Core Viewpoint - The article emphasizes the importance of value investing and highlights Sunoco (SUN) as a strong value stock based on its financial metrics and Zacks Rank [2][4][7]. Company Summary - Sunoco (SUN) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock has a P/E ratio of 11.12, which is lower than the industry average of 12.75, suggesting it may be undervalued [4]. - SUN's Forward P/E has fluctuated between 9.34 and 16.32 over the past year, with a median of 12.12, indicating variability in market perception [4]. - The P/S ratio for SUN is 0.23, compared to the industry average of 0.3, further supporting the notion of undervaluation [5]. - SUN's P/CF ratio stands at 6.75, which is attractive relative to the industry's average of 7.51, indicating solid cash flow performance [6]. - Overall, the financial metrics suggest that SUN is likely being undervalued, combined with a strong earnings outlook [7].

PART I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Sunoco LP's Q1 2024 unaudited consolidated financial statements show net income increased to $230 million, total assets grew to $7.39 billion, reflecting acquisitions and divestitures Consolidated Balance Sheets | | March 31, 2024 (Millions USD) | December 31, 2023 (Millions USD) | | :--- | :--- | :--- | | **Total current assets** | $2,723 | $1,927 | | **Total assets** | $7,392 | $6,826 | | **Total current liabilities** | $1,647 | $1,373 | | **Long-term debt, net** | $3,795 | $3,580 | | **Total liabilities** | $6,271 | $5,848 | | **Total equity** | $1,121 | $978 | - Total assets increased to **$7.39 billion** from **$6.83 billion**, primarily driven by a rise in current assets, which includes **$511 million** in assets held for sale and a significant increase in cash and cash equivalents to **$215 million**[9](index=9&type=chunk) Consolidated Statements of Operations and Comprehensive Income | | Three Months Ended March 31, 2024 (Millions USD) | Three Months Ended March 31, 2023 (Millions USD) | | :--- | :--- | :--- | | **Total revenues** | $5,499 | $5,362 | | **Operating income** | $297 | $199 | | **Net income** | $230 | $141 | | **Diluted EPS** | $2.26 | $1.41 | - Net income increased by **63%** year-over-year, rising to **$230 million** in Q1 2024 from **$141 million** in Q1 2023, primarily driven by higher operating income[12](index=12&type=chunk) Consolidated Statements of Equity - Total equity increased from **$978 million** at the end of 2023 to **$1.12 billion** as of March 31, 2024, driven by net income of **$230 million**, partially offset by **$91 million** in cash distributions to unitholders[15](index=15&type=chunk) Consolidated Statements of Cash Flows | | Three Months Ended March 31, 2024 (Millions USD) | Three Months Ended March 31, 2023 (Millions USD) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $286 | $326 | | **Net cash used in investing activities** | ($223) | ($31) | | **Net cash provided by (used in) financing activities** | $123 | ($188) | | **Net increase in cash and cash equivalents** | $186 | $107 | - Cash used in investing activities increased significantly to **$223 million**, primarily due to a **$185 million** cash payment for an acquisition, while cash from financing activities was positive due to net borrowings of **$214 million** on the Credit Facility[18](index=18&type=chunk) Notes to Consolidated Financial Statements - On May 3, 2024, the company completed its acquisition of NuStar Energy L.P., issuing approximately **50.6 million** common units and assuming about **$3.4 billion** in debt[27](index=27&type=chunk) - On March 13, 2024, the company acquired liquid fuels terminals in Amsterdam and Bantry Bay from Zenith Energy for **€170 million** (**$185 million**)[28](index=28&type=chunk) - On April 16, 2024, the company completed the sale of **204** convenience stores to 7-Eleven, Inc. for approximately **$1.0 billion**, with related assets and liabilities classified as held for sale on the March 31, 2024 balance sheet[29](index=29&type=chunk) - Cost of sales for Q1 2024 included a favorable inventory valuation adjustment of **$130 million**, a significant increase from the **$29 million** favorable adjustment in Q1 2023, which was a primary driver of higher net income[31](index=31&type=chunk) | Segment | Adjusted EBITDA Q1 2024 (Millions USD) | Adjusted EBITDA Q1 2023 (Millions USD) | | :--- | :--- | :--- | | Fuel Distribution and Marketing | $219 | $195 | | All Other | $23 | $26 | | **Total** | **$242** | **$221** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights Q1 2024 performance, including strategic acquisitions and divestitures, a rise in Adjusted EBITDA to $242 million, and strong liquidity Recent Developments - Completed the acquisition of NuStar Energy L.P. on May 3, 2024, adding approximately **9,500 miles** of pipeline and **63** terminal and storage facilities[68](index=68&type=chunk) - Acquired liquid fuels terminals in Amsterdam, Netherlands and Bantry Bay, Ireland from Zenith Energy for **$185 million** on March 13, 2024[69](index=69&type=chunk) - Completed the sale of **204** convenience stores in West Texas, New Mexico, and Oklahoma to 7-Eleven, Inc. for