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☒
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QUARTERLY 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
|
|
30-0740483
|
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(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
|
|
|
Large accelerated filer
|
ý
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging Growth company
|
☐
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|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
Common Units Representing Limited Partner Interests
|
SUN
|
New York Stock Exchange
|
|
|
|
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Page
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||
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June 30,
2019 |
|
December 31,
2018 |
||||
|
|
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(in millions, except units)
|
||||||
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Assets
|
|
|
|
|
||||
|
Current assets:
|
|
|
|
|
||||
|
Cash and cash equivalents
|
|
$
|
36
|
|
|
$
|
56
|
|
|
Accounts receivable, net
|
|
573
|
|
|
374
|
|
||
|
Receivables from affiliates
|
|
2
|
|
|
37
|
|
||
|
Inventories, net
|
|
410
|
|
|
374
|
|
||
|
Other current assets
|
|
77
|
|
|
64
|
|
||
|
Total current assets
|
|
1,098
|
|
|
905
|
|
||
|
|
|
|
|
|
||||
|
Property and equipment
|
|
2,074
|
|
|
2,133
|
|
||
|
Accumulated depreciation
|
|
(635
|
)
|
|
(587
|
)
|
||
|
Property and equipment, net
|
|
1,439
|
|
|
1,546
|
|
||
|
Other assets:
|
|
|
|
|
||||
|
Lease right-of-use assets, net
|
|
536
|
|
|
—
|
|
||
|
Goodwill
|
|
1,558
|
|
|
1,559
|
|
||
|
|
|
|
|
|
||||
|
Intangible assets
|
|
914
|
|
|
915
|
|
||
|
Accumulated amortization
|
|
(235
|
)
|
|
(207
|
)
|
||
|
Intangible assets, net
|
|
679
|
|
|
708
|
|
||
|
Other non-current assets
|
|
160
|
|
|
161
|
|
||
|
Total assets
|
|
$
|
5,470
|
|
|
$
|
4,879
|
|
|
Liabilities and equity
|
|
|
|
|
||||
|
Current liabilities:
|
|
|
|
|
||||
|
Accounts payable
|
|
$
|
530
|
|
|
$
|
412
|
|
|
Accounts payable to affiliates
|
|
24
|
|
|
149
|
|
||
|
Accrued expenses and other current liabilities
|
|
306
|
|
|
299
|
|
||
|
Operating lease current liabilities
|
|
21
|
|
|
—
|
|
||
|
Current maturities of long-term debt
|
|
6
|
|
|
5
|
|
||
|
Total current liabilities
|
|
887
|
|
|
865
|
|
||
|
Operating lease non-current liabilities
|
|
520
|
|
|
—
|
|
||
|
Revolving line of credit
|
|
117
|
|
|
700
|
|
||
|
Long-term debt, net
|
|
2,878
|
|
|
2,280
|
|
||
|
Advances from affiliates
|
|
80
|
|
|
24
|
|
||
|
Deferred tax liability
|
|
90
|
|
|
103
|
|
||
|
Other non-current liabilities
|
|
119
|
|
|
123
|
|
||
|
Total liabilities
|
|
4,691
|
|
|
4,095
|
|
||
|
Commitments and contingencies (Note 12)
|
|
|
|
|
|
|
||
|
Equity:
|
|
|
|
|
||||
|
Limited partners:
|
|
|
|
|
||||
|
Common unitholders
(82,749,333 units issued and outstanding as of June 30, 2019 and 82,665,057 units issued and outstanding as of December 31, 2018) |
|
779
|
|
|
784
|
|
||
|
Class C unitholders - held by subsidiaries
(16,410,780 units issued and outstanding as of June 30, 2019 and December 31, 2018) |
|
—
|
|
|
—
|
|
||
|
Total equity
|
|
779
|
|
|
784
|
|
||
|
Total liabilities and equity
|
|
$
|
5,470
|
|
|
$
|
4,879
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in millions, except unit and per unit amounts)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Motor fuel sales
|
$
|
4,366
|
|
|
$
|
4,507
|
|
|
$
|
7,949
|
|
|
$
|
8,058
|
|
|
Non motor fuel sales
|
74
|
|
|
66
|
|
|
148
|
|
|
242
|
|
||||
|
Lease income
|
35
|
|
|
34
|
|
|
70
|
|
|
56
|
|
||||
|
Total revenues
|
4,475
|
|
|
4,607
|
|
|
8,167
|
|
|
8,356
|
|
||||
|
Cost of sales and operating expenses:
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales
|
4,206
|
|
|
4,297
|
|
|
7,528
|
|
|
7,750
|
|
||||
|
General and administrative
|
34
|
|
|
34
|
|
|
61
|
|
|
69
|
|
||||
|
Other operating
|
73
|
|
|
86
|
|
|
157
|
|
|
184
|
|
||||
|
Lease expense
|
16
|
|
|
19
|
|
|
30
|
|
|
34
|
|
||||
|
Loss on disposal of assets and impairment charges
|
2
|
|
|
2
|
|
|
50
|
|
|
5
|
|
||||
|
Depreciation, amortization and accretion
|
47
|
|
|
41
|
|
|
92
|
|
|
90
|
|
||||
|
Total cost of sales and operating expenses
|
4,378
|
|
|
4,479
|
|
|
7,918
|
|
|
8,132
|
|
||||
|
Operating income
|
97
|
|
|
128
|
|
|
249
|
|
|
224
|
|
||||
|
Other expenses:
|
|
|
|
|
|
|
|
||||||||
|
Interest expense, net
|
43
|
|
|
36
|
|
|
85
|
|
|
70
|
|
||||
|
Loss on extinguishment of debt and other, net
|
(6
|
)
|
|
—
|
|
|
(3
|
)
|
|
109
|
|
||||
|
Income from continuing operations before income taxes
|
60
|
|
|
92
|
|
|
167
|
|
|
45
|
|
||||
|
Income tax expense (benefit)
|
5
|
|
|
(2
|
)
|
|
3
|
|
|
29
|
|
||||
|
Income from continuing operations
|
55
|
|
|
94
|
|
|
164
|
|
|
16
|
|
||||
|
Loss from discontinued operations, net of income taxes
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(263
|
)
|
||||
|
Net income (loss) and comprehensive income (loss)
|
$
|
55
|
|
|
$
|
68
|
|
|
$
|
164
|
|
|
$
|
(247
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income (loss) per common unit - basic:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations - common units
|
$
|
0.44
|
|
|
$
|
0.91
|
|
|
$
|
1.51
|
|
|
$
|
(0.29
|
)
|
|
Discontinued operations - common units
|
0.00
|
|
|
(0.32
|
)
|
|
0.00
|
|
|
(3.05
|
)
|
||||
|
Net income (loss) - common units
|
$
|
0.44
|
|
|
$
|
0.59
|
|
|
$
|
1.51
|
|
|
$
|
(3.34
|
)
|
|
Net income (loss) per common unit - diluted:
|
|
|
|
|
|
|
|
||||||||
|
Continuing operations - common units
|
$
|
0.43
|
|
|
$
|
0.90
|
|
|
$
|
1.50
|
|
|
$
|
(0.29
|
)
|
|
Discontinued operations - common units
|
0.00
|
|
|
(0.32
|
)
|
|
0.00
|
|
|
(3.05
|
)
|
||||
|
Net income (loss) - common units
|
$
|
0.43
|
|
|
$
|
0.58
|
|
|
$
|
1.50
|
|
|
$
|
(3.34
|
)
|
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
||||||||
|
Common units - basic
|
82,742,323
|
|
|
82,494,976
|
|
|
82,726,842
|
|
|
86,104,411
|
|
||||
|
Common units - diluted
|
83,509,987
|
|
|
82,947,669
|
|
|
83,455,021
|
|
|
86,569,372
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
Cash distributions per unit
|
$
|
0.8255
|
|
|
$
|
0.8255
|
|
|
$
|
1.6510
|
|
|
$
|
1.6510
|
|
|
|
Preferred Units-Affiliated
|
|
Common Units
|
|
Total Equity
|
||||||
|
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
784
|
|
|
$
|
784
|
|
|
Cash distribution to unitholders
