Sunoco LP
11/06/2025 | Press release | Distributed by Public on 11/06/2025 12:33
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
(Tabular dollar amounts, except per gallon data, are in millions)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes to consolidated financial statements included elsewhere in this report. Additional discussion and analysis related to the Partnership is contained in our Annual Report on Form 10-K, including the audited consolidated financial statements for the fiscal year ended December 31, 2024 included therein.
Adjusted EBITDA is a non-GAAP financial measure of performance that has limitations and should not be considered as a substitute for net income or other GAAP measures. Please see "Key Measures Used to Evaluate and Assess Our Business" below for a discussion of our use of Adjusted EBITDA in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and a reconciliation to net income for the periods presented.
Cautionary Statement Regarding Forward-Looking Statements
Some of the information in this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 21E of the Exchange Act. All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Statements using words such as "believe," "plan," "could," "expect," "anticipate," "intend," "forecast," "assume," "estimate," "continue," "position," "predict," "project," "goal," "strategy," "budget," "potential," "will" and other similar words or phrases are used to help identify forward-looking statements, although not all forward-looking statements contain such identifying words. Descriptions of our objectives, goals, targets, plans, strategies, costs, anticipated capital expenditures, expected cost savings and benefits are also forward-looking statements. These forward-looking statements are based on our current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially from the results and events anticipated or implied by such forward-looking statements, including:
•our ability to make, complete and integrate acquisitions from affiliates or third parties, including the ability to successfully integrate Parkland's business;
•business strategy and operations of Energy Transfer and its conflicts of interest with us;
•changes in the price of and demand for the motor fuel that we distribute and our ability to appropriately hedge any motor fuel we hold in inventory;
•our dependence on limited principal suppliers;
•competition in the wholesale motor fuel distribution and retail store industry;
•changing customer preferences for alternate fuel sources or improvement in fuel efficiency;
•volatility of fuel prices or a prolonged period of low fuel prices and the effects of actions by, or disputes among or between, oil producing countries with respect to matters related to the price or production of oil;
•any acceleration of the domestic and/or international transition to a low carbon economy as a result of the Inflation Reduction Act of 2022 or otherwise;
•the possibility of cyber and malware attacks;
•changes in our credit rating, as assigned by rating agencies;
•a deterioration in the credit and/or capital markets, including as a result of recent increases in cost of capital resulting from Federal Reserve policies and changes in financial institutions' policies or practices concerning businesses linked to fossil fuels;
•general economic conditions, including sustained periods of inflation, supply chain disruptions, new, increased and reciprocal tariffs and associated central bank monetary policies;
•environmental, tax and other federal, state and local laws and regulations;
•the macroeconomic, regulatory or other potential effects of a prolonged government shutdown;
•changes to, and the application of, regulation of tariff rates and operational requirements related to our joint ventures' and subsidiaries' interstate and intrastate pipelines, including the impact on the raw materials;
•political and economic conditions and events in the U.S. and in foreign oil, natural gas and NGL producing countries, including embargoes, political and regulatory changes implemented by the Trump Administration, continued hostilities in the Middle East, including the Israel-Hamas conflict, and conflict with Iran, and other sustained military campaigns, the armed
conflict in Ukraine and associated economic sanctions on Russia, conditions in South America, Central America and China and acts of terrorism or sabotage;
•the fact that we are not fully insured against all risks incident to our business;
•dangers inherent in the storage and transportation of motor fuel;
•our ability to manage growth and/or control costs;
•the ability to successfully identify and consummate strategic acquisitions at purchase prices that are accretive to our financial results and to successfully integrate acquired businesses;
•our reliance on senior management, supplier trade credit and information technology; and
•our partnership structure, which may create conflicts of interest between us and our General Partner and its affiliates, and limits the fiduciary duties of our General Partner and its affiliates.
All forward-looking statements, expressed or implied, are expressly qualified in their entirety by the foregoing cautionary statements.
Many of the foregoing risks and uncertainties are, and will be, heightened by any further worsening of the global business and economic environment. New factors that could impact forward-looking statements emerge from time to time, and it is not possible for us to predict all such factors. Should one or more of the risks or uncertainties described or referenced in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025 or our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 filed with the SEC onMay 8, 2025 occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements.
You should not put undue reliance on any forward-looking statements. When considering forward-looking statements, please review the risks described or referenced under the heading "Item 1A. Risk Factors" herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025 or from the risk factors set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 filed with the SEC onMay 8, 2025. The list of factors that could affect future performance and the accuracy of forward-looking statements is illustrative but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The forward-looking statements included in this report are based on, and include, our estimates as of the filing of this report. We anticipate that subsequent events and market developments will cause our estimates to change. However, we specifically disclaim any obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law, even if new information becomes available in the future.
In addition to risks and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our structure as a limited partnership, our industry and our company could materially impact our future performance and results of operations.
Overview
As used in this Management's Discussion and Analysis of Financial Condition and Results of Operations, the terms "Partnership," "we," "us" or "our" should be understood to refer to Sunoco LP and its consolidated subsidiaries, unless the context clearly indicates otherwise.
We are a Delaware master limited partnership primarily engaged in energy infrastructure and distribution of motor fuels in 32 countries and territories in North America, the Greater Caribbean, and Europe. Our midstream operations include an extensive network of approximately 14,000 miles of pipeline and over 160 terminals. Our fuel distribution operations serve approximately 11,000 Sunoco and partner branded locations and additional independent dealers and commercial customers.
