Sunoco (NYSE: SUN) Q1 2026 earnings surge with Parkland, TanQuid deals
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Sunoco LP reported sharply higher results for the three months ended March 31, 2026, driven by recent acquisitions and strong fuel distribution. Total revenues rose to $10.69 billion from $5.18 billion, while net income increased to $644 million from $207 million.
Adjusted EBITDA grew to $858 million, up from $458 million, with Fuel Distribution contributing $529 million and notable gains from Pipeline Systems, Terminals and the new Refinery segment. Favorable LIFO inventory valuation adjustments of $444 million and a LIFO liquidation also boosted earnings.
Sunoco completed the TanQuid terminals acquisition for about $239 million and smaller deals totaling $50 million, pushing total assets to $30.26 billion. Long-term debt, net, rose to $13.92 billion, partly due to new senior notes, while cash was $718 million and credit facility availability was $2.22 billion. The partnership raised its quarterly cash distribution per common unit to $0.9899.
Positive
- Strong earnings and cash flow growth: Q1 2026 net income rose to $644 million from $207 million and consolidated Adjusted EBITDA increased by $400 million to $858 million, supported by acquisitions and higher contribution across all segments.
Negative
- None.
Insights
Q1 2026 shows acquisition-fueled growth, stronger cash generation and an active balance sheet reshuffle.
Sunoco LP’s Q1 2026 results highlight the first full impact of the Parkland acquisition plus the new TanQuid terminals. Revenue more than doubled to $10.69 billion and net income reached $644 million, with consolidated Adjusted EBITDA up $400 million year over year to $858 million.
Fuel Distribution remains the core earnings engine, contributing $529 million of Segment Adjusted EBITDA, while Pipeline Systems, Terminals and the Burnaby Refinery add diversification. A large $444 million favorable LIFO inventory valuation adjustment and a LIFO liquidation significantly lifted reported profit, underscoring that part of the earnings jump is accounting-driven and may not repeat.
On the balance sheet, long-term debt, net, increased to $13.92 billion, offset by refinancing into 5.375% and 5.625% senior notes due 2031 and 2034 and redemption of higher-coupon 6.000% notes. Liquidity appears solid with $718 million of cash and $2.22 billion of credit facility availability, while the quarterly distribution per common unit rose to $0.9899, supported by higher cash from operations.
Key Figures
Total revenues: $10.69 billion
Net income: $644 million
Adjusted EBITDA (consolidated): $858 million
+5 more
8 metrics
Total revenues
$10.69 billion
Three months ended March 31, 2026
Net income
$644 million
Three months ended March 31, 2026
Adjusted EBITDA (consolidated)
$858 million
Three months ended March 31, 2026
Favorable LIFO inventory adjustment
$444 million
Included in cost of sales, Q1 2026
TanQuid purchase consideration
$239 million
Acquisition closed January 16, 2026
Long-term debt, net
$13.92 billion
As of March 31, 2026
Cash and cash equivalents
$718 million
As of March 31, 2026
Quarterly distribution per common unit
$0.9899
For period ended March 31, 2026
Key Terms
Adjusted EBITDA, LIFO liquidation, GoZone Bonds, Pillar Two global minimum tax, +2 more
6 terms
Adjusted EBITDA financial
"We report Adjusted EBITDA by segment as a measure of segment performance."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
LIFO liquidation financial
"During the three months ended March 31, 2026, the Partnership reduced its overall fuel inventories, resulting in a LIFO liquidation."
GoZone Bonds financial
"NuStar Logistics' obligations include revenue bonds issued by the Parish of St. James, Louisiana pursuant to the Gulf Opportunity Zone Act of 2005 (the “GoZone Bonds”)."
Pillar Two global minimum tax financial
"The acquisition of Parkland brought Sunoco into the scope of the Pillar Two global minimum tax regime."
Producer Price Index for Finished Goods (PPI-FG) regulatory
"the FERC issued an order setting the indexed rate at PPI-FG plus 0.78% during the five-year period"
interstate common carrier regulation regulatory
"Interstate Common Carrier Regulation In December 2020, the FERC issued an order setting the indexed rate"
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Quarterly Period Ended: March 31, 2026
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
Commission File Number: 001-35653
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of principal executive offices, including zip code)
(214 ) 981-0700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
ý | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging Growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ý
The registrant had 136,894,754 common units, 16,410,780 Class C units and 51,517,198 Class D units, each representing limited partner interests, outstanding as of May 1, 2026.
SUNOCO LP
FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION | ||||||||
Item 1. Financial Statements | 4 | |||||||
Consolidated Balance Sheets | 4 | |||||||
Consolidated Statements of Operations | 5 | |||||||
Consolidated Statements of Comprehensive Income | 6 | |||||||
Consolidated Statements of Equity | 7 | |||||||
Consolidated Statements of Cash Flows | 8 | |||||||
Notes to Consolidated Financial Statements | 9 | |||||||
1. Organization and Principles of Consolidation | 9 | |||||||
2. Summary of Significant Accounting Policies | 9 | |||||||
3. Acquisitions | 10 | |||||||
4. Cash and Cash Equivalents | 11 | |||||||
5. Accounts Receivable, net | 11 | |||||||
6. Inventories, net | 11 | |||||||
7. Investments in Unconsolidated Affiliates | 12 | |||||||
8. Accrued Expenses and Other Current Liabilities | 13 | |||||||
9. Debt Obligations | 14 | |||||||
10. Other Non-Current Liabilities | 15 | |||||||
11. Related Party Transactions | 16 | |||||||
12. Revenue | 16 | |||||||
13. Commitments and Contingencies | 17 | |||||||
14. Equity | 18 | |||||||
15. Segment Reporting | 19 | |||||||
16. Net Income per Common Unit | 22 | |||||||
17. Derivatives | 22 | |||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | |||||||
Recent Developments | 25 | |||||||
Results of Operations | 28 | |||||||
Liquidity and Capital Resources | 32 | |||||||
Description of Indebtedness | 35 | |||||||
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 37 | |||||||
Item 4. Controls and Procedures | 37 | |||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. Legal Proceedings | 38 | |||||||
Item 1A. Risk Factors | 38 | |||||||
Item 6. Exhibits | 38 | |||||||
SIGNATURE | 40 | |||||||
2
Table of Contents
Definitions
References to the “Partnership,” “Sunoco,” “we,” “us” and “our” refer to Sunoco LP and its consolidated subsidiaries. In addition, the following is a list of certain acronyms and terms used throughout this document:
| AOCI | accumulated other comprehensive income (loss) | |||||||
| Burnaby Refinery | refinery located in Burnaby, British Columbia owned and operated by the Partnership, which was acquired in the Parkland Acquisition | |||||||
| Credit Facility | Sunoco LP's $2.50 billion revolving credit facility, which matures in June 2030 | |||||||
| Energy Transfer | Energy Transfer LP (NYSE: ET) | |||||||
| ET-S Permian | ET-S Permian Holdings Company LP, a joint venture between Sunoco LP and Energy Transfer, which owns crude oil and water gathering pipelines and storage assets in the Permian Basin | |||||||
| Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
| FERC | United States Federal Energy Regulatory Commission | |||||||
| GAAP | accounting principles generally accepted in the United States of America | |||||||
| General Partner | Sunoco GP LLC, the general partner of Sunoco LP | |||||||
| IDRs | incentive distribution rights | |||||||
| Isla | Isla Dominicana de Petroleo Corporation | |||||||
| J.C. Nolan | collectively, J.C. Nolan Terminal Co., LLC and J.C. Nolan Pipeline Co., LLC, both of which are joint ventures between Sunoco LP and Energy Transfer, which own a diesel fuel storage terminal in Midland, Texas and a 500-mile diesel fuel pipeline | |||||||
| LIFO | last-in, first-out | |||||||
| NuStar | NuStar Energy L.P. | |||||||
| NuStar Acquisition | acquisition of NuStar completed on May 3, 2024 | |||||||
| NuStar Logistics | NuStar Logistics L.P., a wholly owned subsidiary acquired in the NuStar Acquisition | |||||||
| NYSE | New York Stock Exchange | |||||||
| Parkland | Parkland Corporation, a subsidiary of the Partnership acquired on October 31, 2025 | |||||||
| Parkland Acquisition | Sunoco's acquisition of Parkland completed on October 31, 2025 | |||||||
| Partnership Agreement | Sunoco's Third Amended and Restated Agreement of Limited Partnership, as amended to date | |||||||
| SARA | Societe Anonyme de la Raffinerie des Antilles refinery | |||||||
| SEC | Securities and Exchange Commission | |||||||
| Series A Preferred Units | 7.875% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units | |||||||
| Sunoco Retail | Sunoco Retail LLC, a wholly owned corporate subsidiary of Sunoco LP | |||||||
| SunocoCorp | SunocoCorp LLC, a Delaware limited liability company (NYSE: SUNC), an affiliate which owns all of the Partnership's outstanding Class D Units. | |||||||
| TanQuid | TanQuid GmbH & Co. KG, a subsidiary of the Partnership acquired on January 16, 2026 | |||||||
3
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
SUNOCO LP
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(unaudited)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventories, net | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment | |||||||||||
| Accumulated depreciation | ( | ( | |||||||||
| Property, plant and equipment, net | |||||||||||
| Other assets: | |||||||||||
| Operating lease right-of-use assets, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Other non-current assets | |||||||||||
| Investments in unconsolidated affiliates | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accounts payable to affiliates | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Operating lease current liabilities | |||||||||||
| Current maturities of long-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Operating lease non-current liabilities | |||||||||||
| Long-term debt, net | |||||||||||
| Advances from affiliates | |||||||||||
| Deferred tax liabilities | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 13) | |||||||||||
| Equity: | |||||||||||
| Limited partners: | |||||||||||
Preferred unitholders ( | |||||||||||
Common unitholders ( | |||||||||||
Class C unitholders - held by subsidiaries ( | |||||||||||
Class D unitholder ( | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
Table of Contents
SUNOCO LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per unit data)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| REVENUES: | |||||||||||
| Sales revenue | $ | $ | |||||||||
| Service revenue | |||||||||||
| Lease revenue | |||||||||||
| Total revenues | |||||||||||
| COSTS AND EXPENSES: | |||||||||||
| Cost of sales (excluding items shown separately below) | |||||||||||
Operating expenses | |||||||||||
General and administrative | |||||||||||
Lease expense | |||||||||||
| (Gain) loss on disposal of assets and impairment charges | ( | ||||||||||
Depreciation, amortization and accretion | |||||||||||
| Total cost of sales and operating expenses | |||||||||||
| OPERATING INCOME | |||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||
| Interest expense, net | ( | ( | |||||||||
| Equity in earnings of unconsolidated affiliates | |||||||||||
| Loss on extinguishment of debt | ( | ( | |||||||||
| Other, net | ( | ||||||||||
| INCOME BEFORE INCOME TAXES | |||||||||||
| Income tax expense (benefit) | ( | ||||||||||
| NET INCOME | |||||||||||
| Less: Preferred unitholders' interest in net income | |||||||||||
| Less: Class D unitholder's interest in net income | |||||||||||
| NET INCOME ATTRIBUTABLE TO COMMON UNITS | $ | $ | |||||||||
| NET INCOME PER COMMON UNIT: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
| WEIGHTED AVERAGE COMMON UNITS OUTSTANDING: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
| CASH DISTRIBUTION PER COMMON UNIT | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
Table of Contents
SUNOCO LP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in millions)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | $ | |||||||||
| Other comprehensive income (loss), net of tax | |||||||||||
| Foreign currency translation adjustment | ( | ||||||||||
| ( | |||||||||||
| Comprehensive income | |||||||||||
| Less: Comprehensive income attributable to Preferred unitholders | |||||||||||
| Less: Comprehensive income attributable to Class D unitholder | |||||||||||
| Comprehensive income attributable to common units | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
Table of Contents
SUNOCO LP
CONSOLIDATED STATEMENTS OF EQUITY
(Dollars in millions)
(unaudited)
| Common Unitholders | Class D Unitholder | Series A Preferred Unitholders | AOCI | Total | |||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Cash distributions to unitholders, including incentive distributions | ( | ( | ( | ( | |||||||||||||||||||||||||
| Non-cash unit-based compensation | |||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | ( | ( | |||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
| Common Unitholders | AOCI | Total | |||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ||||||||||||||
| Cash distributions to unitholders, including incentive distributions | ( | ( | |||||||||||||||
| Non-cash unit-based compensation | |||||||||||||||||
| Other comprehensive income, net of tax | |||||||||||||||||
| Units issued in acquisition | |||||||||||||||||
| Other | ( | ||||||||||||||||
| Net income | |||||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | |||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
Table of Contents
SUNOCO LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
(unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | $ | |||||||||
| Reconciliation of net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and accretion | |||||||||||
| Amortization of deferred financing fees | |||||||||||
| (Gain) loss on disposal of assets and impairment charges | ( | ||||||||||
| Loss on extinguishment of debt | |||||||||||
| Other non-cash, net | ( | ||||||||||
| Non-cash unit-based compensation expense | |||||||||||
| Deferred income tax expense (benefit) | ( | ||||||||||
| Inventory valuation adjustments | ( | ( | |||||||||
| Equity in earnings of unconsolidated affiliates | ( | ( | |||||||||
| Distributions from unconsolidated affiliates | |||||||||||
| Net change in operating assets and liabilities, net of effects of acquisitions and divestitures | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| TanQuid acquisition, net of cash acquired | ( | ||||||||||
| Cash paid for other acquisitions | ( | ( | |||||||||
| Contributions to unconsolidated affiliates | ( | ( | |||||||||
| Distributions from unconsolidated affiliates in excess of cumulative earnings | |||||||||||
| Proceeds from disposal of property, plant and equipment | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| FINANCING ACTIVITIES: | |||||||||||
| Senior notes borrowings | |||||||||||
| Senior notes repayments | ( | ( | |||||||||
| Credit Facility borrowings | |||||||||||
| Credit Facility repayments | ( | ( | |||||||||
| Loan origination costs | ( | ( | |||||||||
| Cash distributions to common unitholders, including incentive distributions | ( | ( | |||||||||
| Cash distributions to Class D unitholders | ( | ||||||||||
| Cash distributions to Series A Preferred unitholders | ( | ||||||||||
| Net cash (used in) provided by financing activities | ( | ||||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
8
Table of Contents
SUNOCO LP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollar amounts, except per unit data, are in millions)
(unaudited)
1.Organization and Principles of Consolidation
As used in this document, the terms “Partnership,” “Sunoco,” “we,” “us” or “our” should be understood to refer to Sunoco LP and its consolidated subsidiaries, unless the context clearly indicates otherwise.
