investors to compare partnership performance, and as it provides
investors an enhanced perspective of the operating performance of our
assets and the cash our business is generating.
Adjusted EBITDA and Distributable Cash Flow, as adjusted, are not
recognized terms under GAAP and do not purport to be alternatives to net
income as measures of operating performance or to cash flows from
operating activities as a measure of liquidity. Adjusted EBITDA and
Distributable Cash Flow, as adjusted, have limitations as analytical
tools, and one should not consider them in isolation or as substitutes
for analysis of our results as reported under GAAP. Some of these
limitations include:
-- they do not reflect our total cash expenditures, or future
requirements for capital expenditures or contractual commitments;
-- they do not reflect changes in, or cash requirements for, working
capital;
-- they do not reflect interest expense or the cash requirements
necessary to service interest or principal payments on our revolving
credit facility or senior notes;
-- although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be replaced
in the future, and Adjusted EBITDA does not reflect cash requirements
for such replacements; and
-- as not all companies use identical calculations, our presentation of
Adjusted EBITDA and Distributable Cash Flow, as adjusted, may not be
comparable to similarly titled measures of other companies.
Adjusted EBITDA reflects amounts for the unconsolidated affiliates based
on the same recognition and measurement methods used to record equity in
earnings of unconsolidated affiliates. Adjusted EBITDA related to
unconsolidated affiliates excludes the same items with respect to the
unconsolidated affiliates as those excluded from the calculation of
Adjusted EBITDA, such as interest, taxes, depreciation, depletion,
amortization and other non-cash items. Although these amounts are
excluded from Adjusted EBITDA related to unconsolidated affiliates, such
exclusion should not be understood to imply that we have control over the
operations and resulting revenues and expenses of such affiliates. We do
not control our unconsolidated affiliates; therefore, we do not control
the earnings or cash flows of such affiliates. The use of Adjusted EBITDA
or Adjusted EBITDA related to unconsolidated affiliates as an analytical
tool should be limited accordingly. Inventory valuation adjustments that
are excluded from the calculation of Adjusted EBITDA represent changes in
lower of cost or market reserves on the Partnership's inventory. These
amounts are unrealized valuation adjustments applied to fuel volumes
remaining in inventory at the end of the period.
SUNOCO LP
SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
(Tabular dollar amounts in millions)
(unaudited)
----------------------------------------------------------------------------
Three Months Ended
September 30,
------------------------------------------------
2024 2023
----------------------- -----------------------
Segment Adjusted EBITDA:
Fuel Distribution $ 253 $ 234
Pipeline Systems 136 2
Terminals 67 21
----------------------- -----------------------
Adjusted EBITDA 456 257
Transaction-related
expenses 14 --
----------------------- -----------------------
Adjusted EBITDA,
excluding
transaction-related
expenses $ 470 $ 257
======================= =======================
The following analysis of segment operating results includes a measure of segment profit. Segment profit is a non-GAAP financial measure and is presented herein to assist in the analysis of segment operating results and particularly to facilitate an understanding of the impacts that changes in sales revenues have on the segment performance measure of Segment Adjusted EBITDA. Segment profit is similar to the GAAP measure of gross profit, except that segment profit excludes charges for depreciation, depletion and amortization. The most directly comparable measure to segment profit is gross profit. The following table presents a reconciliation of segment profit to gross profit.
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------- ---------------------------------
2024 2023 2024 2023
---------------- ---------------- ---------------- ---------------
Fuel
Distribution
segment
profit $ 164 $ 467 $ 885 $ 1,095
Pipeline
Systems
segment
profit 159 -- 332 2
Terminals
segment
profit 101 60 256 119
---------------- ---------------- ---------------- ---------------
Total segment
profit 424 527 1,473 1,216
Depreciation,
amortization
and
accretion,
excluding
corporate and
other 93 44 213 141
---------------- ---------------- ---------------- ---------------
Gross profit $ 331 $ 483 $ 1,260 $ 1,075
================ ================ ================ ===============
Fuel Distribution
Three Months Ended
September 30,
--------------------------------------------------
2024 2023
------------------------ ------------------------
Motor fuel gallons sold 2,138 2,118
Motor fuel profit cents
per gallon(1) 12.8 c 12.5 c
Fuel profit $ 96 $ 388
Non-fuel profit 39 40
Lease profit 29 39
------------------------ ------------------------
Fuel Distribution
segment profit $ 164 $ 467
Expenses $ 100 $ 119
Segment Adjusted EBITDA $ 253 $ 234
Transaction-related
expenses -- --
------------------------ ------------------------
Segment Adjusted EBITDA,
excluding
transaction-related
expenses $ 253 $ 234
======================== ========================
(1) Excludes the impact of inventory valuation adjustments consistent with the
definition of Adjusted EBITDA.
Volumes. For the three months ended September 30, 2024 compared to the same period last year, volumes increased primarily due to growth from investments and profit optimization strategies.
Segment Adjusted EBITDA. For the three months ended September 30, 2024 compared to the same period last year, Segment Adjusted EBITDA related to our Fuel Distribution segment increased due to the net impact of the following:
-- an increase of $13 million related to a 1% increase in gallons sold and
an increase in profit per gallon; and
-- a decrease of $19 million in expenses primarily due to the West Texas
Sale in April 2024 and lower allocated overhead; partially offset by
-- a decrease of $10 million in lease profit due to the West Texas Sale in
April 2024.
Pipeline Systems
Three Months Ended
September 30,
---------------------------------------------------
2024 2023
------------------------ -------------------------
Pipelines throughput
(barrels per day) 1,165 --
Pipeline Systems
segment profit $ 159 $ --
Expenses $ 72 $ --
Segment Adjusted EBITDA $ 136 $ 2
Transaction-related
expenses 11 --
------------------------ -------------------------
Segment Adjusted
EBITDA, excluding
transaction-related
expenses $ 147 $ 2
======================== =========================
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