SUN Sunoco LP

SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(unaudited)

September 30,
2024

December 31,
2023

ASSETS

Current assets:

Cash and cash equivalents

$                    116

$                      29

Accounts receivable, net

902

856

Accounts receivable from affiliates

—

20

Inventories, net

890

889

Other current assets

157

133

Total current assets

2,065

1,927

Property and equipment

8,856

2,970

Accumulated depreciation

(1,105)

(1,134)

Property and equipment, net

7,751

1,836

Other assets:

Operating lease right-of-use assets, net

474

506

Goodwill

1,484

1,599

Intangible assets, net

553

544

Other non-current assets

396

290

Investment in unconsolidated affiliates

1,399

124

Total assets

$               14,122

$                 6,826

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$                    929

$                    828

Accounts payable to affiliates

222

170

Accrued expenses and other current liabilities

515

353

Operating lease current liabilities

32

22

Current maturities of long-term debt

78

—

Total current liabilities

1,776

1,373

Operating lease non-current liabilities

482

511

Long-term debt, net

7,259

3,580

Advances from affiliates

86

102

Deferred tax liabilities

166

166

Other non-current liabilities

173

116

Total liabilities

9,942

5,848

Commitments and contingencies

Equity:

Limited partners:

Common unitholders
   (136,001,589 units issued and outstanding as of September 30, 2024 and
    84,408,014 units issued and outstanding as of December 31, 2023)

4,179

978

Class C unitholders - held by subsidiaries
   (16,410,780 units issued and outstanding as of September 30, 2024 and
    December 31, 2023)

—

—

Accumulated other comprehensive income

1

—

Total equity

4,180

978

Total liabilities and equity

$               14,122

$                 6,826

SUNOCO LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per unit data)
(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2024

2023

2024

2023

Revenues

$                 5,751

$                 6,320

$               17,424

$               17,427

Cost of Sales and Operating Expenses:

Cost of sales

5,327

5,793

15,951

16,211

Operating expenses

151

93

373

262

General and administrative

55

30

225

92

Lease expense

18

18

53

51

Loss (gain) on disposal of assets and impairment charges

(2)

4

52

(8)

Depreciation, amortization and accretion

95

44

216

141

Total cost of sales and operating expenses

5,644

5,982

16,870

16,749

Operating Income

107

338

554

678

Other Income (Expense):

Interest expense, net

(116)

(56)

(274)

(162)

Equity in earnings of unconsolidated affiliates

31

1

35

4

Gain on West Texas Sale

—

—

598

—

Loss on extinguishment of debt

—

—

(2)

—

Other, net

(5)

—

(7)

7

Income Before Income Taxes

17

283

904

527

Income tax expense

15

11

171

27

Net Income

$                        2

$                    272

$                    733

$                    500

Net Income (Loss) per Common Unit:

Basic

$                 (0.26)

$                   2.99

$                   5.44

$                   5.20

Diluted

$                 (0.26)

$                   2.95

$                   5.40

$                   5.14

Weighted Average Common Units Outstanding:

Basic

135,998,435

84,064,445

112,650,388

84,061,363

Diluted

136,844,312

85,132,733

113,466,864

85,037,289

Cash Distributions per Unit

$               0.8756

$               0.8420

$               2.6268

$               2.5260

SUNOCO LP
SUPPLEMENTAL INFORMATION
(Dollars and units in millions)
(unaudited)

Three Months Ended September 30,

Net income

$                        2

$                    272

Depreciation, amortization and accretion

95

44

Interest expense, net

116

56

Non-cash unit-based compensation expense

4

4

Loss (gain) on disposal of assets and impairment charges

(2)

4

Unrealized (gains) losses on commodity derivatives

1

(1)

Inventory valuation adjustments

197

(141)

Equity in earnings of unconsolidated affiliates

(31)

(1)

Adjusted EBITDA related to unconsolidated affiliates

47

2

Other non-cash adjustments

12

7

Income tax expense

15

11

Adjusted EBITDA ⁽¹⁾

456

257

Transaction-related expenses

14

—

Adjusted EBITDA⁽¹⁾, excluding transaction-related expenses

$                    470

$                    257

Adjusted EBITDA ⁽¹⁾

$                    456

$                    257

Adjusted EBITDA related to unconsolidated affiliates

(47)

(2)

Distributable cash flow from unconsolidated affiliates

45

2

Cash interest expense

(112)

(54)

Current income tax (expense) benefit

36

(8)

Transaction-related income taxes

(17)

—

Maintenance capital expenditures

(26)

(14)

Distributable Cash Flow

335

181

Transaction-related expenses

14

—

Distributable Cash Flow, as adjusted ⁽¹⁾

$                    349

$                    181

Distributions to Partners:

Limited Partners

$                    119

$                      71

General Partner

36

19

Total distributions to be paid to partners

$                    155

$                      90

Common Units outstanding - end of period

136.0

84.1

⁽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
September 30,

2024

2023

Segment Adjusted EBITDA:

Fuel Distribution

$                    253

$                    234

Pipeline Systems

136

2

Terminals

67

21

Adjusted EBITDA

456

257

Transaction-related expenses

14

—

Adjusted EBITDA, excluding transaction-related expenses

$                    470

$                    257

Three Months Ended
September 30,

Nine Months Ended
September 30,

2024

2023

2024

2023

Fuel Distribution segment profit

$             164

$             467

$             885

$          1,095

Pipeline Systems segment profit

159

—

332

2

Terminals segment profit

101

60

256

119

Total segment profit

424

527

1,473

1,216

Depreciation, amortization and accretion, excluding corporate and other

93

44

213

141

Gross profit

$             331

$             483

$         1,260

$         1,075

Three Months Ended
September 30,

2024

2023

Motor fuel gallons sold

2,138

2,118

Motor fuel profit cents per gallon⁽¹⁾

                   12.8 ¢

                   12.5 ¢

Fuel profit

$                    96

$                  388

Non-fuel profit

39

40

Lease profit

29

39

Fuel Distribution segment profit

$                  164

$                  467

Expenses

$                  100

$                  119

Segment Adjusted EBITDA

$                  253

$                  234

Transaction-related expenses

—

—

Segment Adjusted EBITDA, excluding transaction-related expenses

$                  253

$                  234

⁽¹⁾ Excludes the impact of inventory valuation adjustments consistent with the definition of Adjusted EBITDA.

Three Months Ended
September 30,

2024

2023

Pipelines throughput (barrels per day)

1,165

—

Pipeline Systems segment profit

$                    159

$                      —

Expenses

$                      72

$                      —

Segment Adjusted EBITDA

$                    136

$                        2

Transaction-related expenses

11

—

Segment Adjusted EBITDA, excluding transaction-related expenses

$                    147

$                        2

Three Months Ended
September 30,

2024

2023

Throughput (barrels per day)

694

421

Terminal segment profit

$                    101

$                      60

Expenses

$                      52

$                      22

Segment Adjusted EBITDA

$                      67

$                      21

Transaction-related expenses

3

—

Segment Adjusted EBITDA, excluding transaction-related expenses

$                      70

$                      21