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What changed in Sunoco LP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Sunoco LP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+573 added−465 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-14)

Top changes in Sunoco LP's 2025 10-K

573 paragraphs added · 465 removed · 362 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

113 edited+71 added−43 removed72 unchanged
Biggest changeWe purchase motor fuel primarily from independent refiners and major oil companies and distribute it across more than 40 U.S. states and territories, including Hawaii and Puerto Rico, to: • 76 company-operated retail stores; • 252 independently operated commission agent locations where we sell motor fuel to retail customers under commission agent arrangements with such operators; • 6,965 retail stores operated by independent operators, which we refer to as “dealers” or “distributors,” pursuant to long-term distribution agreements; and • approximately 2,000 other commercial customers, including unbranded retail stores, other fuel distributors, school districts, municipalities and other industrial customers.
Biggest changeThe fuel distribution channel also provides for revenue associated with credit card services, franchise royalty offerings, and rental income from controlled properties leased to independent operators. 8 Table of Contents Index to Financial Statements We purchase motor fuel primarily from independent refiners and major oil companies and distribute it across the United States, Canada and the Greater Caribbean to: • approximately 9,200 retail facilities operated by independent customer operators, which we refer to as “dealers” or “distributors,” pursuant to long-term distribution agreements; • approximately 1,300 independently operated commission agent locations where we sell motor fuel to customers under commission agent arrangements, which we refer to as “commission agents”; • approximately 330 company operated convenience retail facilities; and • over 13,000 other commercial businesses, including retail stores, other fuel distributors, municipalities and industrial customers.
Failure to comply with these laws may result in the loss of necessary licenses and the imposition of fines and penalties on us. Pipeline Systems Segment Our Pipeline Systems segment includes an integrated pipeline and terminal network comprised of approximately 6,000 miles of refined product pipeline (including the pipeline of our J.C.
Failure to comply with these laws may result in the loss of necessary licenses and the imposition of fines and penalties on us. Pipeline Systems Segment Our Pipeline Systems segment includes an integrated pipeline and terminal network comprised of approximately 6,000 miles of refined product pipeline (including the pipeline of J.C.
Every employee acting on behalf of the Partnership must adhere to these policies. Please refer to “Item 10. Directors, Executive Officers and Corporate Governance” for additional information on our Code of Business Conduct and Ethics. Commitment to Health and Safety . Our goal is operational excellence, which means an injury and incident-free workplace.
Every employee acting on behalf of the Partnership must adhere to these policies. Please refer to “Item 10. Directors, Executive Officers and Corporate Governance” for additional information on our Code of Business Conduct and Ethics. Commitment to Health and Safety . Sunoco’s goal is operational excellence, which means an injury and incident-free workplace.
Other Government Regulation The Petroleum Marketing Practices Act (the “PMPA”) is a federal law that governs the relationship between a refiner and a distributor, as well as between a distributor and branded dealer, pursuant to which the refiner or distributor permits a distributor or dealer to use a trademark in connection with the sale or distribution of motor fuel.
Other Government Regulation The Petroleum Marketing Practices Act (the “PMPA”) is a federal law that governs the relationship between a refiner and a distributor, as well as between a distribut or and branded dealer, pursuant to which the refiner or distributor permits a distributor or dealer to use a trademark in connection with the sale or distribution of motor fuel.
Information contained on our website is not part of this report. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our Relationship with Energy Transfer LP One of our principal strengths is our relationship with Energy Transfer.
Information contained on our website is not part of this report. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our Relationship with Energy Transfer One of our principal strengths is our relationship with Energy Transfer.
Any efforts to control and/or reduce GHG emissions by the United States or other countries, or concerted conservation efforts that result in reduced consumption, could adversely impact demand for our products and, in turn, our financial position and results of operations.
Any efforts to control and/or reduce GHG emissions by the United States or other countries, or concerted conservation efforts that result in reduced consumption, could adversely impact demand for Sunoco’s products and, in turn, our financial position and results of operations.
Finally, on December 15, 2022, the FERC issued a Proposed Policy Statement on Oil Pipeline Affiliate Committed Service, which addresses whether a contract for committed transportation service complies with the ICA where the only shipper to obtain the committed service is an affiliate of the regulated entity.
On December 15, 2022, the FERC issued a Proposed Policy Statement on Oil Pipeline Affiliate Committed Service, which addresses whether a contract for committed transportation service complies with the ICA where the only shipper to obtain the committed service is an affiliate of the regulated entity.
We continually seek to expand through the addition of new branded dealers, distributors and commission agent locations, new unbranded commercial customers and through acquisitions of contracts for existing independently operated sites from other distributors.
We continually seek to expand through the addition of new branded dealers, distributors and commission agent locations, new commercial customers and through acquisitions of contracts for existing independently operated sites from other distributors.
This group also assists others throughout the organization in identifying continuous training for personnel, including the training that is required by applicable laws, regulations, standards, and permit conditions. Our safety standards and expectations are clearly communicated to all employees and contractors with the expectation that each individual has the obligation to make safety the highest priority.
This group also assists others throughout the organization in identifying continuous training for personnel, including the training that is required by applicable laws, regulations, standards, and permit conditions. Sunoco’s safety standards and expectations are clearly communicated to all employees and contractors with the expectation that each individual has the obligation to make safety the highest priority.
Transportation and storage of refined products over and adjacent to water involves risk and potentially subjects us to strict, joint, and potentially unlimited liability for removal costs and other consequences of an oil spill where the spill is into navigable waters, along shorelines or in the exclusive economic zone of the United States.
Transportation and storage of refined products over and adjacent to water involves risk and potentially subjects Sunoco to strict, joint, and potentially unlimited liability for removal costs and other consequences of an oil spill where the spill is into navigable waters, along shorelines or in the exclusive economic zone of the United States.
The timing and impact to our pipelines of any tax-related policy change is unknown at this time and varies based on the circumstances of each pipeline. The EPAct of 1992 required the FERC to establish a simplified and generally applicable methodology to adjust tariff rates for inflation for interstate petroleum pipelines.
The timing and impact to Sunoco’s pipelines of any tax-related policy change is unknown at this time and varies based on the circumstances of each pipeline. The EPAct of 1992 required the FERC to establish a simplified and generally applicable methodology to adjust tariff rates for inflation for interstate petroleum pipelines.
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.
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 could file to prospectively increase their indexed rates to their recomputed levels.
Such physical risks may result in damage to our facilities or our customers’ facilities or otherwise adversely impact our operations, such as to the extent changing weather and temperature trends reduce the demand for our products or frequency with which consumers may visit our locations or impact the cost or availability of insurance.
Such physical risks may result in damage to Sunoco’s facilities or its customers’ facilities or otherwise adversely impact its operations, such as to the extent changing weather and temperature trends reduce the demand for our products or frequency with which consumers may visit its locations or impact the cost or availability of insurance.
Store Operations Our remaining retail locations are subject to regulation by federal agencies and to licensing and regulations by state and local health, sanitation, safety, fire and other departments relating to the development and operation of convenience stores, including regulations related to zoning and building requirements and the preparation and sale of food.
Store Operations Sunoco’s remaining retail locations are subject to regulation by federal agencies and to licensing and regulations by state and local health, sanitation, safety, fire and other departments relating to the development and operation of convenience stores, including regulations related to zoning and building requirements and the preparation and sale of food.
We may also be subject to third-party claims alleging property damage and/or personal injury in connection with releases of or exposure to hazardous substances at, from or in the vicinity of, our current properties or off-site waste disposal sites.
Sunoco may also be subject to third-party claims alleging property damage and/or personal injury in connection with releases of or exposure to hazardous substances at, from or in the vicinity of, our current properties or off-site waste disposal sites.
At both the state and the federal level, legislators have from time to time considered legislation to reduce GHG emissions in the United States such as a carbon emissions tax or a cap-and-trade program or direct emission regulation by the EPA.
With respect to the United States, at both the state and the federal level, legislators have from time to time considered legislation to reduce GHG emissions in the United States such as a carbon emissions tax or a cap-and-trade program or direct emission regulation by the EPA.
Spill prevention control and countermeasure requirements of federal and state laws require containment to mitigate or prevent contamination of waters in the event of a refined product overflow, rupture, or leak from above-ground pipelines and storage tanks.
Spill prevention control and countermeasure requirements of federal and state laws require containment and equipment to monitor, mitigate or prevent contamination of waters in the event of a refined product overflow, rupture, or leak from above-ground pipelines and storage tanks.
Our operations are also subject to federal and state laws governing such matters as wage rates, overtime, working conditions and citizenship requirements. At the federal level, there are proposals under consideration from time to time to increase minimum wage rates.
Sunoco’s operations are also subject to federal and state laws governing such matters as wage rates, overtime, working conditions and citizenship requirements. At the federal level, there are proposals under consideration from time to time to increase minimum wage rates.
Separately, enhanced climate related disclosure requirements could lead to reputational or other harm with customers, regulators, investors or other stakeholders and could also increase our litigation risks relating to alleged climate-related damages resulting from our operations, statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future disclosures we may make regarding reported emissions, particularly given the inherent uncertainties and estimations with respect to calculating and reporting GHG emissions.
Separately, enhanced climate related disclosure requirements could lead to reputational or other harm with customers, regulators, investors or other stakeholders and could also increase Sunoco’s litigation risks relating to alleged climate-related damages resulting from its operations, statements alleged to have been made by us or others in our industry regarding climate change risks, or in connection with any future disclosures Sunoco may make regarding reported emissions, particularly given the inherent uncertainties and estimations with respect to calculating and reporting GHG emissions.
Environmental laws and regulations can restrict or impact our business activities in many ways, such as: • requiring remedial action to mitigate releases of hydrocarbons, hazardous substances or wastes caused by our operations or attributable to former operators; • requiring capital expenditures to comply with environmental control requirements; and • enjoining the operations of facilities deemed to be in noncompliance with environmental laws and regulations.
Environmental laws and regulations can restrict or impact Sunoco’s business activities in many ways, such as: • requiring remedial action to mitigate releases of hydrocarbons, hazardous substances or wastes caused by its operations or attributable to former operators; • requiring capital expenditures to comply with environmental control requirements; and • enjoining the operations of facilities deemed to be in noncompliance with environmental laws and regulations.
In addition, as noted above, the rates, terms and conditions for shipments of crude oil or petroleum products on our pipelines could be subject to regulation by the FERC under the ICA and the EPAct of 1992 if the crude oil or petroleum products are transported in interstate or foreign commerce whether by our pipelines or other means of transportation.
In addition, as noted above, the rates, terms and conditions for shipments of crude oil or petroleum products on Sunoco’s pipelines could be subject to regulation by the FERC under the ICA and the EPAct of 1992 if the crude oil or petroleum products are transported in interstate or foreign commerce whether by its pipelines or other means of transportation.
We do not anticipate any significant difficulty in complying with applicable state laws and regulations; however, we cannot guarantee that this will or will always be the case. We regularly review all existing and proposed pipeline safety requirements and work to incorporate the new requirements into procedures and budgets.
We do not anticipate any significant difficulty in complying with applicable state laws and regulations; however, we cannot guarantee that this will or will always be the case. Sunoco regularly reviews all existing and proposed pipeline safety requirements and work to incorporate the new requirements into procedures and budgets.
However, the FERC could investigate our rates at the urging of a third party if the third party is either a current shipper or has a substantial economic interest in the tariff rate level.
However, the FERC could investigate Sunoco’s rates at the urging of a third party if the third party is either a current shipper or has a substantial economic interest in the tariff rate level.
In addition, OSHA’s hazard communication standards require that information be maintained about hazardous materials used or produced in operations and that this information be provided to employees, state and local government authorities and citizens. We believe that we are in substantive compliance with the applicable OSHA requirements.
In addition, OSHA’s hazard communication standards require that information be maintained about hazardous materials used or produced in operations and that this information be provided to employees, state and local government authorities and citizens. We believe that Sunoco is in substantive compliance with the applicable OSHA requirements.
At the international level, the United States and 195 other countries previously reached an agreement during the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (the “Paris Agreement”), a long-term, international framework convention designed to address climate change over the next several decades.
At the international level, the United States, Canada and 194 other countries previously reached an agreement during the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (the “Paris Agreement”), a long-term, international framework convention designed to address climate change over the next several decades.
Failure to comply with environmental laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements and the issuance of orders enjoining or otherwise curtailing future operations.
Failure to comply with environmental laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements and the issuance of orders enjoining, imposing restrictions on or otherwise curtailing future operations.
We make available through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (the “SEC”).
We make available through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.
Climate change may also result in various physical risks, such as the increased frequency or intensity of extreme weather events or changes in meteorological and hydrological patterns that could adversely impact our operations or those of our supply chains.
Climate change may also result in various physical risks, such as the increased frequency or intensity of extreme weather events or changes in meteorological and hydrological patterns that could adversely impact Sunoco’s operations or those of its supply chains.
The Clean Water Act also requires us to maintain spill prevention control and countermeasure plans at our terminal facilities with above-ground storage tanks and pipelines. The U.S. Oil Pollution Act of 1990 (“OPA 90”) amended certain provisions of the Clean Water Act as they relate to the release of petroleum products into navigable waters.
The Clean Water Act also requires Sunoco to maintain spill prevention control and countermeasure plans at its terminal facilities with above-ground storage tanks and pipelines. The U.S. Oil Pollution Act of 1990 (“OPA 90”) amended certain provisions of the Clean Water Act as they relate to the release of petroleum products into navigable waters.
In addition to regulatory changes, costs may be incurred if there is an accidental release of a commodity transported by our system, or a regulatory inspection identifies a deficiency in our required programs and corrective action is required.
In addition to regulatory changes, costs may be incurred if there is an accidental release of a commodity transported by Sunoco’s system, or a regulatory inspection identifies a deficiency in its required programs and corrective action is required.
In recent years, there have been a number of efforts at the federal and state level focused on reducing the levels of greenhouse gas (“GHG”) emissions from various sources in the United States.
In recent years, there have been a number of efforts at the federal, state and provincial levels focused on reducing greenhouse gas (“GHG”) emissions from various sources in the United States and in Canada.
For more information, see “Our operations are subject to federal, state and local laws and regulations pertaining to environmental protection and operational safety that may require significant expenditures or result in liabilities that could have a material adverse effect on our business” in “Item 1A. Risk Factors” in this Annual Report on Form 10-K.
For more information, see “ Sunoco’s operations are subject to federal, state, provincial and local laws and regulations pertaining to environmental protection and operational safety that may require significant expenditures or result in liabilities that could have a material adverse effect on Sunoco’s business” in “Item 1A. Risk Factors” in this Annual Report on Form 10-K.
Financial Statements and Supplementary Data.” 11 Table of Contents In d ex to Financial Statements Hazardous Substances and Releases Certain environmental laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), impose strict, and under certain circumstances, joint and several, liability on the owner and operator as well as former owners and operators of properties for the costs of investigation, removal or remediation of contamination and also impose liability for any related damages to natural resources without regard to fault.
Financial Statements and Supplementary Data.” Hazardous Substances and Releases Certain environmental laws, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), impose strict, and under certain circumstances, joint and several, liability on the owner and operator as well as former owners and operators of properties for the costs of investigation, removal or remediation of contamination and also impose liability for any related damages to natural resources without regard to fault.
Bulk Fuel Purchases We purchase motor fuel in bulk and hold it in inventory or transport it via pipeline. To mitigate inventory risk, we use commodity futures contracts or other derivative instruments, which are matched in quantity and timing to the anticipated usage of the inventory.
Bulk Fuel Purchases We purchase motor fuel in bulk and hold it in inventory or transport it via pipeline, barge, vessel, truck or rail. To mitigate inventory risk, we use commodity futures contracts or other derivative instruments, which are matched in quantity and timing to the anticipated usage of the inventory.
Although no assurance can be given that the tariff rates charged by us ultimately will be upheld if challenged, management believes that the tariff rates now in effect for our pipelines are within the maximum rates allowed under current FERC policies and precedents.
Although no assurance can be given that the tariff rates charged by Sunoco ultimately will be upheld if challenged, management believes that the tariff rates now in effect for Sunoco’s pipelines are within the maximum rates allowed under current FERC policies and precedents.
We seek to accomplish this by fostering a culture that is guided by our ethics and principles, that respects all people and cultures, and that focuses on health and safety. Ethics and Principles . We are committed to operating our business in a manner that honors and respects all people and the communities in which we do business.
It seeks to accomplish this by fostering a culture that is guided by its ethics and principles, that respects all people and cultures, and that focuses on health and safety. Ethics and Principles . We are committed to operating our business in a manner that honors and respects all people and the communities in which we do business.
To date, compliance with applicable product quality specifications for motor fuels has not had a material adverse impact on our business, though we cannot guarantee this will always be the case.
To date, compliance with applicable product quality and volatility specifications for motor fuels has not had a material adverse impact on Sunoco’s business, though we cannot guarantee this will always be the case.
We cannot predict the capital and operating expenditures related to compliance with future PHMSA rulemakings, and such rulemakings may require us to incur significant costs to maintain compliance.
We cannot predict the capital and operating expenditures related to Sunoco’s compliance with future PHMSA rulemakings, and such rulemakings may require it to incur significant costs to maintain compliance.
Nolan joint venture), approximately 6,000 miles of crude oil pipeline (including the pipelines of ET-S Permian), approximately 2,000 miles of ammonia pipeline and 67 terminals. The following details our pipelines and storage facilities, excluding our investments in J.C.
Nolan), approximately 6,000 miles of crude oil pipeline (including the pipelines of ET-S Permian), approximately 2,000 miles of ammonia pipeline and 69 terminals. The following details our pipelines and storage facilities, excluding our investments in J.C.
Risk Factors” in this Annual Report on Form 10-K. Employee Safety We are subject to the requirements of the Occupational Safety and Health Act (“OSHA”) and comparable state statutes that regulate the protection of the health and safety of workers.
Risk Factors” in this Annual Report on Form 10-K. Employee Safety Sunoco is subject to the requirements of the Occupational Safety and Health Act (“OSHA”) and comparable state statutes that regulate the protection of the health and safety of workers.
Our safety culture promotes an open environment for discovering, resolving, and sharing safety challenges. We strive to eliminate unwanted safety events through a comprehensive process that promotes leadership, employee involvement, communication, and personal responsibility to comply with standard operating procedures and regulatory requirements, effective risk reduction processes, maintaining clean facilities, contractor safety, and personal wellness.
Its safety culture promotes an open environment for discovering, resolving, and sharing safety challenges. Sunoco strives to eliminate unwanted safety events through a comprehensive process that promotes leadership, employee involvement, communication, and personal responsibility to comply with standard operating procedures and regulatory requirements, effective risk reduction processes, maintaining clean facilities, contractor safety, and personal wellness.
