SUN
Sunoco Lp
NYSE
10-K: Sunoco LP Reports 2024 Results, Fueled by Strategic Acquisitions and Divestitures
Sentiment:
Annual Results
14 February 2025 1:59 PM
Sunoco LP's 2024 performance was significantly shaped by strategic acquisitions like NuStar Energy and Zenith European Terminals, alongside the divestiture of West Texas convenience stores.
Capital raise
The company has the ability to further incur additional debt under its Credit Facility and the indentures governing its senior notes.
The company may issue debt or equity securities prior to that time as it deems prudent to provide liquidity for new capital projects or other partnership purposes.
Summary
- Sunoco LP's 2024 results reflect a year of strategic portfolio adjustments, including the acquisition of NuStar Energy and Zenith European Terminals, and the sale of West Texas convenience stores.
- The acquisition of NuStar Energy on May 3, 2024, added approximately 9,500 miles of pipeline and 63 terminals, diversifying Sunoco's business and increasing scale.
- The Zenith European Terminals acquisition on March 13, 2024, included liquid fuels terminals in Amsterdam and Bantry Bay, enhancing supply optimization.
- The sale of 204 West Texas convenience stores to 7-Eleven, Inc. on April 16, 2024, generated approximately $1.0 billion and amended a fuel supply agreement.
- Effective July 1, 2024, Sunoco and Energy Transfer formed ET-S Permian, a joint venture operating over 5,000 miles of crude oil and water gathering pipelines with over 11 million barrels of storage capacity; Sunoco holds a 32.5% interest.
- The company's principal executive offices are located in Dallas, Texas, and its internet address is www.sunocolp.com.
- Sunoco's business is comprised of three reportable segments: Fuel Distribution, Pipeline Systems, and Terminals.
- The Fuel Distribution segment distributes motor fuels and other petroleum products to approximately 7,400 Sunoco and partner branded locations and additional independent dealers and commercial customers.
- The Pipeline Systems segment includes an integrated pipeline and terminal network comprised of approximately 6,000 miles of refined product pipeline, approximately 6,000 miles of crude oil pipeline, approximately 2,000 miles of ammonia pipeline and 67 terminals.
- The Terminals segment operates four transmix processing facilities and 56 refined product terminals.
- The company is subject to various environmental laws and regulations, including those relating to underground storage tanks, hazardous materials, and air emissions.
- As of December 31, 2024, Sunoco employed 3,298 employees, 359 of whom are represented by labor unions.
Sentiment
Score: 7
Explanation: The document presents a mixed sentiment. While strategic acquisitions and divestitures are positive, the company faces risks related to competition, environmental regulations, and debt levels. The overall outlook is cautiously optimistic.
Positives
- The acquisition of NuStar Energy is expected to diversify Sunoco's business, increase scale, and improve its credit profile.
- The sale of West Texas convenience stores generated significant cash and amended a fuel supply agreement to incorporate additional fuel gross profit.
- The formation of ET-S Permian allows Sunoco to participate in a large-scale crude oil and water gathering operation.
- The company has a comprehensive program in place for routine tank testing and compliance activities related to underground storage tanks.
- Sunoco offers dealer incentives to attract and retain dealers in its network.
Negatives
- The wholesale motor fuel distribution industry is characterized by intense competition and fragmentation, which results in narrow margins.
- The convenience store industry is highly competitive and impacted by new entrants.
- The company is not fully insured against all risks incident to its business.
- Cybersecurity attacks, data breaches and other disruptions affecting us, or our service providers, could materially and adversely affect our business, operations, reputation, and financial results.
- The company depends on cash flow generated by its subsidiaries.
- An impairment of goodwill and intangible assets could reduce our earnings.
- The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and could impose new costs on our operations.
Risks
- Cash distributions are not guaranteed and may fluctuate with performance and external factors.
- Changes in the prices of motor fuel, crude oil, or refined petroleum products may adversely impact margins and customer financial condition.
- Decreased demand for motor fuel due to alternative fuels or improved fuel efficiency could reduce revenues.
- Severe weather, which may increase in frequency and intensity due to climate change, could adversely affect the business.
- The company faces competition from other midstream service providers and major energy companies.
- The company is subject to significant expenditures or liabilities resulting from environmental laws and regulations.
- The company's debt levels may impair its financial condition and ability to make distributions.
- The company's general partner and its affiliates have conflicts of interest with the company and limited contractual duties.
- The company's partnership agreement limits the liability and duties of its general partner and restricts remedies available to unitholders.
