- Delivers record full year 2023 financial and operating
results
- Reports fourth quarter volume of over 2.2 billion gallons,
highest in the Partnership's history
- Reaffirms full year 2024 Adjusted
EBITDA(1)(2) guidance of $975 million to $1
billion
- Announced a series of definitive agreements in January to:
- Acquire NuStar Energy L.P.
- Acquire European liquid fuels terminals from Zenith Energy
- Divest 204 convenience stores to 7-Eleven, Inc.
DALLAS, Feb. 14,
2024 /PRNewswire/ -- Sunoco LP (NYSE: SUN)
("SUN" or the "Partnership") today reported financial and operating
results for the quarter and year ended December 31, 2023.
Financial and Operational Highlights
For the fourth quarter of 2023, net loss was $106 million compared to net income of
$55 million in the fourth quarter of
2022.
Adjusted EBITDA(1) for the fourth quarter of 2023 was
$236 million compared to $238 million in the fourth quarter of 2022.
Distributable Cash Flow, as adjusted(1), for the
fourth quarter of 2023 was $148
million compared to $153
million in the fourth quarter of 2022.
The Partnership sold over 2.2 billion gallons of fuel in the
fourth quarter of 2023, an increase of 11% from the fourth quarter
of 2022. Fuel margin for all gallons sold was 12.3 cents per gallon for the fourth quarter of
2023 compared to 12.8 cents per
gallon in the fourth quarter of 2022.
For the year ended December 31,
2023, net income was $394
million compared to $475
million in 2022.
Adjusted EBITDA(1) for the year ended December 31, 2023 totaled $964 million, an increase of 5% compared to
$919 million in 2022.
Distributable Cash Flow, as adjusted(1), for the year
ended December 31, 2023 was
$664 million, compared to
$650 million in 2022.
For the year ended December 31,
2023, the Partnership sold approximately 8.3 billion gallons
of fuel, an increase of 8% from the year ended December 31, 2022. Fuel margin for all
gallons sold was 12.7 cents per
gallon for the year ended December 31,
2023 compared to 12.8 cents
per gallon for the year ended December 31,
2022.
Distribution
On January 25, 2024, the Board of
Directors of SUN's general partner declared a distribution for the
fourth quarter of 2023 of $0.8420 per
unit, or $3.3680 per unit on an
annualized basis. The distribution will be paid on
February 20, 2024 to common
unitholders of record on February 7,
2024.
Liquidity and Leverage
At December 31, 2023, SUN had
approximately $400 million of
borrowings against its revolving credit facility and other
long-term debt of $3.2 billion.
The Partnership maintained liquidity of approximately $1.1 billion 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 credit
facility, was 3.7 times at the end of the fourth quarter.
Capital Spending
SUN's total capital expenditures for the fourth quarter were
$83 million, which included
$50 million for growth capital and
$33 million for maintenance
capital. For the full year 2023, growth capital expenditures
were $145 million and maintenance
capital expenditures were $70
million.
Recent Developments
- On January 22, 2024, the
Partnership announced its entry into a definitive agreement to
acquire NuStar Energy L.P. in an all equity unit-for-unit exchange
valued at $7.3 billion. The
transaction is expected to close in the second quarter of 2024,
subject to customary closing conditions.
- On January 11, 2024, the
Partnership announced that it will acquire liquid fuels terminals
in Amsterdam, Netherlands and
Bantry Bay, Ireland from Zenith
Energy for €170 million including working capital. The transaction
is expected to close in the first quarter of 2024, subject to
customary closing conditions.
- On January 11, 2024, SUN
announced its entry into a definitive agreement for the sale of 204
convenience stores to 7-Eleven, Inc. for approximately $1.0 billion. The transaction is expected to
close in the middle of 2024, subject to customary closing
conditions.
2024 Business Outlook
The Partnership expects full year 2024 Adjusted
EBITDA(1)(2) to be between $975
million and $1 billion.
This guidance range excludes the impact of the pending
acquisition of NuStar Energy L.P.
