Form 8-K Sunoco LP For: Nov 09

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November 9, 2016 4:17 PM EST

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934

Date of Report (Date of Earliest Event Reported):
November 9, 2016

Commission file number: 001-35653

SUNOCO LP
(Exact name of registrant as specified in its charter)

Delaware
 
30-0740483
(State or other jurisdiction of 
incorporation or organization)
 
(IRS Employer 
Identification No.)
8020 Park Lane, Suite 200
Dallas, TX 75231
(Address of principal executive offices, including zip codes)

Registrant’s telephone number, including area code: (832) 234-3600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 2.02 Results of Operations and Financial Condition.
 
The following information is furnished under Item 2.02, “Results of Operations and Financial Condition.” This information, including the information contained in Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
On November 9, 2016, Sunoco LP issued a news release announcing its financial results for the third fiscal quarter ended September 30, 2016 and providing access information for an investor conference call to discuss those results. A copy of the news release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 2.02. The conference call will be available for replay approximately 60 days following the date of the call at www.SunocoLP.com, or by telephone through November 17, 2016, by following the telephonic replay instructions provided in the news release.
 
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
 
In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached Exhibit 99.1 is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

 
 
 
 
 
Exhibit Number
 
Exhibit Description
 
99.1
 
News Release of Sunoco LP, dated November 9, 2016.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
SUNOCO LP
 
By:
Sunoco GP LLC, its general partner
Date: November 9, 2016
By:
/s/ Leta McKinley
 
 
Leta McKinley
 
 
Vice President, Controller and Principal Accounting Officer


Exhibit 99.1


sunocolplogoa01.jpg
News Release
Sunoco LP Announces Third Quarter 2016 Financial and Operating Results

•
Generated Net Income of $44.6 million, Adjusted EBITDA of $188.9 million and Distributable Cash Flow, as adjusted, of $124.1 million
•
Maintained quarterly distribution of 82.55 cents and reported current quarter cash coverage of 1.25 times
•
Increased gallons sold by 3.8 percent to 2.0 billion gallons compared to the third quarter 2015
•
Completed the acquisition of the Fuels Business from Emerge Energy Services LP
Conference Call Scheduled for 9:00 a.m. CT (10:00 a.m. ET) on Thursday, November 10
DALLAS, November 9, 2016 - Sunoco LP (NYSE: SUN) (“SUN” or the “Partnership”) today announced financial and operating results for the three-month period ended September 30, 2016.

Revenue totaled $4.1 billion, a decrease of 16.3 percent, compared to $4.9 billion in the third quarter of 2015. The decline was the result of a 47.1 cent per gallon decrease in the average selling price of fuel partly offset by increased merchandise sales and additional gallons sold.

Total gross profit was $577.4 million, compared to $524.8 million in the third quarter of 2015. Key drivers of the increase were higher wholesale motor fuel and merchandise profits partly offset by a decrease in retail motor fuel gross profit.

Income from operations was $104.2 million, versus $93.4 million in the third quarter of 2015, reflecting increased gross profit, partly offset by increased general and administrative and other operating expenses. The increase in general and administrative expenses was primarily related to relocation costs and associated expenses incurred with the opening of a corporate office in Dallas, Texas, while the increase in other operating expenses was driven by operating more stores on a year-over-year basis.

Net income attributable to partners was $44.6 million, or $0.24 per diluted unit, versus $27.5 million, or $0.30 per diluted unit, in the third quarter of 2015.

Adjusted EBITDA (1) for the quarter totaled $188.9 million, compared with $253.7 million in the third quarter of 2015. The unfavorable year-over-year comparison reflects lower fuel margins in both the retail and wholesale segments.

Distributable cash flow attributable to partners (1), as adjusted, was $124.1 million, compared to $112.4 million a year earlier.

On a weighted-average basis, fuel margin for all gallons sold decreased to 15.6 cents per gallon, compared to 18.6 cents per gallon in the third quarter of 2015. The decrease was primarily attributable to increased product costs experienced during the third quarter.