- Unitholders may have liability to repay distributions.
- The company's tax treatment depends on its status as a partnership for U.S. federal income tax purposes.
- Unitholders may be required to pay taxes on their share of the company's income even if they do not receive any cash distributions.
- Tax gain or loss on the disposition of common units could be more or less than expected.
- Tax-exempt entities face unique tax issues from owning common units that may result in adverse tax consequences to them.
- Unitholders will likely be subject to state and local taxes and return filing requirements in states where they do not live as a result of investing in our common units.
Future Outlook
The company expects that certain trends and economic or industry-wide factors will continue to affect its business, both in the short-term and long-term, and that recently completed and announced strategic transactions will continue to diversify the business, add scale and expand cash for reinvestment and distribution growth.
Industry Context
The announcement reflects a trend in the energy industry towards consolidation and diversification, with companies seeking to expand their asset base and geographic reach through strategic acquisitions and joint ventures. The focus on renewable fuels and reducing greenhouse gas emissions also aligns with broader industry efforts to address climate change concerns.
Comparison to Industry Standards
- Sunoco's acquisition of NuStar Energy is comparable to other midstream energy companies acquiring assets to expand their pipeline and storage infrastructure, such as Energy Transfer's acquisition of Enable Midstream Partners.
- The sale of retail convenience stores is a common strategy among energy companies to focus on core midstream operations, similar to Marathon Petroleum's spin-off of Speedway.
- The formation of ET-S Permian is similar to other joint ventures in the Permian Basin, such as the EPIC Crude Pipeline, which aims to provide transportation solutions for crude oil and natural gas liquids.
- Sunoco's efforts to comply with environmental regulations and reduce greenhouse gas emissions are in line with industry standards and initiatives, such as the Oil and Gas Climate Initiative (OGCI).
Stakeholder Impact
- Shareholders may benefit from the company's strategic acquisitions and divestitures, which are expected to increase value and returns.
- Employees may experience changes in their roles and responsibilities as a result of the company's restructuring and integration efforts.
- Customers may see improvements in service and product offerings as a result of the company's expanded asset base and geographic reach.
- Suppliers may be affected by changes in the company's procurement strategies and supply chain management.
- Creditors may be impacted by changes in the company's debt levels and financial performance.
Next Steps
- The company will continue to integrate acquired assets and manage its portfolio to optimize performance.
- Sunoco will monitor and comply with evolving environmental regulations and industry standards.
- The company will evaluate opportunities to refinance existing debt and secure funding for growth projects.
Related Party Transactions
- The company has fee-based commercial agreements with Energy Transfer affiliates for pipeline, terminalling, and storage services.
- Sunoco has agreements with Energy Transfer subsidiaries for the purchase and sale of fuel.
- Sunoco LLC and Sunoco Retail have treasury services agreements with Energy Transfer (R&M), LLC for cash management activities.
- Effective July 1, 2024, SUN and Energy Transfer formed ET-S Permian, a joint venture combining their respective crude oil and produced water gathering assets in the Permian Basin.
Key Dates
- 1934: Securities Exchange Act of 1934 referenced.
- 1976: Resource Conservation and Recovery Act of 1976 referenced.
- 1979: Hazardous Liquids Pipeline Safety Act of 1979 referenced.
- 1980: Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) referenced.
- 1986: U.S. Internal Revenue Code of 1986 referenced.
- 1988: Insider Trading and Securities Fraud Enforcement Act of 1988 referenced.
- 1990: U.S. Oil Pollution Act of 1990 (OPA 90) referenced.
- 1992: Energy Policy Act of 1992 (EPAct of 1992) referenced.
- 1992: Pipeline Safety Act of 1992 referenced.
- 1995: ICC Termination Act of 1995 (ITA) referenced.
- 1996: Accountable Pipeline Safety and Partnership Act of 1996 referenced.
- 2002: Pipeline Safety Improvement Act of 2002 (PSIA) referenced.
- 2002: Sarbanes-Oxley Act of 2002 referenced.
- 2005: Gulf Opportunity Zone Act of 2005 referenced.
- 2006: Pipeline Inspection, Protection, Enforcement and Safety Act of 2006 referenced.
- 2011: Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 (2011 Pipeline Safety Act) referenced.
- 2012: Common units began trading on the New York Stock Exchange on September 20, 2012.
- 2012: First Amended and Restated Agreement of Limited Partnership of Susser Petroleum Partners LP, dated as of September 25, 2012.
- 2015: Bipartisan Budget Act of 2015 referenced.
