Sunoco (SUN) Q3 2024 earnings summary

Executive summary

• Delivered record Q3 2024 Adjusted EBITDA of $470 million, excluding $14 million in one-time transaction expenses, with strong performance across all business segments and successful integration of acquisitions.

• Completed NuStar Energy L.P. acquisition, adding 9,500 miles of pipeline and 63 terminals, and issued 51.5 million common units valued at $2.85 billion.

• Sold 204 convenience stores in West Texas, New Mexico, and Oklahoma to 7-Eleven for $1.0 billion, recognizing a $598 million gain.

• Formed a Permian joint venture with Energy Transfer, combining crude oil and water gathering assets, with a 32.5% interest.

• Confident in meeting full-year 2024 EBITDA guidance and expect another record year.

Financial highlights

• Q3 2024 Adjusted EBITDA reached $470 million, a record for the partnership, and Adjusted Distributable Cash Flow was $349 million, with a coverage ratio of 2.3x for the quarter and 1.9x for the trailing 12 months.

• Q3 2024 revenue was $5.75 billion, down from $6.32 billion in Q3 2023; net income for Q3 2024 was $2 million, down from $272 million in Q3 2023, mainly due to higher expenses and one-time transaction costs.

• Q3 2024 EPS was $(0.26) compared to $2.99 in Q3 2023; cash distributions per unit for Q3 2024 were $0.8756, up from $0.8420 in Q3 2023.

• Cash flow from operations for the nine months was $426 million, up slightly from $416 million year-over-year.

• Long-term debt at September 30, 2024 was $7.3 billion, with $1.4 billion liquidity available on the $1.5 billion revolver.

Outlook and guidance

• Expect to deliver on 2024 EBITDA guidance and anticipate another record year, with bullish outlook for all business segments and industry fundamentals expected to remain supportive.

• Plan to provide formal 2025 guidance and business outlook in December.

• Anticipate multi-year distribution increases and continued growth in DCF per LP unit.

• Expects to spend approximately $120 million in maintenance capital and at least $300 million in growth capital for full year 2024.

• Ongoing sources of liquidity include cash from operations, $1.42 billion in credit facility capacity, and potential debt or equity issuance.