approximately **$1.0 billion** on April 16, 2024[70](index=70&type=chunk) Results of Operations | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | **Net Income (Millions USD)** | $230 | $141 | +$89 | | **Adjusted EBITDA (Millions USD)** | $242 | $221 | +$21 | | **Motor fuel gallons sold (Billions)** | 2.11 | 1.93 | +9.0% | | **Motor fuel profit (Cents/Gallon)** | 11.7 | 12.9 | -1.2 | - Adjusted EBITDA increased by **$21 million** year-over-year, primarily due to a **9%** increase in fuel gallons sold and increased profit from recent acquisitions, partially offset by a **$15 million** increase in operating costs[78](index=78&type=chunk)[82](index=82&type=chunk) - The significant increase in Net Income was primarily due to favorable inventory valuation adjustments, which were **$130 million** in Q1 2024 compared to **$29 million** in Q1 2023[78](index=78&type=chunk)[80](index=80&type=chunk) Liquidity and Capital Resources - As of March 31, 2024, the company had **$215 million** in cash and **$870 million** of available borrowing capacity on its Credit Facility[84](index=84&type=chunk) - In April 2024, the Partnership issued **$1.5 billion** in senior notes (**$750 million** due 2029 and **$750 million** due 2032) to fund the NuStar acquisition and repay NuStar's debt[95](index=95&type=chunk) - Total capital expenditures for Q1 2024 were **$41 million**, consisting of **$27 million** for growth capital and **$14 million** for maintenance capital[93](index=93&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces interest rate risk on variable-rate debt, with a 1% change impacting annual interest expense by $6.3 million, and commodity price risk on its ~$900 million inventory, managed with derivatives - The company is exposed to interest rate risk on its **$625 million** of outstanding variable-rate borrowings, where a one percentage point change in floating rates would alter annual interest expense by approximately **$6.3 million**[99](index=99&type=chunk) - The company faces commodity price risk on its **~$900 million** of petroleum product inventory and uses derivative instruments to hedge this risk, with an aggregate unrealized loss of **$4.8 million** on these positions as of March 31, 2024[101](index=101&type=chunk)[102](index=102&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls during the quarter - Based on an evaluation by management, including the CEO and CFO, the company's disclosure controls and procedures were deemed effective as of March 31, 2024[105](index=105&type=chunk) - There were no changes in internal control over financial reporting during the first quarter of 2024 that have materially affected, or are reasonably likely to materially affect, these controls[106](index=106&type=chunk) PART II [Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any litigation expected to have a material adverse impact on its financial condition or operations - The company reports that it is not party to any litigation that is expected to have a material adverse impact on its financial condition or operations[109](index=109&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) New and heightened risks from recent acquisitions include increased dependency on diverse product demand, international operational risks, heightened regulatory scrutiny, and customer retention challenges - The recent acquisitions of NuStar and Zenith terminals introduce new and more significant risks related to their specific operations[111](index=111&type=chunk) - The business is now more dependent on the demand for and supply of crude oil, refined products, renewable fuels, and anhydrous ammonia, which are subject to global price fluctuations and factors like alternative fuel adoption and economic conditions[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - With assets in Mexico and Europe, the company is exposed to additional risks including political and economic instability, currency fluctuations, and different legal and regulatory requirements[117](index=117&type=chunk)[121](index=121&type=chunk) - Certain acquired interstate common carrier pipelines are subject to regulation by the FERC and the Surface Transportation Board (STB), which could adversely impact the ability to set rates and recover costs[124](index=124&type=chunk)[128](index=128&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the NuStar merger agreement, debt indentures, and CEO/CFO certifications - Key exhibits filed include the Agreement and Plan of Merger with NuStar Energy L.P., various debt indentures, and Sarbanes-Oxley certifications from the CEO and CFO[133](index=133&type=chunk)[137](index=137&type=chunk)

Sunoco LP (NYSE:SUN) Q1 2024 Earnings Conference Call May 8, 2024 10:00 AM ET Company Participants Scott Grischow – Senior Vice President-Finance and Treasurer Karl Fails – Chief Operations Officer Joe Kim – President and Chief Executive Officer Austin Harkness – Chief Commercial Officer Conference Call Participants Theresa Chen – Barclays Spiro Dounis – Citi Elvira Scotto – RBC Capital Markets Robert Mosca – Mizuho Securities Operator Greetings, and welcome to the Sunoco LP’s First Quarter 2024 Earnings Ca ...