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, February 14, 2024, 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 – Finance
(214) 840-5660, scott.grischow@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)
|
|
|
December 31,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
29
|
|
$
82
|
|
Accounts receivable,
net
|
856
|
|
890
|
|
Accounts receivable
from affiliates
|
20
|
|
15
|
|
Inventories,
net
|
889
|
|
821
|
|
Other current
assets
|
133
|
|
175
|
|
Total current
assets
|
1,927
|
|
1,983
|
|
|
|
|
|
Property and
equipment
|
2,970
|
|
2,796
|
|
Accumulated
depreciation
|
(1,134)
|
|
(1,036)
|
|
Property and
equipment, net
|
1,836
|
|
1,760
|
|
Other
assets:
|
|
|
|
|
Operating lease
right-of-use assets, net
|
506
|
|
524
|
|
Goodwill
|
1,599
|
|
1,601
|
|
Intangible assets,
net
|
544
|
|
588
|
|
Other non-current
assets
|
290
|
|
245
|
|
Investments in
unconsolidated affiliates
|
124
|
|
129
|
|
Total
assets
|
$
6,826
|
|
$
6,830
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
828
|
|
$
966
|
|
Accounts payable to
affiliates
|
170
|
|
109
|
|
Accrued expenses and
other current liabilities
|
353
|
|
310
|
|
Operating lease
current liabilities
|
22
|
|
21
|
|
Total current
liabilities
|
1,373
|
|
1,406
|
|
|
|
|
|
Operating lease
non-current liabilities
|
511
|
|
528
|
|
Long-term debt,
net
|
3,580
|
|
3,571
|
|
Advances from
affiliates
|
102
|
|
116
|
|
Deferred tax
liabilities
|
166
|
|
156
|
|
Other non-current
liabilities
|
116
|
|
111
|
|
Total
liabilities
|
5,848
|
|
5,888
|
|
Commitments and
contingencies
|
|
|
|
|
Equity:
|
|
|
|
|
Limited
partners:
|
|
|
|
|
Common unitholders
(84,408,014 and 84,054,765 units issued and outstanding as of
December 31, 2023
and 2022, respectively)
|
978
|
|
942
|
|
Class C unitholders -
held by subsidiary (16,410,780 units issued and outstanding as of
December 31,
2023 and 2022)
|
—
|
|
—
|
|
Total
equity
|
978
|
|
942
|
|
Total liabilities and
equity
|
$
6,826
|
|
$
6,830
|
|
SUNOCO
LP
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(Dollars in millions, except per unit
data)
(unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
5,506
|
|
$
5,793
|
|
$
22,525
|
|
$
25,216
|
|
Non motor fuel
sales
|
97
|
|
88
|
|
392
|
|
370
|
|
Lease
income
|
38
|
|
37
|
|
151
|
|
143
|
|
Total
revenues
|
5,641
|
|
5,918
|
|
23,068
|
|
25,729
|
|
Cost of sales and
operating expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
5,492
|
|
5,647
|
|
21,703
|
|
24,350
|
|
General and
administrative
|
34
|
|
34
|
|
126
|
|
120
|
|
Other
operating
|
94
|
|
88
|
|
356
|
|
338
|
|
Lease
expense
|
17
|
|
16
|
|
68
|
|
63
|
|
Loss (gain) on
disposal of assets
|
1
|
|
(5)
|
|
(7)
|
|
(13)
|
|
Depreciation,
amortization and accretion
|
46
|
|
42
|
|
187
|
|
193
|
|
Total cost of sales and
operating expenses
|
5,684
|
|
5,822
|
|
22,433
|
|
25,051
|
|
Operating income
(loss)
|
(43)
|
|
96
|
|
