DALLAS, Nov. 7, 2017 /PRNewswire/ --
- Maintained quarterly distribution of 82.55 cents and reported current quarter cash
coverage of 1.28 times
- Generated Net Income of $138
million, Adjusted EBITDA(1) of
$199 million and Distributable Cash
Flow(1), as adjusted, of $132 million
- Decreased leverage ratio to 5.59 times at the end of the
third quarter, with available liquidity of $847 million
Sunoco LP (NYSE: SUN) ("SUN" or the "Partnership") today
announced financial and operating results for the three-month
period ended September 30, 2017.
Revenue totaled $2.6 billion, an
increase of 17.9 percent, compared to $2.2
billion in the third quarter of 2016. The increase was the
result of the average wholesale selling price of fuel being
25 cents per gallon higher than last
year and additional wholesale gallons sold.
Total gross profit increased to $251
million, compared to $192
million in the third quarter of 2016, primarily as a result
of higher rental and other gross profits.
Income from continuing operations was $132 million, versus $33
million in the third quarter of 2016. General and
administrative expenses decreased $15
million from the third quarter of 2016 to $30 million due to decreases in costs associated
with relocation, employee termination, and lower contract labor and
professional fees since the company substantially completed its
transition to its Dallas office
during 2016. Other operating expenses decreased $1 million from the third quarter of 2016 to
$49 million.
Income from discontinued operations, net of income taxes, was
$6 million including a $44 million impairment charge, versus income from
discontinued operations, net of income taxes, of $12 million in the third quarter of 2016.
Net income was $138 million, or
$1.08 per diluted unit, versus
$45 million, or $0.24 per diluted unit, in the third quarter of
2016.
Adjusted EBITDA for the quarter totaled $199 million, compared with $189 million in the third quarter of 2016. The
year-over-year increase reflects increased rental and other gross
profits and increased gallons sold in wholesale operations.
Distributable Cash Flow, as adjusted, was $132 million, compared to $124 million a year ago. This year-over-year
increase reflects higher Adjusted EBITDA and decreased maintenance
capital spend partly offset by increased cash interest expense, an
income tax expense compared to a tax benefit last year and a
preferred distribution in this year's third quarter.
On a weighted-average basis, fuel margin for all gallons sold
was 14.9 cents per gallon, compared
to 15.6 cents per gallon in the third
quarter of 2016. The 0.7 cents
per gallon decrease was primarily attributable to lower margins in
the retail segment.
Net income for the wholesale segment was $92 million compared to $40 million a year ago primarily due to the
impact of inventory valuation adjustments. Adjusted EBITDA
was $87 million, versus $81 million in the third quarter of last
year. Total wholesale gallons sold were 1,388 million,
compared to 1,371 million in the third quarter of 2016, an increase
of 1.2 percent as a result of strength in the Southwest
geography. The Partnership earned 10.0
cents per gallon on these volumes, compared to 10.0 cents per gallon a year earlier.
Net income for the retail segment was $46
million compared to a net income of $5 million a year ago. Adjusted EBITDA was
$112 million, versus $108 million in the third quarter of last
year. Total retail gallons sold increased by 0.8 percent to
656 million gallons primarily due to increased gallons sold across
SUN's Southwest geography. The Partnership earned
25.3 cents per gallon on these
volumes, compared to 27.5 cents per
gallon a year earlier.
Total merchandise sales increased by 2.1 percent from a year ago
to $618 million(2),
reflecting an increase in merchandise and restaurant sales across
the Texas oil producing regions.
Merchandise sales contributed $198
million of gross profit(3) with a retail
merchandise margin of 32.1 percent, an increase of 0.3 percentage
points from the third quarter of 2016.
Same-store merchandise sales decreased by 0.1 percent and same
store gallons decreased by 2.0 percent during the third quarter,
reflecting weakness across the East Coast. In the Texas oil producing regions, same-store
merchandise sales increased by 10.7 percent, and same-store gallons
increased 8.3 percent.
As of September 30, 2017, SUN
operated 1,346 convenience stores and retail fuel outlets along the
East Coast, in the Southwest and in Hawaii. Third party wholesale customers and
sites totaled 7,898.
SUN's segment results and other supplementary data are provided
after the financial tables below.
Distribution
On October 26, 2017 the Board of
Directors of SUN's general partner declared a distribution for the
third quarter of 2017 of $0.8255 per
unit, which corresponds to $3.3020
per unit on an annualized basis. The distribution will be
paid on November 14 to unitholders of
record on November 7.
