Sunoco Lp · NYSE:SUN

Sunoco Lp — Investor Presentation (November 2014)

43 slides from Sunoco Lp's investor presentation, November 2014

1. Slide 1: Investor Presentation

   -INVESTOR PRESENTATION- November 2014

2. Slide 2: Forward-Looking Statements

   FORWARD-LOOKING STATEMENTS Some of the statements in this presentation constitute “forward-looking statements” about Sunoco LP (“SUN”) and Energy Transfer Partners, L.P. (“ETP”) and its affiliates that involve risks, uncertainties and assumptions, including without limitation, our discussion and ana

3. Slide 3: Non-GAAP Measures and Explanatory Note Regarding Presentation Scope and Format

   NON-GAAP MEASURES AND EXPLANATORY NOTE REGARDING PRESENTATION SCOPE AND FORMAT This document includes certain non-GAAP financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is provided in the appendix to this presentati

4. Slide 4: Jump Starting Transformation

   JUMP STARTING TRANSFORMATION ETP acquires Susser Holdings, announces plan to drop SUSS and Sunoco Inc. businesses into Susser Petroleum Partners – now Sunoco LP (NYSE: SUN) SUN closes new $1.25 billion revolving credit facility that matures in September 2019 SUN acquires Mid-Atlantic Convenience Sto

5. Slide 5: Sunoco LP Is a Key Player in the Motor Fuels Value Chain

   SUNOCO LP IS A KEY PLAYER IN THE MOTOR FUELS VALUE CHAIN Motor Fuels Value Chain Crude Oil Refining Storage and Wholesale Retail Production Transportation Distribution  SUN operates within the wholesale and retail distribution segments of the motor fuels value chain  Largely generating profit marg

6. Slide 6: Sunoco LP Is a Key Player in the Motor Fuels Value Chain (Cont.)

   SUNOCO LP IS A KEY PLAYER IN THE MOTOR FUELS VALUE CHAIN (CONT.) Motor Fuels Value Chain Crude Oil Refining Storage and Wholesale Retail Production Transportation Distribution  The recent acquisition of our parent company, SUSS, by ETP has opened the door for significant near term growth and unique

7. Slide 7: Combined Retail Marketing Segment Has a Dominant National Footprint

   THE COMBINED RETAIL MARKETING SEGMENT HAS A DOMINANT NATIONAL FOOTPRINT WITH OVER 6,500 SITES Site Count as of September 30, 2014 SUN Sites Remaining Retail Marketing (SUSP + MACS / Segment Total Tiger+ Aloha) (1) (Sunoco + SUSS) (2) Company Operated 153 1,084 1,237 Dealer & Distributor Operated 792

8. Slide 8: Combined Retail Operations Creates a Stronger, More Diversified Retail Marketing Segment

   COMBINED RETAIL OPERATIONS CREATES A STRONGER AND MORE DIVERSIFIED RETAIL MARKETING SEGMENT Growth Opportunities from SUSS & Sunoco Expected to Deliver a Reliable and Growing Cash Flow Stream • One of the largest retail footprints in the fast • Established East Coast and Southeast presence growing S

9. Slide 9: Geographically Diverse Platform for Future Drop Down Growth at SUN

   GEOGRAPHICALLY DIVERSE PLATFORM FOR FUTURE DROP DOWN GROWTH AT SUN ETP Retail Marketing SUN + MACS + Aloha Potential Future Growth Segment LTM 9/30/14 PF Motor Fuel Sales (MM Gallons): 2,465 5,331 7,795 (1) (2) Total Sites (9/30/14): 945 5,650 6,595 26 States 30 States From Locations: TX, NM, OK, LA

10. Slide 10: Brand Portfolio with Powerful Reach and Strength

    BRAND PORTFOLIO WITH POWERFUL REACH AND STRENGTH  Brand equity and presence spans fuel, food service and convenience store platforms  Sunoco ranks in the top 100 U.S. brands in both familiarity and favorability(1)  2nd among fuel brands  Unique sponsorships provide a powerful growth platform  O

11. Slide 11: Diversified Sources of Cash Flow

    DIVERSIFIED SOURCES OF CASH FLOW Pro Forma Gallons Sold by Channel(1) Channel Description Retail Sale of retail fuel and merchandise through “company-operated” sites 13%  “Company Operated”: Operate convenience store and sell fuel 30%  “Consignment”: Sell fuel at dealer-operated site and pay commi

