ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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30-0740483
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common Units Representing Limited Partner Interests
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New York Stock Exchange (NYSE)
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Large accelerated filer
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ý
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging Growth company
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☐
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 1.
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Business
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•
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Sunoco, LLC (“Sunoco LLC”), a Delaware limited liability company, primarily distributes motor fuel in 30 states throughout the East Coast, Midwest, South Central and Southeast regions of the United States. Sunoco LLC also processes transmix and distributes refined product through its terminals in Alabama, Texas, Arkansas and New York.
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•
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Sunoco Retail LLC (“Sunoco Retail”), a Pennsylvania limited liability company, owns and operates retail stores that sell motor fuel and merchandise primarily in New Jersey.
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Aloha Petroleum LLC, a Delaware limited liability company, distributes motor fuel and operates terminal facilities on the Hawaiian Islands.
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Aloha Petroleum, Ltd. (“Aloha”), a Hawaii corporation, owns and operates retail stores on the Hawaiian Islands.
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•
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75
company owned and operated retail stores;
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•
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554
independently operated commission agent locations where we sell motor fuel to retail customers under commission agent arrangements with such operators;
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•
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6,741
retail stores operated by independent operators, which we refer to as “dealers” or “distributors,” pursuant to long-term distribution agreements; and
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•
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2,714
other commercial customers, including unbranded retail stores, other fuel distributors, school districts and municipalities and other industrial customers.
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Owned
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Leased
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Dealer and commission agent sites
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622
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317
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Company-operated retail stores
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6
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69
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Warehouses, offices and other
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63
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77
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Total
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691
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463
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•
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requiring remedial action to mitigate releases of hydrocarbons, hazardous substances or wastes caused by our operations or attributable to former operators;
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requiring capital expenditures to comply with environmental control requirements; and
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enjoining the operations of facilities deemed to be in noncompliance with environmental laws and regulations.
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Item 1A.
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Risk Factors
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•
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demand for motor fuel in the markets we serve, including seasonal fluctuations in demand for motor fuel;
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competition from other companies that sell motor fuel products or have convenience stores in the market areas in which we or our commission agents or dealers operate;
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regulatory action affecting the supply of or demand for motor fuel, our operations, our existing contracts or our operating costs;
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prevailing economic conditions;
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supply, extreme weather and logistics disruptions; and
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volatility of margins for motor fuel.
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the level and timing of capital expenditures we make;
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the cost of acquisitions, if any;
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our debt service requirements and other liabilities;
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fluctuations in our general working capital needs;
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reimbursements made to our general partner and its affiliates for all direct and indirect expenses they incur on our behalf pursuant to the partnership agreement;
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our ability to borrow funds at favorable interest rates and access capital markets;
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restrictions contained in debt agreements to which we are a party;
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the level of costs related to litigation and regulatory compliance matters; and
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the amount of cash reserves established by our general partner in its discretion for the proper conduct of our business.
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a general or prolonged decline in, or shocks to, regional or broader macro-economies;
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regulatory changes that could impact the markets in which we operate, such as immigration or trade reform laws or regulations prohibiting or limiting hydraulic fracturing, which could reduce demand for our goods and services or lead to pricing, currency, or other pressures; and
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deflationary economic pressures, which could hinder our ability to operate profitably in view of the challenges inherent in making corresponding deflationary adjustments to our cost structure.
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our inability to renew a ground lease for certain of our fuel storage terminals on similar terms or at all;
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our dependence on third parties to supply our fuel storage terminals;
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outages at our fuel storage terminals or interrupted operations due to weather-related or other natural causes;
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the threat that the nation’s terminal infrastructure may be a future target of terrorist organizations;
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the volatility in the prices of the products stored at our fuel storage terminals and the resulting fluctuations in demand for our storage services;
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the effects of a sustained recession or other adverse economic conditions;
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the possibility of federal and/or state regulations that may discourage our customers from storing gasoline, diesel fuel, ethanol and jet fuel at our fuel storage terminals or reduce the demand by consumers for petroleum products;
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competition from other fuel storage terminals that are able to supply our customers with comparable storage capacity at lower prices; and
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climate change legislation or regulations that restrict emissions of GHGs could result in increased operating and capital costs and reduced demand for our storage services.
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the validity of our assumptions about revenues, capital expenditures and operating costs of the acquired business or assets, as well as assumptions about achieving synergies with our existing business;
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the validity of our assessment of environmental and other liabilities, including legacy liabilities;
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the costs associated with additional debt or equity capital, which may result in a significant increase in our interest expense and financial leverage resulting from any additional debt incurred to finance the acquisition, or the issuance of additional common units on which we will make distributions, either of which could offset the expected accretion to our unitholders from such acquisition and could be exacerbated by volatility in the equity or debt capital markets;
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a failure to realize anticipated benefits, such as increased available cash per unit, enhanced competitive position or new customer relationships;
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a decrease in our liquidity by using a significant portion of our available cash or borrowing capacity to finance the acquisition;
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the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges; and
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the risk that our existing financial controls, information systems, management resources and human resources will need to grow to support future growth and we may not be able to react timely.
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operating a larger combined organization in new geographic areas and new lines of business;
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hiring, training or retaining qualified personnel to manage and operate our growing business and assets;
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integrating management teams and employees into existing operations and establishing effective communication and information exchange with such management teams and employees;
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diversion of management’s attention from our existing business;
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assimilation of acquired assets and operations, including additional regulatory programs;
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loss of customers or key employees;
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maintaining an effective system of internal controls in compliance with the Sarbanes-Oxley Act of 2002 as well as other regulatory compliance and corporate governance matters; and
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integrating new technology systems for financial reporting.
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making it more difficult for us to satisfy our obligations with respect to our senior notes and our credit agreements governing our revolving credit facility and term loan;
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limiting our ability to borrow additional amounts to fund working capital, capital expenditures, acquisitions, debt service requirements, the execution of our growth strategy and other activities;
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requiring us to dedicate a substantial portion of our cash flow from operations to pay interest on our debt, which would reduce our cash flow available to make distributions to our unitholders and to fund working capital, capital expenditures, acquisitions, execution of our growth strategy and other activities;
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•
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making us more vulnerable to adverse changes in general economic conditions, our industry and government regulations and in our business by limiting our flexibility in planning for, and making it more difficult for us to react quickly to, changing conditions; and
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placing us at a competitive disadvantage compared with our competitors that have less debt.
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incur certain additional indebtedness;
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incur, permit, or assume certain liens to exist on our properties or assets;
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make certain investments or enter into certain restrictive material contracts; and
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merge or dispose of all or substantially all of our assets.
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Our general partner’s affiliates, including ETO, ET and its affiliates, are not prohibited from engaging in other business or activities, including those in direct competition with us.
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In addition, neither our partnership agreement nor any other agreement requires ETO to pursue a business strategy that favors us. The affiliates of our general partner have fiduciary duties to make decisions in their own best interests and in the best interest of their owners, which may be contrary to our interests. In addition, our general partner is allowed to take into account the interests of parties other than us or our unitholders, such as ETO, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders.
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Certain officers and directors of our general partner are officers or directors of affiliates of our general partner, and also devote significant time to the business of these entities and are compensated accordingly.
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Affiliates of our general partner, including ETO, are not limited in their ability to compete with us and may offer business opportunities or sell assets to parties other than us.
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Our partnership agreement provides that our general partner may, but is not required to, in connection with its resolution of a conflict of interest, seek “special approval” of such resolution by appointing a conflicts committee of the general partner’s board of directors composed of one or more independent directors to consider such conflicts of interest and to either, itself, take action or recommend action to the board of directors, and any resolution of the conflict of interest by the conflicts committee shall be conclusively deemed to be approved by our unitholders.
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Except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval.
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Our general partner determines the amount and timing of asset purchases and sales, borrowings, repayment of indebtedness and issuances of additional partnership securities and the level of reserves, each of which can affect the amount of cash that is distributed to our unitholders.
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Our general partner determines the amount and timing of any capital expenditure and whether a capital expenditure is classified as a maintenance capital expenditure or an expansion capital expenditure. These determinations can affect the amount of cash that is distributed to our unitholders.
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Our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions on the incentive distribution rights.
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Our partnership agreement permits us to distribute up to $25 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions on the incentive distribution rights.
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Our general partner determines which costs incurred by it and its affiliates are reimbursable by us.
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Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with its affiliates on our behalf. There is no limitation on the amounts our general partner can cause us to pay it or its affiliates.
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Our general partner has limited its liability regarding our contractual and other obligations.
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Our general partner may exercise its right to call and purchase common units if it and its affiliates own more than 80% of the common units.
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Our general partner controls the enforcement of obligations owed to us by it and its affiliates. In addition, our general partner will decide whether to retain separate counsel or others to perform services for us.
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ETO may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to ETO’s incentive distribution rights without the approval of the conflicts committee of the board of directors of our general partner or our unitholders. This election may result in lower distributions to our common unitholders in certain situations.
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the right to share in Partnership’s profits and losses;
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the right to share in the Partnership’s distributions;
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the rights upon dissolution and liquidation of the Partnership;
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whether, and the terms upon which, the Partnership may redeem the securities;
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whether the securities will be issued, evidenced by certificates and assigned or transferred; and
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the right, if any, of the security to vote on matters relating to the Partnership, including matters relating to the relative rights, preferences and privileges of such security.
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Our partnership agreement permits our general partner to make a number of decisions in its individual capacity, as opposed to its capacity as general partner. This entitles our general partner to consider only the interests and factors that it desires, with no duty or obligation to give consideration to the interests of, or factors affecting, our common unitholders. Decisions made by our general partner in its individual capacity will be made by ETO, as the owner of our general partner, and not by the board of directors of our general partner. Examples of such decisions include:
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whether to exercise limited call rights;
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how to exercise voting rights with respect to any units it owns;
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whether to exercise registration rights; and
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whether to consent to any merger or consolidation, or amendment to our partnership agreement.
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Our partnership agreement provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as general partner so long as it acted in good faith, meaning it believed that the decisions were not adverse to the interests of our partnership.
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Our partnership agreement provides that our general partner and the officers and directors of our general partner will not be liable for monetary damages to us for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or those persons acted in bad faith or, in the case of a criminal matter, acted with knowledge that such person’s conduct was criminal.
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Our partnership agreement provides that our general partner will not be in breach of its obligations under the partnership agreement or its duties to us or our limited partners with respect to any transaction involving an affiliate if:
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the transaction with an affiliate or the resolution of a conflict of interest is:
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approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligated to seek such approval; or
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approved by the vote of a majority of the outstanding common units, excluding any common units owned by our general partner and its affiliates; or
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the board of directors of our general partner acted in good faith in taking any action or failing to act.
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our existing unitholders’ proportionate ownership interest in us will decrease;
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the amount of cash available for distribution on each unit may decrease;
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the ratio of taxable income to distributions may increase;
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the relative voting strength of each previously outstanding unit may be diminished; and
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the market price of the common units may decline.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Our Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities
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•
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provide for the proper conduct of our business;
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comply with applicable law, any of our debt instruments or other agreements or any other obligation; or
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provide funds for distributions to our unitholders for any one or more of the next four quarters;
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Marginal percentage interest in distributions
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Total quarterly distribution per
Common unit target amount
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Common
Unitholders
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IDR Holder
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Minimum Quarterly Distribution
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$0.4375
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100
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%
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—
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First Target Distribution
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Above $0.4375 up to $0.503125
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100
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%
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—
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Second Target Distribution
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Above $0.503125 up to $0.546875
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85
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%
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15
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%
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Third Target Distribution
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Above $0.546875 up to $0.656250
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75
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%
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25
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%
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Thereafter
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Above $0.656250
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50
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%
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50
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%
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Item 6.
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Selected Financial Data
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Year Ended December 31,
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2018
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2017
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2016
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2015
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2014 (1)
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(in millions, except per unit data)
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Statement of Income Data:
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Total revenues
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$
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16,994
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$
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11,723
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$
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9,986
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$
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12,430
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$
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9,579
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Operating income
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$
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345
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$
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229
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$
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145
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$
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252
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$
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37
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Income (loss) from continuing operations
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$
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58
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$
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326
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$
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56
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$
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156
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$
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(26
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)
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Net income (loss) from continuing operations per common limited partner unit - basic
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$
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(0.25
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)
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$
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2.13
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$
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(0.32
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)
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$
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0.91
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$
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1.75
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Net income (loss) from continuing operations per common limited partner unit - diluted
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$
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(0.25
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)
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$
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2.12
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$
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(0.32
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)
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$
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0.91
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$
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1.75
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Cash distribution per unit
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$
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3.30
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$
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3.30
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$
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3.29
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$
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2.89
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$
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2.17
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|
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As of December 31,
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2018
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2017
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2016
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2015
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2014
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(in millions)
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Balance Sheet Data (at period end):
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Total assets
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$
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4,879
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|
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$
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8,344
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$
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8,701
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$
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8,842
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|
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$
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8,773
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Long-term debt, less current maturities
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$
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2,980
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$
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4,284
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$
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4,509
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$
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1,953
|
|
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$
|
1,092
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Total equity
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$
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784
|
|
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$
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2,247
|
|
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$
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2,196
|
|
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$
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5,263
|
|
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$
|
6,008
|
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(1)
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Reflects combined results of the Predecessor period from January 1, 2014 through August 31, 2014, and the Successor period from September 1, 2014 to December 31, 2014. The impact from “push down” accounting related to the ETP Merger resulted in a $1.7 billion net change in the fair value of the Partnership’s assets and liabilities and a $4 million decrease in depreciation expense, offset by a $4 million increase in amortization expense.
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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•
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our ability to make, complete and integrate acquisitions from affiliates or third-parties;
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•
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business strategy and operations of Energy Transfer Operating, L.P. and Energy Transfer LP and their respective conflicts of interest with us;
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•
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changes in the price of and demand for the motor fuel that we distribute and our ability to appropriately hedge any motor fuel we hold in inventory;
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•
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our dependence on limited principal suppliers;
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•
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competition in the wholesale motor fuel distribution and retail store industry;
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•
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changing customer preferences for alternate fuel sources or improvement in fuel efficiency;
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•
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changes in our credit rating, as assigned by rating agencies;
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•
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a deterioration in the credit and/or capital market;
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•
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environmental, tax and other federal, state and local laws and regulations;
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•
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the fact that we are not fully insured against all risk incidents to our business;
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•
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dangers inherent in the storage and transportation of motor fuel;
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•
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our ability to manage growth and/or control costs;
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•
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our reliance on senior management, supplier trade credit and information technology; and
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•
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our partnership structure, which may create conflicts of interest between us and Sunoco GP LLC, our general partner (“General Partner”), and its affiliates, and limits the fiduciary duties of our General Partner and its affiliates.
|
•
|
75
company owned and operated retail stores;
|
•
|
554
independently operated commission agent locations where we sell motor fuel to retail customers under commission agent arrangement with such operators;
|
•
|
6,741
retail stores operated by independent operators, which we refer to as “dealers” or “distributors,” pursuant to long-term distribution agreements; and
|
•
|
2,714
other commercial customers, including unbranded retail stores, other fuel distributors, school districts, municipalities and other industrial customers.
|
•
|
Motor fuel gallons sold
. One of the primary drivers of our business is the total volume of motor fuel sold through our channels. Fuel distribution contracts with our customers generally provide that we distribute motor fuel at a fixed, volume-based profit margin or at an agreed upon level of price support. As a result, gross profit is directly tied to the volume of motor fuel that we distribute.
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•
|
Gross profit per gallon
. Gross profit per gallon is calculated as the gross profit on motor fuel (excluding non-cash inventory adjustments) divided by the number of gallons sold, and is typically expressed as cents per gallon. Our gross profit per gallon varies amongst our third-party relationships and is impacted by the availability of certain discounts and rebates from suppliers. Retail gross profit per gallon is heavily impacted by volatile pricing and intense competition from retail stores, supermarkets, club stores and other retail formats, which varies based on the market.
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•
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Adjusted EBITDA and Distributable Cash Flow, as adjusted
. Adjusted EBITDA, as used throughout this document, 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, Series A Preferred distribution, current income tax expense, maintenance capital expenditures and other non-cash adjustments.
|
•
|
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
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•
|
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.
