SUN - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to Sunoco’s First Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to host Scott Grischow.

Scott Grischow

you. Thank

statements filings our to regarding objectives, have materially today's that in cover. contain statements. begin the few call may the cause remarks, actual management's forward-looking items strategies, to differ on usual targets, A These include prepared comments we and a I the costs, They fully capital of expenditures. with will beliefs, Before expectations based could the assumptions are reminder, subject uncertainties to company's that described company's as the more are the plans, anticipated risks SEC. and that results

a today's EBITDA of Please measure. discuss that and that also certain liabilities each Please operating Sunoco we flow note of adjusted operations LP discontinued our cash and for are including operations. adjusted. retail as assets measures, quarter's part reconciliation During distributable the this call of into refer results, financial non-GAAP moved will the has to financial release divestitures news

on be call As this operations May so time reminder may on such reported of the results view the that any information as the longer Also time-sensitive today's call otherwise company's XXXX, noted. unless no today based only a accurate to continuing speaks at XX, on are of information presented replay.

on call. today’s our Certain on slides website. quarter's You'll earnings presentation an to presentation be release. the referenced this information replay in posted in find investor This morning updated we will that

team. members On are Officer; management Miller, Chief Chief Financial and Commercial the Fails, President the Kim, Tom of call Officer; me Executive and with this morning other Chief LP's Joe Karl Sunoco Officer

the I completed minutes a transformative recap I activities, the quarter. turn to Tom, in would to like take the few Before over call the partnership first to

of in billion was reflected closed quarter lowered of also unsecured basis X-Eleven the results by discontinued issued $X.X constructive we refinancing XX, are our $X.X day, these assets in cost weighted sites our to XX the activity gross retail rate debt sale days and same locations of completed the to first of very the senior billion. retail we new total points. proceeds for The approximately This operating in as the XXX January approximately of a operations. of average The majority on notes. First environment

the While to repurchase from million in $XXX the by four billion of restructure also included million average our $XXX extending preferred and debt, approximately divestiture units We approximately of maturity refinancing the sheet, years. of balance the of retail and profile of repurchase our used asset units. the proceeds repayment which $X secured common

the Next, following our business we also completed transformation. activities related to

retain retail our First, we that the were commission converted XX to of required we agent to channels. by outlets our fuel FTC

we sites converted XX by the by retail agent Next, also in middle channel the acquired early commission fuel were FTC. from as X-Eleven April, the April. These required outlets of to

As the a we fuel it channel, stream about income allows had from said receiving rental us material stable also as in the this retain income, while agents. past, we distribution are to excited

the fuel conversion commission completed Finally located on of West channel. April to Texas our agent we in XXX the Xst, outlets

in full XXX the upside the to of In the to participate allows also sites West Basin conversion in of addition future. just Permian benefits channel the us in to this the mentioned, and agents locations commission to these the I maintain sell package Texas optionality

second among retail sites sites in of remaining as footprint quarter, of XX the the and With conversions these now the Hawaii. New XX Jersey turnpike consisted of beginning complete, our

the between agreement the XX the the to fuel and year technically the in Turning until X-Eleven Xst, end to while supply of our transactions take-or-pay agreement, April start fuel not timeframe we first did did X-Eleven of deliver close quarter. the

for first up Xst. on began growth volumes the April guaranteed the step Additionally,

fuel the run XXX million rate quarterly XXXX of each of each remaining under approximately XXX growth agreement million annual with supply growth XXXX and gallons gallons a we So, April in will gallons. full April components starting and XXXX. QX phase of in expect The million contribution XXXX in XXX

want In in state quarters. fourth third quarter total tax of is update and approximately first throughout and impact impact business the $XXX each early on to We and three transformation tax one approximately additional payment premier made will and and logistics to million our in an transaction. provide wholesale I second late the X-Eleven federal now believe totaling $XXX field the payment million. one April each anticipate the tax Next, with the XXXX, in summary We payments our be payments distribution of occurring complete.

the which successfully With allow also over the outlined. within targets, to also operate leveraging will Tom. We growth restructured that, on while strategy delivering turn previously will call our us I sheet, we to our cover balance