We are a Delaware master limited partnership. We are managed by our General Partner, which is owned by Energy Transfer. As of March 31, 2026, Energy Transfer and its subsidiaries owned 100% of the membership interest our General Partner , 28,463,967 of our common units and all of our IDRs. In addition, Energy Transfer controls SunocoCorp, which owns all of the outstanding Class D Units and currently holds the rights to appoint and remove members of our General Partner.
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. 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.
The consolidated financial statements include Sunoco LP, a publicly traded Delaware limited partnership, and its wholly owned subsidiaries. In the opinion of the Partnership’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All significant intercompany accounts and transactions have been eliminated in consolidation.
The operations of certain pipelines and terminals in which we own an undivided interest are proportionately consolidated in the accompanying consolidated financial statements.
2.Summary of Significant Accounting Policies
Interim Financial Statements
The accompanying interim consolidated financial statements have been prepared in accordance with GAAP. Pursuant to Regulation S-X, certain information and disclosures normally included in the annual consolidated financial statements have been condensed or omitted. The interim consolidated financial statements and notes included herein should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
Significant Accounting Policies
As of March 31, 2026, there have been no changes in the Partnership's significant accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
Motor Fuel and Sales Taxes
Certain motor fuel and sales taxes are collected from customers and remitted to governmental agencies either directly by the Partnership or through suppliers. The Partnership’s accounting policy for wholesale direct sales to dealers, distributors and commercial customers is to exclude the collected motor fuel tax from sales and cost of sales.
For retail locations where the Partnership holds inventory, including commission agent locations, motor fuel sales and motor fuel cost of sales include motor fuel taxes. Such amounts were $185 million and $29 million for the three months ended March 31, 2026 and 2025, respectively. Merchandise sales and cost of merchandise sales are reported net of sales tax in our consolidated statements of operations.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires disclosure of specified information about certain costs and expenses in the notes to the consolidated financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 is to be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact, if any, of ASU 2024-03 on our consolidated financial statements and related disclosures.
9
Table of Contents
3.Acquisitions
TanQuid Acquisition
On January 16, 2026, the Partnership completed the previously announced acquisition of TanQuid for €206 million ($239 million) and assumed debt with a fair value of €298 million ($346 million). TanQuid owns and operates 15 fuel terminals in Germany and one fuel terminal in Poland. The transaction was funded using cash on hand and amounts available under the Partnership's Credit Facility.
The acquisition was recorded using the acquisition method of accounting which requires, among other things, that assets and liabilities assumed be recognized on the balance sheet at their estimated fair values as of the date of acquisition, with any excess purchase price over the fair value of net assets acquired recorded to goodwill. Management, with the assistance of a third-party valuation specialist, determined the fair value of assets and liabilities as of the date of the acquisition. Determining the fair value involves the use of management's judgment as well as the use of significant estimates and assumptions.
As of the date these financial statements were issued, management and the third-party valuation specialist continue to evaluate certain assumptions, which could result in a change to the allocation of the fair value among reporting units or between line items on the consolidated balance sheet, potentially impacting deferred tax balances and/or goodwill.
The following table summarizes the preliminary allocation of the purchase price among assets acquired and liabilities assumed.
| As of January 16, 2026 | |||||
| Total current assets | $ | ||||
| Property, plant and equipment | |||||
| Operating lease right-of-use assets, net | |||||
| Other non-current assets | |||||
| Total assets | |||||
| Total current liabilities | |||||
| Long-term debt | |||||
| Operating lease non-current liabilities | |||||
| Deferred tax liabilities | |||||
| Other non-current liabilities | |||||
| Total liabilities | |||||
| Total consideration | |||||
| Cash acquired | |||||
| Total consideration, net of cash acquired | $ | ||||
Other Acquisitions
In the first quarter of 2026, the Partnership completed other acquisitions for total cash consideration of approximately $50 million, plus working capital. These transactions were accounted for as asset acquisitions.
10
4.Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, demand deposits and short-term investments with original maturities of three months or less.
The net change in operating assets and liabilities, net of effects of acquisitions and divestitures, included in cash flows from operating activities is comprised as follows:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Accounts receivable, net | $ | ( | $ | ||||||||
| Inventories, net | |||||||||||
| Other assets | ( | ||||||||||
| Accounts payable | ( | ||||||||||
| Accounts payable to affiliates | ( | ||||||||||
| Accrued expenses and other current liabilities | ( | ||||||||||
| Other non-current liabilities | ( | ||||||||||
| $ | ( | $ | ( | ||||||||
Non-cash investing and financing activities and supplemental cash flow information:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Units issued in connection with acquisitions | $ | $ | |||||||||
| Lease assets obtained in exchange for new lease liabilities | |||||||||||
| Interest paid | |||||||||||
5.Accounts Receivable, net
Accounts receivable, net, consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Accounts receivable, trade | $ | $ | |||||||||
| Credit card receivables | |||||||||||
| Other receivables | |||||||||||
| Allowance for expected credit losses | ( | ( | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
6.Inventories, net
Fuel inventories included balances stated at the lower of cost or market using the LIFO method. As of March 31, 2026 and December 31, 2025, the Partnership’s fuel inventory balance included lower of cost or market reserves of $1 million and $472 million, respectively. For the three months ended March 31, 2026 and 2025, the Partnership's cost of sales included favorable LIFO inventory valuation adjustments of $444 million and $61 million, respectively, which increased net income.
Inventories, net, consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Fuel | $ | $ | |||||||||
| Other | |||||||||||
| Inventories, net | $ | $ | |||||||||
During the three months ended March 31, 2026, the Partnership reduced its overall fuel inventories, resulting in a LIFO liquidation. Based on the assumed impact to cost of sales if the liquidated inventories had been replaced, the effect of the LIFO liquidation was an increase of $102 million to pre-tax income, or $0.54 per common unit (excluding any income tax impact or any assumed changes to distributions). Interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs; consequently, these interim estimates are subject to changes during the remainder of the year that could impact the final year-end inventory levels or valuation.
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Certain of the Partnership’s fuel inventories in the Caribbean are stated at the lower of cost or market using the first-in, first-out method, under which the cost of fuel sold consists of older acquisition costs, including transportation and storage costs. These FIFO method inventories totaled $165 million and $88 million as of March 31, 2026 and December 31, 2025, respectively.
7.Investments in Unconsolidated Affiliates
Description of Investments
The following is a summary of the Partnership’s significant unconsolidated investments:
J.C. Nolan
ET-S Permian
SARA
Isla
Summary of Balances Related to Unconsolidated Affiliates
The carrying values of the Partnership’s investments in unconsolidated affiliates as of March 31, 2026 and December 31, 2025 were as follows:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| J.C. Nolan | $ | $ | ||||||||||||
| ET-S Permian | ||||||||||||||
| SARA | ||||||||||||||
| Isla | ||||||||||||||
| Other | ||||||||||||||
| $ | $ | |||||||||||||
The following table presents equity in earnings (losses) of unconsolidated affiliates:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| J.C. Nolan | $ | $ | |||||||||
| ET-S Permian | |||||||||||
| SARA | |||||||||||
| Isla | |||||||||||
| Other | ( | ||||||||||
| $ | $ | ||||||||||
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The following tables present selected balance sheet and income statement data for ET-S Permian (on a 100% basis):
| March 31, 2026 | December 31, 2025 | |||||||||||||
Current assets | $ | $ | ||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Current liabilities | $ | $ | ||||||||||||
| Non-current liabilities | ||||||||||||||
| Equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
Revenues (1) | $ | $ | ||||||||||||
| Operating income | ||||||||||||||
| Net income | ||||||||||||||
8.Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Wage and other employee-related accrued expenses | $ | $ | |||||||||
| Accrued tax expense | |||||||||||
| Accrued insurance expense | |||||||||||
| Accrued interest expense | |||||||||||
| Dealer deposits | |||||||||||
| Accrued capital expenditures | |||||||||||
| Accrued environmental expense | |||||||||||
| Contract liabilities | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
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9.Debt Obligations
Our debt obligations consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Credit Facility | $ | $ | |||||||||
Parkland | |||||||||||
TanQuid | |||||||||||
Parkland | |||||||||||
Parkland | |||||||||||
Parkland | |||||||||||
Parkland | |||||||||||
Parkland | |||||||||||
| TanQuid variable rate EUR senior notes due 2030 | |||||||||||
Parkland | |||||||||||
| GoZone Bonds | |||||||||||
| Lease-related financing obligations and other subsidiary debt | |||||||||||
| Net unamortized premiums, discounts and fair value adjustments | ( | ||||||||||
| Deferred debt issuance costs | ( | ( | |||||||||
| Total debt | |||||||||||
| Less: current maturities | |||||||||||
| Total long-term debt, net | $ | $ | |||||||||
(1) These senior notes were redeemed in March 2026. See additional information under “Recent Transactions.”
