Scott Grischow - Director of Investor Relations and Treasury Robert Owens - President and Chief Executive Officer Thomas Miller - Chief Financial Officer.

Andrew Burd - JPMorgan Theresa Chen - Barclays Capital John Edwards - Credit Suisse Robert Balsamo - FBR Capital Markets Shneur Gershuni - UBS Sharon Lui - Wells Fargo Securities Chris Sighinolfi - Jefferies Ben Brownlow - Raymond James.

Greeting and welcome to Sunoco LP's First Quarter 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.

It is now my pleasure to introduce your host Scott Grischow, Director of Investor Relations and Treasury. Thank you, Mr. Grischow, you may begin..

Thank you. Before we begin our prepared remarks, I have a few of the usual items to cover. A reminder that today's call will contain forward-looking statements.

These statements are based on management's beliefs, expectations and assumptions that may include comments regarding the Company's objectives, targets, plans, strategies, costs and anticipated capital expenditures, and anticipated timing for the completion of the announced and perspective retail divestment transactions.

They are subject to the risks and uncertainties that could cause the actual results to differ materially as described more fully in the Company's filings with the SEC. During today's call we will also discuss non-GAAP financial measures, including adjusted EBITDA and distributable cash flow.

Please refer to this quarter's news release for a reconciliation of each financial measure. Also, a reminder that the information reported on this call speaks only to the Company's view as of today, May 4, 2017. So the time-sensitive information may no longer be accurate at the time of any replay.

You will find information on the replay in this quarter's earnings release. On the call with me this morning are Bob Owens, Sunoco LP's President and Chief Executive Officer, Tom Miller, Chief Financial Officer and other members of the management team. I would now like to turn the call over to Bob..

Thanks, Scott, Good morning everyone and thank you for joining us. This morning we will review the financial and operating results of the first quarter, along with other recent activities. I would like to begin my comments by highlighting two important events that transpired since our last earnings call.

The first of which occurred at the end of the first quarter when Sunoco announced the completion of a private placement of $300 million in preferred equity to Energy Transferred Equity ETE. This intra family support provides additional time and flexibility for the partnership to delever.

Tom will expand on this specific to this offering a bit later during his comments. Second on April 6, Sunoco announced a definitive agreement with 7-Eleven to sell approximately 1110 company operated convenient stores as well as the trademarks in intellectual property to liberate our type of company and strikes for purchase price of $3.3 billion.

As part of this transaction Sunoco and 7-Eleven also agreed to enter into our 15 year fixed rate take or pay fuel supply agreement under which Sunoco will provide base volumes of approximately 2.2 billion gallons per year, with committed growth of 0.5 billion gallons over the first four years.

This is a transformative first step and the decision to divest convenient stores and the continental United States. 7-Eleven is a credit worthy strategic partner and with the 15 year fuel supply agreement SUN we will look to build on this partnership as we also build our partnerships with best-in-class dealers and distributors.

Sunoco will continue to utilize its diverse channels of trade and fuel brands. This credit enhancing transaction will allow SUN to recapitalize the balance sheet and sets the stage for strategic optionality targeting MLP qualified income. We expect the deal to close by the fourth quarter of 2017, of course subject to regulatory approvals.

And simultaneously with the 7-Eleven announcement SUN also announced that approximately 200 convenient stores across north and west Texas as well into New Mexico and Oklahoma will be sold in a separate auction process. These stores are favorably positioned in the heart of Permian Basin with exposure to above average economic growth in that region.

While heavily exposed to the energy sector, this geography also contains diversified industry such as education and agriculture, which can help provide more consistent levels or sales and profitability through the cycles. The average store in this group is approximately 3800 square feet and built on 1.5 acres per site.

And about 20% of these sites are new to industry stores built since 2008. 70% of the locations have a fast casual restaurant, with the majority being Laredo Taco company concept. We are encouraged by the initial response from bidders and also anticipate closing on this transaction by the fourth quarter of 2017.

Now that being said this is an active process and therefore updates will be limited. Finally, the sale of approximately 100 of SUN’s real estate assets through NRC which we previously announced is ongoing.

7-Eleven was involved in the bid process for a number of operating sites and at this time approximately 30% of the active retail sites from the initial NRC process have migrated over to the 7-Eleven transaction.