Thomas Miller

Thanks, and everyone. Scott, good morning

financial the Scott far Before what major to two reemphasize said our I I cover want the year. accomplishments, so results for quarter, of this regarding

traditional more a volatile company to take-or-pay a to operated year margin retail margins transformed fixed XX contracts. partnership converting the MLP, First,

classified X.Xx Second, positions our Similar with we leverage and sold X.Xx. balance last assets, results quarter, to the we discontinued coverage believe and ratio fixed target at X.XXx the the recapitalization to operating least liabilities to of maintain sites distribution as associated the sheet, retail us ratio ops. are of

are Texas assets locations in continuing including the Our operations. retained included West

a results manner our it complexity, adds points. term highlights of this in couple Although, near splitting

impaired by retail were First, non-recurring discontinued transactions our expenses. operations

Second, our are are continuing in our and operations expectations. line performing with well

the the quarter attributable million of extinguishing sheet. with and million results. $X net was the combination $XXX Now recorded million our the $XX balance expense, securities ago. adjusted balance related million compared EBITDA million gain restructured includes income a down the partnership improved in coverage restructuring The The on to materially. preferred sale first sheet, a to loss million year have to $XXX loss $XXX gain largely and turning to and Total the ratios X-Eleven to loss tax debt leverage $XXX

expense $X capital. maintenance increase million million, compared lower benefited to distributable year adjusted an cash flow lower of was as a We've ago. Specifically, cash and interest $XX from

coverage $X.XXXX the distribution, was quarter in and DCF same Two quarter. we trailing as a Xx last XX unit the basis. on month per X.Xx first declared weeks ago, Our an

the Our quarter target letters X.Xx million the had the outstanding defined leverage at the would under credit, billion sales leverage down had middle facility. credit When asset million end no year agreement from borrowings credit totaling was consider and tax $XXX $X.X as end. of $X our be range. in X.Xx We liability, the of you by

XXst weighted believe our for point the looking $XXX for $X roughly Our consolidated Slide have expense agents West than retail amount March was been highlights appropriate X converting results results, operations. for includes these operations starting of XXX would the debt is Texas million. We EBITDA This of continuing go-forward rather cost basis. X.X%. After performance average at sites. our removing divested million non-recurring commission with adjusted locations associated at

year, anticipate Now, gallons. trend and the looking at operational volume higher X.XX was Total throughout We that by in performance. will trends. business our billion fuel wholesale growth driven volume seasonality typical

the Over XX% the Slide time. past volumes. margin first years, field our X, over fuel quarter annual contributed shows of few

and previously first the growth be part consistent number the Growth of we people the driven capital growth in contracts For In of $X quarter, to the with X-Eleven first the the to gallon. we commission $X.XXX year is invested by maintenance more $X.XXX million contract sign. this $XX agents. and per of sites by reflect sale fuel We will million of higher discussed. three the Sunoco XXX average move capital consisting in large expenditures, The we $XX and quarter, margin the margin margins capital. capital sign, adjusting contracts was million of calculate capital.

year. We capital to expect $XX million the our growth total for roughly

side, the safe expect on and without to we of said, assets. prudent around million. and we $XX maintenance efficiency capital our be to management focus of compromising have annual On maintenance That total the spend continued our the

X, a number slide you Finally, December. parameters discussed of guidance that last highlights we with

complete, commission we of in transaction rates $XXX other With of annual The achieving operating expense and approximately third closed G&A of anticipate approximately run the $XXX the million the rent million. starting million, and our approximately these expense X-Eleven amounts conversion $XX quarter. expenses agent

from worth sites quarter also guidance of the non-recurring the West we will West million, have continuing Other expense with year higher $XX although rate. up Texas first It's $X to higher the was move million run our was second $XXmillion. quarter, During noting, Texas from expense G&A million, the implies this ago. agent. expense than $XX expense Operating commission a operations drove sites expect the the associated totaled cost. operating Rent

in over to these All turn new a the are strategic for line Joe? closing for update Joe of thoughts. business. call rate and annual will run I the the with now projected

Joe Kim

Good morning.

executed on divestments, a Last during busy, had the first plan. As a year and highly underlying of the but Tom outlined with quarter, our quarter, noise the first we even stated, plan re-sell is strong. business effective we this we

we complete transaction. the X-Eleven First,

commission Second, Texas sites we agent to converted West or the model.

