Sunoco LP Q4 2025 Earnings Call - Parkland acquisition fuels record EBITDA and commits to 5%+ distribution growth

Conference Operator: Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Scott Grischow, Senior Vice President of Finance. Please go ahead.

Scott Grischow, Senior Vice President of Finance, Sunoco LP: Thank you, and good morning, everyone. On the call with me this morning are Joe Kim, President and Chief Executive Officer, Karl Fails, Chief Operating Officer, Austin Harkness, Chief Commercial Officer, Brian Hand, Chief Sales Officer, and Dylan Bramhall, Chief Financial Officer. Today’s call will contain forward-looking statements that include expectations and assumptions regarding Sunoco LP’s future operations and financial performance. Actual results could differ materially, and we undertake no obligation to update these statements based on subsequent events. Please refer to our earnings release as well as our filings with the SEC for a list of these factors. During today’s call, we will also discuss certain non-GAAP financial measures, including adjusted EBITDA and distributable cash flow as adjusted. Please refer to the Sunoco LP website for a reconciliation of each financial measure.

Before reviewing our fourth quarter and full year 2025 financial results, I’d like to take a moment to briefly discuss some changes to our financial reporting format, which is included in today’s earnings release. First, we have incorporated Parkland’s legacy operations into our three segments and have also added a fourth reporting segment for our newly added refining operations. Second, today’s and future earnings releases will include select financial information for SunocoCorp LLC, which we will refer to by its New York Stock Exchange ticker symbol of SUNC. As a reminder, SUNC’s only asset is its limited partner interest in Sunoco LP. Because of its limited partner interest in Sun, SUNC consolidates Sunoco LP into its financial statements. Accordingly, on today’s call and future calls, we do not intend to cover SUNC’s results.

Instead, we have included a schedule in our earnings release that reconciles SUNC’s distribution from Sun with SUNC’s distributable cash flow, as well as a summarized consolidating balance sheet. SUNC began trading shortly after we closed the Parkland transaction and will be an attractive option to invest in Sunoco, especially for investors outside of the United States, institutional investors, and in personal retirement accounts. We expect minimal corporate income taxes at SUNC for at least five years, which will allow for the SUNC distribution to remain very similar to the Sunoco LP distribution for this period of time. Moving to this quarter’s results, the fourth quarter marked the end of a transformative and record-setting year for Sunoco. We closed the Parkland transaction on October 31st, and our team is now fully engaged in integration efforts that are progressing well.

The partnership delivered record adjusted EBITDA of $706 million in the fourth quarter, excluding approximately $60 million of one-time transaction expenses. Karl will discuss the segment performance in his remarks. However, this consolidated result reflects the ongoing strength of our operations and the contribution from the Parkland acquisition. During the quarter, we spent $130 million on growth capital and $103 million on maintenance capital. Fourth quarter distributable cash flow, as adjusted, was $442 million. On January twenty-seventh, we declared a distribution of $0.9317 per common unit for both Sunoco LP common units and SunocoCorp shares. This represents a 1.25% increase over the prior quarter and marks our fifth consecutive quarterly distribution increase.

Our trailing twelve-month coverage ratio finished the year at a strong 1.9x. We continue to see a multi-year path for an annual distribution growth rate of at least 5%. Looking at the full year 2025, Adjusted EBITDA, excluding transaction-related expenses, came in at a record $2.12 billion, a 36% increase over the prior year. This record year reflected solid underlying growth in our base business, a full year of contribution from our new acquisition, and approximately two months from Parkland. Our balance sheet and liquidity position remained strong. We had $2.5 billion in availability under our revolving credit facility at the end of the year, and leverage at the end of the quarter was approximately 4x, in line with our long-term target.

In summary, our financial position continues to be stronger than at any time in Sunoco LP’s history, which we believe will provide us with continued flexibility to balance pursuing high return growth opportunities, maintaining a healthy balance sheet, and targeting a secure and growing distribution for our unitholders. With that, I will turn it over to Karl to walk through some additional thoughts on our fourth quarter performance.

Karl Fails, Chief Operating Officer, Sunoco LP: Thanks, Scott. Good morning, everyone. Our results this quarter cap another record year for Sunoco as we meaningfully expanded our operations and significantly grew our cash flows. With the addition of the Parkland and TanQuid assets, we now operate a diversified footprint spanning 32 countries and territories and have become the largest independent fuel distributor in the Americas. Each of our segments delivered strong performance in 2025 and are well-positioned to contribute meaningfully toward achieving our 2026 guidance. Let me share some more perspective on our fourth quarter results by segment, as well as some thoughts on our 2026 guidance we released last month. Starting with our fuel distribution segment, adjusted EBITDA was $391 million, excluding $59 million of transaction expenses.