(2) As of March 31, 2026, $490 million aggregate principal amount of senior notes due before March 31, 2027 were classified as long-term as management has the intent and ability to refinance the borrowings on a long-term basis .
Recent Transactions
In March 2026, the Partnership issued $600 million aggregate principal amount of 5.375 % senior notes due 2031 and $600 million aggregate principal amount of 5.625 % senior notes due 2034. These notes will mature on July 15, 2031 and July 15, 2034, respectively, and interest is payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2026. The Partnership used a portion of the net proceeds from this private offering to redeem in full its $500 million aggregate principal amount of 6.000 % senior notes due 2026 and its $600 million aggregate principal amount of 6.000 % senior notes due 2027.
In March 2026, the Partnership redeemed Parkland's remaining senior notes.
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GoZone Bonds
NuStar Logistics' obligations include revenue bonds issued by the Parish of St. James, Louisiana pursuant to the Gulf Opportunity Zone Act of 2005 (the “GoZone Bonds”).
As reflected in the table below, the holders of the Series 2008, Series 2010B and Series 2011 GoZone Bonds are required to tender their bonds at the applicable mandatory purchase date in exchange for 100 % of the principal plus accrued and unpaid interest, after which these bonds may be remarketed with a new interest rate established. Each of the Series 2010 and Series 2010A GoZone Bonds is subject to redemption on or after June 1, 2030 by the Parish of St. James, at Sunoco's option, in whole or in part, at a redemption price of 100 % of the principal amount to be redeemed plus accrued and unpaid interest. Interest on the GoZone Bonds is payable semi-annually on June 1 and December 1 of each year.
The following table summarizes the GoZone Bonds outstanding as of March 31, 2026:
| Series | Date Issued | Amount Outstanding | Interest Rate | Mandatory Purchase Date | Optional Redemption Date | Maturity Date | ||||||||||||||||||||||||||||||||
| Series 2008 | $ | % | June 1, 2030 | n/a | ||||||||||||||||||||||||||||||||||
| Series 2010 | % | n/a | June 1, 2030 | |||||||||||||||||||||||||||||||||||
| Series 2010A | % | n/a | June 1, 2030 | |||||||||||||||||||||||||||||||||||
| Series 2010B | % | June 1, 2030 | n/a | |||||||||||||||||||||||||||||||||||
| Series 2011 | % | June 1, 2030 | n/a | |||||||||||||||||||||||||||||||||||
NuStar Logistics’ agreements with the Parish of St. James related to the GoZone Bonds contain: (i) customary restrictive covenants that limit the ability of NuStar Logistics and its subsidiaries to, among other things, create liens, enter into certain sale leaseback transactions, and engage in certain consolidations, mergers or asset sales; and (ii) a repurchase provision which provides that if Sunoco undergoes a change of control that is followed by a ratings decline that occurs within 60 days of the change of control, then each holder may require the trustee, with funds provided by NuStar Logistics, to repurchase all or a portion of that holder’s GoZone Bonds at a price equal to 101 % of the aggregate principal amount repurchased, plus any accrued and unpaid interest. The Partnership and certain of its subsidiaries are guarantors to the agreements related to the GoZone Bonds.
Credit Facility
The Partnership's $2.50 billion Credit Facility matures on June 17, 2030, which date may be extended in accordance with the terms of the Credit Facility. The Credit Facility can be increased from time to time upon Sunoco's written request, subject to certain conditions, up to an aggregate amount of $3.50 billion. As of March 31, 2026, we had $125 million outstanding borrowings on the Credit Facility, and $151 million in standby letters of credit were outstanding. The unused availability on the Credit Facility as of March 31, 2026 was $2.22 billion. The weighted average interest rate on the total amount outstanding as of March 31, 2026 was 5.52 %. The Partnership was in compliance with all financial covenants as of March 31, 2026. The Partnership's net leverage ratio was 3.98 to 1.00 at March 31, 2026.
Receivables Financing Agreement
Upon the closing of the NuStar Acquisition, the commitments under NuStar’s receivables financing agreement were reduced to zero during a suspension period, for which the period end has not been determined. As of March 31, 2026, this facility had no outstanding borrowings.
Fair Value of Debt
The aggregate estimated fair value and carrying amount of our consolidated debt obligations as of March 31, 2026 were $13.99 billion and $13.93 billion, respectively. As of December 31, 2025, the aggregate fair value and carrying amount of our consolidated debt obligations were $13.52 billion and $13.39 billion, respectively. The fair value of our consolidated debt obligations is a Level 2 valuation based on the respective debt obligations' observable inputs for similar liabilities.
10.Other Non-Current Liabilities
Other non-current liabilities consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Asset retirement obligations | $ | $ | |||||||||
| Accrued environmental expense, long-term | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
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11.Related Party Transactions
We are party to fee-based commercial agreements with various affiliates for pipeline, terminalling and storage services. We also have agreements with subsidiaries of Energy Transfer and our unconsolidated affiliates for the purchase and sale of fuel. Additionally, under our Partnership Agreement, our General Partner does not receive a management fee or other compensation for its role as our general partner. However, our General Partner is reimbursed for all expenses incurred on our behalf. These expenses include shared service fees, as well as all other expenses necessary or appropriate to the conduct of our business that are allocable to us, as provided for in our Partnership Agreement. There is no cap on the amount that may be paid or reimbursed to our General Partner.
Summary of Related Party Transactions
Related party transactions for the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Motor fuel sales to affiliates | $ | $ | |||||||||
| Bulk fuel purchases from affiliates | |||||||||||
| Expense reimbursement | |||||||||||
Significant affiliate balances included on the consolidated balance sheets were as follows:
•Accounts payable to affiliates were $374 million and $331 million as of March 31, 2026 and December 31, 2025, respectively, which were attributable to operational expenses and bulk fuel purchases.
•Advances from affiliates were $76 million and $78 million as of March 31, 2026 and December 31, 2025, respectively, which were related to treasury services agreements with Energy Transfer.
12.Revenue
The following table depicts the disaggregation of revenue:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Fuel | $ | $ | |||||||||
| Non-fuel | |||||||||||
| Lease income | |||||||||||
| Pipeline throughput | |||||||||||
| Terminal throughput | |||||||||||
| Refinery | |||||||||||
| Other | |||||||||||
| Total revenues | $ | $ | |||||||||
Contract Balances with Customers
The balances of the Partnership’s contract assets and contract liabilities as of March 31, 2026 and December 31, 2025 were as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Contract assets | $ | $ | |||||||||
| Accounts receivable from contracts with customers | |||||||||||
| Contract liabilities | |||||||||||
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The following tables summarize the consolidated activity of our contract liabilities:
| Contract Liabilities | |||||
| Balance, December 31, 2025 | $ | ||||
| Additions | |||||
| Revenue recognized | ( | ||||
| Balance, March 31, 2026 | $ | ||||
| Contract Liabilities | |||||
| Balance, December 31, 2024 | $ | ||||
| Additions | |||||
| Revenue recognized | ( | ||||
| Balance, March 31, 2025 | $ | ||||
Remaining Performance Obligations
The following table presents our estimated revenues from contracts with customers for remaining performance obligations that have not yet been recognized, representing our contractually committed revenue as of March 31, 2026:
| Remaining Performance Obligations | ||||||||
| (remaining) | $ | |||||||
| Thereafter | ||||||||
| Total | $ | |||||||
Our contractually committed revenue, for purposes of the tabular presentation above, is generally limited to customer contracts that have fixed pricing and fixed volume terms and conditions, including contracts with payment obligations for minimum volume commitments.
Costs to Obtain or Fulfill a Contract
The Partnership recognized amortization on capitalized costs incurred to obtain contracts of $17 million and $9 million for the three months ended March 31, 2026 and 2025, respectively.
13.Commitments and Contingencies
Litigation and Contingencies
We may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business. In the ordinary course of business, we are sometimes threatened with or named as a defendant in various lawsuits seeking actual and punitive damages for personal injury and property damage. We maintain liability insurance with insurers in amounts and with coverage and deductibles management believes are reasonable and prudent, and which are generally accepted in the industry. However, there can be no assurance that the levels of insurance protection currently in effect will continue to be available at reasonable prices or that such levels will remain adequate to protect us from material expenses related to personal injury or property damage in the future. In addition, various regulatory agencies such as tax authorities, environmental agencies, or other such agencies may perform audits or reviews to ensure proper compliance with regulations. We are not fully insured for any claims that may arise from these various agencies and there can be no assurance that any claims arising from these activities would not have an adverse, material effect on our consolidated financial statements.
Environmental Remediation
Sunoco is subject to various federal, state, provincial and local environmental laws and regulations and makes financial expenditures in order to comply with regulations governing its operations adopted by federal, state, provincial and local regulatory agencies. Pursuant to the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the United States Environmental Protection Agency has established a comprehensive regulatory program for the detection, prevention, investigation and cleanup of leaking underground storage tanks. State, provincial or local agencies are often delegated the responsibility for
17
implementing the federal program or developing and implementing equivalent state or local regulations. Additionally, with respect to the Burnaby Refinery, the federal Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations impose technical standards for design, installation, operation and removal of federally regulated tanks.
Federal and state regulations require us to provide and maintain evidence that we are taking financial responsibility for corrective action and compensating third parties in the event of a release from our underground storage tank systems, pipelines and terminals. In order to comply with these requirements, we have historically obtained private insurance in the states in which we operate. These policies provide protection from third-party liability claims. During 2026, our coverage was $15 million per occurrence and in the aggregate. Our sites continue to be covered by these policies.
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. The table below reflects recorded estimated undiscounted liabilities for these sites which are classified as accrued expenses, other current liabilities and other non-current liabilities.
| March 31, 2026 | December 31, 2025 | ||||||||||
| Current | $ | $ | |||||||||
| Non-current | |||||||||||
| Total environmental liabilities | $ | $ | |||||||||
New York Motor Fuel Excise Tax Audit
New York State issued a motor fuel excise tax assessment to Sunoco, LLC, a wholly owned subsidiary of the Partnership, in the amount of approximately $20 million, exclusive of penalties and interest, for the periods of March 2017 through May 2020. Sunoco, LLC filed an appeal with the New York State Division of Tax Appeals challenging the assessment. Sunoco, LLC cannot predict the outcome of this matter at this time.
14.Equity
As of March 31, 2026, Energy Transfer and its subsidiaries owned 28,463,967 of our common units and the public owned 108,430,787 of our common units. As of March 31, 2026, our wholly owned subsidiaries owned all of the 16,410,780 51,517,198
Sunoco Common Units
The change in our outstanding common units for the three months ended March 31, 2026 was as follows:
| Number of Units | |||||
Number of common units at December 31, 2025 | |||||
| Phantom unit vesting | |||||
Number of common units at March 31, 2026 | |||||
Class C Units
The Partnership has outstanding an aggregate of 16,410,780
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Pursuant to the terms described above, these distributions do not have an impact on the Partnership’s consolidated cash flows and as such, are excluded from total cash distributions and allocation of limited partners’ interest in net income.
Class D Units
The Partnership has outstanding an aggregate of 51,517,198 Class D Units, which were issued in connection with the Parkland Acquisition in October 2025 and are held by SunocoCorp.
Preferred Units
In September 2025, the Partnership closed a private offering of 1.5 million of its 7.875 % Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units (the “Series A Preferred Units”) at an offering price of $1,000 per unit. The Partnership received net proceeds of approximately $1.47 billion from the sale of the Series A Preferred Units after deducting the initial purchasers' discount and other estimated offering expenses. The Partnership used the net proceeds from this private offering (i) on the closing date of the Parkland Acquisition, to fund a portion of the cash consideration for the Parkland Acquisition, and (ii) prior to the closing date of the Parkland Acquisition, to temporarily reduce the borrowings outstanding under the Partnership's Credit Facility and to pay interest and fees in connection therewith.