|
—
|
|
|
(87
|
)
|
|
(87
|
)
|
|||
|
Unit-based compensation
|
—
|
|
|
3
|
|
|
3
|
|
|||
|
Partnership net income
|
—
|
|
|
109
|
|
|
109
|
|
|||
|
Balance at March 31, 2019
|
—
|
|
|
809
|
|
|
809
|
|
|||
|
Cash distribution to unitholders
|
—
|
|
|
(88
|
)
|
|
(88
|
)
|
|||
|
Unit-based compensation
|
—
|
|
|
3
|
|
|
3
|
|
|||
|
Partnership net income
|
—
|
|
|
55
|
|
|
55
|
|
|||
|
Balance at June 30, 2019
|
$
|
—
|
|
|
$
|
779
|
|
|
$
|
779
|
|
|
|
|
|
|
|
|
||||||
|
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
|
—
|
|
|
(107
|
)
|
|
(107
|
)
|
|||
|
Dividend to preferred units
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
|
Unit-based compensation
|
—
|
|
|
3
|
|
|
3
|
|
|||
|
Cumulative effect of change in revenue recognition accounting principle
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||
|
Partnership net income (loss)
|
2
|
|
|
(317
|
)
|
|
(315
|
)
|
|||
|
Balance at March 31, 2018
|
—
|
|
|
932
|
|
|
932
|
|
|||
|
Cash distribution to unitholders
|
—
|
|
|
(87
|
)
|
|
(87
|
)
|
|||
|
Unit-based compensation
|
—
|
|
|
3
|
|
|
3
|
|
|||
|
Partnership net income
|
—
|
|
|
68
|
|
|
68
|
|
|||
|
Balance at June 30, 2018
|
$
|
—
|
|
|
$
|
916
|
|
|
$
|
916
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income (loss)
|
$
|
164
|
|
|
$
|
(247
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by continuing operating activities:
|
|
|
|
||||
|
Loss from discontinued operations
|
—
|
|
|
263
|
|
||
|
Depreciation, amortization and accretion
|
92
|
|
|
90
|
|
||
|
Amortization of deferred financing fees
|
3
|
|
|
3
|
|
||
|
Loss on disposal of assets and impairment charges
|
50
|
|
|
5
|
|
||
|
Loss on extinguishment of debt and other,net
|
(3
|
)
|
|
109
|
|
||
|
Non-cash unit based compensation expense
|
6
|
|
|
6
|
|
||
|
Deferred income tax
|
(13
|
)
|
|
21
|
|
||
|
Inventory valuation adjustment
|
(97
|
)
|
|
(57
|
)
|
||
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
|
Accounts receivable
|
(194
|
)
|
|
12
|
|
||
|
Receivable from affiliates
|
35
|
|
|
(8
|
)
|
||
|
Inventories
|
53
|
|
|
47
|
|
||
|
Other assets
|
31
|
|
|
(12
|
)
|
||
|
Accounts payable
|
124
|
|
|
(130
|
)
|
||
|
Accounts payable to affiliates
|
(68
|
)
|
|
(39
|
)
|
||
|
Accrued expenses and other current liabilities
|
8
|
|
|
189
|
|
||
|
Other non-current liabilities
|
(7
|
)
|
|
3
|
|
||
|
Net cash provided by continuing operating activities
|
184
|
|
|
255
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Capital expenditures
|
(57
|
)
|
|
(32
|
)
|
||
|
Purchase of intangible assets
|
—
|
|
|
(2
|
)
|
||
|
Acquisition from Superior
|
—
|
|
|
(58
|
)
|
||
|
Sites purchased from 7-Eleven
|
—
|
|
|
(54
|
)
|
||
|
Proceeds from disposal of property and equipment
|
22
|
|
|
3
|
|
||
|
Net cash used in investing activities
|
(35
|
)
|
|
(143
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Proceeds from issuance of long-term debt
|
600
|
|
|
2,200
|
|
||
|
Payments on long-term debt
|
(4
|
)
|
|
(3,448
|
)
|
||
|
Payments for debt extinguishment costs
|
—
|
|
|
(93
|
)
|
||
|
Revolver borrowings
|
1,064
|
|
|
1,410
|
|
||
|
Revolver repayments
|
(1,647
|
)
|
|
(1,855
|
)
|
||
|
Loan origination costs
|
(6
|
)
|
|
(24
|
)
|
||
|
Advances to/from affiliates
|
(1
|
)
|
|
—
|
|
||
|
Common unit repurchase
|
—
|
|
|
(540
|
)
|
||
|
Redemption of preferred units from ETE
|
—
|
|
|
(303
|
)
|
||
|
Distributions to unitholders
|
(175
|
)
|
|
(208
|
)
|
||
|
Net cash used in financing activities
|
(169
|
)
|
|
(2,861
|
)
|
||
|
Cash flows from discontinued operations:
|
|
|
|
||||
|
Operating activities
|
—
|
|
|
(478
|
)
|
||
|
Investing activities
|
—
|
|
|
3,207
|
|
||
|
Changes in cash included in current assets held for sale
|
—
|
|
|
11
|
|
||
|
Net increase in cash and cash equivalents of discontinued operations
|
—
|
|
|
2,740
|
|
||
|
Net decrease in cash
|
(20
|
)
|
|
(9
|
)
|
||
|
Cash and cash equivalents at beginning of period
|
56
|
|
|
28
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
36
|
|
|
$
|
19
|
|
|
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
|
|
Classification
|
|
Balance at
December 31, 2018
|
|
Adjustments Due to
Topic 842
|
|
Balance at
January 1, 2019
|
||||||
|
|
|
(in millions)
|
||||||||||
|
Assets
|
|
|
|
|
|
|
||||||
|
Property and equipment, net
|
|
$
|
1,546
|
|
|
$
|
(1
|
)
|
|
$
|
1,545
|
|
|
Lease right-of-use assets
|
|
—
|
|
|
548
|
|
|
548
|
|
|||
|
Liabilities
|
|
|
|
|
|
|
||||||
|
Accrued expenses and other current liabilities
|
|
299
|
|
|
(1
|
)
|
|
298
|
|
|||
|
Current maturities of long term debt
|
|
5
|
|
|
1
|
|
|
6
|
|
|||
|
Operating lease current liabilities
|
|
—
|
|
|
25
|
|
|
25
|
|
|||
|
Long term debt, net
|
|
2,280
|
|
|
6
|
|
|
2,286
|
|
|||
|
Operating lease non-current liabilities
|
|
—
|
|
|
528
|
|
|
528
|
|
|||
|
Other non-current liabilities
|
|
123
|
|
|
(12
|
)
|
|
111
|
|
|||
|
3.
|
Acquisitions
|
|
4.
|
Discontinued Operations
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
|
Motor fuel sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
256
|
|
|
Non motor fuel sales (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
93
|
|
||||
|
Total revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
349
|
|
||||
|
Cost of sales and operating expenses:
|
|
|
|
|
|
|
|
||||||||
|
Cost of sales
|
—
|
|
|
—
|
|
|
—
|
|
|
305
|
|
||||
|
General and administrative
|
—
|
|
|
5
|
|
|
—
|
|
|
7
|
|
||||
|
Other operating
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||
|
Lease expense
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
|
Loss on disposal of assets
|
—
|
|
|
38
|
|
|
—
|
|
|
61
|
|
||||
|
Total cost of sales and operating expenses
|
—
|
|
|
43
|
|
|
—
|
|
|
434
|
|
||||
|
Operating loss
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(85
|
)
|
||||
|
Interest expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
|
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
|
Loss from discontinued operations before income taxes
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(107
|
)
|
||||
|
Income tax expense (benefit)
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
156
|
|
||||
|
Loss from discontinued operations, net of income taxes
|
$
|
—
|
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
(263
|
)
|
|
(1)
|
Non motor fuel sales includes merchandise sales totaling $89 million for the six months ended June 30, 2018.
|
|
5.