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•
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they do not reflect our total cash expenditures, or future requirements for capital expenditures or contractual commitments;
|
•
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they do not reflect changes in, or cash requirements for, working capital;
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•
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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;
|
•
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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 do 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.
|
|
Year Ended December 31,
|
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|
2018
|
|
|
2017
|
||||||||||||||||||||
|
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
|
$
|
15,466
|
|
|
$
|
1,038
|
|
|
$
|
16,504
|
|
|
|
$
|
9,333
|
|
|
$
|
1,577
|
|
|
$
|
10,910
|
|
Rental income
|
118
|
|
|
12
|
|
|
130
|
|
|
|
77
|
|
|
12
|
|
|
89
|
|
||||||
Other
|
48
|
|
|
312
|
|
|
360
|
|
|
|
50
|
|
|
674
|
|
|
724
|
|
||||||
Total revenues
|
$
|
15,632
|
|
|
$
|
1,362
|
|
|
$
|
16,994
|
|
|
|
$
|
9,460
|
|
|
$
|
2,263
|
|
|
$
|
11,723
|
|
Gross profit (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Motor fuel
|
$
|
673
|
|
|
$
|
123
|
|
|
$
|
796
|
|
|
|
$
|
535
|
|
|
$
|
157
|
|
|
$
|
692
|
|
Rental
|
118
|
|
|
12
|
|
|
130
|
|
|
|
77
|
|
|
12
|
|
|
89
|
|
||||||
Other
|
40
|
|
|
156
|
|
|
196
|
|
|
|
39
|
|
|
288
|
|
|
327
|
|
||||||
Total gross profit
|
$
|
831
|
|
|
$
|
291
|
|
|
$
|
1,122
|
|
|
|
$
|
651
|
|
|
$
|
457
|
|
|
$
|
1,108
|
|
Income (loss) from continuing operations
|
80
|
|
|
(22
|
)
|
|
58
|
|
|
|
167
|
|
|
159
|
|
|
326
|
|
||||||
Loss from discontinued operations, net of taxes
|
—
|
|
|
(265
|
)
|
|
(265
|
)
|
|
|
—
|
|
|
(177
|
)
|
|
(177
|
)
|
||||||
Net income (loss) and comprehensive income (loss)
|
$
|
80
|
|
|
$
|
(287
|
)
|
|
$
|
(207
|
)
|
|
|
$
|
167
|
|
|
$
|
(18
|
)
|
|
$
|
149
|
|
Adjusted EBITDA (2)
|
$
|
554
|
|
|
$
|
84
|
|
|
$
|
638
|
|
|
|
$
|
346
|
|
|
$
|
386
|
|
|
$
|
732
|
|
Distributable Cash Flow, as adjusted (2)
|
|
|
|
|
$
|
455
|
|
|
|
|
|
|
|
$
|
473
|
|
||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total motor fuel gallons sold (3)
|
|
|
|
|
7,859
|
|
|
|
|
|
|
|
7,947
|
|
||||||||||
Motor fuel gross profit cents per gallon (3) (4)
|
|
|
|
|
|
11.4
|
¢
|
|
|
|
|
|
|
|
15.2
|
¢
|
(1)
|
Excludes depreciation, amortization and accretion.
|
(2)
|
We define Adjusted EBITDA and Distributable Cash Flow, as adjusted as described above under “Key Measures Used to Evaluate and Assess Our Business.”
|
(3)
|
Includes amounts from discontinued operations. The
3.8 cent
per gallon decrease was primarily attributable to the divestiture of the majority of company-operated sites.
|
(4)
|
Includes other non-cash adjustments and excludes the impact of inventory adjustments consistent with the definition of Adjusted EBITDA.
|
|
Year Ended December 31,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
|
(in millions)
|
||||||||||
Segment Adjusted EBITDA
|
|
|
|
|
|
||||||
Fuel distribution and marketing
|
$
|
554
|
|
|
$
|
346
|
|
|
$
|
208
|
|
All other
|
84
|
|
|
386
|
|
|
(302
|
)
|
|||
Total
|
638
|
|
|
732
|
|
|
(94
|
)
|
|||
Depreciation, amortization and accretion (1)
|
(182
|
)
|
|
(203
|
)
|
|
21
|
|
|||
Interest expense, net (1)
|
(146
|
)
|
|
(245
|
)
|
|
99
|
|
|||
Non-cash compensation expense (1)
|
(12
|
)
|
|
(24
|
)
|
|
12
|
|
|||
Loss on disposal of assets and impairment charges (1)
|
(80
|
)
|
|
(400
|
)
|
|
320
|
|
|||
Loss on extinguishment of debt and other (1)
|
(129
|
)
|
|
—
|
|
|
(129
|
)
|
|||
Unrealized gain (loss) on commodity derivatives (1)
|
(6
|
)
|
|
3
|
|
|
(9
|
)
|
|||
Inventory adjustments (1)
|
(84
|
)
|
|
28
|
|
|
(112
|
)
|
|||
Other non-cash adjustments
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
|||
Income (loss) before income tax (expense) benefit (1)
|
(15
|
)
|
|
(109
|
)
|
|
94
|
|
|||
Income tax (expense) benefit (1)
|
(192
|
)
|
|
258
|
|
|
(450
|
)
|
|||
Net income (loss) and comprehensive income (loss)
|
$
|
(207
|
)
|
|
$
|
149
|
|
|
$
|
(356
|
)
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
638
|
|
|
$
|
732
|
|
|
$
|
(94
|
)
|
Cash interest expense (1)
|
142
|
|
|
231
|
|
|
(89
|
)
|
|||
Current income tax expense (1)
|
489
|
|
|
4
|
|
|
485
|
|
|||
Transaction-related income taxes (2)
|
(470
|
)
|
|
—
|
|
|
(470
|
)
|
|||
Maintenance capital expenditures (1)
|
31
|
|
|
48
|
|
|
(17
|
)
|
|||
Distributable Cash Flow
|
446
|
|
|
449
|
|
|
(3
|
)
|
|||
Transaction-related expenses (1)
|
11
|
|
|
47
|
|
|
(36
|
)
|
|||
Series A Preferred distribution
|
(2
|
)
|
|
(23
|
)
|
|
21
|
|
|||
Distributable Cash Flow, as adjusted
|
$
|
455
|
|
|
$
|
473
|
|
|
$
|
(18
|
)
|
(1)
|
Includes amounts from discontinued operations.
|
(2)
|
Transaction-related income taxes primarily related to the 7-Eleven Transaction.
|
•
|
a decrease in the gross profit on motor fuel sales of $294 million, primarily due to a 25.2%, or $0.038, decrease in cents per gallons sold as a result of the change in mix of gallons sold from higher gross profit company-operated fuel sites to supplying lower gross profit fuel distribution and marketing gallons as a result of the divestment of 1,030 company-operated fuel sites to 7-Eleven on January 23, 2018;
|
•
|
a decrease in other gross profit of $671 million, primarily related to lower merchandise gross profit as a result of the divestment of 1,030 company-operated fuel sites to 7-Eleven on January 23, 2018; offset by
|
•
|
a decrease in operating costs of $871 million, as a result of the divestment of 1,030 company-operated fuel sites to 7-Eleven on January 23, 2018. These expenses include other operating expense, general and administrative expense and rent expense.
|
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
2017
|
|
|
2016
|
||||||||||||||||||||
|
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
|
$
|
9,333
|
|
|
$
|
1,577
|
|
|
$
|
10,910
|
|
|
|
$
|
7,874
|
|
|
$
|
1,338
|
|
|
$
|
9,212
|
|
Rental income
|
77
|
|
|
12
|
|
|
89
|
|
|
|
76
|
|
|
12
|
|
|
88
|
|
||||||
Other
|
50
|
|
|
674
|
|
|
724
|
|
|
|
45
|
|
|
641
|
|
|
686
|
|
||||||
Total revenues
|
$
|
9,460
|
|
|
$
|
2,263
|
|
|
$
|
11,723
|
|
|
|
$
|
7,995
|
|
|
$
|
1,991
|
|
|
$
|
9,986
|
|
Gross profit (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Motor fuel
|
$
|
535
|
|
|
$
|
157
|
|
|
$
|
692
|
|
|
|
$
|
596
|
|
|
$
|
163
|
|
|
$
|
759
|
|
Rental
|
77
|
|
|
12
|
|
|
89
|
|
|
|
76
|
|
|
12
|
|
|
88
|
|
||||||
Other
|
39
|
|
|
288
|
|
|
327
|
|
|
|
34
|
|
|
275
|
|
|
309
|
|
||||||
Total gross profit
|
$
|
651
|
|
|
$
|
457
|
|
|
$
|
1,108
|
|
|
|
$
|
706
|
|
|
$
|
450
|
|
|
$
|
1,156
|
|
Income (loss) from continuing operations
|
167
|
|
|
159
|
|
|
326
|
|
|
|
252
|
|
|
(196
|
)
|
|
56
|
|
||||||
Loss from discontinued operations, net of taxes
|
—
|
|
|
(177
|
)
|
|
(177
|
)
|
|
|
—
|
|
|
(462
|
)
|
|
(462
|
)
|
||||||
Net income (loss) and comprehensive income (loss)
|
$
|
167
|
|
|
$
|
(18
|
)
|
|
$
|
149
|
|
|
|
$
|
252
|
|
|
$
|
(658
|
)
|
|
$
|
(406
|
)
|
Adjusted EBITDA (2)
|
$
|
346
|
|
|
$
|
386
|
|
|
$
|
732
|
|
|
|
$
|
320
|
|
|
$
|
345
|
|
|
$
|
665
|
|
Distributable Cash Flow, as adjusted (2)
|
|
|
|
|
$
|
473
|
|
|
|
|
|
|
|
$
|
390
|
|
||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total motor fuel gallons sold (3)
|
|
|
|
|
7,947
|
|
|
|
|
|
|
|
7,805
|
|
||||||||||
Motor fuel gross profit cents per gallon (3) (4)
|
|
|
|
|
|
15.2
|
¢
|
|
|
|
|
|
|
|
14.4
|
¢
|
(1)
|
Excludes depreciation, amortization and accretion.
|
(2)
|
We define Adjusted EBITDA and Distributable Cash Flow, as adjusted as described above under “Key Measures Used to Evaluate and Assess Our Business.”
|
(3)
|
Includes amounts from discontinued operations.
|
(4)
|
Excludes the impact of inventory adjustments consistent with the definition of Adjusted EBITDA.
|
|
Year Ended December 31,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
|
(in millions)
|
||||||||||
Segment Adjusted EBITDA
|
|
|
|
|
|
||||||
Fuel distribution and marketing
|
$
|
346
|
|
|
$
|
320
|
|
|
$
|
26
|
|
All other
|
386
|
|
|
345
|
|
|
41
|
|
|||
Total
|
732
|
|
|
665
|
|
|
67
|
|
|||
Depreciation, amortization and accretion (1)
|
(203
|
)
|
|
(319
|
)
|
|
116
|
|
|||
Interest expense, net (1)
|
(245
|
)
|
|
(189
|
)
|
|
(56
|
)
|
|||
Non-cash compensation expense (1)
|
(24
|
)
|
|
(13
|
)
|
|
(11
|
)
|
|||
Loss on disposal of assets and impairment charges (1)
|
(400
|
)
|
|
(680
|
)
|
|
280
|
|
|||
Unrealized gain (loss) on commodity derivatives (1)
|
3
|
|
|
(5
|
)
|
|
8
|
|
|||
Inventory adjustments (1)
|
28
|
|
|
104
|
|
|
(76
|
)
|
|||
Loss before income tax benefit (1)
|
(109
|
)
|
|
(437
|
)
|
|
328
|
|
|||
Income tax benefit (1)
|
258
|
|
|
31
|
|
|
227
|
|
|||
Net loss and comprehensive loss
|
$
|
149
|
|
|
$
|
(406
|
)
|
|
$
|
555
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
732
|
|
|
$
|
665
|
|
|
$
|
67
|
|
Cash interest expense (1)
|
231
|
|
|
178
|
|
|
53
|
|
|||
Current income tax expense (1)
|
4
|
|
|
—
|
|
|
4
|
|
|||
Maintenance capital expenditures (1)
|
48
|
|
|
106
|
|
|
(58
|
)
|
|||
Distributable Cash Flow
|
449
|
|
|
381
|
|
|
68
|
|
|||
Transaction-related expenses (1)
|
47
|
|
|
9
|
|
|
38
|
|
|||
Series A Preferred distribution
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|||
Distributable Cash Flow, as adjusted
|
$
|
473
|
|
|
$
|
390
|
|
|
$
|
83
|
|
(1)
|
Includes amounts from discontinued operations.
|
•
|
an increase in the gross profit on motor fuel sales of $83 million, primarily due to a 6.8%, or $0.009, increase in cents per gallons sold and an increase in gallons sold of approximately 143 million;
|
•
|
an increase in other gross profit of $31 million, primarily related to new store construction and rental income compared to the prior year; offset by
|
•
|
an increase in operating costs of $47 million, primarily related to transaction costs for
2017
acquisitions and increased operating costs related to new company-operated fuel sites.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||
|
(in millions)
|
||||||||||
Net cash provided by (used in)
|
|
|
|
|
|
||||||
Operating activities - continuing operations
|
$
|
447
|
|
|
$
|
303
|
|
|
$
|
466
|
|
Investing activities - continuing operations
|
(469
|
)
|
|
(132
|
)
|
|
(331
|
)
|
|||
Financing activities - continuing operations
|
(2,684
|
)
|
|
(339
|
)
|
|
2,501
|
|
|||
Discontinued operations
|
2,734
|
|
|
93
|
|
|
(2,585
|
)
|
|||
Net increase (decrease) in cash
|
$
|
28
|
|
|
$
|
(75
|
)
|
|
$
|
51
|
|
•
|
issued $2.2 billion of Senior Notes, 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;
|
•
|
borrowed
$2.8 billion
and repaid
$2.9 billion
under our 2014 Revolver and 2018 Revolver to fund daily operations;
|
•
|
redeemed $2.2 billion of our existing senior notes, comprised of $800 million in aggregate principal amount of 6.250% senior notes due 2021, $600 million in aggregate principal amount of 5.500% senior notes due 2020, and $800 million in aggregate principal amount of 6.375% senior notes due 2023;
|
•
|
repaid the
$1.2 billion
Term Loan in full and terminated it;
|
•
|
redeemed the outstanding Series A Preferred Units held by ETE for $300 million and a call premium of $3 million;
|
•
|
repurchased 17,286,859 SUN common units owned by ETP for aggregate cash consideration of approximately $540 million; and
|
•
|
paid
$383 million
in distributions to our unitholders, of which $192 million was paid to ETO and ET collectively.
|
|
Payments Due by Years
|
||||||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Long-term debt obligations, including current portion (1)
|
$
|
3,008
|
|
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
1,712
|
|
|
$
|
1,279
|
|
Interest payments (2)
|
927
|
|
|
156
|
|
|
311
|
|
|
248
|
|
|
212
|
|
|||||
Operating lease obligations (3)
|
412
|
|
|
64
|
|
|
103
|
|
|
69
|
|
|
176
|
|
|||||
Service concession arrangement (4)
|
394
|
|
|
15
|
|
|
30
|
|
|
31
|
|
|
318
|
|
|||||
Total
|
$
|
4,741
|
|
|
$
|
240
|
|
|
$
|
456
|
|
|
$
|
2,060
|
|
|
$
|
1,985
|
|
(1)
|
Payments include required principal payments on our debt, capital lease obligations and sale leaseback obligations (see Note 10 to our Consolidated Financial Statements). Assumes the balance of the 2018 Revolver, of which the balance at
December 31, 2018
was
$700 million
, remains outstanding until the 2018 Revolver matures in July 2023.
|
(2)
|
Includes interest on outstanding debt, capital lease obligations and sale leaseback financing obligations. Includes interest on the 2018 Revolver balance as of
December 31, 2018
and commitment fees on the unused portion of the facility through July 2023 using rates in effect at
December 31, 2018
.
|
(3)
|
Includes minimum rental commitments under non-cancelable leases.
|
(4)
|
Includes minimum guaranteed payments under service concession arrangements with New Jersey Turnpike Authority and New York Thruway Authority.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
•
|
interest rate risk on short-term borrowings; and
|
•
|
the impact of interest rate movements on our ability to obtain adequate financing to fund future acquisitions.