[Sunoco LP First Quarter 2024 Financial and Operating Results](index=1&type=section&id=Sunoco%20LP%20First%20Quarter%202024%20Financial%20and%20Operating%20Results) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Sunoco LP reported a strong first quarter for 2024, with significant year-over-year growth in net income, Adjusted EBITDA, and Distributable Cash Flow. The Partnership saw a 9% increase in fuel gallons sold, although the fuel margin per gallon slightly decreased compared to the same period in 2023 Q1 2024 Key Financial Metrics (vs. Q1 2023) (in millions) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $230 million | $141 million | +63.1% | | Adjusted EBITDA | $242 million | $221 million | +9.5% | | Distributable Cash Flow, as adjusted | $176 million | $160 million | +10.0% | Q1 2024 Key Operational Metrics (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Fuel Gallons Sold | 2.1 billion | ~1.93 billion | +9.0% | | Fuel Margin per Gallon | 11.7 cents | 12.9 cents | -1.2 cents | [Distribution](index=1&type=section&id=Distribution) The Partnership announced a 4% increase in its quarterly distribution, reflecting continued confidence in the business. The new distribution is $0.8756 per unit, payable in May 2024 - The Board of Directors declared a quarterly distribution of **$0.8756 per unit**, a **4% increase** from the previous quarter[3](index=3&type=chunk) - The distribution will be paid on May 20, 2024, to unitholders of record as of May 13, 2024[3](index=3&type=chunk) [Liquidity, Leverage and Credit](index=1&type=section&id=Liquidity%2C%20Leverage%20and%20Credit) As of March 31, 2024, Sunoco maintained a solid liquidity position with approximately $870 million available under its revolving credit facility. The leverage ratio stood at 3.7x, and the Partnership received credit rating upgrades from both S&P and Moody's - At the end of Q1 2024, SUN had long-term debt of **$3.8 billion** and liquidity of approximately **$870 million**[4](index=4&type=chunk) - The leverage ratio (net debt to Adjusted EBITDA) was **3.7 times** at quarter-end[4](index=4&type=chunk) - Credit ratings were upgraded by S&P Global Ratings to **BB+** and by Moody's Ratings to **Ba1** in May 2024[4](index=4&type=chunk) [Capital Spending](index=1&type=section&id=Capital%20Spending) Total capital expenditures for the first quarter of 2024 amounted to $41 million, with the majority allocated to growth initiatives Q1 2024 Capital Expenditures (in millions) | Category | Amount | | :--- | :--- | | Growth Capital | $27 million | | Maintenance Capital | $14 million | | **Total** | **$41 million** | [Recent Developments](index=1&type=section&id=Recent%20Developments) The Partnership was highly active with strategic transactions, including the completion of the NuStar Energy L.P. and Zenith Energy terminal acquisitions, and the divestiture of 204 convenience stores to 7-Eleven. To support these activities, SUN issued $1.5 billion in unsecured notes and amended its revolving credit facility - **Acquisitions:** Completed the acquisition of NuStar Energy L.P. (May 3) and liquid fuels terminals from Zenith Energy in Europe (March 13)[8](index=8&type=chunk) - **Divestiture:** Completed the sale of 204 convenience stores to 7-Eleven, Inc. for approximately **$1.0 billion** on April 16, 2024[8](index=8&type=chunk) - **Financing:** Issued **$1.5 billion** in unsecured notes to fund NuStar-related repayments and amended its revolving credit facility to an unsecured **$1.5 billion** facility maturing in 2029[8](index=8&type=chunk) [Revised 2024 Business Outlook](index=2&type=section&id=Revised%202024%20Business%20Outlook) Following recent acquisitions and divestitures, Sunoco has revised its full-year 2024 guidance. The Partnership now expects Adjusted EBITDA to be in the range of $1.46 billion to $1.52 billion, incorporating contributions from the NuStar acquisition Full Year 2024 Adjusted EBITDA Guidance (in millions/billions) | Component | Guidance Range | | :--- | :--- | | Legacy SUN | $975 million to $1 billion | | Prorated NuStar | $480 million to $520 million | | **Total Combined** | **$1.46 billion to $1.52 billion** | - The revised guidance excludes the impact from synergies or transaction-related expenses[13](index=13&type=chunk) [Financial Statements and Supplemental Data](index=3&type=section&id=Financial%20Statements%20and%20Supplemental%20Data) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets increased to $7.4 billion from $6.8 billion at year-end 2023, primarily driven by an increase in cash and assets held for sale. Total liabilities also rose to $6.3 billion, with long-term debt increasing to nearly $3.8 billion Selected Balance Sheet Data (in millions) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $215 | $29 | | Assets held for sale | $511 | $0 | | Total assets | $7,392 | $6,826 | | Long-term debt, net | $3,795 | $3,580 | | Total liabilities | $6,271 | $5,848 | | Total equity | $1,121 | $978 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the first quarter of 2024, Sunoco's total revenues grew to $5.5 billion. Operating income saw a substantial increase to $297 million from $199 million in Q1 2023, leading to a 63% rise in net income to $230 million and a diluted EPS of $2.26 Q1 2024 Statement of Operations Highlights (in millions, except per unit data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenues | $5,499 | $5,362 | | Operating Income | $297 | $199 | | Net Income | $230 | $141 | | Diluted EPS | $2.26 | $1.41 | [Key Operating Metrics](index=5&type=section&id=Key%20Operating%20Metrics) In Q1 2024, total motor fuel gallons sold increased to 2.105 billion from 1.930 billion year-over-year. However, the motor fuel profit margin decreased to 11.7 cents per gallon from 12.9 cents. The Fuel Distribution and Marketing segment remained the primary driver of Adjusted EBITDA Q1 2024 Operating Metrics (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Motor fuel gallons sold (millions) | 2,105 | 1,930 | | Motor fuel profit (cents per gallon) | 11.7¢ | 12.9¢ | Adjusted EBITDA by Segment (in millions) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Fuel Distribution and Marketing | $219 | $195 | | All Other | $23 | $26 | | **Total** | **$242** | **$221** | [Reconciliation of Non-GAAP Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The report provides a detailed reconciliation from GAAP Net Income to non-GAAP measures like Adjusted EBITDA and Distributable Cash Flow (DCF). For Q1 2024, Net Income of $230 million was adjusted for items such as depreciation, interest, and a significant inventory valuation adjustment of ($130) million to arrive at an Adjusted EBITDA of $242 million. DCF, as adjusted, was $176 million Q1 2024 Reconciliation Summary (in millions) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net income** | **$230** | **$141** | | Depreciation, amortization and accretion | $43 | $48 | | Interest expense, net | $63 | $53 | | Inventory valuation adjustments | ($130) | ($29) | | Other adjustments | $25 | $10 | | **Adjusted EBITDA** | **$242** | **$221** | | Cash interest, tax, maintenance capex, etc. | ($71) | ($62) | | **Distributable Cash Flow, as adjusted** | **$176** | **$160** | - A supplemental disclosure shows the pro-forma DCF impact of the NuStar acquisition. While SUN's legacy DCF was **$176 million**, NuStar's calculated DCF for the same period was **$94 million**, providing insight into the combined entity's cash generation potential[24](index=24&type=chunk)[25](index=25&type=chunk)

FORM 10-K _____________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents Index to Financial Statements UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________ SUNOCO LP or Registrant's telephone number, including area code: (214) 981-0700 (Exact name of registrant as specified in its charter) _______________________________________ ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2023 was $236 million, a slight decrease from $238 million in Q4 2022 [5] - Full year 2023 adjusted EBITDA reached $964 million, representing a 5% increase compared to the previous year [6] - Total operating expenses for Q4 2023 were $145 million, up $7 million from the same period last year [5] - Full year operating expenses totaled $550 million, consistent with revised guidance [6] - Distributable cash flow for Q4 2023 was $148 million, down from $153 million in Q4 2022, with a coverage ratio of 1.6 times [37] Business Line Data and Key Metrics Changes - The partnership sold over 2.2 billion gallons in Q4 2023, an 11% increase from the same quarter last year [5] - Fuel margin for all gallons sold was $0.123 per gallon, compared to $0.128 per gallon a year ago [5] - Full year deal volume was over 8.3 billion gallons, an 8% increase from 2022, marking the largest reported in the partnership's history [6] Market Data and Key Metrics Changes - The company reported a leverage ratio of 3.7 times at the end of Q4 2023, below the long-term target of 4 times [13] - The company had approximately $400 million outstanding on its revolving credit facility, leaving about $1.1 billion of liquidity [13] Company Strategy and Development Direction - The company aims to improve stability, enhance growth, and maintain a strong balance sheet, positioning itself for future growth [20] - The acquisition of NuStar Energy, valued at $7.3 billion, is expected to diversify cash flows and enhance growth opportunities [7][21] - The divestiture of West Texas marketing assets for approximately $1 billion is anticipated to close in Q2 2024, allowing for reduced leverage [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the base business and financial foundation, expecting 2024 to be another record year [44] - The company anticipates that the same factors contributing to performance in 2023 will continue into 2024 [41] - Management highlighted the importance of executing the integration of NuStar and capturing synergies [42] Other Important Information - The acquisition of two European product terminals from Zenith Energy for €170 million is expected to close by the end of Q1 2024 and is projected to be accretive to unitholders in the first year [14] - The company plans to announce a distribution increase in April 2024 [44] Q&A Session Summary Question: Synergies with the NuStar deal - Management indicated that the target for synergies is at least $150 million, with potential for upside through capital deployment in high-return projects [23][24] Question: Future M&A appetite - Management stated that both tuck-in acquisitions and larger M&A opportunities will be pursued, depending on the potential for double-digit accretion [25][26] Question: Growth opportunities in NuStar's Midwest footprint - Management noted it is too early to outline specific growth opportunities but emphasized a flexible approach to leveraging the acquired assets [29][30] Question: Volume strength and future run-rate - Management reaffirmed guidance for EBITDA and indicated that volume growth is expected to continue, with updates to guidance planned closer to the NuStar close [54][55]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended: September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-35653 SUNOCO LP (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) (I.R.S. Employe ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $257 million for Q3 2023, down from $276 million in the same quarter last year [60] - Distributable cash flow as adjusted was $181 million, compared to $196 million in Q3 2022, resulting in a current quarter coverage ratio of 2x and a trailing 12-month coverage ratio of 1.9x [40] - The leverage ratio at the end of the quarter was 3.9x, with $647 million outstanding on the revolving credit facility and approximately $847 million of liquidity available [4] Business Line Data and Key Metrics Changes - Fuel volumes for the quarter were 2.1 billion gallons, up 7% from the