Sunoco Lp · NYSE:SUN
Sunoco Lp — UBS MLP One-on-One Conference 2016
32 slides from Sunoco Lp's conference presentation, Jan 12, 2016
Slide 1: UBS MLP One-on-One Conference
UBS MLP ONE-ON-ONE CONFERENCE January 12-13, 2016
Slide 2: Forward-Looking Statements and Non-GAAP Measures
FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES Some of the statements in this presentation constitute “forward-looking statements” about Sunoco LP (“SUN”), Energy Transfer Equity, L.P. (“ETE”), Energy Transfer Partners, L.P. (“ETP”), and their respective affiliates that involve risks, uncertaintie
Slide 3: SUN Offers Compelling Investment Highlights
SUN OFFERS COMPELLING INVESTMENT HIGHLIGHTS Leading Position SUN owns and represents some of the most iconic brands in the motor fuels industry in Attractive Industry Industrywide non-fuel retail merchandise sales are strong and growing Fuel margins are not commodity price sensitive and have b
Slide 4: Final Dropdown Completes SUN's Transformation
FINAL DROPDOWN COMPLETES SUN’S TRANSFORMATION SUN’s Transformation at a Glance Overview of 4th & Final Dropdown ETP Acquires Susser Holdings Corp. (SUSS) • ETP sells its remaining wholesale fuel and GP/IDRs of Susser Petroleum Partners LP distribution and retail assets to SUN (SUSP) August 29, 2014
Slide 5: Final Dropdown Benefits for SUN Unitholders
FINAL DROPDOWN BENEFITS FOR SUN UNITHOLDERS • Credit profile materially improved and will Immediately continue to strengthen as SUN continues accretive to SUN’s to expand and diversify organically and through acquisitions distributable Significantly increased liquidity, with little cash flow and d
Slide 6: Details of Final Dropdown from ETP
DETAILS OF FINAL DROPDOWN FROM ETP • Total purchase price of $2.226 billion for Sources ($mm) Term Loan A $2,035 68.42% interest in Sunoco, LLC SUN Units Issued to ETP 194 Equity Private Placement 750 (wholesale fuel business) SUN Revolver Draw 175 Total Sources $3,154 100% interest in Sunoco R&
Slide 7: Final Dropdown Consolidates All Retail Assets into Sunoco LP
FINAL DROPDOWN CONSOLIDATES ALL RETAIL ASSETS INTO SUNOCO LP Current SUN Final Dropdown Dropdown #3: Susser 68.42% of SUN Sunoco R&M SUN Pro Forma Holdings (1) Sunoco, LLC FYE 12/31/14 Adjusted $307 (2) $161 $210 (3) $846 $168 EBITDA ($MM): LTM 9/30/15 Motor 2,584 (2) 1,259 2,836 1,067 7,746 Fuel Sa
Slide 8: Summary Pro Forma Org Structure
SUMMARY PRO FORMA ORG STRUCTURE Publicly Traded MLP Energy Transfer Equity, L.P. Businesses to be acquired (NYSE: ETE) Public 100% GP Interest, IDRs Unitholders 2% LP Interest (1) Energy Transfer Partners, L.P. 52% LP (NYSE: ETP) Interest (1) 46% LP Interest (1) Sunoco LP (1) (NYSE: SUN) Susser Petr
Slide 9: SUN's Unique Value Drivers
SUN’S UNIQUE VALUE DRIVERS Fuel Convenience Food Land Bank Typically 40-60 parcels in queue for future development 9
Slide 10: Wholesale and Retail Margins Are Resilient Through Commodity Cycles
WHOLESALE AND RETAIL MARGINS ARE RESILIENT THROUGH COMMODITY CYCLES Cents/gal $/bbl 30 150 25 130 20 110 15 90 10 70 5 50 0 30 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 WTI ($/bbl) Retail Margin (cents/gal) Wholesale Margin (cents/gal) Note: Wholesale Margin includes Affiliated Margins.