Additionally, approximately 20% of the active retail sites have been awarded to outside bidders and approximately 10% have migrated to the marketing efforts underway by J.P. Morgan. The products as awarding the land bank, excess land and remaining active sites is ongoing.

In summary, we anticipate that Sunoco will have substantially excited the rebuild convenient stores space in the continental United States by the end of 2017. Now turning to the partnerships results for the first quarter of 2017.

The first quarter had some challenging aspects including the less than ideal commodity environment backdrop, lackluster, gasoline demand across the industry. The lapping of tough comparisons and the impact of winter storms in late January and late March.

However, on the plus side Sunoco's much improved operating trends in its oil producing store base, but particularly strength in March that has continued into the second quarter. Remember too that 2016 was a leap year with one extra day.

For the first quarter of 2017 the partnership recorded a net income of $1 million during the first quarter compared to $62 million a year-ago. Largely driven by increased interest expenses from our higher debt profile and increased cost on our floating rate debt. Tom will cover this in more detail later in the call.

Total adjusted EBITDA decreased $4 million from last year to $155 million. Distributable cash flow attributable to partners was $77 million compared to $112 million one year-ago. Sun's distribution for the first quarter remained unchanged from Q4 at [$82.55] (Ph) per unit.

This distribution was a 1% increase from Q1 of 2016 and resulted in a 0.74 times coverage ratio for the first quarter and a 0.88 times coverage ratio on a trailing 12-month basis. As a reminder, the first and fourth quarters are seasonally the weakest quarters of the year for our business year-end and year-out.

In the near-term we are comfortable keeping our coverage below the onetime. Long-term our goal is to manage to 1.1 coverage ratio after the retail asset sales process is complete.

Aided by a combination of growing cash flow via acquisitions or reducing our distributable cash flow obligations through the repurchase of units either in the open market or from energy transfer. Now, let's take a look at operational performance. Total fuel volumes increased 3.6%, to 1.9 billion gallons.

Retail gallons decreased 13 million gallons year-over-year or 2.1%, to 595 million gallons, due to challenging operating environment in the first quarter and the strong first quarter of last year. Wholesale gallons increased 6.5% to approximately 1.3 billion gallons.

The total weighted average cents per gallon margin decreased to $0.14.5 compared to $0.14.7 a year-ago, due to a significantly higher gasoline cost versus last year. Aggressive pricing by competitors and weaker retail demand.

In wholesale cents per gallon was $0.106 compared to $0.114 a year-ago, while retail cents per gallons was $0.231 compared to $0.213 one year-ago. Merchandise sales increased 3.1% year-over-year to $540 with continued market share gains and packaged beverage and beer sales. SUN also experienced strength in food service particularly in the east.

Merchandise gross profit percentage decreased by tenth of a percent compared to last year ending at 31.6% which was consistent with our expectations for the beginning of the year. The margin improved 1.7% from Q4 on food service growth and less merchandising promotional activity. Now let's turn to same-store results.

Remember as I mentioned, the first quarter 2016 contained a leap day in February. We will discuss same-store results including this 2016 leap day, but I didn’t want to emphasis of the extra day in 2016 negatively impacted first quarter 2017 and a year-over-year results and that impact is approximately 1.1%.

With that, same-store gallons declined by 5.7% due to weakness across SUN’s geography. Same-store merchandise sales declined 1.1% due to weakness in Texas particularly in the restaurant business and the border of regions partially offset by gains in food service, packaged, beverage and beer.

Our 140 retail stores in the oil producing regions of Texas are primarily located in the Permian basin with the remainder in Eagle Ford. The market has improved notably over the last six to 12 months with rig counts in the Permian up about 2.5 times ending at 342 as of last Friday.

and WTI prices are currently hovering like around the $50 a barrel since early December. After a lackluster 2016 the oil producing regions reported solid results in the first quarter of 2017 with same-store merchandise sales up 1.6% and same-store fuels gallons of 1.1%.

With the fourth quarter down only low single-digit that’s two straight quarters now have improving year-over-year trends coming off of several quarters at double-digit declines.

We believe this region has turned the corner with March the strongest month of Q1 with same-store in merchandise sales up 6.1% and same-store fuel gallons up 7%, preliminary numbers suggest April year-over-year growth was even stronger than in March.

