Energy Transfer(ET) - 2025 Q1 - Quarterly Report

Acquisition Strategy - Sunoco LP plans to acquire Parkland Corporation for approximately $9.1 billion, including assumed debt, with the transaction expected to close in the second half of 2025[173]. - Sunoco LP has secured a$2.65 billion bridge term loan to fund the cash consideration for the Parkland acquisition[175]. - Sunoco LP entered into an agreement to acquire TanQuid GmbH & Co. KG for approximately €500 million (approximately $540 million), including €300 million of assumed debt, with the transaction also expected to close in the second half of 2025[176]. - Sunoco LP's acquisition strategy includes forming a new publicly-traded entity, SUNCorp, to hold partnership units equivalent to Sunoco LP's common units[174]. - The anticipated acquisitions and strategic initiatives are part of Sunoco LP's broader market expansion and growth strategy[173][176]. Financial Performance - For the three months ended March 31, 2025, net income increased by$28 million, or approximately 2%, primarily due to higher segment margin from multiple segments[196]. - Adjusted EBITDA for the same period increased by $218 million, or approximately 6$1,294 million, up by $376 million or 41$918 million in 2024[208]. - Segment Adjusted EBITDA for the intrastate transportation and storage segment decreased to $344 million from$438 million, a decline of 21%[208]. - Natural gas transported in the interstate transportation and storage segment increased to 18,204 BBtu/d, an increase of 539 BBtu/d compared to 17,665 BBtu/d in 2024[211]. - Segment Adjusted EBITDA for the interstate transportation and storage segment increased to $512 million from$483 million, an increase of 6%[211]. - Revenues for the midstream segment increased to $3,656 million, up by$882 million or 32% from $2,774 million in 2024[214]. - Segment Adjusted EBITDA for the midstream segment increased to$925 million from $696 million, an increase of 33$6,909 million in Q1 2025, a 5.9% increase from $6,526 million in Q1 2024[216]. - Cash provided by operating activities decreased to$2.92 billion in Q1 2025 from $3.77 billion in Q1 2024[233]. Capital Expenditures and Debt - Total capital expenditures for 2025 are expected to be approximately$5 billion, with $1.1 billion allocated for maintenance[227]. - The company redeemed$1.00 billion of 4.05% senior notes due March 2025 using cash on hand and commercial paper borrowings[246]. - As of March 31, 2025, the company's total debt was $59.789 billion, with long-term debt (less current maturities) at$59.782 billion[244]. - The Five-Year Credit Facility had $605 million of outstanding borrowings as of March 31, 2025, with$4.37 billion available for future borrowings[249]. - Sunoco LP's credit facility had no outstanding borrowings and $1.44 billion in unused availability as of March 31, 2025[250]. Operational Challenges and Risks - The FERC's revised policy on income tax allowances may impact the rates charged for FERC-regulated transportation services, with potential revenue reductions depending on future challenges[180]. - The FERC's ongoing review of pipeline certification policies may affect future natural gas pipeline projects, but no significant changes are expected to impact the company differently than other operators[184]. - The Partnership estimates that compliance with the EPA's Good Neighbor Plan may require retrofitting or replacement of approximately 192 engines, leading to substantial capital expenditures[191]. - Key risk factors include the volumes transported on subsidiaries' pipelines and the level of throughput in processing and treating facilities[265]. - The company highlights the impact of energy prices and market demand for natural gas and NGLs on its financial performance[265]. - There are concerns regarding the ability to find and contract for new sources of natural gas supply, which could affect future operations[265]. - The company faces risks related to the construction of new infrastructure projects, including potential delays and increased costs[265]. - Regulatory changes and interpretations may impact operational compliance and financial performance[265]. Cash Distributions - In 2025, the company paid distributions of$1.13 billion to partners, with $455 million to noncontrolling interests and$13 million to redeemable noncontrolling interests[243]. - Cash distributions to partners remained consistent at $1.13 billion for both Q1 2025 and Q1 2024, with distributions to noncontrolling interests increasing from$421 million in 2024 to $455 million in 2025[243]. - The company anticipates future cash distributions will depend on the results of operations, cash flows, and financial condition of its subsidiaries[263].