Slide 11: Dropdowns and Acquisitions Have Rapidly Increased Scale and Diversity
DROPDOWNS AND ACQUISITIONS HAVE RAPIDLY INCREASED SCALE AND DIVERSITY SUN (1) MACS / Aloha 31.58% of Susser 68.42% of Sunoco, SUN Pro Tigermarket Petroleum, Sunoco, Holdings LLC & 100% Forma Ltd. LLC Corp Sunoco Retail Date August 29, October 1, December 16, April 1, July 31, 2015 Announced Closing
Slide 12: Organic Growth, Acquisitions and Drop Downs Increased Cash Flow, Scale and Diversity
ORGANIC GROWTH, ACQUISITIONS AND DROP DOWNS HAVE MEANINGFULLY INCREASED CASH FLOW, SCALE AND DIVERSITY Adjusted EBITDA ($MM) Gallons Sold (MM) SUN SHC 32% Sunoco LLC 68% Sunoco LLC + Sunoco R&M SUN SHC 32% Sunoco LLC 68% Sunoco LLC + R&M $846 7,746 $378 3,903 3,843 $97 1,310 1,310 $161 2,532 1,259 1
Slide 13: Diversified Lines of Business Generate a Portfolio of Stable Cash Flows
DIVERSIFIED LINES OF BUSINESS GENERATE A PORTFOLIO OF STABLE CASH FLOWS Gross Profit Contribution By Channel (LTM 9/30/15) Current SUN (1) SUN Pro Forma (2) 6% 5% 27% 2% 31% 35%13% 18% 42% 9% 25% 28% Total = $1,372 million Total = $2,140 million 59% Retail Fuel Wholesale Fuel Merch & Other C-Store R
Slide 14: The Combined Platform Is One of the Leading Retail Platforms
THE COMBINED PLATFORM IS ONE OF THE LEADING RETAIL PLATFORMS (2) Enterprise Value ($mm) Merchandise Sales $24,478 5,311 $7,645 $5,477 $4,617 2,576 2,127 2,237 $3,267 1,435 (1) (3) PF SUN Couche-Tard CST Casey's Murphy USA PF SUN Couche-Tard CST Casey's Murphy USA Sites (4) LTM Total Fuel Sales (mm g
Slide 15: Laredo Taco Company: SUN's Secret Ingredient
LAREDO TACO COMPANY: SUN’S SECRET INGREDIENT 15
Slide 16: Stripes & Laredo Taco Company: Strong Track Record of Same Store Sales Growth
STRIPES & LAREDO TACO COMPANY: STRONG TRACK RECORD OF SAME STORE SALES GROWTH Overview Food Service Sales (1) 26 straight years of same store sales growth $300 Above industry average inside-sales business $250 Laredo Taco Company generates gross margin in excess of 45% $200 Laredo Taco Compa
Slide 17: Generating Growth Through Integration and Execution of Strategy
GENERATING GROWTH THROUGH INTEGRATION AND EXECUTION OF STRATEGY Key Drivers Average Fuel Gallons Sold per Stripes Retail Store (000s) 1,800 1,705 Leveraging powerful fuel brands 1,700 1,669 1,578 Significant scale in procurement 1,600 1,491 1,500 1,421 New large-scale store format enables 1,40
Slide 18: SUN Will Continue to Leverage Organic Growth Opportunities
SUN WILL CONTINUE TO LEVERAGE ORGANIC GROWTH OPPORTUNITIES 40 new-build Stripes stores completed in 2015 in high growth markets with favorable demographics utilizing land bank inventory New to Allows for more open and modern store designs to increase customer appeal Industry (“NTI”) Carry a la
Slide 19: Fragmented Convenience Store Industry Offers Attractive Acquisition Opportunities
FRAGMENTED CONVENIENCE STORE INDUSTRY OFFERS ATTRACTIVE ACQUISITION OPPORTUNITIES Industry is highly fragmented with nearly 80,000 stores comprising of operators Ownership of ~ 128,000 Convenience Stores Selling Fuel (1) with less than ten locations in their portfolio SUN continually evaluates a
Slide 20: Financial Strategy
FINANCIAL STRATEGY Distribution Growth Financial Flexibility Target long-term distribution coverage of ~1.1x Currently rated Ba2/BB stable Continued focus on organic growth opportunities Target long-term leverage ratio of 4.0x-4.5x Preserve liquidity under revolving credit facility Debt Ma
Slide 21: SUN Has Consistently Grown Distributions Since 2012 IPO
SUN HAS CONSISTENTLY GROWN DISTRIBUTIONS SINCE 2012 IPO Proven History of Strong Distribution Growth for 10 Consecutive Quarters and Counting $ / Unit 24% DPU CAGR $0.80 $0.75 $0.70 $0.69 $0.65 $0.60 $0.60 $0.55 $0.50 $0.52 $0.50 $0.49 2.00x $0.47 $0.45 1.60x $0.44 $0.40 1.20x 0.80x 0.40x [TBU – 3Q]