This compares to $238 million last quarter and $192 million in the fourth quarter of 2024, both excluding transaction expenses. This growth reflects continued strength in our legacy Sunoco operations, coupled with two months of contribution from Parkland.... We distributed 3.3 billion gallons, up 44% versus last quarter and up 54% versus the fourth quarter of last year. We continued to see volume growth in our legacy Sunoco business, with an increase of more than 2% over prior year, compared to a relatively flat U.S. demand profile. This growth is a result of effectively deployed capital via our growth capital plan and roll-up M&A transactions. We have begun the work to optimize our volumes in Canada and the Caribbean as we implement our gross profit optimization approach that we’ve evolved over the years.

Reported margin for the quarter was $0.177 per gallon, compared to $0.107 per gallon last quarter, and $0.106 per gallon for the fourth quarter of 2024. The much higher margin is a result of the addition of the legacy Parkland business to our portfolio that consists of higher-margin geographies and channels. We have also begun the process of evaluating the channels of operation in each geography to ensure the business is matched with the appropriate channel to optimize return on capital. When we step back and look at our fuel distribution business, we have a proven track record of delivering results in the U.S., and the Parkland assets easily fit into our business strategy there. The Caribbean business is proving to be just as good as we thought.

Stable income with the opportunity for growth, especially when it couples with our scale in supplying our East Coast business from the water. In Canada, as we dig into the operation, the business is even better than we expected, with higher stability and higher margins than our U.S. business, which we have proven is very stable. When you put the pieces together, the business is strong, and we are confident that we will continue to grow both fuel profit and EBITDA in this segment going forward. That confidence comes from a foundation of strong underlying businesses with good industry fundamentals. Higher break-even margins and market volatility continue to support our fuel profit. Adding on our proven Gross Profit Optimization approach, quick and thoughtful channel management evaluations, and our capital deployment strategy only increases our optimism.

The final layer comes from the greater scale, enhanced geographic diversity, and improved supply optionality, delivering synergies and enabling continued Adjusted EBITDA growth. We are very excited about the future of our fuel distribution business. In our pipeline system segment, Adjusted EBITDA for the fourth quarter was $187 million, compared to $182 million in the third quarter, and $193 million in the fourth quarter of 2024, excluding transaction expenses. On the volume side, we reported 1.4 million barrels per day of throughput, up from the third quarter and consistent with fourth quarter of last year. Like last year, the fourth quarter was our strongest quarter of the year, with seasonal strength in our agricultural-supported markets, as well as good performance across the rest of the system. Moving on to our terminal segment.

Adjusted EBITDA for the fourth quarter was $87 million. This compares to $76 million in the third quarter and $61 million in the fourth quarter of 2024, all excluding the impact of transaction expenses. We reported around 715,000 barrels per day of throughput, which is up from both last quarter and the fourth quarter of last year. Earnings and volumes in this segment were boosted by the inclusion of terminals income from our Parkland acquisition. This segment continues to deliver stable results, and we’re looking forward to the positive addition of our recently closed TanQuid acquisition in the first quarter. Turning to our new refining segment. Adjusted EBITDA for the fourth quarter was $41 million, excluding $1 million of transaction expenses.

This reflects approximately two months of operations following the close of the Parkland transaction at the end of October. Refinery performance was much improved in 2025 compared to previous years, and we look forward to that trend continuing under our ownership. As we have stated before, the refinery is an important piece of the supply chain, supporting our market-leading fuel distribution business in Western Canada. Our goal is to stabilize and improve operations regardless of what the market crack provides in terms of earnings. Before I wrap up, let me talk a little bit more about 2026. In early January, we shared our full year guidance.

On the last call, we highlighted our confidence in the highly accretive value Parkland brings to our operations, and the guidance reflects this confidence with an Adjusted EBITDA range of $3.1 billion-$3.3 billion. Supporting that EBITDA guidance were a few assumptions. First, that we would close on our TanQuid acquisition in the first quarter, and we accomplished that in January. Second, we expect to realize $125 million of the total $250 million annual synergy target in 2026, and as Scott mentioned earlier, the integration is going well, and we are well on track to deliver on synergies. Third, the guidance includes the planned 50-day maintenance turnaround at the refinery that began in late January.