12. Slide 12: Combined Segment Occupies a Leadership Position in a Stable C-Store Industry

    THE COMBINED SEGMENT OCCUPIES A LEADERSHIP POSITION IN A STABLE & THRIVING C-STORE INDUSTRY  Resilient industry growth ‒ 2013 marked the 11th consecutive year of industry-wide merchandise sales growth  Increasing demand for convenience and improved foodservice offerings continues to drive merchand

13. Slide 13: Combined Retail Marketing Segment Represents a Leading Retail Platform

    THE COMBINED RETAIL MARKETING SEGMENT REPRESENTS A LEADING RETAIL PLATFORM LTM EBITDA ($mm) Total Fuel Sales (millions of gallons) 7,795 (1) (2) $30 $378 $361 (3) $591 $333 3,914 $194 1,726 1,842 1,655 ETP RMS Casey's Murphy USA CST Pantry ETP RMS Casey's Murphy USA CST Pantry Note: CST EBITDA refle

14. Slide 14: Widening the Gap in Per Store Merchandise Sales

    WIDENING THE GAP IN PER STORE MERCHANDISE SALES (IN 000’S, BASED ON LTM DATA) $1,800 Average Per-Store Merchandise Sales $1,637 $1,578 $1,485 $1,500 $1,438 $1,407 $1,217 $1,230 $1,223 $1,230 $1,214 $1,172 $1,200 $1,134 $1,150 $1,142 $1,088 $1,075 $1,001 $1,015 $1,015 $958 $900 $600 $300 2009 2010 20

15. Slide 15: Delivering Best-in-Class Volume Growth

    DELIVERING BEST-IN-CLASS VOLUME GROWTH (IN 000’S, BASED ON LTM DATA) Average Per-Store Gallons 2,000 1,911 1,856 1,847 1,862 1,855 1,819 1,808 1,830 1,800 1,755 1,641 1,600 1,400 1,269 1,255 1,200 1,152 1,117 1,058 1,000 917 869 869 888 854 800 600 2009 2010 2011 2012 2013 (1) ETP Retail Mktg PTRY C

16. Slide 16: Retail Segment Integration Is Underway

    RETAIL SEGMENT INTEGRATION IS UNDERWAY  Synergies are expected to ultimately exceed $70 million annually  Single management team is running the combined retail business  Synergy achievement underway  Resources focused on priority initiatives to capture quick savings  Measurable targets, includi

17. Slide 17: SUN Will Look to Deliver Unitholder Value While Increasing Scale

    SUN WILL LOOK TO DELIVER UNITHOLDER VALUE WHILE INCREASING SCALE  SUN will continue to use multiple avenues to execute its growth strategy:  Drop down growth  Wholesale growth  Same-store sales growth  New store growth  Third party acquisition opportunities  Growth expected to be achieved in

18. Slide 18: Retail Marketing Asset Drop Downs

    RETAIL MARKETING ASSET DROP DOWNS  ETP previously announced its intent to drop down the existing Sunoco and SUSS retail marketing businesses into SUN in a series of synchronized drop down transactions for newly issued SUN common units and cash  Dropdowns of the existing Sunoco and SUSS retail busi

19. Slide 19: Multiple Avenues for Organic Growth

    MULTIPLE AVENUES FOR ORGANIC GROWTH New to Industry (“NTI”) Raze & Rebuilds  Targeted in high growth markets with favorable demographics  Increases returns on existing sites with attractive volume and  NTI growth allows for more open and modern store designs to customer traffic increase customer

20. Slide 20: Fragmented Convenience Store Industry Offers Attractive Acquisition Opportunities

    FRAGMENTED CONVENIENCE STORE INDUSTRY OFFERS ATTRACTIVE ACQUISITION OPPORTUNITIES  Industry is highly fragmented with almost 60% of Ownership of ~ 151,000 Convenience Stores the industry comprising single-store owners Selling Fuel (1)  We continually evaluate acquisition opportunities  Significan

21. Slide 21: SUN Will Target Prudent Growth via Acquisitions

    SUN WILL TARGET PRUDENT GROWTH VIA ACQUISITIONS  SUN will continue to look to opportunistically acquire strong performing retail and wholesale businesses / assets in attractive markets  We evaluate potential acquisitions through the following criteria:  Financial hurdles  Geography  Market marg

22. Slide 22: Growing to the Goal: $1 Billion in EBITDA

    GROWING TO THE GOAL: $1 BILLION IN EBITDA Adjusted EBITDA ($MM) $30 $494 $428 $441 $389 $333 $426 $258 $325 $622 $261 $269 $241 $120 $167 $183 $169 $166 $92 2009 2010 2011 2012 2013 LTM 6/30/2014 (1) (2) (3) Susser Sunoco ETP RetailInc.Marketing Aloha MACS (1) Includes combined Q2 LTM 2014 EBITDA of

