Group 1 - Sunoco LP has made its 2024 Schedule K-3 available online, which includes items of international tax relevance for unitholders [1] - The 2024 Schedule K-3 for NuStar Energy Partners, L.P., which merged with Sunoco on May 3, 2024, is also accessible online [1] - Unitholders needing this information can find it in the investor relations section of the Sunoco website [1] Group 2 - A limited number of unitholders, particularly foreign unitholders and those computing a foreign tax credit, may require the detailed information on Schedule K-3 for their tax reporting [2] - Unitholders can receive an electronic copy of their 2024 Schedule K-3 via email by contacting Tax Package Support [3] - NuStar Energy L.P. unitholders can also obtain an electronic copy of Schedule K-3 by calling designated support numbers [4] Group 3 - Sunoco LP operates as a leading energy infrastructure and fuel distribution master limited partnership across over 40 U.S. states, Puerto Rico, Europe, and Mexico [5] - The partnership's midstream operations include approximately 14,000 miles of pipeline and over 100 terminals, supporting its fuel distribution operations [5] - Sunoco serves around 7,400 branded locations and additional independent dealers and commercial customers [5]

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Financial Performance - Adjusted EBITDA for Q1 2025 was $458 million, a significant increase of 89.3% compared to $242 million in Q1 2024[100] - For the three months ended March 31, 2025, net income decreased to $207 million from $230 million in the same period last year, a decline of 10%[102] - Adjusted EBITDA increased to $458 million for the three months ended March 31, 2025, compared to $242 million in the same period last year, representing a growth of 89%[102] - Total segment profit increased by $238 million, excluding inventory valuation adjustments, primarily due to acquisitions of NuStar and Zenith European terminals[103] - The Fuel Distribution segment reported a profit of $361 million, down from $417 million, a decrease of 13%[115] - Pipeline Systems segment profit surged to $174 million from $1 million, reflecting a significant increase due to recent acquisitions[117] - Terminals segment profit increased to $118 million from $66 million, a growth of 79% attributed to acquisitions[120] - Revenues for the Guarantor Issuer Group for Q1 2025 were $5.006 billion, with a net income of $146 million[145] - Revenues and net income for non-guarantor subsidiaries totaled $173 million and $61 million, respectively, for Q1 2025[145] Acquisitions and Investments - Sunoco plans to acquire Parkland Corporation for approximately $9.1 billion, including assumed debt, with a 25% premium for Parkland shareholders[87][89] - The acquisition of TanQuid GmbH & Co. KG is valued at approximately €500 million (about $540 million), expected to close in the second half of 2025[92] - In Q1 2025, Sunoco completed acquisitions totaling approximately $17 million, including $12 million in cash and newly issued common units[93] Segment Performance - Fuel Distribution segment Adjusted EBITDA increased to $220 million, up 0.9% from $218 million in the previous year[100] - Pipeline Systems segment reported Adjusted EBITDA of $172 million, unchanged from the previous year[100] - Terminals segment Adjusted EBITDA surged to $66 million, a 175% increase from $24 million in Q1 2024[100] - Segment Adjusted EBITDA for the Pipeline Systems segment increased to $172 million in Q1 2025, attributed to the acquisition of NuStar and the formation of ET-S Permian[119] Cash Flow and Liquidity - The company expects ongoing sources of liquidity to include cash generated from operations and borrowings under its Credit Facility[122] - As of March 31, 2025, the company had $172 million in cash and cash equivalents and a borrowing capacity of $1.44 billion on its Credit Facility[124] - Net cash provided by operating activities for Q1 2025 was $156 million, down from $286 million in Q1 2024, while net income decreased to $207 million from $230 million[127] - Net cash provided by financing activities in Q1 2025 was $23 million, a decrease from $123 million in Q1 2024, with a declared quarterly distribution of $0.8976 per common unit[135] Debt and Capital Expenditures - Capital expenditures for Q1 2025 totaled $101 million, significantly higher than $41 million in Q1 2024, with $12 million allocated for acquisitions[132] - The company expects to spend approximately $150 million in maintenance capital expenditures and at least $400 million in growth capital for the full year 2025[138] - As of March 31, 2025, total consolidated