Business Context and Reporting Period
This Form 8-K was filed by Susser Petroleum Partners LP (noting the input metadata reference to Sunoco LP) on July 24, 2014. The report details a definitive material agreement entered into on the same date between Susser Petroleum Operating Company LLC (SPOC), a wholly-owned subsidiary, and Chevron Products Company.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. The primary financial metric disclosed is a contractual volume commitment:
- Minimum Purchase Obligation: SPOC is required to purchase no less than 5,000,000 gallons of Chevron and Texaco-branded fuel annually.
- Term: The agreement is effective from May 1, 2014, through April 30, 2017.
Material Changes
The new agreement replaces prior agreements between the parties for the purchase of Chevron and Texaco branded gasoline and diesel fuel. Key operational changes include:
- Brand Usage: The agreement permits the use of Chevron and Texaco brands and insignias at SPOC's wholesale dealer locations and Susser Holdings Corporation retail convenience store and consignment locations.
- Supply Caps: Chevron's obligation to sell specific products is subject to volumetric caps based on SPOC's average purchases over the prior twelve months and historical terminal delivery averages.
Guidance, Risks, and Contingencies
The filing outlines specific contractual risks and termination provisions:
- Indemnification: SPOC is required to indemnify Chevron against liabilities arising from performance under the agreement.
- Termination by SPOC: SPOC may terminate the agreement at any time by delivering written notice.
- Termination by Chevron: Chevron may terminate the agreement with reasonable advance written notice following a breach by SPOC or specific events of violation, dishonor, or default.
- Unusual Items: No unusual items or management guidance regarding future financial performance were disclosed in this specific filing.
Investor Verification Checklist
- Verify the impact of the 5,000,000 gallon annual minimum purchase requirement on SPOC's working capital and inventory management.
- Confirm the specific volumetric caps applied to the 25 terminals covered by the agreement to assess supply security.
- Review the indemnification clauses to understand the extent of potential liability exposure for SPOC.
- Assess the strategic value of retaining Chevron and Texaco branding at retail and wholesale locations versus the cost of the new agreement.