Energy Transfer Speeds Up Timeline for Dropdowns

DALLAS — Now that it's completed the dropdown of the Susser Holdings Corp. assets to Sunoco LP, Energy Transfer Partners LP (ETP) will dropdown its remaining Sunoco Inc. retail assets by the end of 2016, Chief Financial Officer Thomas Long announced during ETP's fiscal 2015 second-quarter earnings call Thursday.

The Sunoco Inc. assets include approximately 440 convenience stores primarily operating under the APlus brand name.

In the past, ETP has generally stated it would dropdown the Sunoco Inc. retail assets no later than mid-2017. But for the first time on Thursday, the company narrowed down the timeframe.

Once the Sunoco Inc. assets are shed, the master limited partnership will focus on its diversified portfolio of energy assets, including natural gas liquids storage and transportation assets.

Regarding the recently completed Susser dropdown, Long affirmed that the $1.94-billion price it received will help ETP in many ways. Under the transaction, ETP received nearly $1 billion in cash, which can be used to grow the business, he said.

“It will be accretive to us in 2015 and beyond,” said Long.


ETP’s most recent quarter ended June 30. Hence, its results reflect Susser Holdings’ Stripes locations, as well as Sunoco Inc. locations. These assets generated $140 million in adjusted EBITDA. 

Merchandise sales were definitely ETP’s greatest strength in Q2, tripling year over year to $559 million. Retail merchandise margin percentage also had a banner quarter, rising nearly 5 percentage points to 31.5 percent.

Same-store sales were also strong, rising 3 percent year over year at Stripes locations and more than 5 percent at all other retail locations.

Motor fuel margins were the only negative to be found in ETP’s retail division. Motor fuel gross profits dropped 7.5 cents year over year to 21 cents per gallon. However, total motor fuel sales rose to 639 million gallons.

Companywide, Dallas-based ETP achieved adjusted EBITDA of $1.49 billion for the 2015 second quarter, an increase of $95 million compared to the same quarter in 2014. Distributable cash flow attributable to partners of ETP was an adjusted $894 million, an increase of $149 million year over year.

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