DALLAS, Feb. 17, 2021 /PRNewswire/ -- Sunoco LP
(NYSE: SUN) ("SUN" or the "Partnership") today reported financial
and operating results for the three- and twelve-month periods ended
December 31, 2020.
For the three months ended December 31,
2020, net income was $83
million versus $83 million in
the fourth quarter of 2019.
Adjusted EBITDA(1) for the quarter totaled
$159 million compared with
$168 million in the fourth quarter of
2019. This year-over-year decrease reflects lower reported fuel
volume and margins partially offset by a decline in operating
expenses(2).
Distributable Cash Flow, as adjusted(1), for the
quarter was $97 million, compared to
$120 million a year ago.
The Partnership sold 1.8 billion gallons in the fourth quarter
of 2020, down 12% from the fourth quarter of 2019. Fuel
margin for all gallons sold was 9.2
cents per gallon for the quarter compared to 9.9 cents per gallon a year ago. In the
fourth quarter of 2020, fuel margin included approximately
$8 million of one-time write-offs
associated with prior period fuel tax and inventory related
items. In addition, fourth quarter margin included an
unfavorable timing impact of approximately $9 million related to SUN's inventory valuation
and associated hedges. For the full year 2020, the impact of this
inventory valuation and hedging activity resulted in approximately
$2 million of margin
favorability.
For the twelve months ended December 31,
2020, net income was $212
million versus $313 million in
2019.
Adjusted EBITDA(1) for the full year 2020 totaled
$739 million, up 11% from
$665 million a year ago. This
year-over-year increase reflects higher reported fuel margins of
11.9 cents per gallon compared to
10.1 cents per gallon a year ago and
a 11% decline in operating expenses(2) partially offset
by a 13% reduction in gallons sold to 7.1 billion.
Distributable Cash Flow, as adjusted(1), for the full
year 2020 was $517 million, compared
to $453 million a year ago.
Recent Accomplishments and Business Outlook
- Generated record Adjusted EBITDA of $739
million in 2020, up 11% from full year 2019, and continued
to strengthen leverage and coverage metrics with leverage of 4.18
times and trailing twelve months coverage of 1.50
times at the end of 2020.
- Completed a private offering of $800
million 4.500% Senior Notes due 2029 on November 9, 2020. SUN used the proceeds
from the offering to fund the cash tender offer for its 4.875%
Senior Notes due 2023. SUN redeemed the remaining 4.875%
Senior Notes due 2023 on January 15,
2021.
- Acquired a terminal in New
York on December 15, 2020 for
approximately $12 million plus
working capital adjustments. The acquisition was funded with
cash on hand and amounts available on SUN's revolving credit
facility. The approximately 350,000 barrel refined products
waterborne terminal is consistent with SUN's strategy of expanding
the midstream portfolio and providing further income
diversification and stability. SUN expects the acquisition to
be accretive to unitholders in the first year.
- The Partnership expects full year 2021 Adjusted EBITDA to be
between $725 and $765 million. SUN expects 2021 fuel volumes to be
between 7.25 and 7.75 billion gallons, fuel margins to be between
11.0 and 12.0 cents per gallon,
operating expenses(2) in a range of $440 to $450
million, growth capital expenditures of at least
$120 million, and maintenance capital
expenditures of approximately $45
million.
Distribution and Coverage
On January 28, 2021, the Board of
Directors of SUN's general partner declared a distribution for the
fourth quarter of 2020 of $0.8255 per
unit, which corresponds to $3.3020
per unit on an annualized basis. The distribution will be
paid on February 19, 2021 to common
unitholders of record on February 8,
2021. Current quarter cash coverage was 1.13 times and
trailing twelve months coverage was 1.50 times.
Liquidity and Leverage
At December 31, 2020, SUN had no
borrowings against its revolving credit facility and other
long-term debt of $3.1 billion.