a We million balance our have we pursue the Sunoco highlights Plus to and that small This The Three customers. April, This sheet bolt-on LP a an provide commercial a as the its type we we is efficient in Xx into fragmented and business. add one. fixed wholesale acquisition Superior and attractive In serves in continue deals. multiple gallon finally, cash marketplace. blueprint finally a example terminals And additional one acquisition. and organization. opportunities the post-synergy transformed now fee-based we Xx grow. place flow, between materially on for Third, a acquisition to closed foundation cost accretive to year synergies with include XXX of G&A to in ability year material

opportunities robust targets. have to financial only attractive most opportunities, exceed developed pipeline that pursue be deliberate a the meet or M&A We our we’ll of potential

future, prepared to premier on the Operator business Sunoco continue income. and in ability that In over company. take-or-pay As XX stated I estate consider what and to we to our we remain LP supply the by confident we to our concludes grow remarks. deliver underlying transformed be contract fuel our logistics have financial months, look independent real I our goals. towards just solid anchored

the may open You for questions. line

Operator

first question Our from your comes JPMorgan. Instructions] Andrew the with proceed Burd line question. [Operator from Please of

Andrew Burd

for much congratulations quarter. the and done so in getting first you thank Hi,

on for the thanks Plus acquisition. So, multiple the Superior

multiple, embedded like synergies of that you think approximate are on related what that that? As supply within the versus synergies of and and the mention kind about breakdown G&A costs you things overhead can fuel side are

Karl Fails

the The as as cost morning goods Karl. the is main said of commercial well Andy, relates of on bolt-on sold most these to as you we two good category, get this Yeah, G&A. synergies

reasonable XXX% be about of on of this half the we with half that. and look half I synergy the in we that way acquisition think ones that the of year and/or consistent two we’ll to most by is can it at is that one and get about year think usually acquisition a at

Andrew Burd

Or is one Great, year funding acquisition. and about permanent the or in thanks. on cash just that Does a profile? hand? for announced that And accretion talk equity of when on revolver XX/XX that contemplate the as funding kind it putting you

Thomas Miller

good Miller, And Tom should XX/XX credit think funding all to Andy, The target still with within so then stay this on of it range, year. cost – out we facility. I the morning. financing no the will plans Yes, funded the initially have equity issuing be it leverage will that right evaluation. by I point it's be of of initial now

Andrew Burd

spend Great. you those buy X-Eleven? did And just then required from to you're sites housekeeping questions, XX that much capital how on

Thomas Miller

Andy, $XX million. price was that purchase

Andrew Burd

Great. of trends volume the And then wholesale pie? X-Eleven outside the are how of piece

Karl Fails

a Andy. on think wholesale I couple volumes, Yeah, of thoughts

yearly first seasonality, our remarks, annual first is usually think Tom in quarter, know You his prepared XX% mentioned normal volumes. about in quarter I have of you

a geography, our up winter comfortable we're In we the over as that some had In to QX addition ramping gallon contributed billion the up of quarter, see mark and look much loss. some whole, expected our volumes at, our with we in you volume storms as ramping year. late $X the business as for

Andrew Burd

I on question to the that there release will look presentation the final profile? next the you expectation your Or like of results, reflect, new changed financial business will release? press guess, And Great. this any quarter’s quarter's the is presentation better press

Scott Grischow

likely wholesale our breakdowns doesn't make the moving this assets. of is certainly Scott. the retail of forward segments and Andy, given retail sense divestiture Yeah,

to change a reporting So, moving there forward. will be format the likely

Andrew Burd

Thanks hear. taking to questions. Good for the

Operator

of Our next Theresa from Chen Barclays. from the with question line question. proceed your comes Please

Theresa Chen

color your I light around Any wanted guidance. quarter to this the maintenance ask that? relatives CapEx about very to maintenance

Thomas Miller

Theresa, is I’ll It with that. its agree light, Tom.

see XX. The up first expect ramp be to quarter would light. tends towards to We it

But we As to that is high we continue XX of below is at look number. and believe that. we’ve best our for will XX to range said, the ways the now end be right still

Theresa Chen

how ramps we’re and that Okay. affects you And maintenance the weather of the to up. have I’m to volumes looking any to rest aberrations year, impact not do assuming coverage How catch, more going overall?