SUN's distribution coverage ratio for the third quarter was 1.28
times. The distribution coverage ratio on a trailing 12-month basis
was 1.04 times.
Liquidity
At September 30, SUN had
borrowings against its revolving line of credit of $644 million and other long-term debt of
$3.6 billion. Availability on
the revolving credit facility after borrowings and letters of
credit commitments was $847
million. In the third 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 agreements, including
the revolving credit facility and Term Loan, was 5.59 times at the
end of the third quarter.
- 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.
- Includes $599 million in
merchandise sales from discontinued operations.
- Includes $193 million in
merchandise gross profit from discontinued operations.
Earnings Conference Call
Sunoco LP management will hold a conference call on Wednesday, November 8, at 9:30 a.m. CT (10:30 a.m.
ET) to discuss third quarter results and recent
developments. To participate, dial 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 operates 1,346 convenience stores and retail fuel sites and
distributes motor fuel to 7,898 convenience stores, independent
dealers, commercial customers and distributors located in 30
states. Our parent -- Energy Transfer Equity, L.P. (NYSE: ETE) --
owns SUN's general partner and incentive distribution rights.
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, scott.grischow@sunoco.com
Derek Rabe, CFA, Senior Analyst –
Investor Relations and Finance
(214) 840-5553, derek.rabe@sunoco.com
Media:
Alyson Gomez,
Director – Communications
(469) 646-1758, alyson.gomez@sunoco.com
Jeamy Molina, Senior Manager – PR
& Communications
(469) 646-1776, jeamy.molina@sunoco.com
– Financial Schedules Follow –
SUNOCO
LP
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited)
|
|
|
|
September
30, 2017
|
|
December
31, 2016
|
|
|
(in millions,
except units)
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
86
|
|
|
$
|
99
|
|
Accounts receivable,
net
|
|
451
|
|
|
539
|
|
Receivables from
affiliates
|
|
140
|
|
|
3
|
|
Inventories,
net
|
|
359
|
|
|
385
|
|
Other current
assets
|
|
79
|
|
|
72
|
|
Assets held for
sale
|
|
4,147
|
|
|
291
|
|
Total current
assets
|
|
5,262
|
|
|
1,389
|
|
Property and
equipment, net
|
|
1,191
|
|
|
1,188
|
|
Other
assets:
|
|
|
|
|
Goodwill
|
|
1,031
|
|
|
1,050
|
|
Intangible assets,
net
|
|
777
|
|
|
752
|
|
Other noncurrent
assets
|
|
46
|
|
|
64
|
|
Assets held for
sale
|
|
—
|
|
|
4,258
|
|
Total
assets
|
|
$
|
8,307
|
|
|
$
|
8,701
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
583
|
|
|
$
|
616
|
|
Accounts payable to
affiliates
|
|
195
|
|
|
109
|
|
Advances from
affiliates
|
|
85
|
|
|
87
|
|
Accrued expenses and
other current liabilities
|
|
359
|
|
|
372
|
|
Current maturities of
long-term debt
|
|
6
|
|
|
5
|
|
Liabilities
associated with assets held for sale
|
|
81
|
|
|
—
|
|
Total current
liabilities
|
|
1,309
|
|
|
1,189
|
|
Revolving line of
credit
|
|
644
|
|
|
1,000
|
|
Long-term debt,
net
|
|
3,538
|
|
|
3,509
|
|
Deferred tax
liability
|
|
582
|
|
|
643
|
|
Other noncurrent
liabilities
|
|
99
|
|
|
96
|
|
Liabilities
associated with assets held for sale
|
|
—
|
|
|
68
|
|
Total
liabilities
|
|
6,172
|
|
|
6,505
|
|
Commitments and
contingencies (Note 13)
|
|
|
|
|
Equity:
|
|
|
|
|
Limited
partners:
|
|
|
|
|
Series A Preferred
unitholder - affiliated (12,000,000 units issued and outstanding as
of September 30, 2017 and no units issued and outstanding as of
December 31, 2016)
|
|
300
|
|
|
—
|
|
Common unitholders -
public (53,724,405 units issued and outstanding as of September 30,
2017 and 52,430,220 units issued and outstanding as of December 31,
2016)
|
|
1,323
|
|
|
1,467
|
|
Common unitholders -