Energy Transfer, through its wholly owned operating subsidiaries, is primarily engaged in: • natural gas midstream, intrastate and interstate transportation and storage operations; and • crude oil, natural gas liquids (“NGL”) and refined products transportation, terminalling services, and acquisition and marketing activities as well as NGL storage and fractionation services and liquefied natural gas (“LNG”) regasification. 6 Table of Contents In d ex to Financial Statements Our Business and Operations Our business is comprised of three reportable segments: Fuel Distribution, Pipeline Systems and Terminals.
Energy Transfer, through its wholly owned operating subsidiaries, is primarily engaged in: • natural gas midstream, intrastate and interstate transportation and storage operations; and • crude oil, natural gas liquids (“NGL”) and refined products transportation, terminalling services, and acquisition and marketing activities as well as NGL storage and fractionation services and liquefied natural gas (“LNG”) regasification. 7 Table of Contents Index to Financial Statements Our Business and Operations Our business is comprised of four reportable segments: Fuel Distribution, Pipeline Systems, Terminals and Refinery.
To the extent we rely on cost-of-service ratemaking to establish or support our rates, the issue of the proper allowance for federal and state income taxes could arise. In July 2016, the United States Court of Appeals for the District of Columbia Circuit issued an opinion in United Airlines, Inc., et al. v.
To the extent Sunoco relies on cost-of-service ratemaking to establish or support its rates, the issue of the proper allowance for federal and state income taxes could arise. In July 2016, the United States Court of Appeals for the District of Columbia Circuit issued an opinion in United Airlines, Inc., et al. v.
We are able to use various FERC-authorized rate change methodologies for our interstate pipelines, including indexed rates, cost-of-service rates, market-based rates and negotiated rates. Typically, we adjust our rates annually in accordance with the FERC indexing methodology, which currently allows a pipeline to change its rates within prescribed ceiling levels that are tied to an inflation index.
Sunoco is able to use various FERC-authorized rate change methodologies for its interstate pipelines, including indexed rates, cost-of-service rates, market-based rates and negotiated rates. Typically, it adjusts its rates annually in accordance with the FERC indexing methodology, which currently allows a pipeline to change its rates within prescribed ceiling levels that are tied to an inflation index.
We expect to incur increasing regulatory compliance costs, based on the intensification of the regulatory environment and upcoming changes to regulations as outlined above, consistent with other similarly situated midstream companies.
Sunoco expects to incur increasing regulatory compliance costs, based on the intensification of the regulatory environment and upcoming changes to regulations as outlined above, consistent with other similarly situated midstream companies.
Since we do not control the entire transportation path of all crude oil or petroleum products shipped on our pipelines, FERC regulation could be triggered by our customers’ transportation decisions.
Since Sunoco does not control the entire transportation path of all crude oil or petroleum products shipped on our pipelines, FERC regulation could be triggered by our customers’ transportation decisions.
Under the PMPA, we may not terminate or fail to renew a branded distributor contract, unless certain enumerated preconditions or grounds for termination or non-renewal are met and we also comply with the prescribed notice requirements.
Under the PMPA, Sunoco may not terminate or fail to renew a branded distributor contract, unless certain enumerated preconditions or grounds for termination or non-renewal are met and it also complies with the prescribed notice requirements.
We incorporate by reference into this section our disclosures included in Note 13 to our consolidated financial statements included in “Item 8.
We incorporate by reference into this section the disclosures included in Note 15 to our consolidated financial statements included in “Item 8.
Regulation of Interstate Crude Oil and Products Pipelines Interstate common carrier pipeline operations are subject to rate regulation by the Federal Energy Regulatory Commission (“FERC”) under the Interstate Commerce Act (“ICA”), the Energy Policy Act of 1992 (“EPAct of 1992”), and related rules and orders.
Regulation of Interstate Crude Oil and Products Pipelines Interstate common carrier pipeline operations are subject to rate regulation by the FERC under the Interstate Commerce Act (“ICA”), the Energy Policy Act of 1992 (“EPAct of 1992”), and related rules and orders.
In addition, under CERCLA and similar state laws, as persons who arrange for the transportation, treatment or disposal of hazardous substances, we also may be subject to similar liability at sites where such hazardous substances come to be located.
In addition, under CERCLA and similar state laws, as persons who arrange for the transportation, treatment or disposal of hazardous substances, Sunoco also may be subject to similar liability at sites where such hazardous substances are released.
Environmental Reserves We are currently involved in the investigation and remediation of contamination at motor fuel storage and gasoline store sites where releases of regulated substances have been detected. We accrue for anticipated future costs and the related probable state reimbursement amounts for remediation activities.
Environmental Reserves Sunoco is currently involved in the investigation and remediation of contamination at motor fuel storage and gasoline store sites where releases of regulated substances have been detected. It accrues for anticipated future costs and the related probable state reimbursement amounts for remediation activities.
New federal or state restrictions on emissions of GHGs that may be imposed in areas of the United States in which we conduct business and that apply to our operations could adversely affect the demand for our products.
New federal or state restrictions on emissions of GHGs that may be imposed in areas of the United States in which Sunoco conducts business and that apply to its operations could adversely affect the demand for its products.
The map below depicts the major assets of our business and excludes corporate and field offices and certain assets that are less significant to SUN.
The following map depicts the major assets of our business and excludes corporate and field offices and certain assets that are less significant to Sunoco.
Certain environmental statutes impose strict, joint and several liability for costs required to clean up and restore sites where hydrocarbons, hazardous substances or wastes have been released or disposed of.
Certain environmental statutes impose strict, joint and 12 Table of Contents Index to Financial Statements several liability for costs required to clean up and restore sites where hydrocarbons, hazardous substances or wastes have been released or disposed of.
In many instances, even major energy and chemical 10 Table of Contents In d ex to Financial Statements companies that have storage and terminalling facilities are also significant customers of independent terminal operators, especially terminals located in cost-effective locations near key transportation links, such as deep-water ports.
In many instances, even major energy and chemical companies that have storage and terminalling facilities are also significant customers of independent terminal operators, especially terminals located in cost-effective locations near key transportation links, such as deep-water ports.
Environmental Matters Environmental Laws and Regulations We are subject to various federal, state and local environmental laws and regulations, including those relating to underground storage tanks; the release or discharge of hazardous materials into the air, water and soil; the generation, storage, handling, use, transportation and disposal of regulated materials; the exposure of persons to regulated materials; and the remediation of contaminated soil and groundwater.
Environmental Matters Environmental Laws and Regulations Sunoco is subject to various federal, state, p rovincial and local environmental laws and regulations, including those relating to underground storage tanks; the release or discharge of hazardous materials into the air, water and soil; the generation, storage, handling, use, transportation and disposal of regulated materials and wastes; the exposure of persons to regulated materials; and the remediation of contaminated soil, groundwater or other environmental media.
Human Capital Management As of December 31, 2024, we employed an aggregate of 3,298 employees, 359 of which are represented by labor unions. We and our subsidiaries believe that our relations with our employees are good. In order to accomplish our objectives, we must continue to attract and retain top talent.
Human Capital Management As of December 31, 2025, Sunoco employed an aggregate of 8,910 employees, 628 of which are represented by labor unions. We and our subsidiaries believe that our relations with our employees are good. In order to accomplish our objectives, Sunoco must continue to attract and retain top talent.
In January 2024, those maximum civil penalties were increased to $266,015 and $2,660,135, respectively, to account for inflation. The PHMSA has also issued a final rule applying safety regulations to certain rural low-stress hazardous liquid pipelines that were not covered previously by some of its safety regulations.
In December 2024, those maximum civil penalties were increased to $272,926 and $2,729,245, respectively, to account for inflation. The PHMSA has also issued a final rule applying safety regulations to certain rural low-stress hazardous liquid pipelines that were not covered previously by some of its safety regulations.
We do not believe that compliance with federal, state or local environmental laws and regulations will have a material adverse effect on our financial position, results of operations or cash available for distribution to our unitholders. Any future change in regulatory requirements could cause us to incur significant costs.
Sunoco does not believe that compliance with federal, state, provincial or local environmental laws and regulations will have a material adverse effect on its financial position, results of operations or cash available for distribution to its unitholders, including SunocoCorp. Any future change in regulatory requirements could cause it to incur significant costs.
Item 1. Business General As used in this report, the terms “Partnership,” “SUN,” “we,” “us” or “our” should be understood to refer to Sunoco LP and our consolidated subsidiaries as applicable and appropriate. Overview We are a Delaware master limited partnership.
Item 1. Business General As used in this report, the terms “Partnership,” “Sunoco,” “we,” “us” or “our” should be understood to refer to Sunoco LP and our consolidated subsidiaries as applicable and appropriate. Overview We are a Delaware master limited partnership. We are managed by our General Partner, which is owned by Energy Transfer.
The FERC also may investigate, upon complaint or on its own motion, rates that are already in effect and may order a carrier to change its rates prospectively.
The FERC also may investigate, upon complaint or on its own motion, rates that are already in effect and may order a 17 Table of Contents Index to Financial Statements carrier to change its rates prospectively.
Similar to the crude and refined products pipelines, the rates for transportation services on the ammonia pipeline are required to be in a tariff which is posted publicly on our website, however, that tariff is not required to be on file with the STB.
Similar to the crude and refined products pipelines, the rates for transportation services on the ammonia pipeline are required to be in a 19 Table of Contents Index to Financial Statements tariff which is posted publicly on Sunoco’s website, however, that tariff is not required to be on file with the STB.
Upon an appropriate showing, a shipper may obtain reparations for damages sustained for a period of up to two years prior to the filing of a complaint. 15 Table of Contents In d ex to Financial Statements The FERC generally has not investigated interstate rates on its own initiative when those rates, like those we charge, have not been the subject of a protest or a complaint by a shipper.
Upon an appropriate showing, a shipper may obtain reparations for damages sustained for a period of up to two years prior to the filing of a complaint. The FERC generally has not investigated interstate rates on its own initiative when those rates, like those Sunoco charges, have not been the subject of a protest or a complaint by a shipper.
We are required to comply with federal and state financial responsibility requirements to demonstrate that we have the ability to pay for remediation or to compensate third parties for damages incurred as a result of a release of regulated materials from our underground storage tank systems. We meet these requirements primarily by maintaining insurance, which we purchase from private insurers.
Sunoco is required to comply with federal and state financial responsibility requirements to demonstrate that it has the ability to pay for remediation or to compensate third parties for damages incurred as a result of a release of regulated materials from its underground storage tank systems. It meets these requirements primarily by maintaining insurance, which it purchases from private insurers.
To achieve this, we strive to hire and maintain a qualified and dedicated workforce and encourage safety and safety accountability throughout our daily operations. Our environmental, health and safety professionals provide environmental and safety training to our field representatives.
To achieve this, we strive to hire and maintain a qualified and dedicated workforce and encourage safety and safety accountability throughout our daily operations. 20 Table of Contents Index to Financial Statements Sunoco’s environmental, health and safety professionals provide environmental and safety training to our field representatives.
Therefore, the volume of motor fuel that we distribute is typically somewhat higher in the second and third quarters of our fiscal year. As a result, our results from operations may vary from period to period.
Therefore, the volume of motor fuel that we distribute is typically somewhat higher in the second and third quarters of our fiscal year. As a result, our results from operations may vary from period to period. Our commercial operations experience higher volumes in the winter months as a result of higher demand for diesel and heating oil in the winter.
We also distribute unbranded motor fuel, which we purchase in bulk, on a rack basis based upon prices posted by the refiner at a fuel supply terminal or on a contract basis with the price tied to one or more market indices.
The branded fuel supply agreements generally have an initial term of three to five years. We also distribute motor fuel, which we purchase in bulk, on a rack basis based upon prices posted by the refiner at a fuel supply terminal or on a contract basis with the price tied to one or more market indices.
On the West Coast, regulatory priorities continue to increase demand for renewable fuels in the region, while at the same time, obtaining permits for greenfield projects remains difficult, which both add more value to our existing assets.
On the West Coast, regulatory priorities continue to increase demand for renewable fuels in the region, while at the same time, obtaining permits for greenfield projects remains difficult, which both add more value to our existing assets. In the Refinery segment, our Burnaby Refinery competes with other refineries owned by major energy companies.
Reporting under both laws would begin in 2026. Currently, the ultimate impact of these laws on our business is uncertain, but to the extent implemented, we may face additional costs to comply with these disclosure requirements as well as increased costs of and restrictions on access to capital.
Currently, the ultimate impact of these laws on Sunoco’s business is uncertain, but to the extent implemented, Sunoco may face additional costs to comply with these disclosure requirements as well as increased costs of and restrictions on access to capital.
Various federal, state and local agencies have the authority to prescribe product quality specifications for the motor fuels that we sell, largely in an effort to reduce air pollution. Failure to comply with these regulations can result in substantial penalties.
Various federal, state, provincial and local agencies have the authority to prescribe product quality and volatility specifications for the motor fuels that Sunoco sells, including with respect to products produced at the Burnaby Refinery, largely in an effort to reduce air pollution. Failure to comply with these regulations can result in substantial penalties.
The HLPSA regulates safety requirements in the design, construction, operation and maintenance of crude oil and NGL pipeline 14 Table of Contents In d ex to Financial Statements facilities, while the PSIA establishes mandatory inspections for all U.S. crude oil, NGLs and hazardous liquid transmission pipelines in certain high risk areas, such as high-consequence areas (“HCAs”) or moderate consequence areas (“MCAs”).
The HLPSA regulates safety requirements in the design, construction, operation and maintenance of crude oil and NGL pipeline facilities, while the PSIA establishes mandatory inspections for all U.S. crude oil, NGLs and hazardous liquid transmission pipelines in certain high risk areas, such as high-consequence areas (“HCAs”) or moderate consequence areas (“MCAs”). 16 Table of Contents Index to Financial Statements In October 2025, members of Congress introduced the Pipeline Safety Act of 2025, which would reauthorize appropriation for PHMSA and modernize pipeline safety regulations.
In the Terminals segment, we compete primarily with both major energy and chemical companies as well as independent terminal owners. Although major energy and chemical company terminals often have the same capabilities as terminals owned by independent operators, they generally do not provide terminalling services to third parties.
Although major energy and chemical company terminals often have the same capabilities as terminals owned by independent operators, they generally do not provide terminalling services to third parties.
Real Estate and Lease Arrangements As of December 31, 2024, our real estate and lease arrangements were as follows: Owned Leased Dealer and commission agent sites 390 199 Company-operated retail stores 8 47 Warehouses, offices and other 125 37 Total 523 283 Competition In the Fuel Distribution segment, we compete primarily with other independent motor fuel distributors.
Real Estate and Lease Arrangements As of December 31, 2025, our real estate and lease arrangements were as follows: Owned Leased Dealer and commission agent sites 822 1,877 Company-operated retail stores 732 605 Warehouses, offices and other 307 210 Total 1,861 2,692 Competition In the Fuel Distribution segment, we compete primarily with other independent motor fuel distributors.
Fuel Distribution Segment We are a distributor of motor fuels and other petroleum products which we supply to third-party dealers and distributors, to independent operators of commission agent locations, other commercial consumers of motor fuel and to our retail locations.
Fuel Distribution Segment We are a distributor of motor fuels and other petroleum products that we supply to customers that include third-party dealers and distributors, commission agent operators, and commercial businesses, in addition to our directly operated convenience retail facilities.
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%.
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 were permitted to adjust their indexed ceilings annually by PPI-FG minus 0.21%.
We evaluate potential independent site operators based on their creditworthiness and the quality of their sites and operations, including the site’s size and location, projected monthly volumes of motor fuel, monthly merchandise sales, overall financial performance and previous operating experience. We may extend credit to certain dealers based on our credit evaluation process.
We evaluate potential new customers based on the quality of their facilities and operations, including the facility’s size and location, projected monthly volumes of motor fuel, and operating experience. We may extend credit to certain customers based on our credit evaluation process.
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.
Where an oil pipeline’s filed rates exceeded 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.
This vehicle emission standard has become increasingly stringent over time; for example, in March 2024, the EPA finalized new emissions standards for light and medium-duty vehicles, including passenger cars, vans, pickups, sedans and sport utility vehicles for model years 2027 through 2032 and beyond.
For example, the EPA previously finalized new criteria pollutant and GHG emissions standards for light and medium-duty vehicles, including passenger cars, vans, pickups, sedans and sport utility vehicles for model years 2027 through 2032 and beyond.
We arrange for motor fuel to be delivered from the storage terminals to the appropriate sites in our distribution network at prices consistent with those historically charged to third parties for the delivery of fuel. We also deliver motor fuel, propane and lubricating oils to commercial customers involved in petroleum exploration and production.
In Canada, we predominately distribute through third-party carriers and independent brokers. We arrange for motor fuel to be delivered from the storage terminals to the appropriate sites in our distribution network at prices consistent with those historically charged to third parties for the delivery of fuel.
Accordingly, we have recorded estimated undiscounted liabilities for these sites totaling $28 million as of December 31, 2024. As of December 31, 2024, we have additional reserves of $84 million that represent our estimate for future asset retirement obligations for underground storage tanks.
Accordingly, it has recorded estimated undiscounted liabilities for these sites totaling $168 million as of December 31, 2025. As of December 31, 2025, Sunoco has additional reserves of $254 million that re present its estimate for future asset retirement obligations for underground storage tanks.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur financial condition and results of operations are influenced by changes in the prices of motor fuel, crude oil or refined petroleum products, which may adversely impact our margins, our customers’ financial condition and the availability of trade credit. Our operating results are influenced by prices for motor fuel, crude oil and refined petroleum products.
Biggest changeThe nature of these types of risks, which are often unpredictable, makes them difficult to plan for, or otherwise mitigate, and they are generally uninsurable—which compounds their potential impact on our business. 24 Table of Contents Index to Financial Statements Our financial condition and results of operations are influenced by changes in the prices of motor fuel, crude oil, refinery feedstock or refined petroleum products, which may adversely impact our margins, our customers’ financial condition and the availability of trade credit.
We are entitled to reimbursement for certain of these costs under various third-party contractual indemnities and insurance policies, subject to eligibility requirements, deductibles, per incident, annual and aggregate caps.
We are entitled to reimbursement for certain of these costs under various third-party contractual indemnities and insurance policies, subject to eligibility requirements, deductibles, and per incident, annual and aggregate caps.
Examples of such decisions include: ◦ whether to exercise limited call rights; ◦ how to exercise voting rights with respect to any units it owns; ◦ whether to exercise registration rights; and ◦ whether to consent to any merger or consolidation, or amendment to our partnership agreement. • Our partnership agreement provides that our General Partner will not have any liability to us or our unitholders for decisions made in its capacity as General Partner so long as it acted in good faith as defined in the partnership agreement, meaning it believed that the decisions were not adverse to the interests of our partnership. • Our partnership agreement provides that our General Partner and the officers and directors of our General Partner will not be liable for monetary damages to us for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our General Partner or those persons acted in bad faith or, in the case of a criminal matter, acted with knowledge that such person’s conduct was criminal. • Our partnership agreement provides that our General Partner will not be in breach of its obligations under the partnership agreement or its duties to us or our limited partners with respect to any transaction involving an affiliate if: ◦ the transaction with an affiliate or the resolution of a conflict of interest is: • approved by the conflicts committee of the board of directors of our General Partner, although our General Partner is not obligated to seek such approval; or • approved by the vote of a majority of the outstanding common units, excluding any common units owned by our General Partner and its affiliates; or • the board of directors of our General Partner acted in good faith in taking any action or failing to act.
