Energy Transfer LP

RESULTS OF OPERATIONS

We report Segment Adjusted EBITDA and consolidated Adjusted EBITDA as measures of segment performance. We define Segment Adjusted EBITDA and consolidated Adjusted EBITDA as total partnership earnings before interest, taxes, depreciation, depletion, amortization and other non-cash items, such as non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, inventory valuation adjustments, non-cash impairment charges, losses on extinguishments of debt and other non-operating income or expense items, as well as certain non-recurring gains and losses. Inventory valuation adjustments that are excluded from the calculation of Adjusted EBITDA represent only the changes in lower of cost or market reserves on inventory that is carried at LIFO. These amounts are unrealized valuation adjustments applied to Sunoco LP’s fuel volumes remaining in inventory at the end of the period.

Segment Adjusted EBITDA and consolidated Adjusted EBITDA reflect amounts for 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 affiliate as those excluded from the calculation of Segment Adjusted EBITDA and consolidated Adjusted EBITDA, such as interest, taxes, depreciation, depletion, amortization 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 use of Segment Adjusted EBITDA or Adjusted EBITDA related to unconsolidated affiliates as an analytical tool should be limited accordingly.

Segment Adjusted EBITDA, as reported for each segment in the following table, is analyzed for each segment in the section titled “Segment Operating Results.” Adjusted EBITDA is a non-GAAP measure used by industry analysts, investors, lenders and rating agencies to assess the financial performance and the operating results of the Partnership’s fundamental business activities and should not be considered in isolation or as a substitution for net income, income from operations, cash flows from operating activities or other GAAP measures.

Consolidated Results

Net Income. For the three months ended March 31, 2025 compared to the same period last year, net income increased by $28 million, or approximately 2%, primarily due to higher segment margin from multiple segments. The most significant increases were in our midstream segment, where segment margin was favorably impacted by recently acquired assets and the non-recurring recognition of $160 million associated with Winter Storm Uri in 2021, which represents the remainder of midstream segment margin from Winter Storm Uri that had not already been recognized. In our intrastate transportation and storage segment, a total of approximately $285 million of previously invoiced amounts that are currently disputed by customers remain unrecognized, of which approximately $263 million is due from CPS Energy. The increase in net income also reflected an increase from our investment in Sunoco LP segment, where results were also favorably impacted by recent acquisitions and strategic transactions. The increase in segment margin was partially offset by increases in operating expenses, selling, general and administrative expenses, depreciation, depletion and amortization and interest expense. These changes are discussed in more detail below and in “Segment Operating Results.”

Adjusted EBITDA (consolidated). For the three months ended March 31, 2025 compared to the same period last year, Adjusted EBITDA increased by $218 million, or approximately 6%, primarily due to higher segment margin in our midstream segment and our investment in Sunoco LP segment, as discussed above.

Additional discussion on the changes impacting net income and Adjusted EBITDA is available below and in “Segment Operating Results.”

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization increased for the three months ended March 31, 2025 compared to the same period last year primarily due to additional depreciation and amortization from assets recently placed in service and recent acquisitions.

Interest Expense, Net of Interest Capitalized. Interest expense, net of interest capitalized, increased for the three months ended March 31, 2025 compared to the same period last year primarily due to an increase in aggregate debt balances following the acquisitions of NuStar and WTG Midstream Holdings LLC and the refinancing of certain preferred units with long-term debt.

Income Tax Expense. For the three months ended March 31, 2025 compared to the same period last year, income tax expense decreased primarily due to a favorable state tax rate change in the current period.

Impairment Loss. For the three months ended March 31, 2025, the impairment loss was related to USAC’s evaluation of the future deployment of its idle fleet under current market conditions.

Gain on Interest Rate Derivative. For the three months ended March 31, 2024, the gain on interest rate derivative resulted from changes in forward interest rates, which caused USAC’s interest rate swap to change in value. This interest rate derivative was terminated by USAC in August 2024.

Unrealized Losses on Commodity Risk Management Activities. The unrealized losses on our commodity risk management activities include changes in fair value of commodity derivatives and the hedged inventory included in designated fair value hedging relationships. Information on the unrealized gain and loss within each segment is included in “Segment Operating Results,” and additional information on the commodity-related derivatives, including notional volumes, maturities and fair values, is available in “Item 3. Quantitative and Qualitative Disclosures About Market Risk” and in Note 12 to our consolidated financial statements included in “Item 1. Financial Statements.”

Inventory Valuation Adjustments. Inventory valuation adjustments represent changes in lower of cost or market reserves using the LIFO method on Sunoco LP’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, 2025 and 2024, the Partnership’s cost of products sold included Sunoco LP’s favorable inventory valuation adjustments of $61 million and $130 million, respectively, which increased net income.