Thomas Miller

believe still X.X As think added know with achievable in you the we year. we that get with and this is our gallons we margins stick

Joe Kim

is Hey, Joe. Theresa, this

color to forward whenever we going knew add guess, me the the light. our on from was business a a going quarter I look Let capital, little maintenance that. first to we be at that basis,

business, So, put quarter. as on being contemplated. our X.X and light in our was we we we that on having Whenever as our far provided first we anticipated projected maintenance that this light capital presentation, confidence as

we are So all pro-rated XX in but this million, first it’s does guidance. XX that factored the light quarter, gave million, have not a in seasonality, million, it we whenever XX was some

everybody Again, there's side, needs On really a volume probably ramp I think talking aware into other of. that the did to seasonality it good four things the of that about I and up. Karl, job be think the plays

added that’s it And volume million that function growth adding grow, and grow growth in during new seeing top on X-Eleven. other, of is there from the the we’ve and that. April budget then going seasonally have volume. signed and also added we're quarter, a added XX $XX fact in we to bring in beginning We’ve Superior mentioned our our acquisition base already on Tom capital have We of sites we that's grow to which we May. - a customers and have to organic you second And really of us, seen the the we've it have the

gallon, going provided ramp on principle activities the up So, we billion it to see the are member. and this that we’d that to whenever other contribute volumes found that had was we X

Theresa Chen

the Got so give XX% average quarters? you on seasonality it. other in terms And of that for quarter. first the the breakdown, Can for average us

Joe Kim

for looking years. for the three quarter average of have we last is out back We first – the rest XX% for there, don't is what the have but exactly the what the to quarter

Theresa Chen

looks can think the And you and can currently for quickly industry? Okay. the acquisition that us how indication any you give you pipeline, roll-up of how that

Joe Kim

have Sure. my a robust in that pipeline have kind accident I of post we mentioned so we prepared remarks retail. and

So, can out put that we together there. our structured and team really go so expensive an business,

a just other that to out auction people of dealings that might be looking said there. of Plus all we’re done think isn't to think acquisition, acquisition. that, prudent, the at open this, but say, this we with acquisitions. The We sure when and Superior is year multi-year things a I that say it comes disciplined for to it. acquisitions do I targets And think incredibly to we're the to these this we be runway and financial deliberate, of going of small remarks can opportunities compared meets ample, let’s can to out make bolt-on that we're outlined this or be going going we that I in there. multiple the each isn’t The for a one-on-one type are fragmented couple industry's that one kind is it type like that be key

this but our we're multi-year So, this every and be very time same to make about financial to at meets the that runway deliberate think optimistic it multiple year, very we is feel criterias. again, and we sure going

Theresa Chen

Got it. back about aberrations. give EBITDA a And impact one comments was or on, Karl’s to lastly, Can DCF? that, the to going weather number time you

Karl Fails

billion around it. to in X this with don't that going confidence ramp precise up on to at our we’ve that the we we're at plus. get all what different the year I Theresa, contributed factors Yeah, gallons stick I’d terms and of be that looking in guess, for said

Theresa Chen

you. Thank

Operator

of next question. line Please with from proceed Patrick comes from Baird. Our your Wang question W. the Robert

Patrick Wang

how fuel stay My the rent in question implications prices. guys. the about first movement prices recent your we think guidance? low, is to If mainly margin good Hey long-term should around morning

Karl Fails

Yeah.

comments think is I’ll I a couple make, this Karl.

over First, if we’ve the quarters, investor a rate XX at margins including our really X, on quarter you first slide deck, look on last cast our run basis.

quarters. rent through prices at look you have quarters, there been each varying those If of those

look vary $X.XX You and rent between at QX $X.XX. prices

that a there's to things contribute of that. So, lot

and we whatever on that you really enough we’ve they’re that QX That prices going factored margins. margin guidance fit is prices our robust within on rent given think our supports to portfolio thesis wholesale into the I we're rent have, margins. refinings

Patrick Wang

moving expect Okay. quarter. during you trends do activity hit to can there to West bottlenecks any ramp. saw you Got or it. discuss the Have Thanks. to And getting if supplies experienced any fuel Texas, you region then demand you continues to in that