Examples of such decisions include: ◦ whether to exercise limited call rights; ◦ how to exercise voting rights with respect to any units it owns; ◦ whether to exercise registration rights; and ◦ whether to consent to any merger or consolidation, or amendment to our Partnership Agreement. • Our Partnership Agreement provides that our General Partner will not have any liability to us or our unitholders for decisions made in its capacity as General Partner so long as it acted in good faith as defined in the Partnership Agreement, meaning it believed that the decisions were not adverse to the interests of our partnership. • Our Partnership Agreement provides that our General Partner and the officers and directors of our General Partner will not be liable for monetary damages to us for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our General Partner or those persons acted in bad faith or, in the case of a criminal matter, acted with knowledge that such person’s conduct was criminal. • Our Partnership Agreement provides that our General Partner will not be in breach of its obligations under the Partnership Agreement or its duties to us or our limited partners with respect to any transaction involving an affiliate if: ◦ the transaction with an affiliate or the resolution of a conflict of interest is: • approved by the conflicts committee of the board of directors of our General Partner, although our General Partner is not obligated to seek such approval; • approved by the vote of a majority of the outstanding common units, excluding any common units owned by our General Partner and its affiliates; or • the board of directors of our General Partner acted in good faith in taking any action or failing to act.
In addition, our General Partner is allowed to take into account the interests of parties other than us or our unitholders, such as Energy Transfer, in resolving conflicts of interest. • Certain officers and directors of our General Partner are officers or directors of affiliates of our General Partner, and also devote significant time to the business of these entities and are compensated accordingly. • Affiliates of our General Partner, including Energy Transfer, are not limited in their ability to compete with us and may offer business opportunities or sell assets to parties other than us. • Our partnership agreement provides that our General Partner may, but is not required to, in connection with its resolution of a conflict of interest, seek “special approval” of such resolution by appointing a conflicts committee of the General Partner’s board of directors composed of one or more independent directors to consider such conflicts of interest and to either, itself, take action or recommend action to the board of directors, and any resolution of the conflict of interest by the conflicts committee shall be conclusively deemed to be approved by our unitholders. • Except in limited circumstances, our General Partner has the power and authority to conduct our business without unitholder approval. • Our General Partner determines the amount and timing of asset purchases and sales, borrowings, repayment of indebtedness and issuances of additional partnership securities and the level of reserves, each of which can affect the amount of cash that is distributed to our unitholders. • Our General Partner determines the amount and timing of any capital expenditure and whether a capital expenditure is classified as a maintenance capital expenditure or an expansion capital expenditure.
In addition, our General Partner is allowed to take into account the interests of parties other than us or our unitholders, such as Energy Transfer, in resolving conflicts of interest. • Certain officers and directors of our General Partner are officers or directors of affiliates of our General Partner, including SunocoCorp, and also devote significant time to the business of these entities and are compensated accordingly. • Affiliates of our General Partner, including Energy Transfer and SunocoCorp, are not limited in their ability to compete with us and may offer business opportunities or sell assets to parties other than us. • Our Partnership Agreement provides that our General Partner may, but is not required to, in connection with its resolution of a conflict of interest, seek “special approval” of such resolution by appointing a conflicts committee of the General Partner’s board of directors composed of one or more independent directors to consider such conflicts of interest and to either, itself, take action or recommend action to the board of directors, and any resolution of the conflict of interest by the conflicts committee shall be conclusively deemed to be approved by our unitholders. • Except in limited circumstances, our General Partner has the power and authority to conduct our business without unitholder approval. • Our General Partner determines the amount and timing of asset purchases and sales, borrowings, repayment of indebtedness and issuances of additional partnership securities and the level of reserves, each of which can affect the amount of cash that is distributed to our unitholders. • Our General Partner determines the amount and timing of any capital expenditure and whether a capital expenditure is classified as a maintenance capital expenditure or an expansion capital expenditure.
Our results of operations and financial condition could be impacted by many risks that are beyond our control, including the following: • cash distributions are not guaranteed and may fluctuate with our performance and other external factors; • general economic, financial, and political conditions, including the impact of tariffs, to the extent enacted; • the imposition or increase of tariffs on steel or other raw materials, or changes in trade agreements or trade relations; • changes in the prices of motor fuel; • demand for motor fuel, including consumer preference for alternative motor fuels or improvements in fuel efficiency; • demand for and supply of crude oil, refined products, renewable fuels, and anhydrous ammonia; • seasonal trends; • dangers inherent in the storage and transportation of motor fuel, crude oil, renewable fuels and anhydrous ammonia; • operational and business risks associated with our pipelines and fuel storage terminals; • tariff and/or contractually determined rates and fees we charge and the revenue we realize for our services; • domestic and foreign governmental laws, regulations, sanctions, embargoes, and taxes; • events or developments associated with our branded suppliers; • extreme weather events that may be more severe or frequent than historically experienced and that may be attributable to changes in climate due to adverse effects of an industrialized economy; • competition and fragmentation within the wholesale motor fuel distribution industry; • competition within the convenience store industry, including the impact of new entrants; • possible increased costs related to land use and facilities and equipment leases; • possible future litigation; • potential loss of key members of our senior management team; • failure to attract and retain qualified employees; • failure to insure against risks incident to our business; • terrorist attacks and threatened or actual war; • cybersecurity attacks, data breaches and other disruptions affecting us, or our service providers; • disruption of our information systems; • failure to protect sensitive customer, employee or vendor data, or to comply with applicable regulations relating to data security and privacy; • failure to obtain trade credit terms to adequately fund our ongoing operations; • our dependence on cash flow generated by our subsidiaries; and • potential impairment of goodwill and intangible assets.
Our results of operations and financial condition could be impacted by many risks that are beyond our control, including the following: • cash distributions are not guaranteed and may fluctuate with our performance and other external factors; • general economic, financial, and political conditions, including the impact of tariffs; • the imposition or increase of tariffs on steel or other raw materials, or changes in trade agreements or trade relations; • changes in the prices of motor fuel; • demand for motor fuel, including consumer preference for alternative motor fuels or improvements in fuel efficiency; • demand for and supply of crude oil, refined products, renewable fuels, and anhydrous ammonia; • seasonal trends; • dangers inherent in the storage and transportation of motor fuel, crude oil, renewable fuels and anhydrous ammonia; • operational and business risks associated with our refinery, pipelines and fuel storage terminals; • tariff and/or contractually determined rates and fees we charge and the revenue we realize for our services; • domestic and foreign governmental laws, regulations, sanctions, embargoes, and taxes; • events or developments associated with our branded suppliers; • extreme weather events that may be more severe or frequent than historically experienced and that may be attributable to changes in climate due to adverse effects of an industrialized economy; • competition and fragmentation within the wholesale motor fuel distribution industry; • competition within the convenience store industry, including the impact of new entrants; • possible increased costs related to land use and facilities and equipment leases; • possible future litigation; • potential loss of key members of our senior management team; • failure to attract and retain qualified employees; • failure to insure against risks incident to our business; • terrorist attacks and threatened or actual war; • cybersecurity attacks, data breaches and other disruptions affecting us, or our service providers; • disruption of our information systems; • failure to protect sensitive customer, employee or vendor data, or to comply with applicable regulations relating to data security and privacy; • failure to obtain trade credit terms to adequately fund our ongoing operations; • our dependence on cash flow generated by our subsidiaries; and • potential impairment of goodwill and intangible assets.
However, any efforts to control and/or reduce GHG emissions by the United States or other countries, or concerted conservation efforts that result in reduced consumption, could adversely impact demand for our products and, in turn, our financial position and results of operations. Increasingly, fossil fuel companies are also exposed to litigation risks from climate change.
Any efforts to control and/or reduce GHG emissions by the United States or other countries, or concerted conservation efforts that result in reduced consumption, could adversely impact demand for our products and, in turn, our financial position and results of operations. Increasingly, fossil fuel companies are also exposed to litigation risks from climate change.
Our operations are subject to increasingly stringent international, federal, state and local environmental, health, safety and security laws and regulations, including those relating to terminals, underground storage tanks, the release or discharge of regulated materials into the air, water and soil, the generation, storage, handling, use, transportation and disposal of hazardous materials, the exposure of persons to regulated materials, and the health and safety of our employees.
Our operations are subject to increasingly stringent international, federal, state and local environmental, health, safety and security laws and regulations, including those relating to: terminals and underground storage tanks; refinery operations; the release or discharge of regulated materials into the air, water and soil; the generation, storage, handling, use, transportation and disposal of hazardous materials; the exposure of persons to regulated materials; and the health and safety of our employees.
Therefore, if we were treated as a corporation for U.S. federal income tax purposes or otherwise subjected to a material amount of entity-level taxation, there would be a material reduction in the anticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our common units.
Therefore, if we were treated as a corporation for U.S. federal income tax purposes or otherwise subjected to a material amount of entity-level taxation, there would be a material reduction in the anticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our units.
Any such event not covered by our insurance could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. Additionally, our pipelines, terminals and storage assets are generally long-lived assets, and some have been in service for many years.
Any such event not covered by our insurance could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. Additionally, our pipelines, terminals, storage assets and refinery operations are generally long-lived assets, and some have been in service for many years.
Any new owner of our General Partner or our General Partner interest would then be in a position to replace the board of directors and executive officers of our General Partner with its own designees without the consent of unitholders and thereby exert significant control over us, and may change our business strategy.
Any new owner of SunocoCorp or our General Partner interest would then be in a position to replace the board of directors and executive officers of our General Partner with its own designees without the consent of unitholders and thereby exert significant control over us, and may change our business strategy.
The present U.S. federal income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial changes or differing interpretations at any time.
The present U.S. federal income tax treatment of publicly traded partnerships, including us, or an investment in our units may be modified by administrative, legislative or judicial changes or differing interpretations at any time.
Detail of Tax Risks to Common Unitholders Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes, as well as our not being subject to a material amount of entity-level taxation by individual states.
Detail of Tax Risks to Unitholders Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes, as well as our not being subject to a material amount of entity-level taxation by individual states.
Therefore, conflicts of interest may arise between Energy Transfer and its affiliates, including our General Partner, on the one hand, and us and our unitholders, on the other hand. In resolving these conflicts of interest, our General Partner may favor its own interests and the interests of its affiliates over the interests of our common unitholders.
Therefore, conflicts of interest may arise between Energy Transfer and its affiliates, including our General Partner and SunocoCorp, on the one hand, and us and our unitholders, on the other hand. In resolving these conflicts of interest, our General Partner may favor its own interests and the interests of its affiliates over the interests of our common unitholders.
The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis.
The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis.
We are unable to predict whether any changes or other proposals will ultimately be enacted. Any future legislative changes could negatively impact the value of an investment in our common units.
We are unable to predict whether any changes or other proposals will ultimately be enacted. Any future legislative changes could negatively impact the value of an investment in our units.
While we have invested significant amounts in the protection of our information systems and maintain what we believe are adequate security controls over individually identifiable customer, employee and vendor data provided to us, a breakdown or a breach in our systems that results in the unauthorized release of individually identifiable customer or other sensitive data could nonetheless occur and have a material adverse effect on our reputation, operating results and financial condition.
While we have invested significant amounts in the protection of our information systems and maintain what we believe are adequate security controls over personally identifiable customer, employee and vendor data provided to us, a breakdown or a breach in our systems that results in the unauthorized release of personally identifiable customer or other sensitive data could nonetheless occur and have a material adverse effect on our reputation, operating results and financial condition.
Similarly, any sustained decrease in demand for crude oil, refined products, renewable fuels or anhydrous ammonia in the markets our pipelines and terminals serve that extends beyond the expiration of our existing throughput and deficiency agreements could result in a significant reduction in throughputs in our pipelines and storage in our terminals, which would reduce our cash flows and impair our ability to make distributions to our unitholders.
Similarly, any sustained decrease in demand for crude oil, refined products, refinery feedstock, renewable fuels or anhydrous ammonia in the markets our pipelines and terminals serve that extends beyond the expiration of our existing throughput and deficiency agreements could result in a significant reduction in throughputs in our pipelines and storage in our terminals, which would reduce our cash flows and impair our ability to make distributions to our unitholders.
Any deterioration of social, political, labor or economic conditions, including the increasing threat of terrorist organizations and drug cartels in Mexico, or affecting a customer with whom we do business, as well as difficulties in staffing, obtaining necessary equipment and supplies and managing foreign operations, may adversely affect our operations or financial results.
Any deterioration of social, political, labor or economic conditions, including the increasing threat of terrorist organizations and drug cartels in Mexico and tensions in Venezuela, or affecting a customer with whom we do business, as well as difficulties in staffing, obtaining necessary equipment and supplies and managing foreign operations, may adversely affect our operations or financial results.
As a result, our results from operations may vary widely from period to period, affecting our cash flow. The dangers inherent in the storage and transportation of motor fuel, crude oil, refined petroleum products and anhydrous ammonia could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.
As a result, our results from operations may vary widely from period to period, affecting our cash flow. The dangers inherent in the storage and transportation of motor fuel, crude oil, refinery feedstock, refined petroleum products and anhydrous ammonia could cause disruptions in our operations and could expose us to potentially significant losses, costs or liabilities.
Our partnership agreement also contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting our unitholders’ ability to influence the manner or direction of management. Even if holders of our common units are dissatisfied, they cannot easily remove our General Partner without its consent.
Our Partnership Agreement also contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting our unitholders’ ability to influence the manner or direction of management. Even if holders of our common units are dissatisfied, they cannot easily remove our General Partner without its and SunocoCorp’s consent.
Our stakeholders could be impacted by risks related to our partnership agreement, including: • the requirement that we distribute all of our available cash; • the limited liability and duties of our General Partner and restrictions on the remedies available for actions taken; • the potential need to issue common units in connection with a resetting of the target distribution levels related to our IDRs; • our common unitholders’ limited voting rights and lack of rights to elect our General Partner or its directors; • limitations on our common unitholders’ ability to remove our General Partner without its consent; • potential transfer of the General Partner interest or the control of our General Partner to a third party; • the potential requirement for unitholders to sell their common units at an undesirable time or price; • our ability to issue additional units without unitholder approval; • potential sales of substantial amounts of our common units in the public or private markets; • restrictions on the voting rights of unitholders owning 20% or more of our outstanding common units; • the dependence of our distributions primarily on our cash flow and not solely on profitability; • our unitholders’ potential liability to repay distributions; and • the lack of certain corporate governance requirements by the New York Stock Exchange ("NYSE") for a publicly traded partnership like us.
Our stakeholders could be impacted by risks related to our Partnership Agreement, including: • the requirement that we distribute all of our available cash; • the limited liability and duties of our General Partner and restrictions on the remedies available for actions taken; • the potential need to issue common units in connection with a resetting of the target distribution levels related to our IDRs; • our common unitholders’ limited voting rights and lack of rights to elect our General Partner or its directors; • limitations on our common unitholders’ ability to remove our General Partner without its and SunocoCorp’s consent; • potential transfer of the General Partner interest or the control of our General Partner to a third party; • the potential requirement for unitholders to sell their common units at an undesirable time or price; • our ability to issue additional units without unitholder approval; • potential sales of substantial amounts of our common units in the public or private markets; • restrictions on the voting rights of unitholders owning 20% or more of our outstanding common units; • the dependence of our distributions primarily on our cash flow and not solely on profitability; • our unitholders’ potential liability to repay distributions; and • the lack of certain corporate governance requirements by the NYSE for a publicly traded partnership like us.
For example, declines in consumer confidence and/or consumer spending, changes in unemployment, significant inflationary or deflationary changes or disruptive regulatory or geopolitical events could contribute to increased volatility and diminished expectations for the economy and our markets, including the market for our goods and services, and lead to demand or cost pressures that could negatively and adversely impact our business.
Similarly, declines in consumer confidence and/or consumer spending, changes in unemployment, significant inflationary or deflationary changes or disruptive regulatory or geopolitical events could contribute to increased volatility and diminished expectations for the economy and our markets, including the market for our goods and services, and lead to demand or cost pressures that could negatively and adversely impact our business.
A significant decrease in demand for motor fuel, crude oil or refined petroleum products, including increased consumer preference for alternative motor fuels or improvements in fuel efficiency or a material shift toward electric or other alternative-power vehicles, in the areas we serve would reduce our ability to make distributions to our unitholders.
A significant decrease in demand for motor fuel, crude oil, refinery feedstock or refined petroleum products, including increased consumer preference for alternative motor fuels or improvements in fuel efficiency or a material shift toward electric or other alternative-power vehicles, in the areas we serve would reduce our ability to make distributions to our unitholders.
Severe weather, which may increase in frequency and intensity due to climate change, could adversely affect our business by damaging our suppliers’ or our customers’ facilities or communications networks. A substantial portion of our wholesale distribution and retail networks are located in regions susceptible to severe storms, including hurricanes.
Severe weather, which may increase in frequency and intensity due to climate change, could adversely affect our business by damaging our suppliers’ or our customers’ facilities or communications networks. A substantial portion of our wholesale distribution, refinery operations and retail networks are located in regions susceptible to severe storms, including hurricanes.
The combination of two independent businesses is complex, costly and time consuming, and we will be required to continue to devote significant management attention and resources to integrating the business practices and operations of NuStar into the Partnership to achieve, among other things, the targeted cost synergies associated with the acquisition.
The combination of two independent businesses is complex, costly and time consuming, and we will be required to continue to devote significant management attention and resources to integrating the business practices and operations of Parkland into the Partnership to achieve, among other things, the targeted cost synergies associated with the acquisition.
To the extent we meet such targets, it may be achieved through various contractual arrangements, including the purchase of various credits or offsets that may be deemed to mitigate our ESG impact instead of actual changes in our business operations. Some of these arrangements may receive scrutiny from certain constituencies.
To the extent we meet such targets, it may be achieved through various contractual arrangements, including the purchase of various credits or offsets that may be deemed to mitigate our environmental impact instead of actual changes in our business operations. Some of these arrangements may receive scrutiny from certain constituencies.
A failure to successfully integrate the acquired assets or businesses, such as NuStar, with our existing business in a timely manner may have a material adverse effect on our business, financial condition, results of operations or cash available for distribution to our unitholders.
A failure to successfully integrate the acquired assets or businesses, such as Parkland, with our existing business in a timely manner may have a material adverse effect on our business, financial condition, results of operations or cash available for distribution to our unitholders.
