Sunoco LP Reports First Quarter 2025 Financial and Operating Results

SUNOCO LP

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(unaudited)

March 31,
2025

December 31,
2024

ASSETS

Current assets:

Cash and cash equivalents

$                    172

$                      94

Accounts receivable, net

1,031

1,162

Inventories, net

1,111

1,068

Other current assets

199

141

Total current assets

2,513

2,465

Property and equipment

8,995

8,914

Accumulated depreciation

(1,389)

(1,240)

Property and equipment, net

7,606

7,674

Other assets:

Operating lease right-of-use assets, net

495

477

Goodwill

1,477

1,477

Intangible assets, net

540

547

Other non-current assets

435

400

Investments in unconsolidated affiliates

1,276

1,335

Total assets

$               14,342

$               14,375

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$                 1,004

$                 1,255

Accounts payable to affiliates

128

199

Accrued expenses and other current liabilities

460

457

Operating lease current liabilities

31

34

Current maturities of long-term debt

2

2

Total current liabilities

1,625

1,947

Operating lease non-current liabilities

500

479

Long-term debt, net

7,671

7,484

Advances from affiliates

77

82

Deferred tax liabilities

161

157

Other non-current liabilities

152

158

Total liabilities

10,186

10,307

Commitments and contingencies

Equity:

Limited partners:

       Common unitholders (136,327,654 units issued and outstanding as of March 31, 2025 and
          136,228,535 units issued and outstanding as of December 31, 2024)

4,159

4,066

    Class C unitholders - held by subsidiaries (16,410,780 units issued and outstanding as of
        March 31, 2025 and December 31, 2024)

—

—

Accumulated other comprehensive income (loss)

(3)

2

 Total equity

4,156

4,068

Total liabilities and equity

$               14,342

$               14,375

SUNOCO LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in millions, except per unit data)

(unaudited)

Three Months Ended March 31,

Revenues

$                 5,179

$                 5,499

COSTS AND EXPENSES:

Cost of sales

4,526

5,015

Operating expenses

143

88

General and administrative

39

36

Lease expense

16

18

Loss on disposal of assets

3

2

Depreciation, amortization and accretion

156

43

Total cost of sales and operating expenses

4,883

5,202

OPERATING INCOME

296

297

OTHER INCOME (EXPENSE):

Interest expense, net

(121)

(63)

Equity in earnings of unconsolidated affiliates

32

2

Loss on extinguishment of debt

(2)

—

Other, net

—

1

INCOME BEFORE INCOME TAXES

205

237

Income tax expense (benefit)

(2)

7

NET INCOME

$                    207

$                    230

NET INCOME PER COMMON UNIT:

Basic

$                   1.22

$                   2.29

Diluted

$                   1.21

$                   2.26

WEIGHTED AVERAGE COMMON UNITS OUTSTANDING

Basic

136,267,512

84,424,748

Diluted

136,936,311

85,259,238

CASH DISTRIBUTION PER COMMON UNIT

$               0.8976

$               0.8756

SUNOCO LP

SUPPLEMENTAL INFORMATION

(Dollars and units in millions)

(unaudited)

Three Months Ended March 31,

Net income

$                    207

$                    230

Depreciation, amortization and accretion

156

43

Interest expense, net

121

63

Non-cash unit-based compensation expense

4

4

Loss on disposal of assets

3

2

Loss on extinguishment of debt

2

—

Unrealized (gains) losses on commodity derivatives

(1)

13

Inventory valuation adjustments

(61)

(130)

Equity in earnings of unconsolidated affiliates

(32)

(2)

Adjusted EBITDA related to unconsolidated affiliates

50

3

Other non-cash adjustments

11

9

Income tax expense (benefit)

(2)

7

Adjusted EBITDA ⁽¹⁾

$                    458

$                    242

Adjusted EBITDA ⁽¹⁾

$                    458

$                    242

Adjusted EBITDA related to unconsolidated affiliates

(50)

(3)

Distributable cash flow from unconsolidated affiliates

49

3

Cash interest expense

(118)

(54)

Current income tax expense

(5)

(3)

Maintenance capital expenditures ⁽²⁾

(24)

(14)

Distributable Cash Flow

310

171

Transaction-related expenses

—

5

Distributable Cash Flow, as adjusted ⁽¹⁾

$                    310

$                    176

Distributions to Partners:

Limited Partners

$                    122

$                    119

General Partner

39

36

Total distributions to be paid to partners

$                    161

$                    155

Common Units outstanding - end of period

136.3

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, amortization and accretion 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, amortization, accretion 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.

⁽²⁾

Maintenance capital expenditures exclude $2 million for our proportionate share of maintenance capital expenditures related to our investments in ET-S Permian and J.C. Nolan, as these amounts are included in "Distributable cash flow from unconsolidated affiliates."

SUNOCO LP

SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT

(Tabular dollar amounts in millions)

(unaudited)

Three Months Ended March 31,

2025

2024

Segment Adjusted EBITDA:

Fuel Distribution

$                    220

$                    218

Pipeline Systems

172

—

Terminals

66

24

Adjusted EBITDA

$                    458

$                    242

Three Months Ended March 31,

2025

2024

Fuel Distribution segment profit

$                    361

$                    417

Pipeline Systems segment profit

174

1

Terminals segment profit

118

66

Total segment profit

653

484

Depreciation, amortization and accretion, excluding corporate and other

156

43

Gross profit

$                    497

$                    441

Fuel Distribution

Three Months Ended March 31,

2025

2024

Motor fuel gallons sold (millions)

2,087

2,100

Motor fuel profit cents per gallon⁽¹⁾

                   11.5 ¢

                   10.9 ¢

Fuel profit

$                  297

$                  344

Non-fuel profit

35

35

Lease profit

29

38

Fuel Distribution segment profit

$                  361

$                  417

Expenses

$                    94

$                  111

Segment Adjusted EBITDA

$                  220

$                  218

⁽¹⁾

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

Pipeline Systems

Three Months Ended March 31,

2025

2024

Pipelines throughput (thousand barrels per day)

1,258

—

Pipeline Systems segment profit

$                    174

$                        1

Expenses

$                      54

$                        3

Segment Adjusted EBITDA

$                    172

$                      —

Terminals

Three Months Ended March 31,

2025

2024

Throughput (thousand barrels per day)

620

418

Terminal segment profit

$                    118

$                      66

Expenses

$                      50

$                      28

Segment Adjusted EBITDA

$                      66

$                      24