- Reports third quarter results including net income of
$272 million, Adjusted
EBITDA(1) of $257 million
and Distributable Cash Flow, as adjusted(1) of
$181 million
- Increases full-year 2023 Adjusted EBITDA(1)(2)
guidance to be above $935
million
DALLAS, Nov. 1, 2023
/PRNewswire/ -- Sunoco LP (NYSE: SUN) ("SUN" or the
"Partnership") today reported financial and operating results for
the quarter ended September 30,
2023.
Financial and Operational Highlights
For the third quarter of 2023, net income was $272 million versus $83
million in the third quarter of 2022.
Adjusted EBITDA(1) for the third quarter of 2023 was
$257 million compared with
$276 million in the third quarter of
2022.
Distributable Cash Flow, as adjusted(1), for the
third quarter of 2023 was $181
million, compared to $196
million in the third quarter of 2022.
The Partnership sold approximately 2.1 billion gallons of fuel
in the third quarter of 2023, an increase of 7% versus the third
quarter of 2022. Fuel margin for all gallons sold was
13.0 cents per gallon for the third
quarter of 2023 compared to 13.9
cents per gallon in the third quarter of 2022.
Distribution
On October 20, 2023, the Board of
Directors of SUN's general partner declared a distribution for the
third quarter of 2023 of $0.8420 per
unit, or $3.3680 per unit on an
annualized basis. The distribution will be paid on
November 20, 2023 to common
unitholders of record on October 30,
2023.
Liquidity and Leverage
On September 20, 2023, SUN
completed an offering of $500 million
7.000% Senior Notes due 2028. SUN used the net proceeds from the
offering to repay a portion of the outstanding borrowings under its
$1.5 billion revolving credit
facility.
At September 30, 2023, SUN had
$647 million of borrowings against
its revolving credit facility and other long-term debt of
$3.2 billion. The Partnership
maintained liquidity of approximately $847
million at the end of the quarter under its $1.5 billion revolving credit facility.
SUN's leverage ratio of net debt to Adjusted
EBITDA(1), calculated in accordance with its revolving
credit facility, was 3.9 times at the end of the third quarter of
2023.
Capital Spending
SUN's total capital expenditures for the third quarter of 2023
were $45 million, which included
$31 million for growth capital and
$14 million for maintenance
capital.
SUN's segment results and other supplementary data are provided
after the financial tables below.
(1)
|
Adjusted EBITDA and
Distributable Cash Flow, as adjusted, are non-GAAP financial
measures of performance that have limitations and should not be
considered as a substitute for net income. Please refer to the
discussion and tables under "Reconciliations of Non-GAAP Measures"
later in this news release for a discussion of our use of Adjusted
EBITDA and Distributable Cash Flow, as adjusted, and a
reconciliation to net income.
|
(2)
|
A reconciliation of
non-GAAP forward looking information to corresponding GAAP measures
cannot be provided without unreasonable efforts due to the inherent
difficulty in quantifying certain amounts due to a variety of
factors, including the unpredictability of commodity price
movements and future charges or reversals outside the normal course
of business which may be significant.
|
Earnings Conference Call
Sunoco LP management will hold a conference call on Wednesday, November 1, 2023, at 9:00 a.m. Central time (10:00 a.m. Eastern time) to discuss results and
recent developments. To participate, dial 877-407-6184 (toll
free) or 201-389-0877 approximately 10 minutes before the
scheduled start time and ask for the Sunoco LP conference call. The
call will also be accessible live and for later replay via webcast
in the Investor Relations section of Sunoco's website at
www.SunocoLP.com under Webcasts and Presentations.
Sunoco LP (NYSE: SUN) is a master limited
partnership with core operations that include the distribution of
motor fuel to approximately 10,000 convenience stores, independent
dealers, commercial customers and distributors located in more than
40 U.S. states and territories as well as refined product
transportation and terminalling assets. SUN's general partner is
owned by Energy Transfer LP (NYSE: ET).
Forward-Looking Statements
This news release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that are difficult to predict and many of which are beyond
management's control. An extensive list of factors that can affect
future results are discussed in the Partnership's Annual Report on
Form 10-K and other documents filed from time to time with the
Securities and Exchange Commission. The Partnership
undertakes no obligation to update or revise any forward-looking
statement to reflect new information or events.