We may not be able to meet such targets in the manner or on such a timeline as initially contemplated, including but not limited to as a result of unforeseen costs or technical difficulties associated with achieving such results.
We may not be able to meet or progress against such targets in the manner or on such a timeline as initially contemplated, including but not limited to as a result of unforeseen costs or technical difficulties associated with achieving such results.
Factors that tend to decrease market demand include: • a recession, high interest rates, inflation or other adverse economic conditions that result in lower spending by consumers on gasoline, diesel and travel; • events that negatively impact global economic activity, travel and demand generally; • higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of gasoline; • an increase in aggregate automotive engine fuel economy; • new government and regulatory actions or court decisions requiring the phase out or reduced use of gasoline-fueled vehicles; • the increased use of and public demand for use of alternative fuel sources or electric vehicles; • an increase in the market price of crude oil that increases refined product prices, which may reduce demand for refined products and increase demand for alternative products; and • adverse weather events resulting in decreased corn acres planted, which may reduce demand for anhydrous ammonia.
Factors that tend to decrease market demand include: • a recession, high interest rates, inflation or other adverse economic conditions that result in lower spending by consumers on gasoline, diesel and travel; • events that negatively impact global economic activity, travel and demand generally; • higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of gasoline; • an increase in aggregate automotive engine fuel economy; 25 Table of Contents Index to Financial Statements • new government and regulatory actions or court decisions requiring the phase out or reduced use of gasoline-fueled vehicles; • the increased use of and public demand for use of alternative fuel sources or electric vehicles; • an increase in the market price of crude oil that increases refined product prices, which may reduce demand for refined products and increase demand for alternative products; and • adverse weather events resulting in decreased corn acres planted, which may reduce demand for anhydrous ammonia.
Facilities that are adjacent to water require the engagement of Federally Certified Oil Spill Response Organizations to be available to respond to a spill on water from above ground storage tanks or pipelines.
Certain oil handling facilities that are adjacent to water require the engagement of Federally Certified Oil Spill Response Organizations to be available to respond to a spill on water from above-ground storage tanks or pipelines.
It is possible that the index may result in negative rate adjustments in some years, or that changes in the index might not be large enough to fully reflect actual increases in our costs. The FERC’s indexing methodology is subject to review and revision every five years, with the most recent five-year review occurring in 2020.
It is possible that the index may result in negative rate adjustments in some years, or that changes in the index might not be large enough to fully reflect actual increases in our costs. The FERC’s indexing methodology is subject to review and revision every five years, with the most recent five-year review occurring in 2025 and 2026.
Our partnership agreement requires that any claims, suits, actions or proceedings: • arising out of or relating in any way to our partnership agreement (including any claims, suits or actions to interpret, apply or enforce the provisions of our partnership agreement or the duties, obligations or liabilities among our limited partners or of our limited partners to us, or the rights or powers of, or restrictions on, our limited partners or us); • brought in a derivative manner on our behalf; • asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of us or our General Partner, or owed by our General Partner, to us or the limited partners; • asserting a claim arising pursuant to any provision of the Delaware Act; or • asserting a claim governed by the internal affairs doctrine, will be exclusively brought in the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction).
Our Partnership Agreement requires that any claims, suits, actions or proceedings: • arising out of or relating in any way to our Partnership Agreement (including any claims, suits or actions to interpret, apply or enforce the provisions of our Partnership Agreement or the duties, obligations or liabilities among our limited partners or of our limited partners to us, or the rights or powers of, or restrictions on, our limited partners or us); 45 Table of Contents Index to Financial Statements • brought in a derivative manner on our behalf; • asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of us or our General Partner, or owed by our General Partner, to us or the limited partners; • asserting a claim arising pursuant to any provision of the Delaware Act; or • asserting a claim governed by the internal affairs doctrine, will be exclusively brought in the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction).
Integration of assets and businesses acquired in past acquisitions or future acquisitions with our existing business will be a complex, time-consuming and costly process, particularly given that assets acquired to date significantly increased our size and diversified the geographic areas in which we operate.
Integration of assets and businesses acquired in past acquisitions or future acquisitions with our existing business will be a complex, time-consuming and costly process, particularly given that assets acquired to date significantly increased our size and diversif ied the geographic areas in which we operate.
The difficulties of integrating past and future acquisitions with our business include, among other things: • operating a larger combined organization in new geographic areas and new lines of business; • hiring, training or retaining qualified personnel to manage and operate our growing business and assets; • integrating management teams and employees into existing operations and establishing effective communication and information exchange with such management teams and employees; • diversion of management’s attention from our existing business; • assimilation of acquired assets and operations, including additional regulatory programs, operational philosophies and complex systems; • loss of customers, suppliers or key employees; • maintaining an effective system of internal controls in compliance with the Sarbanes-Oxley Act of 2002 as well as other regulatory compliance and corporate governance matters; • integrating new technology systems for financial reporting; and • assuming contractual obligations of acquired businesses, potential unknown liabilities and unforeseeable increased expenses as a result of such acquisitions.
The difficulties of integrating past and future acquisitions with our business include, amo ng other things: • operating a larger combined organization in new geographic areas and new lines of business; • hiring, training or retaining qualified personnel to manage and operate our growing business and assets; • integrating management teams and employees into existing operations and establishing effective communication and information exchange with such management teams and employees; • diversion of management’s attention from our existing business; • assimilation of acquired assets and operations, including additional regulatory programs, operational philosophies and complex systems; 32 Table of Contents Index to Financial Statements • loss of customers, suppliers or key employees; • maintaining an effective system of internal controls in compliance with the Sarbanes-Oxley Act of 2002 as well as other regulatory compliance and corporate governance matters; • integrating new technology systems for financial reporting; and • assuming contractual obligations of acquired businesses, potential unknown liabilities and unforeseeable increased expenses as a result of such acquisitions.
If at any time our General Partner and its affiliates own more than 80% of the common units, our General Partner will have the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price equal to the greater of (1) the average of the daily closing price of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (2) the highest per-unit price paid by our General Partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed.
If at any time our General Partner and its affiliates own more than 80% of the common units, our General Partner will have the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all, of the common units held 44 Table of Contents Index to Financial Statements by unaffiliated persons at a price equal to the greater of (1) the average of the daily closing price of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (2) the highest per-unit price paid by our General Partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed.
The level of our future indebtedness could have important consequences to us, including: • making it more difficult for us to satisfy our obligations with respect to our senior notes and our credit agreement governing our Credit Facility; • limiting our ability to borrow additional amounts to fund working capital, capital expenditures, acquisitions, debt service requirements, the execution of our growth strategy and other activities; • requiring us to dedicate a substantial portion of our cash flow from operations to pay interest on our debt, which would reduce our cash flow available to make distributions to our unitholders and to fund working capital, capital expenditures, acquisitions, execution of our growth strategy and other activities; 36 Table of Contents In d ex to Financial Statements • making us more vulnerable to adverse changes in general economic conditions, our industry and government regulations and in our business by limiting our flexibility in planning for, and making it more difficult for us to react quickly to, changing conditions; and • placing us at a competitive disadvantage compared with our competitors that have less debt.
The level of our future indebtedness could have important consequences to us, including: • making it more difficult for us to satisfy our obligations with respect to our senior notes and our credit agreement governing our Credit Facility; • limiting our ability to borrow additional amounts to fund working capital, capital expenditures, acquisitions, debt service requirements, the execution of our growth strategy and other activities; • requiring us to dedicate a substantial portion of our cash flow from operations to pay interest and principal on our debt, which would reduce our cash flow available to make distributions to our unitholders and to fund working capital, capital expenditures, acquisitions, execution of our growth strategy and other activities; • making us more vulnerable to adverse changes in general economic conditions, our industry and government regulations and in our business by limiting our flexibility in planning for, and making it more difficult for us to react quickly to, changing conditions; and • placing us at a competitive disadvantage compared with our competitors that have less debt.
Our operations are subject to significant hazards and risks inherent in transporting and storing motor fuel. crude oil, refined petroleum products, and anhydrous ammonia.
Our operations are subject to significant hazards and risks inherent in transporting and storing motor fuel crude oil, refinery feedstock, refined petroleum products, and anhydrous ammonia.
The occurrence of any of the events described above could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. Our operations are subject to a series of risks related to climate change .
The occurrence of any of the events described abov e could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. Our operations are subject to a series of risks related to climate change .
These conflicts include the following situations, among others: • Our General Partner’s affiliates, including Energy Transfer and its affiliates, are not prohibited from engaging in other business or activities, including those in direct competition with us. • In addition, neither our partnership agreement nor any other agreement requires Energy Transfer to pursue a business strategy that favors us.
These conflicts include the following situations, among others: • Our General Partner’s affiliates, including Energy Transfer, SunocoCorp and their respective affiliates, are not prohibited from engaging in other business or activities, including those in direct competition with us. • In addition, neither our Partnership Agreement nor any other agreement requires Energy Transfer to pursue a business strategy that favors us.
These determinations can affect the amount of cash that is distributed to our unitholders. • Our General Partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions on the IDRs. • Our partnership agreement permits us to distribute up to $25 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus.
These determinations can affect the amount of cash that is distributed to our unitholders. • Our General Partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions on the IDRs. 41 Table of Contents Index to Financial Statements • Our Partnership Agreement permits us to distribute up to $25 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus.
A significant portion of our revenue and cash flows are generated from our customers’ payments of fees under throughput contracts and storage agreements.
A significant portion of our revenues and cash flows are generated from our customers’ payments of fees under throughput contracts and storage agreements.
If an affiliate transaction or the resolution of a conflict of interest is not approved by our common unitholders or the conflicts committee then it will be presumed that, in making its decision, taking any action or failing to act, the board of directors acted in good faith, and in any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.
If an affiliate transaction or the resolution of a conflict of interest is not approved by our common unitholders or the conflicts committee then it will be presumed that, in making its decision, taking any action or failing to act, the board of directors acted in good 43 Table of Contents Index to Financial Statements faith, and in any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.
Our pipeline and fuel storage terminals are subject to operational and business risks, the most significant of which include the following: • our inability to renew a ground lease for certain of our pipelines or fuel storage terminals on similar terms or at all; • our dependence on third parties to supply our fuel storage terminals; • outages on our pipelines or at our fuel storage terminals or interrupted operations due to weather-related or other natural causes; • the threat that the nation’s terminal infrastructure may be a future target of terrorist organizations; • the volatility in the prices of the products transported on our pipelines or stored at our fuel storage terminals and the resulting fluctuations in demand for our storage services; • the effects of a sustained recession or other adverse economic conditions; • the possibility of federal and/or state regulations that may discourage our customers from transporting or storing gasoline, diesel fuel, ethanol and jet fuel at our fuel storage terminals or reduce the demand by consumers for petroleum products; • competition from other pipelines and fuel storage terminals that are able to provide our customers with comparable transportation service or storage capacity at lower prices; and • climate change legislation or regulations that restrict emissions of GHGs could result in increased operating and capital costs and reduced demand for our transportation and storage services.
Our pipelines, fuel storage terminals and refinery are subject to operational and business risks, the most significant of which include the following: • our inability to renew a ground lease for certain of our pipelines or fuel storage terminals or at the Burnaby Refinery on similar terms or at all; • our dependence on third parties to supply our fuel storage terminals and refinery feedstock; • outages on our pipelines or at our fuel storage terminals or the Burnaby Refinery or interrupted operations due to weather-related or other natural causes; • the threat that the nation’s terminal infrastructure and the Burnaby Refinery may be a future target of terrorist organizations; • the volatility in the prices of the products transported on our pipelines or stored at our fuel storage terminals or our refinery feedstock and the resulting fluctuations in demand for our storage services; • the effects of a sustained recession or other adverse economic conditions; • the possibility of federal and/or state regulations that may discourage our customers from transporting or storing gasoline, diesel fuel, ethanol and jet fuel at our fuel storage terminals or reduce the demand by consumers for petroleum products, and possibility of federal, state or provincial regulation in Canada, particularly with respect to the Burnaby Refinery; • competition from other pipelines and fuel storage terminals that are able to provide our customers with comparable transportation service or storage capacity at lower prices or from other refineries servicing the Lower Mainland in Canada; and • climate change legislation or regulations that restrict emissions of GHGs could result in increased operating and capital costs and reduced demand for our transportation and storage services.
Our pipeline and fuel storage terminals are subject to operational and business risks which may adversely affect our financial condition, results of operations, cash flows and ability to make distributions to our unitholders.
Our pipelines, fuel storage terminals and refinery are subject to operational and business risks which may adversely affect our financial condition, results of operations, cash flows and ability to make distributions to our unitholders.
We have rental agreements for approximately 38% of the partnership, commission agent or dealer operated retail service stations where we currently control the real estate. We also have rental agreements for certain logistics facilities. As such, we are subject to the possibility of increased costs under rental agreements with landowners, primarily through rental increases and renewals of expired agreements.
We have rental agreements for approxim ately 61% of the Partnership, commission agent or dealer operated retail service stations where we currently control the real estate. We also have rental agreements for certain logistics facilities. As such, we are subject to the possibility of increased costs under rental agreements with landowners, primarily through rental increases and renewals of expired agreements.
Additionally, the Federal Reserve and other central banks have implemented policies in an effort to curb inflationary pressure on the costs of goods and services across the U.S., including the significant increases in prevailing interest rates that occurred during 2022 and 2023 as a result of the 525 aggregate basis point 21 Table of Contents In d ex to Financial Statements increase in the federal funds rate, and the associated macroeconomic impact on slowdown in economic growth could negatively impact our business.
Additionally, the Federal Reserve and other central banks have implemented policies in an effort to curb inflationary pressure on the costs of goods and services across the U.S., including the significant increases in prevailing interest rates that occurred during 2022 and 2023 as a result of the 525 aggregate basis point increase in the federal funds rate, and the associated macroeconomic impact on slowdown in economic growth could negatively impact our business.
Liability under, or a violation of compliance with, these laws and regulations, or any future laws or regulations, could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. Pipeline operations are also subject to a number of environmental and safety programs and regulations.
Liability under, or a violation of compliance with, these laws and regulations, or any future laws or regulations, could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 34 Table of Contents Index to Financial Statements Pipeline operations are also subject to a number of environmental and safety programs and regulations.
For example, our credit agreement, the indentures governing our senior notes, the indentures governing the NuStar senior notes and the agreements governing the GoZone Bonds restrict our ability to, among other things: • incur certain additional indebtedness; • incur, permit, or assume certain liens to exist on our properties or assets; • make certain investments or enter into certain restrictive material contracts; • make distributions; • repurchase units; and • merge or dispose of all or substantially all of our assets.
For example, our credit agreement, the indentures governing our senior notes, the indentures governing the NuStar senior notes and the agreements governing the GoZone Bonds restrict our ability to, among other things: • incur certain additional indebtedness; • incur, permit, or assume certain liens to exist on our properties or assets; • make certain investments or enter into certain restrictive material contracts; • make distributions; • repurchase units; and 40 Table of Contents Index to Financial Statements • merge or dispose of all or substantially all of our assets.
Despite our belief that the income tax return positions taken by these subsidiaries are fully supportable, certain positions may be successfully challenged by the IRS, state or local jurisdictions. Our unitholders will be required to pay taxes on their share of our income even if they do not receive any cash distributions from us.
Despite our belief that the income tax return positions taken by these subsidiaries are fully supportable, certain positions may be successfully challenged by the IRS, state or local jurisdictions. 47 Table of Contents Index to Financial Statements Our unitholders will be required to pay taxes on their share of our income even if they do not receive any cash distributions from us.
Any acquisitions involve potential risks, including, among others: • the validity of our assumptions about revenues, capital expenditures and operating costs of the acquired business or assets, as well as assumptions about achieving synergies with our existing business; 29 Table of Contents In d ex to Financial Statements • the validity of our assessment of environmental and other liabilities, including legacy liabilities; • the costs associated with additional debt or equity capital, which may result in a significant increase in our interest expense and financial leverage resulting from any additional debt incurred to finance the acquisition, or the issuance of additional common units on which we will make distributions, either of which could offset the expected accretion to our unitholders from such acquisition and could be exacerbated by volatility in the equity or debt capital markets; • a failure to realize anticipated benefits, such as increased available cash per unit, enhanced competitive position or new customer relationships; • a decrease in our liquidity by using a significant portion of our available cash or borrowing capacity to finance the acquisition; • the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges; and • the risk that our existing financial controls, information systems, management resources and human resources will need to grow to support future growth and we may not be able to react timely.
Any acquisitions involve potential risks, including, among others: • the validity of our assumptions about revenues, capital expenditures and operating costs of the acquired business or assets, as well as assumptions about achieving synergies with our existing business; • the validity of our assessment of environmental and other liabilities, including legacy liabilities; • the costs associated with additional debt or equity capital, which may result in a significant increase in our interest expense and financial leverage resulting from any additional debt incurred to finance the acquisition, or the issuance of additional common units on which we will make distributions, either of which could offset the expected accretion to our unitholders from such acquisition and could be exacerbated by volatility in the equity or debt capital markets; • a failure to realize anticipated benefits, such as increased available cash per unit, enhanced competitive position or new customer relationships; • a decrease in our liquidity by using a significant portion of our available cash or borrowing capacity to finance the acquisition; • the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges; and • the risk that our existing financial controls, information systems, management resources and human resources will need to grow to support future growth and we may not be able to react timely. 33 Table of Contents Index to Financial Statements We could be subject to liabilities from our assets that predate our acquisition of those assets, but that are not covered by indemnification rights we have against the sellers of the assets.
Also, institutional lenders may decide not to provide funding for fossil fuel companies based on climate change related concerns, which could affect our access to capital. We are subject to federal laws related to the RFS.
Also, institutional lenders may decide not to provide funding for fossil fuel companies based on climate change related concerns, which could affect our access to capital. Sunoco is subject to federal laws related to the RFS.
Under CERCLA and similar state laws, as persons who arrange for the transportation, treatment, and disposal of hazardous substances, we may also be subject to liability at sites where such hazardous substances come to be located.
Under CERCLA and similar state laws, as persons who arrange for the transportation, treatment, and disposal of hazardous substances, we may also be subject to liability at sites where such hazardous substances are released.
If the Internal Revenue Service (“IRS”) were to treat us as a corporation for U.S. federal income tax purposes or we were otherwise subject to a material amount of entity-level taxation, then our cash available for distribution to our unitholders would be substantially reduced.
If the IRS were to treat us as a corporation for U.S. federal income tax purposes or we were otherwise subject to a material amount of entity-level taxation, then our cash available for distribution to our unitholders would be substantially reduced.