Cash Distributions
Our Partnership Agreement sets forth the calculation used to determine the amount and priority of cash distributions that the common unitholders receive.
Cash distributions declared and/or paid with respect to Sunoco common units and Class D Units subsequent to December 31, 2025 were as follows:
| Limited Partners | ||||||||||||||||||||||||||||||||||||||
| Period Ended | Record Date | Payment Date | Per Unit Distribution | Distributions on Common Units | Distributions on Class D Units | Distribution to IDR Holders | ||||||||||||||||||||||||||||||||
| December 31, 2025 | February 6, 2026 | February 19, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| March 31, 2026 | May 8, 2026 | May 20, 2026 | ||||||||||||||||||||||||||||||||||||
Cash distributions with respect to our Series A Preferred Units were as follows:
| Record Date | Payment Date | Rate | ||||||||||||
| March 2, 2026 | March 18, 2026 | $ | ||||||||||||
Accumulated Other Comprehensive Loss
The following table presents the components of AOCI, net of tax:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Foreign currency translation adjustment | $ | ( | $ | ( | |||||||
| Total AOCI included in partners’ capital, net of tax | $ | ( | $ | ( | |||||||
15.Segment Reporting
Description of Segments
Our consolidated financial statements reflect four reportable segments: Fuel Distribution, Pipeline Systems, Terminals and Refinery.
Fuel Distribution. Our Fuel Distribution segment supplies motor fuel to independently-operated dealer stations, distributors, commission agents and other consumers. Also included in our Fuel Distribution segment is lease income from properties that we lease or sublease, as well as the Partnership’s credit card services, franchise royalties and retail operations in North America and the Greater Caribbean.
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Pipeline Systems. 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. 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.
Terminals. Our Terminals segment is composed of four transmix processing facilities and 99 refined product terminals (18 in Europe, six in Hawaii, nine in Canada, 13 in the Greater Caribbean and 53 in the continental United States).
Segment Operating Results
We report Adjusted EBITDA by segment as a measure of segment performance. We define Adjusted EBITDA as net income before net interest expense, income tax expense, depreciation, amortization and accretion expense, non-cash compensation expense, gains and losses on disposal of asset, non-cash impairment charges, losses on extinguishment of debt, unrealized gains and losses on commodity derivatives, inventory valuation adjustments, certain foreign currency transaction gains and losses and certain other operating expenses reflected in net income that we do not believe are indicative of ongoing core operations. Inventory valuation adjustments that are excluded from the calculation of Adjusted EBITDA represent changes in lower of cost or market reserves on the Partnership's inventory; these amounts are unrealized valuation adjustments applied to fuel volumes remaining in inventory at the end of the period.
The following tables present financial information by segment for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenues: | |||||||||||
| Fuel Distribution | |||||||||||
| Revenues from external customers | $ | $ | |||||||||
| Intersegment revenues | |||||||||||
| Pipeline Systems | |||||||||||
| Revenues from external customers | |||||||||||
| Intersegment revenues | |||||||||||
| Terminals | |||||||||||
| Revenues from external customers | |||||||||||
| Intersegment revenues | |||||||||||
| Refinery | |||||||||||
| Revenues from external customers | |||||||||||
| Intersegment revenues | |||||||||||
| Eliminations | ( | ( | |||||||||
| Total | $ | $ | |||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cost of sales: | |||||||||||
| Fuel Distribution | $ | $ | |||||||||
| Pipeline Systems | |||||||||||
| Terminals | |||||||||||
| Refinery | |||||||||||
| Eliminations | ( | ( | |||||||||
| Total | $ | $ | |||||||||
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| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Operating and lease expenses, excluding non-cash unit-based compensation: | |||||||||||
| Fuel Distribution | $ | $ | |||||||||
| Pipeline Systems | |||||||||||
| Terminals | |||||||||||
| Refinery | |||||||||||
| Total | $ | $ | |||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| General and administrative expenses, excluding non-cash unit-based compensation: | |||||||||||
| Fuel Distribution | $ | $ | |||||||||
| Pipeline Systems | |||||||||||
| Terminals | |||||||||||
| Refinery | |||||||||||
| Total | $ | $ | |||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Other(1): | |||||||||||
| Fuel Distribution | $ | $ | |||||||||
| Pipeline Systems | ( | ( | |||||||||
| Terminals | |||||||||||
| Refinery | ( | ||||||||||
| Total | $ | $ | |||||||||
(1) Other by segment includes Adjusted EBITDA from unconsolidated affiliates, unrealized gains and losses on commodity derivatives, inventory valuation adjustments and other less significant items, as applicable.
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment Adjusted EBITDA: | |||||||||||
| Fuel Distribution | $ | $ | |||||||||
| Pipeline Systems | |||||||||||
| Terminals | |||||||||||
| Refinery | |||||||||||
| Total | $ | $ | |||||||||
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| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of net income to Adjusted EBITDA: | |||||||||||
| Net income | $ | $ | |||||||||
| Depreciation, amortization and accretion | |||||||||||
| Interest expense, net | |||||||||||
| Non-cash unit-based compensation expense | |||||||||||
| (Gain) loss on disposal of assets and impairment charges | ( | ||||||||||
| Loss on extinguishment of debt | |||||||||||
| Unrealized (gains) losses on commodity derivatives | ( | ||||||||||
| Inventory valuation adjustments | ( | ( | |||||||||
| Equity in earnings of unconsolidated affiliates | ( | ( | |||||||||
| Adjusted EBITDA related to unconsolidated affiliates | |||||||||||
| Other non-cash adjustments | |||||||||||
| Income tax expense (benefit) | ( | ||||||||||
| Adjusted EBITDA (consolidated) | $ | $ | |||||||||
16.Net Income per Common Unit
A reconciliation of the numerators and denominators of the basic and diluted per unit computations is as follows:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net income | $ | $ | |||||||||
| Less: | |||||||||||
Incentive distribution rights | |||||||||||
Distributions on unvested phantom unit awards | |||||||||||
| Preferred unitholders' interest in net income | |||||||||||
| Class D unitholder's interest in net income | |||||||||||
Common unitholders’ interest in net income | $ | $ | |||||||||
| Weighted average common units outstanding: | |||||||||||
Basic | |||||||||||
| Dilutive effect of unvested phantom unit awards | |||||||||||
Diluted | |||||||||||
| Net income per common unit: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
17.Derivatives
Our subsidiaries hold working inventories of refined petroleum products, renewable fuels, gasoline blendstocks and transmix in storage. While in storage, volatility in the market price of stored motor fuel could adversely impact the price at which we can later sell the motor fuel. However, we may use futures, forwards and other derivative instruments (collectively, “positions”) to hedge a variety of price risks relating to deviations in that inventory from a target base operating level established by management. Derivative instruments utilized consist primarily of exchange-traded futures contracts traded on the New York Mercantile Exchange, Chicago Mercantile Exchange and Intercontinental Exchange, as well as over-the-counter transactions (including swap agreements) entered into with established financial institutions and other credit-approved energy companies. While these derivative instruments represent economic hedges, they are not designated as hedges for accounting purposes. 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 derivative positions on 2.8 million barrels with an aggregate unrealized loss of $76 million at March 31, 2026.
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The following table summarizes the location and amounts recognized in our consolidated statements of operations with respect to our derivative financial instruments:
| Location of Gain Recognized on Income on Derivatives | Amount of Gain Recognized in Income on Derivatives | ||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||
| Commodity derivatives | Cost of sales | $ | $ | ||||||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Tabular dollar amounts, except per gallon data, are in millions)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes to consolidated financial statements included elsewhere in this report. Additional discussion and analysis related to the Partnership is contained in our Annual Report on Form 10-K, including the audited consolidated financial statements for the fiscal year ended December 31, 2025 included therein.
Adjusted EBITDA is a non-GAAP financial measure of performance that has limitations and should not be considered as a substitute for net income or other GAAP measures. Please see “Key Measure Used to Evaluate and Assess Our Business” below for a discussion of our use of Adjusted EBITDA in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and a reconciliation to net income for the periods presented.
Cautionary Statement Regarding Forward-Looking Statements
Some of the information in this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 21E of the Exchange Act. All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Statements using words such as “believe,” “plan,” “could,” “expect,” “anticipate,” “intend,” “forecast,” “assume,” “estimate,” “continue,” “position,” “predict,” “project,” “goal,” “strategy,” “budget,” “potential,” “will” and other similar words or phrases are used to help identify forward-looking statements, although not all forward-looking statements contain such identifying words. Descriptions of our objectives, goals, targets, plans, strategies, costs, anticipated capital expenditures, expected cost savings and benefits are also forward-looking statements. These forward-looking statements are based on our current plans and expectations and involve a number of risks and uncertainties that could cause actual results and events to vary materially from the results and events anticipated or implied by such forward-looking statements, including:
•our ability to integrate acquisitions from affiliates or third parties, including the ability to successfully integrate Parkland's business;
•business strategy and operations of Energy Transfer and its conflicts of interest with us;
•changes in the price of and demand for the motor fuel that we distribute and our ability to appropriately hedge any motor fuel we hold in inventory;
•our dependence on limited principal suppliers;
•competition in the wholesale motor fuel distribution and retail store industry;
•changing customer preferences for alternate fuel sources or improvement in fuel efficiency;
•volatility of fuel prices or a prolonged period of low fuel prices and the effects of actions by, or disputes among or between, oil producing countries with respect to matters related to the price or production of oil;
•any acceleration of the domestic and/or international transition to a low carbon economy as a result of policy changes or otherwise;
•the possibility of cyber and malware attacks;
•changes in our credit rating, as assigned by rating agencies;
•a deterioration in the credit and/or capital markets, including as a result of recent increases in cost of capital resulting from Federal Reserve policies and changes in financial institutions’ policies or practices concerning businesses linked to fossil fuels;
•general economic conditions, including sustained periods of inflation, supply chain disruptions, new, increased and reciprocal tariffs and associated central bank monetary policies;
•environmental, tax and other federal, state and local laws and regulations;
•the macroeconomic, regulatory or other potential effects of a prolonged government shutdown;
•changes to, and the application of, regulation of tariff rates and operational requirements related to our joint ventures’ and subsidiaries’ interstate and intrastate pipelines, including the impact on the raw materials;
•political and economic conditions and events in the U.S. and in foreign oil, natural gas and NGL producing countries, including embargoes, political and regulatory changes implemented by the Trump Administration and foreign investments, continued hostilities in the Middle East, including the Israel-Hamas conflict, conflict with Iran and other sustained military
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campaigns, the armed conflict in Ukraine and associated economic sanctions on Russia, conditions in South America, including most recently in Venezuela, Central America and China and acts of terrorism or sabotage;
•the fact that we are not fully insured against all risks incident to our business;
•dangers inherent in the storage and transportation of motor fuel;
•our ability to manage growth and/or control costs;
•our ability to successfully identify and consummate strategic acquisitions at purchase prices that are accretive to our financial results and to successfully integrate acquired businesses;
•our reliance on senior management, supplier trade credit and information technology; and
•our partnership structure, which may create conflicts of interest between us and our General Partner and its affiliates, and limits the fiduciary duties of our General Partner and its affiliates.
All forward-looking statements, expressed or implied, are expressly qualified in their entirety by the foregoing cautionary statements.
Many of the foregoing risks and uncertainties are, and will be, heightened by any further worsening of the global business and economic environment. New factors that could impact forward-looking statements emerge from time to time, and it is not possible for us to predict all such factors. Should one or more of the risks or uncertainties described or referenced in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026 occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements.