|
Accounts Receivable, net
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
(in millions)
|
||||||
|
Accounts receivable, trade
|
$
|
400
|
|
|
$
|
299
|
|
|
Credit card receivables
|
133
|
|
|
49
|
|
||
|
Other receivables
|
42
|
|
|
28
|
|
||
|
Allowance for doubtful accounts
|
(2
|
)
|
|
(2
|
)
|
||
|
Accounts receivable, net
|
$
|
573
|
|
|
$
|
374
|
|
|
6.
|
Inventories, net
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
(in millions)
|
||||||
|
Fuel
|
$
|
402
|
|
|
$
|
363
|
|
|
Other
|
8
|
|
|
11
|
|
||
|
Inventories, net
|
$
|
410
|
|
|
$
|
374
|
|
|
7.
|
Accrued Expenses and Other Current Liabilities
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
(in millions)
|
||||||
|
Wage and other employee-related accrued expenses
|
$
|
29
|
|
|
$
|
41
|
|
|
Accrued tax expense
|
81
|
|
|
91
|
|
||
|
Accrued insurance
|
33
|
|
|
31
|
|
||
|
Accrued interest expense
|
61
|
|
|
47
|
|
||
|
Dealer deposits
|
18
|
|
|
18
|
|
||
|
Accrued environmental expense
|
6
|
|
|
6
|
|
||
|
Other
|
78
|
|
|
65
|
|
||
|
Total
|
$
|
306
|
|
|
$
|
299
|
|
|
8.
|
Long-Term Debt
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
|
|
(in millions)
|
||||||
|
Sale leaseback financing obligation
|
$
|
105
|
|
|
$
|
107
|
|
|
2018 Revolver
|
117
|
|
|
700
|
|
||
|
4.875% Senior Notes Due 2023
|
1,000
|
|
|
1,000
|
|
||
|
5.500% Senior Notes Due 2026
|
800
|
|
|
800
|
|
||
|
6.000% Senior Notes Due 2027
|
600
|
|
|
—
|
|
||
|
5.875% Senior Notes Due 2028
|
400
|
|
|
400
|
|
||
|
Other
|
7
|
|
|
1
|
|
||
|
Total debt
|
3,029
|
|
|
3,008
|
|
||
|
Less: current maturities
|
6
|
|
|
5
|
|
||
|
Less: debt issuance costs
|
28
|
|
|
23
|
|
||
|
Long-term debt, net of current maturities
|
$
|
2,995
|
|
|
$
|
2,980
|
|
|
9.
|
Other Non-current Liabilities
|
|
|
June 30,
2019 |
|
December 31, 2018
|
||||
|
|
(in millions)
|
||||||
|
Reserve for underground storage tank removal
|
$
|
67
|
|
|
$
|
54
|
|
|
Reserve for environmental remediation
|
25
|
|
|
29
|
|
||
|
Unfavorable lease liability
|
15
|
|
|
16
|
|
||
|
Accrued straight-line rent
|
—
|
|
|
12
|
|
||
|
Other
|
12
|
|
|
12
|
|
||
|
Total
|
$
|
119
|
|
|
$
|
123
|
|
|
10.
|
Related-Party Transactions
|
|
•
|
Net advances from affiliates were $80 million and $24 million as of June 30, 2019 and December 31, 2018, respectively. Advances 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 $2 million and $37 million as of June 30, 2019 and December 31, 2018, respectively, which are primarily related to motor fuel sales to affiliates.
|
|
•
|
Net accounts payable to affiliates were $24 million and $149 million as of June 30, 2019 and December 31, 2018, respectively, which are related to operational expenses.
|
|
•
|
Motor fuel sales to affiliates were $0.3 million and $10 million for the three months ended June 30, 2019 and 2018, respectively.
|
|
•
|
Motor fuel sales to affiliates were $1 million and $22 million for the six months ended June 30, 2019 and 2018, respectively.
|
|
•
|
Bulk fuel purchases from affiliates were $103 million and $887 million for the three months ended June 30, 2019 and 2018, respectively, which is included in the cost of sales in our Consolidated Statements of Operations and Comprehensive Income (Loss).
|
|
•
|
Bulk fuel purchases from affiliates were $282 million and $1.7 billion for the six months ended June 30, 2019 and 2018, respectively, which is included in the cost of sales in our Consolidated Statements of Operations and Comprehensive Income (Loss).
|
|
11.
|
Revenue
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Fuel Distribution and Marketing Segment
|
|
|
|
|
|
|
|
||||||||
|
Dealer
|
$
|
989
|
|
|
$
|
983
|
|
|
$
|
1,767
|
|
|
$
|
1,783
|
|
|
Distributor
|
2,142
|
|
|
2,207
|
|
|
3,781
|
|
|
3,830
|
|
||||
|
Unbranded wholesale
|
623
|
|
|
687
|
|
|
1,273
|
|
|
1,249
|
|
||||
|
Commission agent
|
439
|
|
|
427
|
|
|
814
|
|
|
548
|
|
||||
|
Non motor fuel sales
|
16
|
|
|
15
|
|
|
35
|
|
|
29
|
|
||||
|
Lease income
|
31
|
|
|
31
|
|
|
63
|
|
|
50
|
|
||||
|
Total
|
4,240
|
|
|
4,350
|
|
|
7,733
|
|
|
7,489
|
|
||||
|
All Other Segment
|
|
|
|
|
|
|
|
||||||||
|
Motor fuel
|
173
|
|
|
203
|
|
|
314
|
|
|
648
|
|
||||
|
Non motor fuel sales
|
58
|
|
|
51
|
|
|
113
|
|
|
213
|
|
||||
|
Lease income
|
4
|
|
|
3
|
|
|
7
|
|
|
6
|
|
||||
|
Total
|
235
|
|
|
257
|
|
|
434
|
|
|
867
|
|
||||
|
Total revenue
|
$
|
4,475
|
|
|
$
|
4,607
|
|
|
$
|
8,167
|
|
|
$
|
8,356
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
|
(in millions)
|
||||||
|
Contract balances
|
|
|
|
||||
|
Contract asset
|
$
|
95
|
|
|
$
|
75
|
|
|
Accounts receivable from contracts with customers
|
$
|
533
|
|
|
$
|
348
|
|
|
Contract liability
|
$
|
1
|
|
|
$
|
1
|
|
|
12.
|
Commitments and Contingencies
|
|
Lease cost
|
Classification
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
|
|
|
(in millions)
|
||||||
|
Operating lease cost
|
Lease expense
|
$
|
14
|
|
|
$
|
26
|
|
|
Finance lease cost
|
|
|
|
|
||||
|
Amortization of leased assets
|
Depreciation, amortization, and accretion
|
—
|
|
|
—
|
|
||
|
Interest on lease liabilities
|
Interest expense
|
—
|
|
|
—
|
|
||
|
Short term lease cost
|
Lease expense
|
1
|
|
|
2
|
|
||
|
Variable lease cost
|
Lease expense
|
1
|
|
|
2
|
|
||
|
Sublease income
|
Lease income
|
(11
|
)
|
|
(21
|
)
|
||
|
Net lease cost
|
|
$
|
5
|
|
|
$
|
9
|
|
|
Lease Term and Discount Rate
|
|
June 30, 2019
|
|
Weighted-average remaining lease term (years)
|
|
|
|
Operating leases
|
|
24
|
|
Finance leases
|
|
10
|
|
Weighted-average discount rate (%)
|
|
|
|
Operating leases
|
|
6%
|
|
Finance leases
|
|
8%
|
|
Other information
|
|
Six Months Ended June 30, 2019
|
||
|
|
|
(in millions)
|
||
|
(Gain) Loss on sale and leaseback transactions, net
|
|
$
|
—
|
|
|
Cash paid for amount included in the measurement of lease liabilities
|
|
|
||
|
Operating cash flows from operating leases
|
|
$
|
(28
|
)
|
|
Operating cash flows from finance leases
|
|
$
|
—
|
|
|
Financing cash flows from finance leases
|
|
$
|
—
|
|
|
Leased assets obtained in exchange for new finance lease liabilities
|
|
$
|
—
|
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
14
|
|
|
Maturity of lease liabilities
|
|
Operating leases
|
|
Finance leases
|
|
Total
|
||||||
|
|
|
(in millions)
|
||||||||||
|
2019 (remainder)
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
2020
|
|
49
|
|
|
1
|
|
|
50
|
|
|||
|
2021
|
|
46
|
|
|
1
|
|
|
47
|
|
|||
|
2022
|
|
44
|
|
|
1
|
|
|
45
|
|
|||
|
2023
|
|
43
|
|
|
1
|
|
|
44
|
|
|||
|
Thereafter
|
|
838
|
|
|
6
|
|
|
844
|
|
|||
|
Total lease payment
|
|
1,046
|
|
|
10
|
|
|
1,056
|
|
|||
|
Less: interest
|
|
505
|
|
|
3
|
|
|
508
|
|
|||
|
Present value of lease liabilities
|
|
$
|
541
|
|
|
$
|
7
|
|
|
$
|
548
|
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
|
|
(in millions)
|
||||||
|
Fuel Distribution & Marketing lease income
|
$
|
31
|
|
|
$
|
63
|
|
|
All Other lease income
|
4
|
|
|
7
|
|
||
|
Total lease income
|
$
|
35
|
|
|
$
|
70
|
|
|
|
|
June 30, 2019
|
||
|
|
|
(in millions)
|
||
|
2019 (remainder)
|
|
$
|
46
|
|
|
2020
|
|
72
|
|
|
|
2021
|
|
59
|
|
|
|
2022
|
|
53
|
|
|
|
2023
|
|
4
|
|
|
|
Thereafter
|
|
5
|
|
|
|
Total undiscounted cash flow
|
|
$
|
239
|
|
|
13.