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and board of directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Name
|
Age
|
Position With Our General Partner
|
Matthew S. Ramsey
|
63
|
Chairman of the Board
|
Joseph Kim
|
47
|
President & Chief Executive Officer and Director
|
Arnold D. Dodderer
|
51
|
General Counsel & Assistant Secretary
|
Karl R. Fails
|
44
|
Senior Vice President, Chief Operations Officer
|
Brian A. Hand
|
51
|
Senior Vice President, Chief Development & Marketing Officer
|
S. Blake Heinemann
|
65
|
Senior Vice President, Chief Sales Officer
|
Thomas R. Miller
|
58
|
Chief Financial Officer
|
Oscar A. Alvarez
|
63
|
Director
|
Imad K. Anbouba
|
64
|
Director
|
James W. Bryant
|
85
|
Director
|
Christopher R. Curia
|
63
|
Director and Executive Vice President, Human Resources
|
Thomas E. Long
|
62
|
Director
|
Item 11.
|
Executive Compensation
|
•
|
A severance payment to Mr. Heinemann of total gross amount of $294,201.58, less all required government payroll deductions and withholdings, which is an amount equal to forty-four (44) weeks of Mr. Heinemann’s base salary;
|
•
|
The acceleration and vesting of 38,276 restricted phantom units previously granted under the Sunoco LP 2012 Long-Term Incentive Plan; and
|
•
|
Payment by the Partnership of the full cost of Mr. Heinemann’s premium for continued health insurance coverage under the Company’s health insurance plan for a period of eight (8) months;
|
•
|
reward executives with an industry-competitive total compensation package of competitive base salaries and significant incentive opportunities yielding a total compensation package approaching the top-quartile of the market;
|
•
|
attract, retain and reward talented executive officers and key management employees by providing total compensation competitive with that of other executive officers and key management employees employed by publicly traded limited partnerships of similar size and in similar lines of business;
|
•
|
motivate executive officers and key employees to achieve strong financial and operational performance;
|
•
|
emphasize performance-based or “at-risk” compensation; and
|
•
|
reward individual performance.
|
•
|
annual base salary;
|
•
|
non-equity incentive plan compensation consisting solely of discretionary cash bonuses;
|
•
|
time-vested restricted unit and/or restricted phantom unit awards under the equity incentive plan;
|
•
|
payment of distribution equivalent rights (“DERs”) on unvested time-based restricted unit and/or restricted phantom unit awards under our equity incentive plan;
|
•
|
vesting of previously issued time-based restricted unit and/or restricted phantom unit awards issued pursuant to equity incentive plans of affiliates;
|
•
|
401(k) plan employer contributions; and
|
•
|
severance payments where applicable.
|
Employee Level
|
|
Minimum Severance Pay
|
|
Maximum Severance Pay
|
Senior Manager or below
|
|
8 weeks of Base Pay
|
|
26 weeks of Base Pay
|
Director or Senior Director
|
|
16 weeks of Base Pay
|
|
39 weeks of Base Pay
|
Vice President and above
|
|
26 weeks of Base Pay
|
|
52 weeks of Base Pay
|
Employee Level
|
|
Accelerated Vesting of Outstanding LTIP Awards
|
Senior Manager or below
|
|
30% of the unvested outstanding LTIP awards
|
Director or Senior Director
|
|
40% of the unvested outstanding LTIP awards
|
Vice President and above
|
|
50% of the unvested outstanding LTIP awards
|
Name and Principal Position
|
Year
|
|
Salary ($) (1)
|
|
Bonus ($)
|
|
Unit Awards ($) (2)
|
|
Non-Equity Incentive Plan
Compensation ($) (3)
|
|
Change in Nonqualified Deferred Compensation Earnings ($)
|
|
All Other Compensation ($) (4)
|
|
Total ($)
|
||||||||||||||
Joseph Kim
|
2018
|
|
$
|
502,772
|
|
|
$
|
—
|
|
|
$
|
1,964,430
|
|
|
$
|
719,000
|
|
|
$
|
—
|
|
|
$
|
15,541
|
|
|
$
|
3,201,743
|
|
President and Chief Executive Officer
|
2017
|
|
386,913
|
|
|
—
|
|
|
897,278
|
|
|
406,259
|
|
|
—
|
|
|
9,884
|
|
|
1,700,334
|
|
|||||||
2016
|
|
378,462
|
|
|
—
|
|
|
607,425
|
|
|
272,492
|
|
|
—
|
|
|
3,797
|
|
|
1,262,176
|
|
||||||||
Thomas R. Miller
|
2018
|
|
332,542
|
|
|
—
|
|
|
538,200
|
|
|
365,800
|
|
|
—
|
|
|
17,066
|
|
|
1,253,608
|
|
|||||||
Chief Financial Officer and Treasurer
|
2017
|
|
323,692
|
|
|
—
|
|
|
524,475
|
|
|
323,692
|
|
|
—
|
|
|
9,430
|
|
|
1,181,289
|
|
|||||||
2016
|
|
196,923
|
|
|
—
|
|
|
1,021,650
|
|
|
230,400
|
|
|
—
|
|
|
22,208
|
|
|
1,471,181
|
|
||||||||
S. Blake Heinemann
|
2018
|
|
342,240
|
|
|
—
|
|
|
592,020
|
|
|
376,500
|
|
|
—
|
|
|
15,989
|
|
|
1,326,749
|
|
|||||||
Senior Vice President — Chief Sales Officer
|
2017
|
|
333,132
|
|
|
—
|
|
|
524,475
|
|
|
333,132
|
|
|
—
|
|
|
12,294
|
|
|
1,203,033
|
|
|||||||
2016
|
|
325,855
|
|
|
—
|
|
|
534,000
|
|
|
234,616
|
|
|
—
|
|
|
12,182
|
|
|
1,106,653
|
|
||||||||
Karl R. Fails
|
2018
|
|
311,758
|
|
|
—
|
|
|
699,660
|
|
|
342,900
|
|
|
(28,110
|
)
|
|
16,252
|
|
|
1,342,460
|
|
|||||||
Senior Vice President — Chief Commercial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Brian A. Hand
|
2018
|
|
304,154
|
|
|
—
|
|
|
632,385
|
|
|
334,600
|
|
|
(6,552
|
)
|
|
14,764
|
|
|
1,279,351
|
|
|||||||
Senior Vice President — Chief Development & Marketing Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For comparative purposes, the above table provides a summary of the total compensation for each NEO for each of 2016, 2017 and 2018. In accordance with the terms of our partnership agreement, we reimburse our General Partner and its affiliates for compensation related expenses attributable to the portion of the named executive officer’s time dedicated to providing services to us. For the periods presented, amounts reported herein reflect (i) 100% of the cash compensation expense associated with the NEO’s services and (iii) 100% grant date value of phantom unit awards associated with the services performed by each of the NEOs and directors. Cash compensation expenses for each NEO were allocated on the basis of total cash compensation earned by the NEO during the period.
|
(2)
|
The amounts reported for unit awards represent the full grant date fair value of restricted units and/or restricted phantom units granted to each of our NEOs, calculated in accordance with the accounting guidance on share-based payments.
|
(3)
|
Sunoco LP maintains the Bonus Plan which provides for discretionary basis. Award of discretionary bonuses are tied to achievement of targeted performance objectives and described in the Compensation Discussion and Analysis.
|
(4)
|
The amounts reflected for 2018 in this column include (i) 401(k) Plan matching contributions made on behalf of the named executive officers of $12,292 for Mr. Kim, $9,412 for Mr. Heinemann, $11,642 for Mr. Hand and $13,750 each for Messrs. Miller and Fails, (ii) health savings account contributions made on behalf of the named executive officers of $2,000 each for Messrs. Kim, Fails and Hand and $1,000 each for Messrs. Miller and Heinemann, and (iii) the dollar value of life insurance premiums paid for the benefit of the named executive officers of $1,249 for Mr. Kim, $2,316 for Mr. Miller, $5,577 for Mr. Heinemann, $502 for Mr. Fails and $1,122 for Mr. Hand. The amounts reflected for all periods exclude distribution payments in connection with distribution equivalent rights on unvested unit awards, because the dollar value of such distributions are factored into the grant date fair value reported in the “Unit Awards” column of the Summary Compensation Table at the time that the unit awards and distribution equivalent rights were originally granted. For 2018, distribution payments in connection with distribution equivalent rights totaled $262,740 for Mr. Kim, $175,006 for Mr. Miller, $228,645 for Mr. Heinemann, $189,940 for Mr. Fails and $149,322 for Mr. Hand.
|
Name
|
|
Grant Date
|
|
Type of Award (1)
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock
(#) (1)
|
|
Grant Date
Fair Value of
Stock Awards
($) (1)
|
|||
|
|
|
|
|
|
|
|
|
|
||
Joseph Kim
|
|
12/19/2018
|
|
Restricted units
|
|
73,000
|
|
|
$
|
1,964,430
|
|
Thomas R. Miller
|
|
12/19/2018
|
|
Restricted units
|
|
20,000
|
|
|
538,200
|
|
|
S. Blake Heinemann
|
|
12/19/2018
|
|
Restricted units
|
|
22,000
|
|
|
592,020
|
|
|
Karl R. Fails
|
|
12/19/2018
|
|
Restricted units
|
|
26,000
|
|
|
699,660
|
|
|
Brian A. Hand
|
|
12/19/2018
|
|
Restricted units
|
|
23,500
|
|
|
632,385
|
|
(1)
|
The restricted units granted in December 2018 vest 60% in December 2021 and 40% in December 2023. The reported grant date fair value of stock awards was determined in compliance with FASB ASC Topic 718 and are more fully described in Note 18–Unit-Based Compensation in our Notes to Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.”
|
|
|
|
|
Unit Awards (1)
|
||||||||||||
Name
|
|
Grant Date (1)
|
|
Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#)
|
|
Market
Value of
Shares or
Units
That
Have Not
Vested
($) (2)
|
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
(#)
|
|
Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested
($)
|
||||||
Joseph Kim
|
|
12/19/2018
|
|
73,000
|
|
|
$
|
1,984,870
|
|
|
—
|
|
|
$
|
—
|
|
|
|
12/21/2017
|
|
31,650
|
|
|
860,564
|
|
|
—
|
|
|
—
|
|
||
|
|
12/29/2016
|
|
22,750
|
|
|
618,573
|
|
|
—
|
|
|
—
|
|
||
|
|
12/16/2015
|
|
6,868
|
|
|
186,741
|
|
|
—
|
|
|
—
|
|
||
|
|
10/26/2015
|
|
8,000
|
|
|
217,520
|
|
|
—
|
|
|
—
|
|
||
Thomas R. Miller
|
|
12/19/2018
|
|
20,000
|
|
|
543,800
|
|
|
—
|
|
|
—
|
|
||
|
|
12/21/2017
|
|
18,500
|
|
|
503,015
|
|
|
—
|
|
|
—
|
|
||
|
|
12/29/2016
|
|
19,500
|
|
|
530,205
|
|
|
—
|
|
|
—
|
|
||
|
|
5/26/2016
|
|
6,000
|
|
|
163,140
|
|
|
—
|
|
|
—
|
|
||
S. Blake Heinemann
|
|
12/19/2018
|
|
22,000
|
|
|
598,180
|
|
|
—
|
|
|
—
|
|
||
|
|
12/21/2017
|
|
18,500
|
|
|
503,015
|
|
|
—
|
|
|
—
|
|
||
|
|
12/29/2016
|
|
20,000
|
|
|
543,800
|
|
|
—
|
|
|
—
|
|
||
|
|
12/16/2015
|
|
5,912
|
|
|
160,747
|
|
|
—
|
|
|
—
|
|
||
|
|
1/26/2015
|
|
3,312
|
|
|
90,053
|
|
|
—
|
|
|
—
|
|
||
|
|
11/10/2014
|
|
10,000
|
|
|
271,900
|
|
|
—
|
|
|
—
|
|
||
Karl R. Fails
|
|
12/19/2018
|
|
26,000
|
|
|
706,940
|
|
|
—
|
|
|
—
|
|
||
|
|
12/21/2017
|
|
20,500
|
|
|
557,395
|
|
|
—
|
|
|
—
|
|
||
|
|
12/29/2016
|
|
18,000
|
|
|
489,420
|
|
|
—
|
|
|
—
|
|
||
|
|
12/16/2015
|
|
3,640
|
|
|
98,972
|
|
|
—
|
|
|
—
|
|
||
|
|
1/26/2015
|
|
3,028
|
|
|
82,331
|
|
|
—
|
|
|
—
|
|
||
|
|
11/10/2014
|
|
5,000
|
|
|
135,950
|
|
|
—
|
|
|
—
|
|
||
Brian A. Hand
|
|
12/19/2018
|
|
23,500
|
|
|
638,965
|
|
|
—
|
|
|
—
|
|
||
|
|
12/21/2017
|
|
18,000
|
|
|
489,420
|
|
|
—
|
|
|
—
|
|
||
|
|
12/29/2016
|
|
12,750
|
|
|
346,673
|
|
|
—
|
|
|
—
|
|
||
|
|
12/16/2015
|
|
3,328
|
|
|
90,488
|
|
|
—
|
|
|
—
|
|
||
|
|
1/26/2015
|
|
1,636
|
|
|
44,483
|
|
|
—
|
|
|
—
|
|
||
|
|
11/10/2014
|
|
3,000
|
|
|
81,570
|
|
|
—
|
|
|
—
|
|
(1)
|
Common unit awards outstanding vest as follows:
|
(2)
|
Based on the closing market price of our common units of $27.19 on December 31, 2018.
|
|
Unit Awards
|
|||||
Name
|
Number of
Units
Acquired on
Vesting (#)
|
|
Value Realized on
Vesting ($) (1)
|
|||
Sunoco LP restricted unit and restricted phantom unit vestings:
|
|
|
|
|||
Joseph Kim
|
10,302
|
|
|
$
|
286,705
|
|
Thomas R. Miller
|
9,000
|
|
|
250,470
|
|
|
S. Blake Heinemann
|
8,868
|
|
|
246,796
|
|
|
Karl R. Fails
|
5,460
|
|
|
151,952
|
|
|
Brian A. Hand
|
4,992
|
|
|
138,927
|
|
|
ET restricted unit vestings:
|
|
|
|
|||
S. Blake Heinemann
|
5,376
|
|
|
78,199
|
|
|
Karl R. Fails
|
3,840
|
|
|
55,857
|
|
|
Brian A. Hand
|
3,072
|
|
|
44,685
|
|
(1)
|
Amounts presented represent the number of unit awards vested during
2018
and the value realized upon vesting of these awards, which is calculated as the number of units vested multiplied by the closing price of Sunoco LP or ET’s respective common units upon the vesting date.
|
Name
|
Executive Contributions in Last FY ($)
|
|
Registrant Contributions in Last FY ($)
|
|
Aggregate Earnings in Last FY ($)
|
|
Aggregate Withdrawals/Distributions ($)
|
|
Aggregate Balance at Last FYE ($)
|
||||||||||
Joseph Kim
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Thomas R. Miller
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
S. Blake Heinemann
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Karl R. Fails
|
120,720
|
|
|
—
|
|
|
(28,110
|
)
|
|
—
|
|
|
407,654
|
|
|||||
Brian A. Hand
|
45,626
|
|
|
—
|
|
|
(6,552
|
)
|
|
—
|
|
|
107,532
|
|
Name
|
|
Benefit
|
|
Termination
Due to Death
or Disability
($) (1)
|
|
Termination
for any other reason
($)
|
|
Change of
Control
with or without Continued
Employment
($) (1)
|
|
Not for Cause Termination ($)
|
||||||||
Joseph Kim
|
|
Unit Vesting
|
|
$
|
3,868,267
|
|
|
$
|
—
|
|
|
$
|
3,868,267
|
|
|
$
|
—
|
|
Thomas R. Miller
|
|
Unit Vesting
|
|
1,740,160
|
|
|
—
|
|
|
1,740,160
|
|
|
—
|
|
||||
S. Blake Heinemann
|
|
Unit Vesting
|
|
2,167,696
|
|
|
—
|
|
|
2,167,696
|
|
|
—
|
|
||||
Karl R. Fails
|
|
Unit Vesting
|
|
2,071,008
|
|
|
—
|
|
|
2,071,008
|
|
|
—
|
|
||||
Brian A. Hand
|
|
Unit Vesting
|
|
1,691,599
|
|
|
—
|
|
|
1,691,599
|
|
|
—
|
|
(1)
|
The amounts reflected above represent the product of the number of restricted units and/or restricted phantom units that were subject to vesting/restrictions on December 31, 2018 multiplied by the closing price of our common units of $27.19 on that date.