Turning to capital allocation, we expect maintenance capital to be in the $400 million-$450 million range, consistent with our much larger footprint and the refinery turnaround in the first quarter. Additionally, we continue to see very attractive opportunities to grow our business. This will come from a portfolio of at least $600 million of generally quick spend, quick return capital projects, as well as acquisitions, which we included an expected floor on for the first time. To summarize, 2025 was another record year for Sunoco, and we are well positioned for another record year in 2026.

Austin Harkness, Chief Commercial Officer, Sunoco LP: ...Our outlook is supported by disciplined expense management, a proven strategy of optimizing gross profit, and effectively and accretively deploying capital. We enter the year with strong momentum and confidence in our ability to deliver sustained value for our investors. I will now turn it over to Joe to share his final thoughts. Joe?

Joe Kim, President and Chief Executive Officer, Sunoco LP: Thanks, Karl. Good morning, everyone. We came into 2025 financially healthy, and we finished the year bigger and stronger than where we started. Within a very eventful year, there are a few highlights I want to point out. First, our legacy Sunoco business remains resilient. All segments performed well in 2025, and we delivered on our guidance. More importantly, we expect continued strong performance. All segments are off to a good start, and independently, 2026 would have been another record year for Sunoco legacy assets. Second, we expect the Parkland acquisition to be a home run. Karl and Scott have already discussed the material progress we’ve made on creating value for our stakeholders, but I think it’s worthwhile to take a step back and look at the bigger picture.

The Parkland acquisition will be another example of our ability to deliver on value-creating growth year after year. There is growth, and there’s value-creating growth. We delivered value-creating growth for our unitholders. Let me provide a couple of examples. First, our DCF for common unit continues to grow. Sunoco is the only AMZI constituent to grow DCF per common unit for each of the last eight years, and we expect this to continue. Second, our credit profile continues to improve. We are already ahead of schedule with our leverage back to 4x. Our balance sheet is in a very good position. I’ll finish with a final thought. We have earned a solid reputation as a defensive play within the midstream sector, given our ability to deliver strong results in volatile commodity environments, as well as macro challenges such as inflation and even pandemics.

I think it is well-deserved, and we remain well-positioned to differentiate ourselves within future challenges. But let’s also recognize that we’re an attractive growth play. The products that we move and distribute will continue to fuel the U.S. and other economies across the world for decades to come. We have positioned ourselves as a consolidator. With the addition of Parkland and TanQuid, we’re now a bigger company. In our case, bigger means more scale, more scale equates to more synergies, and more synergies mean continued value-creating growth. We have a strong track record of identifying and delivering on growth. Thus, we stated in our January guidance that we have at least $500 million of bolt-on acquisition opportunities each year for the foreseeable future. This is beyond our growth capital. Simply put, we are uniquely positioned as both a thoughtful defensive play as well as an attractive growth story.

As a result, we have never reduced our distribution, but instead, we have increased our distribution for the last three years. With Parkland and other investments, we’re in an even better position to continue distribution growth for both Sun and SunC unitholders. Expect a minimum of 5% annual growth in 2026, and continued growth over a multiyear period. Operator, that concludes our prepared remarks. You may open the line for questions.

Conference Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Theresa Chen from Barclays.

Theresa Chen, Analyst, Barclays: Good morning. Maybe beginning with the fundamentals of the fuel distribution business, how is demand trending across your footprint pro forma Parkland? And on the $0.177 per gallon metric, can you walk us through the drivers of the result this quarter here, and how much of that performance was driven by structural versus maybe more transient factors in your view? And from your perspective, is this CPG sustainable over the medium to long term? Or, or what would you consider as a good run rate or a normalized CPG? And to completely close this loop, is there a specific CPG level that underlies your $250 million synergy target as well?

Austin Harkness, Chief Commercial Officer, Sunoco LP: Yeah. Hey, Theresa, this is Austin. Yeah, let me maybe start in sort of reverse order, answering your question. So, you know, starting with CPG, you know, as you pointed out, as a result of the transaction, our margin profile has evolved higher. You know, whether to put stock in 17.7 as, and pegging that as the new waterline, I think, you know, is you know, probably it’s directionally accurate and in terms of direction and magnitude, but with precision, I think, you know, we’ve always said a couple of caveats. One, there’s gonna be quarter-to-quarter variability in our CPG numbers.