635
|
|
678
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(55)
|
|
(47)
|
|
(217)
|
|
(182)
|
|
Other income,
net
|
—
|
|
1
|
|
7
|
|
1
|
|
Equity in earnings of
unconsolidated affiliates
|
1
|
|
1
|
|
5
|
|
4
|
|
Income (loss) before
income taxes
|
(97)
|
|
51
|
|
430
|
|
501
|
|
Income tax expense
(benefit)
|
9
|
|
(4)
|
|
36
|
|
26
|
|
Net income (loss)
and comprehensive income (loss)
|
$
(106)
|
|
$
55
|
|
$
394
|
|
$
475
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common unit:
|
|
|
|
|
|
|
|
|
Common units -
basic
|
$
(1.50)
|
|
$
0.42
|
|
$
3.70
|
|
$
4.74
|
|
Common units -
diluted
|
$
(1.50)
|
|
$
0.42
|
|
$
3.65
|
|
$
4.68
|
|
|
|
|
|
|
|
|
|
Weighted average
limited partner units outstanding:
|
|
|
|
|
|
|
|
|
Common units -
basic
|
84,139,599
|
|
83,836,166
|
|
84,081,083
|
|
83,755,378
|
|
Common units -
diluted
|
84,139,599
|
|
84,925,646
|
|
85,093,497
|
|
84,803,698
|
|
|
|
|
|
|
|
|
|
Cash distribution
per unit
|
$
0.8420
|
|
$
0.8255
|
|
$
3.3680
|
|
$
3.3020
|
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 below are presented for the three months and years ended
December 31, 2023 and 2022 and have
been derived from our historical consolidated financial
statements.
|
Three Months Ended
December 31,
|
|
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
|
$
5,354
|
|
$
152
|
|
$
5,506
|
|
|
$
5,630
|
|
$
163
|
|
$
5,793
|
|
Non motor fuel
sales
|
39
|
|
58
|
|
97
|
|
|
29
|
|
59
|
|
88
|
|
Lease
income
|
35
|
|
3
|
|
38
|
|
|
33
|
|
4
|
|
37
|
|
Total
revenues
|
$
5,428
|
|
$
213
|
|
$
5,641
|
|
|
$
5,692
|
|
$
226
|
|
$
5,918
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
5,324
|
|
$
140
|
|
$
5,464
|
|
|
$
5,477
|
|
$
139
|
|
$
5,616
|
|
Non motor fuel
sales
|
7
|
|
21
|
|
28
|
|
|
3
|
|
28
|
|
31
|
|
Lease
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Total cost of
sales
|
$
5,331
|
|
$
161
|
|
$
5,492
|
|
|
$
5,480
|
|
$
167
|
|
$
5,647
|
|
Net income (loss) and
comprehensive income (loss)
|
|
|
|
|
$
(106)
|
|
|
|
|
|
|
$
55
|
|
Adjusted EBITDA
(1)
|
$
210
|
|
$
26
|
|
$
236
|
|
|
$
183
|
|
$
55
|
|
$
238
|
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total motor fuel
gallons sold
|
|
|
|
|
2,202
|
|
|
|
|
|
|
1,979
|
|
Motor fuel profit cents
per gallon (2)
|
|
|
|
|
12.3 ¢
|
|
|
|
|
|
|
12.8 ¢
|
|
|
Year Ended December
31,
|
|
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
|
$
21,908
|
|
$
617
|
|
$ 22,525
|
|
|
$
24,508
|
|
$
708
|
|
$ 25,216
|
|
Non motor fuel
sales
|
148
|
|
244
|
|
392
|
|
|
140
|
|
230
|
|
370
|
|
Lease
income
|
139
|
|
12
|
|
151
|
|
|
132
|
|
11
|
|
143
|
|
Total
revenues
|
$
22,195
|
|
$
873
|
|
$ 23,068
|
|
|
$
24,780
|
|
$
949
|
|
$ 25,729
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Motor fuel
sales
|
$
21,007
|
|
$
572
|
|
$ 21,579
|
|
|
$
23,585
|
|
$
634
|
|
$ 24,219
|
|
Non motor fuel
sales
|
27
|
|
97
|
|
124
|
|
|
27
|
|
104
|