|
1.
|
It was determined that, as of December 31, 2018, the applicable employee populations consisted of 2,802 with all of the identified individuals being employed in the United States. This population consisted of all of our full-time and part-time employees. We did not engage any independent contractors in 2018 that are required to be included in our employee population for the CEO pay ratio evaluation.
|
2.
|
To identify the “median employee” from our employee population, we compared the total earnings of our employees as reflected in our payroll records as reported on Form W-2 for 2018.
|
3.
|
We identified our median employee using W-2 reporting and applied this compensation measure consistently to all of our employees required to be included in the calculation. We did not make any cost of living adjustments in identifying the “median employee”.
|
4.
|
Once we identified our median employee, we combined all elements of the employee’s compensation for 2018 resulting in an annual compensation of $71,447. The difference between such employee’s total earnings and the employee’s total compensation represents the estimated value of the employee’s health care benefits (estimated for the employee and such employee’s eligible dependents at $9,689 and the employee’s 401(k) matching contribution and profit sharing contribution, as applicable estimated at $5,518 per employee).
|
5.
|
With respect to Mr. Kim, we used the amount reported in the “Total” column of our 2018 Summary Compensation Table under this Item 11.
|
Name
|
|
Fees
Earned or
Paid in
Cash
($) (1)
|
|
Unit
Awards
($) (2)
|
|
Option
Awards
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
||||||||||
Oscar A. Alvarez
(3)
|
|
$
|
65,806
|
|
|
$
|
70,800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136,606
|
|
Imad K. Anbouba
(3)
|
|
75,819
|
|
|
70,800
|
|
|
—
|
|
|
—
|
|
|
146,619
|
|
|||||
James W. Bryant
|
|
113,533
|
|
|
100,006
|
|
|
—
|
|
|
—
|
|
|
213,539
|
|
|||||
W. Brett Smith
(3)
|
|
44,128
|
|
|
100,006
|
|
|
—
|
|
|
—
|
|
|
144,134
|
|
|||||
K. Rick Turner
(3)
|
|
46,614
|
|
|
100,006
|
|
|
—
|
|
|
—
|
|
|
146,620
|
|
|||||
Thomas E. Long
(4)
|
|
—
|
|
|
520,036
|
|
|
—
|
|
|
—
|
|
|
520,036
|
|
|||||
Christopher R. Curia
(4)
|
|
—
|
|
|
454,375
|
|
|
—
|
|
|
—
|
|
|
454,375
|
|
|||||
Matthew S. Ramsey
(4)
|
|
—
|
|
|
641,131
|
|
|
—
|
|
|
—
|
|
|
641,131
|
|
(1)
|
The amounts in this column reflect the aggregate dollar amount of fees earned or paid in cash including the annual retainer fee.
|
(2)
|
The amounts reported for unit awards represent the full grant date fair value of the awards granted in
2018
, calculated in accordance with FASB ASC Topic 718. These amounts do not correspond to the actual value that may be recognized by the recipient upon any disposition of vested units and do not give effect to any decline or increase in the trading price of our common units since the date of grant. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of the unit awards reported above, see Note 18–Unit-Based Compensation in our Notes to Consolidated Financial Statements. As of
December 31, 2018
, Mr. Alvarez had 2,500 outstanding restricted phantom units, Mr. Anbouba had 2,500 outstanding restricted phantom units, Mr. Bryant had 11,081 outstanding restricted phantom units, Mr. Long had 64,282 outstanding restricted phantom units, Mr. Curia had 50,322 outstanding restricted phantom units and Mr. Ramsey had 24,938 outstanding restricted phantom units.
|
(3)
|
Messrs. Alvarez and Anbouba were elected to the Board of our General Partner in March 2018, subsequent to the March 2018 resignations of Messrs. Smith and Turner.
|
(4)
|
Messrs. Long (ET's Chief Financial Officer), Curia (ET's EVP-Chief Human Resources Officer) and Ramsey (ET's Chief Operating Officer), are entitled to receive grants of restricted units and/or restricted phantom units pursuant to the LTIP in recognition of their commitment and contribution to us and our unitholders. The restricted units granted in December 2018 will vest 60% in December 2021 and 40% in December 2023, subject to the terms of the award agreement. The awards of restricted units to Messrs. Long, Curia and Ramsey in respect of their contribution to us represent a portion of their total awards as executive officers of ET and the allocation of such percentage to us is in recognition of the portion of their total time spent on our business.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters
|
•
|
each person or group of persons known by us to be beneficial owners of 5% or more of our common or Class C units;
|
•
|
each director, director nominee and named executive officer of our general partner; and
|
•
|
all of our directors and executive officers of our general partner, as a group.
|
Name of Beneficial Owner (1)
|
|
Common Units Beneficially Owned (7)
|
|
Percentage of Commons Units Beneficially Owned
|
|
Class C Units Beneficially Owned
|
|
Percentage of
Class C Units Beneficially Owned
|
|
Percentage of Common and
Class C Units Beneficially Owned
|
|||
ETO (2)
|
|
28,463,967
|
|
|
34.4%
|
|
—
|
|
|
—
|
|
|
28.7%
|
Oppenheimer Funds, Inc. (6)
|
|
15,163,482
|
|
|
18.3%
|
|
—
|
|
|
—
|
|
|
15.3%
|
Sunoco Retail LLC
|
|
—
|
|
|
—
|
|
11,168,667
|
|
|
68.1
|
%
|
|
11.3%
|
Aloha Petroleum Ltd (4)
|
|
—
|
|
|
—
|
|
5,242,113
|
|
|
31.9
|
%
|
|
5.3%
|
Citigroup Inc. (3)
|
|
3,633,415
|
|
|
4.4%
|
|
—
|
|
|
—
|
|
|
3.7%
|
Goldman Sachs Asset Management (5)
|
|
5,048,904
|
|
|
6.1%
|
|
—
|
|
|
—
|
|
|
5.1%
|
Karl R. Fails
|
|
11,826
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
Brian A. Hand
|
|
8,078
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
S. Blake Heinemann
|
|
20,082
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
Joseph Kim
|
|
15,378
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
Thomas R. Miller
|
|
5,458
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
Oscar A. Alvarez
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
Imad K. Anbouba
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
James W. Bryant
|
|
2,348
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
Christopher R. Curia
|
|
17,700
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
Thomas E. Long
|
|
8,475
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
Matthew S. Ramsey
|
|
1,118
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
All executive officers and directors as a group (twelve persons)
|
|
90,463
|
|
|
*
|
|
—
|
|
|
—
|
|
|
*
|
*
|
Represents less than 1%.
|
(1)
|
As of the date set forth above, there are no arrangements for any listed beneficial owner to acquire within 60 days common units from options, warrants, rights, conversion privileges or similar obligations. Unless otherwise indicated, the address for all beneficial owners in this table is 8111 Westchester Drive, Suite 400, Dallas, Texas 75225.
|
(2)
|
The address for ETO and ETO’s subsidiaries is 8111 Westchester Drive, Suite 600, Dallas, Texas 75225.
|
(3)
|
The information contained in the table and this footnote with respect to Citigroup Inc. is based solely on a filing on Schedule 13G filed with the Securities and Exchange Commission on January 10, 2017. The business address of the reporting party is 388 Greenwich Street, New York, New York 10013.
|
(4)
|
The address for Aloha is 1132 Bishop St., Suite 1700, Honolulu, Hawaii 96813.
|
(5)
|
The information contained in the table and this footnote with respect to Goldman Sachs Asset Management LP is based solely on a filing on Schedule 13G filed with the Securities and Exchange Commission on February 5, 2019. The business address of the reporting party is 200 West Street, New York, New York 10282.
|
(6)
|
The information contained in the table and this footnote with respect to Oppenheimer Funds, Inc. is based solely on a filing on Schedule 13G filed with the Securities and Exchange Commission on January 18, 2019. The business address of the reporting party is Two World Financial center, 225 Liberty Street, New York, New York 10281.
|
(7)
|
Does not include unvested phantom units that may not be voted or transferred prior to vesting. As of
February 15, 2019
, there were
82,725,202
common units and
16,410,780
Class C Units deemed to be beneficially owned for purposes of the above table.
|
|
|
ET Common Units Beneficially Owned†
|
|||
Name of Beneficial Owner (1)
|
|
Number of Common Units (2)
|
|
Percentage of Total Common Units (3)
|
|
Karl R. Fails
|
|
13,161
|
|
|
*
|
Brian A. Hand
|
|
7,440
|
|
|
*
|
S. Blake Heinemann
|
|
13,407
|
|
|
*
|
Joseph Kim
|
|
6,500
|
|
|
*
|
Thomas R. Miller
|
|
—
|
|
|
—
|
Oscar A. Alvarez
|
|
—
|
|
|
—
|
Imad K. Anbouba
|
|
7,416
|
|
|
*
|
James W. Bryant
|
|
243,540
|
|
|
*
|
Christopher R. Curia
|
|
113,058
|
|
|
*
|
Thomas E. Long
|
|
141,984
|
|
|
*
|
Matthew S. Ramsey
|
|
148,051
|
|
|
*
|
All executive officers and directors as a group (twelve persons)
|
|
694,557
|
|
|
*
|
*
|
Represents less than 1%.
|
†
|
Officers and directors of our General Partner may be deemed to indirectly beneficially own certain limited partnership interests in us or ETO, by virtue of owning common units in ETO or ET, respectively, or based upon their simultaneous service as officers or directors of ETO or ET. Any such deemed ownership is not reflected in the table.
|
(1)
|
Unless otherwise indicated, the address for all beneficial owners in this table is 8111 Westchester Drive, Suite 400, Dallas, Texas 75225.
|
(2)
|
Beneficial ownership for the purposes of the above table is determined in accordance with the rules and regulation of the Securities and Exchange Commission. These rules generally provide that a person is the beneficial owner of securities if they have or share the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof, or have the right to acquire such powers with sixty (60) days.
|
(3)
|
As of
February 15, 2019
, there were 2,619,391,387 common units of ET deemed to be beneficially owned for purposes of the above table.
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (1)
|
||||
Equity compensation plans approved by security holders
|
|
—
|
|
|
$
|
—
|
|
|
212,970
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
9,317,350
|
|
|
Total
|
|
—
|
|
|
$
|
—
|
|
|
9,530,320
|
|
(1)
|
As of January 1, 2019, the number of units awarded for future issuances under the 2012 LTIP increased by 500,000 to 712,970 as the Partnership completed a qualifying equity issuance event during
2018
.
|
Item 13.
|
Certain Relationships, Related Transactions and Director Independence
|
Transaction
|
Explanation
|
Amount/Value
|
|
|
|
2018 quarterly distributions on limited partner interests and IDRs held by affiliates.
|
Represents the aggregate amount of distributions made to affiliates of our general partner in respect of Series A preferred units, common units and IDRs during 2018.
|
$192 million
|
|
|
|
Fuel sold to affiliates.
|
Total revenues we received for fuel gallons sold by us to affiliates of our general partner for 2018.
|
$33 million
|
|
|
|
Bulk purchases of motor fuel from ET and its affiliates.
|
Represents payments made to ET and its affiliates for bulk motor fuel purchases.
|
$1.9 billion
|
|
|
|
Reimbursement to our general partner for certain allocated overhead and other expenses.
|
Total payment to our general partner for reimbursement of overhead and other expenses, including employee compensation costs relating to employees supporting our operations for 2018.
|
$0.1 million
|
Item 14.
|
Principal Accounting Fees and Services
|
|
Fiscal 2018
|
|
Fiscal 2017
|
||||
Audit Fees (1)
|
$
|
2.3
|
|
|
$
|
3.1
|
|
Audit-Related Fees
|
—
|
|
|
—
|
|
||
Tax Fees
|
—
|
|
|
—
|
|
||
All Other Fees
|
—
|
|
|
—
|
|
||
Total
|
$
|
2.3
|
|
|
$
|
3.1
|
|
(1)
|
Includes fees for audits of annual financial statements of our companies, reviews of the related quarterly financial statements, and services that are normally provided by the independent accountants in connection with statutory and regulatory filings or engagements, including reviews of documents filed with the SEC and services related to the audit of our internal control over financial reporting.
|
(1)
|
Financial Statements - see
Index to Consolidated Financial Statements
appearing on page
F-1
.
|
(2)
|
Financial Statement Schedules - None.
|
(3)
|
Exhibits - see
Exhibit Index
set forth on page
72
.
|
Item 16.
|
Form 10-K Summary
|
Exhibit No.
|
|
Description
|
|
2.1
|
|
|
|
|
|
|
|
2.2
|
|
|
|
|
|
|
|
3.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
3.4
|
|
|
|
|
|
|
|
3.5
|
|
|
|
|
|
|
|
3.6
|
|
|
|
|
|
|
|
3.7
|
|
|
|
|
|
|
|
3.8
|
|
|
|
|
|
|
|
3.9
|
|
|
|
|
|
|
|
3.10
|
|
|
|
|
|
|
|
3.11
|
|
|
|
|
|
|
|
3.12
|
|
|
|
|
|
|
|
3.13
|
|
|
|
|
|
|
|
3.14
|
|
|
|
|
|
|
|
3.15
|
|
|
|
|
|
|
|
3.16
|
|
|
|
|
|
|
|
3.17
|
|
|
|
|
|
|
|
4.1
|
|
|
|
|
|
|
|
4.2
|
|
|
|
|
|
|
|
4.3
|
|
|
|
|
|
|
4.4
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
|
10.2
|
|
|
|
|
|
|
|
10.3
|
|
|
|
|
|
|
|
10.4
|
|
|
|
|
|
|
|
10.5
|
|
|
|
|
|
|
|
10.6
|
|
|
|
|
|
|
|
10.7
|
|
|
|
|
|
|
|
10.8
|
|
|
|
|
|
|
|
10.9
|
|
|
|
|
|
|
|
10.10
|
|
|
|
|
|
|
|
10.11
|
|
|
|
|
|
|
|
10.12
|
|
|
|
|
|
|
|
10.13
|
|
|
|
|
|
|
|
10.14
|
|
|
|
|
|
|
|
10.15
|
|
|
|
|
|
|
|
10.16
|
|
|
|
|
|
|
|
10.17
|
|
|
|
|
|
|
|
10.18
|
|
|
|
|
|
|
|
10.19
|
|
|
|
|
|
|
10.20
|
|
|
|
|
|
|
|
10.21
|
|
|
|
|
|
|
|
10.22
|
|
|
|
|
|
|
|
10.23
|
|
|
|
|
|
|
|
10.24
|
|
|
|
|
|
|
|
10.25
|
|
|
|
|
|
|
|
10.26
|
|
|
|
|
|
|
|
10.27
|
|
|
|
|
|
|
|
10.28
|
|
|
|
|
|
|
|
10.29
|
|
|
|
|
|
|
|
10.30
|
|
|
|
|
|
|
|
10.31
|
|
|
|
|
|
|
|
10.32
|
|
|
|
|
|
|
|
10.33
|
|
|
|
|
|
|
|
10.34
|
|
|
|
|
|
|
|
21.1
|
|
|
|
|
|
|
|
23.1
|
|
|
|
|
|
|
|
23.2
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
99.1
|
|
|
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation
|
*
|
Filed herewith.
|
**
|
Filed herewith. Pursuant to SEC Release No. 33-8212, this certification will be treated as “accompanying” this Annual Report on Form 10-K and not “filed” as part of such report for purposes of Section 18 of the Securities Exchange Act, as amended, or otherwise subject to the liability of Section 18 of the Securities Exchange Act, as amended, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Exchange Act of 1933, as amended, except to the extent that the registrant specifically incorporates it by reference.
