Sunoco LP Announces First Quarter 2023 Financial and Operating Results

March 31,
2023

December 31,
2022

Current assets:

  Cash and cash equivalents

  Accounts receivable, net

573

890

  Accounts receivable from affiliates

17

15

  Inventories, net

768

821

  Other current assets

185

175

     Total current assets

1,732

1,983

Property and equipment

2,795

2,796

Accumulated depreciation

(1,069)

(1,036)

  Property and equipment, net

1,726

1,760

Other assets:

  Finance lease right-of-use assets, net

9

9

  Operating lease right-of-use assets, net

524

524

  Goodwill

1,601

1,601

  Intangible assets, net

576

588

  Other non-current assets

258

236

  Investment in unconsolidated affiliates

128

129

     Total assets

$                   6,554

$             6,830

Current liabilities:

  Accounts payable

  Accounts payable to affiliates

125

109

  Accrued expenses and other current liabilities

291

310

  Operating lease current liabilities

21

21

     Total current liabilities

1,167

1,406

Operating lease non-current liabilities

528

528

Revolving line of credit

800

900

Long-term debt, net

2,672

2,671

Advances from affiliates

115

116

Deferred tax liability

159

156

Other non-current liabilities

113

111

  Total liabilities

5,554

5,888

Commitments and contingencies

Equity:

  Limited partners:

     Common unitholders
        (84,060,659 units issued and outstanding as of March 31, 2023 and
         84,054,765 units issued and outstanding as of December 31, 2022)

1,000

942

     Class C unitholders - held by subsidiaries
        (16,410,780 units issued and outstanding as of March 31, 2023 and
         December 31, 2022)

—

—

  Total equity

1,000

942

     Total liabilities and equity

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

Three Months Ended March 31,

2023

2022

REVENUES:

  Motor fuel sales

$                     5,239

  Non-motor fuel sales

86

90

  Lease income

37

35

     Total revenues

5,362

5,402

COST OF SALES AND OPERATING EXPENSES:

  Cost of sales

4,987

4,972

  General and administrative

29

27

  Other operating

82

81

  Lease expense

16

16

  Loss on disposal of assets

1

—

  Depreciation, amortization and accretion

48

47

     Total cost of sales and operating expenses

5,163

5,143

OPERATING INCOME

199

259

OTHER INCOME (EXPENSE):

  Interest expense, net

(53)

(41)

  Equity in earnings of unconsolidated affiliates

2

1

INCOME BEFORE INCOME TAXES

148

219

  Income tax expense

7

3

NET INCOME AND COMPREHENSIVE INCOME

$                        141

$                     216

NET INCOME PER COMMON UNIT:

  Basic

$                       1.43

  Diluted

$                       1.41

WEIGHTED AVERAGE COMMON UNITS OUTSTANDING:

  Basic

84,058,716

83,682,902

  Diluted

84,970,826

84,729,202

CASH DISTRIBUTIONS PER UNIT

$                     0.842

Three Months Ended March 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

  Non-motor fuel sales

29

57

41

49

90

  Lease income

Total revenues

$           5,166

Cost of sales:

  Motor fuel sales

$           4,835

  Non-motor fuel sales

4

23

27

12

22

34

  Lease

Total cost of sales

$           4,839

$         4,810

$         162

$     4,972

Net income and comprehensive income

$      141

$        216

Adjusted EBITDA ⁽¹⁾

$              195

   $           26

$        191

Operating Data:

Motor fuel gallons sold

1,930

1,769

Motor fuel profit cents per gallon ⁽²⁾

12.9¢

12.4¢

Net income and comprehensive income

$                   141

  Depreciation, amortization and accretion

  Interest expense, net

  Non-cash unit-based compensation expense

  Loss on disposal of assets

  Unrealized gain on commodity derivatives

  Inventory adjustments

  Equity in earnings of unconsolidated affiliates

  Adjusted EBITDA related to unconsolidated affiliates

  Other non-cash adjustments

  Income tax expense

Adjusted EBITDA

Adjusted EBITDA ⁽¹⁾

  Adjusted EBITDA related to unconsolidated affiliates

  Distributable cash flow from unconsolidated affiliates

  Cash interest expense

  Current income tax benefit (expense)

  Transaction-related income taxes

  Maintenance capital expenditures

Distributable Cash Flow

  Transaction-related expenses

Distributable Cash Flow, as adjusted ⁽¹⁾

Distributions to Partners:

Limited Partners

General Partners

  Total distributions to be paid to partners

Common Units outstanding - end of period

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.

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