Furthermore, our energy services business which is a business who delivers fuels to squib tanks and rigs in the oil patch has continued to show a very healthy volume in gains, up over 2.5 times since may 2016. We view this performance as a very positive leading indicator for the overall region. Now moving to updates on some other operational items.

We continue to be very happy with the performance of our fuel business that we acquired from Emerge with the Dallas area Hydrotreater up and running and performing up to expectations for several months now. We expect Hydrotreater at the Birmingham facility to be operational by the end of the second quarter.

as a reminder these Hydrotreaters enable SUN to produce ULSD ultra low sulfur diesel to the key attribute to stabilize and increase the earnings of this business overtime. Additionally, along the Indiana Toll Road, we have completed the rebuild of two stores on one of the four plazas and which we have work planned. The first plaza one of the busiest.

That plaza opened in April, we expect the second plaza with where we are performing outfit work on those sites to open mid-2017 after that we expect the third plaza without that work to open by the end of 2017.

Before I turn the call over to Tom, who will discuss the financial highlights of the quarter, I want to leave you with the few thoughts on now we think about Sunoco after our exit from retail. This is a major step and a strategic shift toward MLP qualifying businesses.

Concentrating the Sunoco business model around the simplified wholesale business provide significant scale and cost efficiencies.

Retail divestments will immediately improve Sunoco's financial profile and sets the stage for strategic optionality to take advantage of consolidation opportunities in a fragmented wholesale market or to move into new markets and qualify businesses with stable cash flows.

We look forward to Sunoco being the finished product Company within the energy transfer family. And with that, I'll now hand it off to Tom..

Thanks Bob and good morning everyone. Before I get into the financial results for the first quarter, let me discuss a couple of items. First, the $300 million perpetual preferred offering allowed us to reduce near term leverage concern.

The initial annual distribution rate on this is 10%, after year five the annual distribution becomes floating rate equal to three months LIBOR plus 8%. We have the option to redeem the preferred units for the first five years at 101. After that we can redeem at par, prior to repurchasing common units, we must redeem these preferred units.

Second, from the 7-Eleven transaction and the sale of our remaining continental U.S. Company owned convenient stores let me provide more information on our existing debt. The term for the 7-Eleven agreement require us to either have the note holder's agree to modify various indenture covenants to permit the transaction.

A consent requires a simple majority of each series holders or we can retire the notions in the called feature or the make whole feature of the notes cannot be called. Additionally, we will be required to obtain waivers under the credit facility and the term loan A to permit the transaction.

As for the use of proceeds, we will reduce debt to a level we are ongoing leverage is between 4.5 and 4.75 times adjusted EBITDA. The remaining proceeds will be used in some combination of the reduction in the perpetual preferred securities in common units or to fund accretive acquisitions we will target at 1.1 times distribution coverage ratio.

We estimate the combined tax impact of the two deals to be around 20% of gross proceeds. The actual tax rate depends on the selling price of our remaining retail asset. Finally, before we move to first quarter results, I would like to review the leverage and coverage self help measures we discussed on our year-end call.

First, we talked about using our ATM program. In Q1, we issued 33 million in common units as well as perpetual preferred securities totaling $300 million. We do not intend to use any of the remaining $295 million left on the ATM program in the foreseeable future.

Second, we continue to see additional sales from our new to industry sites built over the last few years. We expect these stores to continue to increase EBITDA while we own them. Third, with regard to our real estate auction by provided insight into where that process stands. I want to reiterate that these tend to be lower volume sites.

Fourth on the capital expenditure side we announced the 2017 growth capital would be roughly $200 million. With the divestment announcement we will see spending additional retail growth capital other than what's contractually committed. Our agreement with 7-Eleven requires us to maintain our stores in a prudent manner.

Therefore we don’t expect to see much ran rate reduction. Obviously our total reported 2017 growth and maintenance capital will depend on when we complete these transactions. Finally, we talked about $75 million G&A and operating cost reduction program. With the pending divestment we will not be updating progress towards that goal.

We view the $75 million cost reduction as our starting point. As we move forward with divestment, we will focus on streamlining our cost structure and lowering G&A ahead of closing. Now let's move to the partnerships liquidity position in cost of debt.

SUN ended the quarter with total debt to adjusted EBITDA calculated in accordance with our credit agreement of 6.31 times. Total debt at March 31 was $4.3 billion, which includes $761 million drawn under our revolving credit facility.