Net income attributable to partners for the wholesale segment was $47.3 million compared to a net income of $2.6 million a year ago. Adjusted EBITDA was $87.9 million, versus $107.0 million in the third quarter of last year. Total wholesale gallons sold were 1,371.2 million, compared with 1,308.8 million in the third quarter of 2015, an increase of 4.8 percent.  This includes gallons sold to consignment stores and third-party customers, including independent dealers, fuel distributors and commercial customers. The Partnership earned 10.0 cents per gallon on these volumes, compared to 12.5 cents per gallon a year earlier.

Net loss attributable to partners for the retail segment was $2.8 million compared to a net income of $24.9 million a year ago. Adjusted EBITDA was $101.1 million, versus $146.7 million in the third quarter of last year. Total retail gallons sold increased by 1.8 percent to 651.4 million gallons as a result of the contribution from third party acquisitions and new-to-industry locations opened during the last 12 months. The Partnership earned 27.5 cents per gallon on these volumes, compared to 31.2 cents per gallon a year earlier.

Total merchandise sales increased by 2.7 percent from a year ago to $605.3 million, reflecting the contribution from third party acquisitions and new-to-industry locations opened during the last 12 months. Merchandise sales contributed $192.3 million of gross profit with a retail merchandise margin of 31.8 percent, a 40 basis point increase from the third quarter of 2015.

Same-store merchandise sales decreased by 2.1 percent, reflecting continued weakness in SUN’s convenience store operations in Texas, particularly in the oil producing regions. Same-store fuel sales decreased by 3.5 percent as a result of weakness throughout the state of Texas, particularly lower year-over-year activity in oil producing markets. In the Texas oil producing regions, same-store merchandise sales decreased by 13.0 percent,

1

and same-store fuel sales declined 13.7 percent. Excluding the oil producing regions, same-store sales decreased by 0.4 percent, and same-store gallons decreased by 2.3 percent.

As of September 30, SUN operated approximately 1,345 convenience stores and retail fuel outlets along the East Coast, in the Southwest and in Hawaii. Third party operated sites totaled 5,600 locations.

SUN’s other recent accomplishments include the following:

•
Completed the acquisition of the fuels business from Emerge Energy Services LP for $171.5 million. The fuels business includes two transmix processing plants with attached refined product terminals located in the Birmingham, Alabama and greater Dallas, Texas metro areas and engages in the processing of transmix and the distribution of refined fuels. These two processing plants have attached refined product terminals with over 800,000 barrels of storage capacity.
•
Completed the previously announced acquisition of the convenience store, wholesale motor fuel distribution and commercial fuels distribution businesses serving East Texas and Louisiana from Denny Oil Company for approximately $54.6 million plus inventory on hand at closing, subject to closing adjustments. The acquisition includes six company-operated locations and approximately 127 supply contracts with dealer-owned and dealer-operated sites and over 500 commercial customers. This transaction closed in the fourth quarter on October 12, 2016.

SUN’s segment results and other supplementary data are provided after the financial tables below.

Distribution
On October 26, the Board of Directors of SUN’s general partner declared a distribution for the third quarter of 2016 of $0.8255 per unit, which corresponds to $3.3020 per unit on an annualized basis. This distribution is unchanged from the second quarter and represents a 10.7 percent increase compared with the third quarter of 2015. The distribution will be paid on November 15 to unitholders of record on November 7.

SUN’s distribution coverage ratio for the third quarter was 1.25 times. The distribution coverage ratio on a trailing 12-month basis was 1.09 times.

Liquidity
At September 30, SUN had borrowings against its revolving line of credit of $958.2 million and other long-term debt of $3.6 billion. Availability on the revolving credit facility after borrowings and letters of credit commitments was $518.2 million. Net debt to Adjusted EBITDA, calculated in accordance with SUN’s revolving credit facility, was 5.97 times at the end of the third quarter.

(1)
Adjusted EBITDA and distributable cash flow are non-GAAP financial measures of performance that have limitations and should not be considered as a substitute for net income. Please refer to the discussion and tables under "Reconciliations of Non-GAAP Measures" later in this news release for a discussion of our use of Adjusted EBITDA and distributable cash flow, and a reconciliation to net income.