The amount of cash generated from operations will fluctuate from quarter to quarter based on a number of factors, some of which are beyond our control, which include, among others: • demand for motor fuel in the markets we serve, including the result of secular trends towards increased usage of electric vehicles and/or seasonal fluctuations in demand for motor fuel; • competition from other companies that sell motor fuel products or have convenience stores in the market areas in which we or our commission agents or dealers operate; • the amount of crude oil and refined petroleum products transported through our subsidiaries’ pipelines; • the level of competition from other midstream, transportation and storage and retail marketing companies and other energy providers; • regulatory action affecting the supply of or demand for motor fuel, crude oil, refined petroleum products, our operations, our existing contracts or our operating costs; 20 Table of Contents In d ex to Financial Statements • prevailing economic conditions; • the price of crude oil and refined petroleum products; • rising interest rates and slowing economic growth; • the accelerated transition to a low carbon economy; • geopolitical events such as the armed conflict in Ukraine and political instability in the Middle East; • supply, extreme weather and logistics disruptions; and • volatility of margins for motor fuel.
The amount of cash generated from operations will fluctuate from quarter to quarter based on a number of factors, some of which are beyond our control, which include, among others: • demand for motor fuel in the markets we serve, including the result of secular trends towards increased usage of electric vehicles and/or seasonal fluctuations in demand for motor fuel; • competition from other companies that sell motor fuel products or have convenience stores in the market areas in which we or our commission agents or dealers operate; • the amount of crude oil and refined petroleum products transported through our subsidiaries’ pipelines; • the level of competition from other midstream, transportation and storage and retail marketing companies, refinery operators and other energy providers; • regulatory action affecting the supply of or demand for motor fuel, crude oil, refined petroleum products, our operations, our existing contracts or our operating costs; • prevailing economic conditions; • the price of crude oil, feedstock at our refining operations and refined petroleum products; • rising interest rates and slowing economic growth; • the accelerated transition to a low carbon economy; • geopolitical events such as the conflicts in Ukraine and Venezuela and political instability in the Middle East; • supply, extreme weather and logistics disruptions; and • volatility of margins for motor fuel.
These systems are vulnerable to, among other things, damage and interruption from power loss or natural disasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of data, security breaches and computer viruses, which could result in a loss of sensitive business information, systems interruption or the disruption of our business operations.
These systems are vulnerable to, among other things, damage and interruption from power loss or natural disasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of data, security breaches and computer viruses, which 30 Table of Contents Index to Financial Statements could result in a loss of sensitive business information, systems interruption or the disruption of our business operations.
As such, we rely primarily upon external financing sources, including borrowings under our Credit Facility and the issuance of debt and equity securities, to fund our acquisitions and expansion capital requirements. To the extent we are unable to finance growth externally, our cash distribution policy may significantly impair our ability to grow.
As such, we rely primarily upon external financing sources, 42 Table of Contents Index to Financial Statements including borrowings under our Credit Facility and the issuance of debt and equity securities, to fund our acquisitions and expansion capital requirements. To the extent we are unable to finance growth externally, our cash distribution policy may significantly impair our ability to grow.
For a transfer of interests in a publicly traded partnership that is effected through a broker the obligation to withhold is imposed on the transferor’s broker. Current and prospective non-U.S. unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units. Item 1B. Unresolved Staff Comments None.
For a transfer of interests in a publicly traded partnership that is effected through a broker the obligation to withhold is imposed on the transferor’s broker. Current and prospective non-U.S. unitholders should consult their tax advisors regarding the impact of these rules on an investment in our common units.
Goodwill is recorded when the purchase price of a business exceeds the fair value of the tangible and separately measurable intangible net assets. Generally accepted accounting principles (“GAAP”) require us to test goodwill and indefinite-lived intangible assets for impairment on an annual basis or when events or circumstances occur, indicating that goodwill or indefinite-lived intangible assets might be impaired.
Goodwill is recorded when the purchase price of a business exceeds the fair value of the tangible and separately measurable intangible net assets. GAAP require us to test goodwill and indefinite-lived intangible assets for impairment on an annual basis or when events or circumstances occur, indicating that goodwill or indefinite-lived intangible assets might be impaired.
Our business, results of operations, cash flows, financial condition and future growth could be impacted by the following: • significant expenditures or liabilities resulting from federal, state and local laws and regulations pertaining to environmental protection, operational safety, pipeline safety or the Renewable Fuel Standard (“RFS”); • changes in demand for motor fuel, crude oil, renewable fuels or other petroleum products resulting from federal and/or state regulations that may discourage the use or storage of petroleum products; • significant expenditures or penalties associated with federal, state and local laws and regulations that govern the product quality specifications of refined petroleum products we purchase and sell; • changes in federal, state or local laws and regulations pertaining to the facilities and operations of third parties that supply fuel to or transport for our storage terminals; • laws, regulations and policies governing the rates, terms and conditions of our services; • failure to recover the full amount of increases in the costs of our pipeline operations; • costs and liabilities resulting from performance of pipeline integrity programs and related repairs; • new or more stringent pipeline safety controls or enforcement of legal requirements; 19 Table of Contents In d ex to Financial Statements • impacts to our business as a result of the energy transition and legislative, regulatory and financial risks relating to climate change; and • regulatory provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the rules adopted thereunder.
Our business, results of operations, cash flows, financial condition and future growth could be impacted by the following: • significant expenditures or liabilities resulting from federal, state, provincial and local laws, regulations and bylaws pertaining to environmental protection, operational safety, pipeline safety or the Renewable Fuel Standard (“RFS”) or Canada’s federal and provincial renewable fuel blending and fuel emissions-intensity legislation, including the Clean Fuel Regulations and Low Carbon Fuels Act; • changes in demand for motor fuel, crude oil, renewable fuels or other petroleum products resulting from federal, state and/or provincial regulations that may discourage the use or storage of petroleum products; • significant expenditures or penalties associated with federal, state and local laws and regulations that govern the product quality specifications of refined petroleum products we purchase and sell; • changes in federal, state or local laws and regulations pertaining to the facilities and operations of third parties that supply fuel to or transport for our storage terminals; • laws, regulations and policies governing the rates, terms and conditions of our services; • failure to recover the full amount of increases in the costs of our pipeline or refinery operations; • costs and liabilities resulting from performance of pipeline integrity programs and related repairs; • new or more stringent pipeline safety controls or enforcement of legal requirements; • impacts to our business as a result of the energy transition and legislative, regulatory and financial risks relating to climate change; and • regulatory provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the rules adopted thereunder.
Our business, results of operations, cash flows, financial condition and future growth could be impacted by the following: • failure to make acquisitions on economically acceptable terms, 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, or to successfully integrate acquired assets; • any acceleration of the domestic and/or international transition to a low carbon economy as a result of the IRA 2022 or otherwise; and • failure to manage risks associated with acquisitions.
Our business, results of operations, cash flows, financial condition and future growth could be impacted by the following: • failure to make acquisitions on economically acceptable terms, 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, or to successfully integrate acquired assets; • any acceleration of the domestic and/or international transition to a low carbon economy as a result policy changes or otherwise; and • failure to manage risks associated with acquisitions. 21 Table of Contents Index to Financial Statements Regulatory Matters.
A decision by a government agency to deny or delay issuing a new or renewed permit, license or approval, or to revoke or substantially modify an existing permit, license or approval, or to impose additional requirements on the renewal could have a material adverse effect on our ability to continue or 35 Table of Contents In d ex to Financial Statements expand our operations and on our financial condition, results of operations, cash flows and ability to make distributions to our unitholders.
A decision by a government agency to deny or delay issuing a new or renewed permit, license or approval, or to revoke or substantially modify an existing permit, license or approval, or to impose additional requirements on the renewal could have a material adverse effect on our ability to continue or expand our operations and on our financial condition, results of operations, cash flows and ability to make distributions to our unitholders.
Pursuant to our partnership agreement, our General Partner has the ability, in its sole discretion and without the approval of our unitholders, to approve the issuance of securities by the Partnership at any time and to specify the terms and conditions of such securities.
Pursuant to our Partnership Agreement, our General Partner has the ability to approve the issuance of securities by the Partnership at any time and to specify the terms and conditions of such securities without the approval of our unitholders.
In addition, the actual amount of cash we will have available for distribution will depend on other factors such as: • the level and timing of capital expenditures we make; • the cost of acquisitions, if any; • our debt service requirements and other liabilities; • fluctuations in our general working capital needs; • reimbursements made to our General Partner and its affiliates for all direct and indirect expenses they incur on our behalf pursuant to the partnership agreement; • our ability to borrow funds at favorable interest rates and access capital markets, including as a result of recent increases in cost of capital resulting from Federal Reserve policies; • restrictions contained in debt agreements to which we are a party; • the level of costs related to litigation and regulatory compliance matters; and • the amount of cash reserves established by our General Partner in its discretion for the proper conduct of our business.
In addition, the actual amount of cash we will have available for distribution will depend on other factors such as: • the level and timing of capital expenditures we make; • the cost of acquisitions, if any; • our debt service requirements, distributions on our Series A Preferred Units and other liabilities; • fluctuations in our general working capital needs; • reimbursements made to our General Partner and its affiliates for all direct and indirect expenses they incur on our behalf pursuant to the Partnership Agreement; • our ability to borrow funds at favorable interest rates and access capital markets; • restrictions contained in debt agreements to which we are a party; • the level of costs related to litigation and regulatory compliance matters; and • the amount of cash reserves established by our General Partner in its discretion for the proper conduct of our business.
The risk factors set forth below are not all the risks we face and other factors that we face in the ordinary course of our business, that are currently considered immaterial or that are currently unknown to us may impact our future operations. 18 Table of Contents In d ex to Financial Statements Risk Factor Summary Risks Related to Our Business Results of Operations and Financial Condition.
The risk factors set forth below are not all the risks we face and other factors that we face in the ordinary course of our business, that are currently considered immaterial or that are currently unknown to us may impact our future operations. Risk Factor Summary Risks Related to Our Business Results of Operations and Financial Condition.
The occurrence of any of the above situations, among others, may affect operations at our fuel storage terminals and may adversely affect our business, financial condition, results of operations, cash flows and ability to make distributions to our unitholders. Negative events or developments associated with our branded suppliers could have an adverse impact on our revenues.
The occurrence of any of the above situations, among others, may affect operations at our fuel storage terminals or the Burnaby Refinery and may adversely affect our business, financial condition, results of operations, cash flows and ability to make distributions to our unitholders. 26 Table of Contents Index to Financial Statements Negative events or developments associated with our branded suppliers could have an adverse impact on our revenues.
It is possible, however, that Energy Transfer could exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions it receives related to its 40 Table of Contents In d ex to Financial Statements IDRs and may, therefore, desire to be issued common units rather than retain the right to receive incentive distributions based on the initial target distribution levels.
It is possible, however, that Energy Transfer could exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions it receives related to its IDRs and may, therefore, desire to be issued common units rather than retain the right to receive incentive distributions based on the initial target distribution levels.
We may be unable to obtain or maintain insurance with the coverage that we desire at reasonable rates. As a result of market conditions, the premiums and deductibles for certain of our insurance policies have increased and could continue to do so. Certain insurance coverage could become unavailable or available only for reduced amounts of coverage.
We may be unable to obtain or maintain insurance with the coverage that we desire at reasonable rates. As a result of market conditions, the premiums and deductibles for certain of our insurance policies have increased and could continue to do so.
Specifically, strategic targets such as energy related assets (which could include refineries that produce the motor fuel we purchase, ports in which crude oil is delivered or attacks to the electrical grid) may be at greater risk of future terrorist attacks than other targets in the United States.
Specifically, strategic targets such as energy related assets (which could include refineries that produce the motor fuel we purchase, ports in which crude oil is delivered or attacks to the electrical grid) may be at greater risk of future terrorist attacks than other targets in North America, the Greater Caribbean and Europe.
By purchasing common units, common unitholders consent to be bound by the partnership agreement, and pursuant to our partnership agreement, each unitholder consents to 39 Table of Contents In d ex to Financial Statements various actions and conflicts of interest contemplated in our partnership agreement that might otherwise constitute a breach of fiduciary or other duties under Delaware law.
By purchasing common units, common unitholders consent to be bound by the Partnership Agreement, and pursuant to our Partnership Agreement, each unitholder consents to various actions and conflicts of interest contemplated in our Partnership Agreement that might otherwise constitute a breach of fiduciary or other duties under Delaware law.
In the taxable period in which a unitholders sells their units, such unitholder may recognize ordinary income from our allocations of income and gain 44 Table of Contents In d ex to Financial Statements to such unitholder prior to the sale and from recapture items that generally cannot be offset by any capital loss recognized upon the sale of units.
In the taxable period in which a unitholders sells their units, such unitholder may recognize ordinary income from our allocations of income and gain to such unitholder prior to the sale and from recapture items that generally cannot be offset by any capital loss recognized upon the sale of units.
If we are unable to make acquisitions from third parties for any reason, including if we 28 Table of Contents In d ex to Financial Statements are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts, we are unable to obtain financing for these acquisitions on economically acceptable terms, we are outbid by competitors, or we or the seller are unable to obtain all necessary consents, our future growth and ability to increase distributions to unitholders will be limited.
If we are unable to make acquisitions from third parties for any reason, including if we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts, we are unable to obtain financing for these acquisitions on economically acceptable terms, we are outbid by competitors, or we or the seller are unable to obtain all necessary consents, our future growth and ability to increase distributions to unitholders will be limited.
Future litigation could adversely affect our financial condition and results of operations. We are exposed to various litigation claims in the ordinary course of our wholesale business operations, including, but not limited to, dealer litigation and industry-wide or class-action claims arising from the products we carry, the equipment or processes we use or employ or industry-specific business practices.
We are exposed to various litigation claims in the ordinary course of our wholesale business operations, including, but not limited to, dealer litigation and industry-wide or class-action claims arising from the products we carry, the equipment or processes we use or employ or industry-specific business practices.
As we do not compute our 46 Table of Contents In d ex to Financial Statements cumulative net income for such purposes due to the complexity of the calculation and lack of clarity in how it would apply to us, we intend to treat all of our distributions as being in excess of our cumulative net income for such purposes and subject to such 10% withholding tax.
As we do not compute our cumulative net income for such purposes due to the complexity of the calculation and lack of clarity in how it would apply to us, we intend to treat all of our distributions as being in excess of our cumulative net income for such purposes and subject to such 10% withholding tax.
General economic, financial, and political conditions may materially adversely affect our results of operations and financial condition. General economic, financial, and political conditions may have a material adverse effect on our results of operations and financial condition.
General economic, financial, and political conditions, including the impact of tariffs, may materially adversely affect our results of operations and financial condition. General economic, financial, and political conditions may have a material adverse effect on our results of operations and financial condition.
Should variable interest rates rise, the amount of cash we would otherwise have available for distribution would ordinarily be expected to decline, which could impact our ability to maintain or grow our quarterly distributions.
Should variable interest rates rise, the amount of cash we would otherwise have available for distribution would ordinarily be expected to decline, which could impact our ability to make distributions on our Series A Preferred Units or to maintain or grow our quarterly distributions.
Sales of refined motor fuels accounted for approximately 94% of our total revenues and 47% of our profit for the year ended December 31, 2024. A significant decrease in demand for motor fuel in the areas we serve could significantly reduce our revenues and our ability to make distributions to our unitholders.
Sales of refined motor fuels accounted for approximately 92% of Sunoco’s total revenues and 42% of Sunoco’s profit for the year ended December 31, 2025. A significant decrease in demand for motor fuel in the areas we serve could significantly reduce our revenues and our ability to make distributions to our unitholders.
If any of our facilities, or those of our customers or 23 Table of Contents In d ex to Financial Statements suppliers, suffer significant damage or are forced to shut down for a significant period of time, it may have a material adverse effect on our results of operations and our financial condition as a whole.
If any of our facilities, or those of our customers or suppliers, suffer significant damage or are forced to shut down for a significant period of time, it may have a material adverse effect on our results of operations and our financial condition as a whole.
Additionally, a shift toward electric, hydrogen, natural gas or other alternative-power vehicles could fundamentally change our customers’ shopping habits or lead to new forms of fueling destinations or new competitive pressures. 22 Table of Contents In d ex to Financial Statements New technologies have been developed and governmental mandates have been implemented to improve fuel efficiency, which may result in decreased demand for petroleum-based fuel.
Additionally, a shift toward electric, hydrogen, natural gas or other alternative-power vehicles could fundamentally change our customers’ shopping habits or lead to new forms of fueling destinations or new competitive pressures. New technologies have been developed and from time to time governmental mandates have been implemented to improve fuel efficiency, which may ultimately result in decreased demand for petroleum-based fuel.
The Clean Water Act also requires us to maintain spill prevention control and countermeasure plans at our terminal facilities with above-ground storage tanks and pipelines. In addition, OPA 90 requires that most fuel transport and storage companies maintain and update various oil spill 30 Table of Contents In d ex to Financial Statements prevention and oil spill contingency plans.
The Clean Water Act also requires us to maintain spill prevention control and countermeasure plans at our terminal facilities with above-ground storage tanks and pipelines. In addition, OPA 90 requires that most fuel transport and storage companies maintain and update various oil spill prevention and oil spill contingency plans.
We might not have, or be able to obtain, sufficient funds to make these accelerated payments. 37 Table of Contents In d ex to Financial Statements Detail of Risk Factors Related to Our Structure Our General Partner Energy Transfer owns and controls our General Partner, which has sole responsibility for conducting our business and managing our operations.
We might not have, or be able to obtain, sufficient funds to make these accelerated payments. Detail of Risk Factors Related to Our Structure Our General Partner Energy Transfer owns and controls our General Partner, which has sole responsibility for conducting our business and managing our operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeEmployees are required to use multifactor authentication and keep their passwords confidential, among other measures. We recognize that third-party service providers may introduce cybersecurity risks. In an effort to mitigate these risks, before contracting with certain technology services providers, when possible, we conduct due diligence to evaluate their cybersecurity capabilities.
Biggest changeUser access controls have been implemented to limit unauthorized access to sensitive information and critical systems. Employees are required to use multifactor authentication and keep their passwords confidential, among other measures. We recognize that third-party service providers may introduce cybersecurity risks.
The Partnership’s IT team is responsible for our efforts to comply with applicable cybersecurity standards, establish effective cybersecurity protocols and protect the integrity, confidentiality and availability of our IT infrastructure.
The IT team is responsible for the Partnership’s efforts to comply with applicable cybersecurity standards, establish effective cybersecurity protocols and protect the integrity, confidentiality and availability of our IT infrastructure.
The members of this team have over 50 years of combined experience in the field of IT, including 20 years dedicated to cybersecurity, and hold various certifications, including Global Industrial Cyber Security Professional (GICSP), Certified Information Systems Security Professional (CISSP) and Certified Ethical Hacker (CEH) certifications.
The members of the IT team have over 50 years of combined experience in the field of IT, including 20 years dedicated to cybersecurity, and hold various certifications, including Global Industrial Cyber Security Professional (GICSP), Certified Information Systems Security Professional (CISSP) and Certified Ethical Hacker (CEH) certifications.