|
Sunoco LP
|
|
By:
|
Sunoco GP LLC, its general partner
|
By:
|
/s/
Joseph Kim
|
|
Joseph Kim
|
|
President and Chief Executive Officer
|
|
(On behalf of the registrant, and in his capacity as principal executive officer)
|
|
|
Date:
|
February 22, 2019
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Joseph Kim
|
|
Director, President and Chief Executive Officer
|
|
February 22, 2019
|
Joseph Kim
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/
Thomas R. Miller
|
|
Chief Financial Officer
|
|
February 22, 2019
|
Thomas R. Miller
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/
Camilla A. Harris
|
|
Vice President, Controller and Principal Accounting Officer
|
|
February 22, 2019
|
Camilla A. Harris
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/
Matthew S. Ramsey
|
|
Chairman of the Board
|
|
February 22, 2019
|
Matthew S. Ramsey
|
|
|
|
|
|
|
|
|
|
/s/
Thomas E. Long
|
|
Director
|
|
February 22, 2019
|
Thomas E. Long
|
|
|
|
|
|
|
|
|
|
/s/
James W. Bryant
|
|
Director
|
|
February 22, 2019
|
James W. Bryant
|
|
|
|
|
|
|
|
|
|
/s/
Christopher R. Curia
|
|
Director
|
|
February 22, 2019
|
Christopher R. Curia
|
|
|
|
|
|
|
|
|
|
/s/ Imad K. Anbouba
|
|
Director
|
|
February 22, 2019
|
Imad K. Anbouba
|
|
|
|
|
|
|
|
|
|
/s/ Oscar A. Alvarez
|
|
Director
|
|
February 22, 2019
|
Oscar A. Alvarez
|
|
|
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions, except units)
|
||||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
56
|
|
|
$
|
28
|
|
Accounts receivable, net
|
374
|
|
|
541
|
|
||
Receivables from affiliates
|
37
|
|
|
155
|
|
||
Inventories, net
|
374
|
|
|
426
|
|
||
Other current assets
|
64
|
|
|
81
|
|
||
Assets held for sale
|
—
|
|
|
3,313
|
|
||
Total current assets
|
905
|
|
|
4,544
|
|
||
Property and equipment, net
|
1,546
|
|
|
1,557
|
|
||
Other assets:
|
|
|
|
||||
Goodwill
|
1,559
|
|
|
1,430
|
|
||
Intangible assets, net
|
708
|
|
|
768
|
|
||
Other noncurrent assets
|
161
|
|
|
45
|
|
||
Total assets
|
$
|
4,879
|
|
|
$
|
8,344
|
|
Liabilities and equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
412
|
|
|
$
|
559
|
|
Accounts payable to affiliates
|
149
|
|
|
206
|
|
||
Accrued expenses and other current liabilities
|
299
|
|
|
368
|
|
||
Current maturities of long-term debt
|
5
|
|
|
6
|
|
||
Liabilities associated with assets held for sale
|
—
|
|
|
75
|
|
||
Total current liabilities
|
865
|
|
|
1,214
|
|
||
Revolving line of credit
|
700
|
|
|
765
|
|
||
Long-term debt, net
|
2,280
|
|
|
3,519
|
|
||
Advances from affiliates
|
24
|
|
|
85
|
|
||
Deferred tax liability
|
103
|
|
|
389
|
|
||
Other noncurrent liabilities
|
123
|
|
|
125
|
|
||
Total liabilities
|
4,095
|
|
|
6,097
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Limited partners:
|
|
|
|
||||
Series A Preferred unitholders - affiliated
(no units issued and outstanding as of December 31, 2018 and 12,000,000 units issued and outstanding as of December 31, 2017) |
—
|
|
|
300
|
|
||
Common unitholders
(82,665,057 units issued and outstanding as of December 31, 2018 and 99,667,999 units issued and outstanding as of December 31, 2017) |
784
|
|
|
1,947
|
|
||
Class C unitholders - held by subsidiary
(16,410,780 units issued and outstanding as of December 31, 2018 and December 31, 2017) |
—
|
|
|
—
|
|
||
Total equity
|
784
|
|
|
2,247
|
|
||
Total liabilities and equity
|
$
|
4,879
|
|
|
$
|
8,344
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(dollars in millions, except unit and per unit amounts)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||
Motor fuel sales
|
$
|
16,504
|
|
|
$
|
10,910
|
|
|
$
|
9,212
|
|
Rental income
|
130
|
|
|
89
|
|
|
88
|
|
|||
Other
|
360
|
|
|
724
|
|
|
686
|
|
|||
Total revenues
|
16,994
|
|
|
11,723
|
|
|
9,986
|
|
|||
Cost of sales and operating expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
15,872
|
|
|
10,615
|
|
|
8,830
|
|
|||
General and administrative
|
141
|
|
|
140
|
|
|
155
|
|
|||
Other operating
|
363
|
|
|
375
|
|
|
374
|
|
|||
Rent
|
72
|
|
|
81
|
|
|
81
|
|
|||
Loss on disposal of assets and impairment charges
|
19
|
|
|
114
|
|
|
225
|
|
|||
Depreciation, amortization and accretion
|
182
|
|
|
169
|
|
|
176
|
|
|||
Total cost of sales and operating expenses
|
16,649
|
|
|
11,494
|
|
|
9,841
|
|
|||
Operating income
|
345
|
|
|
229
|
|
|
145
|
|
|||
Interest expense, net
|
144
|
|
|
209
|
|
|
161
|
|
|||
Loss on extinguishment of debt and other
|
109
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from continuing operations before income taxes
|
92
|
|
|
20
|
|
|
(16
|
)
|
|||
Income tax expense (benefit)
|
34
|
|
|
(306
|
)
|
|
(72
|
)
|
|||
Income from continuing operations
|
58
|
|
|
326
|
|
|
56
|
|
|||
Loss from discontinued operations, net of income taxes
|
(265
|
)
|
|
(177
|
)
|
|
(462
|
)
|
|||
Net income (loss) and comprehensive income (loss)
|
$
|
(207
|
)
|
|
$
|
149
|
|
|
$
|
(406
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per common unit - basic:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(0.25
|
)
|
|
$
|
2.13
|
|
|
$
|
(0.32
|
)
|
Discontinued operations
|
(3.14
|
)
|
|
(1.78
|
)
|
|
(4.94
|
)
|
|||
Net income (loss)
|
$
|
(3.39
|
)
|
|
$
|
0.35
|
|
|
$
|
(5.26
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per common unit - diluted:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(0.25
|
)
|
|
$
|
2.12
|
|
|
$
|
(0.32
|
)
|
Discontinued operations
|
(3.14
|
)
|
|
(1.78
|
)
|
|
(4.94
|
)
|
|||
Net income (loss)
|
$
|
(3.39
|
)
|
|
$
|
0.34
|
|
|
$
|
(5.26
|
)
|
|
|
|
|
|
|
||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
||||||
Common units - basic
|
84,299,893
|
|
|
99,270,120
|
|
|
93,575,530
|
|
|||
Common units - diluted
|
84,820,570
|
|
|
99,728,354
|
|
|
93,603,835
|
|
|||
|
|
|
|
|
|
||||||
Cash distribution per unit
|
$
|
3.30
|
|
|
$
|
3.30
|
|
|
$
|
3.29
|
|
|
Preferred Units - Affiliated
|
|
Common Units
|
|
Predecessor
Equity
|
|
Total Equity
|
||||||||
Balance at December 31, 2015
|
$
|
—
|
|
|
$
|
3,045
|
|
|
$
|
2,218
|
|
|
$
|
5,263
|
|
Contribution of Sunoco Retail & Sunoco LLC from ETP
|
—
|
|
|
—
|
|
|
(2,200
|
)
|
|
(2,200
|
)
|
||||
Equity issued to ETP
|
—
|
|
|
194
|
|
|
—
|
|
|
194
|
|
||||
Equity issued to ETE, net of issuance costs
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||
Equity issued under ATM, net
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
||||
Contribution of assets between entities under common control above historic cost
|
—
|
|
|
(374
|
)
|
|
(18
|
)
|
|
(392
|
)
|
||||
Cash distribution to unitholders
|
—
|
|
|
(386
|
)
|
|
—
|
|
|
(386
|
)
|
||||
Cash distribution to ETP
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
(50
|
)
|
||||
Unit-based compensation
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||
Other
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
||||
Partnership net loss
|
—
|
|
|
(406
|
)
|
|
—
|
|
|
(406
|
)
|
||||
Balance at December 31, 2016
|
—
|
|
|
2,196
|
|
|
—
|
|
|
2,196
|
|
||||
Equity issued under ATM, net
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||
Equity issued to ETE
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
||||
Cash distribution to unitholders
|
—
|
|
|
(420
|
)
|
|
—
|
|
|
(420
|
)
|
||||
Distribution to preferred units
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||
Unit-based compensation
|
—
|
|
|
24
|
|
|
—
|
|
|
24
|
|
||||
Other
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Partnership net income
|
23
|
|
|
126
|
|
|
—
|
|
|
149
|
|
||||
Balance at December 31, 2017
|
300
|
|
|
1,947
|
|
|
—
|
|
|
2,247
|
|
||||
Common unit repurchase
|
—
|
|
|
(540
|
)
|
|
—
|
|
|
(540
|
)
|
||||
Redemption of preferred units
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
||||
Cash distribution to unitholders
|
—
|
|
|
(369
|
)
|
|
—
|
|
|
(369
|
)
|
||||
Dividend to preferred units
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Unit-based compensation
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Cumulative effect of change in revenue recognition accounting principle
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
||||
Other
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||
Partnership net income (loss)
|
2
|
|
|
(209
|
)
|
|
—
|
|
|
(207
|
)
|
||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
784
|
|
|
$
|
—
|
|
|
$
|
784
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
$
|
(207
|
)
|
|
$
|
149
|
|
|
$
|
(406
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Loss from discontinued operations
|
265
|
|
|
177
|
|
|
462
|
|
|||
Depreciation, amortization and accretion
|
182
|
|
|
169
|
|
|
176
|
|
|||
Amortization of deferred financing fees
|
6
|
|
|
15
|
|
|
11
|
|
|||
Loss on disposal of assets and impairment charges
|
19
|
|
|
114
|
|
|
225
|
|
|||
Loss on extinguishment of debt and other
|
109
|
|
|
—
|
|
|
—
|
|
|||
Non-cash unit based compensation expense
|
12
|
|
|
24
|
|
|
13
|
|
|||
Deferred income tax
|
6
|
|
|
(308
|
)
|
|
(8
|
)
|
|||
Inventory valuation adjustment
|
85
|
|
|
(24
|
)
|
|
(97
|
)
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
201
|
|
|
(1
|
)
|
|
(215
|
)
|
|||
Accounts receivable from affiliates
|
15
|
|
|
(131
|
)
|
|
5
|
|
|||
Inventories
|
(11
|
)
|
|
21
|
|
|
18
|
|
|||
Other assets
|
(45
|
)
|
|
7
|
|
|
(62
|
)
|
|||
Accounts payable
|
(123
|
)
|
|
(44
|
)
|
|
221
|
|
|||
Accounts payable to affiliates
|
(15
|
)
|
|
97
|
|
|
94
|
|
|||
Accrued expenses and other current liabilities
|
(55
|
)
|
|
(16
|
)
|
|
56
|
|
|||
Other noncurrent liabilities
|
3
|
|
|
54
|
|
|
(27
|
)
|
|||
Net cash provided by continuing operating activities
|
447
|
|
|
303
|
|
|
466
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(103
|
)
|
|
(103
|
)
|
|
(119
|
)
|
|||
Purchase of intangible assets
|
(2
|
)
|
|
(39
|
)
|
|
(50
|
)
|
|||
Acquisition from Superior
|
(58
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of sites from 7-Eleven
|
(54
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition from Sandford, net of cash acquired
|
(90
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition from BRENCO
|
(26
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition from AMID
|
(127
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition from Schmitt
|
(46
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of Emerge fuels business, net of cash acquired
|
—
|
|
|
—
|
|
|
(171
|
)
|
|||
Proceeds from disposal of property and equipment
|
37
|
|
|
10
|
|
|
9
|
|
|||
Net cash used in investing activities
|
(469
|
)
|
|
(132
|
)
|
|
(331
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
2,200
|
|
|
—
|
|
|
2,835
|
|
|||
Payments on long-term debt
|
(3,450
|
)
|
|
(5
|
)
|
|
(808
|
)
|
|||
Payments on debt extinguishment costs
|
(93
|
)
|
|
—
|
|
|
—
|
|
|||
Revolver borrowings
|
2,790
|
|
|
2,653
|
|
|
2,811
|
|
|||
Revolver repayments
|
(2,855
|
)
|
|
(2,888
|
)
|
|
(2,261
|
)
|
|||
Loan origination costs
|
(35
|
)
|
|
—
|
|
|
(30
|
)
|
|||
Advances from affiliates
|
—
|
|
|
3
|
|
|
255
|
|
|||
Equity issued to ETE, net of issuance costs
|
—
|
|
|
300
|
|
|
61
|
|
|||
Proceeds from issuance of common units, net of offering costs
|
—
|
|
|
33
|
|
|
71
|
|
|||
Common unit repurchase
|
(540
|
)
|
|
—
|
|
|
—
|
|
|||
Redemption of preferred units from ETE
|
(303
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions to ETP
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||
Other cash from financing activities, net
|
(15
|
)
|
|
(4
|
)
|
|
3
|
|
|||
Distributions to unitholders
|
(383
|
)
|
|
(431
|
)
|
|
(386
|
)
|
|||
Net cash provided by (used in) financing activities
|
(2,684
|
)
|
|
(339
|
)
|
|
2,501
|
|
|||
Cash flows from discontinued operations:
|
|
|
|
|
|
||||||
Operating activities
|
(484
|
)
|
|
136
|
|
|
93
|
|
|||
Investing activities
|
3,207
|
|
|
(38
|
)
|
|
(2,683
|
)
|
|||
Changes in cash included in current assets held for sale
|
11
|
|
|
(5
|
)
|
|
5
|
|
|||
Net increase (decrease) in cash and cash equivalents of discontinued operations
|
2,734
|
|
|
93
|
|
|
(2,585
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
28
|
|
|
(75
|
)
|
|
51
|
|
|||
Cash and cash equivalents at beginning of period
|
28
|
|
|
103
|
|
|
52
|
|
|||
Cash and cash equivalents at end of period
|
$
|
56
|
|
|
$
|
28
|
|
|
$
|
103
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Supplemental disclosure of non-cash financing activities:
|
|
|
|
|
|
||||||
Equity issued to ETP and ETE
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
255
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
140
|
|
|
$
|
209
|
|
|
$
|
167
|
|
Income taxes paid (refunded), net
|
$
|
501
|
|
|
$
|
(1
|
)
|
|
$
|
(30
|
)
|
1.
|
Organization and Principles of Consolidation
|
•
|
Sunoco, LLC (“Sunoco LLC”), a Delaware limited liability company, primarily distributes motor fuel in
30
states throughout the East Coast, Midwest, South Central and Southeast regions of the United States. Sunoco LLC also processes transmix and distributes refined product through its terminals in Alabama, Texas, Arkansas and New York.
|
•
|
Sunoco Retail LLC (“Sunoco Retail”), a Pennsylvania limited liability company, owns and operates retail stores that sell motor fuel and merchandise primarily in New Jersey.
|
•
|
Aloha Petroleum LLC, a Delaware limited liability company, distributes motor fuel and operates terminal facilities on the Hawaiian Islands.
|
•
|
Aloha Petroleum, Ltd. (“Aloha”), a Hawaii corporation, owns and operates retail stores on the Hawaiian Islands.
|
2.
|
Summary of Significant Accounting Policies
|
Level 1
|
Quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
Level 2
|
Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
|
Level 3
|
Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.