affiliated (45,750,826 units issued and outstanding as of September
30, 2017 and December 31, 2016)
|
|
512
|
|
|
729
|
|
Class C unitholders -
held by subsidiary (16,410,780 units issued and outstanding as of
September 30, 2017 and December 31, 2016)
|
|
—
|
|
|
—
|
|
Total
equity
|
|
2,135
|
|
|
2,196
|
|
Total liabilities and
equity
|
|
$
|
8,307
|
|
|
$
|
8,701
|
|
SUNOCO
LP
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
(unaudited)
|
|
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in millions,
except unit and per unit amounts)
|
Revenues:
|
|
|
|
|
|
|
|
Retail motor
fuel
|
$
|
40
|
|
|
$
|
36
|
|
|
$
|
117
|
|
|
$
|
102
|
|
Wholesale motor fuel
sales to third parties
|
2,419
|
|
|
2,027
|
|
|
6,944
|
|
|
5,545
|
|
Wholesale motor fuel
sales to affiliates
|
16
|
|
|
28
|
|
|
44
|
|
|
45
|
|
Merchandise
|
19
|
|
|
17
|
|
|
53
|
|
|
50
|
|
Rental
income
|
22
|
|
|
23
|
|
|
66
|
|
|
66
|
|
Other
|
39
|
|
|
36
|
|
|
106
|
|
|
110
|
|
Total
revenues
|
2,555
|
|
|
2,167
|
|
|
7,330
|
|
|
5,918
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
Retail motor fuel
cost of sales
|
35
|
|
|
30
|
|
|
101
|
|
|
88
|
|
Wholesale motor fuel
cost of sales
|
2,254
|
|
|
1,924
|
|
|
6,582
|
|
|
5,154
|
|
Merchandise cost of
sales
|
14
|
|
|
13
|
|
|
38
|
|
|
36
|
|
Other
|
1
|
|
|
8
|
|
|
9
|
|
|
12
|
|
Total cost of
sales
|
2,304
|
|
|
1,975
|
|
|
6,730
|
|
|
5,290
|
|
Gross
profit
|
251
|
|
|
192
|
|
|
600
|
|
|
628
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
General and
administrative
|
30
|
|
|
45
|
|
|
102
|
|
|
128
|
|
Other
operating
|
49
|
|
|
50
|
|
|
144
|
|
|
135
|
|
Rent
|
13
|
|
|
12
|
|
|
38
|
|
|
36
|
|
Gain on disposal of
assets
|
(4)
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
Depreciation,
amortization and accretion
|
24
|
|
|
31
|
|
|
87
|
|
|
85
|
|
Total operating
expenses
|
112
|
|
|
138
|
|
|
371
|
|
|
383
|
|
Operating
income
|
139
|
|
|
54
|
|
|
229
|
|
|
245
|
|
Interest expense,
net
|
51
|
|
|
47
|
|
|
162
|
|
|
111
|
|
Income from continuing
operations before income taxes
|
88
|
|
|
7
|
|
|
67
|
|
|
134
|
|
Income tax
benefit
|
(44)
|
|
|
(26)
|
|
|
(114)
|
|
|
(21)
|
|
Income from
continuing operations
|
132
|
|
|
33
|
|
|
181
|
|
|
155
|
|
Income (loss) from
discontinued operations, net of income taxes
|
6
|
|
|
12
|
|
|
(264)
|
|
|
24
|
|
Net income (loss)
and comprehensive income (loss)
|
$
|
138
|
|
|
$
|
45
|
|
|
$
|
(83)
|
|
|
$
|
179
|
|
Net income (loss)
per limited partner unit - basic:
|
|
|
|
|
|
|
|
Continuing operations
- common units
|
$
|
1.03
|
|
|
$
|
0.11
|
|
|
$
|
0.98
|
|
|
$
|
0.98
|
|
Discontinued
operations - common units
|
0.06
|
|
|
0.13
|
|
|
(2.66)
|
|
|
0.26
|
|
Net income (loss) -
common units
|
$
|
1.09
|
|
|
$
|
0.24
|
|
|
$
|
(1.68)
|
|
|
$
|
1.24
|
|
Net income (loss)
per limited partner unit - diluted:
|
|
|
|
|
|
|
|
Continuing operations
- common units
|
$
|
1.02
|
|
|
$
|
0.11
|
|
|
$
|
0.98
|
|
|
$
|
0.98
|
|
Discontinued
operations - common units
|
0.06
|
|
|
0.13
|
|
|
(2.66)
|
|
|
0.26
|
|
Net income (loss) -
common units
|
$
|
1.08
|
|
|
$
|
0.24
|
|
|
$
|
(1.68)
|
|
|
$
|
1.24
|
|
Weighted average
limited partner units outstanding:
|
|
|
|
|
|
|
|
Common units - public
(basic)
|
53,718,817
|
|
|
49,588,960
|
|
|
53,434,216
|
|
|
49,588,960
|
|
Common units - public
(diluted)
|
54,366,190
|
|
|
49,663,618
|
|
|
53,830,800
|
|
|
49,663,618
|
|
Common units -
affiliated (basic and diluted)
|
45,750,826
|
|
|
45,750,826
|
|
|
45,750,826
|
|
|
43,131,603
|
|
|
|
|
|
|
|
|
|
Cash distribution
per unit
|
$
|
0.8255
|
|
|
$
|
0.8255
|
|
|
$
|
2.4765
|
|
|
$
|
2.4683
|
|
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
divisions, wholesale and retail, both of which are included as
reportable segments.