- 2020: FERC issued an order setting the indexed rate at PPI-FG plus 0.78% during the five-year period commencing July 1, 2021 and ending June 30, 2026.
- 2020: Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2020 referenced.
- 2022: President Biden signed the IRA 2022 into law.
- 2023: EPA released a final rule under the RFS for renewable fuel volumes for the years 2023-2025.
- 2024: EPA finalized new emissions standards for light and medium-duty vehicles in March 2024.
- 2024: Sunoco LP completed the acquisition of NuStar Energy on May 3, 2024.
- 2024: Sunoco LP completed the sale of 204 convenience stores to 7-Eleven, Inc. on April 16, 2024.
- 2024: Sunoco and Energy Transfer formed ET-S Permian on July 1, 2024.
- 2024: Sunoco LP acquired a terminal in Portland, Maine on August 30, 2024.
- 2024: Sunoco LP acquired liquid fuels terminals in Amsterdam and Bantry Bay on March 13, 2024.
- 2025: President Trump signed an Executive Order, Unleashing American Energy in January 2025.
- 2025: Sunoco LP declared a quarterly distribution of $0.8865 per common unit on January 27, 2025.
- 2025: Sunoco LP had 136,235,878 common units and 16,410,780 Class C units outstanding as of February 7, 2025.
- 2025: Sunoco LP amended and restated its First Amended and Restated Agreement of Limited Partnership on February 12, 2025.
Keywords
Sunoco LP, NuStar Energy, Zenith Terminals, Fuel Distribution, Pipeline Systems, Terminals, Acquisition, Divestiture, Financial Results, Master Limited Partnership, Energy Transfer, ET-S Permian, West Texas Sale, Crude Oil, Refined Products, Ammonia, Motor Fuel, Distribution
SUN
Sunoco Lp
NYSE
Sector: Energy
Filings with Classifications
Better than expected
29 May 2025 7:00 AM
Merger Announcement
- The transaction offers a 25% premium to Parkland shareholders based on recent trading prices.
- It provides flexible consideration options, including immediate cash liquidity and participation in future upside via SunocoCorp units.
- The deal is expected to generate significant annual run-rate synergies of US$250 million, indicating improved financial performance for the combined entity.
- The creation of SunocoCorp offers a more tax-efficient structure for non-U.S. and institutional investors, enhancing shareholder value.
Capital raise
29 May 2025 7:00 AM
Merger Announcement
- Committed bridge financing is in place for the cash portion of the acquisition.
Capital raise
28 May 2025 9:29 PM
Acquisition Update
- Sunoco has secured a $2.65 billion 364-day bridge term loan to fund the cash consideration for the Parkland Acquisition.
- In connection with the Parkland Acquisition, Sunoco would issue $1 billion in preferred units.
- Sunoco would issue $1.7 billion in aggregate principal amount of senior notes for the Parkland Acquisition.
- SunocoCorp (a wholly-owned subsidiary of SunocoCorp) is expected to issue 51,442,494 common units to Parkland shareholders as part of the acquisition consideration.
Worse than expected
28 May 2025 9:29 PM
Acquisition Update
- The unaudited pro forma net income attributable to limited partners for the full year ended December 31, 2024, shows a loss of $(262) million, which is a negative financial outcome for the combined entity.
Worse than expected
28 May 2025 9:25 PM
Acquisition Update
- The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, shows a net loss attributable to limited partners of $(262) million, which is a negative financial outcome for the combined entity on a pro forma basis.
- The pro forma basic net income (loss) per limited partner unit for the year ended December 31, 2024, is also negative at $(1.40).
Capital raise
28 May 2025 9:25 PM
Acquisition Update
- Sunoco has secured a $2.65 billion 364-day bridge term loan to fund the proposed cash consideration for the Parkland Acquisition.
- In connection with the Parkland Acquisition, Sunoco would issue $1 billion in preferred units.
- In connection with the Parkland Acquisition, Sunoco would issue $1.7 billion aggregate principal amount of senior notes.
Capital raise
8 May 2025 4:25 PM
Quarterly Report
- Sunoco has secured a $2.65 billion 364-day bridge term loan for the proposed cash consideration of the Parkland acquisition.
- The transaction is expected to be funded using cash on hand and amounts available under the Partnership's Credit Facility.
Worse than expected
8 May 2025 4:25 PM
Quarterly Report
- Net income decreased compared to the same period last year, primarily due to increased operating expenses, depreciation, and interest expense.