The Partnership maintained ample liquidity of approximately
$1.5 billion at the end of the
quarter under its $1.5 billion
revolving credit facility that matures in July 2023 and has no Senior Notes maturities
prior to 2026. SUN's leverage ratio of net debt to Adjusted
EBITDA, calculated in accordance with its credit facility, was
4.18 times at the end of the fourth quarter compared to 4.61
times at the end of the fourth quarter of 2019.
Capital Spending
SUN's gross capital expenditures for the fourth quarter were
$45 million, which included
$25 million for growth capital and
$20 million for maintenance
capital. For the full year 2020, the Partnership spent
$124 million on gross capital
expenditures, which included $89
million on growth capital and $35
million on maintenance capital.
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)
|
Operating expenses
include general and administrative, other operating and lease
expenses.
|
Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, February 18, at 8:00 a.m. CT (9:00 a.m.
ET) to discuss 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 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
30 states as well as refined product transportation and
terminalling assets. SUN's general partner is owned by Energy
Transfer Operating, L.P., a wholly owned subsidiary of 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 decline 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
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, Vice President – Investor
Relations and Treasury
(214) 840-5660, scott.grischow@sunoco.com
Derek Rabe, CFA, Manager –
Investor Relations, Strategy and Growth
(214) 840-5553, derek.rabe@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)
|
|
|
December
31,
2020
|
|
December
31,
2019
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
97
|
|
|
$
|
21
|
|
Accounts receivable,
net
|
295
|
|
|
399
|
|
Receivables from
affiliates
|
11
|
|
|
12
|
|
Inventories,
net
|
382
|
|
|
419
|
|
Other current
assets
|
62
|
|
|
73
|
|
Total current
assets
|
847
|
|
|
924
|
|
|
|
|
|
Property and
equipment
|
2,231
|
|
|
2,134
|
|
Accumulated
depreciation
|
(806)
|
|
|
(692)
|
|
Property and
equipment, net
|
1,425
|
|
|
1,442
|
|
Other
assets:
|
|
|
|
Finance lease
right-of-use assets, net
|
3
|
|
|
29
|
|
Operating lease
right-of-use assets, net
|
536
|
|
|
533
|
|
Goodwill
|
1,564
|
|
|
1,555
|
|
|
|
|
|
Intangible assets,
net
|
588
|
|
|
646
|
|
Other noncurrent
assets
|
168
|
|
|
188
|
|
Investment in
unconsolidated affiliate
|
136
|
|
|
121
|
|
Total
assets
|
$
|
5,267
|
|
|
$
|
5,438
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
267
|
|
|
$
|
445
|
|
Accounts payable to
affiliates
|
79
|
|
|
49
|
|
Accrued expenses and
other current liabilities
|
282
|
|
|
219
|
|
Operating lease
current liabilities
|
19
|
|
|
20
|
|
Current maturities of
long-term debt
|
6
|
|
|
11
|
|
Total current
liabilities
|
653
|
|
|
744
|
|
Operating lease
non-current liabilities
|
538
|
|
|
530
|
|
Revolving line of
credit
|
—
|
|
|
162
|
|
Long-term debt,
net
