Slide 1: Investor Presentation August 2017
INVESTOR PRESENTATION August 2017
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”, “we”, “our, and “us”) that involve risks, uncertainties and assumptions, including, without limitation, statements regarding SUN’s proposed sal
Slide 3: Overview of Sunoco LP
OVERVIEW OF SUNOCO LP Sunoco LP (NYSE: SUN) is a master limited partnership with retail and wholesale operations spanning more than 30 states, headquartered in Dallas, TX and a part of the Energy Transfer family of companies Retail Segment Wholesale Segment ● Retail operations at ~1,353 locations ●
Slide 4: SUN Offers Compelling Investment Highlights
SUN OFFERS COMPELLING INVESTMENT HIGHLIGHTS ● SUN owns and represents some of the most iconic brands in the motor fuels industry Leading Position Sunoco is the only non-refiner wholesaler with its own fuel brand in Attractive The NASCAR partnership extends Sunoco’s reach far beyond the current o
Slide 5: History of the Partnership
HISTORY OF THE PARTNERSHIP 2014: 2012: Susser Holdings Corp 1920: Susser Petroleum acquired by ETP Partners (SUSP) goes Sunoco opened its public as the first pure first service station 2014: play fuel distribution in PA master limited SUN is relisted on partnership the NYSE 1920s 2012 2014 2017 1925
Slide 6: Over $700 Million of Diversified M&A Since December 2014
OVER $700 MILLION OF DIVERSIFIED M&A SINCE DECEMBER 2014 Wholesale Retail Acquisitions Hybrid Acquisitions Acquisition Midstream Acquisitions Rattlers Pico Aziz Quick Hawaii Valentine Northeast Stores & Denny Oil Aloha Fuels Petroleum Stops Sites Stores Distributor Kolkhorst Petroleum Business Petro
Slide 7: SUN's Business Has Significant Operating & Geographic Diversity
SUN’S BUSINESS HAS SIGNIFICANT OPERATING & GEOGRAPHIC DIVERSITY ~750 Stripes locations Mainland U.S. Locations ~480 Laredo Taco locations in Stripes stores with pilot expansion to other regions ~450 locations along the East Coast and Mid- Atlantic regions Generally, higher real estate cost a
Slide 8: Multi-Channel Wholesale Operations
MULTI-CHANNEL WHOLESALE OPERATIONS SUN supplies nearly 8 billion gallons annually to all customers Third party operates a Wholesale sale of fuel, typically convenience store under the under contract of one year or less, Unbranded Franchisee Aplus or Stripes offering and or on a spot basis pays royal
Slide 9: Financial and Operational Metrics
FINANCIAL AND OPERATIONAL METRICS Full Year 2015 Full Year 2016 Gross Profit Gross Profit Rent and Rent and Retail Motor Other, 13% Other, Retail Motor Fuel, 32% 12% Fuel, 28% Merchandise, 34% Merchandise, 32% Wholesale Wholesale Motor Fuel, Motor Fuel, 28% 21% Total = $1,984 million Total = $2,219
Slide 10: Wholesale Segment Overview
WHOLESALE SEGMENT OVERVIEW ● Wholesale operates through 7,937 customers along the East Coast, the Southwest and Hawaii ~5,682 wholesale locations, consisting of independent dealers or distributors Full Year 2016 Gross Profit ~2,255 commercial customers, including unbranded stores and commercial
Slide 11: Brand Portfolio with Powerful Reach and Strength
BRAND PORTFOLIO WITH POWERFUL REACH AND STRENGTH ● Sunoco ranks in the top 50 U.S. brands in both familiarity and favorability (1) Second among only two fuel brands in the top 100 Unique sponsorships provide a powerful growth platform ─ Official fuel of NASCAR ─ Official fuel of NHRA ─ Official
Slide 12: SUN Liquidity and Capital Structure
SUN LIQUIDITY AND CAPITAL STRUCTURE ($ in Millions) As Reported As Reported 3/31/17 6/30/17 Revolver Capacity $1,500 $1,500 Less: Total Borrowings ($761) ($825) Less: Letters of Credit Outstanding ($21) ($20) Total Liquidity (1) $718 $655 Revolver Size $1,500 $1,500 Revolver Utilization (2) 52% 56%
Slide 13: Debt Maturity & Interest Rate Exposure
DEBT MATURITY & INTEREST RATE EXPOSURE ($ in Millions) Debt Maturity Schedule Current Interest Rate Exposure $3,000 $2,500 $675 Undrawn Revolver 53% $2,000 47% $825 Drawn $1,500 $2,068 in Revolver 2019 maturities 6.25% Senior 6.375% Senior $1,000 $1,243 5.5% Notes Notes Term Senior Notes Loan A $800
Slide 14: Full Year | Quarterly Highlights and Operating Performance
FULL YEAR | QUARTERLY HIGHLIGHTS AND OPERATING PERFORMANCE ● March 31, 2016: Completed the final drop-down from Energy Transfer Partners (NYSE: ETP) All retail and wholesale marketing assets now reside at SUN ● August 31, 2016: Completed the acquisition of the Fuels Business from Emerge Energy Ser
Slide 15: Appendix
APPENDIX APPENDIX
Slide 16: Hawaii Operations: Aloha Petroleum, Ltd.