This team is responsible for cybersecurity threat prevention, detection, mitigation, and remediation for the combined organization. Our cyber incident response plan requires IT team members who detect suspicious activity in our IT environment to escalate that activity to a supervisor who then evaluates the threat. If necessary, the suspicious activity is reported to the Chief Information Officer.
This team is responsible for cybersecurity threat prevention, detection, mitigation, and remediation for the combined organization. Our cyber incident response plan requires IT team members who detect suspicious activity in our IT environment to escalate that activity to a supervisor who then evaluates the threat. If necessary, the suspicious activity is reported to Energy Transfer’s Chief Information Officer.
In an effort to validate the effectiveness of our cybersecurity program and assess such program’s compliance with legal and regulatory requirements, we engage third-party service providers to perform audits, assessments, and penetration tests. Cybersecurity awareness among our employees is promoted with regular training and awareness programs.
In an effort to validate the effectiveness of our cybersecurity program and assess such program’s compliance with legal and regulatory requirements, we and the IT team engage third-party service providers to perform audits, assessments, and penetration tests. Cybersecurity awareness among our employees is promoted with regular training and awareness programs.
Risk Factors - 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; and - We rely on our information systems to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business. ” Board of Directors’ Oversight and Management’s Role Our Chief Information Officer oversees the Partnership’s functions of IT, cybersecurity, infrastructure and IT governance (including the Partnership’s IT team) and has more than 35 years of experience leading business technology functions.
Risk Factors - 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; and - We rely on our information systems to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business. ” Board of Directors’ Oversight and Management’s Role Under the Cybersecurity Program, Energy Transfer’s Chief Information Officer oversees the Partnership’s functions of IT, cybersecurity, infrastructure and IT governance (including the Partnership’s IT team) and has more than 35 years of experience leading business technology functions.
Coast Guard (USCG), we seek to follow industry cybersecurity standards and protect our infrastructure against cyberattacks from domestic and international threats. We seek to use a defense-in-depth approach for cybersecurity management, layers of technology, policies, and training at all levels of the enterprise designed to keep the Partnership’s assets secure and operational.
Coast Guard (USCG), we and the IT Team seek to follow industry cybersecurity standards and protect our infrastructure against cyberattacks from domestic and international threats. The Cybersecurity Program seeks to use a defense-in-depth approach for cybersecurity management, layers of technology, policies, and training at all levels of the enterprise designed to keep the Partnership’s assets secure and operational.
This program includes processes that are modeled after the National Institute of Standards and Technology’s Cybersecurity Framework and focuses on using business drivers to guide cybersecurity activities. This program is managed by a team of full-time employees, overseen by our Chief Information Officer, that are tasked with conducting our day-to-day IT operations (collectively, the “IT team”).
This program includes processes that are modeled after the National Institute of Standards and Technology’s Cybersecurity Framework and focuses on using business drivers to guide cybersecurity activities. This program is managed by Energy Transfer’s Chief Information Officer, who is supported by a team of full-time employees tasked with conducting our day-to-day IT operations (collectively, the “IT team”).
We use various processes as part of our efforts to maintain the confidentiality, integrity, and availability of our systems, including security threat intelligence, incident response, identity and access management, supply-chain security assessments, endpoint extended detection and response protection, network segmentation, data encryption, event monitoring, and a Security Operations Center (SOC).
It uses various processes to maintain the confidentiality, integrity, and availability of our systems, including security threat intelligence, incident response, identity and access management, supply-chain security assessments, endpoint extended detection and response protection, network segmentation, data encryption, event monitoring, and a Security Operations Center (SOC).
In the normal course of business, we may collect and store certain sensitive information of the Partnership, including proprietary and confidential business information, trade secrets, intellectual property, sensitive third-party and employee information, and certain personally identifiable information. The Partnership maintains a shared services cybersecurity program for assessing, identifying, and managing material risks from cybersecurity threats.
In the normal course of business, we may collect and store certain sensitive information of the Partnership, including proprietary and confidential business information, trade secrets, intellectual property, sensitive third-party and employee information, and certain personally identifiable information. We are part of Energy Transfer’s shared services cybersecurity program (the “Cybersecurity Program”) for assessing, identifying, and managing material risks from cybersecurity threats.
Moreover, the dynamic nature of these requirements may lead to overlapping or inconsistent obligations, further complicating compliance efforts. Monitoring these developments and integrating them into our cybersecurity and compliance frameworks is essential to mitigate potential risks.
Failure to comply could result in legal penalties, increased regulatory scrutiny and reputational damage. Moreover, the dynamic nature of these requirements may lead to overlapping or inconsistent obligations, further complicating compliance efforts. Monitoring these developments and integrating them into our cybersecurity and compliance frameworks is essential to mitigate potential risks.
Management (including representatives from the legal, human resources, IT and corporate security departments) is notified by the IT team whenever a discovered cybersecurity incident may potentially have a significant impact on our business operations.
Management (including representatives from the legal, human resources, IT and corporate security departments) is notified by the IT team whenever a discovered cybersecurity incident may potentially have a significant impact on our business operations. The Partnership’s Board of Directors has delegated the responsibility for the oversight of cybersecurity risks to the Audit Committee.
All employees who have access to our systems are required to undergo annual cybersecurity training and, each year, our employees must review and acknowledge our cybersecurity policies. Further, our IT team is trained to understand how to manage, use and protect personally identifiable information. User access controls have been implemented to limit unauthorized access to sensitive information and critical systems.
All employees who have access to our systems are required to undergo annual cybersecurity training and, each year, our employees must review and acknowledge our cybersecurity policies. Further, the IT team is trained to understand how to manage, use and protect personally 51 Table of Contents Index to Financial Statements identifiable information.
Management also updates the Audit Committee as new risks are identified and regarding the steps taken to mitigate such risks. The Audit Committee reviews periodic reporting and updates regarding our cybersecurity risk management.
The IT team provides periodic cybersecurity program updates to senior management and to the Audit Committee. Management also updates the Audit Committee as new risks are identified and regarding the steps taken to mitigate such risks. The Audit Committee reviews periodic reporting and updates regarding our cybersecurity risk management. 52 Table of Contents Index to Financial Statements
Impact of Risks from Cybersecurity Threats The energy industry’s increasing dependence on IT and operational technology to support critical functions, such as energy distribution and management activities, has heightened its vulnerability to cybersecurity incidents.
Impact of Risks from Cybersecurity Threats The energy industry’s increasing dependence on IT and operational technology to support critical functions, such as energy distribution and management activities, has heightened its vulnerability to cybersecurity incidents. Consequently, the global surge in cybersecurity incidents, whether caused by intentional attacks or accidental events, presents a significant challenge to our sector.
Compliance with evolving cybersecurity reporting requirements, such as those mandated by FERC, presents significant challenges. These regulations necessitate timely and detailed reporting of cyber incidents, demanding substantial resources and robust internal processes to ensure adherence. Failure to comply could result in legal penalties, increased regulatory scrutiny and reputational damage.
As cybersecurity threats grow in complexity and scale, preventing, detecting, mitigating and remediating these incidents remains a continuous and increasingly demanding task for the industry. Compliance with evolving cybersecurity reporting requirements, such as those mandated by FERC, presents significant challenges. These regulations necessitate timely and detailed reporting of cyber incidents, demanding substantial resources and robust internal processes to ensure adherence.
Additionally, we endeavor to include cybersecurity requirements in our contracts with these providers and endeavor to require them to adhere to security standards and protocols. Further, we also endeavor to engage with any third-party service providers with access to personally identifiable employee information to evaluate their security controls. Finally, the Partnership maintains cybersecurity insurance coverage.
Further, the IT team also endeavors to engage with any third-party service providers with access to personally identifiable employee information to evaluate their security controls. Finally, Energy Transfer maintains cybersecurity insurance coverage which coverage extends to the Partnership.
Removed
Consequently, the global surge in 47 Table of Contents In d ex to Financial Statements cybersecurity incidents, whether caused by intentional attacks or accidental events, presents a significant challenge to our sector. As cybersecurity threats grow in complexity and scale, preventing, detecting, mitigating and remediating these incidents remains a continuous and increasingly demanding task for the industry.
Added
In an effort to mitigate these risks, before contracting with certain technology services providers, when possible, we conduct due diligence to evaluate their cybersecurity capabilities. Additionally, the IT team endeavors to include cybersecurity requirements in contracts with these providers and endeavor to require them to adhere to security standards and protocols.
Removed
The Partnership’s Board of Directors has delegated the responsibility for the oversight of cybersecurity risks to the Audit Committee, which is ultimately responsible for assessing and managing the Partnership’s material risks from cybersecurity threats. The IT team provides periodic cybersecurity program updates to senior management and to the Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we believe that we have, or are in the process of obtaining, all required material approvals, authorizations, orders, licenses, permits, franchises and consents of, and have obtained or made all required material registrations, qualifications and filings with, the various state and local government and regulatory authorities which relate to ownership of our properties or the operations of our business. 48 Table of Contents In d ex to Financial Statements
Biggest changeIn addition, we believe that we have, or are in the process of obtaining, all required material approvals, authorizations, orders, licenses, permits, franchises and consents of, and have obtained or made all required material registrations, qualifications and filings with, the various state and local government and regulatory authorities which relate to ownership of our properties or the operations of our business.
Item 2. Properties A description of our properties is included in “Item 1. Business.” In addition, we own and lease warehouses and offices in Pennsylvania, Texas, Hawaii and Puerto Rico.
Item 2. Properties A description of our properties is included in “Item 1. Business.” In addition, we own and lease warehouses and offices in the continental United States, Canada, Europe, Hawaii and the Greater Caribbean.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Item 3. Legal Proceedings Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we do not believe that we are party to any litigation that will have a material adverse impact to our financial condition or results of operations.
Added
Item 3. Legal Proceedings For information regarding legal proceedings, see Note 15 to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for the year ended December 31, 2025.
Added
Sunoco LP, Aloha Petroleum and other Energy Transfer affiliates are defendants in lawsuits alleging liability for climate change impacts from greenhouse gas emissions in Hawaii, Maine and Vermont.
Added
Plaintiffs in these cases allege deceptive marketing and concealment of information about these effects, violations of state consumer protection and unfair trade practices laws, and seek certain equitable relief, statutory and civil penalties, punitive damages, disgorgement of profits and attorney’s fees. We are unable to estimate the possible loss or range of loss in excess of amounts accrued.
Added
Sunoco intends to vigorously defend the subject claims.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+4 added−0 removed12 unchanged
Biggest changeHolders At the close of business on February 7, 2025, we had 216 holders of record of our common units and two holders of record of our Class C Units. The number of record holders does not include holders of units in “street names” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depositories.
Biggest changeThe number of record holders does not include holders of units in “street names” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depositories.
Minimum Quarterly Distributions We intend to make a cash distribution to the holders of our common units and Class C Units on a quarterly basis to the extent we have sufficient cash from our operations after the establishment of cash reserves and the payment of costs and expenses, including payments to our General Partner and its affiliates.
Minimum Quarterly Distributions We intend to make a cash distribution to the holders of our common units, Class C Units and Class D Units on a quarterly basis to the extent we have sufficient cash from our operations after the establishment of cash reserves and the payment of costs and expenses, including payments to our General Partner and its affiliates.
The distributions on the Class C Units are paid out of our available cash, except that the Class C Units do not share in distributions of available cash to the extent such cash is derived from or attributable to any distribution received by us from Sunoco Retail LLC, our indirect wholly owned subsidiary that is subject to state and federal income tax (“Sunoco Retail”), the proceeds of any sale of the membership interests in Sunoco Retail, or any interest or principal payments we receive with respect to indebtedness of Sunoco Retail or its subsidiaries.
The distributions on the Class C Units are paid out of our available cash, except that the Class C Units do not share in distributions of available cash to the extent such cash is derived from or attributable to any distribution received by us from Sunoco Retail, our indirect wholly owned subsidiary that is subject to state and federal income tax, the proceeds of any sale of the membership interests in Sunoco Retail, or any interest or principal payments we receive with respect to indebtedness of Sunoco Retail or its subsidiaries.
Energy Transfer currently owns all of our IDRs. 50 Table of Contents In d ex to Financial Statements Marginal percentage interest in distributions Total quarterly distribution per common unit target amount Common Unitholders IDR Holder Minimum Quarterly Distribution $0.4375 100 % — First Target Distribution Above $0.4375 up to $0.503125 100 % — Second Target Distribution Above $0.503125 up to $0.546875 85 % 15 % Third Target Distribution Above $0.546875 up to $0.656250 75 % 25 % Thereafter Above $0.656250 50 % 50 % Class C Units We have outstanding an aggregate of 16,410,780 Class C Units, all of which are held by wholly owned subsidiaries of the Partnership.
Energy Transfer currently owns all of our IDRs. 54 Table of Contents Index to Financial Statements Marginal percentage interest in distributions Total quarterly distribution per common unit target amount Common Unitholders IDR Holder Minimum Quarterly Distribution $0.4375 100 % — First Target Distribution Above $0.4375 up to $0.503125 100 % — Second Target Distribution Above $0.503125 up to $0.546875 85 % 15 % Third Target Distribution Above $0.546875 up to $0.656250 75 % 25 % Thereafter Above $0.656250 50 % 50 % Class C Units We have outstanding an aggregat e of 16,410,780 Class C Units, all of which are held by wholly owned subsidiaries of the Partnership.
As of February 7, 2025, Energy Transfer directly owned approximately 20.9% of our outstanding common units. Our General Partner is 100% owned by Energy Transfer and owns a non-economic general partner interest in us. Energy Transfer also owns all of our IDRs.
As of February 13, 2026, Energy Transfer directly owned approximately 20.8% of our outstanding common units. Our General Partner is 100% owned by Energy Transfer and owns a non-economic general partner interest in us. Energy Transfer also owns all of our IDRs.
Item 5. Market for Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Our Partnership Interest As of February 7, 2025, we had outstanding 136,235,878 common units, 16,410,780 Class C units representing limited partner interests in the Partnership (“Class C Units”), a non-economic general partner interest and IDRs.
Item 5. Market for Registrant's Common Equity, Related Unitholder Matters and Issuer Purchases of Equity Securities Our Partnership Interest As of February 13, 2026, we had outstanding 136,894,754 common units, 16,410,780 Class C units representing limited partner interests in the Partnership (“Class C Units”), 51,517,198 Class D Units, a non-economic general partner interest, and IDRs.
Added
Holders At the close of business on February 13, 2026, we had 206 holders of record of our common units, two holders of record of our Class C Units and one holder of record of our Class D Units.
Added
Class D Units The Partnership has outstanding an aggrega te of 51,517,198 Class D Units, all of which are held by SunocoCorp. Class D Units represent limited partner interests in the Partnership and are economically equivalent to other Partnership common units.
Added
No distribution may be made in respect of the Partnership’s common units unless an equal distribution is simultaneously made on the Class D Units.
Added
For a period from October 31, 2025 to December 31, 2027 (the “Equalization Period”), Class D Units shall receive, from the Partnership, cash necessary and sufficient to pay distributions on each SunocoCorp common unit for each quarter during the Equalization Period in an amount equal to 100% of the distributions paid by the Partnership on each Sunoco common unit during such quarter.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

62 edited+59 added−25 removed53 unchanged
Biggest changeWe currently expect to spend approximately $150 million in maintenance capital and at least $400 million in growth capital for the full year 2025. 58 Table of Contents In d ex to Financial Statements Description of Indebtedness Our outstanding consolidated indebtedness was as follows: December 31, 2024 December 31, 2023 Credit Facility $ 203 $ 411 5.750% senior notes due 2025 (1) (2) 600 — 6.000% senior notes due 2026 (1) 500 — 6.000% senior notes due 2027 600 600 5.625% senior notes due 2027 (1) 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 — 4.500% senior notes due 2030 800 800 6.375% senior notes due 2030 (1) 600 — 7.250% senior notes due 2032 750 — GoZone Bonds (1) (2) 322 — Lease-related financing obligations 132 94 Net unamortized premiums, discounts, and fair value adjustments 16 — Deferred debt issuance costs (37) (25) Total debt 7,486 3,580 Less: current maturities 2 — Total long-term debt, net $ 7,484 $ 3,580 (1) These senior notes and bonds, totaling $2.57 billion aggregate principal amount, were assumed by the Partnership in connection with the closing of the NuStar acquisition in May 2024.
Biggest changeDescription of Indebtedness Our outstanding consolidated indebtedness was as follows: December 31, 2025 December 31, 2024 Credit Facility $ — $ 203 5.750% senior notes due 2025 — 600 6.000% senior notes due 2026 (1) 500 500 3.875% CAD senior notes due 2026 (1)(2) 400 — Parkland 3.875% CAD senior notes due 2026 (1)(3) 37 — 6.000% senior notes due 2027 600 600 5.625% senior notes due 2027 550 550 5.875% senior notes due 2027 (2) 499 — Parkland 5.875% senior notes due 2027 (3) 1 — 5.875% senior notes due 2028 400 400 7.000% senior notes due 2028 500 500 6.000% CAD senior notes due 2028 (2) 277 — Parkland 6.000% CAD senior notes due 2028 (3) 14 — 4.500% senior notes due 2029 800 800 7.000% senior notes due 2029 750 750 4.375% CAD senior notes due 2029 (2) 397 — Parkland 4.375% CAD senior notes due 2029 (3) 40 — 4.500% senior notes due 2029 (2) 790 — Parkland 4.500% senior notes due 2029 (3) 10 — 4.500% senior notes due 2030 800 800 6.375% senior notes due 2030 600 600 4.625% senior notes due 2030 (2) 798 — Parkland 4.625% senior notes due 2030 (3) 2 — 5.625% senior notes due 2031 1,000 — 7.250% senior notes due 2032 750 750 6.625% senior notes due 2032 (2) 493 — Parkland 6.625% senior notes due 2032 (3) 7 — 6.250% senior notes due 2033 1,000 — 5.875% senior notes due 2034 900 — GoZone Bonds 322 322 Lease-related financing obligations and other subsidiary debt 233 132 Net unamortized premiums, discounts and fair value adjustments 2 16 Deferred debt issuance costs (83) (37) Total debt 13,389 7,486 Less: current maturities 17 2 Total long-term debt, net $ 13,372 $ 7,484 (1) As of December 31, 2025, $937 million aggregate principal amount of senior notes due before December 31, 2026 were classified as long-term as management has the intent and ability to refinance the borrowings on a long-term basis.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular dollar and unit amounts, except per unit data, are in millions) The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2024 and 2023 should be read in conjunction with our audited consolidated financial statements and notes to audited consolidated financial statements included elsewhere in this report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Tabular dollar and unit amounts, except per unit data, are in millions) The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2025 and 2024 should be read in conjunction with our audited consolidated financial statements and notes to audited consolidated financial statements included elsewhere in this report.