The information contained in this press release is available on
our website at www.SunocoLP.com
Contacts
Investors:
Scott Grischow, Treasurer, Senior
Vice President – Investor Relations and Mergers &
Acquisitions
(214) 840-5660, scott.grischow@sunoco.com
Matthew Kobler, Senior Manager –
Investor Relations
(214) 840-5604, matthew.kobler@sunoco.com
Media:
Alexis Daniel,
Manager – Communications
(214) 981-0739, alexis.daniel@sunoco.com
– Financial Schedules Follow –
SUNOCO
LP CONSOLIDATED BALANCE SHEETS (Dollars in
millions)
(unaudited)
|
|
|
September
30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
256
|
|
$
82
|
Accounts receivable,
net
|
1,145
|
|
890
|
Accounts receivable
from affiliates
|
10
|
|
15
|
Inventories,
net
|
909
|
|
821
|
Other current
assets
|
162
|
|
175
|
Total current
assets
|
2,482
|
|
1,983
|
|
|
|
|
Property and
equipment
|
2,924
|
|
2,796
|
Accumulated
depreciation
|
(1,103)
|
|
(1,036)
|
Property and
equipment, net
|
1,821
|
|
1,760
|
Other
assets:
|
|
|
|
Finance lease
right-of-use assets, net
|
9
|
|
9
|
Operating lease
right-of-use assets, net
|
509
|
|
524
|
Goodwill
|
1,599
|
|
1,601
|
Intangible assets,
net
|
554
|
|
588
|
Other non-current
assets
|
267
|
|
236
|
Investment in
unconsolidated affiliates
|
126
|
|
129
|
Total
assets
|
$
7,367
|
|
$
6,830
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
991
|
|
$
966
|
Accounts payable to
affiliates
|
114
|
|
109
|
Accrued expenses and
other current liabilities
|
350
|
|
310
|
Operating lease
current liabilities
|
21
|
|
21
|
Total current
liabilities
|
1,476
|
|
1,406
|
|
|
|
|
Operating lease
non-current liabilities
|
514
|
|
528
|
Revolving credit
facility
|
647
|
|
900
|
Long-term debt,
net
|
3,169
|
|
2,671
|
Advances from
affiliates
|
104
|
|
116
|
Deferred tax
liability
|
162
|
|
156
|
Other non-current
liabilities
|
115
|
|
111
|
Total
liabilities
|
6,187
|
|
5,888
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
Limited
partners:
|
|
|
|
Common unitholders
(84,065,099 units issued and outstanding as of
September 30, 2023 and
84,054,765 units issued and outstanding as of
December 31, 2022)
|
1,180
|
|
942
|
Class C unitholders -
held by subsidiaries
(16,410,780 units issued and outstanding as of
September 30, 2023 and
December 31, 2022)
|
—
|
|
—
|
Total
equity
|
1,180
|
|
942
|
Total liabilities and
equity
|
$
7,367
|
|
$
6,830
|
SUNOCO
LP CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (Dollars in millions, except per unit
data)
(unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
REVENUES:
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
6,173
|
|
$
6,468
|
|
$
17,019
|
|
$
19,423
|
Non-motor fuel
sales
|
109
|
|
90
|
|
295
|
|
282
|
Lease
income
|
38
|
|
36
|
|
113
|
|
106
|
Total
revenues
|
6,320
|
|
6,594
|
|
17,427
|
|
19,811
|
COST OF SALES AND
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
Cost of
sales
|
5,793
|
|
6,261
|
|
16,211
|
|
18,703
|
General and
administrative
|
30
|
|
29
|
|
92
|
|
86
|
Other
operating
|
93
|
|
86
|
|
262
|
|
250
|
Lease
expense
|
18
|
|
16
|
|
51
|
|
47
|
(Gain) loss on
disposal of assets
|
4
|
|
(3)
|
|
(8)
|
|
(8)
|
Depreciation,
amortization and accretion
|
44
|
|
55
|
|
141
|
|
151
|
Total cost of sales
and operating expenses
|
5,982
|
|
6,444
|
|
16,749
|
|
19,229
|
OPERATING
INCOME
|
338
|
|
150
|
|
678
|
|
582
|
OTHER INCOME
(EXPENSE):
|
|
|
|
|
|
|
|
Interest expense,
net
|
(56)
|
|
(49)
|
|
(162)
|
|
(135)
|
Other income,
net
|
—
|
|
—
|
|
7
|
|
—
|
Equity in earnings of
unconsolidated affiliates
|
1
|
|
1
|
|
4
|
|
3
|
INCOME BEFORE INCOME
TAXES
|
283
|
|
102
|
|
527
|
|
450
|
Income tax
expense
|
11
|
|
19
|
|
27
|
|
30
|
NET INCOME AND
COMPREHENSIVE INCOME
|
$
272
|
|
$
83
|
|
$
500
|
|
$
420
|
|
|
|
|
|
|
|
|
NET INCOME PER COMMON
UNIT:
|
|
|
|
|
|
|
|
Basic
|
$
2.99
|
|
$
0.76
|
|
$
5.20
|
|
$
4.32
|
Diluted
|
$
2.95
|
|
$
0.75
|
|
$
5.14
|
|
$
4.27
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON
UNITS
OUTSTANDING:
|
|
|
|
|
|
|
|
Basic
|
84,064,445
|
|
83,763,064
|
|
84,061,363
|
|
83,728,153
|
Diluted
|
85,132,733
|
|
84,831,037
|
|
85,037,289
|
|
84,769,526
|
|
|
|
|
|
|
|
|
CASH DISTRIBUTIONS PER
UNIT
|
$
0.8420
|
|
$
0.8255
|
|
$
2.5260
|
|
$
2.4765
|
Key Operating Metrics
The following information is intended to provide investors with
a reasonable basis for assessing our historical operations, but
should not serve as the only criteria for predicting our future
performance.