HAWAII OPERATIONS: ALOHA PETROLEUM, LTD. ● Aloha operates a unique integrated business model in the State of Hawaii, comprised of three core businesses and an Population Growth Outpacing U.S Total attractive portfolio of real estate: Retail: ~50 Company-operated retail fuel locations 1.3% includin
Slide 17: Real Estate Portfolio Summary as of 6/30/2017
REAL ESTATE PORTFOLIO SUMMARY AS OF 6/30/2017 Fee Leased Total Retail 863 490 1,353 Wholesale 471 218 689 Terminal 5 3 8 Total (1) 1,339 711 2,050 (1) Excludes warehouses, offices, and other facilities that fall outside of the standard “retail”, “wholesale” and “terminal” categories 17
Slide 18: Reconciliation of Adjusted EBITDA to Net Income
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME ($ in millions) Fiscal Year Ended, Three Months Ended, December 31, 2016 December 31, 2015 June 30, 2017 June 30, 2016 Net income (loss) $ (406) $ 194 $ (222) $ 72 Depreciation, amortization and accrection 319 278 39 79 Interest expense, net 189 88 58
Slide 19: Divestiture of Retail Operations in Continental U.S.
INVESTOR CONFERENCE CALL DIVESTITURE OF RETAIL OPERATIONS IN CONTINENTAL U.S. April 6, 2017
Slide 20: Deal Terms Overview
DEAL TERMS OVERVIEW • Sunoco LP (“SUN”) entered into a definitive agreement to sell approximately 1,110 convenience stores to 7-Eleven, Inc. (“7-Eleven”) for a purchase price of $3.3 billion in cash, plus fuel, merchandise, supplies and other inventories at close • Assets divested: Approximately 1,1
Slide 21: First Step in Strategic Decision to Divest Convenience Stores
FIRST STEP IN STRATEGIC DECISION TO DIVEST CONVENIENCE STORES IN CONTINENTAL U.S. • 7-Eleven is a logical buyer of majority of SUN’s retail assets in the continental U.S. • SUN has retained J.P. Morgan to market the remaining convenience stores in the continental U.S., including assets in North and
Slide 22: Finished Product Company within the Energy Transfer Family
FINISHED PRODUCT COMPANY WITHIN THE ENERGY TRANSFER FAMILY Highlights of the Wholesale Business • Limited direct commodity risk given fixed-fee nature Pro Forma Wholesale Volume by Channel • Long-term contracts with blue-chip counterparties provide 29% 26% enhanced and stable cash flows • Reliabilit
Slide 23: Improved Financial State with New Long-Term Leverage Target
IMPROVED FINANCIAL STATE WITH NEW LONG-TERM LEVERAGE TARGET 7.00x • Transaction proceeds will allow SUN to reduce leverage, placing it within a range of 6.50x 4.50-4.75x, and to target a long-term 6.00x distribution coverage ratio of 1.1x • Year 1 will be impacted by transaction-related 5.50x expens
Slide 24: Illustrative Timing and Steps
ILLUSTRATIVE TIMING AND STEPS Expected Timing From Announcement To Closing: 3 – 6 Months April 2017 Q2-Q3 2017 End of Q4 2017 Week of April 2nd – Sign Asset Purchase Regulatory and Expected Agreement And Counterparty Transaction Announce The Approvals Close Transaction April 2017 Summer 2017 End of