|
Interest Expense, net
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Interest expense
|
$
|
41
|
|
|
$
|
36
|
|
|
$
|
83
|
|
|
$
|
70
|
|
|
Amortization of deferred financing fees
|
2
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
|
Interest income
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
||||
|
Interest expense, net
|
$
|
43
|
|
|
$
|
36
|
|
|
$
|
85
|
|
|
$
|
70
|
|
|
14.
|
Income Tax Expense
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
Income tax expense (benefit) at statutory federal rate
|
$
|
13
|
|
|
$
|
18
|
|
|
$
|
35
|
|
|
$
|
8
|
|
|
Partnership earnings not subject to tax
|
(10
|
)
|
|
(10
|
)
|
|
(36
|
)
|
|
(1
|
)
|
||||
|
Statutory tax rate changes
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
19
|
|
||||
|
Other
|
2
|
|
|
—
|
|
|
4
|
|
|
3
|
|
||||
|
Net income tax expense (benefit)
|
$
|
5
|
|
|
$
|
(2
|
)
|
|
$
|
3
|
|
|
$
|
29
|
|
|
15.
|
Partners' Capital
|
|
|
Number of Units
|
|
|
Number of common units at December 31, 2018
|
82,665,057
|
|
|
Phantom unit vesting
|
84,276
|
|
|
Number of common units at June 30, 2019
|
82,749,333
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Attributable to Common Units
|
|
|
|
|
|
|
|
||||||||
|
Distributions
|
$
|
68
|
|
|
$
|
68
|
|
|
$
|
136
|
|
|
$
|
136
|
|
|
Distributions in excess of net income
|
(32
|
)
|
|
(19
|
)
|
|
(12
|
)
|
|
(423
|
)
|
||||
|
Limited partners' interest in net income (loss)
|
$
|
36
|
|
|
$
|
49
|
|
|
$
|
124
|
|
|
$
|
(287
|
)
|
|
|
|
Limited Partners
|
|
|
||||||||
|
Payment Date
|
|
Per Unit Distribution
|
|
Total Cash Distribution
|
|
Distribution to IDR Holders
|
||||||
|
|
|
(in millions, except per unit amounts)
|
||||||||||
|
August 14, 2019
|
|
$
|
0.8255
|
|
|
$
|
68
|
|
|
$
|
18
|
|
|
May 15, 2019
|
|
$
|
0.8255
|
|
|
$
|
68
|
|
|
$
|
18
|
|
|
February 14, 2019
|
|
$
|
0.8255
|
|
|
$
|
68
|
|
|
$
|
18
|
|
|
16.
|
Unit-Based Compensation
|
|
|
Number of Phantom Units
|
|
Weighted-Average Grant Date Fair Value
|
|||
|
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
|
|
|
|
Granted
|
41,311
|
|
|
29.01
|
|
|
|
Vested
|
(125,741
|
)
|
|
29.21
|
|
|
|
Forfeited
|
(167,339
|
)
|
|
28.19
|
|
|
|
Outstanding at June 30, 2019
|
1,872,243
|
|
|
$
|
28.88
|
|
|
17.
|
Segment Reporting
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||
|
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Intercompany Eliminations
|
|
Totals
|
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Intercompany Eliminations
|
|
Totals
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||||
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Motor fuel sales
|
$
|
4,193
|
|
|
$
|
173
|
|
|
|
|
$
|
4,366
|
|
|
$
|
4,304
|
|
|
$
|
203
|
|
|
|
|
$
|
4,507
|
|
||
|
Non motor fuel sales
|
16
|
|
|
58
|
|
|
|
|
74
|
|
|
15
|
|
|
51
|
|
|
|
|
66
|
|
||||||||
|
Lease income
|
31
|
|
|
4
|
|
|
|
|
35
|
|
|
31
|
|
|
3
|
|
|
|
|
34
|
|
||||||||
|
Intersegment sales
|
463
|
|
|
16
|
|
|
(479
|
)
|
|
—
|
|
|
453
|
|
|
30
|
|
|
(483
|
)
|
|
—
|
|
||||||
|
Total revenue
|
4,703
|
|
|
251
|
|
|
(479
|
)
|
|
4,475
|
|
|
4,803
|
|
|
287
|
|
|
(483
|
)
|
|
4,607
|
|
||||||
|
Gross profit (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Motor fuel
|
171
|
|
|
19
|
|
|
|
|
190
|
|
|
204
|
|
|
23
|
|
|
|
|
227
|
|
||||||||
|
Non motor fuel
|
13
|
|
|
31
|
|
|
|
|
44
|
|
|
18
|
|
|
31
|
|
|
|
|
49
|
|
||||||||
|
Lease
|
31
|
|
|
4
|
|
|
|
|
35
|
|
|
31
|
|
|
3
|
|
|
|
|
34
|
|
||||||||
|
Total gross profit
|
215
|
|
|
54
|
|
|
|
|
269
|
|
|
253
|
|
|
57
|
|
|
|
|
310
|
|
||||||||
|
Total operating expenses
|
139
|
|
|
33
|
|
|
|
|
172
|
|
|
128
|
|
|
54
|
|
|
|
|
182
|
|
||||||||
|
Operating income
|
76
|
|
|
21
|
|
|
|
|
97
|
|
|
125
|
|
|
3
|
|
|
|
|
128
|
|
||||||||
|
Interest expense, net
|
35
|
|
|
8
|
|
|
|
|
43
|
|
|
27
|
|
|
9
|
|
|
|
|
36
|
|
||||||||
|
Loss on extinguishment of debt and other, net
|
—
|
|
|
(6
|
)
|
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
|
Income (loss) from continuing operations before income taxes
|
41
|
|
|
19
|
|
|
|
|
60
|
|
|
98
|
|
|
(6
|
)
|
|
|
|
92
|
|
||||||||
|
Income tax expense (benefit)
|
2
|
|
|
3
|
|
|
|
|
5
|
|
|
(3
|
)
|
|
1
|
|
|
|
|
(2
|
)
|
||||||||
|
Income (loss) from continuing operations
|
39
|
|
|
16
|
|
|
|
|
55
|
|
|
101
|
|
|
(7
|
)
|
|
|
|
94
|
|
||||||||
|
Loss from discontinued operations,
net of income taxes (See Note 4)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
|
|
(26
|
)
|
||||||||
|
Net income (loss) and
comprehensive income (loss)
|
$
|
39
|
|
|
$
|
16
|
|
|
|
|
$
|
55
|
|
|
$
|
101
|
|
|
$
|
(33
|
)
|
|
|
|
$
|
68
|
|
||
|
Depreciation, amortization and accretion
|
37
|
|
|
10
|
|
|
|
|
47
|
|
|
35
|
|
|
6
|
|
|
|
|
41
|
|
||||||||
|
Interest expense, net
|
35
|
|
|
8
|
|
|
|
|
43
|
|
|
27
|
|
|
9
|
|
|
|
|
36
|
|
||||||||
|
Income tax expense (benefit) (2)
|
2
|
|
|
3
|
|
|
|
|
5
|
|
|
(3
|
)
|
|
(16
|
)
|
|
|
|
(19
|
)
|
||||||||
|
EBITDA
|
113
|
|
|
37
|
|
|
|
|
150
|
|
|
160
|
|
|
(34
|
)
|
|
|
|
126
|
|
||||||||
|
Non-cash compensation expense
|
3
|
|
|
—
|
|
|
|
|
3
|
|
|
1
|
|
|
2
|