And then second, you know, as Karl shared in his prepared remarks, as a result of this acquisition, we’re gonna be breaking out and executing against our playbook on Gross Profit Optimization and channel management. And so for those reasons, there might be movement in both our volume and CPG numbers, independent of what the market might afford. You know, and in terms of, you know, do we have a specific number in mind? You know, historically, we haven’t... You know, we don’t target or solve for a CPG number. What we solve for, you know, as we’ve shared in the past, is fuel profit and sustained EBITDA growth, over time.

With that said, you know, in terms of drivers, it might make sense to walk through the different geographic regions in our kind of newly expanded portfolio now, and what’s driving that. Because essentially, what we found is, you know, Parkland had more street margin exposure in their portfolio than the legacy Sunoco business. And we’ve always said we’re very specific and selective in where we want that street margin exposure and the geographies that Parkland had exposure to, we really like. So starting with the U.S. business, I think the story is pretty familiar. You know, demand from an EIA standpoint has been flat to slightly off toward the end of the year on a year-over-year basis. Obviously, Sunoco outperformed those trends given our deployment of growth capital.

And then on the margin side, you know, we continue to see a bullish margin environment buoyed by elevated breakevens. And so, you know, if demand, you know, moves one way or the other relative to trend, if it exceeds trend, we’re well positioned to participate in that environment. If it underperforms trend, obviously, as we’ve seen in the past, you guys know that that creates a pretty bullish margin environment for us to operate in. So we feel really good about the U.S. business. And then turning to Canada, you know, as we shared in, and Joe and Karl shared in the prepared remarks, we’re really excited about the Canadian business, and the closer we get to it, the more we like it. And that’s for a couple of reasons.

If you think about demand, you know, from a trend standpoint, Canadian refined product demand tends to mirror that in the U.S. Albeit on a relative basis, it’s been stronger in recent years. So, you know, where the U.S. has been flat to slightly off on a year-over-year basis, Canada’s been flat to slightly up over the last couple of years. And the margin environment is actually very strong. So where we have street margin exposure in Canada, are markets that structurally look and feel very similar to the West Coast in the U.S. and the Northeast, where you have high barriers to entry, highly regulated markets, high real estate costs, high labor costs. And if you followed our story, you know that those things are highly correlated with strong margin environments. So we feel really good about the business.

Overall, the Canadian business is gonna be an outstanding addition to our portfolio. Then moving on to the Caribbean. Man, we continue to be really excited about the Caribbean. I think, you know, it’s important to remember that we talk about the Caribbean as if it’s this singular, monolithic region. The reality is, we deliver refined products to 25 different jurisdictions in the region, 22 of which we have onshore business in. And so each of those are gonna come with their own specific volume and demand, or volume and margin profiles. What I will say largely is, volume is very strong in the region.

A lot of that’s driven by markets where we have exposure, like in South America, where, for example, a country like Guyana, where we’re the major share player, has had 20+% GDP growth over the last three years. And Suriname is likely up next, given the offshore oil discoveries in both of those countries. But across the region, we’ve seen strong demand. And then on the margin side of things, you know, the markets kind of fall into one of two categories. What we’ve seen is there’s highly regulated pricing environments, which has actually had the result of stabilizing margins higher for all participants in those markets.

Then there’s the more kind of free market, open competition markets where our share, our global supply chain, and our scale allow us to enjoy and command a significant margin advantage over other participants in the market. So just to wrap it all up, I think overall, you know, I think we’ve proven over the years the consistency and resiliency of the fuel distribution segment and our ability to grow EBITDA year over year. Now with our addition of the Canadian business and the Caribbean business, we’re better positioned than ever in the segment to continue to grow EBITDA going forward.

Theresa Chen, Analyst, Barclays: Thank you for that detailed answer, Austin. Maybe turning to the infrastructure outlook, can you walk us through the pro forma terminaling portfolio post-integration of Parkland and TanQuid? And how do the assets now position you across the Atlantic and Pacific basins amid evolving product flows? And where do you see the most attractive growth opportunities from here within your portfolio?

