Sunoco LP - FORM 10-Q - EX-99.1 - EXHIBIT 99.1 - May 11, 2020

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EX-32.2 - EXHIBIT 32.2 - Sunoco LPsun-03312020xexx322.htm
EX-32.1 - EXHIBIT 32.1 - Sunoco LPsun-03312020xexx321.htm
EX-31.2 - EXHIBIT 31.2 - Sunoco LPsun-03312020xexx312.htm
EX-31.1 - EXHIBIT 31.1 - Sunoco LPsun-03312020xexx311.htm
10-Q - 10-Q - Sunoco LPsun-03312020x10q.htm


Exhibit 99.1






ETC M-A Acquisition LLC
Financial Statements
As of March 31, 2020 and December 31, 2019
Three Months Ended March 31, 2020 and 2019






ETC M-A Acquisition LLC
Table of Contents

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







ETC M-A Acquisition LLC
Balance Sheets
(Dollars in millions)
(unaudited)
 
March 31, 2020
 
December 31, 2019
ASSETS
 
 
 
Current assets:
 
 
 
Advances to affiliated companies
$
183

 
$
161

Total current assets
183

 
161

 
 
 
 
Investment in unconsolidated affiliate
382

 
450

Total assets
$
565

 
$
611

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

 
$
3

Total current liabilities
3

 
3

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity:
 
 
 
Member’s equity
562

 
608

Total equity
562

 
608

Total liabilities and equity
$
565

 
$
611




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 March 31,
 
2020
 
2019
Income (loss) from unconsolidated affiliate
$
(46
)
 
$
11

Net income (loss)
$
(46
)
 
$
11














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


ETC M-A Acquisition LLC
Statements of Equity
(Dollars in millions)
(unaudited)
 
 
Total
Balance, December 31, 2019
 
$
608

Net loss
 
(46
)
Balance, March 31, 2020
 
$
562

 
 
 
Balance, December 31, 2018
 
$
294

Net income
 
11

Contribution from ETO
 
255

Balance, March 31, 2019
 
$
560



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)
 
Three Months Ended March 31,
 
2020
 
2019
Cash flows from operating activities:
 
 
 
Net income (loss)
$
(46
)
 
$
11

Reconciliation of net income to net cash provided by operating activities:
 
 
 
(Income) loss from unconsolidated affiliate
46

 
(11
)
Distributions from unconsolidated affiliate
22

 
8

Net cash provided by operating activities
22

 
8

Cash flows from financing activities:
 
 
 
Advances to affiliated company
(22
)
 
(8
)
Net cash used in financing activities
(22
)
 
(8
)
Change in cash and cash equivalents
—

 
—

Cash and cash equivalents, beginning of period
—

 
—

Cash and cash equivalents, end of period
$
—

 
$
—


 
Three Months Ended March 31,
 
2020
 
2019
Supplemental disclosure of non-cash financing and investing activities:
 
 
 
Contribution of Sunoco LP common units from ETO
$
—

 
$
255



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. (“ETO”).
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 26,200,809 Sunoco LP common units are presented as the investment in unconsolidated affiliate held by the Company as of March 31, 2020.
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 due to the affiliate relationship resulting from both entities being under the common control of ETO. 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.
3. Investment in Unconsolidated Affiliate:
On March 31, 2019, ETO contributed 15,710,865 Sunoco LP common units to the Company.
As of March 31, 2020 and December 31, 2019, the Company’s investment in unconsolidated affiliate consisted of 26,200,809 Sunoco LP common units. The Company's investment represented approximately 32% of the total outstanding Sunoco LP common units at March 31, 2020 and December 31, 2019.
4.
Commitments and Contingencies:
ETC M-A Acquisition LLC Guarantee of Sunoco LP Notes
In connection with previous transactions, the Company has guaranteed collection with respect to the payment of principal amounts of the following senior notes issued by Sunoco LP:
•$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.

5


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.
5.    Subsequent Events:
Effective May 1, 2020, the Company contributed all of its 26,200,809 Sunoco LP common units to ETO, and the Company assigned to ETO the guarantees of Sunoco LP’s $1 billion principal amount of 4.875% senior notes due 2023, $800 million principal amount of 5.5% senior notes due 2026 and $400 million principal amount of 5.875% senior notes due 2028. Effective May 4, 2020, the Company was merged into a subsidiary of ETO.




6

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