|
|
|
|
3
|
|
||||||||
|
Loss on disposal of assets and impairment charges (2)
|
—
|
|
|
2
|
|
|
|
|
2
|
|
|
—
|
|
|
40
|
|
|
|
|
40
|
|
||||||||
|
Loss on extinguishment of debt and other, net
|
—
|
|
|
(6
|
)
|
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
|
Unrealized loss on commodity derivatives
|
3
|
|
|
—
|
|
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
|
Inventory adjustments
|
(4
|
)
|
|
—
|
|
|
|
|
(4
|
)
|
|
(32
|
)
|
|
—
|
|
|
|
|
(32
|
)
|
||||||||
|
Other non-cash adjustments
|
4
|
|
|
—
|
|
|
|
|
4
|
|
|
3
|
|
|
—
|
|
|
|
|
3
|
|
||||||||
|
Adjusted EBITDA
|
$
|
119
|
|
|
$
|
33
|
|
|
|
|
$
|
152
|
|
|
$
|
132
|
|
|
$
|
8
|
|
|
|
|
$
|
140
|
|
||
|
Capital expenditures
|
$
|
28
|
|
|
$
|
3
|
|
|
|
|
$
|
31
|
|
|
$
|
11
|
|
|
$
|
2
|
|
|
|
|
$
|
13
|
|
||
|
Total assets as of June 30, 2019 and
December 31, 2018, respectively
|
$
|
4,146
|
|
|
$
|
1,324
|
|
|
|
|
$
|
5,470
|
|
|
$
|
3,878
|
|
|
$
|
1,001
|
|
|
|
|
$
|
4,879
|
|
||
|
(1)
|
Excludes depreciation, amortization and accretion.
|
|
(2)
|
Includes amounts from discontinued operations for the three months ended June 30, 2018.
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||
|
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Intercompany Eliminations
|
|
Totals
|
|
Fuel Distribution and Marketing
|
|
All Other
|
|
Intercompany Eliminations
|
|
Totals
|
||||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||||||||
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Motor fuel sales
|
$
|
7,635
|
|
|
$
|
314
|
|
|
|
|
$
|
7,949
|
|
|
$
|
7,410
|
|
|
$
|
648
|
|
|
|
|
$
|
8,058
|
|
||
|
Non motor fuel sales
|
35
|
|
|
113
|
|
|
|
|
148
|
|
|
29
|
|
|
213
|
|
|
|
|
242
|
|
||||||||
|
Lease income
|
63
|
|
|
7
|
|
|
|
|
70
|
|
|
50
|
|
|
6
|
|
|
|
|
56
|
|
||||||||
|
Intersegment sales
|
827
|
|
|
48
|
|
|
(875
|
)
|
|
—
|
|
|
811
|
|
|
64
|
|
|
(875
|
)
|
|
—
|
|
||||||
|
Total revenue
|
8,560
|
|
|
482
|
|
|
(875
|
)
|
|
8,167
|
|
|
8,300
|
|
|
931
|
|
|
(875
|
)
|
|
8,356
|
|
||||||
|
Gross profit (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Motor fuel
|
429
|
|
|
46
|
|
|
|
|
475
|
|
|
365
|
|
|
67
|
|
|
|
|
432
|
|
||||||||
|
Non motor fuel
|
30
|
|
|
64
|
|
|
|
|
94
|
|
|
28
|
|
|
90
|
|
|
|
|
118
|
|
||||||||
|
Lease
|
63
|
|
|
7
|
|
|
|
|
70
|
|
|
50
|
|
|
6
|
|
|
|
|
56
|
|
||||||||
|
Total gross profit
|
522
|
|
|
117
|
|
|
|
|
639
|
|
|
443
|
|
|
163
|
|
|
|
|
606
|
|
||||||||
|
Total operating expenses
|
274
|
|
|
116
|
|
|
|
|
390
|
|
|
247
|
|
|
135
|
|
|
|
|
382
|
|
||||||||
|
Operating income
|
248
|
|
|
1
|
|
|
|
|
249
|
|
|
196
|
|
|
28
|
|
|
|
|
224
|
|
||||||||
|
Interest expense, net
|
71
|
|
|
14
|
|
|
|
|
85
|
|
|
46
|
|
|
24
|
|
|
|
|
70
|
|
||||||||
|
Loss on extinguishment of debt and other, net
|
(3
|
)
|
|
—
|
|
|
|
|
(3
|
)
|
|
109
|
|
|
—
|
|
|
|
|
109
|
|
||||||||
|
Income (loss) from continuing operations before income taxes
|
180
|
|
|
(13
|
)
|
|
|
|
167
|
|
|
41
|
|
|
4
|
|
|
|
|
45
|
|
||||||||
|
Income tax expense (benefit)
|
4
|
|
|
(1
|
)
|
|
|
|
3
|
|
|
(2
|
)
|
|
31
|
|
|
|
|
29
|
|
||||||||
|
Income (loss) from continuing operations
|
176
|
|
|
(12
|
)
|
|
|
|
164
|
|
|
43
|
|
|
(27
|
)
|
|
|
|
16
|
|
||||||||
|
Loss from discontinued operations,
net of income taxes (See Note 4)
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
(263
|
)
|
|
|
|
(263
|
)
|
||||||||
|
Net income (loss) and
comprehensive income (loss)
|
$
|
176
|
|
|
$
|
(12
|
)
|
|
|
|
$
|
164
|
|
|
$
|
43
|
|
|
$
|
(290
|
)
|
|
|
|
$
|
(247
|
)
|
||
|
Depreciation, amortization and accretion (2)
|
71
|
|
|
21
|
|
|
|
|
92
|
|
|
63
|
|
|
27
|
|
|
|
|
90
|
|
||||||||
|
Interest expense, net (2)
|
71
|
|
|
14
|
|
|
|
|
85
|
|
|
46
|
|
|
26
|
|
|
|
|
72
|
|
||||||||
|
Income tax expense (benefit) (2)
|
4
|
|
|
(1
|
)
|
|
|
|
3
|
|
|
(2
|
)
|
|
187
|
|
|
|
|
185
|
|
||||||||
|
EBITDA
|
322
|
|
|
22
|
|
|
|
|
344
|
|
|
150
|
|
|
(50
|
)
|
|
|
|
100
|
|
||||||||
|
Non-cash compensation expense (2)
|
6
|
|
|
—
|
|
|
|
|
6
|
|
|
1
|
|
|
5
|
|
|
|
|
6
|
|
||||||||
|
Loss on disposal of assets and impairment charges (2)
|
4
|
|
|
46
|
|
|
|
|
50
|
|
|
3
|
|
|
63
|
|
|
|
|
66
|
|
||||||||
|
Loss on extinguishment of debt and other, net (2)
|
(3
|
)
|
|
—
|
|
|
|
|
(3
|
)
|
|
109
|
|
|
20
|
|
|
|
|
129
|
|
||||||||
|
Unrealized gain on commodity derivatives (2)
|
(3
|
)
|
|
—
|
|
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
|
Inventory adjustments (2)
|
(97
|
)
|
|
—
|
|
|
|
|
(97
|
)
|
|
(57
|
)
|
|
(1
|
)
|
|
|
|
(58
|
)
|
||||||||
|
Other non-cash adjustments
|
8
|
|
|
—
|
|
|
|
|
8
|
|
|
6
|
|
|
—
|
|
|
|
|
6
|
|
||||||||
|
Adjusted EBITDA
|
$
|
237
|
|
|
$
|
68
|
|
|
|
|
$
|
305
|
|
|
$
|
212
|
|
|
$
|
37
|
|
|
|
|
$
|
249
|
|
||
|
Capital expenditures (2)
|
$
|
48
|
|
|
$
|
9
|
|
|
|
|
$
|
57
|
|
|
$
|
23
|
|
|
$
|
9
|
|
|
|
|
$
|
32
|
|
||
|
Total assets as of June 30, 2019 and
December 31, 2018, respectively
|
$
|
4,146
|
|
|
$
|
1,324
|
|
|
|
|
$
|
5,470
|
|
|
$
|
3,878
|
|
|
$
|
1,001
|
|
|
|
|
$
|
4,879
|
|
||
|
(1)
|
Excludes deprecation, amortization and accretion.
