Sunoco LP - FORM 10-Q - EX-99.1 - EXHIBIT 99.1 - November 8, 2018

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EX-32.2 - EXHIBIT 32.2 - Sunoco LPsun-09302018xexx322.htm
EX-32.1 - EXHIBIT 32.1 - Sunoco LPsun-09302018xexx321.htm
EX-31.2 - EXHIBIT 31.2 - Sunoco LPsun-09302018xexx312.htm
EX-31.1 - EXHIBIT 31.1 - Sunoco LPsun-09302018xexx311.htm
10-Q - 10-Q - Sunoco LPsun-09302018x10q.htm


Exhibit 99.1






ETC M-A Acquisition LLC
Financial Statements
As of September 30, 2018 and December 31, 2017
Three and Nine Months Ended September 30, 2018 and 2017






ETC M-A Acquisition LLC
Table of Contents

 
Page
Balance Sheets
1
Statements of Operations
2
Statement of Equity
3
Statements of Cash Flows
4
Notes to Financial Statements
5







ETC M-A Acquisition LLC
Balance Sheets
(Dollars in millions)
(unaudited)
 
September 30, 2018
 
December 31, 2017
ASSETS
 
 
 
Current Assets:
 
 
 
Advances to affiliated companies
$
78

 
$
52

Total current assets
78

 
52

 
 
 
 
Investment in unconsolidated affiliate
230

 
282

Total assets
$
308

 
$
334

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Accrued and other current liabilities
$
3

 
$
3

Total current liabilities
3

 
3

 
 
 
 
Commitments and contingencies
 
 
 
 
 

 
 
Equity:
 
 
 
Member’s equity
305

 
331

Total equity
305

 
331

Total liabilities and equity
$
308

 
$
334




The accompanying notes are an integral part of these financial statements.
1


ETC M-A Acquisition LLC
Statements of Operations
(Dollars in millions)
(unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Income (loss) from unconsolidated affiliate
$
12

 
$
11

 
$
(26
)
 
$
(18
)
Net income (loss)
$
12

 
$
11

 
$
(26
)
 
$
(18
)













The accompanying notes are an integral part of these financial statements.
2


ETC M-A Acquisition LLC
Statement of Equity
(Dollars in millions)
(unaudited)
 
Total
Balance, December 31, 2017
$
331

Net loss
(26
)
Balance, September 30, 2018
$
305



The accompanying notes are an integral part of these financial statements.
3


ETC M-A Acquisition LLC
Statements of Cash Flows
(Dollars in millions)
(unaudited)
 
Nine Months Ended September 30,
 
2018
 
2017
Cash flows from operating activities:
 
 
 
Net loss
$
(26
)
 
$
(18
)
Reconciliation of net loss to net cash provided by operating activities:
 
 
 
Loss from unconsolidated affiliate
26

 
18

Distributions from unconsolidated affiliate
26

 
26

Net cash provided by operating activities
26

 
26

Cash flows from financing activities:
 
 
 
Advances to Sunoco, Inc.
(26
)
 
(26
)
Net cash used in financing activities
(26
)
 
(26
)
Change in cash and cash equivalents
—

 
—

Cash and cash equivalents, beginning of period
—

 
—

Cash and cash equivalents, end of period
$
—

 
$
—



The accompanying notes are an integral part of these financial statements.
4



ETC M-A Acquisition LLC
Notes to Financial Statements
(unaudited)
1.
Operations and Organization:
ETC M-A Acquisition LLC, a Delaware limited liability company formed in August 2013, (the “Company”) is an indirect wholly-owned subsidiary of Energy Transfer Operating, L.P. (“ETP”). In October 2018, Energy Transfer Equity, L.P. (“ETE”) and ETP completed the previously announced merger of ETP with a wholly-owned subsidiary of ETE in a unit-for-unit exchange. Following the closing of the merger, ETE changed its name to “Energy Transfer LP” and its common units began trading on the New York Stock Exchange under the “ET” ticker symbol on Friday, October 19, 2018. In addition, ETP changed its name to “Energy Transfer Operating, L.P.” For purposes of maintaining clarity, the following references are used herein:
•
References herein to “ETP” refer to Energy Transfer Partners, L.P. prior to its name change and Energy Transfer Operating, L.P. following its name change;
•
References herein to “ETE” refer to Energy Transfer Equity, L.P. prior to its name change and Energy Transfer LP following its name change;
In connection with the transaction, immediately prior to closing, ETE contributed 2,263,158 Sunoco LP common units to ETP in exchange for 2,874,275 ETP common units, and contributed 100% of the limited liability company interests in Sunoco LP’s general partner, Sunoco GP LLC (“General Partner”), and all of its incentive distribution rights to ETP in exchange for 42,812,389 ETP common units. As a result, following the transaction, ETP directly owns Sunoco LP’s General Partner, all of its incentive distribution rights and approximately 34.5% of its common units, which constitutes a 28.8% limited partner interest in Sunoco LP.
2.
Summary of Significant Accounting Policies:
Basis of Presentation
The financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
For purposes of these financial statements, the aggregate total of 10,489,944 Sunoco LP common units are presented as the investment in unconsolidated affiliate held by the Company.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
Cash
The Company considers cash and cash equivalents to include liquid investments with original maturities of three months or less.
Investment in Unconsolidated Affiliate
The Company owns an interest in Sunoco LP, which is accounted for by the equity method, for which the Company exercises significant influence over, but does not control, the investee’s operating and financial policies.
Fair Value of Financial Instruments
The carrying amounts recorded for advances to affiliated companies and accrued and other current liabilities in the financial statements approximate fair value because of the short-term maturity of the instruments.

5


3. Investment in Unconsolidated Affiliate:
During the periods presented, the Company’s investment in unconsolidated affiliate reflected 10,489,944 Sunoco LP common units. The Company’s investment represented approximately 13% of the total outstanding Sunoco LP common units at September 30, 2018. The Company’s investment in Sunoco LP is accounted for in our financial statements using the equity method, because the Company is presumed to have significant influence over Sunoco LP due to the affiliate relationship resulting from both entities being under the common control of ETE.
4.
Commitments and Contingencies:
ETC M-A Acquisition LLC Guarantee of Sunoco LP Notes
On January 23, 2018, Sunoco LP redeemed its previously guaranteed senior notes and issued the following senior notes, for which the Company has guaranteed collection with respect to the payment of principal amounts:
•$1 billion of 4.875% senior notes due 2023;
•$800 million of 5.5% senior notes due 2026; and
•$400 million of 5.875% senior notes due 2028.
Under the guarantee of collection, the Company would have the obligation to pay the principal of each series of notes once all remedies, including in the context of bankruptcy proceedings, have first been fully exhausted against Sunoco LP with respect to such payment obligation, and holders of the notes are still owed amounts in respect of the principal of such notes. The Company will not otherwise be subject to the covenants of the indenture governing the notes.
In connection with the issuance of the Notes, Sunoco LP entered into a registration rights agreement with the initial purchasers pursuant to which it agreed to complete an offer to exchange the Notes for an issue of registered notes with terms substantively identical to each series of Notes and evidencing the same indebtedness as the Notes on or before January 23, 2019.


6

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