We also had $21 million in standby letters of credit, leaving the unused availability on the credit facility of $718 million at the end of the quarter. Spends weighted average cost of debt at March 31, was 5.1%. Moving onto key financial results. Gross profit decreased by $8 million or 1.6%, to $503 million.

Lower growth profit reflects lower wholesale motor fuels profits per gallon which fell from $0.114 to $0.106. Somewhat mitigated by increases in retail motor fuel and merchandised profits. Other operating expenses increased by $14 million from last year to $263 million.

This primarily reflects increases in maintenance expense, property tax and other costs associated with retail stores built or acquired over the last 12 months. Other operating expenses decreased by $4 million from the fourth quarter.

G&A increased by $6 million year over year to $64 million, reflecting higher advertising cost as well as salaries and wages. G&A costs declined $3 million from the fourth quarter, combined other operating expenses in G&A cost declined $7 million from the fourth quarter of 2016. Net income for the quarter was $1 million versus $62 a year ago.

In addition to higher cost, lower net income was driven by higher interest expense associated with increased debt due to the final dropdown at the end of the first quarter of last year.

Adjusted EBITDA for the first quarter decreased $4 million from the year-ago to $155 million primarily related to higher operating cost and lower wholesale gross profit. Turning to retail adjusted EBITDA from a retail segment was $60 million, an increase of $4 million from a year ago. This increase primarily reflects higher margins.

Retail margins averaged $0.23.1 per gallon compared to $0.21.3 per gallon year ago. Over the long-term, we expect retail margins to be in the $0.23 to $0.25 range, even though we will have quarters outside this range. SUN's retail merchandise gross profit was $170 million, a $4 million increase from the year ago.

As Bob mentioned earlier, merchandise gross profit percentage decreased by 1/10th of 1% compared to last year's 31.6%. The margin improved 1.7% from the fourth quarter on food and service growth and less merchandizing promotional activity. Now turning to the wholesale business.

Adjusted EBITDA for the quarter was $95 million, down $8 million from a year ago primarily due to gross profits per gallon. Finally, in the first quarter SUN invested $66 million in capital expenditure. Consisting a $48 million of growth capital and $18 million for maintenance capital.

SUN completed construction on 10 new industry sites in the first quarter for which the majority of the capital was spent last year. Operator, that concludes our prepared remarks. You may now open the line for questions..

Thank you, ladies and gentlemen, we will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Andrew Burd from JPMorgan. Please proceed with your question..

So assuming that all of the asset sales are close by the year-end target. Do you anticipate that the distribution coverage short-fall will be solved concurrently and if not how long will you be comfortable maintaining potentially stretched coverage lead pursue either M&A or share repurchases..

Andy I think concurrently maybe a bit strong, but almost concurrently is the way I would answer it.

And I think in the prepared remarks we've said that with this inflow of cash we will look at alternatives there would be both M&A type or from a financial restructuring standpoint that obviously unit buyback and we will do what is most prudent at that point in time..

Great, and Tom I appreciate your comments and additional color on kind of ballpark tax rate for the assets that are being sold.

What are the and initially would be better for EPT, but would they have tax consequences as well for the equity they on in Sunoco should they divest that, is that a mechanic similar to what you are facing with the asset sale?.

I’m really not in position to answer that, sorry Andy..

Last question Bob if I remember correctly, Sunoco is a pretty big ship around colonial and other industry participants have noted some pre health economics early in the first quarter, but Sunoco posted pretty strong fuel margins or certainly on a relative basis.

Did you see something different on colonial or was it just the advantage of the diversified asset base and being able to offset the weakness by strengths elsewhere?.

Andy it's the latter we saw the same market conditions - the Q1 was a combination of the interesting phenomenon's big squeeze and the Great Lakes area with some issues there, the New York, Harbor Golf are the two that you mentioned.

I think our results speak to the benefit of our diversification and our scale within the three different big refining centers and that work to our advantage in Q1..

So was there one particular market that offset the New York Harbor Golf coast harbor or was that a confluence of factors?.

I think confluence of factors..

Okay, great. Thanks for taking my questions..

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

Going back to the strength in the wholesale margin and in the first quarter, that $10.6 per gallon metric is that at all benefited from the portion of Emerge business with Transmic processing that I imagine the gross margin there would be lumped in wholesale but there are no associated gallons?.