Earnings Conference Call
Sunoco LP management will hold a conference call on Thursday, November 10, at 9:00 a.m. CT (10:00 a.m. ET) to discuss third quarter results and recent developments. To participate, dial 412-902-0003 approximately 10 minutes early and ask for the Sunoco LP conference call. The call will also be accessible live and for later replay via webcast in the Investor Relations section of Sunoco’s website at www.SunocoLP.com under Events and Presentations.

Sunoco LP (NYSE: SUN) is a master limited partnership that operates approximately 1,345 retail fuel sites and convenience stores (including APlus, Stripes, Aloha Island Mart and Tigermarket brands) and distributes motor fuel to convenience stores, independent dealers, commercial customers and distributors located in more than 30 states at approximately 6,900 sites. Our parent -- Energy Transfer Equity, L.P. (NYSE: ETE) -- owns Sunoco's general partner and incentive distribution rights. For more information, visit the Sunoco LP website at www.SunocoLP.com

Forward-Looking Statements
This press release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in the Partnership’s Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

The information contained in this press release is available on our website at www.SunocoLP.com



2

Qualified Notice
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of Sunoco LP's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, Sunoco LP's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

Contacts
Investors:
Scott Grischow, Senior Director - Investor Relations and Treasury
(214) 840-5660, [email protected]

Patrick Graham, Senior Analyst - Investor Relations and Finance
(214) 840-5678, [email protected]

Media:
Jeff Shields, Communications Manager
(215) 977-6056, [email protected]


- Financial Schedules Follow -


3

SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(in thousands, except units)
(unaudited)
 
 
September 30,
2016
 
December 31,
2015
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
80,565

 
$
72,627

Advances to affiliates
 
—

 
365,536

Accounts receivable, net
 
385,497

 
308,285

Accounts receivable from affiliates
 
8,790

 
8,074

Inventories, net
 
488,780

 
467,291

Other current assets
 
97,621

 
46,080

Total current assets
 
1,061,253

 
1,267,893

Property and equipment, net
 
3,322,718

 
3,154,826

Other assets:
 
 
 
 
Goodwill
 
3,236,398

 
3,111,262

Intangible assets, net
 
1,290,764

 
1,259,440

Other noncurrent assets
 
85,868

 
48,398

Total assets
 
$
8,997,001

 
$
8,841,819

Liabilities and equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
439,950

 
$
433,988

Accounts payable to affiliates
 
31,635

 
14,988

Advances from affiliates
 
62,716

 
—

Accrued expenses and other current liabilities
 
321,349

 
307,939

Current maturities of long-term debt
 
5,010

 
5,084

Total current liabilities
 
860,660

 
761,999

Revolving line of credit
 
958,236

 
450,000

Long-term debt, net
 
3,515,194

 
1,502,531

Deferred tax liability
 
694,995

 
694,383

Other noncurrent liabilities
 
160,675

 
170,169

Total liabilities
 
6,189,760

 
3,579,082

Commitments and contingencies (Note 11)
 
 
 
 
Equity:
 
 
 
 
Limited partners:
 
 
 
 
Common unitholders - public
(49,588,960 units issued and outstanding as of September 30, 2016 and
December 31, 2015)
 
1,745,339

 
1,768,890

Common unitholders - affiliated
(45,750,826 units issued and outstanding as of September 30, 2016 and
37,776,746 units issued and outstanding as of December 31, 2015)
 
1,061,902

 
1,275,558

Class A unitholders - held by subsidiary
(no units issued and outstanding as of September 30, 2016 and
11,018,744 units issued and outstanding as of December 31, 2015)
 
—

 
—

Class C unitholders - held by subsidiary
(16,410,780 units issued and outstanding as of September 30, 2016 and
no units issued and outstanding as of December 31, 2015)
 
—

 
—

Total partners' capital
 
2,807,241

 
3,044,448

Predecessor equity
 
—

 
2,218,289

Total equity
 
2,807,241

 
5,262,737

Total liabilities and equity
 
$
8,997,001

 
$
8,841,819

 

4

SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except unit and per unit amounts)
(unaudited)
 
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
 
2016
 
2015
 
2016
 
2015
Revenues
 
 
 
 
 
 
 