|
131
|
|
Lease
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Total cost of
sales
|
$
21,034
|
|
$
669
|
|
$ 21,703
|
|
|
$
23,612
|
|
$
738
|
|
$ 24,350
|
|
Net income and
comprehensive income
|
|
|
|
|
$
394
|
|
|
|
|
|
|
$
475
|
|
Adjusted EBITDA
(1)
|
$
853
|
|
$
111
|
|
$
964
|
|
|
$
807
|
|
$
112
|
|
$
919
|
|
Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total motor fuel
gallons sold
|
|
|
|
|
8,342
|
|
|
|
|
|
|
7,720
|
|
Motor fuel profit cents
per gallon (2)
|
|
|
|
|
12.7 ¢
|
|
|
|
|
|
|
12.8 ¢
|
The following table presents a reconciliation of Adjusted EBITDA
to net income and Adjusted EBITDA to Distributable Cash Flow, as
adjusted, for the three months and years ended December 31, 2023 and 2022:
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(dollars in
millions)
|
|
Net income (loss)
and comprehensive income (loss)
|
$
(106)
|
|
$
55
|
|
$
394
|
|
$
475
|
|
Depreciation,
amortization and accretion
|
46
|
|
42
|
|
187
|
|
193
|
|
Interest expense,
net
|
55
|
|
47
|
|
217
|
|
182
|
|
Non-cash unit-based
compensation expense
|
4
|
|
2
|
|
17
|
|
14
|
|
(Gain) loss on
disposal of assets
|
1
|
|
(5)
|
|
(7)
|
|
(13)
|
|
Unrealized (gain) loss
on commodity derivatives
|
(10)
|
|
18
|
|
(21)
|
|
21
|
|
Inventory
adjustments
|
227
|
|
76
|
|
114
|
|
(5)
|
|
Equity in earnings of
unconsolidated affiliates
|
(1)
|
|
(1)
|
|
(5)
|
|
(4)
|
|
Adjusted EBITDA
related to unconsolidated affiliates
|
2
|
|
3
|
|
10
|
|
10
|
|
Other non-cash
adjustments
|
9
|
|
5
|
|
22
|
|
20
|
|
Income tax expense
(benefit)
|
9
|
|
(4)
|
|
36
|
|
26
|
|
Adjusted
EBITDA
|
$
236
|
|
$
238
|
|
$
964
|
|
$
919
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(1)
|
$
236
|
|
$
238
|
|
$
964
|
|
$
919
|
|
Adjusted EBITDA
related to unconsolidated affiliates
|
(2)
|
|
(3)
|
|
(10)
|
|
(10)
|
|
Distributable cash
flow from unconsolidated affiliates
|
1
|
|
3
|
|
7
|
|
8
|
|
Cash interest
expense
|
(53)
|
|
(47)
|
|
(210)
|
|
(176)
|
|
Current income tax
(expense) benefit
|
(4)
|
|
(6)
|
|
(23)
|
|
2
|
|
Transaction-related
income taxes
|
—
|
|
—
|
|
—
|
|
(42)
|
|
Maintenance capital
expenditures
|
(33)
|
|
(33)
|
|
(70)
|
|
(54)
|
|
Distributable Cash
Flow
|
145
|
|
152
|
|
658
|
|
647
|
|
Transaction-related
expenses
|
3
|
|
1
|
|
6
|
|
3
|
|
Distributable Cash
Flow, as adjusted (1)
|
$
148
|
|
$
153
|
|
$
664
|
|
$
650
|
|
|
|
|
|
|
|
|
|
Distributions to
Partners:
|
|
|
|
|
|
|
|
|
Limited
Partners
|
$
71
|
|
$
69
|
|
$
284
|
|
$
277
|
|
General
Partners
|
19
|
|
18
|
|
76
|
|
72
|
|
Total distributions to
be paid to partners
|
$
90
|
|
$
87
|
|
$
360
|
|
$
349
|
|
Common Units
outstanding - end of period
|
84.4
|
|
84.1
|
|
84.4
|
|
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 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 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
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