|
|
Balance at
December 31, 2017
|
|
Adjustments Due to
ASC 606
|
|
Balance at
January 1, 2018
|
||||||
|
(in millions)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
81
|
|
|
$
|
8
|
|
|
$
|
89
|
|
Property and equipment, net
|
1,557
|
|
|
—
|
|
|
1,557
|
|
|||
Intangible assets, net
|
768
|
|
|
(100
|
)
|
|
668
|
|
|||
Other noncurrent assets
|
45
|
|
|
39
|
|
|
84
|
|
|||
Liabilities and Equity
|
|
|
|
|
|
||||||
Other noncurrent liabilities
|
125
|
|
|
1
|
|
|
126
|
|
|||
Common unitholders
|
1,947
|
|
|
(54
|
)
|
|
1,893
|
|
|
|
For the Year Ended December 31, 2018
|
||||||||||
|
|
As
Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
|
|
(in millions)
|
||||||||||
Revenues
|
|
|
|
|
|
|
||||||
Motor fuel sales
|
|
$
|
16,504
|
|
|
$
|
16,555
|
|
|
$
|
(51
|
)
|
Rental income
|
|
130
|
|
|
130
|
|
|
—
|
|
|||
Other
|
|
360
|
|
|
359
|
|
|
1
|
|
|||
Cost of sales and operating expenses:
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
15,872
|
|
|
15,875
|
|
|
(3
|
)
|
|||
Other operating
|
|
363
|
|
|
371
|
|
|
(8
|
)
|
|||
Depreciation, amortization and accretion
|
|
182
|
|
|
211
|
|
|
(29
|
)
|
|
December 31, 2018
|
||||||||||
|
As
Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
Higher/(Lower)
|
||||||
|
(in millions)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
64
|
|
|
$
|
52
|
|
|
$
|
12
|
|
Property and equipment, net
|
1,546
|
|
|
1,546
|
|
|
—
|
|
|||
Intangible assets, net
|
708
|
|
|
842
|
|
|
(134
|
)
|
|||
Other noncurrent assets
|
161
|
|
|
102
|
|
|
59
|
|
|||
Liabilities and Equity
|
|
|
|
|
|
||||||
Other noncurrent liabilities
|
123
|
|
|
122
|
|
|
1
|
|
|||
Common unitholders
|
784
|
|
|
848
|
|
|
(64
|
)
|
3.
|
Acquisitions
|
•
|
synergies created through increased fuel purchasing advantages and integration with our existing wholesale business;
|
•
|
strategic advantages of owning transmix processing plants and increasing our terminal capacity; and
|
•
|
competitors processing transmix in the geographic region.
|
|
|
August 31, 2016
|
||
Current assets
|
|
$
|
27
|
|
Property and equipment
|
|
51
|
|
|
Goodwill
|
|
53
|
|
|
Intangible assets
|
|
56
|
|
|
Current liabilities
|
|
(16
|
)
|
|
Net assets
|
|
171
|
|
|
Cash acquired
|
|
—
|
|
|
Total cash consideration, net of cash acquired
|
|
$
|
171
|
|
|
|
7-Eleven
|
|
Superior
|
|
Sandford
|
|
BRENCO
|
|
Schmitt
|
|
AMID
|
||||||||||||
Current assets
|
|
$
|
4
|
|
|
$
|
18
|
|
|
$
|
39
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Property and equipment
|
|
20
|
|
|
20
|
|
|
13
|
|
|
7
|
|
|
20
|
|
|
41
|
|
||||||
Intangible assets
|
|
—
|
|
|
12
|
|
|
34
|
|
|
12
|
|
|
16
|
|
|
40
|
|
||||||
Goodwill
|
|
30
|
|
|
10
|
|
|
31
|
|
|
5
|
|
|
9
|
|
|
44
|
|
||||||
Other noncurrent assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Current liabilities
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Deferred tax liabilities
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other noncurrent liabilities
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
54
|
|
|
$
|
58
|
|
|
$
|
93
|
|
|
$
|
26
|
|
|
$
|
46
|
|
|
$
|
127
|
|
4.
|
Discontinued Operations
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
|
(in millions)
|
||||||
Carrying amount of assets held for sale:
|
|
|
|
|
||||
Cash
|
|
$
|
—
|
|
|
$
|
21
|
|
Inventories
|
|
—
|
|
|
149
|
|
||
Other current assets
|
|
—
|
|
|
16
|
|
||
Property and equipment, net
|
|
—
|
|
|
1,851
|
|
||
Goodwill
|
|
—
|
|
|
796
|
|
||
Intangible assets, net
|
|
—
|
|
|
477
|
|
||
Other noncurrent assets
|
|
—
|
|
|
3
|
|
||
Total assets held for sale
|
|
$
|
—
|
|
|
$
|
3,313
|
|
|
|
|
|
|
||||
Carrying amount of liabilities associated with assets held for sale:
|
|
|
|
|
||||
Long term debt
|
|
$
|
—
|
|
|
$
|
21
|
|
Other current and noncurrent liabilities
|
|
—
|
|
|
54
|
|
||
Total liabilities associated with assets held for sale
|
|
$
|
—
|
|
|
$
|
75
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Motor fuel sales
|
$
|
256
|
|
|
$
|
5,137
|
|
|
$
|
3,923
|
|
Other (1)
|
93
|
|
|
1,827
|
|
|
1,789
|
|
|||
Total revenues
|
349
|
|
|
6,964
|
|
|
5,712
|
|
|||
Cost of sales and operating expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
305
|
|
|
5,806
|
|
|
4,649
|
|
|||
General and administrative
|
7
|
|
|
168
|
|
|
114
|
|
|||
Other operating
|
57
|
|
|
707
|
|
|
685
|
|
|||
Rent
|
4
|
|
|
56
|
|
|
59
|
|
|||
Loss on disposal of assets and impairment charge
|
61
|
|
|
286
|
|
|
455
|
|
|||
Depreciation, amortization and accretion expense
|
—
|
|
|
34
|
|
|
143
|
|
|||
Total cost of sales and operating expenses
|
434
|
|
|
7,057
|
|
|
6,105
|
|
|||
Operating loss
|
(85
|
)
|
|
(93
|
)
|
|
(393
|
)
|
|||
Interest expense, net
|
2
|
|
|
36
|
|
|
28
|
|
|||
Loss on extinguishment of debt
|
20
|
|
|
—
|
|
|
—
|
|
|||
Loss from discontinued operations before income taxes
|
(107
|
)
|
|
(129
|
)
|
|
(421
|
)
|
|||
Income tax expense
|
158
|
|
|
48
|
|
|
41
|
|
|||
Loss from discontinued operations, net of income taxes
|
$
|
(265
|
)
|
|
$
|
(177
|
)
|
|
$
|
(462
|
)
|
(1)
|
Other revenue includes merchandise sales totaling
$89 million
,
$1.8 billion
and
$1.7 billion
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
5.
|
Accounts Receivable, net
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Accounts receivable, trade
|
$
|
299
|
|
|
$
|
285
|
|
Credit card receivables
|
49
|
|
|
160
|
|
||
Vendor receivables for rebates, branding, and other
|
1
|
|
|
29
|
|
||
Other receivables
|
27
|
|
|
69
|
|
||
Allowance for doubtful accounts
|
(2
|
)
|
|
(2
|
)
|
||
Accounts receivable, net
|
$
|
374
|
|
|
$
|
541
|
|
6.
|
Inventories, net
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Fuel
|
$
|
363
|
|
|
$
|
387
|
|
Other
|
11
|
|
|
39
|
|
||
Inventories, net
|
$
|
374
|
|
|
$
|
426
|
|
7.
|
Property and Equipment, net
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Land
|
$
|
518
|
|
|
$
|
516
|
|
Buildings and leasehold improvements
|
727
|
|
|
714
|
|
||
Equipment
|
810
|
|
|
623
|
|
||
Construction in progress
|
78
|
|
|
159
|
|
||
Total property and equipment
|
2,133
|
|
|
2,012
|
|
||
Less: accumulated depreciation
|
587
|
|
|
455
|
|
||
Property and equipment, net
|
$
|
1,546
|
|
|
$
|
1,557
|
|
8.
|
Goodwill and Other Intangible Assets
|
|
Segment
|
|
|
||||||||
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Consolidated
|
||||||
|
(in millions)
|
||||||||||
Balance at December 31, 2016
|
$
|
770
|
|
|
$
|
780
|
|
|
$
|
1,550
|
|
Goodwill adjustment related to Emerge acquisition
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||
Goodwill adjustment related to Denny acquisition
|
7
|
|
|
—
|
|
|
7
|
|
|||
Goodwill impairment charge
|
—
|
|
|
(102
|
)
|
|
(102
|
)
|
|||
Balance at December 31, 2017
|
752
|
|
|
678
|
|
|
1,430
|
|
|||
Goodwill related to 7-Eleven Purchase
|
30
|
|
|
—
|
|
|
30
|
|
|||
Goodwill related to Superior acquisition
|
10
|
|
|
—
|
|
|
10
|
|
|||
Goodwill related to Sandford acquisition
|
31
|
|
|
—
|
|
|
31
|
|
|||
Goodwill related to BRENCO Acquisition
|
5
|
|
|
—
|
|
|
5
|
|
|||
Goodwill related to AMID acquisition
|
44
|
|
|
—
|
|
|
44
|
|
|||
Goodwill related to Schmitt acquisition
|
9
|
|
|
—
|
|
|
9
|
|
|||
Balance at December 31, 2018
|
$
|
881
|
|
|
$
|
678
|
|
|
$
|
1,559
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book Value
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Book Value
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Indefinite-lived
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tradenames
|
$
|
295
|
|
|
$
|
—
|
|
|
$
|
295
|
|
|
$
|
295
|
|
|
$
|
—
|
|
|
$
|
295
|
|
Contractual rights
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||||
Liquor licenses
|
12
|
|
|
—
|
|
|
12
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Finite-lived
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relations including supply agreements (1)
|
579
|
|
|
198
|
|
|
381
|
|
|
674
|
|
|
256
|
|
|
418
|
|
||||||
Favorable leasehold arrangements, net
|
10
|
|
|
3
|
|
|
7
|
|
|
12
|
|
|
5
|
|
|
7
|
|
||||||
Loan origination costs (2)
|
9
|
|
|
1
|
|
|
8
|
|
|
10
|
|
|
6
|
|
|
4
|
|
||||||
Other intangibles
|
10
|
|
|
5
|
|
|
5
|
|
|
5
|
|
|
3
|
|
|
2
|
|
||||||
Intangible assets, net
|
$
|
915
|
|
|
$
|
207
|
|
|
$
|
708
|
|
|
$
|
1,038
|
|
|
$
|
270
|
|
|
$
|
768
|
|
(1)
|
Decrease in gross carrying amount is mainly due to the adoption of ASU No. 2014-09,
Revenue from Contracts with Customers,
see Note 2.
|
(2)
|
Loan origination costs are associated with the the Revolving Credit Agreement, see Note 10 for further information.
|
|
Amortization
|
|
Interest
|
||||
2019
|
$
|
57
|
|
|
$
|
2
|
|
2020
|
56
|
|
|
2
|
|
||
2021
|
53
|
|
|
2
|
|
||
2022
|
43
|
|
|
2
|
|
||
2023
|
38
|
|
|
—
|
|
||
Thereafter
|
146
|
|
|
—
|
|
||
Total
|
$
|
393
|
|
|
$
|
8
|
|
9.
|
Accrued Expenses and Other Current Liabilities
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(in millions)
|
||||||
Wage and other employee-related accrued expenses
|
$
|
41
|
|
|
$
|
72
|
|
Accrued tax expense
|
91
|
|
|
180
|
|
||
Accrued insurance
|
31
|
|
|
26
|
|
||
Accrued interest expense
|
47
|
|
|
43
|
|
||
Dealer deposits
|
18
|
|
|
16
|
|
||
Accrued environmental expense
|
6
|
|
|
—
|
|
||
Other
|
65
|
|
|
31
|
|
||
Total
|
$
|
299
|
|
|
$
|
368
|
|
10.
|
Long-Term Debt
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Term Loan (1)
|
$
|
—
|
|
|
$
|
1,243
|
|
Sale leaseback financing obligation
|
107
|
|
|
113
|
|
||
2018 Revolver
|
700
|
|
|
—
|
|
||
2014 Revolver (2)
|
—
|
|
|
765
|
|
||
4.875% Senior Notes Due 2023
|
1,000
|
|
|
—
|
|
||
5.500% Senior Notes Due 2026
|
800
|
|
|
—
|
|
||
5.875% Senior Notes Due 2028
|
400
|
|
|
—
|
|
||
6.375% Senior Notes Due 2023 (3)
|
—
|
|
|
800
|
|
||
5.500% Senior Notes Due 2020 (3)
|
—
|
|
|
600
|
|
||
6.250% Senior Notes Due 2021 (3)
|
—
|
|
|
800
|
|
||
Other
|
1
|
|
|
3
|
|
||
Total debt
|
3,008
|
|
|
4,324
|
|
||
Less: current maturities
|
5
|
|
|
6
|
|
||
Less: debt issuance costs
|
23
|
|
|
34
|
|
||
Long-term debt, net of current maturities
|
$
|
2,980
|
|
|
$
|
4,284
|
|
(1)
|
The Term Loan was repaid in full and terminated on January 23, 2018.
|
(2)
|
The 2014 Revolver was repaid in full on July 27, 2018.
|
(3)
|
Senior Notes were redeemed on January 23, 2018.
|
2019
|
$
|
5
|
|
2020
|
6
|
|
|
2021
|
6
|
|
|
2022
|
6
|
|
|
2023
|
1,706
|
|
|
Thereafter
|
1,279
|
|
|
Total
|
$
|
3,008
|
|
11.
|
Other Noncurrent Liabilities
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(in millions)
|
||||||
Accrued straight-line rent
|
$
|
12
|
|
|
$
|
13
|
|
Reserve for underground storage tank removal
|
54
|
|
|
41
|
|
||
Reserve for environmental remediation, long-term
|
29
|
|
|
23
|
|
||
Unfavorable lease liability
|
16
|
|
|
10
|
|
||
Aloha acquisition contingent consideration
|
—
|
|
|
15
|
|
||
Other
|
12
|
|
|
23
|
|
||
Total
|
$
|
123
|
|
|
$
|
125
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(in millions)
|
||||||
Balance at beginning of year
|
$
|
41
|
|
|
$
|
34
|
|
Liabilities incurred
|
4
|
|
|
3
|
|
||
Liabilities settled
|
(1
|
)
|
|
(2
|
)
|
||
Accretion expense
|
10
|
|
|
6
|
|
||
Balance at end of year
|
$
|
54
|
|
|
$
|
41
|
|
12.
|
Related-Party Transactions
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Motor fuel sales to affiliates
|
$
|
33
|
|
|
$
|
55
|
|
|
$
|
62
|
|
Bulk fuel purchases from affiliates
|
$
|
1,947
|
|
|
$
|
2,416
|
|
|
$
|
1,867
|
|
•
|
Net advances from affiliates were
$24 million
and
$85 million
at
December 31, 2018
and
2017
, respectively. Advances to and from affiliates are primarily related to the treasury services agreements between Sunoco LLC and Sunoco (R&M), LLC and Sunoco Retail and Sunoco (R&M), LLC, which are in place for purposes of cash management.
|
•
|
Net accounts receivable from affiliates were
$37 million
and
$155 million
at
December 31, 2018
and
2017
, respectively, which are primarily related to motor fuel sales to affiliates.
|
•
|
Net accounts payable to affiliates was
$149 million
and
$206 million
as of
December 31, 2018
and
2017
, respectively, attributable to operational expenses.
|
13.
|
Revenue
|
|
|
Year Ended December 31, 2018
|
||
|
|
(in millions)
|
||
Fuel Distribution and Marketing Segment
|
|
|
||
Dealer
|
|
$
|
3,639
|
|
Distributor
|
|
7,873
|
|
|
Unbranded Wholesale
|
|
2,577
|
|
|
Commission Agent
|
|
1,377
|
|
|
Rental income
|
|
118
|
|
|
Other
|
|
48
|
|
|
Total
|
|
15,632
|
|
|
All Other Segment
|
|
|
||
Motor Fuel
|
|
1,038
|
|
|
Rental income
|
|
12
|
|
|
Other
|
|
312
|
|
|
Total
|
|
1,362
|
|
|
Total Revenue
|
|
$
|
16,994
|
|
|
Balance at
January 1, 2018
|
|
Balance at December 31, 2018
|
|
Increase/ (Decrease)
|
||||||
|
(in millions)
|
||||||||||
Contract Balances
|
|
|
|
|
|
||||||
Contract Asset
|
$
|
51
|
|
|
$
|
75
|
|
|
$
|
24
|
|
Accounts receivable from contracts with customers
|
$
|
445
|
|
|
$
|
348
|
|
|
$
|
(97
|
)
|
Contract Liability
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
•
|
Significant financing component
- The Partnership elected not to adjust the promised amount of consideration for the effects of significant financing component if the Partnership expects at contract inception that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less.
|
•
|
Incremental costs of obtaining a contract
- The Partnership generally expenses sales commissions when incurred because the amortization period would have been less than one year. We record these costs within general and administrative expenses. The Partnership elected to expense the incremental costs of obtaining a contract when the amortization period for such contracts would have been one year or less.