You should not put undue reliance on any forward-looking statements. When considering forward-looking statements, please review the risks described or referenced under the heading “Part II - Item 1A. Risk Factors” herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026. The list of factors that could affect future performance and the accuracy of forward-looking statements is illustrative but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. The forward-looking statements included in this report are based on, and include, our estimates as of the filing of this report. We anticipate that subsequent events and market developments will cause our estimates to change. However, we specifically disclaim any obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q, except as required by law, even if new information becomes available in the future.
In addition to risks and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our structure as a limited partnership, our industry and our company could materially impact our future performance and results of operations.
Overview
As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, the terms “Partnership,” “we,” “us” or “our” should be understood to refer to Sunoco LP and its consolidated subsidiaries, unless the context clearly indicates otherwise.
We are a Delaware master limited partnership primarily engaged in energy infrastructure and distribution of motor fuels across 32 countries and territories in North America, the Greater Caribbean and Europe. 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.
Recent Developments
TanQuid Acquisition
On January 16, 2026, the Partnership completed the previously announced acquisition of TanQuid for €206 million ($239 million ) and assumed debt with a fair value of €298 million ($346 million as of January 16, 2026). TanQuid owns and operates 15 fuel terminals in Germany and one fuel terminal in Poland. The transaction was funded using cash on hand and amounts available under the Partnership's Credit Facility.
Other Acquisitions
In the first quarter of 2026, the Partnership completed other acquisitions for total cash consideration of approximately $50 million, plus working capital. These transactions were accounted for as asset acquisitions.
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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. Several jurisdictions in which Sunoco now operates have enacted legislation implementing the Organization for Economic Co-operation and Development (“OECD”) Pillar Two global minimum tax framework. These rules generally impose a 15% minimum top-up tax on the profits of large multinational enterprises. Sunoco estimates its Pillar Two global minimum tax expense to be immaterial in 2026 and has not accrued any current tax expense related to Pillar Two during the three months ended March 31, 2026.
On January 5, 2026, the OECD released new guidance that provides relief for U.S. parented multinationals and establishes a side-by-side framework for the U.S. tax system to coexist with Pillar Two global minimum tax. Effective for fiscal years beginning on or after January 1, 2026, U.S. parented multinationals would be exempt from the main charging provisions of Pillar Two. Sunoco will continue to estimate and potentially accrue Pillar Two global minimum tax until the relevant jurisdictions in which Sunoco operates enact the side-by-side framework into law.
Interstate Common Carrier Regulation
In December 2020, the FERC issued an order setting the indexed rate at PPI-FG plus 0.78% during the five-year period commencing July 1, 2021 and ending June 30, 2026. 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%. The FERC directed liquids pipelines to recompute their ceiling levels for July 1, 2021 through June 30, 2022, as well as the ceiling levels for the period July 1, 2022 through June 30, 2023, based on the new index level. Where an oil pipeline’s filed rates exceeded its ceiling levels, the 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, 2022 order with the FERC, which was denied by the FERC on May 6, 2022. Certain parties appealed the January 20 and May 6 orders. On July 26, 2024, the D.C. Circuit ruled in LEPA v. FERC that the FERC violated the Administrative Procedure Act because the January 20, 2022 order modified the index without following notice and comment. As a result, the D.C. Circuit vacated the January 20, 2022 order and on September 17, 2024, the FERC reinstated the index level established by its original December 17, 2020 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. On October 17, 2024, the FERC issued a Supplemental Notice of Proposed Rulemaking (“Supplemental NOPR”) that proposed a reduction to the then- effective index by one percent.
On November 20, 2025, the FERC withdrew the Supplemental NOPR and confirmed that the PPI-FG-0.78% index established in its December 17, 2020 order will remain in effect through June 30, 2026. On the same day, the FERC issued an Order Denying Rehearing of the Reinstatement Order and Granting Remedial Relief (“Remedial Relief Order”), which granted remedial relief to liquids pipelines for the period of March 1, 2022 to September 17, 2024 (the “Locked-In Period”), when the lower index was effective under the order vacated by the D.C. Circuit in LEPA v. FERC, but only if such pipelines charged the maximum rate allowed under the applicable index ceiling during the relevant time period. Parties have since filed requests for clarification or rehearing, as well as court appeals, to determine whether pipelines may recover rate differences in other scenarios. Those requests and appeals remain pending.
Also on November 20, 2025, the FERC issued a Notice of Proposed Rulemaking on the 2026 Five-Year Oil Pipeline Index (“2026 Index NOPR”), proposing to use the Producer Price Index for Finished Goods (PPI-FG) minus 1.42% as the index level beginning July 1, 2026 to June 30, 2031. The NOPR proceeded through the standard notice-and-comment process, with comments submitted in late 2025 and early 2026, and remains pending final Commission action.
On December 18, 2025, the FERC issued an Order Denying Petition for Emergency Relief (“Emergency Relief Order Denial”), which denied a petition requesting emergency relief from invoices issued by a liquid pipeline company to recover amounts of indexed rates for the Locked-In Period and explained that, consistent with the Remedial Relief Order, pipelines that charged the maximum rates permitted under the FERC’s now-vacated January 20, 2022 rehearing order during the Locked-In Period may invoice shippers to recover the amounts that would have been chargeable under the December 17, 2020 order.
In January 2026, multiple shippers have filed petitions for review at the D.C. Circuit challenging the FERC’s November 20, 2025 orders, including, the (i) Remedial Relief Order, (ii) Order Terminating Supplemental NOPR, and (iii) Emergency Relief Order Denial. These appeals are pending.
Separately, 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 Interstate Commerce Act (“ICA”) where the only shipper to obtain the committed service is an affiliate of the regulated entity. If adopted, the proposed policy statement would create a rebuttable presumption that affiliate contracts are unduly discriminatory and not just and reasonable in
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certain circumstances and require a pipeline to produce additional evidentiary support for affiliate contracts rates and terms. This follows a trend of increased scrutiny by the FERC on affiliated contracts across all industries regulated by the FERC. The FERC has taken no further action on the proposed policy statement.
Regulation of Intrastate Crude Oil and Products Pipelines
In addition to federally regulated body oversight, various states, including Colorado, Kansas, Louisiana, North Dakota and Texas, maintain commissions focused on the rates and practices of common carrier pipelines offering services within their borders. Although the applicable state statutes and regulations vary, they generally require that intrastate pipelines publish tariffs setting forth all rates, rules and regulations applying to intrastate service, and generally require that pipeline rates and practices be just, reasonable and nondiscriminatory.
Shippers may challenge tariff rates, rules and regulations on our pipelines. In most instances, state commissions have not initiated investigations of the rates or practices of pipelines in the absence of shipper complaints. There are no pending challenges or complaints regarding our tariffs or tariff rates.
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 Energy Policy Act of 1992 (“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. 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.
Regulation of Interstate Ammonia Pipelines
Our ammonia pipeline is subject to regulation by the Surface Transportation Board (the “STB”) pursuant to the ICA applicable to such pipelines (which differs from the ICA applicable to interstate liquids pipelines). Under that regulation, the ammonia pipeline’s rates, classifications, rules and practices related to the interstate transportation of anhydrous ammonia must be reasonable and, in providing interstate transportation, the ammonia pipeline may not subject a person, place, port or type of traffic to unreasonable discrimination. 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 Sunoco’s website, however, that tariff is not required to be on file with the STB. The STB does not prescribe an indexing approach similar to the EPAct of 1992 but rates under the STB must be reasonable and the pipeline may not subject a person, place, port or type of traffic to unreasonable discrimination.
Key Measure Used to Evaluate and Assess Our Business
Adjusted EBITDA, as used throughout this document, is defined as net income before net interest expense, income tax expense, depreciation, amortization and accretion expense, non-cash compensation expense, gains and losses on disposal of asset, non-cash impairment charges, losses on extinguishment of debt, unrealized gains and losses on commodity derivatives, inventory valuation adjustments, certain foreign currency transaction gains and losses and certain other operating expenses reflected in net income that we do not believe are indicative of ongoing core operations. Inventory valuation adjustments that are excluded from the calculation of Adjusted EBITDA represent changes in lower of cost or market reserves on the Partnership's inventory; these amounts are unrealized valuation adjustments applied to fuel volumes remaining in inventory at the end of the period.
Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP, read “Key Operating Metrics and Results of Operations” below.
We believe Adjusted EBITDA is useful to investors in evaluating our operating performance because:
•Adjusted EBITDA is used as a performance measure under our Credit Facility;
•securities analysts and other interested parties use Adjusted EBITDA as a measure of financial performance; and
•our management uses Adjusted EBITDA for internal planning purposes, including aspects of our consolidated operating budget and capital expenditures.
Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net income as a measure of operating performance. Adjusted EBITDA has limitations as an analytical tool, and one should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
•it does not reflect interest expense or the cash requirements necessary to service interest or principal payments on our Credit Facility or senior notes;
•although depreciation, amortization and accretion are non-cash charges, the assets being depreciated, amortized and accreted will often have to be replaced in the future, and Adjusted EBITDA does not reflect cash requirements for such replacements; and
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•as not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
Adjusted EBITDA reflects amounts for the unconsolidated affiliates based on the same recognition and measurement methods used to record equity in earnings of unconsolidated affiliates. Adjusted EBITDA related to unconsolidated affiliates excludes the same items with respect to the unconsolidated affiliates as those excluded from the calculation of Adjusted EBITDA, such as interest, taxes, depreciation, amortization, accretion and other non-cash items. Although these amounts are excluded from Adjusted EBITDA related to unconsolidated affiliates, such exclusion should not be understood to imply that we have control over the operations and resulting revenues and expenses of such affiliates. Sunoco does not control its unconsolidated affiliates; therefore, Sunoco does not control the earnings or cash flows of such affiliates. The use of Adjusted EBITDA or Adjusted EBITDA related to unconsolidated affiliates as an analytical tool should be limited accordingly.
Results of Operations
Consolidated Results
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Segment Adjusted EBITDA: | |||||||||||||||||
| Fuel Distribution | $ | 529 | $ | 220 | $ | 309 | |||||||||||
| Pipeline Systems | 179 | 172 | 7 | ||||||||||||||
| Terminals | 107 | 66 | 41 | ||||||||||||||
| Refinery | 43 | — | 43 | ||||||||||||||
| Adjusted EBITDA (consolidated) | $ | 858 | $ | 458 | $ | 400 | |||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Reconciliation of net income to Adjusted EBITDA: | |||||||||||||||||
| Net income | $ | 644 | $ | 207 | $ | 437 | |||||||||||
| Depreciation, amortization and accretion | 286 | 156 | 130 | ||||||||||||||
| Interest expense, net | 201 | 121 | 80 | ||||||||||||||
| Non-cash unit-based compensation expense | 6 | 4 | 2 | ||||||||||||||
| (Gain) loss on disposal of assets and impairment charges | (1) | 3 | (4) | ||||||||||||||
| Loss on extinguishment of debt | 1 | 2 | (1) | ||||||||||||||
| Unrealized (gains) losses on commodity derivatives | 56 | (1) | 57 | ||||||||||||||
| Inventory valuation adjustments | (444) | (61) | (383) | ||||||||||||||
| Equity in earnings of unconsolidated affiliates | (42) | (32) | (10) | ||||||||||||||
| Adjusted EBITDA related to unconsolidated affiliates | 69 | 50 | 19 | ||||||||||||||
| Other non-cash adjustments | 47 | 11 | 36 | ||||||||||||||
| Income tax expense (benefit) | 35 | (2) | 37 | ||||||||||||||
| Adjusted EBITDA (consolidated) | $ | 858 | $ | 458 | $ | 400 | |||||||||||
Net Income. For the three months ended March 31, 2026 compared to the same period last year, net income increased by $437 million, or approximately 211%, primarily due to higher Segment Adjusted EBITDA from multiple segments, with the most significant increases driven by the Parkland Acquisition and other acquisitions; these increases were partially offset by increases in depreciation, amortization and accretion and interest expense. These increases and decreases are discussed further below.