third quarter of last year, marking the highest volume quarter in the company's history [60][63] - Fuel margin on all gallons sold was $0.13 per gallon, compared to $0.139 per gallon a year ago [60] - Total operating expenses for Q3 were $141 million, an increase of $10 million from the same period last year, attributed to the Peerless and Zenith acquisitions [60] Market Data and Key Metrics Changes - The company is outpacing the sector in market share growth, with volume growth driven by both acquisitions and organic investments [43][49] - The overall demand in the market is flat to slightly below last year, which supports higher breakeven margins [55] Company Strategy and Development Direction - The company focuses on three pillars: maintaining a secure distribution with annual growth, protecting the balance sheet, and pursuing disciplined investment in growth opportunities [5] - The company aims to grow both organically and through acquisitions, with a strong emphasis on optimizing gross profit and managing expenses [10][11] - The company is positioned to increase distributions next year while maintaining strong coverage and leverage ratios [11][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong results in various macro environments, regardless of fuel demand fluctuations or geopolitical uncertainties [47] - The company expects to grow and have another strong year in 2024, with industry fundamentals remaining supportive [67] - Management highlighted the importance of expense discipline and gross profit optimization as key strengths [44][66] Other Important Information - The company completed a $500 million offering of senior notes due 2028, which improved liquidity and reduced interest expenses [4] - The company experienced some business impact from the wildfires in Maui, but overall results were not materially affected [96] Q&A Session Questions and Answers Question: Can you talk about the distribution increase factors? - Management indicated that the capital allocation strategy, balance sheet protection, and growth opportunities are key factors in determining distribution increases [31][52] Question: Any updates on the Peerless acquisition? - Management noted that the acquisition has already contributed positively to EBITDA and that they are optimistic about future growth from this asset [15][32] Question: What is the company's long-term outlook on EBITDA and distribution growth? - Management plans to provide insights on 2024 and beyond in the upcoming December investor presentation, emphasizing confidence in industry fundamentals [80]

[FORM 10-Q Filing Details](index=1&type=section&id=FORM%2010-Q%20Filing%20Details) This section outlines the essential filing information for Sunoco LP's Quarterly Report on Form 10-Q, including registrant details and report specifics [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides key identification details for Sunoco LP's Quarterly Report on Form 10-Q for the period ended June 30, 2023, including its legal name, jurisdiction, address, and stock exchange listing - The report is a Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the period ended June 30, 2023[2](index=2&type=chunk) - Sunoco LP is a Delaware entity with its principal executive offices in Dallas, Texas[3](index=3&type=chunk)[4](index=4&type=chunk) Securities Registered Pursuant to Section 12(b) of the Act | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :-------------------------------- | :------------------ | :---------------------------------------- | | Common Units Representing Limited Partner Interests | SUN | New York Stock Exchange | - The registrant is an Accelerated Filer and is not a shell company[5](index=5&type=chunk)[6](index=6&type=chunk) - As of July 28, 2023, there were **84,065,099 common units** and **16,410,780 Class C units** representing limited partner interests outstanding[6](index=6&type=chunk) [PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents Sunoco LP's unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Sunoco LP's unaudited consolidated financial statements, including the balance sheets, statements of operations and comprehensive income, statements of equity, and statements of cash flows, along with accompanying notes for the periods ended June 30, 2023 and December 31, 2022 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of Sunoco LP's financial position, detailing assets, liabilities, and equity as of June 30, 2023, and December 31, 2022 Consolidated Balance Sheet Highlights (Dollars in millions) | Metric | June 30, 2023 | December 31, 2022 | Change | | :-------------------------------- | :-------------- | :------------------ | :----- | | Cash and cash equivalents | $239 | $82 | +$157 | | Accounts receivable, net | $543 | $890 | -$347 | | Inventories, net | $931 | $821 | +$110 | | Total current assets | $1,868 | $1,983 | -$115 | | Property and equipment, net | $1,822 | $1,760 | +$62 | | Goodwill | $1,599 | $1,601 | -$2 | | Total assets | $6,782 | $6,830 | -$48 | | Accounts payable | $783 | $966 | -$183 | | Total current liabilities | $1,217 | $1,406 | -$189 | | Credit Facility | $990 | $900 | +$90 | | Long-term debt, net | $2,673 | $2,671 | +$2 | | Total liabilities | $5,783 | $5,888 | -$105 | | Total equity | $999 | $942 | +$57 | [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This section outlines Sunoco LP's financial performance, presenting revenues, expenses, and net income for the three and six months ended June 30, 2023 and 2022 Consolidated Statements of Operations Highlights (Dollars in millions, except per unit data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $5,745 | $7,815 | $11,107 | $13,217 | | Total cost of sales and operating expenses | $5,604 | $7,642 | $10,767 | $12,785 | | Operating income | $141 | $173 | $340 | $432 | | Net income and comprehensive income | $87 | $121 | $228 | $337 | | Basic Net Income Per Common Unit | $0.79 | $1.22 | $2.21 | $3.56 | | Diluted Net Income Per Common