|
|
(2)
|
Includes amounts from discontinued operations for the six months ended June 30, 2018.
|
|
18.
|
Net Income per Unit
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
|
(in millions, except units and per unit amounts)
|
||||||||||||||
|
Income from continuing operations
|
$
|
55
|
|
|
$
|
94
|
|
|
$
|
164
|
|
|
$
|
16
|
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
|
Distributions on Series A Preferred units
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
|
Incentive distribution rights
|
17
|
|
|
17
|
|
|
35
|
|
|
35
|
|
||||
|
Distributions on nonvested phantom unit awards
|
2
|
|
|
2
|
|
|
4
|
|
|
3
|
|
||||
|
Limited partners’ interest in net income (loss) from continuing operations
|
$
|
36
|
|
|
$
|
75
|
|
|
$
|
125
|
|
|
$
|
(24
|
)
|
|
Loss from discontinued operations
|
$
|
—
|
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
(263
|
)
|
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
||||||||
|
Common - basic
|
82,742,323
|
|
|
82,494,976
|
|
|
82,726,842
|
|
|
86,104,411
|
|
||||
|
Common - equivalents
|
767,664
|
|
|
452,693
|
|
|
728,179
|
|
|
464,961
|
|
||||
|
Common - diluted
|
83,509,987
|
|
|
82,947,669
|
|
|
83,455,021
|
|
|
86,569,372
|
|
||||
|
Income (loss) from continuing operations per limited partner unit:
|
|
|
|
|
|
|
|
||||||||
|
Common - basic
|
$
|
0.44
|
|
|
$
|
0.91
|
|
|
$
|
1.51
|
|
|
$
|
(0.29
|
)
|
|
Common - diluted
|
$
|
0.43
|
|
|
$
|
0.90
|
|
|
$
|
1.50
|
|
|
$
|
(0.29
|
)
|
|
Loss from discontinued operations per limited partner unit:
|
|
|
|
|
|
|
|
||||||||
|
Common - basic
|
$
|
0.00
|
|
|
$
|
(0.32
|
)
|
|
$
|
0.00
|
|
|
$
|
(3.05
|
)
|
|
Common - diluted
|
$
|
0.00
|
|
|
$
|
(0.32
|
)
|
|
$
|
0.00
|
|
|
$
|
(3.05
|
)
|
|
•
|
our ability to make, complete and integrate acquisitions from affiliates or third-parties;
|
|
•
|
business strategy and operations of Energy Transfer Operating, L.P. and Energy Transfer LP and their respective conflicts of interest with us;
|
|
•
|
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;
|
|
•
|
our dependence on limited principal suppliers;
|
|
•
|
competition in the wholesale motor fuel distribution and retail store industry;
|
|
•
|
changing customer preferences for alternate fuel sources or improvement in fuel efficiency;
|
|
•
|
changes in our credit rating, as assigned by rating agencies;
|
|
•
|
a deterioration in the credit and/or capital markets;
|
|
•
|
environmental, tax and other federal, state and local laws and regulations;
|
|
•
|
the fact that we are not fully insured against all risks incident to our business;
|
|
•
|
dangers inherent in the storage and transportation of motor fuel;
|
|
•
|
our ability to manage growth and/or control costs;
|
|
•
|
our reliance on senior management, supplier trade credit and information technology; and
|
|
•
|
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;
|
|
•
|
551 independently operated commission agent locations where we sell motor fuel to retail customers under commission arrangements with such operators;
|
|
•
|
6,726 retail stores operated by independent operators, which we refer to as “dealers” or “distributors,” pursuant to long-term distribution agreements; and
|
|
•
|
2,441 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. Total motor fuel gross profit dollars earned from the product of gross profit per gallon and motor fuel gallons sold are used by management to evaluate business performance.
|
|
•
|
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.
|
|
•
|
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
|
|
•
|
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, and assess our ability to make distributions to our unitholders and our debt service capabilities;
|
|
•
|
our management uses them for internal planning purposes, including aspects of our consolidated operating budget, and capital expenditures; and
|
|
•
|
Distributable Cash Flow, as adjusted provides useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance, and as it provides investors an enhanced perspective of the operating performance of our assets and the cash our business is generating.
|
|
•
|
they do not reflect our total cash expenditures, or future requirements for capital expenditures or contractual commitments;
|
|
•
|
they do not reflect changes in, or cash requirements for, working capital;
|
|
•
|
they do not reflect interest expense or the cash requirements necessary to service interest or principal payments on our revolving credit facility or term loan;
|
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements; and
|
|
•
|
as not all companies use identical calculations, our presentation of Adjusted EBITDA and Distributable Cash Flow, as adjusted may not be comparable to similarly titled measures of other companies.
|
|
|
Three Months Ended June 30,
|
|||||||||||||||||||||||
|
|
2019
|
|
|
2018
|
||||||||||||||||||||
|
|
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
|
$
|
4,193
|
|
|
$
|
173
|
|
|
$
|
4,366
|
|
|
|
$
|
4,304
|
|
|
$
|
203
|
|
|
$
|
4,507
|
|
|
Non motor fuel sales
|
16
|
|
|
58
|
|
|
74
|
|
|
|
15
|
|
|
51
|
|
|
66
|
|
||||||
|
Lease income
|
31
|
|
|
4
|
|
|
35
|
|
|
|
31
|
|
|
3
|
|
|
34
|
|
||||||
|
Total revenues
|
$
|
4,240
|
|
|
$
|
235
|
|
|
$
|
4,475
|
|
|
|
$
|
4,350
|
|
|
$
|
257
|
|
|
$
|
4,607
|
|
|
Gross profit (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Motor fuel sales
|
$
|
171
|
|
|
$
|
19
|
|
|
$
|
190
|
|
|
|
$
|
204
|
|
|
$
|
23
|
|
|
$
|
227
|
|
|
Non motor fuel sales
|
13
|
|
|
31
|
|
|
44
|
|
|
|
18
|
|
|
31
|
|
|
49
|
|
||||||
|
Lease
|
31
|
|
|
4
|
|
|
35
|
|
|
|
31
|
|
|
3
|
|
|
34
|
|
||||||
|
Total gross profit
|
$
|
215
|
|
|
$
|
54
|
|
|
$
|
269
|
|
|
|
$
|
253
|
|
|
$
|
57
|
|
|
$
|
310
|
|
|
Income (loss) from continuing operations
|
39
|
|
|
16
|
|
|
55
|
|
|
|
101
|
|
|
(7
|
)
|
|
94
|
|
||||||
|
Loss from discontinued operations, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
||||||
|
Net income (loss) and comprehensive income (loss)
|
$
|
39
|
|
|
$
|
16
|
|
|
$
|
55
|
|
|
|
$
|
101
|
|
|
$
|
(33
|
)
|
|
$
|
68
|
|
|
Adjusted EBITDA (2)
|
$
|
119
|
|
|
$
|
33
|
|
|
$
|
152
|
|
|
|
$
|
132
|
|
|
$
|
8
|
|
|
$
|
140
|
|
|
Distributable Cash Flow, as adjusted (2)
|
|
|
|
|
$
|
101
|
|
|
|
|
|
|
|
$
|
106
|
|
||||||||
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Motor fuel gallons sold
|
|
|
|
|
2,054
|
|
|
|
|
|
|
|
1,977
|
|
||||||||||
|
Motor fuel gross profit cents per gallon (3)
|
|
|
|
|
|
9.1
|
¢
|
|
|
|
|
|
|
|
9.9
|
¢
|
||||||||
|
(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 other non-cash adjustments and excludes the impact of inventory adjustments consistent with the definition of Adjusted EBITDA.