Yes, those gallons are in there. So remember wholesale includes our dealer business, our unbranded and branded distributor business, the contracted gallons that we sell for own retail as well as the Emerge business in our race fuels business so it’s a blended margin that we report..

Okay.

So that $10.6 is apples-to-apples compared with the $11.4 from the previous year?.

Emerge would be the only difference but that’s not a lot of barrels I would say what you are seeing their delta wise is more reflective of market conditions than change in asset mix..

Okay.

And if you stripped out the portion of Emerge, it’s not included you know what that 10.6 would have been?.

Not off the top of my head.

Scott do you know?.

Teresa I can follow-up with you on that, we can get that data. Yes..

Okay, got it.

So looking towards the future of following the exit of the retail business, how do you view your competitive position at that point when you are in the market for M&A, does having less real assets affects how you compete for assets? And would you be focusing more on wholesale businesses with no retail or would you be following your traditional or historical performance there?.

I guess what I would tell you is relative what we have been in recent history. I think the completion of this transaction and resulting improvement in balance sheet positions us much better with the better cost of capital for competing for M&A assets.

with respect to the type of assets, look this is an exit of company operated convenient stores in the continental United States and that will make sense for us as we remove all the cost associated with running those types of businesses.

So as we look at M&A activity in the future, it will be around on the fuel side, dealer distributor type assets might there would be company asset we would purchase with the intent of converting over to other classes or trade sure that they made economic sense.

In addition to that, as been mentioned both in our prepared remarks and it was talked about it in the Energy Transfer Session earlier this morning more midstream assets have [indiscernible] as well..

Thank you very much..

Our next question comes from the line of John Edwards from Credit Suisse. Please proceed with your question..

Food morning, thanks of taking m question.

Just can you give us an idea of what you think the transaction related expenses will come out to be associated with the pending divestitures?.

I would either there is going to be changes in personal so there will be cost associated with that. There will be perhaps fees to receive consensus to move things and certainly the bonds that I talked about. We don’t have a affirm estimate on that but it's going to be maybe $25 million to $50 million is what we see right now..

Okay, that's helpful.

And then on the prepared remarks I think that you indicated there is about a 20% expected tax drag on the proceeds, should think we about that is the sort of the tax on the overall proceeds we were just trying to figure out given what the basins estimate you had in the retail gas stations, we are kind of figure out how much of that might be capital gains versus ordinary income.

So just any color you can give on that or how you came to that 20% tax number, so just we were actually thinking it might be a little bit less because we thought a lot of it will be capital gains related, so being you can comment that would be great..

We think that most of this will be taxed at 35% rate it's above the whatever we have above the tax basis whatever we received and as I said what that rate is going to be dependent on what we receive for the Texas package if you will, and the NRC package in addition so that's not where we are on the tax rate..

Okay, great.

And then on the outlook for the wholesale margins any revision to the $0.6 to $0.8 per gallon number that you have been guiding to?.

Not at this point and time John. We are working hard to pro forma for the balance of the year and stock will be back to people, but as of now no..

Okay, great. That’s it for me..

Our next question comes from the line of Robert Balsamo from FBR. Please proceed with your question..

Thanks for the color that helps on the some of the growing wholesale and Emerge impact.

You mentioned the SG&A and I know you are not going to be updating on progress moving forward but is there any color you can give us on just maybe what that 75 million would have been allocated to retail versus wholesale businesses?.

First of all its G&A and OpEx and given that OpEx at the retail is much higher. that would have been roughly 50/50 between G&A and operating expenditures. We think that the vast majority of that would have been on the retail side of the operating expenditures..

My other questions were answered. That’s it. Thank you very much..

Our next question comes from the line of [indiscernible] from UBS. Please proceed with your question..

Hi it's actually Shneur Gershuni with UBS. Good morning guys. I just wanted a follow up on some of the discussions about colonial in terms of its impacts. Do you feel that this is going to be something that continues to longer term? is it a function of pad two volumes coming into pad one.

I was just wondering if you can talk about the dynamics of some of the capital that’s put in place that seems to be moving around inventory balances, and will it compressed spreads in one area to potentially improve spreads in other areas. Foreign exchange talk about that a little bit..