Unit | $0.78 | $1.20 | $2.19 | $3.52 | | Cash Distributions Per Unit | $0.842 | $0.8255 | $1.684 | $1.6510 | [Consolidated Statements of Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Equity) This section details changes in Sunoco LP's equity, including net income, distributions, and unit-based compensation for the six months ended June 30, 2023 Consolidated Statements of Equity Highlights (Dollars in millions) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------- | :-------------- | :------------------ | | Balance, December 31, 2022 | $942 | $942 | | Cash distributions to unitholders (6 months) | $(180) | N/A | | Unit-based compensation (6 months) | $9 | N/A | | Net income (6 months) | $228 | N/A | | Balance, June 30, 2023 | $999 | N/A | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes Sunoco LP's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, Dollars in millions) | Metric | 2023 | 2022 | | :-------------------------------------- | :----- | :----- | | Net cash provided by operating activities | $417 | $337 | | Net cash used in investing activities | $(170) | $(305) | | Net cash provided by (used in) financing activities | $(90) | $111 | | Net increase in cash and cash equivalents | $157 | $143 | | Cash and cash equivalents, end of period | $239 | $168 | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements, including accounting policies and significant transactions - Sunoco LP is a Delaware master limited partnership managed by its general partner, Sunoco GP LLC, which is owned by Energy Transfer LP. Energy Transfer LP holds a **28.3% limited partner interest** and all incentive distribution rights (IDRs)[22](index=22&type=chunk) - The Partnership completed the acquisition of **16 refined product terminals** from Zenith Energy for **$111 million** on May 1, 2023, primarily allocated to property and equipment[29](index=29&type=chunk) Accounts Receivable, net (Dollars in millions) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------- | :-------------- | :------------------ | | Accounts receivable, trade | $431 | $755 | | Credit card receivables | $46 | $81 | | Other receivables | $67 | $56 | | Allowance for expected credit losses | $(1) | $(2) | | **Accounts receivable, net** | **$543** | **$890** | Inventories, net (Dollars in millions) | Category | June 30, 2023 | December 31, 2022 | | :--------- | :-------------- | :------------------ | | Fuel | $919 | $809 | | Other | $12 | $12 | | **Inventories, net** | **$931** | **$821** | Long-Term Debt (Dollars in millions) | Debt Type | June 30, 2023 | December 31, 2022 | | :-------------------------- | :-------------- | :------------------ | | Credit Facility | $990 | $900 | | 6.000% Senior Notes due 2027 | $600 | $600 | | 5.875% Senior Notes due 2028 | $400 | $400 | | 4.500% Senior Notes due 2029 | $800 | $800 | | 4.500% Senior Notes due 2030 | $800 | $800 | | Lease-related financing obligations | $94 | $94 | | **Total debt** | **$3,684** | **$3,594** | | Less: debt issuance costs | $21 | $23 | | **Long-term debt, net** | **$3,663** | **$3,571** | - The fair value of debt as of June 30, 2023, was approximately **$3.5 billion**, valued using Level 2 inputs (current interest rates for similar securities)[36](index=36&type=chunk) Related Party Transactions (Dollars in millions) | Transaction Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Motor fuel sales to affiliates | $15 | $23 | $28 | $28 | | Bulk fuel purchases from affiliates | $471 | $703 | $882 | $1,243 | Revenue Disaggregation by Segment and Channel (Three Months Ended June 30, Dollars in millions) | Segment/Channel | 2023 | 2022 | | :-------------------------- | :----- | :----- | | **Fuel Distribution and Marketing Segment** | | | | Distributor | $2,464 | $3,346 | | Dealer | $1,038 | $1,427 | | Unbranded wholesale | $1,587 | $2,193 | | Commission agent | $362 | $515 | | Non-motor fuel sales | $35 | $41 | | Lease income | $35 | $32 | | **Total Fuel Distribution and Marketing** | **$5,521** | **$7,554** | | **All Other Segment** | | | | Motor fuel | $156 | $197 | | Non-motor fuel sales | $65 | $61 | | Lease income | $3 | $3 | | **Total All Other Segment** | **$224** | **$261** | | **Total revenue** | **$5,745** | **$7,815** | Revenue Disaggregation by Segment and Channel (Six Months Ended June 30, Dollars in millions) | Segment/Channel | 2023 | 2022 | | :-------------------------- | :----- | :----- | | **Fuel Distribution and Marketing Segment** | | | | Distributor | $4,767 | $5,753 | | Dealer | $1,957 | $2,481 | | Unbranded wholesale | $3,127 | $3,456 | | Commission agent | $703 | $918 | | Non-motor fuel sales | $64 | $82 | | Lease income | $69 | $64 | | **Total Fuel Distribution and Marketing** | **$10,687** | **$12,754** | | **All Other Segment** | | | | Motor fuel | $292 | $347 | | Non-motor fuel sales | $122 | $110 | | Lease income | $6 | $6 | | **Total All Other Segment** | **$420** | **$463** | | **Total revenue** | **$11,107** | **$13,217** | - The Partnership is generally not subject to federal income tax, but its corporate subsidiaries are. The effective tax rate differs from the statutory rate primarily due to partnership earnings not subject to tax at the partnership level[46](index=46&type=chunk)[47](index=47&type=chunk) - As of June 30, 2023, Energy Transfer and its subsidiaries owned **28,463,967 common units** (**28.3% limited partner interest**), and the public owned **55,597,041 common units**. Wholly-owned consolidated subsidiaries owned all **16,410,780 Class C units**[22](index=22&type=chunk)[48](index=48&type=chunk) Cash Distributions Paid or Declared (2023) | Payment Date | Per Unit Distribution | Total Cash Distribution (millions) | Distribution to IDR Holders (millions) | | :------------- | :-------------------- | :------------------------------- | :----------------------------------- | | August 21, 2023 | $0.8420 | $71 | $19 | | May 22, 2023 | $0.8420 | $71 | $19 | | February 21, 2023 | $0.8255 | $70 | $18 | Adjusted