|
3,106
|
|
|
2,898
|
|
Advances from
affiliates
|
125
|
|
|
140
|
|
Deferred tax
liability
|
104
|
|
|
109
|
|
Other noncurrent
liabilities
|
109
|
|
|
97
|
|
Total
liabilities
|
4,635
|
|
|
4,680
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Limited
partners:
|
|
|
|
Common
unitholders
(83,333,631 units issued and outstanding as of
December 31, 2020 and
82,985,941 units issued and outstanding as of December
31, 2019)
|
632
|
|
|
758
|
|
Class C unitholders -
held by subsidiary
(16,410,780 units issued and outstanding as of
December 31, 2020 and
December 31, 2019)
|
—
|
|
|
—
|
|
Total
equity
|
632
|
|
|
758
|
|
Total liabilities and
equity
|
$
|
5,267
|
|
|
$
|
5,438
|
|
SUNOCO
LP
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
(Dollars in millions,
except per unit data)
|
(unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
|
2,463
|
|
|
$
|
4,002
|
|
|
$
|
10,332
|
|
|
$
|
16,176
|
|
Non motor fuel
sales
|
55
|
|
|
61
|
|
|
240
|
|
|
278
|
|
Lease
income
|
35
|
|
|
35
|
|
|
138
|
|
|
142
|
|
Total
revenues
|
2,553
|
|
|
4,098
|
|
|
10,710
|
|
|
16,596
|
|
Cost of sales and
operating expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
2,271
|
|
|
3,813
|
|
|
9,654
|
|
|
15,380
|
|
General and
administrative
|
25
|
|
|
35
|
|
|
112
|
|
|
136
|
|
Other
operating
|
56
|
|
|
68
|
|
|
275
|
|
|
304
|
|
Lease
expense
|
15
|
|
|
16
|
|
|
61
|
|
|
61
|
|
Loss (gain) on
disposal of assets and impairment charges
|
(5)
|
|
|
22
|
|
|
2
|
|
|
68
|
|
Depreciation,
amortization and accretion
|
47
|
|
|
46
|
|
|
189
|
|
|
183
|
|
Total cost of sales
and operating expenses
|
2,409
|
|
|
4,000
|
|
|
10,293
|
|
|
16,132
|
|
Operating
income
|
144
|
|
|
98
|
|
|
417
|
|
|
464
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense,
net
|
(44)
|
|
|
(43)
|
|
|
(175)
|
|
|
(173)
|
|
Other income
(expense), net
|
2
|
|
|
—
|
|
|
2
|
|
|
3
|
|
Equity in earnings of
unconsolidated affiliate
|
2
|
|
|
2
|
|
|
5
|
|
|
2
|
|
Loss on extinguishment
of debt
|
(13)
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
Income before income
taxes
|
91
|
|
|
57
|
|
|
236
|
|
|
296
|
|
Income tax expense
(benefit)
|
8
|
|
|
(26)
|
|
|
24
|
|
|
(17)
|
|
Net income and
comprehensive income
|
$
|
83
|
|
|
$
|
83
|
|
|
$
|
212
|
|
|
$
|
313
|
|
|
|
|
|
|
|
|
|
Net income per
common unit:
|
|
|
|
|
|
|
|
Common units -
basic
|
$
|
0.78
|
|
|
$
|
0.76
|
|
|
$
|
1.63
|
|
|
$
|
2.84
|
|
Common units -
diluted
|
$
|
0.77
|
|
|
$
|
0.75
|
|
|
$
|
1.61
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
|
Weighted average
limited partner units outstanding:
|
|
|
|
|
|
|
|
Common units -
basic
|
83,147,345
|
|
|
82,813,411
|
|
|
83,062,159
|
|
|
82,755,520
|
|
Common units -
diluted
|
83,912,647
|
|
|
83,713,959
|
|
|
83,716,464
|
|
|
83,551,962
|
|
|
|
|
|
|
|
|
|
Cash distribution
per unit
|
$
|
0.8255
|
|
|
$
|
0.8255
|
|
|
$
|
3.30
|
|
|
$
|
3.30
|
|
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 and years ended
December 31, 2020 and 2019 and have
been derived from our historical consolidated financial
statements.