Adjusted EBITDA (consolidated). For the three months ended March 31, 2026 compared to the same period last year, Adjusted EBITDA increased primarily due to the Parkland Acquisition and other acquisitions.
Additional information on changes impacting net income and comprehensive income (loss) and Adjusted EBITDA for the three months ended March 31, 2026 compared to the same period last year is available below and in “Segment Operating Results.”
Depreciation, Amortization and Accretion. For the three months ended March 31, 2026 compared to the same period last year, depreciation, amortization and accretion increased primarily due to additional depreciation and amortization from assets recently placed in service and from recent acquisitions.
Interest Expense, net. For the three months ended March 31, 2026 compared to the same period last year, interest expense increased primarily due to an increase in average total long-term debt, including debt assumed in the Parkland Acquisition.
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Unrealized (Gains) Losses on Commodity Derivatives. The unrealized gains and losses on our commodity derivatives represent the changes in fair value of our commodity derivatives. The change in unrealized gains and losses between periods is impacted by the notional amounts and commodity price changes on our commodity derivatives. Additional information on commodity derivatives is included in “Item 3. Quantitative and Qualitative Disclosures about Market Risk” below.
Inventory Valuation Adjustments. Inventory valuation adjustments represent changes in lower of cost or market reserves using the LIFO method on the Partnership’s inventory. These amounts are unrealized valuation adjustments applied to fuel volumes remaining in inventory at the end of the period. For the three months ended March 31, 2026 and 2025, the Partnership's cost of sales included favorable LIFO inventory valuation adjustments of $444 million and $61 million, respectively, which increased net income.
Adjusted EBITDA Related to Unconsolidated Affiliates and Equity in Earnings of Unconsolidated Affiliates. See additional information in “Supplemental Information on Unconsolidated Affiliates” and “Segment Operating Results.”
Income Tax Expense (Benefit). For the three months ended March 31, 2026 compared to the same period last year, income tax expense increased primarily due to increased corporate earnings from recent acquisitions.
Supplemental Information on Unconsolidated Affiliates
The following table presents financial information related to unconsolidated affiliates:
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Equity in earnings of unconsolidated affiliates | |||||||||||||||||
| J.C. Nolan | $ | 2 | $ | 2 | $ | — | |||||||||||
| ET-S Permian | 37 | 30 | 7 | ||||||||||||||
| SARA | 1 | — | 1 | ||||||||||||||
| Isla | 3 | — | 3 | ||||||||||||||
| Other | (1) | — | (1) | ||||||||||||||
| Total equity in earnings of unconsolidated affiliates | $ | 42 | $ | 32 | $ | 10 | |||||||||||
Adjusted EBITDA related to unconsolidated affiliates(1): | |||||||||||||||||
| J.C. Nolan | $ | 3 | $ | 3 | $ | — | |||||||||||
| ET-S Permian | 53 | 47 | 6 | ||||||||||||||
| SARA | 5 | — | 5 | ||||||||||||||
| Isla | 6 | — | 6 | ||||||||||||||
| Other | 2 | — | 2 | ||||||||||||||
| Total Adjusted EBITDA related to unconsolidated affiliates | $ | 69 | $ | 50 | $ | 19 | |||||||||||
| Distributions received from unconsolidated affiliates: | |||||||||||||||||
| J.C. Nolan | $ | 3 | $ | 2 | $ | 1 | |||||||||||
| ET-S Permian | 56 | 116 | (60) | ||||||||||||||
| SARA | — | — | — | ||||||||||||||
| Isla | 2 | — | 2 | ||||||||||||||
| Other | — | — | — | ||||||||||||||
| Total distributions received from unconsolidated affiliates | $ | 61 | $ | 118 | $ | (57) | |||||||||||
(1)These amounts represent our proportionate share of the Adjusted EBITDA of our unconsolidated affiliates and are based on our equity in earnings or losses of our unconsolidated affiliates adjusted for our proportionate share of the unconsolidated affiliates’ interest, depreciation, amortization, accretion, non-cash items and taxes.
Segment Operating Results
We evaluate segment performance based on Segment Adjusted EBITDA, which we believe is an important performance measure of the core profitability of our operations. This measure represents the basis of our internal financial reporting and is one of the performance measures used by senior management in deciding how to allocate capital resources among business segments.
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The following tables identify the components of Segment Adjusted EBITDA, which is calculated as follows:
•Segment profit, operating expenses and selling, general and administrative expenses. These amounts represent the amounts included in our consolidated financial statements that are attributable to each segment.
•Adjusted EBITDA related to unconsolidated affiliates. Adjusted EBITDA related to unconsolidated affiliates excludes the same items with respect to the unconsolidated affiliates as those excluded from the calculation of Segment Adjusted EBITDA, such as interest, taxes, depreciation, amortization, accretion and other non-cash items. Although these amounts are excluded from Adjusted EBITDA related to unconsolidated affiliates, such exclusion should not be understood to imply that we have control over the operations and resulting revenues and expenses of such affiliates. We do not control our unconsolidated affiliates; therefore, we do not control the earnings or cash flows of such affiliates.
The following analysis of segment operating results includes a measure of segment profit. Segment profit is a non-GAAP financial measure and is presented herein to assist in the analysis of segment operating results and particularly to facilitate an understanding of the impacts that changes in sales revenues have on the segment performance measure of Segment Adjusted EBITDA. Segment profit is similar to the GAAP measure of gross profit, except that segment profit excludes charges for depreciation, amortization and accretion. The most directly comparable measure to segment profit is gross profit.
The following table presents a reconciliation of segment profit to gross profit:
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Fuel Distribution segment profit | $ | 1,236 | $ | 361 | $ | 875 | |||||||||||
| Pipeline Systems segment profit | 184 | 174 | 10 | ||||||||||||||
| Terminals segment profit | 225 | 118 | 107 | ||||||||||||||
| Refinery segment profit | 44 | — | 44 | ||||||||||||||
| Total segment profit | 1,689 | 653 | 1,036 | ||||||||||||||
| Depreciation, amortization and accretion, excluding corporate and other | 284 | 156 | 128 | ||||||||||||||
| Gross profit | $ | 1,405 | $ | 497 | $ | 908 | |||||||||||
In addition, for the Fuel Distribution segment, the following section includes information on the components of segment profit by sales type, which components are included in order to provide additional disaggregated information to facilitate the analysis of segment profit and Segment Adjusted EBITDA. These components of segment profit are calculated consistent with the calculation of segment profit; therefore, these components also exclude charges for depreciation, amortization and accretion.
Fuel Distribution
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Motor fuel gallons sold (millions) | 3,796 | 2,087 | 1,709 | ||||||||||||||
Motor fuel profit cents per gallon (1) | 17.0 | ¢ | 11.5 | ¢ | (11.3) | ¢ | |||||||||||
| Fuel profit | $ | 1,044 | $ | 297 | $ | 747 | |||||||||||
| Non-fuel profit | 153 | 35 | 118 | ||||||||||||||
| Lease profit | 39 | 29 | 10 | ||||||||||||||
| Fuel Distribution segment profit | $ | 1,236 | $ | 361 | $ | 875 | |||||||||||
| Unrealized (gains) losses on commodity risk management activities | 54 | (1) | 55 | ||||||||||||||
Expenses, excluding non-cash unit-based compensation expense (2) | (391) | (92) | (299) | ||||||||||||||
| Adjusted EBITDA related to unconsolidated affiliates | 8 | — | 8 | ||||||||||||||
| Inventory valuation adjustments | (398) | (58) | (340) | ||||||||||||||
| Other | 20 | 10 | 10 | ||||||||||||||
| Segment Adjusted EBITDA | $ | 529 | $ | 220 | $ | 309 | |||||||||||
(1) Excludes the impact of inventory valuation adjustments consistent with the definition of Adjusted EBITDA.
(2) Includes operating expenses, general and administrative and lease expense.
Volumes. For the three months ended March 31, 2026 compared to the same period last year, volumes increased primarily due to the Parkland Acquisition.
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Segment Adjusted EBITDA. For the three months ended March 31, 2026 compared to the same period last year, Segment Adjusted EBITDA related to our Fuel Distribution segment increased due to the net impact of the following:
•an increase of $590 million in segment profit (excluding unrealized gains and losses on commodity risk management activities and inventory valuation adjustments) primarily due to the Parkland Acquisition and other acquisitions, as well as a favorable impact from a one-time gain on sale of inventory in the current period; and
•an increase of $8 million in Adjusted EBITDA related to unconsolidated affiliates from the Parkland Acquisition; partially offset by
•an increase of $299 million in expenses primarily due to the Parkland Acquisition.
Pipeline Systems
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Pipelines throughput (thousand barrels per day) | 1,291 | 1,258 | 33 | ||||||||||||||
| Pipeline Systems segment profit | $ | 184 | $ | 174 | $ | 10 | |||||||||||
Expenses, excluding non-cash unit-based compensation expense (1) | (61) | (53) | (8) | ||||||||||||||
| Adjusted EBITDA related to unconsolidated affiliates | 56 | 50 | 6 | ||||||||||||||
| Other | — | 1 | (1) | ||||||||||||||
| Segment Adjusted EBITDA | $ | 179 | $ | 172 | $ | 7 | |||||||||||
(1) Includes operating expenses, general and administrative and lease expense.
Volumes. For the three months ended March 31, 2026 compared to the same period last year, the increase in throughput volumes reflected the impact of refinery turnarounds in the prior period and overall increased market demand in 2026.
Segment Adjusted EBITDA. For the three months ended March 31, 2026 compared to the same period last year, Segment Adjusted EBITDA related to our Pipeline Systems segment increased due to the net impact of the following:
•a $10 million increase in segment profit primarily due to refinery turnarounds and contract expirations in the prior period, improved butane blending, and overall increased market demand; and
•a $6 million increase in Adjusted EBITDA related to ET-S Permian; partially offset by
•an $8 million increase in expenses primarily due to higher utility costs, maintenance costs and corporate allocations.
Terminals
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Throughput (thousand barrels per day) | 1,013 | 620 | 393 | ||||||||||||||
| Terminals segment profit | $ | 225 | $ | 118 | $ | 107 | |||||||||||
Expenses, excluding non-cash unit-based compensation expense (1) | (74) | (49) | (25) | ||||||||||||||
| Inventory valuation adjustments | (44) | (3) | (41) | ||||||||||||||
| Segment Adjusted EBITDA | $ | 107 | $ | 66 | $ | 41 | |||||||||||
(1) Includes operating expenses, general and administrative and lease expense.
Volumes. For the three months ended March 31, 2026 compared to the same period last year, volumes increased due to recently acquired assets.
Segment Adjusted EBITDA. For the three months ended March 31, 2026 compared to the same period last year, Segment Adjusted EBITDA related to our Terminals segment increased due to the net impact of the following:
•a $66 million increase in segment profit (excluding inventory valuation adjustments) primarily due to the acquisitions of Parkland and TanQuid; partially offset by
•a $25 million increase in expenses primarily due to the acquisitions of Parkland and TanQuid.