 
Retail motor fuel
 
$
1,401,830

 
$
1,580,815

 
$
3,876,542

 
$
4,597,670

Wholesale motor fuel sales to third parties
 
2,026,454

 
2,664,186

 
5,544,905

 
7,946,323

Wholesale motor fuel sales to affiliates
 
28,226

 
3,779

 
45,065

 
8,718

Merchandise
 
605,275

 
589,299

 
1,705,963

 
1,633,102

Rental income
 
22,883

 
20,949

 
67,582

 
61,265

Other
 
52,649

 
47,744

 
151,740

 
136,630

Total revenues
 
4,137,317

 
4,906,772

 
11,391,797

 
14,383,708

Cost of sales
 
 
 
 
 
 
 
 
Retail motor fuel
 
1,222,827

 
1,384,813

 
3,428,659

 
4,114,463

Wholesale motor fuel
 
1,916,511

 
2,591,791

 
5,136,083

 
7,623,330

Merchandise
 
412,983

 
404,179

 
1,160,001

 
1,122,970

Other
 
7,609

 
1,231

 
10,357

 
3,744

Total cost of sales
 
3,559,930

 
4,382,014

 
9,735,100

 
12,864,507

Gross profit
 
577,387

 
524,758

 
1,656,697

 
1,519,201

Operating expenses
 
 
 
 
 
 
 
 
General and administrative
 
82,774

 
61,547

 
201,688

 
167,747

Other operating
 
276,401

 
266,681

 
792,194

 
759,713

Rent
 
36,231

 
36,447

 
105,327

 
105,564

Loss on disposal of assets
 
203

 
747

 
2,918

 
894

Depreciation, amortization and accretion
 
77,628

 
65,984

 
234,418

 
202,927

Total operating expenses
 
473,237

 
431,406

 
1,336,545

 
1,236,845

Income from operations
 
104,150

 
93,352

 
320,152

 
282,356

Interest expense, net
 
54,289

 
28,517

 
132,565

 
57,692

Income before income taxes
 
49,861

 
64,835

 
187,587

 
224,664

Income tax expense
 
5,310

 
30,124

 
8,890

 
47,113

Net income and comprehensive income
 
44,551

 
34,711

 
178,697

 
177,551

Less: Net income and comprehensive income
attributable to noncontrolling interest
 
—

 
852

 
—

 
2,545

Less: Preacquisition income allocated to general partner
 
—

 
6,315

 
—

 
117,728

Net income and comprehensive income attributable to partners
 
$
44,551

 
$
27,544

 
$
178,697

 
$
57,278

Net income per limited partner unit:
 
 
 
 
 
 
 
 
Common (basic and diluted)
 
$
0.24

 
$
0.30

 
$
1.25

 
$
0.96

Subordinated (basic and diluted)
 
$
—

 
$
0.52

 
$
—

 
$
1.21

Weighted average limited partner units outstanding:
 
 
 
 
 
 
 
 
Common units - public (basic)
 
49,588,960

 
24,340,677

 
49,588,960

 
21,486,878

Common units - public (diluted)
 
49,663,618

 
24,340,793

 
49,663,618

 
21,486,994

Common units - affiliated (basic and diluted)
 
45,750,826

 
19,431,349

 
43,131,603

 
9,507,137

Subordinated units - affiliated
 
—

 
10,939,436

 
—

 
10,939,436

Cash distribution per common unit
 
$
0.8255

 
$
0.7454

 
$
2.4683

 
$
2.0838



5

Key Operating Metrics
The following information is intended to provide investors with a reasonable basis for assessing our historical operations but should not serve as the only criteria for predicting our future performance. We operate our business in two primary operating divisions, wholesale and retail, both of which are included as reportable segments.
Key operating metrics set forth below are presented as of and for the three and nine months ended September 30, 2016 and 2015 and have been derived from our historical consolidated financial statements.
The following table sets forth, for the periods indicated, information concerning key measures we rely on to gauge our operating performance (in thousands, except gross profit per gallon):
 
For the Three Months Ended September 30,
 
2016
 
 
2015
 
Wholesale
 
Retail
 
Total
 
 
Wholesale
 
Retail
 
Total
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
Retail motor fuel
$
—

