(1)

Adjusted EBITDA and Distributable Cash Flow, as adjusted, 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, as adjusted, and a reconciliation to net income.

SUNOCO LP

CONSOLIDATED BALANCE SHEETS

(unaudited)

December 31, 2018

December 31, 2017

(in millions, except units)

Assets

Current assets:

Cash and cash equivalents

$

56

$

28

Accounts receivable, net

374

541

Receivables from affiliates

37

155

Inventories, net

374

426

Other current assets

64

81

Assets held for sale

—

3,313

Total current assets

905

4,544

Property and equipment, net

1,546

1,557

Other assets:

Goodwill

1,559

1,430

Intangible assets, net

708

768

Other noncurrent assets

161

45

Total assets

$

4,879

$

8,344

Liabilities and equity

Current liabilities:

Accounts payable

$

412

$

559

Accounts payable to affiliates

149

206

Accrued expenses and other current liabilities

299

368

Current maturities of long-term debt

5

6

Liabilities associated with assets held for sale

—

75

Total current liabilities

865

1,214

Revolving line of credit

700

765

Long-term debt, net

2,280

3,519

Advances from affiliates

24

85

Deferred tax liability

103

389

Other noncurrent liabilities

123

125

Total liabilities

4,095

6,097

Commitments and contingencies

Equity:

Limited partners:

Series A Preferred unitholders - affiliated (no units issued and outstanding as of December 31, 2018 and 12,000,000 units issued and outstanding as of December 31, 2017)

—

300

Common unitholders (82,665,057 units issued and outstanding as of December 31, 2018 and 99,667,999 units issued and outstanding as of December 31, 2017)

784

1,947

Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of December 31, 2018 and December 31, 2017)

—

—

Total equity

784

2,247

Total liabilities and equity

$

4,879

$

8,344

SUNOCO LP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(unaudited)

Three Months EndedDecember 31,

Year Ended December 31,

2018

2017

2018

2017

(dollars in millions, except unit and per unit amounts)

Revenues:

Motor fuel sales

$

3,784

$

2,758

$

16,504

$

10,910

Rental income

39

22

130

89

Other

54

179

360

724

Total revenues

3,877

2,959

16,994

11,723

Cost of sales and operating expenses:

Cost of sales

3,694

2,682

15,872

10,615

General and administrative

38

42

141

140

Other operating

93

94

363

375

Rent

18

19

72

81

Loss on disposal of assets and impairment charges

22

12

19

114

Depreciation, amortization and accretion

50

45

182

169

Total cost of sales and operating expenses

3,915

2,894

16,649

11,494

Operating income (loss)

(38)

65

345

229

Interest expense, net

39

46

144

209

Loss on extinguishment of debt and other

—

—

109

—

Income (loss) from continuing operations before income taxes

(77)

19

92

20

Income tax expense (benefit)

(5)

(202)

34

(306)

Income (loss) from continuing operations

(72)

221

58

326

Income (loss) from discontinued operations, net of income taxes

—

11

(265)

(177)

Net income (loss) and comprehensive income (loss)

$

(72)

$

232

$

(207)

$

149

Net income (loss) per common unit - basic:

Continuing operations

$

(1.11)

$

1.91

$

(0.25)

$

2.13

Discontinued operations

—

0.11

(3.14)

(1.78)

Net income (loss)

$

(1.11)

$

2.02

$

(3.39)

$

0.35

Net income (loss) per common unit - diluted:

Continuing operations

$

(1.11)

$

1.90

$

(0.25)

$

2.12

Discontinued operations

—

0.11

(3.14)

(1.78)

Net income (loss)

$

(1.11)

$

2.01

$

(3.39)

$

0.34

Weighted average limited partner units outstanding:

Common units - basic

82,543,312

99,522,581

84,299,893

99,270,120

Common units - diluted

83,226,399

100,177,114

84,820,570

99,728,354

Cash distribution per unit

$

0.8255

$

0.8255

$

3.30

$

3.30

Year Ended December 31,

2018

2017

Fuel DistributionandMarketing

Total

FuelDistributionandMarketing

All Other

Total

(dollars and gallons in millions, except gross profit per gallon)

Revenues:

Motor fuel sales

$

15,466

$

1,038

$

16,504

$

9,333

$

1,577

$

10,910

Rental income

118

12

130

77

12

89

Other

48

312

360

50

674

724

Total revenues

$

15,632

$

1,362

$

16,994

$

9,460

$

2,263

$

11,723

Gross profit (1):

Motor fuel

$

673

$

123

$

796

$

535

$

157

$

692

Rental

118

12

130

77

12

89

Other

40

156

196

39

288

327

Total gross profit

$

831

$

291

$

1,122

$

651

$

457

$

1,108

Income (loss) from continuing operations

80

(22)

58

167

159

326

Loss from discontinued operations, net of taxes

—

(265)

(265)

—

(177)

(177)

Net income (loss) and comprehensive income (loss)

$

80

$

(287)

$

(207)

$

167

$

(18)

$

149

Adjusted EBITDA (2)

$

554

$

84

$

638

$

346

$

386

$

732

Distributable Cash Flow, as adjusted (2)

$

455

$

473

Operating Data:

Total motor fuel gallons sold (3)

7,859

7,947

Motor fuel gross profit cents per gallon (3) (4)

11.4

¢

15.2

¢

Year Ended December 31,

2018

2017

Change

(in millions)

Segment Adjusted EBITDA

Fuel distribution and marketing

$

554

$

346

$

208

All other

84

386

(302)

Total

638

732

(94)