|
•
|
Shipping and handling costs
- The Partnership elected to account for shipping and handling activities that occur after the customer has obtained control of a good as fulfillment activities (i.e., an expense) rather than as a promised service.
|
•
|
Measurement of transaction price
- The Partnership has elected to exclude from the measurement of transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Partnership from a customer (i.e., sales tax, value added tax, etc).
|
•
|
Variable consideration of wholly unsatisfied performance obligations
-
The Partnership has elected to exclude the estimate of variable consideration to the allocation of wholly unsatisfied performance obligations.
|
14.
|
Commitments and Contingencies
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Cash rent:
|
|
|
|
|
|
|
|
||||
Store base rent (1)(2)
|
$
|
70
|
|
|
$
|
66
|
|
|
$
|
66
|
|
Equipment and other rent (3)
|
2
|
|
|
14
|
|
|
14
|
|
|||
Total cash rent
|
72
|
|
|
80
|
|
|
80
|
|
|||
Non-cash rent:
|
|
|
|
|
|
|
|||||
Straight-line rent
|
—
|
|
|
1
|
|
|
1
|
|
|||
Net rent expense
|
$
|
72
|
|
|
$
|
81
|
|
|
$
|
81
|
|
(1)
|
Store base rent includes minimum guaranteed payments under service concession arrangements with New Jersey Turnpike Authority and New York Thruway Authority and the Partnership’s rent expense for leased convenience store properties which are subleased to third-party operators. The sublease income from these sites is recorded in rental income on the Consolidated Statement of Operations and Comprehensive Income (Loss) and totaled
$40 million
,
$25 million
and
$25 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(2)
|
Store base rent includes contingent rent expense totaling
$4 million
,
$16 million
, and
$18 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
(3)
|
Equipment and other rent consists primarily of vehicles and store equipment.
|
2019
|
$
|
64
|
|
2020
|
58
|
|
|
2021
|
45
|
|
|
2022
|
37
|
|
|
2023
|
32
|
|
|
Thereafter
|
176
|
|
|
Total
|
$
|
412
|
|
15.
|
Rental Income under Operating Leases
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(in millions)
|
||||||
Land
|
$
|
414
|
|
|
$
|
354
|
|
Buildings and improvements
|
506
|
|
|
254
|
|
||
Equipment
|
306
|
|
|
53
|
|
||
Total property and equipment
|
1,226
|
|
|
661
|
|
||
Less: accumulated depreciation
|
(321
|
)
|
|
(90
|
)
|
||
Property and equipment, net
|
$
|
905
|
|
|
$
|
571
|
|
2019
|
$
|
88
|
|
2020
|
71
|
|
|
2021
|
58
|
|
|
2022
|
52
|
|
|
2023
|
3
|
|
|
Thereafter
|
7
|
|
|
Total minimum future rentals
|
$
|
279
|
|
16.
|
Interest Expense, net
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Interest expense
|
$
|
141
|
|
|
$
|
195
|
|
|
$
|
153
|
|
Amortization of deferred financing fees
|
6
|
|
|
15
|
|
|
11
|
|
|||
Interest income
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Interest expense, net
|
$
|
144
|
|
|
$
|
209
|
|
|
$
|
161
|
|
17.
|
Income Tax Expense
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
(65
|
)
|
State
|
4
|
|
|
2
|
|
|
1
|
|
|||
Total current income tax expense
|
28
|
|
|
2
|
|
|
(64
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|||||
Federal
|
(14
|
)
|
|
(302
|
)
|
|
(12
|
)
|
|||
State
|
20
|
|
|
(6
|
)
|
|
4
|
|
|||
Total deferred tax expense (benefit)
|
6
|
|
|
(308
|
)
|
|
(8
|
)
|
|||
Net income tax expense (benefit)
|
$
|
34
|
|
|
$
|
(306
|
)
|
|
$
|
(72
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions)
|
||||||||||
Tax at statutory federal rate
|
$
|
19
|
|
|
$
|
7
|
|
|
$
|
(6
|
)
|
Partnership earnings not subject to tax
|
(9
|
)
|
|
(126
|
)
|
|
(127
|
)
|
|||
Goodwill impairment
|
—
|
|
|
36
|
|
|
55
|
|
|||
State and local tax, net of federal benefit
|
24
|
|
|
(6
|
)
|
|
4
|
|
|||
Statutory rate change
|
—
|
|
|
(225
|
)
|
|
—
|
|
|||
Other
|
—
|
|
|
8
|
|
|
2
|
|
|||
Net income tax expense (benefit)
|
$
|
34
|
|
|
$
|
(306
|
)
|
|
$
|
(72
|
)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
|
(in millions)
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||
Environmental, asset retirement obligations, and other reserves
|
$
|
12
|
|
|
$
|
20
|
|
Inventories
|
2
|
|
|
(1
|
)
|
||
Net operating loss carry forwards
|
—
|
|
|
79
|
|
||
Other
|
49
|
|
|
78
|
|
||
Total deferred tax assets
|
63
|
|
|
176
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
63
|
|
|
324
|
|
||
Trademarks and other intangibles
|
63
|
|
|
169
|
|
||
Investments in affiliates
|
15
|
|
|
72
|
|
||
Other
|
25
|
|
|
—
|
|
||
Total deferred tax liabilities
|
166
|
|
|
565
|
|
||
Net deferred income tax liabilities
|
$
|
103
|
|
|
$
|
389
|
|
18.
|
Partners’ Capital
|
|
Number of Units
|
|
Number of common units at December 31, 2016
|
98,181,046
|
|
Common units issued in connection with the ATM
|
1,268,750
|
|
Phantom unit vesting
|
195,813
|
|
Other
|
22,390
|
|
Number of common units at December 31, 2017
|
99,667,999
|
|
Common units repurchase
|
(17,286,859
|
)
|
Phantom unit vesting
|
283,917
|
|
Number of common units at December 31, 2018
|
82,665,057
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Attributable to Common Units
|
|
|
|
|
|
|
|
|
|||
Distributions (a)
|
$
|
272
|
|
|
$
|
328
|
|
|
$
|
317
|
|
Distributions in excess of net income
|
(557
|
)
|
|
(293
|
)
|
|
(809
|
)
|
|||
Limited partners’ interest in net income (loss)
|
$
|
(285
|
)
|
|
$
|
35
|
|
|
$
|
(492
|
)
|
|
|
|
|
|
|
|
|
|
|||
(a) Distributions declared per unit to unitholders as of record date
|
$
|
3.3020
|
|
|
$
|
3.3020
|
|
|
$
|
3.2938
|
|
|
|
|
Marginal percentage interest in distributions
|
||||
|
Total quarterly distribution per Common unit
target amount
|
|
Common
Unitholders
|
|
Holder of IDRs
|
||
Minimum Quarterly Distribution
|
$0.4375
|
|
100
|
%
|
|
—
|
|
First Target Distribution
|
Above $0.4375 up to $0.503125
|
|
100
|
%
|
|
—
|
|
Second Target Distribution
|
Above $0.503125 up to $0.546875
|
|
85
|
%
|
|
15
|
%
|
Third Target Distribution
|
Above $0.546875 up to $0.656250
|
|
75
|
%
|
|
25
|
%
|
Thereafter
|
Above $0.656250
|
|
50
|
%
|
|
50
|
%
|
|
|
Limited Partners
|
|
|
||||||||
Payment Date
|
|
Per Unit Distribution
|
|
Total Cash Distribution
|
|
Distribution to IDR Holders
|
||||||
|
|
(in millions, except per unit amounts)
|
||||||||||
February 14, 2019
|
|
$
|
0.8255
|
|
|
$
|
68
|
|
|
$
|
18
|
|
November 14, 2018
|
|
$
|
0.8255
|
|
|
$
|
68
|
|
|
$
|
18
|
|
August 15, 2018
|
|
$
|
0.8255
|
|
|
$
|
68
|
|
|
$
|
17
|
|
May 15, 2018
|
|
$
|
0.8255
|
|
|
$
|
68
|
|
|
$
|
18
|
|
February 14, 2018
|
|
$
|
0.8255
|
|
|
$
|
82
|
|
|
$
|
21
|
|
November 14, 2017
|
|
$
|
0.8255
|
|
|
$
|
82
|
|
|
$
|
22
|
|
August 15, 2017
|
|
$
|
0.8255
|
|
|
$
|
82
|
|
|
$
|
21
|
|
May 16, 2017
|
|
$
|
0.8255
|
|
|
$
|
82
|
|
|
$
|
21
|
|
February 21, 2017
|
|
$
|
0.8255
|
|
|
$
|
81
|
|
|
$
|
21
|
|
November 15, 2016
|
|
$
|
0.8255
|
|
|
$
|
79
|
|
|
$
|
20
|
|
August 15, 2016
|
|
$
|
0.8255
|
|
|
$
|
79
|
|
|
$
|
20
|
|
May 16, 2016
|
|
$
|
0.8173
|
|
|
$
|
78
|
|
|
$
|
20
|
|
February 16, 2016
|
|
$
|
0.8013
|
|
|
$
|
70
|
|
|
$
|
17
|
|
(1)
|
$10 million cash distribution paid on January 25, 2018 includes $8 million cash distribution for the three months ended December 31, 2017 and $2 million cash distribution for the period from January 1, 2018 through January 25, 2018.
|
19.
|
Unit-Based Compensation
|
|
Number of Phantom Common Units
|
|
Weighted-Average Grant Date Fair Value
|
|||
Outstanding at December 31, 2016
|
2,013,634
|
|
|
$
|
34.43
|
|
Granted
|
203,867
|
|
|
28.31
|
|
|
Vested
|
(289,377
|
)
|
|
45.48
|
|
|
Forfeited
|
(150,823
|
)
|
|
34.71
|
|
|
Outstanding at December 31, 2017
|
1,777,301
|
|
|
31.89
|
|
|
Granted
|
1,072,600
|
|
|
27.67
|
|
|
Vested
|
(414,472
|
)
|
|
32.92
|
|
|
Forfeited
|
(311,417
|
)
|
|
31.26
|
|
|
Outstanding at December 31, 2018
|
2,124,012
|
|
|
$
|
29.15
|
|
20.
|
Segment Reporting
|
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Intercompany
Eliminations
|
|
Totals
|
|||||||
|
(in millions)
|
|||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||
Motor fuel sales
|
$
|
15,466
|
|
|
$
|
1,038
|
|
|
|
|
|
$
|
16,504
|
|
Rental income
|
118
|
|
|
12
|
|
|
|
|
|
130
|
|
|||
Other
|
48
|
|
|
312
|
|
|
|
|
|
360
|
|
|||
Intersegment sales
|
1,649
|
|
|
120
|
|
|
(1,769
|
)
|
|
—
|
|
|||
Total revenue
|
17,281
|
|
|
1,482
|
|
|
(1,769
|
)
|
|
16,994
|
|
|||
Gross profit (1)
|
|
|
|
|
|
|
|
|
||||||
Motor fuel
|
673
|
|
|
123
|
|
|
|
|
796
|
|
||||
Rental
|
118
|
|
|
12
|
|
|
|
|
|
130
|
|
|||
Other
|
40
|
|
|
156
|
|
|
|
|
|
196
|
|
|||
Total gross profit
|
831
|
|
|
291
|
|
|
|
|
1,122
|
|
||||
Total operating expenses
|
538
|
|
|
239
|
|
|
|
|
|
777
|
|
|||
Operating income
|
293
|
|
|
52
|
|
|
|
|
|
345
|
|
|||
Interest expense, net
|
103
|
|
|
41
|
|
|
|
|
|
144
|
|
|||
Loss on extinguishment of debt and other
|
109
|
|
|
—
|
|
|
|
|
109
|
|
||||
Income from continuing operations before income taxes
|
81
|
|
|
11
|
|
|
|
|
|
92
|
|
|||
Income tax expense
|
1
|
|
|
33
|
|
|
|
|
|
34
|
|
|||
Income (loss) from continuing operations
|
80
|
|
|
(22
|
)
|
|
|
|
58
|
|
||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
(265
|
)
|
|
|
|
(265
|
)
|
||||
Net income (loss) and comprehensive income (loss)
|
$
|
80
|
|
|
$
|
(287
|
)
|
|
|
|
|
$
|
(207
|
)
|
Depreciation, amortization and accretion (2)
|
128
|
|
|
54
|
|
|
|
|
|
182
|
|
|||
Interest expense, net (2)
|
103
|
|
|
43
|
|
|
|
|
|
146
|
|
|||
Income tax expense (2)
|
1
|
|
|
191
|
|
|
|
|
|
192
|
|
|||
EBITDA
|
312
|
|
|
1
|
|
|
|
|
|
313
|
|
|||
Non-cash compensation expense (2)
|
2
|
|
|
10
|
|
|
|
|
|
12
|
|
|||
Loss on disposal of assets and impairment charges (2)
|
27
|
|
|
53
|
|
|
|
|
|
80
|
|
|||
Loss on extinguishment of debt and other (2)
|
109
|
|
|
20
|
|
|
|
|
129
|
|
||||
Unrealized loss on commodity derivatives (2)
|
6
|
|
|
—
|
|
|
|
|
|
6
|
|
|||
Inventory adjustments (2)
|
84
|
|
|
—
|
|
|
|
|
|
84
|
|
|||
Other non-cash adjustments
|
14
|
|
|
—
|
|
|
|
|
14
|
|
||||
Adjusted EBITDA
|
$
|
554
|
|
|
$
|
84
|
|
|
|
|
|
$
|
638
|
|
Capital expenditures (2)
|
$
|
77
|
|
|
$
|
26
|
|
|
|
|
|
$
|
103
|
|
Total assets, end of period (2)
|
$
|
3,878
|
|
|
$
|
1,001
|
|
|
|
|
|
$
|
4,879
|
|
(1)
|
Excludes depreciation, amortization and accretion.
|
(2)
|
Includes amounts from discontinued operations.
|
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Intercompany
Eliminations
|
|
Totals
|
|||||||
|
(in millions)
|
|||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||
Motor fuel sales
|
$
|
9,333
|
|
|
$
|
1,577
|
|
|
|
|
$
|
10,910
|
|
|
Rental income
|
77
|
|
|
12
|
|
|
|
|
89
|
|
||||
Other
|
50
|
|
|
674
|
|
|
|
|
724
|
|
||||
Intersegment sales
|
1,472
|
|
|
125
|
|
|
(1,597
|
)
|
|
—
|
|
|||
Total revenue
|
10,932
|
|
|
2,388
|
|
|
(1,597
|
)
|
|
11,723
|
|
|||
Gross profit (1)
|
|
|
|
|
|
|
|
|||||||
Motor fuel
|
535
|
|
|
157
|
|
|
|
|
692
|
|
||||
Rental
|
77
|
|
|
12
|
|
|
|
|
89
|
|
||||
Other
|
39
|
|
|
288
|
|
|
|
|
327
|
|
||||
Total gross profit
|
651
|
|
|
457
|
|
|
|
|
1,108
|
|
||||
Total operating expenses
|
406
|
|
|
473
|
|
|
|
|
879
|
|
||||
Operating income (loss)
|
245
|
|
|
(16
|
)
|
|
|
|
229
|
|
||||
Interest expense, net
|
88
|
|
|
121
|
|
|
|
|
209
|
|
||||
Income (loss) from continuing operations before income taxes
|
157
|
|
|
(137
|
)
|
|
|
|
20
|
|
||||
Income tax benefit
|
(10
|
)
|
|
(296
|
)
|
|
|
|
(306
|
)
|
||||
Income from continuing operations
|
167
|
|
|
159
|
|
|
|
|
326
|
|
||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
(177
|
)
|
|
|
|
(177
|
)
|
||||
Net income (loss) and comprehensive income (loss)
|
$
|
167
|
|
|
$
|
(18
|
)
|
|
|
|
$
|
149
|
|
|
Depreciation, amortization and accretion (2)
|
118
|
|
|
85
|
|
|
|
|
203
|
|
||||
Interest expense, net (2)
|
88
|
|
|
157
|
|
|
|
|
245
|
|
||||
Income tax benefit (2)
|
(10
|
)
|
|
(248
|
)
|
|
|
|
(258
|
)
|
||||
EBITDA
|
363
|
|
|
(24
|
)
|
|
|
|
339
|
|
||||
Non-cash compensation expense (2)
|
2
|
|
|
22
|
|
|
|
|
24
|
|
||||
Loss on disposal of assets and impairment charges (2)
|
8
|
|
|
392
|
|
|
|
|
400
|
|
||||
Unrealized gain on commodity derivatives (2)
|
(3
|
)
|
|
—
|
|
|
|
|
(3
|
)
|
||||
Inventory adjustments (2)
|
(24
|
)
|
|
(4
|
)
|
|
|
|
(28
|
)
|
||||
Adjusted EBITDA
|
$
|
346
|
|
|
$
|
386
|
|
|
|
|
$
|
732
|
|
|
Capital expenditures (2)
|
$
|
71
|
|
|
$
|
106
|
|
|
|
|
$
|
177
|
|
|
Total assets, end of period (2)
|
$
|
3,130
|
|
|
$
|
5,214
|
|
|
|
|
$
|
8,344
|
|
(1)
|
Excludes depreciation, amortization and accretion.