|
Three Months Ended
December 31,
|
|
2020
|
|
|
2019
|
|
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
|
$
|
2,361
|
|
|
$
|
102
|
|
|
$
|
2,463
|
|
|
|
$
|
3,846
|
|
|
$
|
156
|
|
|
$
|
4,002
|
|
Non motor fuel
sales
|
8
|
|
|
46
|
|
|
54
|
|
|
|
13
|
|
|
48
|
|
|
61
|
|
Lease
income
|
38
|
|
|
(3)
|
|
|
35
|
|
|
|
37
|
|
|
(2)
|
|
|
35
|
|
Total
revenues
|
$
|
2,407
|
|
|
$
|
145
|
|
|
$
|
2,552
|
|
|
|
$
|
3,896
|
|
|
$
|
202
|
|
|
$
|
4,098
|
|
Gross profit
(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
|
198
|
|
|
$
|
14
|
|
|
$
|
212
|
|
|
|
$
|
193
|
|
|
$
|
20
|
|
|
$
|
213
|
|
Non motor fuel
sales
|
13
|
|
|
22
|
|
|
35
|
|
|
|
13
|
|
|
24
|
|
|
37
|
|
Lease
|
38
|
|
|
(3)
|
|
|
35
|
|
|
|
37
|
|
|
(2)
|
|
|
35
|
|
Total gross
profit
|
$
|
249
|
|
|
$
|
33
|
|
|
$
|
282
|
|
|
|
$
|
243
|
|
|
$
|
42
|
|
|
$
|
285
|
|
Net income and
comprehensive income
|
$
|
97
|
|
|
$
|
(14)
|
|
|
$
|
83
|
|
|
|
$
|
57
|
|
|
$
|
26
|
|
|
$
|
83
|
|
Adjusted EBITDA
(2)
|
$
|
157
|
|
|
$
|
2
|
|
|
$
|
159
|
|
|
|
$
|
147
|
|
|
$
|
21
|
|
|
$
|
168
|
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total motor fuel
gallons sold
|
|
|
|
|
1,829
|
|
|
|
|
|
|
|
2,087
|
|
Motor fuel gross
profit cents per gallon (3)
|
|
|
|
|
9.2
|
¢
|
|
|
|
|
|
|
9.9
|
¢
|
|
Year Ended
December 31,
|
|
2020
|
|
|
2019
|
|
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
|
$
|
9,930
|
|
|
$
|
402
|
|
|
$
|
10,332
|
|
|
|
$
|
15,522
|
|
|
$
|
654
|
|
|
$
|
16,176
|
|
Non motor fuel
sales
|
54
|
|
|
186
|
|
|
240
|
|
|
|
62
|
|
|
216
|
|
|
278
|
|
Lease
income
|
127
|
|
|
11
|
|
|
138
|
|
|
|
131
|
|
|
11
|
|
|
142
|
|
Total
revenues
|
$
|
10,111
|
|
|
$
|
599
|
|
|
$
|
10,710
|
|
|
|
$
|
15,715
|
|
|
$
|
881
|
|
|
$
|
16,596
|
|
Gross profit
(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
|
691
|
|
|
$
|
73
|
|
|
$
|
764
|
|
|
|
$
|
817
|
|
|
$
|
89
|
|
|
$
|
906
|
|
Non motor fuel
sales
|
48
|
|
|
106
|
|
|
154
|
|
|
|
53
|
|
|
115
|
|
|
168
|
|
Lease
|
127
|
|
|
11
|
|
|
138
|
|
|
|
131
|
|
|
11
|
|
|
142
|
|
Total gross
profit
|
$
|
866
|
|
|
$
|
190
|
|
|
$
|
1,056
|
|
|
|
$
|
1,001
|
|
|
$
|
215
|
|
|
$
|
1,216
|
|
Net income and
comprehensive income
|
$
|
208
|
|
|
$
|
4
|
|
|
$
|
212
|
|
|
|
$
|
290
|
|
|
$
|
23
|
|
|
$
|
313
|
|
Adjusted EBITDA
(2)
|
$
|
654
|
|
|
$
|
85
|
|
|
$
|
739
|
|
|
|
$
|
545
|
|
|
$
|
120
|
|
|
$
|
665
|
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total motor fuel
gallons sold
|
|
|
|
|
7,094
|
|
|
|
|
|
|
|
8,193
|
|
Motor fuel gross
profit cents per gallon (3)
|
|
|
|
|
11.9
|
¢
|
|
|
|
|
|
|
10.1
|
¢
|
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 and years ended December 31, 2020 and 2019:
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