Recent Developments
Acquisitions
Parkland Acquisition
On October 31, 2025, we completed the previously announced acquisition of Parkland whereby the Partnership acquired all the outstanding shares of Parkland, in exchange for SunocoCorp units that were contributed by SunocoCorp to the Partnership at the close of the acquisition. Under the terms of the agreement, Parkland shareholders received 0.295 SunocoCorp units and C$19.80 for each Parkland share. Parkland shareholders could elect, in the alternative, to receive C$44.00 per Parkland share in cash or 0.536 SunocoCorp units for each Parkland share, subject to proration to ensure that the aggregate consideration payable in connection with the transaction would not exceed C$19.80 in cash per Parkland share outstanding as of immediately before close and 0.295 SunocoCorp units per Parkland share outstanding as of immediately before close.
Parkland is a leading international fuel distributor, marketer and convenience retailer with operations in 26 countries across the Americas.
As part of the transaction, the Partnership repurposed and renamed an existing subsidiary as SunocoCorp. Prior to the Parkland Acquisition, SunocoCorp did not have any significant assets, liabilities or operations; in connection with the Parkland Acquisition, the Partnership deconsolidated SunocoCorp and SunocoCorp became a publicly traded entity classified as a corporation for U.S. federal income tax purposes. SunocoCorp's common units began trading on the New York Stock Exchange effective November 6, 2025. Subsequent to the Parkland Acquisition, SunocoCorp holds limited partnership units of Sunoco that are generally economically equivalent to Sunoco's publicly traded common units on the basis of one Sunoco common unit for each outstanding SunocoCorp unit. For a period of two years following closing of the transaction, Sunoco will ensure that SunocoCorp unitholders receive distributions on a per unit basis that are equivalent to the per unit distributions to Sunoco unitholders.
TanQuid Acquisition
In March 2025, the Partnership entered into an agreement to acquire TanQuid for approximately €500 million (approximately $587 million as of September 30, 2025), including approximately €300 million of assumed debt. TanQuid owns and operates15 fuel terminals in Germany and one fuel terminal in Poland. The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions, and will be funded using cash on hand and amounts available under the Partnership's Credit Facility.
Other Acquisitions
In the first quarter of 2025, we acquired fuel equipment, motor fuel inventory and supply agreements in two separate transactions for total consideration of approximately$17 million. Aggregate consideration included$12 million in cash and91,776 newly issued Sunoco common units, which had an aggregate acquisition-date fair value of approximately$5 million.
In the second quarter of 2025, we acquired a total of 151 fuel distribution consignment sites in three separate transactions for total consideration of approximately$105 million plus working capital. Aggregate consideration included$92 million in cash and251,646 newly issued Sunoco common units which had an aggregate acquisition-date fair value of approximately$13 million.
In the third quarter of 2025, we acquired approximately 70fuel distribution consignment sites and 100 supply agreements in five separate transactions for total cash consideration of approximately $85 million, plus working capital.
Regulatory Update
One Big Beautiful Bill Act
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA permanently reinstates 100% bonus depreciation on qualified property and modifies the calculation of the business interest expense limitation for U.S. federal income tax purposes. We anticipate the OBBBA will defer the payment of a significant portion of the Partnership's corporate subsidiaries' U.S. federal income taxes in future periods. All effects of changes in tax law are recognized in the consolidated financial statements during the period of enactment. As such, the effects of the OBBBA are reflected in our provision for income taxes as of and for the three and nine months ended September 30, 2025. Because the income tax provisions of the Partnership's corporate subsidiaries include both current and deferred income taxes, income tax expense for the period was not significantly impacted, and we currently do not anticipate a significant impact to the Partnership's overall income tax expense in future periods.
Interstate Common Carrier Regulation
Liquids pipelines transporting in interstate commerce are regulated by the Federal Energy Regulatory Commission ("FERC") as common carriers under the Interstate Commerce Act ("ICA"). Under the ICA, the FERC utilizes an indexing rate methodology which, as currently in effect, allows common carriers to change their rates within prescribed ceiling levels that are tied to changes in the Producer Price Index for Finished Goods, or PPI-FG. Many existing pipelines utilize the FERC liquids index to change transportation rates annually. The indexing methodology is applicable to existing rates, with the exclusion of market-based rates. The FERC's indexing methodology is subject to review every five years.
On December 17, 2020, FERC issued an order establishing a new index of PPI-FG plus 0.78%. The FERC received requests for rehearing of its December 17, 2020 order and on January 20, 2022, granted rehearing and modified the oil index. Specifically, for the five-year period commencing July 1, 2021 and ending June 30, 2026, FERC-regulated liquids pipelines charging indexed rates are permitted to adjust their indexed ceilings annually by PPI-FG minus 0.21%. FERC directed liquids pipelines to recompute their ceiling levels for July 1, 2021 through June 30, 2022, as well as the ceiling levels for the period July 1, 2022 to June 30, 2023, based on the new index level. Where an oil pipeline's filed rates exceed its ceiling levels, FERC ordered such oil pipelines to reduce the rate to bring it into compliance with the recomputed ceiling level to be effective March 1, 2022. Some parties sought rehearing of the January 20 order with FERC, which was denied by FERC on May 6, 2022. Certain parties appealed the January 20 and May 6 orders. On July 26, 2024, the D.C. Circuit ruled in LEPA v. FERCthat FERC violated the Administrative Procedure Act because the January 20 order modified the index without following notice and comment. As a result, the D.C. Circuit vacated
the January 20 order and on September 17, 2024, the Commission reinstated the index level established by its original December 17 order, directed pipelines to file an informational filing to show their recomputed ceiling levels reflecting the reinstated index level and stated that pipelines may file to prospectively increase their indexed rates to their recomputed levels. On October 17, 2024, FERC issued a Supplemental Notice of Proposed Rulemaking ("Supplemental NOPR") that proposes a reduction to the currently effective index by one percent. The Supplemental NOPR, which remains pending before FERC, could result in the reimplementation through a notice-and-comment rulemaking of the same rulings that were vacated by the D.C. Circuit in LEPA v. FERC.
