Sunoco LP Reports Fourth Quarter and Record Full Year 2024 Financial and Operating Results

SUNOCO LP

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(unaudited)

December 31,
2024

December 31,
2023

ASSETS

Current assets:

Cash and cash equivalents

$                      94

$                      29

Accounts receivable, net

1,162

856

Accounts receivable from affiliates

—

20

Inventories, net

1,068

889

Other current assets

141

133

Total current assets

2,465

1,927

Property and equipment

8,914

2,970

Accumulated depreciation

(1,240)

(1,134)

Property and equipment, net

7,674

1,836

Other assets:

Operating lease right-of-use assets, net

477

506

Goodwill

1,477

1,599

Intangible assets, net

547

544

Other non-current assets

400

290

Investment in unconsolidated affiliates

1,335

124

Total assets

$               14,375

$                 6,826

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$                 1,255

$                    828

Accounts payable to affiliates

199

170

Accrued expenses and other current liabilities

457

353

Operating lease current liabilities

34

22

Current maturities of long-term debt

2

—

Total current liabilities

1,947

1,373

Operating lease non-current liabilities

479

511

Long-term debt, net

7,484

3,580

Advances from affiliates

82

102

Deferred tax liabilities

157

166

Other non-current liabilities

158

116

Total liabilities

10,307

5,848

Commitments and contingencies

Equity:

Limited partners:

Common unitholders (136,228,535 and 84,408,014 units issued and outstanding as of
   December 31, 2024 and 2023, respectively)

4,066

978

Class C unitholders - held by subsidiary (16,410,780 units issued and outstanding as of
     December 31, 2024 and 2023)

—

—

Accumulated other comprehensive income

2

—

Total equity

4,068

978

Total liabilities and equity

$               14,375

$                 6,826

SUNOCO LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in millions, except per unit data)

(unaudited)

Three months ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Revenues

$                 5,269

$                 5,641

$               22,693

$               23,068

Costs and Expenses:

Cost of sales

4,644

5,492

20,595

21,703

Operating expenses

172

94

545

356

General and administrative

52

34

277

126

Lease expense

19

17

72

68

(Gain) loss on disposal of assets and impairment charges

(7)

1

45

(7)

Depreciation, amortization and accretion

152

46

368

187

Total cost of sales and operating expenses

5,032

5,684

21,902

22,433

Operating Income (Loss)

237

(43)

791

635

Other Income (Expense):

Interest expense, net

(117)

(55)

(391)

(217)

Equity in earnings of unconsolidated affiliates

25

1

60

5

Gain (loss) on West Texas Sale

(12)

—

586

—

Loss on extinguishment of debt

—

—

(2)

—

Other, net

12

—

5

7

Income (Loss) Before Income Taxes

145

(97)

1,049

430

Income tax expense

4

9

175

36

Net Income (Loss)

$                    141

$                  (106)

$                    874

$                    394

Net Income (Loss) per Common Unit:

Basic

$                   0.76

$                 (1.50)

$                   6.04

$                   3.70

Diluted

$                   0.75

$                 (1.50)

$                   6.00

$                   3.65

Weighted Average Common Units Outstanding:

Basic

136,038,591

84,139,599

118,529,390

84,081,083

Diluted

136,870,335

84,139,599

119,342,038

85,093,497

Cash Distributions per Common Unit

$               0.8865

$               0.8420

$               3.5133

$               3.3680

SUNOCO LP

SUPPLEMENTAL INFORMATION

(Dollars and units in millions)

(unaudited)

Three months ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Net income (loss)

$                    141

$                  (106)

$                    874

$                    394

Depreciation, amortization and accretion

152

46

368

187

Interest expense, net

117

55

391

217

Non-cash unit-based compensation expense

5

4

17

17

(Gain) loss on disposal of assets and impairment charges

(7)

1

45

(7)

Loss on extinguishment of debt

—

—

2

—

Unrealized (gains) losses on commodity derivatives

4

(10)

12

(21)

Inventory valuation adjustments

(13)

227

86

114

Equity in earnings of unconsolidated affiliates

(25)

(1)

(60)

(5)

Adjusted EBITDA related to unconsolidated affiliates

48

2

101

10

(Gain) loss on West Texas Sale

12

—

(586)

—

Other non-cash adjustments

1

9

32

22

Income tax expense

4

9

175

36

Adjusted EBITDA ⁽¹⁾

439

236

1,457

964

Transaction-related expenses

7

—

106

—

Adjusted EBITDA⁽¹⁾, excluding transaction-related
expenses

$                    446

$                    236

$                 1,563

$                    964

Adjusted EBITDA ⁽¹⁾

$                    439

$                    236

$                 1,457

$                    964

Adjusted EBITDA related to unconsolidated affiliates

(48)