Joe Kim

Hey, Pat, it’s Joe.

kind On basis, Texas, As out the XXX on the the market fuel you over far on if merchandise as West there. has it We a jewel same-store for far robust X.X%. up up it's a crown first as same-store bases very X%, so as been on saw the back about performance. gallon quarter sales sites, we’re look

As think definitely from there, bottleneck we out there. like to have, there out I far there's feel the out get so as still various bottlenecks much margins out come will that is product people out how there might sources. different But figure there, activity we enough

Patrick Wang

picture, synergies out to that which Okay. transfers timeframe? commercial in from pipeline bigger West then new do diesel expect energy you fuel XXXX get Texas, should be And proposed to

Joe Kim

Yeah, whatever that's presents a a itself. Sunoco great this we avenues be project from how still part could and and think we're that seeing potential of either evaluating

Patrick Wang

All much. right. very Thank you

Joe Kim

Thanks, Pat.

Operator

with line Raymond next from James. proceed of Ben question from comes Please your Our Brownlow the questions.

Ben Brownlow

to Thanks two morning. for quick good taking Hi, question, my questions. stick I'll

XXX to commission reduction is kind million initiatives? the pro versus of pure much just internal quarter How that annualized forma that of model for on and of first million How Just the in on quarter. the you OpEx other much and third getting had from OpEx to of the guidance XX XXX timeframe reduction that expense kind the the rate. run million that that

Joe Kim

will of costs question, little of clearly you rate cost think have to Texas Ben, bit in a the operations the that of clean up exclude if we're that in we're within that I that you on good run all morning. the focused second close But on quarter. That's the saying West XXX. terms we’re be know I'm good target

Ben Brownlow

clear, just so bulk be Okay, of model? to the that commission just to moving the is

Joe Kim

of moved had the for do all and had accounting most our we we to Yes, out. it accounts

Ben Brownlow

great. more qualitative kind Okay, just just question. one And then of a

kind quarter? You touched characterization just you kind But of of in fuel could pardon backdrop fuel the a the gives margin. in on margin rents of

Karl Fails

Sure, the for think so you up QX, $X.XX the face margin seasonal RBOB quarter. price headwind, we moved typical about during

a a that’s on business our $X.XXX. recast we at in typically still in margin headwind, but So, came basis,

think environment we that you of the the have portion then and and of we that So, take-or-pay mentioned mentioned, competitors exposure earlier, our strong do some the we is exists growth you general I Permian. margin a large have to other income. think in Sunoco about positioned as maybe rental mitigating how maybe X-Eleven don't. have the mean I Joe factors Joe

all high showed those that So, of the I we that of even the think end our solidly came headwinds some factors quarter on guidance. with in

Joe Kim

me look operated add Let down kind of to two company broke at kind you other pieces. operated one business it – our thing, if company and former of

first XX the down. margins think quarter X-Eleven, sites for this days it, that if last days year were you the the we the definitely look have that at we showed I operated still XX that year versus

key saw very for this. want up West XX in region. all very, robust and – to impact West we and of As in the outlier the crude the of reasons We this strategic why that you that you Texas saw remained believe had. was we we presentation for Texas why was is fuel that put if saw the one that spike in though a January conversely you days look the company can very, really keep was if in margins impact We’ve down, few but was $X.XXX averaged $X.XX. margins you see operated you updated, we out our back at which $X.XXX commission we consistent, above look years. agent at year last and very model, went recasted even that our that always this every that

transformed, we reinforce the the we’ve company we at that I'm out the saw So, take headwinds that is to lot ops, way point you know of a the that that volatility. trying

Ben Brownlow

the you all Thank Great. color. for

Joe Kim

you. Thank

Operator

of with the from your Wells Our question. line from Please proceed next comes Fargo Lui Sharon question Securities.

