, 2022 /PRNewswire/ -- Sunoco LP (NYSE: SUN)
("SUN" or the "Partnership") today reported financial and operating
results for the three-month period ended March 31, 2022.
Financial and Operational Highlights
For the three months ended March 31,
2022, net income was $216
million versus $154 million in
the first quarter of 2021.
Adjusted EBITDA(1) for the quarter was $191 million compared with $157 million in the first quarter of 2021. The
increase in Adjusted EBITDA(1) reflects higher reported
fuel margins and volume, the acquisition of nine refined products
terminals during the fourth quarter of 2021, partially offset by
higher operating expenses(3).
Distributable Cash Flow, as adjusted(1), for the
quarter was $142 million, compared to
$108 million a year ago.
The Partnership sold approximately 1.8 billion gallons of fuel
in the first quarter of 2022, representing a 1% increase from the
first quarter of 2021. Fuel margin for all gallons sold was
12.4 cents per gallon for the quarter
compared to 10.3 cents per gallon a
year ago.
Recent Accomplishments
- Completed the acquisition of a transmix processing and terminal
facility in Huntington, Indiana
from Gladieux Capital Partners, LLC for $190
million plus working capital adjustments. The facility is
the largest transmix plant in North
America with onsite product storage. The Partnership expects
the acquisition to be accretive to unitholders in the first year of
ownership and further expand SUN's growing midstream business.
- Completed construction and began operations at the Brownsville, Texas terminal. Commercial sales
commenced in late March.
- Amended and extended $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 size
up to $500 million, subject to
additional lender commitments. The facility matures in April 2027.
Distribution and Coverage
On April 26, 2022, the Board of
Directors of SUN's general partner declared a distribution for the
first quarter of 2022 of $0.8255 per
unit, or $3.3020 per unit on an
annualized basis. The distribution will be paid on
May 19, 2022 to common unitholders of
record on May 9, 2022. SUN's
current quarter cash coverage was 1.63 times and trailing twelve
months coverage was 1.66 times.
Liquidity and Leverage
At March 31, 2022, SUN had
$1.0 billion of borrowings against
its revolving credit facility and other long-term debt of
$2.7 billion. The Partnership
maintained liquidity of approximately $482
million at the end of the quarter under its $1.5 billion revolving credit facility.
SUN's leverage ratio of net debt to Adjusted EBITDA(1),
calculated in accordance with its credit facility, was 4.35 times
at the end of the first quarter.
Capital Spending
SUN's total capital expenditures for the first quarter were
$26 million, which included
$21 million for growth capital and
$5 million for maintenance
capital. For the full-year 2022, SUN continues to expect
growth capital expenditures of at least $150
million and maintenance capital expenditures of
approximately $50 million.
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)
|
A reconciliation of
non-GAAP forward looking information to corresponding GAAP measures
cannot be provided without unreasonable efforts due to the inherent
difficulty in quantifying certain amounts due to a variety of
factors, including the unpredictability of commodity price
movements and future charges or reversals outside the normal course
of business which may be significant.
|
(3)
|
Operating expenses
include general and administrative, other operating, and lease
expenses.
|
Earnings Conference Call
Sunoco LP management will hold a conference call on Wednesday, May 4, 2022, at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss results and
recent developments. To participate, dial 877-407-6184 (toll
free) or 201-389-0877 approximately 10 minutes before the scheduled
start time 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 Webcasts 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 40 U.S.
states and territories as well as refined product transportation
and terminalling assets. SUN's general partner is owned by Energy
Transfer LP (NYSE: ET).