indebtedness was $7.673 billion, with long-term debt net of current maturities at $7.671 billion[139] - The company issued $1.00 billion of 6.250% senior notes due 2033 in March 2025 to refinance existing debt[140] Other Financial Metrics - Interest expense rose to $121 million for the three months ended March 31, 2025, up from $63 million in the same period last year, an increase of 92%[102] - Equity in earnings of unconsolidated affiliates rose to $32 million for the three months ended March 31, 2025, compared to $2 million in the same period last year, a substantial increase of 1500%[111] - Adjusted EBITDA related to unconsolidated affiliates increased by $47 million, primarily due to the formation of ET-S Permian[108] - Favorable inventory valuation adjustments contributed $61 million to net income in Q1 2025, compared to $130 million in Q1 2024[107] - Current assets for the Guarantor Issuer Group increased to $2.354 billion as of March 31, 2025, from $2.225 billion as of December 31, 2024[144] - Non-current liabilities, including long-term debt, were $8.445 billion as of March 31, 2025, compared to $8.244 billion as of December 31, 2024[144]

Group 1 - The junk bond market is experiencing a resurgence after a period of stagnation due to U.S. President Donald Trump's tariff policies, with companies like Golden Goose and Motel One issuing bonds again [1] - Investment activity is primarily increasing in Europe, driven by expectations of quicker interest rate declines and U.S. investors seeking diversification due to tariff impacts [1] - High-risk transaction types, such as dividend recapitalizations and payment-in-kind notes, indicate rising investor demand [1] Group 2 - The high-yield bond market has made a strong comeback, with last week being the busiest of the year, supported by ample market liquidity [2] - European pharmaceutical company Zentiva raised over €500 million (approximately $550 million) for dividend payments, part of a trend among borrowers engaging in similar transactions [2] - Major transactions are in the pipeline, including JPMorgan leading a $6.5 billion debt financing for 3G Capital's acquisition of Skechers [2] Group 3 - Sunoco LP's acquisition of Parkland Corp. will receive $2.65 billion in loan support, while KKR seeks $3.1 billion for its acquisition of OSTTRA [3] - Some market participants remain cautious, recognizing that not all upcoming projects will succeed despite the current wave of activity [3]

Core Viewpoint - Sunoco LP reported first-quarter 2025 earnings of $1.21 per unit, missing the Zacks Consensus Estimate of $1.69, but showing improvement from $1.06 per unit in the same quarter last year. Total revenues of $5.18 billion also fell short of the estimate of $5.32 billion and decreased from $5.50 billion year-over-year [1][2]. Financial Performance - The year-over-year increase in earnings was attributed to lower total expenses and higher fuel margins, although net income decreased [2]. - Total operating income for the quarter was $296 million, slightly down from $297 million in the prior-year quarter. Net income was reported at $207 million, compared to $230 million in the first quarter of 2024 [6]. - Adjusted distributable cash flow totaled $310 million, up from $176 million year-over-year [7]. Revenue and Expenses - Total cost of sales and operating expenses decreased to $4.88 billion from $5.20 billion a year ago [8]. - The partnership sold 2.1 billion gallons of fuel in the reported quarter, lower than the estimate of 2.3 billion gallons. Motor fuel gross profit per gallon increased to 11.5 cents from 10.9 cents year-over-year [5]. Distribution and Growth - The board declared a distribution of $0.8976 per unit for the first quarter of 2025, an increase from $0.8865 per unit in the previous quarter. The partnership targets a distribution growth rate of at least 5% for 2025 [3]. Segment Performance - Fuel Distribution segment reported adjusted EBITDA of $220 million, slightly up from $218 million in the comparable period of 2024, affected by lower fuel sales and lease profits [4]. - Pipeline Systems reported adjusted EBITDA of $172 million, benefiting from the acquisition of NuStar [4]. - Terminals segment saw adjusted EBITDA rise to $66 million from $24 million year-over-year, primarily due to acquisitions [5]. Balance Sheet and Outlook - As of March 31, 2025, Sunoco had cash and cash equivalents of $172 million and net long-term debt of $7.67 billion [9]. - The company reaffirmed its full-year 2025 Adjusted EBITDA guidance in the range of $1.90-$1.95 billion, with total operating expenses projected between $900 million and $925 million [10].