Sharon Lui

Hi, good morning.

housekeeping Just a questions. couple of

in is the converting in additional first the to The exiting costs retail the additional just quarters? quarter? terms second clean expenses Or the just and pay second should tied or any quarter business site West be of Texas

Thomas Miller

Sharon, quarter, Tom. as good – estimate, have bit a least this little it we cost more. don't is five this very looked expect and we do I No, at at really probably a

factors the going Some just operations. into gets moving of We're into same rolled the it for agent into continuing it model. commission expecting accounts the

Sharon Lui

tax I funded through that just And guess of during balance the is Okay. the year in going the of then payments the to terms be revolver?

Thomas Miller

this that's all pay plan, Yes, been the down. is to along

bonds leave capital And billion right than drawn structure, this us So, $X.X we billion facility. X.X was less in felt when have. amount the credit the on we did the the will third to then

Sharon Lui

past And guess I thoughts extending maturity of the any of revolver Okay. next year? terms in the

Thomas Miller

thoughts it. the just which right Not go current, about in won't it We're with happens let moving away. that fall. forward We

Sharon Lui

capacity? Okay. terms the And thinking revolver same the of keeping size you’re size the about, in

Thomas Miller

Yes.

Sharon Lui

Thank Great. Okay. you.

Operator

Instructions] from comes Sighinolfi Please with next of [Operator line from your Our proceed Chris the question. Jefferies. question

Chris Sighinolfi

guys. taking my good Hi, Thanks morning for question.

want remarks, it just to offered something end just understanding I Scott, had prepared sure at the I'm make of clarify to correctly. the First,

understand on Aprils up initial in three April first under X.X Xst the each Did supply and billion the a commenced volume agreement next that I agreement? So, with X-Eleven. four was formally sort a But similar of gallon will delivered Aprils? that of step or the some year, it quarter,

Thomas Miller

volume correction, right initial one on just started the Xst is billion. April X Yes, that around

then gallons up So, and XXX referenced. million steps that Scott, on referenced Scott schedule the it approximately a quarter

Chris Sighinolfi

in color the how XQ referenced. on whatever the XQ. see step from going in to a wholesale to interpretation that, an up just Are much of one XQ we'll is with agreement, give delivered get amount to us trying the the regard Okay, first at to able formal of, if I guess, delivered in XQ look I’m were was in in volumes – we terms you to quarter. any Maybe and Scott that place

Joe Kim

we’ve period, talked think was Hey, stop commenced Xst take-or-pay Chris, all the so the like April it. quarter on a about first I

you at far about first the the As you about I to the quarter, seasonality. for kind as I should you of business think volume our context if if gave to ultra up But what in think that business, precise, want the ultra starting pretty that step be that I that a précised is. get you I We the just that we gone look think it, up think if in to point. it, the ramps want haven't of think overall XX% use would probably XX% seasonality solid

Chris Sighinolfi

Okay. of the it let's X-Eleven in see contact And is the every seasonality of amount the take-or-pay? that be that or is ratable, rest does that i.e. Joe quarter same business with the that first billion sort in say mirror of we you what weighted should percent the expect quarter your X is would XX%

Joe Kim

contract. It's an annual

Chris Sighinolfi

Okay.

Joe Kim

yet, Meaning ratable. it’s yeah so an it’s right, seasonality, the annual not, take-or-pay had contract

Chris Sighinolfi

the pressure Okay. your what Understood. wholesale of same-store curious West in showcased And that front, on then Texas. have rest the you you might talked for was about sales --? some margin mentioned I some divested, you saw side operations? and they of being the just You the retail supported figures

Scott Grischow

same-store Yeah, never really we – that that’s metrics, wouldn't information. relevant, the about it, business a wholesale not talked don't aren’t for wholesale metric. We’ve metrics have the retail we

Chris Sighinolfi

Okay.

earlier. you flat help get [indiscernible] Any just I'm again, were understand all in. year-on-year, to guess, could to I mean, I gauge provide were up we trying there after. legacy were that have year-on-year. I coming that I’m year-on-year, trying Scott, were business guys some So, referenced That's down say me there. multiple would because on weather issues we you volumes

Scott Grischow

to Yeah, down. you say we're and that look that if think Chris, it's at I fair total just volume

have switch of the not mentioned split is two think X.X. You whenever get X-Eleven there just switched But to downtime, pretty at so I to think to we're on other weather, and a don't that’s that shaky of did exactly some model, you for that trying over, what the look have that And the doing commission a a of a weather that was variables we part of it I Tom was is and little precision volume, the we switch contributor down the but agent over bit that. saw, whenever sign. we’re to the