(2)

(101)

(10)

Distributable cash flow from unconsolidated affiliates

43

1

93

7

Cash interest expense

(114)

(53)

(369)

(210)

Current income tax expense

(5)

(4)

(189)

(23)

Transaction-related income taxes

(3)

—

179

—

Maintenance capital expenditures

(58)

(33)

(124)

(70)

Distributable Cash Flow

254

145

946

658

Transaction-related expenses

7

3

135

6

Distributable Cash Flow, as adjusted ⁽¹⁾

$                    261

$                    148

$                 1,081

$                    664

Distributions to Partners:

Limited Partners

$                    121

$                      71

$                    478

$                    284

General Partner

37

19

145

76

Total distributions to be paid to partners

$                    158

$                      90

$                    623

$                    360

Common Units outstanding - end of period

136.2

84.4

136.2

84.4

⁽¹⁾ 

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 valuation adjustments, and certain other operating expenses reflected in net income that we do not believe are indicative of ongoing core operations, such as gains or losses on disposal of assets and non-cash impairment charges. We define Distributable Cash Flow 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, current income tax expense, maintenance capital expenditures and other non-cash adjustments. For Distributable Cash Flow, as adjusted, certain transaction-related adjustments and non-recurring expenses are excluded.

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 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 senior notes;
• 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.

Adjusted EBITDA reflects amounts for the unconsolidated affiliates based on the same recognition and measurement methods used to record equity in earnings of unconsolidated affiliates. Adjusted EBITDA related to unconsolidated affiliates excludes the same items with respect to the unconsolidated affiliates as those excluded from the calculation of Adjusted EBITDA, such as interest, taxes, depreciation, depletion, amortization and other non-cash items. Although these amounts are excluded from Adjusted EBITDA related to unconsolidated affiliates, such exclusion should not be understood to imply that we have control over the operations and resulting revenues and expenses of such affiliates. We do not control our unconsolidated affiliates; therefore, we do not control the earnings or cash flows of such affiliates. The use of Adjusted EBITDA or Adjusted EBITDA related to unconsolidated affiliates as an analytical tool should be limited accordingly. Inventory valuation adjustments that are excluded from the calculation of Adjusted EBITDA represent changes in lower of cost or market reserves on the Partnership's inventory. These amounts are unrealized valuation adjustments applied to fuel volumes remaining in inventory at the end of the period.

SUNOCO LP

SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT

(Tabular dollar amounts in millions)

(unaudited)

Three months ended December 31,

2024

2023

Segment Adjusted EBITDA:

Fuel Distribution

$                    192

$                    209

Pipeline Systems

188

2

Terminals

59

25

Adjusted EBITDA

439

236

Transaction-related expenses

7

—

Adjusted EBITDA, excluding transaction-related expenses

$                    446

$                    236

Three months ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Fuel Distribution segment profit

$                    302

$                    130

$                 1,187

$                 1,225

Pipeline Systems segment profit

203

1

535

3

Terminals segment profit

120

18

376

137

Total segment profit

625

149

2,098

1,365

Depreciation, amortization and accretion, excluding
corporate and other

151

45

364

186

Gross profit

$                    474

$                    104

$                 1,734

$                 1,179

Three months ended December 31,

2024

2023

Motor fuel gallons sold (millions)

2,151

2,195

Motor fuel profit cents per gallon⁽¹⁾

                   10.6 ¢

                   11.8 ¢

Fuel profit

$                  239

$                    60

Non-fuel profit

35

32

Lease profit

28

38

Fuel Distribution segment profit

$                  302

$                  130

Expenses

$                (120)

$                (126)

Segment Adjusted EBITDA

$                  192

$                  209

Transaction-related expenses

—

—

Segment Adjusted EBITDA, excluding transaction-related expenses

$                  192

$                  209

Three months ended December 31,

2024

2023

Pipelines throughput (thousand barrels per day)

1,395

—

Pipeline Systems segment profit

$                    203

$                        1

Expenses

$                    (64)

$                      —

Segment Adjusted EBITDA

$                    188

$                        2

Transaction-related expenses

5

—

Segment Adjusted EBITDA, excluding transaction-related expenses

$                    193

$                        2

Three months ended December 31,

2024

2023

Throughput (thousand barrels per day)

593

411

Terminal segment profit

$                    120

$                      18

Expenses

$                    (59)

$                    (19)

Segment Adjusted EBITDA

$                      59

$                      25

Transaction-related expenses

2

—

Segment Adjusted EBITDA, excluding transaction-related expenses

$                      61

$                      25