 
$
1,401,830

 
$
1,401,830

 
 
$
—

 
$
1,580,815

 
$
1,580,815

Wholesale motor fuel sales to third parties
2,026,454

 
—

 
2,026,454

 
 
2,664,186

 
—

 
2,664,186

Wholesale motor fuel sales to affiliates
28,226

 
—

 
28,226

 
 
3,779

 
—

 
3,779

Merchandise
—

 
605,275

 
605,275

 
 
—

 
589,299

 
589,299

Rental income
19,353

 
3,530

 
22,883

 
 
11,333

 
9,616

 
20,949

Other
13,331

 
39,318

 
52,649

 
 
5,996

 
41,748

 
47,744

Total revenues
$
2,087,364

 
$
2,049,953

 
$
4,137,317

 
 
$
2,685,294

 
$
2,221,478

 
$
4,906,772

Gross profit
 
 
 
 
 
 
 
 
 
 
 
 
Retail motor fuel
$
—

 
$
179,003

 
$
179,003

 
 
$
—

 
$
196,002

 
$
196,002

Wholesale motor fuel
138,169

 
—

 
138,169

 
 
76,174

 
—

 
76,174

Merchandise
—

 
192,292

 
192,292

 
 
—

 
185,120

 
185,120

Rental and other
26,629

 
41,294

 
67,923

 
 
16,099

 
51,363

 
67,462

Total gross profit
$
164,798

 
$
412,589

 
$
577,387

 
 
$
92,273

 
$
432,485

 
$
524,758

Net income (loss) and comprehensive income (loss) attributable to partners
$
47,318

 
$
(2,767
)
 
$
44,551

 
 
$
2,595

 
$
24,949

 
$
27,544

Adjusted EBITDA attributable to partners (2)
$
87,867

 
$
101,053

 
$
188,920

 
 
$
106,977

 
$
142,800

 
$
249,777

Distributable cash flow attributable to partners, as adjusted (2)
 
 
 
 
$
124,084

 
 
 
 
 
 
$
112,378

Operating Data
 
 
 
 
 
 
 
 
 
 
 
 
Total motor fuel gallons sold:
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
651,386

 
651,386

 
 
 
 
639,824

 
639,824

Wholesale
1,371,236

 
 
 
1,371,236

 
 
1,308,814

 
 
 
1,308,814

Motor fuel gross profit (cents per gallon) (1):
 
 
 
 
 
 
 
 
 
 
 
 
Retail
 
 
27.5¢

 
 
 
 
 
 
31.2¢

 
 
Wholesale
10.0¢

 
 
 
 
 
 
12.5¢

 
 
 
 
Volume-weighted average for all gallons
 
 
 
 
15.6¢

 
 
 

 
 
 
18.6¢

Retail merchandise margin
 
 
31.8%

 
 
 
 
 
 
31.4%

 
 
________________________________
(1)
Excludes the impact of inventory fair value adjustments consistent with the definition of Adjusted EBITDA.
(2)
We define EBITDA as net income before net interest expense, income tax expense and depreciation, amortization and accretion expense. We define Adjusted EBITDA to include adjustments for non-cash compensation expense, gains and losses on disposal of assets, unrealized gains and losses on commodity derivatives and inventory fair value adjustments. We define distributable cash flow as Adjusted EBITDA less cash interest expense including the accrual of interest expense related to our 2020 and 2023 Senior Notes that is paid on a semi-annual basis, current income tax expense, maintenance capital expenditures, and other non-cash adjustments. Further adjustments are made to distributable cash flow for certain transaction-related and non-recurring expenses that are included in net income.
We believe EBITDA, Adjusted EBITDA, and distributable cash flow are useful to investors in evaluating our operating performance because:
•
Adjusted EBITDA is used as a performance measure under our revolving credit facility;
•
securities analysts and other interested parties use such metrics as measures of financial performance, ability to make distributions to our unitholders and debt service capabilities;