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
|
2019
|
|
2018
|
|
Change
|
||||||
|
|
(in millions)
|
||||||||||
|
Segment Adjusted EBITDA
|
|
|
|
|
|
||||||
|
Fuel distribution and marketing
|
$
|
119
|
|
|
$
|
132
|
|
|
$
|
(13
|
)
|
|
All other
|
33
|
|
|
8
|
|
|
25
|
|
|||
|
Total
|
152
|
|
|
140
|
|
|
12
|
|
|||
|
Depreciation, amortization and accretion
|
(47
|
)
|
|
(41
|
)
|
|
(6
|
)
|
|||
|
Interest expense, net
|
(43
|
)
|
|
(36
|
)
|
|
(7
|
)
|
|||
|
Non-cash compensation expense
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|||
|
Loss on disposal of assets and impairment charges (1)
|
(2
|
)
|
|
(40
|
)
|
|
38
|
|
|||
|
Loss on extinguishment of debt and other, net
|
6
|
|
|
—
|
|
|
6
|
|
|||
|
Unrealized loss on commodity derivatives
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
|
Inventory adjustments
|
4
|
|
|
32
|
|
|
(28
|
)
|
|||
|
Other non-cash adjustments
|
(4
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|||
|
Income before income tax (expense) benefit (1)
|
60
|
|
|
49
|
|
|
11
|
|
|||
|
Income tax (expense) benefit (1)
|
(5
|
)
|
|
19
|
|
|
(24
|
)
|
|||
|
Net income and comprehensive income
|
$
|
55
|
|
|
$
|
68
|
|
|
$
|
(13
|
)
|
|
|
|
|
|
|
|
||||||
|
Adjusted EBITDA
|
$
|
152
|
|
|
$
|
140
|
|
|
$
|
12
|
|
|
Cash interest expense
|
41
|
|
|
34
|
|
|
7
|
|
|||
|
Current income tax expense (benefit) (1)
|
4
|
|
|
(5
|
)
|
|
9
|
|
|||
|
Transaction-related income taxes
|
—
|
|
|
10
|
|
|
(10
|
)
|
|||
|
Maintenance capital expenditures
|
6
|
|
|
2
|
|
|
4
|
|
|||
|
Distributable Cash Flow
|
101
|
|
|
99
|
|
|
2
|
|
|||
|
Transaction-related expenses (1)
|
—
|
|
|
7
|
|
|
(7
|
)
|
|||
|
Distributable Cash Flow, as adjusted
|
$
|
101
|
|
|
$
|
106
|
|
|
$
|
(5
|
)
|
|
(1)
|
Includes amounts from discontinued operations for the three months ended June 30, 2018.
|
|
•
|
a decrease in operating costs of $21 million, primarily as a result of lower salaries and benefits, maintenance, utilities, property tax and environmental expenses. In addition, the prior period included $7 million of acquisition costs. These expenses include other operating expense, general and administrative expense and lease expense; offset by
|
|
•
|
a decrease in the gross profit on motor fuel sales of $5 million, primarily due to a 8.3%, or $0.008, decrease in cents per gallons sold primarily as a result of a $8 million one-time charge related to a reserve for an open contractual dispute;
|
|
•
|
a decrease in non motor fuel sales gross profit of $4 million.
|
|
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
|
|
2019
|
|
|
2018
|
||||||||||||||||||||
|
|
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
|
$
|
7,635
|
|
|
$
|
314
|
|
|
$
|
7,949
|
|
|
|
$
|
7,410
|
|
|
$
|
648
|
|
|
$
|
8,058
|
|
|
Non motor fuel sales
|
35
|
|
|
113
|
|
|
148
|
|
|
|
29
|
|
|
213
|
|
|
242
|
|
||||||
|
Lease income
|
63
|
|
|
7
|
|
|
70
|
|
|
|
50
|
|
|
6
|
|
|
56
|
|
||||||
|
Total revenues
|
$
|
7,733
|
|
|
$
|
434
|
|
|
$
|
8,167
|
|
|
|
$
|
7,489
|
|
|
$
|
867
|
|
|
$
|
8,356
|
|
|
Gross profit (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Motor fuel sales
|
$
|
429
|
|
|
$
|
46
|
|
|
$
|
475
|
|
|
|
$
|
365
|
|
|
$
|
67
|
|
|
$
|
432
|
|
|
Non motor fuel sales
|
30
|
|
|
64
|
|
|
94
|
|
|
|
28
|
|
|
90
|
|
|
118
|
|
||||||
|
Lease
|
63
|
|
|
7
|
|
|
70
|
|
|
|
50
|
|
|
6
|
|
|
56
|
|
||||||
|
Total gross profit
|
$
|
522
|
|
|
$
|
117
|
|
|
$
|
639
|
|
|
|
$
|
443
|
|
|
$
|
163
|
|
|
$
|
606
|
|
|
Income (loss) from continuing operations
|
176
|
|
|
(12
|
)
|
|
164
|
|
|
|
43
|
|
|
(27
|
)
|
|
16
|
|
||||||
|
Loss from discontinued operations, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(263
|
)
|
|
(263
|
)
|
||||||
|
Net income (loss) and comprehensive income (loss)
|
$
|
176
|
|
|
$
|
(12
|
)
|
|
$
|
164
|
|
|
|
$
|
43
|
|
|
$
|
(290
|
)
|
|
$
|
(247
|
)
|
|
Adjusted EBITDA (2)
|
$
|
237
|
|
|
$
|
68
|
|
|
$
|
305
|
|
|
|
$
|
212
|
|
|
$
|
37
|
|
|
$
|
249
|
|
|
Distributable Cash Flow, as adjusted (2)
|
|
|
|
|
$
|
200
|
|
|
|
|
|
|
|
$
|
191
|
|
||||||||
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total motor fuel gallons sold (3)
|
|
|
|
|
3,995
|
|
|
|
|
|
|
|
3,834
|
|
||||||||||
|
Motor fuel gross profit cents per gallon (3) (4)
|
|
|
|
|
|
9.5
|
¢
|
|
|
|
|
|
|
|
10.2
|
¢
|
||||||||
|
(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 for the six months ended June 30, 2018.
|
|
(4)
|
Includes other non-cash adjustments and excludes the impact of inventory adjustments consistent with the definition of Adjusted EBITDA.