On October 20, 2022, the FERC issued a policy statement on the Standard Applied to Complaints Against Oil Pipeline Index Rate Changes to establish guidelines regarding how the FERC will evaluate shipper complaints against oil pipeline index rate increases. Specifically, the policy statement adopted the proposal in the FERC's earlier Notice of Inquiry issued on March 25, 2020 to eliminate the "Substantially Exacerbate Test" as the preliminary screen applied to complaints against index rate increases and instead adopt the proposal to apply the "Percentage Comparison Test" as the preliminary screen for both protests and complaints against index rate increases. At this time, we cannot determine the effect of a change in the FERC's preliminary screen for complaints against index rate changes; however, a revised screen would result in a threshold aligned with the existing threshold for protests against index rate increases. Any complaint or protest raised by a shipper could materially and adversely affect our financial condition, results of operations or cash flows.
Key Measures Used to Evaluate and Assess Our Business
Management uses a variety of financial measurements to analyze business performance, including the following key measures:
•Adjusted EBITDA. Adjusted EBITDA, as used throughout this document, is defined as earnings before net interest expense, income taxes, depreciation, amortization and accretion expense, non-cash unit-based compensation expense, gains and losses on disposal of assets, non-cash impairment charges, losses on extinguishment of debt, unrealized gains and losses on commodity derivatives, inventory valuation adjustments, and certain other operating expenses reflected in net income that we do not believe are indicative of ongoing core operations. 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.
Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP, read "Key Operating Metrics and Results of Operations" below.
We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because:
•Adjusted EBITDA is used as a performance measure under our Credit Facility;
•securities analysts and other interested parties use Adjusted EBITDA as a measure of financial performance; and
•our management uses Adjusted EBITDA for internal planning purposes, including aspects of our consolidated operating budget and capital expenditures.
Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance. Adjusted EBITDA has limitations as an analytical tool, and one should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
•it does not reflect interest expense or the cash requirements necessary to service interest or principal payments on our Credit Facility or senior notes;
•although depreciation, amortization and accretion are non-cash charges, the assets being depreciated, amortized and accreted 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 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, amortization, accretion 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.
Results of Operations
Consolidated Results
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Segment Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||
| Fuel Distribution | $ | 232 | $ | 253 | $ | (21) | $ | 658 | $ | 716 | $ | (58) | |||||||||||||||||||||||
| Pipeline Systems | 182 | 136 | 46 | 531 | 189 | 342 | |||||||||||||||||||||||||||||
| Terminals | 75 | 67 | 8 | 212 | 113 | 99 | |||||||||||||||||||||||||||||
| Adjusted EBITDA (consolidated) | $ | 489 | $ | 456 | $ | 33 | $ | 1,401 | $ | 1,018 | $ | 383 | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Reconciliation of net income to Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||
| Net income | $ | 137 | $ | 2 | $ | 135 | $ | 430 | $ | 733 | $ | (303) | |||||||||||||||||||||||
| Depreciation, amortization and accretion | 159 | 95 | 64 | 469 | 216 | 253 | |||||||||||||||||||||||||||||
| Interest expense, net | 131 | 116 | 15 | 375 | 274 | 101 | |||||||||||||||||||||||||||||
| Non-cash unit-based compensation expense | 5 | 4 | 1 | 14 | 12 | 2 | |||||||||||||||||||||||||||||
| (Gain) loss on disposal of assets and impairment charges | 3 | (2) | 5 | 4 | 52 | (48) | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | 12 | - | 12 | 31 | 2 | 29 | |||||||||||||||||||||||||||||
| Unrealized losses on commodity derivatives | 15 | 1 | 14 | 7 | 8 | (1) | |||||||||||||||||||||||||||||
| Inventory valuation adjustments | (10) | 197 | (207) | (31) | 99 | (130) | |||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | (40) | (31) | (9) | (103) | (35) | (68) | |||||||||||||||||||||||||||||
| Adjusted EBITDA related to unconsolidated affiliates | 58 | 47 | 11 | 159 | 53 | 106 | |||||||||||||||||||||||||||||
| Gain on West Texas Sale | - | - | - | - | (598) | 598 | |||||||||||||||||||||||||||||
| Other non-cash adjustments | 8 | 12 | (4) | 30 | 31 | (1) | |||||||||||||||||||||||||||||
| Income tax expense | 11 | 15 | (4) | 16 | 171 | (155) | |||||||||||||||||||||||||||||
| Adjusted EBITDA (consolidated) | $ | 489 | $ | 456 | $ | 33 | $ | 1,401 | $ | 1,018 | $ | 383 | |||||||||||||||||||||||
Net Income. For the three months ended September 30, 2025 compared to the same period last year, net income increased primarily due to an increase in operating income and higher equity in earnings of unconsolidated affiliates, partially offset by increases in depreciation, amortization and accretion and interest expense. For the nine months ended September 30, 2025 compared to the same period last year, net income decreased due to a $598 million gain on the West Texas Sale in April 2024, as well as increases in interest expense and losses on extinguishment of debt. These decreases were partially offset by an increase in operating income, as well as higher equity in earnings of unconsolidated affiliates and a decrease in income tax expense. For the three and nine months ended September 30, 2025 compared to the same periods last year, the increases in operating income were primarily driven by higher Adjusted EBITDA, partially offset by increases in depreciation, amortization and accretion. These increases and decreases are discussed further below.