Key operating metrics set forth below are presented as of and
for the three months ended September 30, 2017 and 2016 and
have been derived from our historical consolidated financial
statements.
The operating results for the discontinued operations are shown
in the retail operations segment for the purposes of presenting the
key operating metrics.
The following table sets forth, for the periods indicated,
information concerning key measures we rely on to gauge our
operating performance:
|
For the Three
Months Ended September 30,
|
|
2017
|
|
|
2016
|
|
Wholesale
|
|
Retail
|
|
Total
|
|
|
Wholesale
|
|
Retail
|
|
Total
|
|
(dollars and
gallons in millions, except motor fuel gross profit per
gallon)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail motor
fuel
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
36
|
|
Wholesale motor fuel
sales to third parties
|
2,419
|
|
|
—
|
|
|
2,419
|
|
|
|
2,027
|
|
|
—
|
|
|
2,027
|
|
Wholesale motor fuel
sale to affiliates
|
16
|
|
|
—
|
|
|
16
|
|
|
|
28
|
|
|
—
|
|
|
28
|
|
Merchandise
|
—
|
|
|
19
|
|
|
19
|
|
|
|
—
|
|
|
17
|
|
|
17
|
|
Rental
income
|
19
|
|
|
3
|
|
|
22
|
|
|
|
19
|
|
|
4
|
|
|
23
|
|
Other
|
13
|
|
|
26
|
|
|
39
|
|
|
|
13
|
|
|
23
|
|
|
36
|
|
Total
revenues
|
$
|
2,467
|
|
|
$
|
88
|
|
|
$
|
2,555
|
|
|
|
$
|
2,087
|
|
|
$
|
80
|
|
|
$
|
2,167
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail motor
fuel
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
6
|
|
Wholesale motor
fuel
|
181
|
|
|
—
|
|
|
181
|
|
|
|
131
|
|
|
—
|
|
|
131
|
|
Merchandise
|
—
|
|
|
5
|
|
|
5
|
|
|
|
—
|
|
|
4
|
|
|
4
|
|
Rental and
other
|
32
|
|
|
28
|
|
|
60
|
|
|
|
27
|
|
|
24
|
|
|
51
|
|
Total gross
profit
|
$
|
213
|
|
|
$
|
38
|
|
|
$
|
251
|
|
|
|
$
|
158
|
|
|
$
|
34
|
|
|
$
|
192
|
|
Net income (loss) and
comprehensive income (loss) from continuing operations
|
92
|
|
|
40
|
|
|
132
|
|
|
|
40
|
|
|
(7)
|
|
|
33
|
|
Net income (loss) and
comprehensive income (loss) from discontinued operations
|
—
|
|
|
6
|
|
|
6
|
|
|
|
—
|
|
|
12
|
|
|
12
|
|
Net income and
comprehensive income
|
$
|
92
|
|
|
$
|
46
|
|
|
$
|
138
|
|
|
|
$
|
40
|
|
|
$
|
5
|
|
|
$
|
45
|
|
Adjusted EBITDA
(2)
|
$
|
87
|
|
|
$
|
112
|
|
|
$
|
199
|
|
|
|
$
|
81
|
|
|
$
|
108
|
|
|
$
|
189
|
|
Distributable cash
flow, as adjusted (2)
|
|
|
|
|
$
|
132
|
|
|
|
|
|
|
|
$
|
124
|
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total motor fuel
gallons sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail (3)
|
|
|
656
|
|
|
656
|
|
|
|
|
|
651
|
|
|
651
|
|
Wholesale
|
1,388
|
|
|
|
|
1,388
|
|
|
|
1,371
|
|
|
|
|
1,371
|
|
Motor fuel gross profit
cents per gallon (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail (3)