Calculating the fair value of assets or reporting units in connection with business combination accounting or impairment testing requires management to make several estimates, assumptions and judgements, and in some circumstances management may also utilize third-party specialists to assist and advise on those calculations.
Calculating the fair value of assets or reporting units in connection with business combination accounting or impairment testing requires management to make several estimates, assumptions and judgments, and in some circumstances management may also utilize third-party specialists to assist and advise on those calculations.
The increase in cash flows provided by operations was primarily due to a $28 million net increase in net income (excluding the impacts of the gain on West Texas Sale in 2024, as well as depreciation, amortization and accretion, inventory valuation adjustments and other non-cash items) compared to the prior year; partially offset by a decrease in net cash flow from operating assets and liabilities of $79 million compared to the prior year.
The increase in cash flows provided by operations was primarily due to a $628 million net increase in net income (excluding the impacts of the gain on West Texas Sale in 2024, as well as depreciation, amortization and accretion, inventory valuation adjustments and other non-cash items) compared to the prior year; partially offset by a decrease in net cash flow from operating assets and liabilities of $181 million compared to the prior year.
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 was impacted by the notional amounts and commodity price changes on our commodity derivatives. Additional information on commodity derivatives is included in “Item 7A.
Unrealized (Gains) Losses on Commodity Derivatives. The unrealized gains and losses on Sunoco’s commodity derivatives represent the changes in fair value of its commodity derivatives. The change in unrealized gains and losses between periods was impacted by the notional amounts and commodity price changes on Sunoco’s commodity derivatives. Additional information on commodity derivatives is included in “Item 7A.
For the year ended December 31, 2024 compared to the prior year, volumes increased due to recently acquired assets. Segment Adjusted EBITDA .
For the year ended December 31, 2025 compared to the prior year, volumes increased due to recently acquired assets. Segment Adjusted EBITDA .
For the years ended December 31, 2024 and 2023, the Partnership’s cost of sales included unfavorable inventory adjustments of $86 million and $114 million, respectively, which decreased net income for the respective periods. Equity in Earnings of Unconsolidated Affiliates and Adjusted EBITDA Related to Unconsolidated Affiliates.
For the years ended December 31, 2025 and 2024, the Partnership’s cost of sales included unfavorable inventory adjustments of $156 million and $86 million, respectively, which decreased net income for the respective periods. Equity in Earnings of Unconsolidated Affiliates and Adjusted EBITDA Related to Unconsolidated Affiliates.
The Partnership is party to a Third Amended and Restated Credit Agreement among the Partnership, as borrower, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and a line of credit issuer (the "Credit Facility").
The Partnership is party to a Third Amended and Restated Credit Agreement among the Partnership, as borrower, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and a letter of credit issuer providing for the Credit Facility.
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 affiliate. We do not control our unconsolidated affiliates; therefore, we do not control the earnings or cash flows of such affiliates.
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 affiliate. Sunoco does not control its unconsolidated affiliates; therefore, Sunoco does not control the earnings or cash flows of such affiliates.
On January 27, 2025 , we declared a quarterly distribution of $0.8865 per common unit based on the results for the three months ended December 31, 2024, excluding distributions to Class C unitholders.
On January 27, 2026, we declared a quarterly distribution of $0.9317 per common unit based on the results for the three months ended December 31, 2025, excluding distributions to Class C unitholders.
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 last-in, first-out method (“LIFO”) on the Partnership’s inventory. These amounts are unrealized valuation adjustments applied to fuel volumes remaining in inventory at the end of the period.
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.
To the extent our underlying assumptions about or interpretation of available information prove to be incorrect, our actual results may vary materially from our expected results. Read “Item 1A. Risk Factors” included herein for additional information about the risks associated with purchasing our common units.
To the extent our underlying assumptions about or interpretation of available information prove to be incorrect, our actual results may 56 Table of Contents Index to Financial Statements vary materially from our expected results. Read “Item 1A. Risk Factors” included herein for additional information about the risks associated with purchasing our common units.
For the year ended December 31, 2024 compared to the prior year, volumes increased primarily due to growth from investments and profit optimization strategies. Segment Adjusted EBITDA .
For the year ended December 31, 2025 compared to the prior year, volumes increased primarily due to the Parkland Acquisition growth, from investments and profit optimization strategies. Segment Adjusted EBITDA .
See Note 9 to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” for a discussion of certain of our debt obligations. 59 Table of Contents In d ex to Financial Statements The following tables present summarized combined balance sheet and income statement information for the Partnership, Sunoco Finance Corp. and NuStar Logistics, L.P.
See Note 11 to our consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” for a discussion of certain of our debt obligations. The following tables present summarized combined balance sheet and income statement information for the Partnership, Sunoco Finance Corp. and NuStar Logistics, L.P.
Inventory 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.
Inventory 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.
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. Net cash provided by operations was $549 million and $600 million for 2024 and 2023, respectively.
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. Net cash provided by operations was $1.19 billion and $549 million for 2025 and 2024, respectively.
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.
Segment profit is similar to the GAAP measure of gross profit, except that segment profit excludes charges for depreciation, amortization and 60 Table of Contents Index to Financial Statements accretion. The most directly comparable measure to segment profit is gross profit. The following table presents a reconciliation of segment profit to gross profit.
We are, however, subject to a statutory requirement that our non-qualifying income cannot exceed 10% of our total gross income, determined on a calendar year basis under the applicable income 61 Table of Contents In d ex to Financial Statements tax provisions. If the amount of our non-qualifying income exceeds this statutory limit, we would be taxed as a corporation.
We are, however, subject to a statutory requirement that our non-qualifying income cannot exceed 10% of our total gross income, determined on a calendar year basis under the applicable income tax provisions. If the amount of our non-qualifying income exceeds this statutory limit, we would be taxed as a corporation.
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 and accretion and other non-cash items.
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, 57 Table of Contents Index to Financial Statements depreciation, amortization and accretion and other non-cash items.
Seasonality Our business exhibits some seasonality due to our customers’ increased demand for motor fuel during the late spring and summer months, as compared to the fall and winter months. Travel, recreation, and construction activities typically increase in these months, 52 Table of Contents In d ex to Financial Statements driving up the demand for motor fuel sales.
Seasonality Our business exhibits some seasonality due to our customers’ increased demand for motor fuel during the late spring and summer months, as compared to the fall and winter months. Travel, recreation, and construction activities typically increase in these months, driving up the demand for motor fuel sales.
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.
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 66 Table of Contents Index to Financial Statements Guarantor Issuer Group with non-guarantor subsidiaries, including the Guarantor Issuer Group’s investment balances in non-guarantor subsidiaries.
Year Ended December 31, 2024 2023 Net cash provided by (used in) Operating activities $ 549 $ 600 Investing activities 477 (288) Financing activities (961) (365) Net increase (decrease) in cash and cash equivalents $ 65 $ (53) 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).
Year Ended December 31, 2025 2024 Net cash provided by (used in) Operating activities $ 1,192 $ 549 Investing activities (2,807) 477 Financing activities 2,412 (961) Net increase in cash and cash equivalents $ 797 $ 65 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).
Discussion and analysis of matters pertaining to the year ended December 31, 2022 and year-to-year comparisons between the years ended December 31, 2023 and 2022 are not included in this Form 10-K, but can be found under Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2023 that was filed with the SEC on February 16, 2024 and in Exhibit 99.1 to the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 24, 2024.
Discussion and analysis of matters pertaining to the year ended December 31, 2023 and year-to-year comparisons between the years ended December 31, 2024 and 2023 are not included in this Form 10-K, but can be found under Part II, Item 7 of our annual report on Form 10-K for the year ended December 31, 2024 that was filed with the SEC on February 14, 2025.
As of December 31, 2024, we had $94 million of cash and cash equivalents on hand and borrowing capacity of $1.25 billion under the Credit Facility.
As of December 31, 2025, we had $891 million of cash and cash equivalents on hand and borrowing capacity of $2.47 billion under the Credit Facility.
Guarantor Summarized Financial Information The senior notes issued by NuStar Logistics, L.P., a wholly owned subsidiary acquired in the NuStar acquisition (“NuStar Logistics”) are fully and unconditionally guaranteed by the Partnership, Sunoco Finance Corp. and certain of its subsidiaries; the senior notes issued by the Partnership and Sunoco Finance Corp. are fully and unconditionally guaranteed by NuStar Logistics and certain other subsidiaries.
Guarantor Summarized Financial Information The senior notes issued by NuStar Logistics are fully and unconditionally guaranteed by the Partnership, Sunoco Finance Corp. and certain of its subsidiaries; the senior notes issued by the Partnership and Sunoco Finance Corp. are fully and unconditionally guaranteed by NuStar Logistics and certain other subsidiaries.
During the year ended December 31, 2024 we: • borrowed $1.50 billion and repaid $421 million in senior notes; • borrowed $2.79 billion and repaid $3.45 billion under the Credit Facility to fund daily operations; • paid $19 million in loan origination costs; • redeemed $784 million of preferred units; • paid $566 million in distributions to our unitholders, of which $226 million was paid to Energy Transfer; and • paid $8 million in distributions to noncontrolling interests.
During the year ended December 31, 2025, we: • borrowed $2.90 billion and repaid $600 million in senior notes; • repurchased and remarketed $75 million principal amount of Series 2011 GoZone Bonds; • borrowed $2.08 billion and repaid $2.28 billion under the Credit Facility to fund daily operations; • repaid $444 million related to Parkland’s credit facility; • paid $57 million in loan origination costs; • issued $1.47 billion of Series A Preferred Units; and • paid $657 million in distributions to our unitholders, of which $262 million was paid to Energy Transfer; and During the year ended December 31, 2024, we: • borrowed $1.50 billion and repaid $421 million in senior notes; • borrowed $2.79 billion and repaid $3.45 billion under the Credit Facility to fund daily operations; • paid $19 million in loan origination costs; • redeemed $784 million of preferred units; • paid $566 million in distributions to our unitholders, of which $226 million was paid to Energy Transfer; and • paid $8 million in distributions to noncontrolling interests.
The distribution will be approximately $121 million in the aggregate for common units and approximately $37 million with respect to IDRs, and will be paid on February 19, 2025 to unitholders of record on February 7, 2025 .
The distribution will be approximately $128 million in the aggregate for common units, approximately $48 million with respect to Class D Units and approximately $60 million with respect to IDRs, and will be paid on February 19, 2026 to unitholders of record on February 6, 2026.
Year Ended December 31, 2024 2023 Change Fuel Distribution segment profit $ 1,187 $ 1,225 $ (38) Pipeline Systems segment profit 535 3 532 Terminals segment profit 376 137 239 Total segment profit 2,098 1,365 733 Depreciation, amortization and accretion, excluding corporate and other 364 186 178 Gross profit $ 1,734 $ 1,179 $ 555 In addition, the following sections include information on the components of segment profit by sales type (for the fuel distribution segment), which components are included in order to provide additional disaggregated information to facilitate the analysis of segment profit and Segment Adjusted EBITDA.
Year Ended December 31, 2025 2024 Change Fuel Distribution segment profit $ 1,514 $ 1,187 $ 327 Pipeline Systems segment profit 738 535 203 Terminals segment profit 500 376 124 Refinery segment profit 40 — 40 Total segment profit 2,792 2,098 694 Depreciation, amortization and accretion, excluding corporate and other 686 364 322 Gross profit $ 2,106 $ 1,734 $ 372 In addition, the following sections include information on the components of segment profit by sales type (for the fuel distribution segment), which components are included in order to provide additional disaggregated information to facilitate the analysis of segment profit and Segment Adjusted EBITDA.
For the year ended December 31, 2024 compared to the prior year, volumes increased due to recently acquired assets. Segment Adjusted EBITDA . For the year ended December 31, 2024 compared to the prior year, Segment Adjusted EBITDA related to our Pipeline Systems segment increased due to the acquisition of NuStar on May 3, 2024.
For the year ended December 31, 2025 compared to the prior year, volumes increased due to recently acquired assets. Segment Adjusted EBITDA . For the year ended December 31, 2025 compared to the prior year, Segment Adjusted EBITDA related to our Refinery segment increased primarily due to the acquisition of Parkland. Expenses .
Our gallons sold are typically somewhat higher in the second and third quarters of our fiscal years due to this seasonality. Results of operations may therefore vary from period to period.
Our gallons sold are typically somewhat higher in the second and third quarters of our fiscal years due to this seasonality. Results of operations may therefore vary from period to period. Regulatory Update OECD Pillar Two Global Minimum Tax The acquisition of Parkland brought Sunoco into the scope of the Pillar Two global minimum tax regime.
We expect our ongoing sources of liquidity to include cash generated from 56 Table of Contents In d ex to Financial Statements operations, borrowings under our Credit Facility and the issuance of additional long-term debt or partnership units as appropriate given market conditions.
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.
Summarized Combined Balance Sheet Information for the Guarantor Issuer Group: December 31, 2024 Current assets $ 2,225 Non-current assets 11,119 Current liabilities (a) 1,903 Non-current liabilities, including long-term debt 8,244 (a) Exc ludes $73 million of net intercompany payable owed to the non-guarantor subsidiaries from the Guarantor Issuer Group.
Summarized Combined Balance Sheet Information for the Guarantor Issuer Group: December 31, 2025 Current assets $ 2,544 Non-current assets 16,775 Current liabilities (a) 1,816 Non-current liabilities, including long-term debt 14,200 (a) Exc l udes $418 million of net intercompany payable owed to the non-guarantor subsidiaries from the Guarantor Issuer Group.
The estimates of future cash flows and EBITDA are subjective in nature and are subject to impacts from the business risks described in “Item 1A. Risk Factors.” Therefore, the actual results could differ significantly from the amounts used for business combination accounting and impairment testing, and significant changes in fair value estimates could occur in a given period.
Risk Factors.” Therefore, the actual results could differ significantly from the amounts used for business 68 Table of Contents Index to Financial Statements combination accounting and impairment testing, and significant changes in fair value estimates could occur in a given period.
Pipeline Systems Year Ended December 31, 2024 2023 Change Pipelines throughput (thousand barrels per day) 1,000 — 1,000 Pipeline Systems segment profit $ 535 $ 3 $ 532 Expenses $ 260 $ 2 $ 258 Segment Adjusted EBITDA $ 377 $ 11 $ 366 Volumes .
Pipeline Systems Year Ended December 31, 2025 2024 Change Pipelines throughput (thousand barrels per day) 1,289 1,000 289 Pipeline Systems segment profit $ 738 $ 535 $ 203 Expenses $ 243 $ 260 $ (17) Segment Adjusted EBITDA $ 718 $ 377 $ 341 Volumes .
Differences between the anticipated and actual outcomes of these future tax consequences could have a material impact on our consolidated results of operations or financial position.
Differences between the anticipated and actual outcomes of these future tax consequences could have a material impact on our consolidated results of operations or financial position. Sunoco recognizes benefits in earnings and related deferred tax assets for net operating loss carryforwards (“NOLs”) and tax credit carryforwards.
For the year ended December 31, 2024 compared to the prior year, Segment Adjusted EBITDA related to our Fuel Distribution segment increased due to the net impact of the following: • an increase of $31 million related to a 3% increase in gallons sold, partially offset by a decrease in profit per gallon primarily due to the West Texas Sale in April 2024; and • a decrease of $53 million in expenses primarily due to the West Texas Sale and lower allocated overhead; partially offset by • a decrease of $26 million in lease profit due to the West Texas Sale.
For the year ended December 31, 2025 compared to the prior year, Segment Adjusted EBITDA related to our Fuel Distribution segment increased due to the net impact of the following: • an increase of $361 million in segment profit (excluding unrealized gains and losses on commodity derivatives and inventory valuation adjustments) primarily related to a 15% increase in gallons sold and increase in profit per gallon sold primarily due to the Parkland Acquisition; partially offset by • an increase of $280 million in expenses primarily due to the Parkland Acquisition partially offset by the West Texas Sale.
Overview As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, the terms “Partnership,” “SUN,” “we,” “us” or “our” should be understood to refer to Sunoco LP and our consolidated subsidiaries, unless the context clearly indicates otherwise.
Overview As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, the terms “Partnership,” “Sunoco,” “we,” “us” or “our” should be understood to refer to Sunoco LP and our consolidated subsidiaries, unless the context clearly indicates otherwise. 55 Table of Contents Index to Financial Statements We are primarily engaged in energy infrastructure and distribution of motor fuels across 32 countries and territories in North America, the Greater Caribbean and Europe .
This increase was primarily attributable to an increase in average total long-term debt, including debt assumed in the NuStar acquisition. (Gain) Loss on Disposal of Assets and Impairment Charges . For the year ended December 31, 2024, loss on disposal of assets and impairment charges primarily related to the termination of a lease in June 2024.
For the year ended December 31, 2025 compared to the prior year, interest expense increased primarily due to an increase in average total long-term debt, including debt assumed in the acquisitions of Parkland and NuStar. (Gain) Loss on Disposal of Assets and Impairment Charges .
Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Consolidated Results of Operations Year Ended December 31, 2024 2023 Change Segment Adjusted EBITDA: Fuel Distribution $ 908 $ 865 $ 43 Pipeline Systems 377 11 366 Terminals 172 88 84 Total $ 1,457 $ 964 $ 493 53 Table of Contents In d ex to Financial Statements Year Ended December 31, 2024 2023 Change Reconciliation of net income to Adjusted EBITDA: Net income $ 874 $ 394 $ 480 Depreciation, amortization and accretion 368 187 181 Interest expense, net 391 217 174 Non-cash unit-based compensation expense 17 17 — (Gain) loss on disposal of assets and impairment charges 45 (7) 52 Loss on extinguishment of debt 2 — 2 Unrealized (gains) losses on commodity derivatives 12 (21) 33 Inventory valuation adjustments 86 114 (28) Equity in earnings of unconsolidated affiliates (60) (5) (55) Adjusted EBITDA related to unconsolidated affiliates 101 10 91 Gain on West Texas Sale (586) — (586) Other non-cash adjustments 32 22 10 Income tax expense 175 36 139 Adjusted EBITDA (consolidated) $ 1,457 $ 964 $ 493 The following discussion of results compares the operations for the years ended December 31, 2024 and 2023.
Results of Operations Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Consolidated Results of Operations Year Ended December 31, 2025 2024 Change Segment Adjusted EBITDA: Fuel Distribution $ 990 $ 908 $ 82 Pipeline Systems 718 377 341 Terminals 299 172 127 Refinery 40 — 40 Total $ 2,047 $ 1,457 $ 590 Year Ended December 31, 2025 2024 Change Reconciliation of net income to Adjusted EBITDA: Net income $ 527 $ 874 $ (347) Depreciation, amortization and accretion 688 368 320 Interest expense, net 541 391 150 Non-cash unit-based compensation expense 19 17 2 (Gain) loss on disposal of assets and impairment charges (6) 45 (51) Loss on extinguishment of debt 31 2 29 Unrealized (gains) losses on commodity derivatives (11) 12 (23) Inventory valuation adjustments 156 86 70 Equity in earnings of unconsolidated affiliates (143) (60) (83) Adjusted EBITDA related to unconsolidated affiliates 221 101 120 Gain on West Texas Sale — (586) 586 Other non-cash adjustments (38) 32 (70) Income tax expense 62 175 (113) Adjusted EBITDA (consolidated) $ 2,047 $ 1,457 $ 590 The following discussion of results compares the operations for the years ended December 31, 2025 and 2024.