Adjusted EBITDA (consolidated).For the three months ended September 30, 2025 compared to the same period last year, Adjusted EBITDA increased primarily due to an increase in total segment profit of $29 million, excluding unrealized gains and losses on commodity derivatives and inventory valuation adjustments, primarily due to increased fuel volumes and increased margin from transmix and blending activities and an increase in Adjusted EBITDA related to unconsolidated affiliates of $11 million, partially offset by an increase in operating costs (including operating expenses, general and administrative expenses and lease expense) of $8 million due to transaction costs related to the Parkland Acquisition and other acquisitions. For the nine months ended September 30, 2025, compared to the same period last year, Adjusted EBITDA increased primarily due to an increase in segment profit of $264 million, excluding unrealized gains and losses on commodity derivatives and inventory valuation adjustments, primarily related to the acquisitions of NuStar and Zenith European terminals, an increase in Adjusted EBITDA related to unconsolidated affiliates of $106 million, and a $7 million decrease in operating costs (including operating expenses, general and administrative expenses and lease expense) due to one-time NuStar Acquisition expenses in 2024, partially offset by the full period impact of NuStar operating costs and one-time expenses associated with the Parkland Acquisition in the current period.
Additional discussion on the changes impacting net income and comprehensive income (loss) and Adjusted EBITDA for the three and nine months ended September 30, 2025 compared to the same periods last year is available below and in "Segment Operating Results."
Depreciation, Amortization and Accretion. For the three and nine months ended September 30, 2025 compared to the same periods last year, depreciation, amortization and accretion increased primarily due to additional depreciation and amortization from assets recently placed in service and from recent acquisitions.
Interest Expense, net. For the three and nine months ended September 30, 2025 compared to the same periods last year, interest expense increased primarily due to an increase in average total long-term debt resulting from the issuance of senior notes to fund a portion of the cash consideration for the Parkland Acquisition.
(Gain) Loss on Disposal of Assets and Impairment Charges.For the nine months ended September 30, 2024 loss on disposal of assets and impairment charges primarily related to the termination of a lease in June 2024.
Loss on Extinguishment of Debt. For the three and nine months ended September 30, 2025, loss on extinguishment of debt was primarily due to the termination of bridge financing related to the Parkland Acquisition.
Unrealized (Gains) Losses on Commodity Derivatives.The unrealized gains and losses on our commodity derivatives represent the changes in fair value of our commodity derivatives. The change in unrealized gains and losses between periods is impacted by the notional amounts and commodity price changes on our commodity derivatives. Additional information on commodity derivatives is included in "Item 3. Quantitative and Qualitative Disclosures about Market Risk" below.
Inventory Valuation Adjustments.Inventory valuation adjustments represent changes in lower of cost or market reserves using the LIFO method on the Partnership's inventory. These amounts are unrealized valuation adjustments applied to fuel volumes remaining in inventory at the end of the period. For the three months ended September 30, 2025,the Partnership's cost of sales included favorable inventory valuation adjustments of $10 million, which increased net income; and for the three months ended September 30, 2024, the Partnership's cost of sales included unfavorable inventory valuation adjustments of$197 million, which decreased net income. For the nine months ended September 30, 2025, the Partnership's cost of sales included favorable inventory valuation adjustments of $31 million, which increased net income; and for the nine months ended September 30, 2024 the Partnership's cost of sales included unfavorable inventory valuation adjustments of $99 million, which decreased net income.
Adjusted EBITDA Related to Unconsolidated Affiliates and Equity in Earnings of Unconsolidated Affiliates. See additional information in "Supplemental Information on Unconsolidated Affiliates" and "Segment Operating Results."
Gain on West Texas Sale. The gain on West Texas Sale relates to the gain recognized by Sunoco LP upon completion of the sale of convenience stores to 7-Eleven, Inc. in April 2024.
Income Tax Expense. For the three months ended September 30, 2025 compared to the same period last year, income tax expense decreased primarily due to lower earnings from the Partnership's consolidated corporate subsidiaries. For the nine months ended September 30, 2025 compared to the same period last year, income tax expense decreased primarily due to a taxable gain recognized by a corporate subsidiary on the West Texas Sale in April 2024.
Supplemental Information on Unconsolidated Affiliates
The following table presents financial information related to unconsolidated affiliates:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | |||||||||||||||||||||||||||||||||||
| J.C. Nolan | $ | 2 | $ | 1 | $ | 1 | $ | 5 | $ | 5 | $ | - | |||||||||||||||||||||||
| ET-S Permian | 38 | 30 | 8 | 98 | 30 | 68 | |||||||||||||||||||||||||||||
| Total equity in earnings of unconsolidated affiliates | $ | 40 | $ | 31 | $ | 9 | $ | 103 | $ | 35 | $ | 68 | |||||||||||||||||||||||
|
Adjusted EBITDA related to unconsolidated affiliates(1):
|
|||||||||||||||||||||||||||||||||||
| J.C. Nolan | $ | 3 | $ | 3 | $ | - | $ | 9 | $ | 9 | $ | - | |||||||||||||||||||||||
| ET-S Permian | 55 | 44 | 11 | 150 | 44 | 106 | |||||||||||||||||||||||||||||
| Total Adjusted EBITDA related to unconsolidated affiliates | $ | 58 | $ | 47 | $ | 11 | $ | 159 | $ | 53 | $ | 106 | |||||||||||||||||||||||
| Distributions received from unconsolidated affiliates: | |||||||||||||||||||||||||||||||||||
| J.C. Nolan | $ | 2 | $ | - | $ | 2 | $ | 7 | $ | 4 | $ | 3 | |||||||||||||||||||||||
| ET-S Permian | 49 | - | 49 | 208 | - | 208 | |||||||||||||||||||||||||||||
| Total distributions received from unconsolidated affiliates | $ | 51 | $ | - | $ | 51 | $ | 215 | $ | 4 | $ | 211 | |||||||||||||||||||||||
(1)These amounts represent our proportionate share of the Adjusted EBITDA of our unconsolidated affiliates and are based on our equity in earnings or losses of our unconsolidated affiliates adjusted for our proportionate share of the unconsolidated affiliates' interest, depreciation, amortization, accretion, non-cash items and taxes.
