(MENAFNEditorial) DALLAS, Feb. 21, 2018 /PRNewswire/ --
Closed on strategic divestiture of convenience stores to 7-Eleven, Inc. and completed refinancing and equity repurchase initiatives Reduced debt by over $2 billion Refinanced $2.2 billion of senior notes Repurchased over 17 million common limited partner units Redeemed $300 million of Series A Preferred units Maintained quarterly distribution of 82.55 cents and reported current quarter cash coverage of 1.03 times Cash coverage of 1.15 times for the trailing twelve months Generated fourth quarter Net Income of $232 million, Adjusted EBITDA(1) of $158 million and Distributable Cash Flow(1), as adjusted, of $106 million Net income and Adjusted EBITDA results include approximately $25 million of transaction costs related to the retail divestiture Sunoco LP (NYSE: ) ("SUN" or the "Partnership") today announced financial and operating results for the three- and twelve-month period ended December 31, 2017. Revenue totaled $3.0 billion, an increase of 4.8 percent, compared to $2.8 billion in the fourth quarter of 2016. The increase was the result of the average selling price of fuel being 25 cents per gallon higher than last year.
Total gross profit decreased to $277 million, compared to $296 million in the fourth quarter of 2016, as a result oflower motor fuel gross profits.
Income from continuing operations was $221 million, including $17 million of intangible impairment charges, versus a loss of $122 million in the fourth quarter of 2016, which included $227 million of goodwill impairment charges.
Income from discontinued operations, net of income taxes, was $11 million, including $23 million of goodwill impairment charges, versus a loss from discontinued operations, net of income taxes, of $463 million in the fourth quarter of 2016, which included $446 million of goodwill and intangibles impairment charges.
Net income was $232 million, or $2.01 per diluted unit, versus a net loss of $585 million, or ($6.32) per diluted unit, in the fourth quarter of 2016.
Adjusted EBITDA for the quarter totaled $158 million, compared with $154 million in the fourth quarter of 2016.
Distributable Cash Flow, as adjusted, was $106 million, compared to $63 million a year ago. This year-over-year increase reflects higher Adjusted EBITDA, decreased maintenance capital spend and a cash tax benefit compared to a cash tax expense a year ago.
On a weighted-average basis, fuel margin for all gallons sold was 15.3 cents per gallon, compared to 14.3 cents per gallon in the fourth quarter of 2016. The 1.0 cent per gallon increase was attributable to higher margins in the wholesale segment.
Net income for the wholesale segment was $47 million compared to $63 million a year ago. Adjusted EBITDA was $90 million, versus $78 million in the fourth quarter of last year. Total wholesale gallons sold were 1,346 million, compared to 1,359 million in the fourth quarter of 2016, a decrease of 1.0 percent. The Partnership earned 11.1 cents per gallon on these volumes, compared to 9.0 cents per gallon a year earlier.
Net income for the retail segment was $185 million compared to a net loss of $648 million a year ago. Adjusted EBITDA was $68 million, versus $76 million in the fourth quarter of last year. Total retail gallons sold were flat with a year ago at 626 million gallons. The Partnership earned 24.2 cents per gallon on these volumes, compared to 25.7 cents per gallon a year earlier.
Total merchandise sales increased by 0.5 percent from a year ago to $568 million(2), reflecting an increase in merchandise and restaurant sales across the Texas oil producing regions. Merchandise sales contributed $173 million of gross profit(3) with a retail merchandise margin of 30.6 percent, an increase of 0.7 percentage points from the fourth quarter of 2016.
Same-store merchandise sales decreased by 0.8 percent and same store gallons decreased by 1.4 percent during the fourth quarter, reflecting weakness across the East Coast. In the Texas oil producing regions, same-store merchandise sales increased by 11.2 percent, and same-store gallons increased 4.8 percent.
SUN's recent accomplishments include the following:
Closed the strategic divestiture of convenience stores in the continental United States to 7-Eleven, Inc. on January 23, 2018 for gross proceeds of approximately $3.2 billion Completed the following refinancing and equity repurchase initiatives: Closed the private offering of $2.2 billion of new senior notes on January 23, 2018, 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. Proceeds from this offering were used to redeem in full amounts owed under existing senior notes Repaid in full and terminated the term loan agreement and paid down all outstanding amounts owed under the revolving credit facility Redeemed $300 million of Series A Preferred Units held by Energy Transfer Equity for an aggregate redemption amount of approximately $313 million Repurchased 17,286,859 Sunoco common units owned by Energy Transfer Partners for aggregate cash consideration of approximately $540 million at a 10-day volume weighted average price of $31.2376 per unit Entered into a commission agent arrangement for the 207 West Texas sites on December 5, 2017 with conversion expected to occur in the first quarter of 2018 SUN's segment results and other supplementary data are provided after the financial tables below. FY 2017 Compared to FY 2016
Revenue for the full year 2017 totaled $11.7 billion, a 17.4 percent increase compared to full year 2016. Gross profit for this period decreased 4.2 percent year-over-year to $1.1 billion.
Income from continuing operations was $326 million for the full year 2017 compared to $56 million in 2016. General and administrative expenses decreased $15 million from 2016 to $140 million. Other operating expenses increased $1 million from 2016 to $375 million and rent expenses were flat at $81 million.
Loss from discontinued operations, net of income taxes, was $177 million compared to a loss from discontinued operations, net of income taxes, of $462 million in the full year 2016.
Net income attributable to partners for the full year 2017 totaled $149 million compared to a net loss attributable to partners of $406 million a year ago. Adjusted EBITDA attributable to partners was $732 million, compared to $665 million for the 2016 period, and distributable cash flow, as adjusted was $473 million, versus $390 million for 2016.
Wholesale gallons sold to third parties increased by 2.5 percent to 5.4 billion gallons. Retail gallons sold increased by 0.4 percent to 2.5 billion gallons. On a weighted-average basis, fuel margin for all gallons sold increased to 15.2 cents per gallon for the full year 2017, versus 14.4 cents per gallon in the full year 2016.
Total merchandise sales increased by 2.7 percent from full year 2016 to $2.3 billion(4). Merchandise sales contributed $737 million of gross profit(5) with a retail merchandise margin of 31.6 percent, 0.1 percent increase from full year 2016.
Distribution
On January 24, 2018, the Board of Directors of SUN's general partner declared a distribution for the fourth quarter of 2017 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. The distribution was paid on February 14 to unitholders of record on February 6.
SUN's distribution coverage ratio for the fourth quarter was 1.03 times. The distribution coverage ratio on a trailing 12-month basis was 1.15 times.
Liquidity
At December 31, SUN had borrowings against its revolving line of credit of $765 million and other long-term debt of $3.6 billion. Availability on the revolving credit facility after borrowings and letters of credit commitments was $726 million. In the fourth quarter of 2017, SUN did not issue any common units through its at-the-market equity program. The leverage ratio of debt to Adjusted EBITDA, calculated in accordance with SUN's credit facility, was 5.58 times at the end of the fourth quarter.
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