Capital raise
6 May 2025 8:50 AM
Merger Announcement
- The $2.6 billion cash consideration is supported by a fully committed bridge facility.
- Sunoco expects to permanently finance this through a combination of senior notes and preferred equity prior to close.
- The transaction includes the creation of SUNCorp, a new publicly traded vehicle, to support growth and attract a new investor base.
Better than expected
6 May 2025 7:12 AM
Earnings Release
- Adjusted EBITDA and Distributable Cash Flow were significantly higher than the same quarter last year.
Capital raise
5 May 2025 9:45 PM
Merger Announcement
- Sunoco has secured debt financing commitments of $7.55 billion to fund the acquisition.
- The transaction involves the issuance of new SUNCorp Units to Parkland shareholders.
Delay expected
5 May 2025 9:43 PM
Merger Announcement
- The Effective Time does not occur on or prior to February 4, 2026, or such later date as may be agreed to in writing by the parties (the Outside Date ) (provided that the Outside Date may be extended by either party for 90 days following February 4, 2026 if certain required regulatory approvals have not yet been obtained).
Capital raise
5 May 2025 9:21 AM
Merger Announcement
- Sunoco has secured a $2.65 billion 364-day bridge term loan for the proposed cash consideration.
- The bridge loan is expected to be permanently financed through a combination of senior notes and a preferred equity offering prior to closing.
Capital raise
5 May 2025 8:36 AM
Merger Announcement
- Sunoco has secured a $2.65 billion 364-day bridge term loan for the proposed cash consideration.
- The bridge facility is expected to be permanently financed through a combination of senior notes and a preferred equity offering prior to closing.
Capital raise
20 March 2025 5:03 PM
Debt Offering Announcement
- Sunoco LP is conducting a private offering of $1 billion in senior notes due 2033.
- The offering was upsized from an initial $750 million.
- The proceeds will be used to repay existing indebtedness.
Capital raise
20 March 2025 8:06 AM
Current Report on Form 8-K
- Sunoco LP announced a private offering of $750 million in senior notes due 2033.
- The company intends to use the net proceeds from the offering to repay indebtedness, including redeeming in full NuStar Logistics, L.P.'s 5.750% senior notes due 2025 and repaying a portion of the outstanding borrowings under Sunoco's revolving credit facility.
- The Notes Offering is not conditioned on the consummation of the acquisition of the German and Polish terminalling assets.
Capital raise
14 February 2025 1:59 PM
Annual Results
- The company has the ability to further incur additional debt under its Credit Facility and the indentures governing its senior notes.
- The company may issue debt or equity securities prior to that time as it deems prudent to provide liquidity for new capital projects or other partnership purposes.
Better than expected
11 February 2025 7:21 AM
Earnings Release
- The company's net income, Adjusted EBITDA, and Distributable Cash Flow all significantly increased compared to the previous year.
- The company is targeting a distribution growth rate of at least 5% for 2025, indicating confidence in future performance.
- The company anticipates strong Adjusted EBITDA growth in 2025.
Better than expected
27 January 2025 7:18 AM
Distribution Announcement
- The company announced a 1.25% increase in the quarterly distribution, which is better than the previous quarter.
- The company also announced a target of at least 5% distribution growth for 2025, which is a positive outlook for investors.
Worse than expected
7 November 2024 12:04 PM
Quarterly Report
- The company's net income decreased significantly due to unfavorable inventory valuation adjustments and increased expenses, indicating worse than expected results.
Worse than expected
6 November 2024 8:04 AM
Quarterly Report
- The net income decreased significantly from $272 million to $2 million year-over-year, indicating a substantial decline in profitability despite improvements in other areas.
Better than expected
8 August 2024 11:59 AM
Quarterly Report
- The company's net income and adjusted EBITDA were significantly better than the same period last year due to the gain on the West Texas sale and the positive impact of acquisitions.
Capital raise
8 August 2024 11:59 AM
Quarterly Report
- Sunoco issued $1.5 billion in senior notes in April 2024 to fund the NuStar acquisition and related transactions.
- The company may issue debt or equity securities prior to the end of 2024 as deemed prudent to provide liquidity for new capital projects or other partnership purposes.
Better than expected
7 August 2024 7:36 AM
Quarterly Report
- The company reported a record net income of $501 million, significantly higher than the $87 million reported in the same quarter last year.
- Adjusted EBITDA, excluding transaction-related expenses, was $400 million, exceeding the $250 million reported in the same quarter last year.
- Distributable Cash Flow, as adjusted, was $295 million, up from $175 million in the prior year's second quarter.