|
|
|
25.3¢
|
|
|
25.3¢
|
|
|
|
|
|
27.5¢
|
|
|
27.5¢
|
|
Wholesale
|
10.0¢
|
|
|
|
|
10.0¢
|
|
|
|
10.0¢
|
|
|
|
|
10.0¢
|
|
Volume-weighted average
for all gallons (3)
|
|
|
|
|
14.9¢
|
|
|
|
|
|
|
|
15.6¢
|
|
Retail merchandise
margin (3)
|
|
|
32.1%
|
|
|
|
|
|
|
|
31.8%
|
|
|
|
The following table presents a reconciliation of net income to
EBITDA, Adjusted EBITDA and distributable cash flow for the three
months ended September 30, 2017 and
2016:
|
For the Three
Months Ended September 30,
|
|
2017
|
|
|
2016
|
|
Wholesale
|
|
Retail
|
|
Total
|
|
|
Wholesale
|
|
Retail
|
|
Total
|
|
(in
millions)
|
Net income and
comprehensive income
|
$
|
92
|
|
|
$
|
46
|
|
|
$
|
138
|
|
|
|
$
|
40
|
|
|
$
|
5
|
|
|
$
|
45
|
|
Depreciation,
amortization and accretion (3)
|
23
|
|
|
6
|
|
|
29
|
|
|
|
22
|
|
|
56
|
|
|
78
|
|
Interest expense, net
(3)
|
34
|
|
|
30
|
|
|
64
|
|
|
|
13
|
|
|
41
|
|
|
54
|
|
Income tax expense
(benefit) (3)
|
(1)
|
|
|
(13)
|
|
|
(14)
|
|
|
|
1
|
|
|
4
|
|
|
5
|
|
EBITDA
|
$
|
148
|
|
|
$
|
69
|
|
|
$
|
217
|
|
|
|
$
|
76
|
|
|
$
|
106
|
|
|
$
|
182
|
|
Non-cash compensation
expense (3)
|
—
|
|
|
9
|
|
|
9
|
|
|
|
2
|
|
|
1
|
|
|
3
|
|
Loss (gain) on
disposal of assets and impairment charges (3)
|
(4)
|
|
|
38
|
|
|
34
|
|
|
|
(1)
|
|
|
1
|
|
|
—
|
|
Unrealized loss
(gain) on commodity derivatives (3)
|
(6)
|
|
|
—
|
|
|
(6)
|
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Inventory adjustments
(3)
|
(51)
|
|
|
(4)
|
|
|
(55)
|
|
|
|
(2)
|
|
|
—
|
|
|
(2)
|
|
Adjusted
EBITDA
|
$
|
87
|
|
|
$
|
112
|
|
|
$
|
199
|
|
|
|
$
|
81
|
|
|
$
|
108
|
|
|
$
|
189
|
|
Cash interest expense
(3)
|
|
|
|
|
59
|
|
|
|
|
|
|
|
51
|
|
Current income tax
expense (benefit) (3)
|
|
|
|
|
5
|
|
|
|
|
|
|
|
(15)
|
|
Maintenance capital
expenditures (3)
|
|
|
|
|
10
|
|
|
|
|
|
|
|
30
|
|
Distributable cash
flow
|
|
|
|
|
$
|
125
|
|
|
|
|
|
|
|
$
|
123
|
|
Transaction-related
expenses (3)
|
|
|
|
|
14
|
|
|
|
|
|
|
|
1
|
|
Series A Preferred
distribution
|
|
|
|
|
(7)
|
|
|
|
|
|
|
|
—
|
|
Distributable cash
flow, as adjusted
|
|
|
|
|
$
|
132
|
|
|
|
|
|
|
|
$
|
124
|
|
________________
|
(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 third quarter were
$41 million, which included
$31 million for growth capital and
$10 million for maintenance
capital.
Excluding acquisitions, SUN expects to spend approximately
$150 million on growth capital and
approximately $70 million on
maintenance capital for the full year 2017.
Growth capital spending includes the rebuilding of locations SUN
is operating on the Indiana Toll Road.
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SOURCE Sunoco LP