|
(2)
|
Includes amounts from discontinued operations.
|
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Intercompany
Eliminations
|
|
Totals
|
|||||||
|
(in millions)
|
|||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|||
Motor fuel sales
|
$
|
7,874
|
|
|
$
|
1,338
|
|
|
|
|
$
|
9,212
|
|
|
Rental income
|
76
|
|
|
12
|
|
|
|
|
88
|
|
||||
Other
|
45
|
|
|
641
|
|
|
|
|
686
|
|
||||
Intersegment sales
|
1,195
|
|
|
133
|
|
|
(1,328
|
)
|
|
—
|
|
|||
Total revenue
|
9,190
|
|
|
2,124
|
|
|
(1,328
|
)
|
|
9,986
|
|
|||
Gross profit (1)
|
|
|
|
|
|
|
|
|||||||
Motor fuel
|
596
|
|
|
163
|
|
|
|
|
759
|
|
||||
Rental
|
76
|
|
|
12
|
|
|
|
|
88
|
|
||||
Other
|
34
|
|
|
275
|
|
|
|
|
309
|
|
||||
Total gross profit
|
706
|
|
|
450
|
|
|
|
|
1,156
|
|
||||
Total operating expenses
|
390
|
|
|
621
|
|
|
|
|
1,011
|
|
||||
Operating income (loss)
|
316
|
|
|
(171
|
)
|
|
|
|
145
|
|
||||
Interest expense, net
|
59
|
|
|
102
|
|
|
|
|
161
|
|
||||
Income (loss) from continuing operations before income taxes
|
257
|
|
|
(273
|
)
|
|
|
|
(16
|
)
|
||||
Income tax expense (benefit)
|
5
|
|
|
(77
|
)
|
|
|
|
(72
|
)
|
||||
Income (loss) from continuing operations
|
252
|
|
|
(196
|
)
|
|
|
|
56
|
|
||||
Loss from discontinued operations, net of income taxes
|
—
|
|
|
(462
|
)
|
|
|
|
(462
|
)
|
||||
Net income (loss) and comprehensive income (loss)
|
$
|
252
|
|
|
$
|
(658
|
)
|
|
|
|
$
|
(406
|
)
|
|
Depreciation, amortization and accretion (2)
|
94
|
|
|
225
|
|
|
|
|
319
|
|
||||
Interest expense, net (2)
|
59
|
|
|
130
|
|
|
|
|
189
|
|
||||
Income tax expense (benefit) (2)
|
5
|
|
|
(36
|
)
|
|
|
|
(31
|
)
|
||||
EBITDA
|
410
|
|
|
(339
|
)
|
|
|
|
71
|
|
||||
Non-cash compensation expense (2)
|
6
|
|
|
7
|
|
|
|
|
13
|
|
||||
Loss (gain) on disposal of assets and impairment charges (2)
|
(3
|
)
|
|
683
|
|
|
|
|
680
|
|
||||
Unrealized loss on commodity derivatives (2)
|
5
|
|
|
—
|
|
|
|
|
5
|
|
||||
Inventory adjustments (2)
|
(98
|
)
|
|
(6
|
)
|
|
|
|
(104
|
)
|
||||
Adjusted EBITDA
|
$
|
320
|
|
|
$
|
345
|
|
|
|
|
$
|
665
|
|
|
Capital expenditures (2)
|
$
|
112
|
|
|
$
|
327
|
|
|
|
|
$
|
439
|
|
|
Total assets, end of period (2)
|
$
|
3,201
|
|
|
$
|
5,500
|
|
|
|
|
$
|
8,701
|
|
(1)
|
Excludes depreciation, amortization and accretion.
|
(2)
|
Includes amounts from discontinued operations.
|
21.
|
Net Income per Unit
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in millions, except units and per unit amounts)
|
||||||||||
Income from continuing operations
|
$
|
58
|
|
|
$
|
326
|
|
|
$
|
56
|
|
Less:
|
|
|
|
|
|
||||||
Series A Preferred units
|
2
|
|
|
23
|
|
|
—
|
|
|||
Incentive distribution rights
|
70
|
|
|
85
|
|
|
81
|
|
|||
Distributions on nonvested phantom unit awards
|
6
|
|
|
6
|
|
|
5
|
|
|||
Limited partners’ interest in net income (loss) from continuing operations
|
$
|
(20
|
)
|
|
$
|
212
|
|
|
$
|
(30
|
)
|
Loss from discontinued operations
|
$
|
(265
|
)
|
|
$
|
(177
|
)
|
|
$
|
(462
|
)
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
|||
Common - basic
|
84,299,893
|
|
|
99,270,120
|
|
|
93,575,530
|
|
|||
Common - equivalents
|
520,677
|
|
|
458,234
|
|
|
28,305
|
|
|||
Common - diluted
|
84,820,570
|
|
|
99,728,354
|
|
|
93,603,835
|
|
|||
Income (loss) from continuing operations per limited partner unit:
|
|
|
|
|
|
|
|
|
|||
Common - basic
|
$
|
(0.25
|
)
|
|
$
|
2.13
|
|
|
$
|
(0.32
|
)
|
Common - diluted
|
$
|
(0.25
|
)
|
|
$
|
2.12
|
|
|
$
|
(0.32
|
)
|
Loss from discontinued operations per limited partner unit:
|
|
|
|
|
|
||||||
Common - basic
|
$
|
(3.14
|
)
|
|
$
|
(1.78
|
)
|
|
$
|
(4.94
|
)
|
Common - diluted
|
$
|
(3.14
|
)
|
|
$
|
(1.78
|
)
|
|
$
|
(4.94
|
)
|
22.
|
Selected Quarterly Financial Data (unaudited)
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
4th
QTR |
|
3rd
QTR |
|
2nd
QTR |
|
1st
QTR |
|
4th
QTR |
|
3rd
QTR |
|
2nd
QTR |
|
1st
QTR |
||||||||||||||||
|
(in millions, except per unit amounts)
|
||||||||||||||||||||||||||||||
Total revenues
|
$
|
3,877
|
|
|
$
|
4,761
|
|
|
$
|
4,607
|
|
|
$
|
3,749
|
|
|
$
|
2,959
|
|
|
$
|
3,064
|
|
|
$
|
2,892
|
|
|
$
|
2,808
|
|
Operating income (loss)
|
$
|
(38
|
)
|
|
$
|
159
|
|
|
$
|
128
|
|
|
$
|
96
|
|
|
$
|
65
|
|
|
$
|
128
|
|
|
$
|
(20
|
)
|
|
$
|
56
|
|
Net Income (loss)
|
$
|
(72
|
)
|
|
$
|
112
|
|
|
$
|
68
|
|
|
$
|
(315
|
)
|
|
$
|
232
|
|
|
$
|
138
|
|
|
$
|
(222
|
)
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations per limited partner unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common (basic)
|
$
|
(1.11
|
)
|
|
$
|
1.16
|
|
|
$
|
0.91
|
|
|
$
|
(1.11
|
)
|
|
$
|
1.91
|
|
|
$
|
0.92
|
|
|
$
|
(0.58
|
)
|
|
$
|
(0.11
|
)
|
Common (diluted)
|
$
|
(1.11
|
)
|
|
$
|
1.15
|
|
|
$
|
0.90
|
|
|
$
|
(1.11
|
)
|
|
$
|
1.90
|
|
|
$
|
0.91
|
|
|
$
|
(0.59
|
)
|
|
$
|
(0.11
|
)
|
Income (loss) from discontinued operations per limited partner unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common (basic)
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(2.63
|
)
|
|
$
|
0.11
|
|
|
$
|
0.17
|
|
|
$
|
(1.94
|
)
|
|
$
|
(0.11
|
)
|
Common (diluted)
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(2.63
|
)
|
|
$
|
0.11
|
|
|
$
|
0.17
|
|
|
$
|
(1.94
|
)
|
|
$
|
(0.11
|
)
|
23.
|
Subsequent Events
|
By:
|
/s/ Thomas R. Miller
|
Name:
|
Thomas R. Miller
|
Title:
|
Chief Financial Officer
|
By:
|
Sunoco GP LLC, its general partner
|
By:
|
/s/ Thomas R. Miller
|
Name:
|
Thomas R. Miller
|
Title:
|
Chief Financial Officer
|
By:
|
/s/ Thomas R. Miller
|
Name:
|
Thomas R. Miller
|
Title:
|
Chief Financial Officer
|
By:
|
Sunoco LP, its sole member
|
By:
|
Sunoco GP LLC, its general partner
|
By:
|
/s/ Thomas R. Miller
|
Name:
|
Thomas R. Miller
|
Title:
|
Chief Financial Officer
|
By:
|
Sunoco, LLC, its sole member
|
By:
|
/s/ Thomas R. Miller
|
Name:
|
Thomas R. Miller
|
Title:
|
Chief Financial Officer
|
By:
|
Sunoco Property Company LLC, its sole member
|
By:
|
Sunoco, LLC, its sole member
|
By:
|
/s/ Thomas R. Miller
|
Name:
|
Thomas R. Miller
|
Title:
|
Chief Financial Officer
|
By:
|
Sunoco Retail LLC, its sole member
|
By:
|
Sunoco Property Company LLC, its sole member
|
By:
|
Sunoco, LLC, its sole member
|
By:
|
/s/ Thomas R. Miller
|
Name:
|
Thomas R. Miller
|
Title:
|
Chief Financial Officer
|
By:
|
/s/ Thomas A. Grimes
|
Name:
|
Thomas A. Grimes
|
Title:
|
President
|
By:
|
Alejandro Hoyos
|
Name:
|
Alejandro Hoyos
|
Title:
|
Authorized Signatory
|
(a)
|
Participant: Participant Name
|
(b)
|
Date of Grant: Grant Date
|
(c)
|
Total Number of Restricted Units: Number of Awards Granted
|
(d)
|
Vesting Schedule:
|
•
|
Participants ages 65-68 are eligible for the accelerated vesting of 40% of the remaining unvested Restricted Units under the Award at the time of the Participant’s retirement.
|
•
|
Participants over the age of 68 are eligible for the accelerated vesting of 50% of the remaining unvested Restricted Units under the Award at the time of the Participant’s retirement.
|
(i)
|
influence, induce, solicit or encourage any customer or business partner of the SUN Entities to abandon, reduce, or materially change its business relationship with the SUN Entities, or
|
(ii)
|
provide products or services related to the Restricted Business (as defined below) to any customer or business partner of the SUN Entities.
|
(i)
|
Restricted Business
.
The Restricted Business is defined as the products and services provided or proposed to be provided by the SUN Entities during Participant’s employment and which Participant (i) was directly involved or indirectly involved through the supervision of other employees; or (ii) about which Participant received Confidential Information.
|
(ii)
|
Restrictive Covenant Period
.
The Restrictive Covenant Period is defined as the period of time during Participant’s employment with any SUN Entity and continuing for one (1) year after the date Participant is no longer employed by any of the SUN Entities, regardless of the reason for the termination of Participant’s employment and regardless of whether Participant’s employment was terminated by Participant or the SUN Entities.
|
1.
|
I have reviewed this annual report on Form 10-K of Sunoco LP;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 22, 2019
|
/s/
Joseph Kim
|
|
Joseph Kim
|
|
President and Chief Executive Officer of Sunoco GP LLC, the general partner of Sunoco LP
|
1.
|
I have reviewed this annual report on Form 10-K of Sunoco LP;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 22, 2019
|
/s/
Thomas R. Miller
|
|
Thomas R. Miller
|
|
Chief Financial Officer of Sunoco GP LLC, the general partner of Sunoco LP
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
Date: February 22, 2019
|
/s/
Joseph Kim
|
|
Joseph Kim
|
|
President and Chief Executive Officer of Sunoco GP LLC, the general partner of Sunoco LP
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
Date: February 22, 2019
|
/s/
Thomas R. Miller
|
|
Thomas R. Miller
|
|
Chief Financial Officer of Sunoco GP LLC, the general partner of Sunoco LP
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
i
|
Balance Sheets
|
1
|
Statements of Operations
|
2
|
Statement of Equity
|
3
|
Statements of Cash Flows
|
4
|
Notes to Financial Statements
|
5
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(Loss) income from unconsolidated affiliate
|
$
|
(37
|
)
|
|
$
|
4
|
|
|
$
|
(53
|
)
|
Net (loss) income
|
$
|
(37
|
)
|
|
$
|
4
|
|
|
$
|
(53
|
)
|
|
Total
|
||
Balance, December 31, 2015
|
$
|
360
|
|
Sunoco Retail Transaction
|
2,297
|
|
|
Distributions to ETP
|
(77
|
)
|
|
R&M and Atlantic Distribution
|
(2,200
|
)
|
|
Net loss
|
(53
|
)
|
|
Balance, December 31, 2016
|
327
|
|
|
Net income
|
4
|
|
|
Balance, December 31, 2017
|
331
|
|
|
Net loss
|
(37
|
)
|
|
Balance, December 31, 2018
|
$
|
294
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(37
|
)
|
|
$
|
4
|
|
|
$
|
(53
|
)
|
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Loss (income) from unconsolidated affiliate
|
37
|
|
|
(4
|
)
|
|
53
|
|
|||
Distributions from unconsolidated affiliate
|
35
|
|
|
35
|
|
|
30
|
|
|||
Net cash provided by operating activities
|
35
|
|
|
35
|
|
|
30
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from Sunoco Retail Transaction
|
—
|
|
|
—
|
|
|
2,200
|
|
|||
Net cash provided by investing activities
|
—
|
|
|
—
|
|
|
2,200
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Advances to Sunoco, Inc.
|
(35
|
)
|
|
(35
|
)
|
|
(30
|
)
|
|||
R&M and Atlantic Distribution
|
—
|
|
|
—
|
|
|
(2,200
|
)
|
|||
Net cash used in financing activities
|
(35
|
)
|
|
(35
|
)
|
|
(2,230
|
)
|
|||
Change in cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosure of non-cash financing activities:
|
|
|
|
|
|
||||||
Non-cash distribution to members
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(77
|
)
|
1.
|
Operations and Organization:
|
•
|
dealer, distributor and fuel supply agreements,
|
•
|
fuel supply agreements to distribute motor fuel to Sunoco convenience stores and other retail fuel outlets,
|
•
|
real property owned in fee,
|
•
|
leases and subleases under which it was a tenant, and
|
•
|
leases and subleases under which it was a landlord.
|
2.
|
Summary of Significant Accounting Policies:
|
3.
|
Investment in Unconsolidated Affiliate:
|
4.
|
Commitments and Contingencies:
|
•
|
$1 billion of 4.875% senior notes due 2023;
|
•
|
$800 million of 5.50% senior notes due 2026; and
|
•
|
$400 million of 5.875% senior notes due 2028.
|
5.
|
Quarterly Financial Data (unaudited):
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
4th
QTR |
|
3rd
QTR |
|
2nd
QTR |
|
1st
QTR |
|
4th
QTR |
|
3rd
QTR |
|
2nd
QTR |
|
1st
QTR |
||||||||||||||||
(Loss) income from unconsolidated affiliate
|
$
|
(11
|
)
|
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
(45
|
)
|
|
$
|
22
|
|
|
$
|
11
|
|
|
$
|
(27
|
)
|
|
$
|
(2
|
)
|
Net (loss) income
|
(11
|
)
|
|
12
|
|
|
7
|
|
|
(45
|
)
|
|
22
|
|
|
11
|
|
|
(27
|
)
|
|
(2
|
)
|