millions)
|
|
(in
millions)
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Fuel distribution and
marketing
|
$
|
157
|
|
|
$
|
147
|
|
|
$
|
654
|
|
|
$
|
545
|
|
All other
|
2
|
|
|
21
|
|
|
85
|
|
|
120
|
|
Total Adjusted
EBITDA
|
159
|
|
|
168
|
|
|
739
|
|
|
665
|
|
Depreciation,
amortization and accretion
|
(47)
|
|
|
(46)
|
|
|
(189)
|
|
|
(183)
|
|
Interest expense,
net
|
(44)
|
|
|
(43)
|
|
|
(175)
|
|
|
(173)
|
|
Non-cash unit-based
compensation expense
|
(3)
|
|
|
(3)
|
|
|
(14)
|
|
|
(13)
|
|
(Loss) gain on
disposal of assets and impairment charges
|
5
|
|
|
(22)
|
|
|
(2)
|
|
|
(68)
|
|
Loss on extinguishment
of debt
|
(13)
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
Unrealized gain (loss)
on commodity derivatives
|
(6)
|
|
|
1
|
|
|
(6)
|
|
|
5
|
|
Inventory
adjustments
|
44
|
|
|
8
|
|
|
(82)
|
|
|
79
|
|
Equity in earnings of
unconsolidated affiliate
|
2
|
|
|
2
|
|
|
5
|
|
|
2
|
|
Adjusted EBITDA
related to unconsolidated affiliate
|
(3)
|
|
|
(3)
|
|
|
(10)
|
|
|
(4)
|
|
Other non-cash
adjustments
|
(3)
|
|
|
(5)
|
|
|
(17)
|
|
|
(14)
|
|
Income tax (expense)
benefit
|
(8)
|
|
|
26
|
|
|
(24)
|
|
|
17
|
|
Net income and
comprehensive income
|
$
|
83
|
|
|
$
|
83
|
|
|
$
|
212
|
|
|
$
|
313
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
|
159
|
|
|
$
|
168
|
|
|
$
|
739
|
|
|
$
|
665
|
|
Adjusted EBITDA
related to unconsolidated affiliate
|
3
|
|
|
3
|
|
|
10
|
|
|
4
|
|
Distributable cash
flow from unconsolidated affiliate
|
(3)
|
|
|
(3)
|
|
|
(10)
|
|
|
(4)
|
|
Cash interest
expense
|
42
|
|
|
41
|
|
|
168
|
|
|
166
|
|
Current income tax
expense (benefit)
|
—
|
|
|
(41)
|
|
|
19
|
|
|
(22)
|
|
Transaction-related
income taxes
|
—
|
|
|
31
|
|
|
—
|
|
|
31
|
|
Maintenance capital
expenditures
|
20
|
|
|
17
|
|
|
35
|
|
|
40
|
|
Distributable Cash
Flow
|
97
|
|
|
120
|
|
|
517
|
|
|
450
|
|
Transaction-related
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Distributable Cash
Flow, as adjusted (2)
|
$
|
97
|
|
|
$
|
120
|
|
|
$
|
517
|
|
|
$
|
453
|
|
|
|
|
|
|
|
|
|
Distributions to
Partners:
|
|
|
|
|
|
|
|
Limited
Partners
|
$
|
69
|
|
|
$
|
69
|
|
|
$
|
274
|
|
|
$
|
273
|
|
General
Partners
|
18
|
|
|
18
|
|
|
71
|
|
|
72
|
|
Total distributions to
be paid to partners
|
$
|
87
|
|
|
$
|
87
|
|
|
$
|
345
|
|
|
$
|
345
|
|
Common Units
outstanding - end of period
|
83.3
|
|
|
83.0
|
|
|
83.3
|
|
|
83.0
|
|
Distribution coverage
ratio (4)
|
1.13x
|
|
1.39x
|
|
1.50x
|
|
1.32x
|
___________________________
(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 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.
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.
|
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SOURCE Sunoco LP