Losses on Extinguishments of Debt. For the three months ended March 31, 2025, loss on extinguishment of debt was related to Sunoco LP's redemption of senior notes.

Adjusted EBITDA Related to Unconsolidated Affiliatesand Equity in Earnings of Unconsolidated Affiliates. See additional information in “Supplemental Information on Unconsolidated Affiliates” and “Segment Operating Results.”

Other, net. Other, net primarily includes the amortization of regulatory assets and other income and expense amounts.

Supplemental Information on Unconsolidated Affiliates

The following table presents financial information related to unconsolidated affiliates:

(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, depletion, amortization, 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.

The following tables identify the components of Segment Adjusted EBITDA, which is calculated as follows:

•Segment margin, operating expensesand selling, general and administrative expenses. These amounts represent the amounts included in our consolidated financial statements that are attributable to each segment.

•Unrealized gain or loss on commodity risk management activities and inventory valuation adjustments. These are the unrealized amounts that are included in cost of products sold to calculate segment margin. These amounts are not included in Segment Adjusted EBITDA; therefore, the unrealized loss is added back and the unrealized gain is subtracted to calculate the segment measure.

•Non-cash compensation expense. These amounts represent the total non-cash compensation recorded in operating expenses and selling, general and administrative expenses. This expense is not included in Segment Adjusted EBITDA and therefore is added back to calculate the segment measure.

•Adjusted EBITDA related to unconsolidated affiliates. Adjusted EBITDA related to unconsolidated affiliates excludes the same items with respect to the unconsolidated affiliate as those excluded from the calculation of Segment Adjusted EBITDA, such as interest, taxes, depreciation, depletion, amortization 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 margin. Segment margin 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 margin is similar to the GAAP measure of gross margin, except that segment margin excludes charges for depreciation, depletion and amortization. Among the GAAP measures reported by the Partnership, the most directly comparable measure to segment margin is Segment Adjusted EBITDA; a reconciliation of segment margin to Segment Adjusted EBITDA is included in the following tables for each segment where segment margin is presented.

In addition, for certain segments, the following sections include information on the components of segment margin by sales type, which components are included in order to provide additional disaggregated information to facilitate the analysis of segment margin and Segment Adjusted EBITDA. For example, these components include transportation margin, storage margin and other margin. These components of segment margin are calculated consistent with the calculation of segment margin; therefore, these components also exclude charges for depreciation, depletion and amortization.

Intrastate Transportation and Storage

Volumes. For the three months ended March 31, 2025 compared to the same period last year, transported volumes of gas on our Texas and Oklahoma intrastate pipelines increased primarily due to more third party transportation, partially offset by lower gas production from the Haynesville area. Transported volumes reported above exclude volumes attributable to purchases and sales of gas for our pipelines’ own accounts and the optimization of any unused capacity.

Segment Margin. The components of our intrastate transportation and storage segment margin were as follows:

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our intrastate transportation and storage segment decreased due to the net impact of the following:

•a decrease of $122 million in realized natural gas sales and other primarily due to lower pipeline optimization as a result of lower volatility in natural gas prices; and

•an increase of $4 million in operating expenses primarily due to increases in project costs, employee costs and ad valorem taxes; partially offset by

•an increase of $26 million in storage margin primarily due to higher storage optimization; and

•an increase of $8 million in retained fuel margin primarily due to higher gas prices.

Interstate Transportation and Storage

Volumes. For the three months ended March 31, 2025 compared to the same period last year, transported volumes increased primarily due to more capacity sold and higher utilization on our Panhandle, Trunkline and Gulf Run systems due to increased demand.

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our interstate transportation and storage segment increased due to the net impact of the following:

•an increase of $18 million in segment margin primarily due to a $9 million increase in operational gas sales resulting from higher prices, a $5 million increase in storage and parking revenue and a $4 million increase in transportation revenue from several of our interstate pipeline systems due to higher contracted volumes at higher rates;

•a decrease of $14 million in operating expenses primarily due to lower maintenance costs; and

•an increase of $1 million in Adjusted EBITDA related to unconsolidated affiliates primarily due to an increase from our Southeast Supply Header joint venture; partially offset by

•an increase of $4 million in selling, general and administrative expenses primarily due to an increase in employee costs.

Midstream

Volumes. For the three months ended March 31, 2025 compared to the same period last year, gathered volumes increased primarily due to newly acquired assets and higher volumes in the Permian region, partially offset by declines in other regions. NGL production increased primarily due to recently acquired assets and increased Permian plant utilization.