Forward-Looking Statements
This news 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. In addition to the risks
and uncertainties previously disclosed, the Partnership has also
been, or may in the future be, impacted by new or heightened risks
related to the COVID-19 pandemic and the recent instability in
commodity prices, and we cannot predict the length and ultimate
impact of those risks. 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
Contacts
Investors:
Scott Grischow, Treasurer, Vice President –
Investor Relations and Mergers & Acquisitions
(214) 840-5660, scott.grischow@sunoco.com
James Heckler, Director –
Investor Relations and Corporate Finance
(214) 840-5415, james.heckler@sunoco.com
Media:
Alexis Daniel,
Manager – Communications
(214) 981-0739, alexis.daniel@sunoco.com
– Financial Schedules Follow –
SUNOCO
LP CONSOLIDATED BALANCE SHEETS (Dollars in
millions)
(unaudited)
|
|
|
March 31,
2022
|
|
December
31,
2021
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
104
|
|
$
25
|
Accounts receivable,
net
|
725
|
|
526
|
Receivables from
affiliates
|
13
|
|
12
|
Inventories,
net
|
704
|
|
534
|
Other current
assets
|
478
|
|
95
|
Total current
assets
|
2,024
|
|
1,192
|
|
|
|
|
Property and
equipment
|
2,572
|
|
2,581
|
Accumulated
depreciation
|
(943)
|
|
(914)
|
Property and
equipment, net
|
1,629
|
|
1,667
|
Other
assets:
|
|
|
|
Finance lease
right-of-use assets, net
|
9
|
|
9
|
Operating lease
right-of-use assets, net
|
517
|
|
517
|
Goodwill
|
1,568
|
|
1,568
|
|
|
|
|
Intangible
assets
|
902
|
|
902
|
Accumulated
amortization
|
(372)
|
|
(360)
|
Intangible assets,
net
|
530
|
|
542
|
Other noncurrent
assets
|
196
|
|
188
|
Investment in
unconsolidated affiliate
|
132
|
|
132
|
Total
assets
|
$
6,605
|
|
$
5,815
|
Liabilities and
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
705
|
|
$
515
|
Accounts payable to
affiliates
|
77
|
|
59
|
Accrued expenses and
other current liabilities
|
275
|
|
291
|
Operating lease
current liabilities
|
19
|
|
19
|
Current maturities of
long-term debt
|
—
|
|
6
|
Total current
liabilities
|
1,076
|
|
890
|
Operating lease
noncurrent liabilities
|
522
|
|
521
|
Revolving line of
credit
|
1,012
|
|
581
|
Long-term debt,
net
|
2,668
|
|
2,668
|
Advances from
affiliates
|
121
|
|
126
|
Deferred tax
liability
|
155
|
|
114
|
Other noncurrent
liabilities
|
107
|
|
104
|
Total
liabilities
|
5,661
|
|
5,004
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Limited
partners:
|
|
|
|
Common unitholders
(83,688,670 units issued and
outstanding as of March 31, 2022 and
83,670,950 units issued and
outstanding as of December 31, 2021)
|
944
|
|
811
|
Class C unitholders -
held by subsidiaries (16,410,780 units issued and outstanding as of
March 31, 2022 and
December 31,
2021)
|
—
|
|
—
|
Total
equity
|
944
|
|
811
|
Total liabilities and
equity
|
$
6,605
|
|
$
5,815
|
SUNOCO
LP CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (Dollars in millions, except per unit
data)
(unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
Motor fuel
sales
|
$
5,277
|
|
$
3,363
|
Non motor fuel
sales
|
90
|
|
73
|
Lease
income
|
35
|
|
35
|
Total
revenues
|
5,402
|
|
3,471
|
Cost of sales and
operating expenses:
|
|
|
|
Cost of
sales
|
4,972
|
|
3,120
|
General and
administrative
|
27
|
|
24
|
Other
operating
|
81
|
|
61
|
Lease
expense
|
16
|
|
15
|
Depreciation,
amortization and accretion
|
47
|
|
47
|
Total cost of sales
and operating expenses
|
5,143
|
|
3,267
|
Operating
income
|
259
|
|
204
|
Other income
(expense):
|
|
|
|
Interest expense,
net
|
(41)
|
|
(41)
|
Equity in earnings of
unconsolidated affiliate
|
1
|
|
1
|
Loss on extinguishment
of debt
|
—
|
|
(7)
|
Income before income
taxes
|
219
|
|
157
|
Income tax
expense
|
3
|
|
3
|
Net income and
comprehensive income
|
$
216
|
|
$
154
|
|
|
|
|
Net income per
common unit:
|
|
|
|
Basic
|
$
2.35
|
|
$
1.61
|
Diluted
|
$
2.32
|
|
$
1.60
|
|
|
|
|
Weighted average
common units outstanding:
|
|
|
|
Basic
|
83,682,902
|
|
83,342,828
|
Diluted
|
84,729,202
|
|
84,141,261
|
|
|
|
|
Cash distributions
per unit
|
$
0.8255
|
|
$
0.8255
|
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.