23. Slide 23: Simplified SUN Org Structure

    SIMPLIFIED SUN ORG STRUCTURE Publicly Traded MLP Energy Transfer Equity, L.P. (1) (NYSE: ETE) General Partner/Parent Company Public Unitholders Energy Transfer Partners, L.P. (NYSE: ETP) 55.8% LP Interest 44.2% LP Interest 100% GP Interest, IDR’s Sunoco LP (2) Sunoco Inc. Qualifying / Susser Holding

24. Slide 24: Fuel Distribution Produces Significant Qualifying Income

    FUEL DISTRIBUTION PRODUCES SIGNIFICANT QUALIFYING INCOME Qualifying Non-Qualifying  Wholesale supply of fuel to related party,  Sales of fuel products to retail customers independent dealers or lessee dealers, and  Merchandise sales most 3rd parties  Rental income from affiliated leases  Real p

25. Slide 25: Retail Marketing Segment Delivers Stable & Growing Operating and Financial Performance

    OUR RETAIL MARKETING SEGMENT CONSISTENTLY DELIVERS STABLE & GROWING OPERATING AND FINANCIAL PERFORMANCE Fuel Volumes (millions of gallons) Fuel Margin ($ mm) Third Party Operated Company Operated Third Party Operated Company Operated 7,626 7,745 $995 7,010 7,086 $875 $885 6,307 $838 2,258 2,330 2,01

26. Slide 26: Combined Segment Generates Stable Cash Flows from Diversified Lines of Business

    COMBINED SEGMENT GENERATES STABLE CASH FLOWS FROM DIVERSIFIED LINES OF BUSINESS Gross Profit Contribution From Segment Stable Average Motor Fuel Margin (Cents per Gallon) (LTM 9/30/14)(1) FY2010 FY2011 FY2012 FY2013 9/30/14 LTM Retail Marketing 5% 4% Segment 10.5 12.0 12.4 11.6 12.8 27% (Combined Pl

27. Slide 27: Q3 2014 Update

    Q3 2014 UPDATE ETP Retail Marketing Segment Sunoco LP Y TD Sept 2013 Y TD Sept 2014 Change Y TD Sept 2013 Y TD Sept 2014 Change Total fuel gallons 3,995 4,470 12% Total fuel gallons 1,155 1,364 18% Average fuel margin cents/gallon 9.8 12.6 29% Average fuel margin cents/gallon 3.6 3.8 6% Merchandise

28. Slide 28: SUN Has Consistently Grown Distributions Since 2012 IPO

    SUN HAS CONSISTENTLY GROWN DISTRIBUTIONS SINCE 2012 IPO Distributions / Unit 16% DPU CAGR $0.60 $0.55 $0.55 $0.52 $0.50 $0.50 $0.49 $0.47 $0.45 $0.45 $0.44 $0.40 +5% $0.35 +3.5% +3.5% +3.5% +3.5% +3.5% $0.30 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Future Distribution Growth Will Be F

29. Slide 29: 2014 & 2015 Capex Outlook

    2014 & 2015 CAPEX OUTLOOK $ in millions 2014 Forecast 2015 Estimate Low High Low High ETP Retail Marketing Maintenance $60 $75 $95 $125 ETP Retail Marketing Growth 205 255 350 450 ETP Retail Marketing Total Capex (including SUN) (1) $265 $330 $445 $575 Sunoco LP Maintenance $2 $5 $15 $25 Sunoco LP G

30. Slide 30: Financial Goals & Policies Designed to Position SUN for Long Term Success

    OUR FINANCIAL GOALS & POLICIES ARE DESIGNED TO POSITION SUN FOR LONG TERM FINANCIAL SUCCESS  Financial Targets Supported by Stable Cash Flows  Target 4.0x-4.5x proforma Debt/EBITDA during the dropdown period, expected to trend down after – Leverage ratio as of 9/30/14 is approximately 4.0x  Conse

31. Slide 31: Leveraging the Relationship with Energy Transfer

    LEVERAGING THE RELATIONSHIP WITH ENERGY TRANSFER ETP’s interests are clearly aligned with SUN’s Experienced team Strong track that has managed record of acquisitions, creating value for ETP owns integrations, unitholders SUN’s GP, transitions 100% of its IDRs and is the largest unitholder Halo effec

32. Slide 32: Key Investment Highlights

    KEY INVESTMENT HIGHLIGHTS Stability Visible Growth • Significant amount of long-term, • Meaningful growth achievable fee-based contracts through significant inventory of • Historical stability of fuel margins drops from ETP • Strong and resilient industry • Ability to pursue combined retail / fundam