Segment Operating Results
We evaluate segment performance based on Segment Adjusted EBITDA, which we believe is an important performance measure of the core profitability of our operations. This measure represents the basis of our internal financial reporting and is one of the performance measures used by senior management in deciding how to allocate capital resources among business segments.
The following tables identify the components of Segment Adjusted EBITDA, which is calculated as follows:
•Segment profit, operating expenses andselling, general and administrative expenses. These amounts represent the amounts included in our consolidated financial statements that are attributable to each segment.
•Adjusted EBITDA related to 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 Segment Adjusted EBITDA, such as interest, taxes, depreciation, amortization, accretion 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 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, amortization and accretion. 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Fuel Distribution segment profit | $ | 329 | $ | 164 | $ | 165 | $ | 952 | $ | 885 | $ | 67 | |||||||||||||||||||||||
| Pipeline Systems segment profit | 189 | 159 | 30 | 546 | 332 | 214 | |||||||||||||||||||||||||||||
| Terminals segment profit | 128 | 101 | 27 | 370 | 256 | 114 | |||||||||||||||||||||||||||||
| Total segment profit | 646 | 424 | 222 | 1,868 | 1,473 | 395 | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion, excluding corporate and other | 159 | 93 | 66 | 468 | 213 | 255 | |||||||||||||||||||||||||||||
| Gross profit | $ | 487 | $ | 331 | $ | 156 | $ | 1,400 | $ | 1,260 | $ | 140 | |||||||||||||||||||||||
In addition, for the Fuel Distribution segment, the following sections include information on the components of segment profit by sales type, which components are included in order to provide additional disaggregated information to facilitate the analysis of segment profit and Segment Adjusted EBITDA. These components of segment profit are calculated consistent with the calculation of segment profit; therefore, these components also exclude charges for depreciation, amortization and accretion.
Fuel Distribution
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Motor fuel gallons sold (millions) | 2,295 | 2,138 | 157 | 6,570 | 6,427 | 143 | |||||||||||||||||||||||||||||
|
Motor fuel profit cents per gallon(1)
|
10.7 | ¢ | 12.8 | ¢ | (2.1) | ¢ | 10.9 | ¢ | 11.9 | ¢ | (1.0) | ¢ | |||||||||||||||||||||||
| Fuel profit | $ | 254 | $ | 96 | $ | 158 | $ | 742 | $ | 670 | $ | 72 | |||||||||||||||||||||||
| Non-fuel profit | 44 | 39 | 5 | 120 | 118 | 2 | |||||||||||||||||||||||||||||
| Lease profit | 31 | 29 | 2 | 90 | 97 | (7) | |||||||||||||||||||||||||||||
| Fuel Distribution segment profit | $ | 329 | $ | 164 | $ | 165 | $ | 952 | $ | 885 | $ | 67 | |||||||||||||||||||||||
| Expenses | $ | 113 | $ | 100 | $ | 13 | $ | 309 | $ | 307 | $ | 2 | |||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | 232 | $ | 253 | $ | (21) | $ | 658 | $ | 716 | $ | (58) | |||||||||||||||||||||||
(1) Excludes the impact of inventory valuation adjustments consistent with the definition of Adjusted EBITDA.
Volumes. For the three and nine months ended September 30, 2025 compared to the same periods last year, volumes increased primarily due to acquisitions. For the nine months ended September 30, 2025 compared to the same period last year, these volume increases were partially offset by the impact of the sale of assets in West Texas in April 2024.
Segment Adjusted EBITDA. For the three months ended September 30, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our Fuel Distribution segment decreased due to the net impact of the following:
•a decrease of $10 million due to lower profit per gallon; and
•an increase of $13 million in expenses primarily due to the Parkland Acquisition and other acquisitions.
For the nine months ended September 30, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our Fuel Distribution segment decreased due to the net impact of the following:
•a decrease of $49 million related to a decrease in fuel gross profit due to the West Texas Sale, partially offset by an increase in gallons sold due to acquisitions;
•a decrease of $7 million in lease profit due to the West Texas Sale; and
•an increase of $2 million in expenses primarily due to the Parkland Acquisition and other acquisitions, partially offset by a reduction related to the West Texas Sale.
Pipeline Systems
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Pipelines throughput (thousand barrels per day) | 1,296 | 1,165 | 131 | 1,262 | 867 | 395 | |||||||||||||||||||||||||||||
| Pipeline Systems segment profit | $ | 189 | $ | 159 | $ | 30 | $ | 546 | $ | 332 | $ | 214 | |||||||||||||||||||||||
| Expenses | $ | 66 | $ | 72 | $ | (6) | $ | 178 | $ | 196 | $ | (18) | |||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | 182 | $ | 136 | $ | 46 | $ | 531 | $ | 189 | $ | 342 | |||||||||||||||||||||||
Volumes. For the three and nine months ended September 30, 2025 compared to the same periods last year, the increase in throughput volumes reflected the impact of refinery turnarounds in the prior period. For the nine months ended September 30, 2025 compared to the same period last year, the increase in throughput volumes also reflected the impact of the NuStar Acquisition in the prior period.
Segment Adjusted EBITDA. For the three months ended September 30, 2025compared to the same period last year, Segment Adjusted EBITDA related to our Pipeline Systems segment increased due to the net impact of the following:
•a $30 million increase in segment profit primarily due to refinery turnarounds in the prior period and overall system demand;
•an $11 million increase in Adjusted EBITDA related to ET-S Permian; and
•a $6 million decrease in operating costs primarily due to a decrease in general and administrative expenses related to one-time NuStar Acquisition expenses incurred in 2024.