Shneur, I would tell you that we are watching it carefully clearly you heard the plans from number of players to find opportunities to extend logistics equipment deeper in the pad one from pad two.

Our view is that we are best served with optionality and there will have been in the past and will likely be in the future incidence that occurs where orbs are created amongst the three supply areas and our objective has been to be as flexible as we can be.

That flexibility includes line space, it includes tank age, it includes our own transportation fleet, and the flexibility that comes with that and relationships with suppliers in all three centers.

So that’s not an exact answer to your question in terms of prediction, but winning the delta and historic deltas pad one to pad three, but I think it remains to be seen and our view is we are best served maintaining that from flexibility..

When you say you are maintaining maximum flexibility with more assets in place, do you try and develop shipping history on some of these newer assets?.

That is among the things that we are considering right now..

Okay, great. Thank you very much guys. I appreciate the color..

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

Just thinking about the properties being sold to NRC, I think in the prepared remarks you indicated that 20% has gone to other third-parties, are you implying it was sold to third-parties already?.

Yes. Not closed, but under contract..

Under contract and what is the estimated fee?.

We have not disclosed that Sharon. We are still working through the balance, we are early in the program we are negotiating with parties on the balance of the assets, have active process is underway with other assets. So we are just not disclosing numbers right now..

Okay, alright and I think you also mentioned with regards to use of proceeds, is the stock that you would need to redeem the preferred before buying back any of the coming units?.

Yes, that’s a requirement in the indenture of that..

Okay. Just wanted to clarify. Thank you..

Our next question is coming from the line of Chris Sighinolfi from Jefferies. Please proceed with your question..

I was just curious and this is sort of an effort to try and figure out a pro forma look. You had provided same-store sales figures on the fuel side in last night’s release.

I was wondering I think it was possible to get a breakdown of that figure retail versus wholesale?.

The same-store sales were all recapped..

That figure in last night's release is the all retail?.

Yes we only reported retail same-store sales..

Okay, understood. And then just the earlier dialogue on wholesale margins sort of raised something for me and I was wondering if you could clarify.

Since Emerge have captured in the wholesale margin per gallon that you report, is it to assume that’s consistent with the $0.6 to $0.08 that you have guided meaning its included in that $0.6 to $0.8 expectation as well..

Well, yes....

Or you are just talking about fuel margin?.

It is a blended margin, so it is included in that..

Okay perfect. That’s it for me. Thanks again guys..

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

You talked about the same-store sales just follow up on the last question, about same-store sales improvement. And I think I heard you correctly in merchandise and fuel up in the 6% to 7% range.

Was that just Texas? And can you speak to the rest of the chain? And did you also see similar type of demand trend at wholesale volume?.

Yes so let me be clear those statistics were just in the Permian basin, the oil patch 75% of which are in the Permian. Since we called those sales out previously that was the highlight that we gave in terms of how they are doing.

We are seeing continued weakness however in particularly in South Texas in the border areas consistent with numbers that we talked about it in the past and the release and the information contained same-store sale across the entire chain..

And that quarter end kind of improvements there was that a broad basin improvements you saw across the chain as well there?.

Well not to the degree - what we are seeing is an accelerating improvement in just activity in the Permian basin and the resulting benefit of that in terms of more people being employed more, people travelling as the rig counts increase and I talked about our Sunoco Energy services that kind of a living indicator that now approaching three times the business volume than it had done in the past.

As we are getting into the summer driving season we are seeing demand pickup in other parts of the chain, but the real strength that was highlighted was unique to the oil pad..

That’s helpful and one last one for me.

On the fuel margin that the retail side any color you can give on Aloha?.

Margins were about on budget and consistent with historical levels there, Hawaii is a unique market we have a very unique position there with the combination of assets that we have got retail wholesale and logistics assets. So that are continues to be very ratable in terms of cash flow for us..

And that long-term target of 23 to 25 that is pro forma after the asset divesture?.

No that is a blended margin across our entire chain and Hawaii is a positive contributor to that not in small measure low gallons but strong margins. And the number would be different post divestment..

Great, thank you guys..

Thank you..

[Operator Instructions] There are no further questions in queue. I would like to hand the call back over to Mr. Owens for closing comments..

Okay, well thanks everybody once again for taking time to join us this morning. And this concludes our call..

Ladies and gentlemen this does concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time. And have a wonderful day..