EBITDA by Segment (Three Months Ended June 30, Dollars in millions) | Segment | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Fuel Distribution and Marketing | $222 | $200 | | All Other | $28 | $14 | | **Total Adjusted EBITDA** | **$250** | **$214** | Adjusted EBITDA by Segment (Six Months Ended June 30, Dollars in millions) | Segment | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Fuel Distribution and Marketing | $417 | $374 | | All Other | $54 | $31 | | **Total Adjusted EBITDA** | **$471** | **$405** | Net Income Per Common Unit Reconciliation (Three Months Ended June 30) | Metric | 2023 | 2022 | | :------------------------------------ | :----------- | :----------- | | Net income and comprehensive income | $87 | $121 | | Less: Incentive distribution rights | $20 | $18 | | Less: Distributions on non-vested phantom unit awards | $1 | $1 | | Common unitholders' interest in net income | $66 | $102 | | Weighted average common units outstanding (Basic) | 84,060,866 | 83,737,613 | | Weighted average common units outstanding (Diluted) | 85,034,268 | 84,767,972 | | Basic Net income per common unit | $0.79 | $1.22 | | Diluted Net income per common unit | $0.78 | $1.20 | Net Income Per Common Unit Reconciliation (Six Months Ended June 30) | Metric | 2023 | 2022 | | :------------------------------------ | :----------- | :----------- | | Net income and comprehensive income | $228 | $337 | | Less: Incentive distribution rights | $39 | $36 | | Less: Distributions on non-vested phantom unit awards | $3 | $3 | | Common unitholders' interest in net income | $186 | $298 | | Weighted average common units outstanding (Basic) | 84,059,797 | 83,710,409 | | Weighted average common units outstanding (Diluted) | 84,998,777 | 84,749,895 | | Basic Net income per common unit | $2.21 | $3.56 | | Diluted Net income per common unit | $2.19 | $3.52 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Sunoco LP's financial condition and results of operations, highlighting key performance drivers, recent developments, and a detailed comparison of financial results for the three and six months ended June 30, 2023, against the prior year [Cautionary Statement Regarding Forward-Looking Statements](index=15&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section advises that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, including those related to acquisitions, fuel price volatility, competition, and economic conditions[57](index=57&type=chunk)[58](index=58&type=chunk) [Overview](index=16&type=section&id=Overview) This section provides a general description of Sunoco LP's business, including its primary activities and recent strategic acquisitions - Sunoco LP is a Delaware master limited partnership primarily engaged in motor fuel distribution to independent dealers, distributors, and commission agents, operating across over **40 states and territories**[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - On May 1, 2023, the Partnership acquired **16 refined product terminals** from Zenith Energy for **$111 million**, including working capital[65](index=65&type=chunk) [Key Measures Used to Evaluate and Assess Our Business](index=16&type=section&id=Key%20Measures%20Used%20to%20Evaluate%20and%20Assess%20Our%20Business) This section identifies the primary financial and operational metrics management uses to assess Sunoco LP's business performance - Management uses **motor fuel gallons sold**, **profit per gallon**, and **Adjusted EBITDA** to evaluate business performance[66](index=66&type=chunk)[69](index=69&type=chunk) - Adjusted EBITDA is a non-GAAP measure defined as earnings before net interest expense, income taxes, depreciation, amortization, non-cash unit-based compensation, unrealized gains/losses on commodity derivatives, inventory adjustments, and certain other operating expenses[69](index=69&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) This section analyzes Sunoco LP's financial performance, comparing revenues, expenses, and profitability for the current and prior year periods Key Operating Performance Measures (Three Months Ended June 30, Dollars in millions, except cents per gallon) | Metric | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Total revenues | $5,745 | $7,815 | | Total cost of sales | $5,431 | $7,470 | | Net income and comprehensive income | $87 | $121 | | Adjusted EBITDA | $250 | $214 | | Motor fuel gallons sold (millions) | 2,086 | 1,985 | | Motor fuel profit cents per gallon | 12.7¢ | 12.3¢ | - For the three months ended June 30, 2023, net income decreased primarily due to unfavorable inventory adjustments, while Adjusted EBITDA increased by **$36 million** due to higher motor fuel profit and non-motor fuel sales/lease profit, partially offset by increased operating costs[75](index=75&type=chunk)[79](index=79&type=chunk) - Interest expense increased due to higher interest rates on floating rate debt[75](index=75&type=chunk) - Inventory adjustments resulted in an unfavorable impact of **$57 million** in Q2 2023 due to decreasing fuel prices, compared to a favorable impact of **$1 million** in Q2 2022[78](index=78&type=chunk) Key Operating Performance Measures (Six Months Ended June 30, Dollars in millions, except cents per gallon) | Metric | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Total revenues | $11,107 | $13,217 | | Total cost of sales | $10,418 | $12,442 | | Net income and comprehensive income | $228 | $337 | | Adjusted EBITDA | $471 | $405 | | Total motor fuel gallons sold (millions) | 4,016 | 3,755 | | Motor fuel gross profit cents per gallon | 12.8¢ | 12.3¢ | - For the six months ended June 30, 2023, Adjusted EBITDA increased by **$66 million**, driven by a **$64 million** increase in motor fuel sales gross profit (**4% increase in profit per gallon**, **7% increase in gallons sold**) and a **$12 million** increase in non-motor fuel sales and lease gross profit, partially offset by a **$12 million** increase in operating costs due to