Sunoco LP(SUN) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial and Operating Results Overview Financial and Operational Highlights Sunoco LP reported $86 million net income and $454 million Adjusted EBITDA in Q2 2025, with strong growth in pipeline systems and terminals offsetting fuel distribution changes Q2 2025 Key Financial Metrics | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (YoY) | Q2 2025 Adjusted EBITDA (Excluding Transaction-Related Expenses) | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (YoY) | Q2 2025 Adjusted EBITDA by Business Segment | Business Segment | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (YoY) | Distribution Sunoco LP declared a $0.9088 distribution per unit for Q2 2025, an annualized $3.6352, marking the third consecutive quarterly increase and aligning with the company's annual distribution growth target of at least 5% Q2 2025 Distribution Information | Metric | Amount | Change (YoY) | - This marks SUN's third consecutive quarter of distribution growth, aligning with the company's target of at least 5% annual distribution growth for 2025, with distributions increasing by approximately 10% since 2022[4] Liquidity and Leverage As of June 30, 2025, Sunoco LP reported approximately $7.8 billion in long-term debt, $1.2 billion in available liquidity, and a net debt to Adjusted EBITDA leverage ratio of 4.2x Q2 2025 End Liquidity and Leverage | Metric | Amount (million USD) | - The company reaffirmed its full-year 2025 Adjusted EBITDA guidance target of $1.90 billion to $1.95 billion, excluding transaction-related expenses[6] Capital Spending In Q2 2025, Sunoco LP's total capital spending was $160 million, comprising $120 million for growth capital and $40 million for maintenance capital, including its share in joint ventures Q2 2025 Capital Spending | Category | Amount (million USD) | Strategic Developments The Parkland acquisition has received over 93% shareholder approval and is awaiting regulatory and exchange listing approvals, with completion anticipated in Q4 2025 - Parkland shareholders have voted to approve the merger with SUN, with over 93% of votes cast in favor of the transaction[8] - The merger transaction remains on track and is expected to close in the fourth quarter of 2025[8] Company Information About Sunoco LP Sunoco LP is a leading energy infrastructure and fuel distribution limited partnership operating across over 40 U.S. states, Puerto Rico, Europe, and Mexico, with approximately 14,000 miles of pipelines and 100+ terminals - Sunoco LP is a leading energy infrastructure and fuel distribution limited partnership with operations across over 40 U.S. states, Puerto Rico, Europe, and Mexico[10] - Midstream operations include approximately 14,000 miles of pipeline network and over 100 terminals[10] - Fuel distribution serves approximately 7,400 Sunoco and partner-branded sites, along with other independent dealers and commercial customers[10] Forward-Looking Statements This press release contains forward-looking statements regarding future expectations, subject to known and unknown risks, uncertainties, and other factors beyond management's control, with no obligation for the company to update or revise them - The press release contains forward-looking statements subject to various known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management's control[11] - The company undertakes no obligation to update or revise any forward-looking statements to reflect new information or events[11] Contacts Investor and media contact information is provided for further company inquiries or information - Investor Contact: Scott Grischow, Treasurer, Senior Vice President – Finance, (214) 840-5660, scott.grischow@sunoco.com[12] - Media Contact: Chris Cho, Senior Manager – Communications, (469) 646-1647, chris.cho@sunoco.com[12] Consolidated Financial Statements Consolidated Balance Sheets As of June 30, 2025, Sunoco LP's total assets were $14.428 billion, slightly up from $14.375 billion at year-end 2024, with total liabilities at $10.331 billion and total equity at $4.097 billion Consolidated Balance Sheet Key Data | Metric (million USD) | June 30, 2025 | December 31, 2024 | Condensed Consolidated Statements of Operations In Q2 2025, Sunoco LP's revenue was $5.39 billion, down from $6.174 billion in the prior year, with net income at $86 million, significantly lower than $501 million previously, mainly due to West Texas sales proceeds and increased interest expense Condensed Consolidated Statements