Slide 22: SUN Capital Structure
SUN CAPITAL STRUCTURE ($ in Millions) Historical 9/30/15 As Adjusted 9/30/15 (1) Cash $48 $48 Debt $1.5bn Revolver $875 $300 6.375% Senior Notes Due 2023 800 800 5.5% Senior Notes Due 2020 600 600 Other Debt 182 182 Term Loan A 0 2,035 Total Debt $2,457 $3,917 (2) Market Capitalization 2,896 4,006 T
Slide 23: Rating Agency Comments
RATING AGENCY COMMENTS The outlook revision reflects our view that the company's enhanced size and scale accomplished from the transaction only partially offsets our expectation for higher near-term leverage in the range of 5x-5.5x in 2016…A key credit consideration, in our view, is management's abi
Slide 24: SUN Is Well Positioned for Long-Term Growth in Unitholder Value
SUN IS WELL POSITIONED FOR LONG-TERM GROWTH IN UNITHOLDER VALUE Diversified Business and Geography Mitigates Risk and Volatility Strong Track Leading Record of Market Stable Cash Position with Flows Iconic Brands Highly Fragmented Supportive Market with and Dedicated Potential to General Augment Sca
Slide 25: Summary Sunoco LP Strategy
SUMMARY SUNOCO LP STRATEGY Stability Visible Growth • Significant amount of long-term fuel • Ability to pursue combined retail / supply agreements wholesale asset acquisitions in highly attractive markets • Historical stability of fuel margins • Organic expansion of convenience • Fuel margins are no
Slide 26: Appendix
APPENDIX 26
Slide 27: 3Q 2015 Operating Performance
3Q 2015 OPERATING PERFORMANCE Three Months Ended Nine Months Ended September 30, 2015 September 30, 2015 Gallons Sold (in thousands): Retail 353,641 1,060,297 Wholesale 608,397 1,788,579 Affiliated 90,387 262,367 Total Pro Forma Gallons 1,052,425 3,111,243 Motor Fuel Gross Profit (cents/gallon) Reta
Slide 28: SUN LP Poised to Hold a Leading Position in a Stable & Thriving C-Store Industry
SUN LP POISED TO HOLD A LEADING POSITION IN A STABLE & THRIVING C-STORE INDUSTRY Resilient industry growth ‒ 2014 marked the 12th consecutive year of industry-wide merchandise sales growth Increasing demand for convenience and improved foodservice offerings continues to drive merchandise sales g
Slide 29: SUN Reconciliation of Adjusted EBITDA to Net Income
SUN RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME ($ in Thousands) Predecessor Successor Pro Forma Pro Forma Combined Actual Combined Fiscal Year Fiscal Year Fiscal Year Results for the Results for the Ended Ended Ended Twelve Months Twelve Months Fiscal Year December 31, December 31, December 31,
Slide 30: Sunoco, LLC Reconciliation of Adjusted EBITDA to Net Income
SUNOCO, LLC RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME ($ in Thousands) Fiscal Year Ended December 31, 2013 2014 Net income (loss) $134,413 $36,732 Depreciation, amortization and accretion 48,091 50,547 Income tax expense 65,774 44,862 EBITDA 248,278 132,141 Non-cash unit based compensation 777
Slide 31: Sunoco R&M Reconciliation of Adjusted EBITDA to Net Income
SUNOCO R&M RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME ($ in Thousands) Fiscal Year Ended December 31, 2014 Net income (loss) $82,196 Depreciation, amortization and accretion 73,706 Income tax expense 2 EBITDA 155,902 Non-cash unit based compensation 2,422 Unrealized gains on commodity derivativ
Slide 32: Susser Reconciliation of Net Income to Adjusted EBITDA
SUSSER RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA ($ in Thousands) Historical (1) Pro Forma Adjustments Pro Forma Memo - EBITDA and DCF reconciliation Susser SUN (2) Adjustments (3) Susser Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended December 31, December 31, December 31, 2014 2014 201