acquisitions[84](index=84&type=chunk)[87](index=87&type=chunk) - Inventory adjustments had an unfavorable impact of **$28 million** in H1 2023 due to decreasing fuel prices, compared to a favorable impact of **$121 million** in H1 2022[87](index=87&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Sunoco LP's financial flexibility, including cash position, credit facilities, and capital expenditure plans - The Partnership's primary liquidity requirements are for current operations, capital expenditures (including acquisitions), debt service, and distributions[88](index=88&type=chunk) Liquidity Position (Dollars in millions) | Metric | June 30, 2023 | | :-------------------------- | :-------------- | | Cash and cash equivalents | $239 | | Unused availability on Credit Facility | $503 | - Net cash provided by operating activities increased to **$417 million** for the six months ended June 30, 2023, from **$337 million** in the prior year, primarily due to an **$81 million** increase in net cash flow from operating assets and liabilities[93](index=93&type=chunk) - Net cash used in investing activities decreased to **$170 million** for the six months ended June 30, 2023, from **$305 million** in the prior year, mainly due to a lower cash outlay for acquisitions (**$111 million** in 2023 vs. **$264 million** in 2022)[95](index=95&type=chunk) - Net cash used in financing activities was **$90 million** for the six months ended June 30, 2023, compared to net cash provided of **$111 million** in the prior year, reflecting Credit Facility borrowings of **$1.56 billion** and repayments of **$1.47 billion**, and **$180 million** in distributions to unitholders[97](index=97&type=chunk) Capital Expenditures (Six Months Ended June 30, 2023, Dollars in millions) | Category | Amount | | :----------------- | :----- | | Growth capital | $64 | | Maintenance capital | $23 | | **Total** | **$87** | - For the full year 2023, the Partnership expects to spend approximately **$65 million** in maintenance capital and at least **$150 million** in growth capital[98](index=98&type=chunk) - As of June 30, 2023, the Credit Facility balance was **$990 million** with a weighted average interest rate of **7.00%**. The Partnership was in compliance with all financial covenants[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details Sunoco LP's exposure to market risks, specifically interest rate risk on its variable-rate debt and commodity price risk related to its refined petroleum product inventories, and the strategies used to manage these risks - The Partnership is exposed to interest rate risk on its **$990 million** outstanding Credit Facility borrowings as of June 30, 2023. A **one percentage point** change in floating interest rates would result in a **$9.9 million** change to interest expense[103](index=103&type=chunk) - The Partnership holds approximately **$852 million** of refined petroleum product inventories as of June 30, 2023, exposing it to commodity price risk. Derivative instruments (futures, forwards, swaps) are used to hedge price risks, though not designated as accounting hedges[104](index=104&type=chunk) - As of June 30, 2023, the Partnership had a commodity derivative position of **2.5 million barrels** with an aggregate unrealized loss of **$2.8 million**[105](index=105&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Sunoco LP's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter ended June 30, 2023 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2023[108](index=108&type=chunk) - There have been no material changes in internal control over financial reporting during the three months ended June 30, 2023[109](index=109&type=chunk) [PART II – OTHER INFORMATION](index=26&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers additional information not included in the financial statements, such as legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) Sunoco LP reports that it is not currently party to any legal proceedings that are expected to have a material adverse impact on its financial condition, results of operations, or cash flows - The Partnership does not believe it is involved in any litigation that will have a material adverse impact on its financial condition or operations[112](index=112&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes have occurred from the risk factors described in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2022[114](index=114&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, certifications, and financial information formatted in Inline XBRL - The exhibits include various amendments to the Certificate of Limited Partnership and Limited Liability Company Agreement, certifications by the CEO and CFO, and financial information in Inline XBRL format[117](index=117&type=chunk)[119](index=119&type=chunk) [SIGNATURE](index=28&type=section&id=SIGNATURE) This section formally concludes the Form 10-Q filing, providing the authorized signature and date of submission [Report Signature](index=28&type=section&id=Report%20Signature) This section formally concludes the Form 10-Q filing, indicating that the report has been duly authorized and signed on behalf of Sunoco LP by its Principal Accounting Officer - The report is signed by **Rick Raymer**, Vice President, Controller, and Principal Accounting Officer of Sunoco GP LLC, the general partner of Sunoco LP, on **August 3, 2023**[121](index=121&type=chunk)[122](index=122&type=chunk)

Sunoco LP (NYSE:SUN) Q2 2023 Earnings Conference Call August 2, 2023 10:00 AM ET Company Participants Scott Grischow - VP, IR, SVP, Finance & Treasurer Joseph Kim - President, CEO & Director, Sunoco GP LLC Karl Fails - EVP & COO, Sunoco GP LLC Conference Call Participants Robert Mosca - Mizuho Securities Selman Akyol - Stifel, Nicolaus & Company Ned Baramov - Wells Fargo Securities John Royall - JPMorgan Chase & Co. Operator Greetings, and welcome to the Sunoco LP's Q2 2023 Earnings Call. [Operator Instruct ...