Austin Harkness, Chief Commercial Officer, Sunoco LP: Yeah, Theresa, this is Karl. Yeah, we’ve got our, as you point out, across the geographies that Austin just talked about, in each one of those geographies, and then if you add Europe into the mix, we have critical infrastructure in each of those markets. And I think it varies by market, but our general approach and view is, in many of those markets, I’d say the Caribbean is probably the easiest one to think about, our infrastructure really supports and is foundational for our fuel distribution business. In other markets, take Europe, you know, we don’t have a fuel distribution business yet, but the assets that we’ve picked up are highly utilized and in very important infrastructure to in the supply chain of those markets.

And then we have other geographies, whether it’s in the West Coast or in the Northeast, where our terminal and pipeline network supports other people’s moving product around, as well as our own business. And so I think we have examples of each ends of that spectrum, and we’ve talked about the opportunity for this vertical integration between our fuel distribution business and our assets. But we’ve also talked about how all parties are welcome, and we have customers, because our overall approach is to fully utilize the assets that we have. So as we go forward, I think the same playbook is applicable. We think there’s more runway to go. I think there’s more opportunity, whether it’s through kind of quick-hitting capital projects that we’ve talked about or additional M&A opportunities to grow that footprint.

Theresa Chen, Analyst, Barclays: Thank you.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Jeremy Tonet from JP Morgan Securities LLC.

Eli, Analyst, JP Morgan Securities LLC: Hey, good morning. This is Eli, on for Jeremy. Just wanted to start on the outlook for bolt-on M&A, which I know you touched on in opening remarks. I’m not sure if this has historically been part of forward guidance, but if we think about the $500 million annual target with respect to your guide, should we think about sort of execution there as upside to the guide and the long-term outlook? I know you guys executed a roll-up earlier in the year, so just thinking about contributions from that and the overall strategy with respect to guidance. Thanks.

Joe Kim, President and Chief Executive Officer, Sunoco LP: Hey, Eli, this is Joe. I, like I said in my prepared remarks, I think we have a highly attractive long-term growth story. The foundation of that is we’re in a very good financial position. We’ve invested wisely, and our free cash flow continues to grow, so we have more dollars to spend on growth on a going-forward basis. And as Carl and Austin talked about, the Parkland acquisition and with our entry into Europe, we’ve greatly expanded our scale and our geography. So, you know, not too long ago, we were basically a U.S.-only business. Now, we have investment opportunities in U.S., Canada, Greater Caribbean, and Europe. The U.S. is gonna still remain our foundation. Like, for example, last year, we did over 10 small bolt-on acquisitions in the U.S. alone.

And we could have probably done a lot more, but we kinda slowed down because we had the Parkland acquisition we’re closing on. So the runway of doing these, you know, we gave the guidance of $500 million. We could probably do that alone in the U.S. Then you add on Canada, Greater Caribbean, and you add on Europe, you can see why we think that, that providing guidance of doing at least $500 million, we think is a floor and is very reasonable for us for next year and for multiple years to come. On the valuation standpoint, you know, the landscape hasn’t changed that much for us.

We think the valuations are still highly attractive, and the reason why we believe that, because we’re one of the very few, maybe only company in this sector that can bring material synergies to the table. So valuation remains in the same ballpark, but as we get bigger and we have more scale, we remain efficient, being a low-cost provider, we get advantage economics. That’s why we felt very comfortable this year, providing a bolt-on guidance for our investors. As far as, you know, you mentioned a question about guidance. Here’s the way I think you should think about it. If we do more than, you know, materially more than $500 million in 2026, yeah, that gives us some upside for 2026. It depends on the timing of that.

But I think the way you should think about it is that, that’s the floor, and that’s a sustainable floor on a multi-year basis, which gives us kind of a year-after-year, growth in our story.

Eli, Analyst, JP Morgan Securities LLC: Awesome. Appreciate the color there. And then, you know, thinking about the impact of these bolt-ons, maybe with respect to the SUNC dividend and Sun distribution equivalents, you know, I know you extended that equivalence recently, but if we think about sort of these bolt-ons helping avoid any tax, tax leakage, you know, has the team considered extending that guidance? Again, I know you, you already extended it, but just, in the context of Sun and SUNC, the way they trade, you know, just thinking about the long-term kind of tax protection there. Thanks.

Scott Grischow, Senior Vice President of Finance, Sunoco LP: Yeah, Eli, this is Scott. You know, in our investment materials that we published last year, we talked about the fact that we expect minimal corporate income taxes for at least five years. A lot of that was predicated on our outlook for the business itself, and certainly continuing to invest in the business, either through acquisitions or growth capital, will help us manage that tax profile going forward. So as we sit here today, there’s really no change to that minimal corporate income taxes for at least five years, which again has given us confidence that the distribution between SUNC and Sunoco LP will continue for that period of time.