For the nine months ended September 30, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our Pipeline Systems segment increased due to the net impact of the following:
•a $214 million increase in segment profit driven by a $234 million increase from the timing of the NuStar Acquisition, which occurred on May 3, 2024 and therefore is only reflected for five months in the prior period, and a $28 million increase due to refinery turnarounds in the prior period, partially offset by a $50 million decrease from the deconsolidation of certain NuStar assets in connection with the formation of ET-S Permian effective July 1, 2024;
•a $106 million increase in Adjusted EBITDA primarily related to the formation of ET-S Permian; and
•an $18 million decrease in operating costs primarily due to a decrease in general and administrative expenses related to one-time NuStar Acquisition expenses incurred in the prior period. This decrease was partially offset by an increase in operating expenses from the timing of the NuStar Acquisition, which occurred on May 3, 2024, and a decrease of $6 million from the deconsolidation of certain NuStar assets in connection with the formation of ET-S Permian effective July 1, 2024.
Terminals
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||||||||||||||||||||||
| Throughput (thousand barrels per day) | 656 | 694 | (38) | 656 | 581 | 75 | |||||||||||||||||||||||||||||
| Terminals segment profit | $ | 128 | $ | 101 | $ | 27 | $ | 370 | $ | 256 | $ | 114 | |||||||||||||||||||||||
| Expenses | $ | 53 | $ | 52 | $ | 1 | $ | 157 | $ | 148 | $ | 9 | |||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | 75 | $ | 67 | $ | 8 | $ | 212 | $ | 113 | $ | 99 | |||||||||||||||||||||||
Volumes. For the three months ended September 30, 2025 compared to the same period last year, volumes decreased due to lower trading activity as well as customer transitions. For the nine months ended September 30, 2025 compared to the same period last year, volumes increased due to recently acquired assets.
Segment Adjusted EBITDA. For the three months ended September 30, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our Terminals segment increased primarily due to the following:
•a $9 million increase in segment profit (excluding inventory valuation adjustments) primarily due to favorable margins from transmix activities and the Portland terminal acquisition, which occurred in August 2024 and therefore is only reflected for two months in the prior period.
For the nine months ended September 30, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our Terminals segment increased due to the net impact of the following:
•a $106 million increase in segment profit (excluding inventory valuation adjustments) due to the acquisitions of NuStar, the Zenith European terminals and a terminal in Portland; partially offset by
•a $9 million increase in operating costs primarily due to an increase in operating expenses from the timing of the NuStar and Zenith European terminals acquisitions.
Liquidity and Capital Resources
Liquidity
Our principal liquidity requirements are to finance current operations, to fund capital expenditures, including acquisitions from time to time, to service our debt and to make distributions. We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our Credit Facility and the issuance of additional long-term debt or partnership units as appropriate given market conditions. We expect that these sources of funds will be adequate to provide for our short-term and long-term liquidity needs.
Our ability to meet our debt service obligations and other capital requirements, including capital expenditures and acquisitions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, depending on market conditions, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may cause us to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions. In addition, any of the risks described or referenced under the heading "Item 1A. Risk Factors" herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 may also significantly impact our liquidity.
As of September 30, 2025, we had $3.24 billionofcash and cash equivalents on hand and borrowing capacity of $1.45 billionon our Credit Facility. The Partnership was in compliance with all financial covenants at September 30, 2025. Based on our current estimates, we expect to utilize capacity under the Credit Facility, along with cash from operations, to fund our announced growth capital expenditures and working capital needs for 2025; however, we may issue debt or equity securities as we deem prudent to provide liquidity for new capital projects or other partnership purposes.
Cash Flows
Our cash flows may change in the future due to a number of factors, some of which we cannot control. These factors include regulatory changes, the price of products and services, the demand for such products and services, margin requirements resulting from significant changes in commodity prices, operational risks, the successful integration of our acquisitions and other factors.
Operating Activities
Changes in cash flows from operating activities between periods primarily result from changes in earnings, excluding the impacts of non-cash items and changes in operating assets and liabilities (net of effects of acquisitions and divestitures). Non-cash items include recurring non-cash expenses, such as depreciation, amortization and accretion expense and non-cash unit-based compensation expense. Cash flows from operating activities also differ from earnings as a result of non-cash charges that may not be recurring, such as impairment charges. Our daily working capital requirements fluctuate within each month, primarily in response to the timing of payments for motor fuels, motor fuels tax and rent.
Nine months ended September 30, 2025 compared to nine months ended September 30, 2024.Net cash provided by operating activities during 2025 was $800 million compared to $426 million for 2024, and net income was $430 million for 2025 and $733 million for 2024. The difference between net income and net cash provided by operating activities for the nine months ended September 30, 2025 primarily consisted of net changes in operating assets and liabilities of $220 million, non-cash items totaling $434 million. Net income also included equity in earnings of unconsolidated affiliates of $103 million and $35 million in 2025 and 2024, respectively, and a $598 milliongain from the West Texas Sale in 2024, while cash provided by operating activities included cash distributions received from unconsolidated affiliates that are deemed to be paid from cumulative earnings, which distributions were $156 million in 2025.
The non-cash activity in 2025 and 2024 consisted primarily of depreciation, amortization and accretion of $469 million and $216 million, respectively, non-cash unit-based compensation expense of $14 million and $12 million, respectively, favorable inventory valuation adjustments of $31 million and unfavorable inventory valuation adjustments of $99 million, respectively, loss on extinguishment of debt of $31 million and $2 million, respectively, loss on disposal of assets and impairment charges of
$4 million and $52 million, respectively, amortization of deferred financing fees of $20 million for both periods, and deferred income tax expense of $2 million and deferred income tax benefit of $14 million, respectively.
Investing Activities
Cash flows from investing activities primarily consist of capital expenditures, cash contributions to unconsolidated affiliates, cash amounts paid for acquisitions and cash proceeds from the sale or disposal of assets. Changes in capital expenditures between periods primarily result from increases or decreases in our growth capital expenditures to fund our construction and expansion projects.