6

•
our management uses them for internal planning purposes, including aspects of our consolidated operating budget, and capital expenditures; and
•
distributable cash flow provides useful information to investors as it is a widely accepted financial indicator used by investors to compare partnership performance, and as it provides investors an enhanced perspective of the operating performance of our assets and the cash our business is generating.
EBITDA, Adjusted EBITDA and distributable cash flow are not recognized terms under GAAP and do not purport to be alternatives to net income (loss) as measures of operating performance or to cash flows from operating activities as a measure of liquidity. EBITDA, Adjusted EBITDA and distributable cash flow have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations include:
•
they do not reflect our total cash expenditures, or future requirements for, capital expenditures or contractual commitments;
•
they do not reflect changes in, or cash requirements for, working capital;
•
they do not reflect interest expense or the cash requirements necessary to service interest or principal payments on our revolving credit facility or term loan;
•
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and
•
because not all companies use identical calculations, our presentation of EBITDA, Adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of net income to EBITDA, Adjusted EBITDA and distributable cash flow for the three months ended September 30, 2016 and 2015 (in thousands):
 
For the Three Months Ended September 30,
 
2016
 
 
2015
 
Wholesale
 
Retail
 
Total
 
 
Wholesale
 
Retail
 
Total
Net income (loss) and comprehensive income (loss)
$
47,318

 
$
(2,767
)
 
$
44,551

 
 
$
(10,399
)
 
$
45,110

 
$
34,711

   Depreciation, amortization and accretion
21,819

 
55,809

 
77,628

 
 
13,571

 
52,413

 
65,984

   Interest expense, net
13,198

 
41,091

 
54,289

 
 
13,106

 
15,411

 
28,517

Income tax expense (benefit)
507

 
4,803

 
5,310

 
 
39

 
30,085

 
30,124

EBITDA
$
82,842

 
$
98,936

 
$
181,778

 
 
$
16,317

 
$
143,019

 
$
159,336

   Non-cash stock compensation expense
1,516

 
1,501

 
3,017

 
 
1,697

 
435

 
2,132

   Loss (gain) on disposal of assets
(599
)
 
802

 
203

 
 
921

 
(174
)
 
747

   Unrealized loss on commodity derivatives
5,689

 
—

 
5,689

 
 
735

 
—

 
735

   Inventory fair value adjustment
(1,581
)
 
(186
)
 
(1,767
)
 
 
87,307

 
3,456

 
90,763

Adjusted EBITDA
$
87,867

 
$
101,053

 
$
188,920

 
 
$
106,977

 
$
146,736

 
$
253,713

Adjusted EBITDA attributable to noncontrolling interest
—

 
—

 
—

 
 
—

 
3,936

 
3,936

Adjusted EBITDA attributable to partners
$
87,867

 
$
101,053

 
$
188,920

 
 
$
106,977

 
$
142,800

 
$
249,777

Cash interest expense (3)
 
 
 
 
50,681

 
 
 
 
 
 
27,419

Income tax expense (benefit) (current)
 
 
 
 
(14,574
)
 
 
 
 
 
 
537

Maintenance capital expenditures
 
 
 
 
29,705

 
 
 
 
 
 
8,351

Preacquisition earnings
 
 
 
 
—

 
 
 
 
 
 
101,950

Distributable cash flow attributable to partners
 
 
 
 
$
123,108

 
 
 
 
 
 
$
111,520

Transaction-related expense
 
 
 
 
976

 
 
 
 
 
 
858

Distributable cash flow attributable to partners, as adjusted
 
 
 
 
$
124,084

 
 
 
 
 
 
$
112,378

________________________________
(3)
Reflects the Partnership’s cash interest less the cash interest paid on our VIE debt of $2.3 million during the three months ended September 30, 2015.

7

Capital Spending
SUN's gross capital expenditures for the third quarter were $110.6 million, which included $80.9 million for growth capital and $29.7 million for maintenance capital. Approximately $36.6 million of the growth capital spent was for the construction of new-to-industry sites, of which three were opened in the third quarter, with 21 currently under construction.
SUN expects capital spending for the full year 2016, excluding acquisitions, to be within the following ranges ($ in millions)
Growth
Maintenance
Low
High
Low
High
$360
$380
$100
$110
Growth capital spending includes the construction of at least 35 new-to-industry sites that SUN expects to complete in 2016.


8

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