Capital Expenditures For the year ended December 31, 2024, total capital expenditures were $344 million, which included $220 million for growth capital and $124 million for maintenance capital.
Capital Expenditures For the year ended December 31, 2025, total capital expenditures on an accrual basis were $651 million , which included $440 million for growth capital and $211 million for maintenance capital.
For 60 Table of Contents In d ex to Financial Statements impairment testing, long-lived assets are required to be tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
For business combinations, assets and liabilities are required to be recorded at estimated fair value in connection with the initial recognition of the transaction. For impairment testing, long-lived assets are required to be tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
Terminals Year Ended December 31, 2024 2023 Change Throughput (thousand barrels per day) 584 399 185 Terminals segment profit $ 376 $ 137 $ 239 Expenses $ 207 $ 68 $ 139 Segment Adjusted EBITDA $ 172 $ 88 $ 84 Volumes .
Terminals Year Ended December 31, 2025 2024 Change Throughput (thousand barrels per day) 680 584 96 Terminals segment profit $ 500 $ 376 $ 124 Expenses $ 219 $ 207 $ 12 Segment Adjusted EBITDA $ 299 $ 172 $ 127 Volumes .
For the year ended December 31, 2024 compared to the prior year, Adjusted EBITDA increased primarily due to an increase in segment profit of $705 million, excluding inventory valuation adjustments (see below for explanation of inventory adjustments), primarily related to the acquisitions of NuStar and Zenith European terminals, partially offset by increases in operating costs (including operating expenses, general and administrative expenses and lease expense) of $344 million, primarily related to the acquisitions of NuStar and Zenith European terminals.
For the year ended December 31, 2025 compared to the prior year, Segment Adjusted EBITDA related to our Terminals segment increased primarily due to the following: • a $135 million increase in segment profit (excluding inventory valuation adjustments) due to the acquisitions of Parkland, NuStar, the Zenith European terminals and a terminal in Portland as well as favorable transmix business performance; partially offset by • a $12 million increase in operating costs primarily due to an increase in operating expenses from the Parkland Acquisition and timing of the NuStar and Zenith European terminals acquisitions, partially offset by one-time NuStar Acquisition and Zenith European terminals transaction related expenses in 2024.
Proceeds from disposal of property and equipment were $23 million and $31 million in 2024 and 2023, 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.
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.
Long-term assets for the non-guarantor subsidiaries totaled $792 million a s of December 31, 2024.
Long-term assets for the non-guarantor subsidiaries totaled $6.07 billion as of December 31, 2025.
Net cash used in investing activities included $224 million and $111 million of cash paid for acquisitions of terminals and other assets in 2024 and 2023, respectively.
Net cash used in investing activities included $253 million and $224 million of cash paid for other acquisition in 2025 and 2024, respectively. In 2025, we paid $2.00 billion, net of cash acquired, for the Parkland Acquisition.
Net Income . For the year ended December 31, 2024 compared to the prior year, net income increased primarily due to a $586 million gain on the West Texas Sale in April 2024, as discussed below. In addition, the increase in net income reflected favorable results from our operations, as reflected in the increases in Segment Adjusted EBITDA.
Net Income . For the year ended December 31, 2025 compared to the prior year, net income decreased due to a $586 million gain on the West Texas Sale in April 2024, as well as a $150 million increase in interest expense and a $29 million increase in losses on extinguishments of debt.
Credit Facility As of December 31, 2024, the balance on the Credit Facility was $203 million, and $43 million in standby letters of credit were outstanding. The unused availability on the Credit Facility at December 31, 2024 was $1.25 billion. The weighted average interest rate on the total amount outstanding at December 31, 2024 was 6.57%.
Credit Facility As of December 31, 2025, we had no outstanding borrowings on the Credit Facility, and we had $26 million in standby letters of credit outstanding. The unused availability on the Credit Facility at December 31, 2025 was $2.47 billion .
Net cash provided by investing activities was $477 million in 2024 and net cash used in investing activities was $288 million in 2023. Capital expenditures were $344 million and $215 million in 2024 and 2023, respectively.
Changes in capital expenditures between periods primarily result from increases or decreases in our growth capital expenditures to fund our expansion projects. Net cash used in investing activities was $2.81 billion in 2025 and net cash provided by investing activities was $477 million in 2024. Capital expenditures were $577 million and $344 million in 2025 and 2024, respectively.
In 2024, we received $27 million in cash from the NuStar acquisition and we received $987 million in cash proceeds from the West Texas Sale. 57 Table of Contents In d ex to Financial Statements Distributions from unconsolidated affiliates in excess of cumulative earnings were $8 million in 2024 and $9 million in 2023.
In 2024, we received $27 million in cash from the NuStar Acquisition and we received $987 million in cash proceeds from the West Texas Sale. Proceeds from disposal of property, plant and equipment were $28 million and $23 million in 2025 and 2024, respectively.
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.
For the year ended December 31, 2025, expenses excluded certain direct costs of labor, maintenance expenses, utilities, and other direct operating costs which are included in cost of sales. 62 Table of Contents Index to Financial Statements 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.
Fuel hedging positions are not significant to our operations. On a consolidated basis, the Partnership had a position of 0.3 million barrels with an aggregated unrealized loss of $3.8 million at December 31, 2024. Off-Balance Sheet Arrangements We do not maintain any off-balance sheet arrangements for the purpose of credit enhancement, hedging transactions or other financial or investment purposes.
Contractual Obligations We periodically enter into derivatives, such as futures and options, to manage our fuel price risk on inventory in the distribution system. Fuel hedging positions are not significant to our operations. On a consolidated basis, the Partnership had a position of 8.9 million barrels with an aggregated unrealized gain of $1.0 million at December 31, 2025.
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 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 expansion projects.
Cash provided by operating activities for 2025 also includes $196 million cash distributions received from unconsolidated affiliates that are deemed to be paid from cumulative earnings. 63 Table of Contents Index to Financial Statements 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 sale or disposal of assets.
Under the terms of the agreement, NuStar common unitholders received 0.400 SUN common units for each NuStar common unit.
Under the terms of the agreement, Parkland shareholders received 0.295 SunocoCorp units and C$19.80 for each Parkland share.
Additional discussion on the changes impacting net income and Adjusted EBITDA for the year ended December 31, 2024 compared to the prior year is available below and in “Segment Operating Results.” Depreciation, Amortization and Accretion. Depreciation, amortization and accretion was $368 million in 2024, an increase of $181 million from 2023.
These increases were partially offset by a $281 million increase in operating costs (including operating expenses, general and administrative expenses and lease expense) due to the full-year impact of NuStar’s operations and two months of Parkland’s operations, as well as one-time transaction related expenses associated with the Parkland Acquisition in 2025, partially offset by one-time NuStar Acquisition and Zenith European terminals transaction related expenses in 2024. 58 Table of Contents Index to Financial Statements Additional discussion on the changes impacting net income and Adjusted EBITDA for the year ended December 31, 2025 compared t o the prior year is available below and in “Segment Operating Results.” Depreciation, Amortization and Accretion.
This increase was primarily due to additional depreciation and amortization from assets recently placed in service and from recent acquisitions, as well as changes in certain estimates. Interest Expense . Interest expense was $391 million in 2024, an increase of $174 million from 2023.
For the year ended December 31, 2025 compared to the prior 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 .
Summarized Combined Income Statement Information for the Guarantor Issuer Group: Year Ended December 31, 2024 Revenues $ 21,912 Operating income 667 Net income 757 Revenues and net income for the non-guarantor subsidiarie s totaled $781 million and $117 million, respectively, for the year ended December 31, 2024 Contractual Obligations We periodically enter into derivatives, such as futures and options, to manage our fuel price risk on inventory in the distribution system.
Summarized Combined Income Statement Information for the Guarantor Issuer Group: Year Ended December 31, 2025 Revenues $ 21,247 Operating income 463 Net income 51 Revenues and net income for the non-guarantor subsidiarie s totaled $3.95 billion and $476 million, respec tively, for the year ended December 31, 2025.
The gain on West Texas Sale related to the gain recognized by SUN upon completion of the sale of convenience stores to 7-Eleven Inc. in April 2024. During the fourth quarter of 2024, the Partnership recorded a $12 million reduction to the gain to reflect adjustments to the cash proceeds and certain balance sheet accounts associated with the business sold.
See additional information in “Supplemental Information on Unconsolidated Affiliates” and “Segment Operating Results.” Gain on West Texas Sale. The gain on West Texas Sale related to the gain recognized by Sunoco upon completion of the sale of convenience stores to 7-Eleven, Inc. in April 2024. Income Tax Expense .
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. 55 Table of Contents In d ex to Financial Statements Fuel Distribution Year Ended December 31, 2024 2023 Change Motor fuel gallons sold (millions) 8,578 8,317 261 Motor fuel profit cents per gallon 11.6 ¢ 12.5 ¢ (0.9) ¢ Fuel profit $ 909 $ 926 $ (17) Non-fuel profit 153 148 5 Lease profit 125 151 (26) Fuel Distribution segment profit $ 1,187 $ 1,225 $ (38) Expenses $ 427 $ 480 $ (53) Segment Adjusted EBITDA $ 908 $ 865 $ 43 Volumes .
Fuel Distribution Year Ended December 31, 2025 2024 Change Motor fuel gallons sold (millions) 9,884 8,578 1,306 Motor fuel profit cents per gallon 13.2 ¢ 11.6 ¢ 1.6 ¢ Fuel profit $ 1,161 $ 909 $ 252 Non-fuel profit 223 153 70 Lease profit 130 125 5 Fuel Distribution segment profit $ 1,514 $ 1,187 $ 327 Expenses $ 707 $ 427 $ 280 Segment Adjusted EBITDA $ 990 $ 908 $ 82 Volumes .
For the year ended December 31, 2024 compared to the prior year, Segment Adjusted EBITDA related to our Terminals segment increased primarily due to the recent acquisitions of NuStar, Zenith European terminals and Zenith Energy terminals located across the East Coast and Midwest.
For the year ended December 31, 2025 compared to the prior year, Adjusted EBITDA increased primarily due to a $741 million increase in segment profit (excluding unrealized gains and losses on commodity derivatives and inventory valuation adjustments) primarily related to the acquisitions of Parkland, NuStar and Zenith European terminals, and a $120 million increase in Adjusted EBITDA related to unconsolidated affiliates primarily from the full-year impact of the ET-S Permian joint venture.
For the year ended December 31, 2024, the increase in the amounts reported related to unconsolidated affiliates was primarily due to the formation of ET-S Permian effective July 1, 2024. 54 Table of Contents In d ex to Financial Statements Gain on West Texas Sale.
For the year ended December 31, 2025 compared to the prior year, income tax expense decreased primarily due to the taxable gain recognized by a corporate subsidiary on the West Texas Sale in April 2024. 59 Table of Contents Index to Financial Statements Supplemental Information on Unconsolidated Affiliates The following table presents financial information related to unconsolidated affiliates: Year Ended December 31, 2025 2024 Change Equity in earnings (losses) of unconsolidated affiliates: J.C.
These increases were partially offset by unfavorable inventory valuation adjustments, unrealized losses on commodity derivatives, increases in depreciation, amortization and accretion, and losses on disposal of asset and impairment charges. The increases in net income were also offset by increases in interest expense and income tax expense. These changes are discussed in more detail below. Adjusted EBITDA .
The increase in operating income was 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 .
Removed
We are primarily engaged in energy infrastructure and distribution of motor fuels in over 40 U.S. states, Puerto Rico, Europe and Mexico. Our midstream operations include an extensive network of over 14,000 miles of pipeline and over 100 terminals.
Added
Our midstream operations include an extensive network of over 14,000 miles of pipeline and over 160 terminals. Our fuel distribution operations distribute over 15 billion gallons annually to approximately 11,000 Sunoco and partner branded locations, as well as independent dealers and commercial customers.
Removed
Our fuel distribution operations serve approximately 7,400 Sunoco and partner branded locations and additional independent dealers and commercial customers. 51 Table of Contents In d ex to Financial Statements Acquisitions NuStar Acquisition On May 3, 2024, we completed the acquisition of 100% of the common units of NuStar Energy L.P. (“NuStar”).
Added
Acquisitions Parkland Acquisition On October 31, 2025, we completed the previously announced acquisition of Parkland, whereby Sunoco Retail, a wholly owned corporate subsidiary of the Partnership, indirectly acquired all the outstanding shares of Parkland, in exchange for cash and SunocoCorp units that were contributed by SunocoCorp to the Partnership at the close of the Parkland Acquisition.
Removed
In connection with the acquisition, we issued approximately 51.5 million common units, which had a fair value of approximately $2.85 billion, assumed debt totaling approximately $3.5 billion, including approximately $56 million of lease related financing obligations, and assumed preferred units with a fair value of approximately $800 million.
Added
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.
Removed
Subsequent to the closing of the NuStar acquisition, the Partnership redeemed all outstanding NuStar preferred units totaling $784 million, redeemed NuStar's subordinated notes totaling $403 million and repaid and terminated the NuStar credit facility totaling $455 million.
Added
In connection with the closing of the Parkland Acquisition, we paid approximately $2.60 billion to Parkland’s shareholders and transferred 51,517,198 SunocoCorp common units, which we had received from SunocoCorp in exchange for our issuance of 51,517,198 Sunoco Class D Units to SunocoCorp.
Removed
NuStar has approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids. The acquisition is expected to diversify the Partnership’s business, increase scale and provide vertical integration, as well as improving the Partnership’s credit profile and enhancing growth.
Added
Parkland is a leading international fuel distributor, marketer and convenience retailer with operations in 26 countries across the Americas. Parkland’s functional currency is the Canadian dollar, and its consolidated structure includes subsidiaries with multiple other functional currencies. As part of the transaction, the Partnership repurposed and renamed an existing subsidiary as SunocoCorp.
Removed
Zenith European Terminals Acquisition On March 13, 2024, we completed the acquisition of liquid fuels terminals in Amsterdam, Netherlands and Bantry Bay, Ireland from Zenith Energy for €170 million ($185 million), including working capital. The acquisition is expected to supply optimization for the Partnership’s existing East Coast business and continues its focus on growing its portfolio of stable midstream income.
Added
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 units began trading on the NYSE effective November 6, 2025.
Removed
Other Acquisition On August 30, 2024, we acquired a terminal in Portland, Maine for approximately $24 million, including working capital. Divestiture West Texas Sale On April 16, 2024, we completed the sale of 204 convenience stores located in West Texas, New Mexico and Oklahoma to 7-Eleven, Inc. for approximately $1.0 billion, including customary adjustments for fuel and merchandise inventory.
Added
Subsequent to the Parkland Acquisition, SunocoCorp holds Sunoco Class D Units, representing limited partnership interests in 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.
Removed
As part of the sale, SUN also amended its existing take-or-pay fuel supply agreement with 7-Eleven, Inc. to incorporate additional fuel gross profit. Other Transactions ET-S Permian 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.
Added
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 unithold ers.
Removed
SUN contributed all of its Permian crude oil gathering assets and operations to ET-S Permian. Energy Transfer contributed its Permian crude oil and produced water gathering assets and operations to ET-S Permian. Energy Transfer’s long-haul crude pipeline network that provides transportation of crude oil out of the Permian Basin to Nederland, Houston, and Cushing is excluded from ET-S Permian.
Added
TanQuid Acquisition On January 16, 2026, the Partnership completed the previously announced acquisition of TanQuid for approximately €465 million (approximately $540 million as of January 16, 2026), includ ing approximately €300 million of assumed debt, less approximately €39 million of cash acquired. TanQuid owns and operates 15 fuel terminals in Germany and one fuel terminal in Poland.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical change of 100 basis points would result in a maximum potential change to interest expense of $2 million annually. Our primary exposure relates to: • interest rate risk on short-term borrowings; and • the impact of interest rate movements on our ability to obtain adequate financing to fund future acquisitions.
Biggest changeTherefore, a hypothetical change in variable rates would not have had a material impact on us at December 31, 2025. Our primary exposure relates to: • interest rate risk on short-term borrowings; and 69 Table of Contents Index to Financial Statements • the impact of interest rate movements on our ability to obtain adequate financing to fund future acquisitions.
We may also engage in controlled trading in accordance with specific parameters set forth in a written risk management policy. On a consolidated basis, the Partnership had a position of 0.3 million barrels with an aggregated unrealized loss of $3.8 million at December 31, 2024.
We may also engage in controlled trading in accordance with specific parameters set forth in a written risk management policy. On a consolidated basis, the Partnership had a position of 8.9 million barrels with an aggregated unrealized gain of $1.0 million at December 31, 2025.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk We are subject to market risk from exposure to changes in interest rates based on our financing, investing and cash management activities. We had outstanding variable interest rate borrowings on the Credit Facility of $203 million as of December 31, 2024.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk We are subject to market risk from exposure to changes in interest rates based on our financing, investing and cash management activities. We regularly borrow under our Credit Facility; however, we had no outstanding variable interest rate borrowings on the Credit Facility as of December 31, 2025.
We had no interest rate swaps in effect during the years ended December 31, 2024 and 2023. Commodity Price Risk Our subsidiaries hold working inventories of refined petroleum products, renewable fuels, gasoline blendstocks and transmix in storage. As of December 31, 2024, we held approximately $960 million of such inventory.
We had no inter est rate swaps in effect during the years ended December 31, 2025 and 2024. Commodity Price Risk Our subsidiaries hold working inventories of refined petroleum products, renewable fuels, gasoline blendstocks and transmix in storage. As of December 31, 2025, we held approximately $1.77 billion of such inventory.
Added
Foreign Currency Translation Risk We generate revenues, incur expenses, and maintain investments and subsidiaries in currencies other than the U.S. dollar. As a result, our reported earnings, cash flows, and AOCI are exposed to fluctuations in foreign currency exchange rates.
Added
Changes in exchange rates can affect the U.S. dollar value of our foreign‑currency‑denominated assets and liabilities, as well as the translation of the operating results and financial position of our international subsidiaries. We may utilize derivative instruments, including foreign currency forward contracts and other hedging strategies, to mitigate the effects of foreign currency‑denominated cash flow and earnings exposures.
Added
As of December 31, 2025, the Partnership did not have any outstanding foreign currency derivatives.

Other SUN 10-K year-over-year comparisons