Financial Performance - Net income attributable to the partners increased by 7% to $1.32 billion in Q1 2025 compared to Q1 2024[5] - Adjusted EBITDA increased by 6% to $4.10 billion in Q1 2025 compared to Q1 2024[6] - The company reiterated its 2025 Adjusted EBITDA guidance of $16.1 - $16.5 billion, with the midpoint up 5% compared to FY 2024[7] - Distributable Cash Flow attributable to partners was $2.31 billion in Q1 2025[8] Operational Highlights - Interstate natural gas transportation volumes increased by 3%, setting a new partnership record[8] - Crude oil transportation volumes increased by 10%[8] - NGL transportation volumes increased by 4%[8] - Total NGL exports increased by 5%[8] Strategic Initiatives - Commenced construction of the Hugh Brinson Pipeline, which will provide additional transportation capacity out of the Permian Basin[8] - The Hugh Brinson Pipeline project's combined capital costs for Phase 1 and Phase 2 are expected to be approximately $2.7 billion[21] - The Sabina 2 Pipeline conversion project is expected to increase capacity from 25,000 Bbls/d to approximately 70,000 Bbls/d[19]

Financial Data and Key Metrics Changes - For Q1 2025, adjusted EBITDA was $4.1 billion, an increase from $3.9 billion in Q1 2024, driven by strong volumes across various segments [4] - Distributable cash flow (DCF) attributable to partners was $2.3 billion, with approximately $955 million spent on organic growth capital [4] Business Line Data and Key Metrics Changes - NGL and refined products segment adjusted EBITDA was $978 million, down from $989 million in Q1 2024, due to higher operating expenses and lower blending margins [5] - Midstream segment adjusted EBITDA increased to $925 million from $696 million, attributed to higher legacy volumes in the Permian Basin, which rose by 8% [5] - Crude oil segment adjusted EBITDA decreased to $742 million from $848 million, impacted by lower transportation revenues and higher expenses [6] - Interstate natural gas segment adjusted EBITDA rose to $512 million from $483 million, driven by record volumes [7] - Intrastate natural gas segment adjusted EBITDA fell to $344 million from $438 million, due to reduced pipeline optimization [8] Market Data and Key Metrics Changes - The company expects to spend approximately $5 billion on organic growth capital projects in 2025, with most projects anticipated to come online in 2025 or 2026 [9] - The company is experiencing strong demand for natural gas transportation, particularly in Texas, with significant opportunities in data centers and power generation [41][42] Company Strategy and Development Direction - The company is focused on expanding its infrastructure to support growing demand for LNG and natural gas, with ongoing projects like the Hugh Brinson pipeline and Flexport expansion [10][11] - The company is optimistic about the new administration's support for the oil and gas industry, expecting a more favorable permitting process [85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's diversified business model, which is well-positioned to manage market volatility and capitalize on growth opportunities [16][17] - Despite some recent slowdowns in production, management remains bullish on long-term growth, particularly in the LNG market [39][66] Other Important Information - The company is making substantial progress on the Lake Charles LNG project, with a target for final investment decision (FID) by year-end [20][104] - Sunoco's acquisition of Parkland Corporation is expected to create the largest independent fuel distributor in the Americas [18] Q&A Session Summary Question: Update on Lake Charles progress and U.S. LNG market dynamics - Management is excited about the progress towards FID and has secured additional contracts, targeting 15 million tons of LNG production [22][24] Question: Potential for Energy Transfer to have a C Corp presence - Management is evaluating the option but has no immediate plans for a C Corp structure [27] Question: Outlook for production given commodity price volatility - Management noted that while there is some slowdown, the diversified nature of the business allows for resilience [38][66] Question: Speed of ramp for Flexport expansion and LPG export market - Management is confident in the demand for ethane and LPG, with significant contracts already in place [49][51] Question: Timing and capacity for Phase two of Hugh Brinson pipeline - Management is negotiating for more capacity than currently available and is optimistic about future expansions [57][60] Question: Changes in permitting process under the new administration - Management sees a more supportive environment for oil and gas projects, with expectations for easier infrastructure development [85] Question: Guidance for 2025 adjusted EBITDA - Management maintains guidance of $16.1 billion to $16.5 billion, with various factors influencing the range [88][90]