Depreciation, amortization and accretion (3)

(182)

(203)

21

Interest expense, net (3)

(146)

(245)

99

Non-cash compensation expense (3)

(12)

(24)

12

Loss on disposal of assets and impairment charges (3)

(80)

(400)

320

Loss on extinguishment of debt and other (3)

(129)

—

(129)

Unrealized gain (loss) on commodity derivatives (3)

(6)

3

(9)

Inventory adjustments (3)

(84)

28

(112)

Other non-cash adjustments

(14)

—

(14)

Income (loss) before income tax (expense) benefit (3)

(15)

(109)

94

Income tax (expense) benefit (3)

(192)

258

(450)

Net income (loss) and comprehensive income (loss)

$

(207)

$

149

$

(356)

Adjusted EBITDA

$

638

$

732

$

(94)

Cash interest expense (3)

142

231

(89)

Current income tax expense (3)

489

4

485

Transaction-related income taxes (5)

(470)

—

(470)

Maintenance capital expenditures (3)

31

48

(17)

Distributable Cash Flow

446

449

(3)

Transaction-related expenses (3)

11

47

(36)

Series A Preferred distribution

(2)

(23)

21

Distributable Cash Flow, as adjusted

$

455

$

473

$

(18)

Three Months Ended December 31,

2018

2017

Fuel DistributionandMarketing

All Other

Total

FuelDistributionand Marketing

All Other

Total

(dollars and gallons in millions, except gross profit per gallon)

Revenues:

Motor fuel sales

$

3,606

$

178

$

3,784

$

2,344

$

414

$

2,758

Rental income

36

3

39

19

3

22

Other

7

47

54

12

167

179

Total revenues

$

3,649

$

228

$

3,877

$

2,375

$

584

$

2,959

Gross profit (1):

Motor fuel

$

86

$

31

$

117

$

151

$

25

$

176

Rental

36

3

39

19

3

22

Other

5

22

27

10

69

79

Total gross profit

$

127

$

56

$

183

$

180

$

97

$

277

Income (loss) from continuing operations

(52)

(20)

(72)

47

174

221

Income from discontinued operations, net of taxes

—

—

—

—

11

11

Net income (loss) and comprehensive income (loss)

$

(52)

$

(20)

$

(72)

$

47

$

185

$

232

Adjusted EBITDA (2)

$

159

$

21

$

180

$

90

$

68

$

158

Distributable Cash Flow, as adjusted (2)

$

114

$

106

Operating Data:

Total motor fuel gallons sold (3)

2,021

1,972

Motor fuel gross profit cents per gallon (3) (4)

12.4

¢

15.3

¢

Three Months EndedDecember 31,

2018

2017

Change

(in millions)

Segment Adjusted EBITDA

Fuel distribution and marketing

$

159

$

90

$

69

All other

21

68

(47)

Total

180

158

22

Depreciation, amortization and accretion (3)

(50)

(48)

(2)

Interest expense, net (3)

(39)

(61)

22

Non-cash compensation expense (3)

(2)

(6)

4

Loss on disposal of assets and impairment charges (3)

(22)

(33)

11

Unrealized loss on commodity derivatives (3)

(5)

(2)

(3)

Inventory adjustments (3)

(135)

20

(155)

Other non-cash adjustments

(4)

—

(4)

Income (loss) before income tax (expense) benefit (3)

(77)

28

(105)

Income tax (expense) benefit (3)

5

204

(199)

Net income (loss) and comprehensive income (loss)

$

(72)

$

232

$

(304)

Adjusted EBITDA

$

180

$

158

$

22

Cash interest expense (3)

39

59

(20)

Current income tax expense (3)

11

(3)

14

Maintenance capital expenditures (3)

15

13

2

Distributable Cash Flow

115

89

26

Transaction-related expenses (3)

(1)

25

(26)

Series A Preferred distribution

—

(8)

8

Distributable Cash Flow, as adjusted

$

114

$

106

$

8

_______________________________

(1) Excludes depreciation, amortization and accretion.

(2) Adjusted EBITDA is defined as earnings before net interest expense, income taxes, depreciation, amortization and accretion expense, allocated non-cash compensation expense, unrealized gains and losses on commodity derivatives and inventory adjustments, and certain other operating expenses reflected in net income that we do not believe are indicative of ongoing core operations, such as gain or loss on disposal of assets and non-cash impairment charges. We define Distributable Cash Flow, as adjusted, as Adjusted EBITDA less cash interest expense, including the accrual of interest expense related to our long-term debt which is paid on a semi-annual basis, Series A Preferred distribution, current income tax expense, maintenance capital expenditures and other non-cash adjustments.

We believe Adjusted EBITDA and Distributable Cash Flow, as adjusted, 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;

• our management uses them for internal planning purposes, including aspects of our consolidated operating budget, and capital expenditures; and

• Distributable Cash Flow, as adjusted, 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.

Adjusted EBITDA and Distributable Cash Flow, as adjusted, 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. Adjusted EBITDA and Distributable Cash Flow, as adjusted, have limitations as analytical tools, and one should not consider them 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 Adjusted EBITDA does not reflect cash requirements for such replacements; and

• as not all companies use identical calculations, our presentation of Adjusted EBITDA and Distributable Cash Flow, as adjusted, may not be comparable to similarly titled measures of other companies.

(3) Includes amounts from discontinued operations.

(4) Includes other non-cash adjustments and excludes the impact of inventory adjustments consistent with the definition of Adjusted EBITDA.

(5) Transaction-related income taxes primarily related to the 7-Eleven Transaction.