Joe Kim, President and Chief Executive Officer, Sunoco LP: Eli, let me add one other thing to that. I think one of your... where you’re going with the question is that we gave the five-year, at least five years, with, I would say, probably a modest assumption of growth. We believe we’re gonna grow materially, so any type of material growth on top of that will put us in an even better position on a going-forward basis.

Eli, Analyst, JP Morgan Securities LLC: Great. Thanks, guys.

Conference Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our next question comes from the line of Selman Akyol from Stifel.

Selman Akyol, Analyst, Stifel: Thank you. Good morning. So just a point of clarification real quick. On the $500 million in bolt-on acquisitions, would that all be U.S.-based, or would that be across your entire footprint now?

Joe Kim, President and Chief Executive Officer, Sunoco LP: No, Mr. It, it’ll be across the whole footprint. I guess the point I was trying to make earlier is that the U.S. is kind of the foundation, and on a U.S. alone, we may be able to do that just on U.S. alone, but the way we’re gonna look at it is best projects win. So now we get to choose between U.S., Caribbean, Europe, Canada. And then, so the best projects is the ones we’re gonna take, we’re gonna look at first, but in totality, it’s the whole kind of global perspective.

Selman Akyol, Analyst, Stifel: Got it. And then, last week, there was a rescission on the greenhouse gases endangerment finding. So rolling back sort of greenhouse gases is a threat to public health. Can you guys just talk about how that may be impacting you or what you think that might do?

Joe Kim, President and Chief Executive Officer, Sunoco LP: Yeah, it’s early stages, so more clarity is gonna come out in the future. But here’s some initial thoughts. In the short run, there’s no effect on Sun. Longer term, it is bullish for refined products, all other variables equal. Additionally, at any time there’s any legislation that creates potentially state-by-state specs and add complexity, that’s always gonna be good for Sun. We thrive in those environments whenever there’s complexity, and we have the team and scale to source from all different areas, so that’s gonna be bullish for us. On a personal level, and I think I speak for many people, the elimination of the annoying start, stop engine cutoff function, I think is gonna be a really good development.

Selman Akyol, Analyst, Stifel: Okay. And then last one for me, and you’ve kind of teased it up several times where you talk about distribution growth of at least 5%. And then, you know, listening to all your comments, things seem to be going exceedingly well. Your outlook seems to be very confident and very bright. So what does it actually take to see something on the plus side of 5%?

Joe Kim, President and Chief Executive Officer, Sunoco LP: Yeah, so, you know, here’s the most important takeaway. We have a multiyear growth in distribution. For this year, you know, we raised it 2% three years ago, 4%, 4% two years ago, and we raised a little bit over 5% last year. And this year, we stated at a minimum 5%. As far as an exact amount, we haven’t determined that yet, but then the takeaway is it’s gonna be on a multiyear basis. We’re in a really good position. You know, we’re... It’s not just distribution. We’re gonna take care of our balance sheet. We’re gonna remain a growth company.

You can tell from our results, and you can tell from the guidance, you can tell from the tone of this call, we think that we’re gonna continue to grow our business, and we’re gonna grow DCF per common unit. Our cash flows are gonna expand. We’re in a very good position from a capital allocation standpoint. We’re gonna have more dollars to deploy to all three areas. The exact allocation, that’s our job to optimize that, to make sure that we don’t just take care of the short run, but for the long run. Stay tuned, we’ll provide more clarity as to the exact allocation as the year goes on, but the takeaway should be the number is growing, so we’re gonna have more options to deploy that in all three areas.

Selman Akyol, Analyst, Stifel: All right. Thank you very much.

Conference Operator: Thank you. One moment for our next question. Our next question comes from the line of Elvira Scotto from RBC Capital Markets.

Elvira Scotto, Analyst, RBC Capital Markets: Hey, good morning. On M&A, I have a couple questions on M&A. I guess, first, where do you see the greatest opportunity? Is it terminal fuel distribution? And then my second question on M&A is: Is there a gating item on M&A? You talk about sort of a $500 million floor. You’ve become a much bigger, more diversified company. I mean, is there a ceiling or anything that would, you know, keep you from doing, you know, more substantial M&A?