Financial Data and Key Metrics Changes - For Q1 2025, adjusted EBITDA was $4.1 billion, an increase from $3.9 billion in Q1 2024, driven by strong volumes in midstream operations and NGL exports [5] - Distributable cash flow (DCF) attributable to partners was $2.3 billion, with approximately $955 million spent on organic growth capital [5] - The company expects 2025 adjusted EBITDA to be between $16.1 billion and $16.5 billion, indicating a strong financial outlook despite some market volatility [17][18] Business Line Data and Key Metrics Changes - NGL and refined products segment adjusted EBITDA was $978 million, slightly down from $989 million in Q1 2024 due to higher operating expenses [6] - Midstream segment adjusted EBITDA increased to $925 million from $696 million, attributed to higher legacy volumes in the Permian Basin [6] - Crude oil segment adjusted EBITDA decreased to $742 million from $848 million, impacted by lower transportation revenues and higher expenses [7][8] - Interstate natural gas segment adjusted EBITDA rose to $512 million from $483 million, driven by record volumes [9] - Intrastate natural gas segment adjusted EBITDA fell to $344 million from $438 million, affected by reduced pipeline optimization [9] Market Data and Key Metrics Changes - The company reported strong NGL exports during the quarter, contributing positively to overall performance [5] - The Permian Basin saw an 8% increase in legacy volumes, enhancing the midstream segment's performance [6] Company Strategy and Development Direction - The company plans to invest approximately $5 billion in organic growth capital projects in 2025, with expectations for mid-teen returns [10] - Major projects include the Flexport NGL export expansion and several processing plant expansions in the Permian [10][12] - The company is optimistic about the Lake Charles LNG project, with significant progress towards commercialization and agreements with international partners [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's diversified business model, which is well-positioned to manage market volatility [17][18] - The new administration is seen as supportive of the oil and gas industry, with expectations for a more favorable permitting process [85] - Despite some recent slowdowns in production, management remains bullish on long-term growth prospects, particularly in the LNG and natural gas markets [39][66] Other Important Information - The company is excited about Sunoco's acquisition of Parkland Corporation, which is expected to create the largest independent fuel distributor in the Americas [19] - Construction of eight 10-megawatt natural gas-fired electric generation facilities is ongoing, with the first facility already in service [17] Q&A Session Summary Question: Update on Lake Charles progress and U.S. LNG competitiveness - Management is optimistic about reaching FID by year-end, with ongoing negotiations for additional capacity and partnerships [22][24] Question: Impact of commodity price volatility on production outlook - Management noted that while there is some slowdown, the diversified nature of the business helps mitigate risks [38][66] Question: Contracting position for NGL exports - The Flexport project is 90% contracted for three to five years, with expectations for strong international demand [76] Question: Potential for further expansion of Hugh Brinson pipeline - Management is exploring options for additional capacity and pricing power due to high demand [80][81] Question: Changes in permitting processes under the new administration - Management sees a more supportive environment for infrastructure projects, which is expected to benefit the company [85]

Financial Data and Key Metrics Changes - The partnership reported adjusted EBITDA of $458 million and distributable cash flow as adjusted of $310 million for Q1 2025, with a strong balance sheet and liquidity [6][9] - The leverage ratio at the end of the quarter was 4.1 times, aligning with the long-term target [7] - A distribution of $0.08 per common unit was declared, representing an increase of just over 1.25% compared to the previous quarter, with a trailing twelve-month coverage ratio of 1.9 times [8][9] Business Line Data and Key Metrics Changes - Fuel Distribution segment adjusted EBITDA was $220 million, with volumes at 2.1 billion gallons, down 3% from the previous quarter but flat year-over-year [12] - Pipeline Systems segment reported adjusted EBITDA of $172 million, with throughput at approximately 1.3 million barrels per day, down from 1.4 million barrels per day in the previous quarter [13] - Terminals segment delivered adjusted EBITDA of $66 million, with throughput increasing to 620,000 barrels per day from around 600,000 barrels per day in the previous quarter [14] Market Data and Key Metrics Changes - The company is expanding its geographic reach through acquisitions, including Parkland Corporation and Tankwit, which will enhance its presence in North America and Europe [4][8][15] - The acquisition of Tankwit, Germany's largest independent storage operator, is expected to close in the second half of 2025 and will be accretive to unitholders in the first year [7][8] Company Strategy and Development Direction - The company aims for an annual distribution growth rate of at least 5%, having increased distributions by approximately 9% since 2022 [9] - The strategy focuses on fuel profit optimization and integration with midstream assets, leveraging existing infrastructure for growth [15][18] - The company emphasizes strong operational execution, expense discipline, and profit optimization to deliver strong returns on capital [18][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 guidance despite potential challenges from inflation and recession [20][22] - The business model is designed to perform well in volatile environments, supported by pipeline and terminal assets that provide stable income [21][22] - The company is proactively managing expenses to remain below operating expense guidance, ensuring continued growth and value creation [23] Other Important Information - The company completed a $1 billion offering of senior notes to improve financial flexibility and extend debt maturity [6][7] - The acquisition of Parkland Corporation is valued at approximately $9.1 billion and is expected to close in the second half of 2025 [4][8] Q&A Session Summary Question: Future capital allocation among regions post Parkland close - Management indicated that capital allocation is evaluated across all segments and geographies, focusing on the best projects rather than specific regional targets [26][27] Question: Right mix between fuel distribution and conventional midstream assets - Management stated that while the portfolio may not always be perfectly balanced, the goal is to maintain a diversified portfolio, with a focus on long-term strength [28][29]

Financial Data and Key Metrics Changes - The partnership reported adjusted EBITDA of $458 million and distributable cash flow as adjusted of $310 million for the first quarter [5] - The leverage ratio at the end of the quarter was 4.1 times, aligning with the long-term target [6] - A distribution of $0.08 per common unit was declared, representing an increase of just over 1.25% compared to the previous quarter, with a trailing twelve-month coverage ratio of 1.9 times [7][8] Business Line Data and Key Metrics Changes - In the Fuel Distribution segment, adjusted EBITDA was $220 million, with volumes at 2.1 billion gallons, down 3% from the previous quarter but flat year-over-year [11] - The Pipeline Systems segment reported adjusted EBITDA of $172 million, with throughput of approximately 1.3 million barrels per day, down from 1.4 million barrels per day in the previous quarter [12] - The Terminals segment delivered adjusted EBITDA of $66 million, with throughput of 620,000 barrels per day, up from around 600,000 barrels per day in the previous quarter [13] Market Data and Key Metrics Changes - The company is acquiring Parkland Corporation for approximately $9.1 billion, expected to close in the second half of 2025 [3] - The acquisition of Tankwit, Germany's largest independent storage operator, for approximately €500 million is also in progress, expected to close in the second half of 2025 [6][7] Company Strategy and Development Direction - The company aims for an annual distribution growth rate of at least 5% and has increased distributions by approximately 9% since 2022 [8] - The strategy focuses on growing scale, optimizing fuel profit, and integrating with midstream assets, particularly through recent acquisitions [14][15] - The company emphasizes the importance of refined products in the global energy mix and plans to leverage existing infrastructure for future growth [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 guidance despite potential challenges from inflation and recession [20] - The business model is designed to perform well in volatile environments, supported by pipeline and terminal assets [22] - The company is proactively managing expenses and expects continued growth in EBITDA and distributions [23] Other Important Information - The company completed a $1 billion offering of senior notes to improve financial flexibility and extend debt maturity [6] - The partnership's strong liquidity positions it well for future growth and capital allocation priorities [6][8] Q&A Session Summary Question: Future capital allocation among regions post-Parkland close - Management indicated that capital allocation is evaluated across all segments and geographies, focusing on the best projects rather than specific regional targets [26][27] Question: Right mix between fuel distribution and midstream assets - Management stated that while the portfolio may not always be perfectly balanced, the goal is to maintain a diversified portfolio, with a focus on opportunities that provide strong financial benefits [28][29]