The key operating metrics by segment and accompanying footnotes
set forth in the following table are presented for the three months
ended September 30, 2023 and 2022 and
have been derived from our historical consolidated financial
statements.
|
Three Months Ended
September 30,
|
|
2023
|
|
|
2022
|
|
Fuel
Distribution
and
Marketing
|
|
All
Other
|
|
Total
|
|
|
Fuel
Distribution
and
Marketing
|
|
All
Other
|
|
Total
|
|
(dollars and
gallons in millions, except profit per gallon)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
6,000
|
|
$
173
|
|
$ 6,173
|
|
|
$
6,270
|
|
$
198
|
|
$ 6,468
|
Non-motor fuel
sales
|
45
|
|
64
|
|
109
|
|
|
29
|
|
61
|
|
90
|
Lease
income
|
35
|
|
3
|
|
38
|
|
|
35
|
|
1
|
|
36
|
Total
revenues
|
$
6,080
|
|
$
240
|
|
$ 6,320
|
|
|
$
6,334
|
|
$
260
|
|
$ 6,594
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
5,593
|
|
$
162
|
|
$ 5,755
|
|
|
$
6,062
|
|
$
170
|
|
$ 6,232
|
Non-motor fuel
sales
|
13
|
|
25
|
|
38
|
|
|
2
|
|
27
|
|
29
|
Lease
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
Total cost of
sales
|
$
5,606
|
|
$
187
|
|
$ 5,793
|
|
|
$
6,064
|
|
$
197
|
|
$ 6,261
|
Net income and
comprehensive income
|
|
|
|
|
$
272
|
|
|
|
|
|
|
$
83
|
Adjusted EBITDA
(1)
|
$
226
|
|
$
31
|
|
$
257
|
|
|
$
250
|
|
$
26
|
|
$
276
|
Operating
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel gallons
sold
|
|
|
|
|
2,124
|
|
|
|
|
|
|
1,986
|
Motor fuel profit cents
per gallon (2)
|
|
|
|
|
13.0
¢
|
|
|
|
|
|
|
13.9
¢
|
The following table presents a reconciliation of net income to
Adjusted EBITDA and Distributable Cash Flow, as adjusted, for the
three months ended September 30, 2023
and 2022:
|
Three Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
(in
millions)
|
Net income and
comprehensive income
|
$
272
|
|
$
83
|
Depreciation,
amortization and accretion
|
44
|
|
55
|
Interest expense,
net
|
56
|
|
49
|
Non-cash unit-based
compensation expense
|
4
|
|
4
|
(Gain) loss on
disposal of assets
|
4
|
|
(3)
|
Unrealized (gain) loss
on commodity derivatives
|
(1)
|
|
23
|
Inventory
adjustments
|
(141)
|
|
40
|
Equity in earnings of
unconsolidated affiliates
|
(1)
|
|
(1)
|
Adjusted EBITDA
related to unconsolidated affiliates
|
2
|
|
2
|
Other non-cash
adjustments
|
7
|
|
5
|
Income tax
expense
|
11
|
|
19
|
Adjusted EBITDA
(1)
|
$
257
|
|
$
276
|
|
|
|
|
Adjusted EBITDA
(1)
|
$
257
|
|
$
276
|
Adjusted EBITDA
related to unconsolidated affiliates
|
(2)
|
|
(2)
|
Distributable cash
flow from unconsolidated affiliates
|
2
|
|
2
|
Cash interest
expense
|
(54)
|
|
(46)
|
Current income tax
expense
|
(8)
|
|
(24)
|
Maintenance capital
expenditures
|
(14)
|
|
(11)
|
Distributable Cash
Flow
|
181
|
|
195
|
Transaction-related
expenses
|
—
|
|
1
|
Distributable Cash
Flow, as adjusted (1)
|
$
181
|
|
$
196
|
|
|
|
|
Distributions to
Partners:
|
|
|
|
Limited
Partners
|
$
71
|
|
$
69
|
General
Partners
|
19
|
|
18
|
Total distributions to
be paid to partners
|
$
90
|
|
$
87
|
Common Units
outstanding - end of period
|
84.1
|
|
83.8
|
|
|
(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 adjustments, and certain other
operating expenses reflected in net income that we do not believe
are indicative of ongoing core operations, such as gain or loss on
disposal of assets and non-cash impairment charges. We define
Distributable Cash Flow, as adjusted, 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.
|
|
|
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
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.
|
|
|
(2)
|
Excludes the impact of
inventory adjustments consistent with the definition of Adjusted
EBITDA.
|
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SOURCE Sunoco LP