Nine months ended September 30, 2025 compared to nine months ended September 30, 2024.Net cash used in investing activities during 2025 was $594 million compared to net cash provided by investing activities of $609 million in 2024. Capital expenditures for 2025 were $418 million compared to $212 million for 2024. In 2025, we paid $189 million in cash for the acquisitions of fuel equipment, motor fuel inventory, supply agreements and fuel distribution consignment sites. In 2024, we paid $209 million in cash for the acquisition of Zenith European terminals, received $27 million in cash from the NuStar Acquisition and received $990 million in cash proceeds from the West Texas Sale. Proceeds from disposal of property, plant and equipment were $11 million and $7 million for 2025 and 2024, respectively.
In 2025, we paid $57 million in cash contributions to unconsolidated affiliates. Distributions from unconsolidated affiliates in excess of cumulative earnings were $59 million and $6 million for 2025 and 2024, respectively.
Financing Activities
Changes in cash flows from financing activities between periods primarily result from changes in the levels of borrowings and equity issuances, which are primarily used to fund our acquisitions and growth capital expenditures. Distributions increase between the periods based on increases in the number of common units outstanding or increases in the distribution rate.
Nine months ended September 30, 2025 compared to nine months ended September 30, 2024. Net cash provided by financing activities during 2025 was $2.94 billion compared to net cash used in financing activities of $948 million in 2024.
During the nine months ended September 30, 2025, we:
•borrowed $2.90 billion and repaid $632 million in senior notes;
•borrowed $2.08 billion and repaid $2.28 billion under the Credit Facility;
•repurchased $75 million principal amount of Series 2011 GoZone Bonds;
•paid $36 million in loan origination costs;
•issued $1.47 billion of Series A Preferred Units; and
•paid $488 million in distributions to our unitholders, of which $195 million was paid to Energy Transfer.
During the nine months ended September 30, 2024, we:
•borrowed $1.50 billionand repaid $415 million in senior notes;
•borrowed $1.87 billion and repaid $2.69 billion under the Credit Facility;
•paid $19 millionin loan origination costs;
•redeemed $784 million of preferred units;
•paid $406 million in distributions to our unitholders, of which $165 million was paid to Energy Transfer; and
•paid $8 million in distributions to noncontrolling interests.
We intend to pay cash distributions to the holders of our common units and Class C units representing limited partner interests in the Partnership on a quarterly basis, to the extent we have sufficient cash from our operations after establishment of cash reserves and payment of fees and expenses, including payments to our General Partner and its affiliates. Class C unitholders receive distributions at a fixed rate equal to $0.8682 per quarter for each Class C unit outstanding. There is no guarantee that we will pay a distribution on our units. In October 2025, we declared a quarterly distribution of $0.9202 per common unit, which will result in the payment of approximately $126 million to common unitholders and $42 million to the IDR holders. The declared distribution will be paid on November 19, 2025 to unitholders of record on October 30, 2025.
Capital Expenditures
For the nine months ended September 30, 2025, total capital expenditures on an accrual basis were $418 million, which included $310 million for growth capital and $108 million for maintenance capital. This includes the Partnership's proportionate share of
capital expenditures related to its investments in ET-S Permian and J.C. Nolan of $49 million for growth capital and $8 million for maintenance capital.
We currently expect to spend approximately $150 million in maintenance capital expenditures and at least $400 million in growth capital for the full year 2025. These amounts include the Partnership's proportionate share for joint ventures.
Description of Indebtedness
As of the dates set forth below, our outstanding consolidated indebtedness was as follows:
|
September 30, 2025 |
December 31, 2024 |
||||||||||
| Credit Facility | $ | - | $ | 203 | |||||||
|
5.750% senior notes due 2025
|
- | 600 | |||||||||
|
6.000% senior notes due 2026 (1)
|
500 | 500 | |||||||||
|
6.000% senior notes due 2027
|
600 | 600 | |||||||||
|
5.625% senior notes due 2027
|
550 | 550 | |||||||||
|
5.875% senior notes due 2028
|
400 | 400 | |||||||||
|
7.000% senior notes due 2028
|
500 | 500 | |||||||||
| 4.500% senior notes due 2029 | 800 | 800 | |||||||||
| 7.000% senior notes due 2029 | 750 | 750 | |||||||||
| 4.500% senior notes due 2030 | 800 | 800 | |||||||||
| 6.375% senior notes due 2030 | 600 | 600 | |||||||||
|
5.625% senior notes due 2031
|
1,000 | - | |||||||||
| 7.250% senior notes due 2032 | 750 | 750 | |||||||||
| 6.250% senior notes due 2033 | 1,000 | - | |||||||||
|
5.875% senior notes due 2034
|
900 | - | |||||||||
| GoZone Bonds | 247 | 322 | |||||||||
| Lease-related financing obligations | 131 | 132 | |||||||||
| Net unamortized premiums, discounts and fair value adjustments | 17 | 16 | |||||||||
| Deferred debt issuance costs | (67) | (37) | |||||||||
| Total debt | 9,478 | 7,486 | |||||||||
| Less: current maturities | 2 | 2 | |||||||||
| Total long-term debt, net | $ | 9,476 | $ | 7,484 | |||||||
(1) As of September 30, 2025, $500 million aggregate principal amount of 6.000% senior notes due before September 30, 2026 were classified as long-term as management has the intent and ability to refinance the borrowings on a long-term basis.
Recent Transactions
March 2025 Senior Notes Offering and Redemption
In March 2025, the Partnership issued $1.00 billion aggregate principal amount of 6.250% senior notes due 2033 in a private offering. These notes will mature on July 1, 2033 and interest is payable semi-annually on January 1 and July 1 of each year. The Partnership used the net proceeds from the private offering to repay its $600 million aggregate principal amount of 5.750% senior notes due 2025 and to repay a portion of the outstanding borrowings under its Credit Facility.
