Sunoco (SUN) Q2 2024 earnings summary

Executive summary

• Completed NuStar Energy L.P. acquisition, adding 9,500 miles of pipeline and 63 terminals, issuing 51.5M common units, assuming $3.5B debt and $800M preferred units, and closed the divestiture of 204 convenience stores for $1 billion, recognizing a $598M gain.

• Achieved record Q2 2024 net income of $501 million and Adjusted EBITDA (excluding transaction-related expenses) of $400 million, reflecting major acquisitions and divestitures.

• Issued $1.5 billion in senior unsecured notes to refinance NuStar's debt, reducing annual interest expense by $60 million.

• Formed a joint venture with Energy Transfer in the Permian Basin, combining crude oil and water gathering assets.

• Acquired Zenith European terminals in Amsterdam and Bantry Bay for €170M ($185M) and agreed to acquire a refined product terminal in Portland, Maine.

Financial highlights

• Q2 2024 net income was $501 million, up from $87 million year-over-year; Adjusted EBITDA (excluding transaction expenses) was $400 million, up from $250 million; distributable cash flow as adjusted was $295 million.

• Revenues for Q2 2024 were $6.17 billion, up from $5.75 billion in Q2 2023; six-month revenues were $11.67 billion.

• Q2 2024 EPS (basic) was $3.88, compared to $0.79 in Q2 2023.

• Declared a Q2 2024 distribution of $0.8756 per unit, unchanged from the prior quarter.

• Maintained strong liquidity with $1.4 billion available on a $1.5 billion revolving credit facility; total assets increased to $14.47 billion.

Outlook and guidance

• 2024 Adjusted EBITDA guidance remains $1.46–$1.52 billion, excluding transaction expenses and synergies.

• Increased annual synergy target from NuStar acquisition to $200 million by 2026, with $50 million expected in 2024 and $125 million in 2025.

• Growth capital spending expected to be at least $300 million in 2024, with $120 million for maintenance capital.

• Expects $100 million in transaction-related expenses for 2024, mostly related to NuStar integration.

• Ongoing sources of liquidity include cash from operations, $1.4 billion available under the credit facility, and potential debt or equity issuances.