Slide 1: Investor Presentation
INVESTOR PRESENTATION December 2017
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Some of the statements in this presentation constitute “forward-looking statements” about Sunoco LP (“SUN”, “we”, “our, and “us”) that involve risks, uncertainties and assumptions, including, without limitation, statements regarding SUN’s proposed sale of a majority of its
Slide 3: 2017 – Laying the Foundation for the Future
2017 – LAYING THE FOUNDATION FOR THE FUTURE ● Continued strength in wholesale margins along with an upswing in retail margins drove improvement in key financial metrics • Decreased leverage from 6.5x as of 12/31/16 to 5.6x as of 9/30/17 • Increased LTM cash coverage from 0.98x as of 12/31/16 to 1.04
Slide 4: 7-Eleven: Closing on Track
7-ELEVEN: CLOSING ON TRACK ● Key deal terms on April 6, 2017 • $3.3 billion for ~1,110 company-operated convenience stores • ~2.2 billion gallons through a 15-year fixed-rate, take-or-pay fuel supply agreement • Additional 500 million gallons over the first four years ● 7-Eleven, Inc. and Sunoco LP
Slide 5: West Texas: Defined Value-Creating Path
WEST TEXAS: DEFINED VALUE-CREATING PATH ● A signed agreement with a proven operator for the 207 West Texas sites as a commission agent • The conversion of sites is expected to occur in Q1 2018 • Commission agent is a proven and profitable channel within our current fuel distribution portfolio ● Key
Slide 6: Guidance on the New Business Model
GUIDANCE ON THE NEW BUSINESS MODEL Operating G&A Cents Per Maintenance Growth Expenses Expenses Gallon Capital Capital ~$325 million ~$140 million 8.0 to 9.5 range ~$40 million ~$90 million • The 7-Eleven • With the • Wholesale • The retention of • The exit of the transaction elimination of margins
Slide 7: Key Investment Highlights of the New Business Model
KEY INVESTMENT HIGHLIGHTS OF THE NEW BUSINESS MODEL 2 3 Significant Portfolio Of Economies Of Stable Income Scale Streams 1 Attractive Fuel Distribution Sector 5 4 Lean Capital Runway Of And Expense Diversified Structure With Growth A Disciplined Financial Strategy 7
Slide 8: Significant Economies of Scale to Thrive in an Attractive Fuel Distribution Sector
SIGNIFICANT ECONOMIES OF SCALE TO THRIVE IN AN 1 & 2 ATTRACTIVE FUEL DISTRIBUTION SECTOR ● Fuel distribution sector remains robust • Fuel distribution margins have been attractive and stable • 2016 U.S. gasoline demand was highest on record at 9.3 MBD ● SUN is well positioned to capitalize on sector
Slide 9: Portfolio of Stable Income Streams
3 PORTFOLIO OF STABLE INCOME STREAMS Portfolio of Diversified Channels 12.0¢ Average: 9.1¢ • 7-Eleven: 15-year take or pay Minimum: 8.3¢ • Dealers 8.0¢ • Commission agents Wholesale • Distributors Fuel • Aloha fuel sales 4.0¢ ~ % of Gross Profit Income ~70%(1) • Commercial accounts • Transmix operat
Slide 10: Lean Capital and Expense Structure with a Disciplined Financial Strategy
4 LEAN CAPITAL AND EXPENSE STRUCTURE WITH A DISCIPLINED FINANCIAL STRATEGY Maintain Distribution Balanced Capital And Liquidity Disciplined Coverage Financing Overhead Light Leverage Profile Strategy Model Target Target ~1.1x Invest In Projects Maintain Cost Maintain Credit ~4.5x – 4.75x Distributio
Slide 11: Runway of Diversified Growth
5 RUNWAY OF DIVERSIFIED GROWTH Grow Core Manage Expand Into Fuels Logistics And Organic Growth Adjacent Sectors Distribution Business • Consolidation opportunities in • Obtain incremental business • Diversify into adjacent sectors a highly fragmented sector from existing customers to drive further i
Slide 12: Appendix
Appendix SUNOCO
Slide 13: West Texas Store Statistics
WEST TEXAS STORE STATISTICS Geographic Composition Total Sites Midland/Odessa 33 Texoma 24 San Angelo 45 Lubbock/High Plains 56 Permian - Other 38 Abilene 11 Total 207 Real Estate Composition Owned 138 67% Leased 69 33% Total 207 13