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Refinery
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Crude utilization | 38 | % | — | 38 | % | ||||||||||||
| Composite utilization | 40 | % | — | 40 | % | ||||||||||||
| Crude throughput (thousand barrels per day) | 21 | — | 21 | ||||||||||||||
| Bio-feedstock throughput (thousand barrels per day) | 1 | — | 1 | ||||||||||||||
Refinery segment profit (1) | $ | 44 | $ | — | $ | 44 | |||||||||||
| Unrealized losses on commodity risk management activities | 2 | — | 2 | ||||||||||||||
Expenses, excluding non-cash unit-based compensation expense (2) | (6) | — | (6) | ||||||||||||||
| Adjusted EBITDA related to unconsolidated affiliates | 5 | — | 5 | ||||||||||||||
| Inventory valuation adjustments | (2) | — | (2) | ||||||||||||||
| Segment Adjusted EBITDA | $ | 43 | $ | — | $ | 43 | |||||||||||
(1) Refinery segment profit includes $61 million of production costs, supply and logistics, and terminal operating costs for the three months ended March 31, 2026.
(2) Includes operating expenses, general and administrative and lease expense.
Volumes. For the three months ended March 31, 2026 compared to the same period last year, volumes increased due to recently acquired assets.
Segment Adjusted EBITDA. For the three months ended March 31, 2026 compared to the same period last year, Segment Adjusted EBITDA related to our Refinery segment increased due to the Parkland Acquisition.
Liquidity and Capital Resources
Liquidity
Our principal liquidity requirements are to finance current operations, to fund capital expenditures, including acquisitions from time to time, to service our debt and to make distributions. We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our Credit Facility and the issuance of additional long-term debt or partnership units as appropriate given market conditions. We expect that these sources of funds will be adequate to provide for our short-term and long-term liquidity needs.
Our ability to meet our debt service obligations and other capital requirements, including capital expenditures and acquisitions, will depend on our future operating performance which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, depending on market conditions, we will from time to time consider opportunities to repay, redeem, repurchase or refinance our indebtedness. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may cause us to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions. In addition, any of the risks described or referenced under the heading “Part II - Item 1A. Risk Factors” herein, including the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 may also significantly impact our liquidity.
As of March 31, 2026, we had $718 million of cash and cash equivalents on hand and borrowing capacity of $2.22 billion on our Credit Facility. The Partnership was in compliance with all financial covenants at March 31, 2026. Based on our current estimates, we expect to utilize capacity under the Credit Facility, along with cash from operations, to fund our announced growth capital expenditures and working capital needs for 2026; however, we may issue debt or equity securities as we deem prudent to provide liquidity for new capital projects or other partnership purposes.
Cash Flows
Our cash flows may change in the future due to a number of factors, some of which we cannot control. These factors include regulatory changes, the price of products and services, the demand for such products and services, margin requirements resulting from significant changes in commodity prices, operational risks, the successful integration of our acquisitions and other factors.
Operating Activities
Changes in cash flows from operating activities between periods primarily result from changes in earnings, excluding the impacts of non-cash items and changes in operating assets and liabilities (net of effects of acquisitions and divestitures). Non-cash items include recurring non-cash expenses, such as depreciation, amortization and accretion expense and non-cash unit-based
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compensation expense. Cash flows from operating activities also differ from earnings as a result of non-cash charges that may not be recurring, such as impairment charges. Our daily working capital requirements fluctuate within each month, primarily in response to the timing of payments for motor fuels, motor fuels tax and rent.
Three months ended March 31, 2026 compared to three months ended March 31, 2025. Net cash provided by operating activities during 2026 was $454 million compared to $156 million for 2025, and net income was $644 million for 2026 and $207 million for 2025. The difference between net income and net cash provided by operating activities for the three months ended March 31, 2026 primarily consisted of net changes in operating assets and liabilities of $53 million and non-cash items totaling $178 million.
The non-cash activity in 2026 and 2025 consisted primarily of depreciation, amortization and accretion of $286 million and $156 million, respectively, non-cash unit-based compensation expense of $6 million and $4 million, respectively, favorable inventory valuation adjustments of $444 million and $61 million, respectively, loss on extinguishment of debt of $1 million and $2 million, respectively, gain on disposal of assets and impairment charges of $1 million and loss on disposal of assets and impairment charges of $3 million, respectively, amortization of deferred financing fees of $9 million and $3 million, respectively, and deferred income tax expense of $17 million and deferred income tax benefit of $7 million, respectively. Net income also included equity in earnings of unconsolidated affiliates of $42 million and $32 million in 2026 and 2025, respectively.
Cash provided by operating activities included cash distributions received from unconsolidated affiliates that were deemed to be paid from cumulative earnings, which distributions were $41 million in 2026 and $85 million in 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 the sale or disposal of assets. Changes in capital expenditures between periods primarily result from increases or decreases in our growth capital expenditures to fund our construction and expansion projects.
Three months ended March 31, 2026 compared to three months ended March 31, 2025. Net cash used in investing activities during 2026 was $430 million compared to $101 million in 2025. Capital expenditures for 2026 were $199 million compared to $101 million for 2025. In 2026, we paid $194 million for the acquisition of TanQuid and $50 million in cash for other acquisitions. In 2025, we paid $12 million in cash for other acquisitions. Proceeds from disposal of property, plant and equipment were $3 million for both periods.
In 2026 and in 2025, we paid $10 million and $24 million in cash contributions to unconsolidated affiliates, respectively. Distributions from unconsolidated affiliates in excess of cumulative earnings were $20 million and $33 million for 2026 and 2025, respectively.
Financing Activities
Changes in cash flows from financing activities between periods primarily result from changes in the levels of borrowings and equity issuances, which are primarily used to fund our acquisitions and growth capital expenditures. Distributions increase between the periods based on increases in the number of common units outstanding or increases in the distribution rate.
Three months ended March 31, 2026 compared to three months ended March 31, 2025. Net cash used in financing activities during 2026 was $197 million compared to net cash provided in financing activities of $23 million in 2025.
During the three months ended March 31, 2026, we:
•borrowed $1.20 billion and repaid $1.21 billion in senior notes;
•borrowed $1.18 billion and repaid $1.06 billion under the Credit Facility;
•paid $15 million in loan origination costs;
•paid $59 million in distributions to Series A Preferred unitholders;
•paid $48 million in distributions to Class D unitholders; and
•paid $189 million in distributions to our common unitholders, including incentive distributions.
During the three months ended March 31, 2025, we:
•borrowed $1.00 billion and repaid $603 million in senior notes;
•borrowed $1.09 billion and repaid $1.30 billion under the Credit Facility;
•paid $12 million in loan origination costs; and
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•paid $159 million in distributions to our common unitholders, including incentive distributions.
We intend to pay cash distributions 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 establishment of cash reserves and payment of fees and expenses, including payments to our General Partner and its affiliates. Class C unitholders receive distributions at a fixed rate equal to $0.8682 per quarter for each Class C Unit outstanding. There is no guarantee that we will pay a distribution on our units. On April 20, 2026, we declared a quarterly distribution of $0.9899 per common unit based on the results for the three months ended March 31, 2026, excluding distributions to Class C unitholders. The distribution will be approximately $136 million in the aggregate for common units, approximately $51 million with respect to Class D Units and approximately $71 million with respect to IDRs, and will be paid on May 20, 2026 to unitholders of record on May 8, 2026.
Capital Expenditures
For the three months ended March 31, 2026, total capital expenditures on an accrual basis were $199 million, which included $106 million for growth capital and $93 million for maintenance capital. This includes the Partnership's proportionate share of capital expenditures related to its investments in ET-S Permian and J.C. Nolan of $13 million for growth capital.
We currently expect to spend between $400 million and $450 million in maintenance capital expenditures and at least $600 million in growth capital for the full year 2026. These amounts include the Partnership's proportionate share for joint ventures.
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Description of Indebtedness
As of the dates set forth below, our outstanding consolidated indebtedness was as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Credit Facility | $ | 125 | $ | — | |||||||
6.000% Senior Notes due 2026 (1) | — | 500 | |||||||||
3.875% CAD senior notes due 2026 (2) | 395 | 400 | |||||||||
Parkland 3.875% CAD senior notes due 2026 (1) | — | 37 | |||||||||
TanQuid 2.340% EUR senior notes due 2026 (2) | 95 | — | |||||||||
6.000% senior notes due 2027 (1) | — | 600 | |||||||||
5.625% senior notes due 2027 | 550 | 550 | |||||||||
5.875% senior notes due 2027 | 499 | 499 | |||||||||
Parkland 5.875% senior notes due 2027 (1) | — | 1 | |||||||||
5.875% senior notes due 2028 | 400 | 400 | |||||||||
7.000% senior notes due 2028 | 500 | 500 | |||||||||
6.000% CAD senior notes due 2028 | 274 | 277 | |||||||||
Parkland 6.000% CAD senior notes due 2028 (1) | — | 14 | |||||||||
4.500% senior notes due 2029 | 800 | 800 | |||||||||
7.000% senior notes due 2029 | 750 | 750 | |||||||||
4.375% CAD senior notes due 2029 | 391 | 397 | |||||||||
Parkland 4.375% CAD senior notes due 2029 (1) | — | 40 | |||||||||
4.500% senior notes due 2029 | 790 | 790 | |||||||||
Parkland 4.500% senior notes due 2029 (1) | — | 10 | |||||||||
4.500% senior notes due 2030 | 800 | 800 | |||||||||
6.375% senior notes due 2030 | 600 | 600 | |||||||||
4.625% senior notes due 2030 | 798 | 798 | |||||||||
Parkland 4.625% senior notes due 2030 (1) | — | 2 | |||||||||
| TanQuid variable rate EUR senior notes due 2030 | 54 | — | |||||||||
5.625% senior notes due 2031 | 1,000 | 1,000 | |||||||||
5.375% senior notes due 2031 | 600 | — | |||||||||
7.250% senior notes due 2032 | 750 | 750 | |||||||||
6.625% senior notes due 2032 | 493 | 493 | |||||||||
Parkland 6.625% senior notes due 2032 (1) | — | 7 | |||||||||
6.250% senior notes due 2033 | 1,000 | 1,000 | |||||||||
5.875% senior notes due 2034 | 900 | 900 | |||||||||
5.625% senior notes due 2034 | 600 | — | |||||||||
| GoZone Bonds | 322 | 322 | |||||||||
| Lease-related financing obligations and other subsidiary debt | 539 | 233 | |||||||||
| Net unamortized premiums, discounts and fair value adjustments | (1) | 2 | |||||||||
| Deferred debt issuance costs | (92) | (83) | |||||||||
| Total debt | 13,932 | 13,389 | |||||||||
| Less: current maturities | 12 | 17 | |||||||||
| Total long-term debt, net | $ | 13,920 | $ | 13,372 | |||||||
(1) These senior notes were redeemed in March 2026. See additional information under “Recent Transactions.”
(2) As of March 31, 2026, $490 million aggregate principal amount of senior notes due before March 31, 2027 were classified as long-term as management has the intent and ability to refinance the borrowings on a long-term basis.
Recent Transactions
In March 2026, the Partnership issued $600 million aggregate principal amount of 5.375% senior notes due 2031 and $600 million aggregate principal amount of 5.625% senior notes due 2034. These notes will mature on July 15, 2031 and July 15, 2034, respectively, and interest is payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2026. The Partnership used a portion of the net proceeds from this private offering to redeem in full its $500 million aggregate principal amount of 6.000% senior notes due 2026 and its $600 million aggregate principal amount of 6.000% senior notes due 2027.
In March 2026, the Partnership redeemed Parkland's remaining senior notes.
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Credit Facility
As of March 31, 2026, we had $125 million outstanding borrowings on the Credit Facility, which matures on June 17, 2030, and $151 million standby letters of credit were outstanding. The unused availability on the Credit Facility as of March 31, 2026 was $2.22 billion. The weighted average interest rate on the total amount outstanding as of March 31, 2026 was 5.52%. The Partnership was in compliance with all financial covenants as of March 31, 2026.