|
|
|
Six Months Ended June 30,
|
|
|
||||||||
|
|
2019
|
|
2018
|
|
Change
|
||||||
|
|
(in millions)
|
||||||||||
|
Segment Adjusted EBITDA
|
|
|
|
|
|
||||||
|
Fuel distribution and marketing
|
$
|
237
|
|
|
$
|
212
|
|
|
$
|
25
|
|
|
All other
|
68
|
|
|
37
|
|
|
31
|
|
|||
|
Total
|
305
|
|
|
249
|
|
|
56
|
|
|||
|
Depreciation, amortization and accretion (1)
|
(92
|
)
|
|
(90
|
)
|
|
(2
|
)
|
|||
|
Interest expense, net (1)
|
(85
|
)
|
|
(72
|
)
|
|
(13
|
)
|
|||
|
Non-cash compensation expense (1)
|
(6
|
)
|
|
(6
|
)
|
|
—
|
|
|||
|
Loss on disposal of assets and impairment charges (1)
|
(50
|
)
|
|
(66
|
)
|
|
16
|
|
|||
|
Loss on extinguishment of debt and other, net (1)
|
3
|
|
|
(129
|
)
|
|
132
|
|
|||
|
Unrealized gain on commodity derivatives (1)
|
3
|
|
|
—
|
|
|
3
|
|
|||
|
Inventory adjustments (1)
|
97
|
|
|
58
|
|
|
39
|
|
|||
|
Other non-cash adjustments
|
(8
|
)
|
|
(6
|
)
|
|
(2
|
)
|
|||
|
Income (loss) before income tax expense (1)
|
167
|
|
|
(62
|
)
|
|
229
|
|
|||
|
Income tax expense (1)
|
(3
|
)
|
|
(185
|
)
|
|
182
|
|
|||
|
Net income (loss) and comprehensive income (loss)
|
$
|
164
|
|
|
$
|
(247
|
)
|
|
$
|
411
|
|
|
|
|
|
|
|
|
||||||
|
Adjusted EBITDA
|
$
|
305
|
|
|
$
|
249
|
|
|
$
|
56
|
|
|
Cash interest expense (1)
|
82
|
|
|
68
|
|
|
14
|
|
|||
|
Current income tax expense (1)
|
16
|
|
|
463
|
|
|
(447
|
)
|
|||
|
Transaction-related income taxes (2)
|
—
|
|
|
(470
|
)
|
|
470
|
|
|||
|
Maintenance capital expenditures (1)
|
10
|
|
|
5
|
|
|
5
|
|
|||
|
Distributable Cash Flow
|
197
|
|
|
183
|
|
|
14
|
|
|||
|
Transaction-related expenses (1)
|
3
|
|
|
10
|
|
|
(7
|
)
|
|||
|
Series A Preferred distribution
|
—
|
|
|
(2
|
)
|
|
2
|
|
|||
|
Distributable Cash Flow, as adjusted
|
$
|
200
|
|
|
$
|
191
|
|
|
$
|
9
|
|
|
(1)
|
Includes amounts from discontinued operations for for the six months ended June 30, 2018.
|
|
(2)
|
Transaction-related income taxes primarily related to the 7-Eleven Transaction.
|
|
•
|
a decrease in the gross profit on motor fuel sales of $13 million, primarily due to a 7.0%, or $0.007, 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 and a $8 million one-time charge related to a reserve for an open contractual dispute;
|
|
•
|
a decrease in non motor fuel sales gross profit of $38 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 and the conversion of 207 retail sites to commission agent sites during April 2018; offset by
|
|
•
|
a decrease in operating costs of $107 million, as a result of the divestment of 1,030 company-operated fuel sites to 7-Eleven on January 23, 2018 and the conversion of 207 retail sites to commission agent sites during April 2018. These expenses include other operating expense, general and administrative expense and lease expense.
|
|
|
For the Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
|
Net cash provided by (used in)
|
|
|
|
||||
|
Operating activities - continuing operations
|
$
|
184
|
|
|
$
|
255
|
|
|
Investing activities - continuing operations
|
(35
|
)
|
|
(143
|
)
|
||
|
Financing activities - continuing operations
|
(169
|
)
|
|
(2,861
|
)
|
||
|
Discontinued operations
|
—
|
|
|
2,740
|
|
||
|
Net decrease in cash and cash equivalents
|
$
|
(20
|
)
|
|
$
|
(9
|
)
|
|
•
|
issued $600 million of 6.000% Senior Notes due 2027;
|
|
•
|
borrowed $1.1 billion and repaid $1.6 billion under our 2018 Revolver to fund daily operations; and
|
|
•
|
paid $175 million in distributions to our unitholders, of which $82 million was paid to ETO.
|
|
|
Owned
|
|
Leased
|
||
|
Dealer and commission agent sites
|
631
|
|
|
321
|
|
|
Company-operated retail stores
|
6
|
|
|
69
|
|
|
Warehouses, offices and other
|
59
|
|
|
82
|
|
|
Total
|
696
|
|
|
472
|
|
|
•
|
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.
|
|
|
SUNOCO LP
|
|
|
|
|
|
|
|
By
|
Sunoco GP LLC, its general partner
|
|
|
|
|
|
Date: August 8, 2019
|
By
|
/s/ Thomas R. Miller
|
|
|
|
Thomas R. Miller
|
|
|
|
Chief Financial Officer
(On behalf of the registrant and in his capacity as chief financial officer) |
|
|
|
|
|
|
By
|
/s/ Camilla A. Harris
|
|
|
|
Camilla A. Harris
|
|
|
|
Vice President, Controller and
Principal Accounting Officer (In her capacity as principal accounting officer) |
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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: August 8, 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 quarterly report on Form 10-Q 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: August 8, 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: August 8, 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: August 8, 2019
|
/s/ Thomas R. Miller
|
|
|
Thomas R. Miller
|
|
|
Chief Financial Officer of Sunoco GP LLC, the general partner of Sunoco LP
|
|
|
Page
|
|
Balance Sheets
|
1
|
|
Statements of Operations
|
2
|
|
Statements of Equity
|
3
|
|
Statements of Cash Flows
|
4
|
|
Notes to Financial Statements
|
5
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
ASSETS
|
|
|
|
||||
|
Current assets:
|
|
|
|
||||
|
Advances to affiliated companies
|
$
|
117
|
|
|
$
|
87
|
|
|
Total current assets
|
117
|
|
|
87
|
|
||
|
|
|
|
|
||||
|
Investment in unconsolidated affiliate
|
458
|
|
|
210
|
|
||
|
Total assets
|
$
|
575
|
|
|
$
|
297
|
|
|
|
|
|
|
||||
|
LIABILITIES AND EQUITY
|
|
|
|
||||
|
Current liabilities:
|
|
|
|
||||
|
Accrued and other current liabilities
|
$
|
3
|
|
|
$
|
3
|
|
|
Total current liabilities
|
3
|
|
|
3
|
|
||
|
|
|
|
|
||||
|
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
|
||||
|
Equity:
|
|
|
|
||||
|
Member’s equity
|
572
|
|
|
294
|
|
||
|
Total equity
|
572
|
|
|
294
|
|
||
|
Total liabilities and equity
|
$
|
575
|
|
|
$
|
297
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
Income (loss) from unconsolidated affiliate
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
23
|
|
|
$
|
(38
|
)
|
|
Net income (loss)
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
23
|
|
|
$
|
(38
|
)
|
|
|
Total
|
||
|
Balance, December 31, 2018
|
$
|
294
|
|
|
Net income
|
11
|
|
|
|
Contribution from ETO
|
255
|
|
|
|
Balance, March 31, 2019
|
560
|
|
|
|
Net income
|
12
|
|
|
|
Balance, June 30, 2019
|
$
|
572
|
|
|
|
|
||
|
Balance, December 31, 2017
|
$
|
331
|
|
|
Net loss
|
(45
|
)
|
|
|
Balance, March 31, 2018
|
286
|
|
|
|
Net income
|
7
|
|
|
|
Balance, June 30, 2018
|
$
|
293
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income (loss)
|
$
|
23
|
|
|
$
|
(38
|
)
|
|
Reconciliation of net loss to net cash provided by operating activities:
|
|
|
|
||||
|
(Income) loss from unconsolidated affiliate
|
(23
|
)
|
|
38
|
|
||
|
Distributions from unconsolidated affiliate
|
30
|
|
|
17
|
|
||
|
Net cash provided by operating activities
|
30
|
|
|
17
|
|
||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Advances to affiliated company
|
(30
|
)
|
|
(17
|
)
|
||
|
Net cash used in financing activities
|
(30
|
)
|
|
(17
|
)
|
||
|
Change in cash and cash equivalents
|
—
|
|
|
—
|
|
||
|
Cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
||
|
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
||||
|
Contribution of Sunoco LP common units from ETO
|
$
|
255
|
|
|
$
|
—
|
|
|
1.
|
Operations and Organization:
|
|
2.
|
Summary of Significant Accounting Policies:
|
|
4.
|
Commitments and Contingencies:
|