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our midstream segment increased due to the net impact of the following:

•an increase of $153 million in segment margin primarily due to recently acquired assets and higher volumes in the Permian region;

•an increase of $160 million in segment margin due to the non-recurring recognition of certain amounts associated with Winter Storm Uri in 2021, which represents the remainder of midstream segment margin from Winter Storm Uri that had not already been recognized; and

•an increase of $28 million in segment margin due to higher natural gas prices of $35 million offset by lower NGL prices of $7 million; partially offset by

•an increase of $98 million in operating expenses primarily due to recent acquisitions and assets placed in service; and

•an increase of $12 million in selling, general and administrative expenses due to higher corporate allocations, as well as the impact of a $5 million decrease in workers’ compensation reserve in the prior period.

NGL and Refined Products Transportation and Services

Volumes. For the three months ended March 31, 2025 compared to the same period last year, NGL transportation volumes increased primarily due to higher volumes from the Permian region and on our Mariner East pipeline system. The increase in transportation volumes also led to higher fractionated volumes at our Mont Belvieu NGL Complex.

Segment Margin. The components of our NGL and refined products transportation and services segment margin were as follows:

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our NGL and refined products transportation and services segment decreased due to the net impact of the following:

•an increase of $19 million in operating expenses primarily due to a $10 million increase in gas and power utility costs and a $6 million increase in employee costs;

•a decrease of $15 million in fractionators and refinery services margin primarily due to lower gains from blending activities; and

•an increase of $6 million in selling, general and administrative expenses primarily due to increased costs from recently acquired assets; partially offset by

•an increase of $24 million in terminal services margin primarily due to a $22 million increase in fees from loading NGL volumes for export at our Nederland and Marcus Hook terminals and a $2 million increase from higher throughput and storage at our refined product terminals; and

•an increase of $2 million in storage margin primarily due to the timing of deficiency payments.

Crude Oil Transportation and Services

Volumes. For the three months ended March 31, 2025 compared to the same period last year, crude oil transportation volumes were higher due to continued growth on our gathering systems and from assets contributed upon the recent formation of the ET-S Permian joint venture with Sunoco LP, partially offset by lower volumes on our Bakken Pipeline.

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our crude oil transportation and services segment decreased due to the net impact of the following:

•a decrease of $69 million in segment margin (excluding unrealized losses on commodity risk management activities) due to decreased transportation and the timing of optimization losses realized during the quarter which we expect to partially reverse in future periods, partially offset by increases from assets contributed upon the formation of ET-S Permian;

•an increase of $25 million in operating expenses primarily due to a $9 million increase from assets contributed upon the formation of ET-S Permian, a $7 million increase in volume-driven expenses, and a $5 million increase in employee expenses;

•an increase of $8 million in selling, general and administrative expenses primarily due to costs associated with ET-S Permian; and

•a decrease of $3 million in Adjusted EBITDA related to unconsolidated affiliates due to lower volumes and lower re-contracted rates.

Investment in Sunoco LP

The investment in Sunoco LP segment reflects the consolidated results of Sunoco LP.

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our investment in Sunoco LP segment increased due to the net impact of the following:

•an increase of $224 million in segment margin (excluding unrealized gains and losses on commodity risk management activities and inventory valuation adjustments) primarily due to the acquisitions of NuStar and Zenith European terminals; and

•an increase of $47 million in Adjusted EBITDA related to unconsolidated affiliates due to the formation of ET-S Permian; partially offset by

•an increase of $53 million in operating expenses and $4 million in selling, general and administrative expenses primarily due to the acquisitions of NuStar and Zenith European terminals.

Investment in USAC

The investment in USAC segment reflects the consolidated results of USAC.

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our investment in USAC segment increased due to the net impact of the following:

•an increase of $14 million in segment margin primarily due to higher market-based rates on newly deployed and redeployed compression units and higher average rates on existing customer contracts, and higher revenue-generating horsepower as a result of increased demand for compression services; partially offset by

•an increase of $4 million in operating expenses primarily due to an increase in employee costs associated with increased revenue-generating horsepower.

All Other

Amounts reflected in our all other segment primarily include:

•our natural gas marketing operations;

•our wholly owned natural gas compression operations; and

•our natural resources business.

Segment Adjusted EBITDA. For the three months ended March 31, 2025 compared to the same period last year, Segment Adjusted EBITDA related to our all other segment decreased due to the net impact of the following:

•a decrease of $47 million due to intersegment eliminations of Sunoco LP’s 32.5% share of ET-S Permian, which is consolidated in our crude oil transportation and services segment and also reflected as an unconsolidated affiliate in our investment in Sunoco LP segment; and

•a decrease of $13 million in our natural gas marketing business due to the timing of gains on stored natural gas in the prior period; partially offset by

•an increase of $3 million in rental income on recently acquired real estate.