Upon the closing of the NuStar Acquisition, the commitments under NuStar’s receivables financing agreement were reduced to zero during a suspension period, for which the period end has not been determined. As of March 31, 2026, this facility had no outstanding borrowings.
Guarantor Summarized Financial Information
The senior notes issued by NuStar Logistics are fully and unconditionally guaranteed by Sunoco LP, Sunoco Finance Corp. and certain of its subsidiaries; the senior notes issued by Sunoco LP and the senior notes co-issued by Sunoco LP and Sunoco Finance Corp. are fully and unconditionally guaranteed by NuStar, NuStar Logistics and certain other subsidiaries. Each guarantee of the senior notes (i) ranks equally in right of payment with all other existing and future unsecured senior indebtedness of that guarantor, (ii) is structurally subordinated to all existing and any future indebtedness and obligations of any subsidiaries of that guarantor that do not guarantee the notes and (iii) ranks senior to its guarantee of our subordinated indebtedness. See Note 9 of the Notes to Financial Statements in Item 1. “Financial Statements” for a discussion of certain of our debt obligations.
The following tables present summarized combined balance sheet and income statement information for Sunoco LP, Sunoco Finance Corp. and NuStar Logistics (the “Issuers”), as well as the subsidiaries that guarantee the senior notes issued by those three entities (collectively with the Issuers, the “Guarantor Issuer Group”). Intercompany items among the Guarantor Issuer Group have been eliminated in the summarized combined financial information below, as well as intercompany balances and activity for the Guarantor Issuer Group with non-guarantor subsidiaries, including the Guarantor Issuer Group’s investment balances in non-guarantor subsidiaries.
| Summarized Combined Balance Sheet Information for the Guarantor Issuer Group: | March 31, 2026 | December 31, 2025 | ||||||||||||
| Current assets | $ | 3,591 | $ | 2,544 | ||||||||||
| Non-current assets | 14,755 | 16,775 | ||||||||||||
Current liabilities(a) | 2,705 | 1,816 | ||||||||||||
| Non-current liabilities, including long-term debt | 14,464 | 14,200 | ||||||||||||
(a)Excludes $330 million and $418 million of net intercompany payables owed to the non-guarantor subsidiaries from the Guarantor Issuer Group as of March 31, 2026 and December 31, 2025, respectively.
Long-term assets for the non-guarantor subsidiaries totaled $8.66 billion and $6.07 billion as of March 31, 2026 and December 31, 2025, respectively.
| Summarized Combined Income Statement Information for the Guarantor Issuer Group: | Three Months Ended March 31, 2026 | |||||||
| Revenues | $ | 5,425 | ||||||
| Operating income | 740 | |||||||
| Net income | 559 | |||||||
Revenues and net income for the non-guarantor subsidiaries totaled $5.27 billion and $85 million, respectively, for the three months ended March 31, 2026.
Critical Accounting Estimates
The Partnership's critical accounting estimates are described in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026. No significant changes have occurred subsequent to the Form 10-K filing.
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Item 3. 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. As of March 31, 2026, we had $179 million of variable rate debt outstanding. A hypothetical change of 100 basis points would result in a maximum potential change to interest expense of approximately $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.
While we cannot predict or manage our ability to refinance existing debt or the impact interest rate movements will have on our existing debt, management evaluates our financial position on an ongoing basis. From time to time, we may enter into interest rate swaps to reduce the impact of changes in interest rates on our floating rate debt.
Commodity Price Risk
Our subsidiaries hold working inventories of refined petroleum products, renewable fuels, gasoline blendstocks and transmix in storage. As of March 31, 2026, we held approximately $1.89 billion of such inventory. While in storage, volatility in the market price of stored motor fuel could adversely impact the price at which we can later sell the motor fuel. However, we may use futures, forwards and other derivative instruments (collectively, “positions”) to hedge a variety of price risks relating to deviations in that inventory from a target base operating level established by management. Derivative instruments utilized consist primarily of exchange-traded futures contracts traded on the New York Mercantile Exchange, Chicago Mercantile Exchange and Intercontinental Exchange, as well as over-the-counter transactions (including swap agreements) entered into with established financial institutions and other credit-approved energy companies. While these derivative instruments represent economic hedges, they are not designated as hedges for accounting purposes. 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 derivative positions on 2.8 million barrels with an aggregate unrealized loss of $76 million at March 31, 2026, for which an assumed hypothetical 10% change in the underlying price of the commodity would result in an impact of approximately $24 million to pre-tax income, excluding any offsetting impact to the inventory that is economically hedged by these open positions.
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. 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. As of March 31, 2026, the Partnership did not have any outstanding foreign currency derivatives.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by paragraph (b) of Rule 13a-15 under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were effective at the reasonable assurance level for which they were designed in that the information required to be disclosed by the Partnership in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) or Rule 15d-15(f) of the Exchange Act) during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding legal proceedings, see our Annual Report on Form 10-K filed with the SEC on February 19, 2026 and Note 13 in “Item 1. Financial Statements” in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.
Sunoco, 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. 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. Sunoco intends to vigorously defend the subject claims.
Item 1A. Risk Factors
There have been no material changes from the risk factors described in “Part I — Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 19, 2026.
Item 6. Exhibits
| Exhibit No. | Description | |||||||
| 2.1 | Agreement and Plan of Merger, dated as of January 22, 2024, by and among Sunoco LP, Saturn Merger Sub, LLC, NuStar Energy L.P., Riverwalk Logistics, L.P., NuStar GP, LLC and Sunoco GP, LLC (incorporated by reference to Exhibit 2.1 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on January 22, 2024) | |||||||
| 2.2 | Contribution Agreement, by and among Sunoco LP, SUN Pipeline Holdings LLC, NuStar Permian Transportation and Storage LLC, NuStar Permian Crude Logistics LLC, NuStar Permian Holdings LLC, NuStar Logistics, L.P., ET-S Permian Holdings Company LP, ET-S Permian Pipeline Company LLC, ET-S Permian Marketing Company LLC, Energy Transfer LP, and Energy Transfer Crude Marketing, LLC, dated as of July 14, 2024 (incorporated by reference to Exhibit 2.1 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on July 18, 2024) | |||||||
| 2.3 | Arrangement Agreement, dated as of May 4, 2025, by and among Sunoco LP, NuStar GP Holdings, LLC, 2709716 Alberta Ltd. and Parkland Corporation (incorporated by reference to Exhibit 2.1 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on May 6, 2025) | |||||||
| 2.4 | First Amending Agreement to the Arrangement Agreement, dated as of May 26, 2025, by and among Sunoco LP, NuStar GP Holdings, LLC, 2709716 Alberta Ltd. and Parkland Corporation (incorporated by reference to Exhibit 2.1 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on May 29, 2025) | |||||||
| 2.5 | Second Amending Agreement, dated as of October 10, 2025, by and among Sunoco LP, 2709716 Alberta ULC, SunocoCorp LLC, and Parkland Corporation (incorporated by reference to Exhibit 2.3 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on November 3, 2025) | |||||||
| 3.1 | Second Amended and Restated Certificate of Limited Partnership of Sunoco LP, dated as of May 8, 2018 (incorporated by reference to Exhibit 3.1 of the quarterly report on Form 10-Q (File Number 001-35653) filed by the registrant on May 10, 2018) | |||||||
| 3.2 | Third Amended and Restated Agreement of Limited Partnership of Sunoco LP, dated September 18, 2025 (incorporated by reference to Exhibit 3.1 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on September 18, 2025) | |||||||
| 3.3 | Amendment No. 1 to the Third Amended and Restated Agreement of Limited Partnership of Sunoco LP, dated as of October 31, 2025 (incorporated by reference to Exhibit 3.1 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on November 3, 2025) | |||||||
| 3.4 | Certificate of Formation of Susser Petroleum Partners GP LLC, dated as of June 11, 2012 (incorporated by reference to Exhibit 3.4 of the registration statement on Form S-1 (File Number 333-182276), as amended, originally filed by the registrant on June 22, 2012) | |||||||
| 3.5 | Certificate of Amendment to the Certificate of Formation of Susser Petroleum Partners GP LLC (incorporated by reference to Exhibit 3.3 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on October 28, 2014) | |||||||
| 3.6 | Second Amended and Restated Limited Liability Company Agreement of Sunoco GP LLC, dated as of October 28, 2025 (incorporated by reference to Exhibit 3.2 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on November 3, 2025) | |||||||
| 4.1 | Indenture, dated as of March 9, 2026, by and among Sunoco LP, the Guarantors party thereto and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K (File Number 001-35653) filed by the registrant on March 9, 2026) | |||||||
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| Exhibit No. | Description | |||||||
| 22.1 * | List of Guarantor and Issuer Subsidiaries | |||||||
| 31.1 * | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act | |||||||
| 31.2 * | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act | |||||||
| 32.1 ** | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act | |||||||
| 32.2 ** | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act | |||||||
| 101 * | The following financial information from the Partnership’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
| * | Filed herewith | |||||||
| ** | Furnished herewith | |||||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| SUNOCO LP | ||||||||
| By | Sunoco GP LLC, its general partner | |||||||
| Date: May 7, 2026 | By | /s/ Rick Raymer | ||||||
| Rick Raymer | ||||||||
| Vice President, Controller and Principal Accounting Officer | ||||||||
| (In his capacity as principal accounting officer) | ||||||||
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FAQ
How did Sunoco (SUN) perform financially in Q1 2026?
Sunoco’s Q1 2026 net income was $644 million, up from $207 million a year earlier. Revenue grew to $10.69 billion from $5.18 billion. Consolidated Adjusted EBITDA rose to $858 million, reflecting acquisitions and stronger segment contributions.
What drove Sunoco’s increase in Adjusted EBITDA in Q1 2026?
Adjusted EBITDA increased to $858 million from $458 million, mainly from the Parkland and TanQuid acquisitions and stronger Fuel Distribution results. All segments contributed, with Fuel Distribution Adjusted EBITDA rising to $529 million and Terminals and Refinery adding meaningful incremental earnings.
How much debt and liquidity does Sunoco (SUN) have as of March 31, 2026?
As of March 31, 2026, Sunoco reported $13.92 billion in long-term debt, net, and total debt of $13.93 billion. Liquidity included $718 million of cash and cash equivalents and $2.22 billion of unused borrowing capacity under its $2.50 billion credit facility.
What recent acquisitions affected Sunoco’s Q1 2026 results?
Sunoco completed the TanQuid acquisition on January 16, 2026 for about €206 million ($239 million) and assumed €298 million ($346 million) of debt. It also closed other acquisitions totaling roughly $50 million in cash, enhancing terminal and fuel distribution assets.
How did inventory accounting impact Sunoco’s Q1 2026 earnings?
Sunoco’s Q1 2026 cost of sales reflected favorable LIFO inventory valuation adjustments of $444 million, versus $61 million in 2025. A LIFO liquidation increased pre-tax income by $102 million, or $0.54 per common unit, highlighting a significant non-recurring accounting tailwind.
What distributions did Sunoco (SUN) declare for common and preferred units?
For Q1 2026, Sunoco declared a quarterly cash distribution of $0.9899 per common unit and equal Class D distribution, totaling about $136 million on common units and $51 million on Class D. Series A preferred unitholders received $39.38 per unit on March 18, 2026.
What were Sunoco’s key segment results in Q1 2026?
Fuel Distribution delivered Segment Adjusted EBITDA of $529 million, Pipeline Systems $179 million, Terminals $107 million, and Refinery $43 million. Fuel volumes reached 3,796 million gallons, and terminal throughput was 1,013 thousand barrels per day.