The key operating metrics by segment and accompanying footnotes
set forth below are presented for the three months ended
March 31, 2022 and 2021 and have been
derived from our historical consolidated financial statements.
|
Three Months Ended
March 31,
|
|
2022
|
|
|
2021
|
|
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
|
$
5,127
|
|
$
150
|
|
$
5,277
|
|
|
$
3,252
|
|
$
111
|
|
$
3,363
|
Non motor fuel
sales
|
41
|
|
49
|
|
90
|
|
|
14
|
|
59
|
|
73
|
Lease
income
|
32
|
|
3
|
|
35
|
|
|
33
|
|
2
|
|
35
|
Total
revenues
|
$
5,200
|
|
$
202
|
|
$
5,402
|
|
|
$
3,299
|
|
$
172
|
|
$
3,471
|
Gross profit
(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
329
|
|
$
10
|
|
$
339
|
|
|
$
273
|
|
$
8
|
|
$
281
|
Non motor fuel
sales
|
29
|
|
27
|
|
56
|
|
|
11
|
|
24
|
|
35
|
Lease
|
32
|
|
3
|
|
35
|
|
|
33
|
|
2
|
|
35
|
Total gross
profit
|
$
390
|
|
$
40
|
|
$
430
|
|
|
$
317
|
|
$
34
|
|
$
351
|
Net income (loss) and
comprehensive income (loss)
|
$
210
|
|
$
6
|
|
$
216
|
|
|
$
162
|
|
$
(8)
|
|
$
154
|
Adjusted EBITDA
(2)
|
$
174
|
|
$
17
|
|
$
191
|
|
|
$
153
|
|
$
4
|
|
$
157
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total motor fuel
gallons sold
|
|
|
|
|
1,769
|
|
|
|
|
|
|
1,756
|
Motor fuel gross
profit cents per gallon (3)
|
|
|
|
|
12.4 ¢
|
|
|
|
|
|
|
10.3 ¢
|
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 ended March
31, 2022 and 2021:
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
(in
millions)
|
Adjusted
EBITDA
|
|
|
|
Fuel distribution and
marketing
|
$
174
|
|
$
153
|
All other
|
17
|
|
4
|
Total Adjusted
EBITDA
|
191
|
|
157
|
Depreciation,
amortization and accretion
|
(47)
|
|
(47)
|
Interest expense,
net
|
(41)
|
|
(41)
|
Non-cash unit-based
compensation expense
|
(5)
|
|
(4)
|
Loss on extinguishment
of debt
|
—
|
|
(7)
|
Unrealized gain on
commodity derivatives
|
9
|
|
5
|
Inventory
adjustments
|
120
|
|
100
|
Equity in earnings of
unconsolidated affiliate
|
1
|
|
1
|
Adjusted EBITDA
related to unconsolidated affiliate
|
(2)
|
|
(2)
|
Other non-cash
adjustments
|
(7)
|
|
(5)
|
Income tax
expense
|
(3)
|
|
(3)
|
Net income and
comprehensive income
|
$
216
|
|
$
154
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
191
|
|
$
157
|
Adjusted EBITDA
related to unconsolidated affiliate
|
(2)
|
|
(2)
|
Distributable cash
flow from unconsolidated affiliate
|
2
|
|
2
|
Cash interest
expense
|
(40)
|
|
(40)
|
Current income tax
benefit (expense)
|
37
|
|
(4)
|
Transaction-related
income taxes (5)
|
(42)
|
|
—
|
Maintenance capital
expenditures
|
(5)
|
|
(5)
|
Distributable Cash
Flow
|
141
|
|
108
|
Transaction-related
expenses
|
1
|
|
—
|
Distributable Cash
Flow, as adjusted (2)
|
$
142
|
|
$
108
|
|
|
|
|
Distributions to
Partners:
|
|
|
|
Limited
Partners
|
$
69
|
|
$
69
|
General
Partners
|
18
|
|
18
|
Total distributions to
be paid to partners
|
$
87
|
|
$
87
|
Common Units
outstanding - end of period
|
83.7
|
|
83.3
|
Distribution coverage
ratio (4)
|
1.63x
|
|
1.25x
|
___________________________
|
(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, 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 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
senior notes;
|
•
|
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. Although these
amounts are excluded from Adjusted EBITDA related to unconsolidated
affiliate, such exclusion should not be understood to imply that we
have control over the operations and resulting revenues and
expenses of such affiliate. We do not control our unconsolidated
affiliate; therefore, we do not control the earnings or cash flows
of such affiliate. The use of Adjusted EBITDA or Adjusted EBITDA
related to unconsolidated affiliate as an analytical tool should be
limited accordingly. Inventory adjustments that are excluded from
the calculation of Adjusted EBITDA represent changes in lower of
cost or market reserves on the Partnership's inventory. These
amounts are unrealized valuation adjustments applied to fuel
volumes remaining in inventory at the end of the period.
|
(3)
|
Excludes the impact
of inventory adjustments consistent with the definition of Adjusted
EBITDA.
|
(4)
|
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.
|
(5)
|
Related to an amended
tax return from a previous transaction.
|
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SOURCE Sunoco LP