September 2025 Senior Notes Offering
In September 2025, the Partnership issued $1.00 billion aggregate principal amount of 5.625% senior notes due 2031 and $900 million aggregate principal amount of 5.875% senior notes due 2034 in a private offering. These notes will mature on March 15, 2031 and March 15, 2034, respectively, and interest is payable semi-annually on March 15 and September 15 of each year, commencing on March 15, 2026. The Partnership used the net proceeds from this private offering (i) on the closing date of the Parkland Acquisition to fund a portion of the cash consideration for the Parkland Acquisition and related transaction costs, with the remaining proceeds used for general corporate purposes, and (ii) prior to the closing date of the Parkland Acquisition, to temporarily reduce the borrowings outstanding under the Partnership's Credit Facility and to pay interest and fees in connection therewith.
The 5.625% senior notes due 2031 and 5.875% senior notes due 2034 were originally subject to a special mandatory redemption requirement, which was eliminated upon closing of the Parkland Acquisition.
Parkland Senior Note Exchange
In October 2025, in connection with the Parkland Acquisition, the Partnership commenced a private offering to exchange C$1.60 billion Canadian dollar denominated notes (collectively, the "PKI CAD Notes") and $2.60 billion U.S. dollar denominated notes (collectively, the "PKI USD Notes"). The exchange offer closed on November 4, 2025 with approximately C$1.47 billion of the PKI CAD Notes and approximately $2.58 billion of the PKI USD Notes being validly tendered and not validly withdrawn.
Credit Facility
As of September 30, 2025, we had no outstanding borrowings on the Credit Facility, which matures on June 17, 2030, and $47 millionstandby letters of credit were outstanding. The unused availability on the Credit Facility as of September 30, 2025 was $1.45 billion. The weighted average interest rate on the total amount outstanding as of September 30, 2025 was 6.42%. The Partnership was in compliance with all financial covenants as of September 30, 2025.
Upon the closing of the NuStar Acquisition, the commitments under NuStar's receivables financing agreement were reduced to zero during a suspension period, for which the period end has not been determined. As of September 30, 2025, this facility had no outstanding borrowings.
Guarantor Summarized Financial Information
The senior notes issued by NuStar Logistics are fully and unconditionally guaranteed by Sunoco LP, Sunoco Finance Corp. and certain of its subsidiaries; the senior notes issued by Sunoco LP and the senior notes co-issued by Sunoco LP and Sunoco Finance Corp. are fully and unconditionally guaranteed by NuStar, NuStar Logistics and certain other subsidiaries. Each guarantee of the senior notes (i) ranks equally in right of payment with all other existing and future unsecured senior indebtedness of that guarantor, (ii) is structurally subordinated to all existing and any future indebtedness and obligations of any subsidiaries of that guarantor that do not guarantee the notes and (iii) ranks senior to its guarantee of our subordinated indebtedness. See Note 9 of the Notes to Financial Statements in Item 1. "Financial Statements" for a discussion of certain of our debt obligations.
The following tables present summarized combined balance sheet and income statement information for Sunoco LP, Sunoco Finance Corp. and NuStar Logistics (the "Issuers"), as well as the subsidiaries that guarantee the senior notes issued by those three entities (collectively with the Issuers, the "Guarantor Issuer Group"). Intercompany items among the Guarantor Issuer Group have been eliminated in the summarized combined financial information below, as well as intercompany balances and activity for the Guarantor Issuer Group with non-guarantor subsidiaries, including the Guarantor Issuer Group's investment balances in non-guarantor subsidiaries. Comparative period information for the summarized combined income statement is not included in the respective table below, as such information was not required for the prior period.
| Summarized Combined Balance Sheet Information for the Guarantor Issuer Group: |
September 30, 2025 |
December 31, 2024 |
||||||||||||
| Current assets | $ | 5,633 | $ | 2,225 | ||||||||||
| Non-current assets | 11,121 | 11,119 | ||||||||||||
|
Current liabilities(a)
|
1,601 | 1,903 | ||||||||||||
| Non-current liabilities, including long-term debt | 10,312 | 8,244 | ||||||||||||
(a)Excludes $259 million and $73 million of net intercompany payables owed to the non-guarantor subsidiaries from the Guarantor Issuer Group as of September 30, 2025 and December 31, 2024, respectively.
Long-term assets for the non-guarantor subsidiaries totaled $911 million and $792 million as of September 30, 2025 and December 31, 2024, respectively.
| Summarized Combined Income Statement Information for the Guarantor Issuer Group: | Nine Months Ended September 30, 2025 | |||||||
| Revenues | $ | 16,071 | ||||||
| Operating income | 524 | |||||||
| Net income | 200 | |||||||
Revenues and net income for the non-guarantor subsidiaries totaled $530 million and $230 million, respectively, for the nine months ended September 30, 2025.
September 2025 Series A Preferred Units Offering
In September 2025, the Partnership closed a private offering of 1.5 million of its 7.875% Series A Preferred Units at an offering price of $1,000 per unit. The Partnership received net proceeds of approximately $1.47 billion from the sale of the Series A Preferred Units after deducting the initial purchasers' discount and other estimated offering expenses. The Partnership used the net proceeds from this private offering (i) on the closing date of the Parkland Acquisition to fund a portion of the cash consideration
for the Parkland Acquisition, and (ii) prior to the closing date of the Parkland Acquisition, to temporarily reduce the borrowings outstanding under the Partnership's Credit Facility and to pay interest and fees in connection therewith.
Critical Accounting Estimates
The Partnership's critical accounting estimates are described in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025. No significant changes have occurred subsequent to the Form 10-K filing.
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