Better than expected
9 May 2024 11:56 AM
Quarterly Report
- Net income and Adjusted EBITDA both increased year-over-year, indicating better than expected financial performance.
- The company's motor fuel sales volume increased by 9%, demonstrating strong operational performance.
Capital raise
9 May 2024 11:56 AM
Quarterly Report
- The Partnership issued $750 million of 7.000% senior notes due 2029 and $750 million of 7.250% senior notes due 2032 in a private offering on April 30, 2024.
- The net proceeds from the offering were used to repay NuStar's debt, fund the redemption of NuStar's preferred units, and pay offering fees and expenses in connection with the merger.
Capital raise
8 May 2024 7:27 AM
Quarterly Report
- The company issued $1.5 billion in unsecured notes on April 30, 2024.
- The proceeds from this offering will be used to fund the repayment of NuStar's credit and receivables facilities, and redeem NuStar's preferred equity and subordinated notes.
Better than expected
8 May 2024 7:27 AM
Quarterly Report
- The company reported a record first quarter net income of $230 million, significantly higher than the $141 million reported in the same period last year.
- Adjusted EBITDA for the quarter was $242 million, up from $221 million in the first quarter of 2023.
- The company increased its full-year Adjusted EBITDA guidance to $1.46 billion to $1.52 billion.
Better than expected
3 May 2024 4:45 PM
Merger Announcement
- The acquisition is expected to be immediately accretive to distributable cash flow per LP unit, growing to greater than 10% accretion by the third year following close.
- The company also expects to realize at least $150 million of expense and commercial synergies and at least $50 million per year of additional cash flow from refinancing activity.
Capital raise
30 April 2024 4:47 PM
Debt Offering Announcement
- Sunoco LP completed a private offering of $1.5 billion in senior notes.
- The offering included $750 million in 7.000% Senior Notes due 2029 and $750 million in 7.250% Senior Notes due 2032.
- Net proceeds were approximately $1.485 billion after deducting discounts and commissions.
- The funds will be used to repay NuStar Energy debt, redeem NuStar's preferred units, and cover offering expenses related to the merger.
Capital raise
30 April 2024 4:45 PM
Debt Offering Announcement
- Sunoco LP completed a private offering of $1.5 billion in senior notes.
- The net proceeds will be used to repay NuStar's debt, redeem NuStar's preferred units, and cover offering expenses.
Capital raise
16 April 2024 7:06 PM
Debt Offering Announcement
- Sunoco LP has priced a private offering of $1.5 billion in senior notes.
- The offering includes $750 million of 7.000% senior notes due 2029 and $750 million of 7.250% senior notes due 2032.
- The proceeds will be used to refinance debt and redeem preferred units of NuStar Energy in connection with the pending merger.
Capital raise
16 April 2024 6:59 PM
Debt Offering Announcement
- Sunoco has priced a private offering of $1.5 billion in senior notes.
- The offering is split into $750 million of 7.000% notes due 2029 and $750 million of 7.250% notes due 2032.
- The proceeds will be used to refinance NuStar's debt and preferred units, and to fund the merger.
Capital raise
16 April 2024 8:36 AM
Current Report on Form 8-K
- Sunoco is conducting a private offering of $1.5 billion in senior notes due 2029 and 2032.
- The proceeds will be used to repay NuStar Energy's debt, fund the redemption of NuStar's preferred units, and pay offering fees and expenses related to the pending merger.
- The offering is not contingent on the completion of the NuStar Merger.
Capital raise
16 April 2024 8:34 AM
Debt Offering Announcement
- Sunoco is conducting a private offering of $1.5 billion in senior notes.
- The notes are split into $750 million due in 2029 and $750 million due in 2032.
Capital raise
16 February 2024 12:21 PM
Partnership Agreement Details
- The partnership agreement authorizes the issuance of an unlimited number of additional partnership interests without unitholder approval.
- The document mentions that the partnership may fund acquisitions through the issuance of additional common units or other partnership interests.
Worse than expected
14 February 2024 9:43 AM
Quarterly Report
- The company reported a net loss for the fourth quarter of 2023, compared to a net income in the same period of 2022.
- The company's net income for the full year 2023 decreased compared to 2022.
Capital raise
22 January 2024 5:26 PM
Merger Announcement
- Sunoco has secured a $1.6 billion 364-day bridge term loan to refinance NuStar's existing debt.
- The transaction is an all-equity deal, with NuStar unitholders receiving Sunoco units.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.