33. Slide 33: Appendix

    APPENDIX 33

34. Slide 34: Evolution of SUSS / SUSP and Sunoco

    EVOLUTION OF SUSS / SUSP AND SUNOCO 2014: 2012: SUN acquires MACS from ETP; Susser Petroleum Partners IPO; formed Purchases Aloha; Formal name from SUSS wholesale business change to Sunoco LP (NYSE: SUN) 1988-2001: SUSS acquired over 326 retail stores and nearly 234 dealer sites 2014: Today: 2006: S

35. Slide 35: Retail Marketing Segment Operating Results

    RETAIL MARKETING SEGMENT OPERATING RESULTS T hree Months Ended Nine Months Ended In USD millions September 30, September 30, 2014 2013 Change 2014 2013 Change Retail gasoline outlets, end of period: T otal 6,497 4,972 1,525 6,497 4,972 1,525 Company-operated 1,210 443 767 1,210 443 767 Motor fuel sa

36. Slide 36: Recent Developments

    RECENT DEVELOPMENTS MACS Drop Down Acquisition Aloha Acquisition  On October 1, 2014, SUN closed the acquisition of Mid-Atlantic  SUN has also agreed to acquire Honolulu-based Aloha Petroleum, Convenience Stores, LLC from ETP in a transaction valued at Ltd. for approximately $240 million in initia

37. Slide 37: Real Estate Summary as of September 30, 2014

    REAL ESTATE SUMMARY AS OF SEPTEMBER 30, 2014 Properties Controlled by SUN (1) Fee Leased Total Retail 68 85 153 Wholesale 167 89 256 Total Operating Sites 235 174 409 Properties Controlled by ETP’s Retail Marketing Segment Fee Leased Total Retail 584 446 1,030 Wholesale 337 130 467 Total Operating S

38. Slide 38: Aloha Petroleum Ltd. Overview

    ALOHA PETROLEUM LTD. OVERVIEW  SUN has agreed to acquire Aloha Petroleum  $240 million base with an 8 year earn out structure at 50 / 50 for margins above $68 million  Aloha Petroleum Ltd. Aloha, formed in 1977 by Easy Serve (TX), operates a unique integrated business model in the State of Hawaii

39. Slide 39: Hawaiian Market Overview

    HAWAIIAN MARKET OVERVIEW The Fundamentals Of The Hawaii Economy, Supported In Part By The Tourism Industry, Drive Growth For Fuel And C-store Retailers Hawaii Market Overview Population Growth  Hawaii is serviced by over 300 gas stations and 500 convenience stores U.S. Hawaii 1.0% 1.0% 1.0% 1.0% 1.

40. Slide 40: ETP Retail Marketing Segment/Sunoco Inc. Reconciliation of Adjusted EBITDA to Net Income

    ETP RETAIL MARKETING SEGMENT/SUNOCO INC. RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME In Millions 2009 2010 2011 2012 2013 (1) 6/30/14 LTM (1) Net Income $ 86 $ 110 $ 169 $ 83 $ 204 $ 283 Taxes 60 70 - - - - Depreciation 92 90 90 100 114 140 Equity in JV Earnings - - - (1) 3 1 Other Income 2 - 2

41. Slide 41: Susser Holdings Consolidated Reconciliation of EBITDA to Net Income

    SUSSER HOLDINGS CONSOLIDATED RECONCILIATION OF EBITDA TO NET INCOME In Thousands 2009 2010 2011 2012 2013 6/30/14 LTM(1) Net income attributable to Susser Holdings Corporation $2,068 $786 $47,457 $46,725 $14,331 $29,325 Net income attributable to noncontrolling interest 39 3 14 4,572 18,473 19,361 D

42. Slide 42: Aloha Petroleum Reconciliation of EBITDA to Net Income

    ALOHA PETROLEUM RECONCILIATION OF EBITDA TO NET INCOME In Thousands 6/30/14 LTM (1) Net income $10,523 Depreciation, amortization and accretion 10,009 Interest expense, net 2,832 Income tax expense 6,387 EBITDA $29,751 Loss (gain) on disposal of assets and impairment charge 347 Adjusted EBITDA $30,0

43. Slide 43: Sunoco LP Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income

    SUNOCO LP, RECONCILIATION OF ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW TO NET INCOME In Thousands Predecessor Successor September 1, 2014 Combined Results for Twelve Months Nine Months January 1, 2014 through the Nine Months ended December Ended September through August September 30, Ended Septemb

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