So, can the those was seasonality wholesale going always we it a collectively is we in said to other going two a to ramp very strongly billion is and get – contributable factors. type we But we've business felt business. up down what on right say to projects year-over-year plus that that felt like that have I guided we on we on of that have what on we based our back X business have is

Chris Sighinolfi

or sort with you the margin removed, Okay. RBOB front. could wholesale sensitive long seen Joe, then think if I But were obviously crude, anything us, it could, time. just this price and lot as talking I and a about much wondering, moving And we you that like gauge we’ve know earlier a that's to more dynamics are regard consumer on price one as price, response of business that increased retail Historically, element stage you I’m people. this see of there points at operated which surprised you’ve for

were you how something the how that could should wholesale. we of, me, So, price there consumer if didn't about certainly think surprised offer terms in dovetail response just it the know might I and back so on by

Karl Fails

Yeah, this is add Karl, a of bit can I color. little

it's I and that that it's to way point, not long but persistent is. only how the think that about it point price think price how the is stays

demand. in in mean can So, I go mean, you decade, variances I you last the see back

across States, included I to even prices think in deck, XXXX, at demand in strength we XXXX vehicle that with rate, can the look lot at demand country, in gasoline into equal retail you miles of unemployment XXXX can average so a the a our influenced. of that demand just remember XXXX, traveled One but the that's starting you the there is other of use Price economy, one impact, other things that. highest rise $X.XX than an have data all factors point United price. of levels go Right,

comfortable very increase those saw XXXX right you now. in the the we're $X.XX of counteract and with factors So, to in enough U.S. economy demand

a XXXX. think I any bearing will also on impacts in that demand have

Chris Sighinolfi

really have sheet I pack. us snapshot a the That's provided left yesterday. and of help. question margin, you balance data shows of or [indiscernible] just Okay. slide page of And the XX one XX on had Tom, sort it

April reflective superior shake the is the So, from where I’m is three debt the the at that or I'm just I out wondering X-Eleven first acquired were come. balance, or purchase and of that those to if cash some tax items just curious payment sites early look to of XQ.

Scott Grischow

of as quarter. Scott. end Yeah, of were Chris this is the the Those

So, the subsequent tax of well M&A first some that made activities. to as payment was as, the

Chris Sighinolfi

Okay. guys. a Thanks helpful. Really lot

Operator

question of next Chen question. comes Theresa Please the line your with Barclays. proceed Our from from

Theresa Chen

next think assets Hi. it had to economically your related will this. of to And out? a are are how positioned come How politically board sold this the year actually the happen and what follow to for fruition? think about if just happen Karl prospect when do Do either EXX playing the step for we like the so, you think round. needs across or development to being that this see discussion. I up you you rents

Karl Fails

that in try the stay around the on mean, wrapped Theresa, conversation very Obviously, question as lot marketplace Yeah, Congress. and there's opinion like be the up a close I that. in of and RFS what to you part or between going and the there's differences to of I around think we think EPA your about, forward administration, looks

think in I demand of consumer see. can is fuel. a its infancy There's lot EXX of As far goes, we that a as not EXX

we a liquid compatibility some overall from vehicle want. still marks customers question that fuels company, wholesale our there's is, to view think manufacturer to a mean, standpoint. I I vehicle particularly want supply our petroleum as related fuel

in under-represent the big just piece ethanol of Ultimately, Right look obviously, participate very lending think about it's think now, at business. as choice. these choices and choices people lot the our models not So, customers as and we're I that of think We’ll things a fuel one it. a demand about of that vehicle market. gasoline you the consumer

see. we'll So,

Theresa Chen

you. Thank

Operator

Ladies have Scott turn session. and like call to the And closing remarks. to would reached question-and-answer gentlemen, the end the of for I back we

Scott Grischow

joining morning. for everyone Well, this thanks us

out me, reach talk to questions otherwise follow-up any to have we'll soon. you to free you If Thank feel you.

Operator

today's conclude conference. does This

time. lines You you participation. this your may Thank for disconnect your at

Sunoco (SUN) 10 May 182018 Q1 Earnings call transcript