of Operations Key Data (Three Months Ended) | Metric (million USD) | Q2 2025 | Q2 2024 | Change (YoY) | Condensed Consolidated Statements of Operations Key Data (Six Months Ended) | Metric (million USD) | H1 2025 | H1 2024 | Change (YoY) | Supplemental Financial Data and Non-GAAP Reconciliations Reconciliation of Adjusted EBITDA and Distributable Cash Flow This section provides a detailed reconciliation from net income to Adjusted EBITDA and Distributable Cash Flow (Adjusted), highlighting adjustments for depreciation, amortization, interest expense, non-cash compensation, and transaction-related expenses Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow | Metric (million USD) | Q2 2025 | Q2 2024 | Explanation and Limitations of Non-GAAP Measures This section defines Adjusted EBITDA and Distributable Cash Flow (Adjusted), explains their utility in assessing operational performance and distribution capacity, and details their limitations, emphasizing they are not substitutes for GAAP net income or operating cash flow - Adjusted EBITDA and Distributable Cash Flow (Adjusted) are utilized to assess operational performance, distribution capacity, and debt service capability, also serving as internal planning tools[19][20] - Limitations of non-GAAP measures include not reflecting total cash expenditures, changes in working capital, cash requirements for interest or principal payments, or future replacement of depreciated assets[23] - Due to varying calculation methodologies, the company's Adjusted EBITDA and Distributable Cash Flow (Adjusted) may not be comparable to similarly titled measures used by other companies[23] Segment Performance Analysis Summary Analysis of Quarterly Results by Segment In Q2 2025, Sunoco LP's Adjusted EBITDA was $454 million, with $206 million from Fuel Distribution, $177 million from Pipeline Systems, and $71 million from Terminals; Adjusted EBITDA was $464 million excluding transaction-related expenses Segment Adjusted EBITDA | Segment | Q2 2025 (million USD) | Q2 2024 (million USD) | Reconciliation of Segment Profit to Gross Profit | Metric (million USD) | Q2 2025 | Q2 2024 | Fuel Distribution Segment The Fuel Distribution segment reported $206 million in Adjusted EBITDA for Q2 2025, a decrease from $245 million year-over-year, driven by slightly lower fuel volumes and a reduced fuel margin per gallon from 11.8 cents to 10.5 cents, primarily due to the West Texas asset sale Fuel Distribution Segment Key Operating and Financial Data | Metric | Q2 2025 | Q2 2024 | - The decrease in fuel volumes was primarily due to the April 2024 West Texas asset sale, partially offset by volume growth from investments and margin optimization[28] - Segment Adjusted EBITDA decreased mainly due to a $29 million decline in fuel margin per gallon and $6 million in increased expenses related to the Parkland acquisition[29][30] Pipeline Systems Segment The Pipeline Systems segment achieved $177 million in Adjusted EBITDA for Q2 2025, a significant increase from $53 million year-over-year, driven by improved segment gross profit and reduced operating costs, despite slightly lower throughput, largely due to the NuStar acquisition and ET-S Permian formation Pipeline Systems Segment Key Operating and Financial Data | Metric | Q2 2025 | Q2 2024 | - Throughput decreased primarily due to the July 2024 contribution of assets to ET-S Permian[29] - Segment Adjusted EBITDA growth was primarily driven by an $11 million increase in segment gross profit (timing impact of NuStar acquisition), a $48 million increase in Adjusted EBITDA from the ET-S Permian formation, and a $65 million reduction in operating costs (mainly due to reduced one-time administrative expenses related to the 2024 NuStar acquisition)[31] Terminals Segment The Terminals segment achieved $71 million in Adjusted EBITDA for Q2 2025, a significant increase from $22 million year-over-year, driven by increased throughput from recent acquisitions and improved segment gross profit and operating costs, particularly due to the timing impact of the NuStar acquisition Terminals Segment Key Operating and Financial Data | Metric | Q2 2025 | Q2 2024 | - Throughput increased primarily due to recently acquired assets[32] - Segment Adjusted EBITDA growth was primarily driven by a $33 million increase in segment gross profit (timing impact of NuStar acquisition) and a $14 million reduction in operating costs (mainly due to reduced one-time administrative expenses related to the 2024 NuStar acquisition)[33]