Joe Kim, President and Chief Executive Officer, Sunoco LP: Hey, Elvira Scotto. As far as the greater opportunity, the answer is all of the above. We’re gonna grow our midstream business, we’re gonna grow our fuel distribution business, and we’re gonna grow in all the geographies that we’re in right now. So, that’s the position that we like being in, where we’re not, you know, so focused on a single geography or so focused on a single segment of our business. And the way we’re gonna do it is that we have growing growth capital. You know, some of the Parkland acquisitions that we acquired, for example, like in Guyana, Suriname, we’ve already have three terminal projects in the works in those markets. So we’re gonna get some natural growth from being in the right market with the right business.

From a decision between which one, I always go back to capital discipline and choosing the best projects, and we’ve got a wide range of opportunities, and we’ll pick the best projects. As far as your question about a gating item or a ceiling, probably a little bit of clarification on the guidance we gave. We said at least $500 million of bolt-on acquisition. That’s not saying that we think that’s a target acquisition number, and, you know, based on the fact that we’re already back to our 4x leverage within 3 or 4 months, 2 months. So we’re gonna take care of our balance sheet. If we were, you know... I think after the Parkland transaction, we said we’ll be back between 12 to 18 months.

Well, we got back a lot quicker, so now we’re in even a better position to grow on a going-forward basis. $500, as I thought, was a pretty low bar for us to at least give the street that these bolt-on acquisitions aren’t just sporadic, that we may pick up, you know, a few this year, maybe a few a couple of years from now. They’re ratable in the fact that US is a super highly fragmented market on the fuel distribution side, so we have ample opportunity. As far as Canada and the Greater Caribbean, it’s not as fragmented as the US, but there’s plenty of opportunities. And I keep emphasizing, scale matters in this business.

Whenever you’re the biggest player with the most efficiencies, regardless of what the market valuation is, we have an opportunity to take a turn or two or more down from that acquisition, so that becomes highly attractive to us. So I would give guidance to the street that we think that $500 million of bolt-on acquisitions. This doesn’t include growth capital, this doesn’t include bigger opportunistic acquisition. But as a baseline, I think you should view us as that we have a solid layer of organic growth capital, and we have a solid layer of bolt-on M&A.

Elvira Scotto, Analyst, RBC Capital Markets: ... Thank you. That’s very helpful. And then my next question is, now that you’ve closed on Parkland, you know, you’ve had it for a few months, how do you feel about your synergy target? And, you know, you have a very good track record of exceeding these targets on your acquisitions. So, you know, do you think there’s a possibility of exceeding your target here?

Karl Fails, Chief Operating Officer, Sunoco LP: Yeah, Elvira, this is Karl. Yeah, we’re very excited about Parkland. I think Austin gave a good rundown of the various geographies from a fuel distribution side, and I’d say from the other parts of the business that we picked up, I think we’re equally excited. Yeah, I think our past history would show if you were deciding to take the over or the under, I would take the over on us delivering on our synergies also. I think our main focus is delivering on the synergies quickly, and so for us to deliver in 2026, $125 million, clearly we’ll be ramping up through the year. Some of those activities already started in the fourth quarter.

And so we should exit the year well north of that $125 million on a run rate basis. But the other thing that’s super important is the base business, and so our view on how strong that base business is and the sustainability of that going forward is just as important. So it’s really the combination of those factors that gives us confidence in the 2026 guidance, and then going forward in 2027 and 2028. You know, Joe mentioned in his last answer, the two metrics that we look at in totality that are the most important. It’s really where our leverage sits, and are we, you know, delivering on our commitments on growing the DCF per LP unit? And we’re very confident in those for this year and beyond.

I guess the bottom line is, I think, NuStar was a home run acquisition, and Parkland’s gonna be another home run acquisition for us.

Elvira Scotto, Analyst, RBC Capital Markets: Great. Thank you very much.

Karl Fails, Chief Operating Officer, Sunoco LP: Thanks.

Conference Operator: Thank you. At this time, I would now like to turn the conference back over to Scott Grischow for closing remarks.

Karl Fails, Chief Operating Officer, Sunoco LP: Thanks for joining us on the call today. There are a lot of exciting things to look forward to in 2026 for Sunoco, and we look forward to updating you across the year. In the meantime, please feel free, feel free to reach out if you have any questions. Thanks for tuning in, and we appreciate your support.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.