Energy Transfer LP

Overview

Our ability to satisfy obligations and pay distributions to unitholders will depend on our future performance, which will be subject to prevailing economic, financial, business and weather conditions, and other factors, many of which are beyond management’s control.

We currently expect capital expenditures in 2025 to be approximately as follows (including capitalized interest and overhead and only our proportionate share for joint ventures, but excluding capital expenditures related to our investments in Sunoco LP and USAC):

The assets used in our natural gas and liquids operations, including pipelines, gathering systems and related facilities, are generally long-lived assets and do not require significant maintenance capital expenditures. Accordingly, we do not have any significant financial commitments for maintenance capital expenditures in our businesses. From time to time we experience increases in pipe costs due to a number of reasons, including but not limited to, delays from steel mills, limited selection of mills capable of producing large diameter pipe timely, higher steel prices, including as a result of the recent governmental action on tariffs, and other factors beyond our control. However, we have included these factors in our anticipated growth capital expenditures for each year.

We generally fund capital expenditures and distributions with cash flows from operating activities.

Sunoco LP currently expects to invest approximately $150 million in maintenance capital expenditures and at least $400 million in growth capital for the full year 2025.

USAC currently plans to invest between $38 million and $42 million in maintenance capital expenditures and between $120 million and $140 million in expansion capital expenditures for the full year 2025.

Cash Flows

Our cash flows may change in the future due to a number of factors, some of which we cannot control. These include regulatory changes, the price for our 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 (as discussed in “Results of Operations”), excluding the impacts of non-cash items and changes in operating assets and liabilities. Non-cash items include recurring non-cash expenses, such as depreciation, depletion and amortization expense and non-cash compensation expense. The increase in depreciation, depletion and amortization expense during the periods presented primarily resulted from construction and acquisition of assets, while changes in non-cash compensation expense resulted from changes in the number of units granted and changes in the grant date fair value estimated for such grants. 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 and allowance for equity funds used during construction. The allowance for equity funds used during construction increases in periods when we have a significant amount of interstate pipeline construction in progress. Changes in operating assets and liabilities between periods result from factors such as the changes in the value of price risk management assets and liabilities, the timing of accounts receivable collection, the timing of payments on accounts payable, the timing of purchase and sales of inventories and the timing of advances and deposits received from customers.

Three months ended March 31, 2025 compared to three months ended March 31, 2024. Cash provided by operating activities during 2025 was $2.92 billion compared to $3.77 billion for 2024, and net income was $1.72 billion for 2025 and $1.69 billion for 2024. The difference between net income and net cash provided by operating activities for the three months ended March 31, 2025 primarily consisted of net changes in operating assets and liabilities (net of effects of acquisitions) of $122 million and other items totaling $1.26 billion, which includes non-cash items and items related to investing and financing activities that are included in net income.

The non-cash activity in 2025 and 2024 consisted primarily of depreciation, depletion and amortization of $1.37 billion and $1.25 billion, respectively, deferred income tax benefit of $16 million and deferred income tax expense of $67 million, respectively, favorable inventory valuation adjustments of $61 million and $130 million, respectively, and non-cash compensation expense of $37 million and $46 million, respectively. For 2025 and 2024, net income also included equity in earnings of unconsolidated affiliates of $92 million and $98 million, respectively, and losses on extinguishments of debt of $2 million and $5 million, respectively, as well as an impairment loss of $4 million in 2025.

Cash provided by operating activities includes cash distributions received from unconsolidated affiliates that are deemed to be paid from cumulative earnings, which distributions were $77 million in 2025 and $84 million in 2024.

Cash paid for interest, net of interest capitalized, was $519 million and $444 million for the three months ended March 31, 2025 and 2024, respectively. Interest capitalized was $47 million and $23 million for the three months ended March 31, 2025 and 2024, respectively.

Investing Activities

Cash flows from investing activities primarily consist of cash amounts paid for acquisitions, capital expenditures, cash contributions to our joint ventures and cash proceeds from sales or contributions of assets or businesses. In addition, distributions from equity investees are included in cash flows from investing activities if the distributions are deemed to be a return of the Partnership’s investment. 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, 2025 compared to three months ended March 31, 2024. Cash used in investing activities was $1.20 billion for both 2025 and 2024. Total capital expenditures (excluding the allowance for equity funds used during construction and net of contributions in aid of construction costs) for 2025 were $1.21 billion compared to $770 million for 2024. Additional detail related to our capital expenditures is provided in the table below.

In 2025, Sunoco LP paid $12 million in cash for acquisitions of fuel equipment, motor fuel inventory and supply agreements. In 2024, Sunoco LP paid $185 million in cash for the acquisition of Zenith European terminals. In 2024, we also paid $84 million to acquire the outstanding noncontrolling interest in Edwards Lime Gathering, LLC, which is now a wholly owned subsidiary, and $180 million for other acquisitions.

In 2025 and 2024, we received cash distributions from unconsolidated affiliates in excess of cumulative earnings of $20 million and $23 million, respectively, and we paid cash contributions to unconsolidated affiliates of $1 million and $2 million, respectively.

The following is a summary of capital expenditures (including only our proportionate share for joint ventures, net of contributions in aid of construction costs) on an accrual basis for the three months ended March 31, 2025:

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, 2025 compared to three months ended March 31, 2024. Cash used in financing activities during 2025 was $1.58 billion compared to $791 million for 2024. During 2025, we had a net increase in our debt level of $72 million compared to a net increase of $1.88 billion for 2024. In 2025 and 2024, we paid debt issuance costs of $51 million and $60 million, respectively. In 2024, we paid $895 million in cash for the redemption of our Series C and Series D Preferred Units and paid $37 million in cash to redeem a portion of the outstanding Crestwood Niobrara LLC preferred units. In 2024, USAC paid $749 million in cash for investments in government securities in connection with the legal defeasance of senior notes.

For both 2025 and 2024, we paid distributions of $1.13 billion to our partners. In 2025 and 2024, we paid distributions of $455 million and $421 million, respectively, to noncontrolling interests. In 2025 and 2024, we paid distributions of $13 million and $22 million, respectively, to our redeemable noncontrolling interests.

In 2025 and 2024, we received capital contributions of $2 million and $637 million, respectively, in cash from noncontrolling interests.

Description of Indebtedness

Our outstanding consolidated indebtedness was as follows:

(1)As of March 31, 2025, these balances included approximately $2.48 billion aggregate principal amount due on or before March 31, 2026, which were classified as long-term as management has the intent and ability to refinance the borrowings on a long-term basis.

(2)See additional information below under “Recent Transactions.”

Recent Transactions

Energy Transfer Senior Notes Issuance and Redemption

In March 2025, the Partnership issued $650 million aggregate principal amount of 5.20% senior notes due April 2030, $1.25 billion aggregate principal amount of 5.70% senior notes due April 2035 and $1.10 billion aggregate principal amount of 6.20% senior notes due April 2055. The Partnership used the net proceeds to refinance existing indebtedness, including to repay commercial paper and borrowings under its Five-Year Credit Facility (described below), and for general partnership purposes.

In March 2025, the Partnership redeemed its $1.00 billion aggregate principal amount of 4.05% senior notes due March 2025 using cash on hand and commercial paper borrowings.

Sunoco LP Senior Notes Issuance and Redemption

In March 2025, Sunoco LP issued $1.00 billion of 6.250% senior notes due 2033 in a private offering. These notes will mature on July 1, 2033 and interest is payable semi-annually on January 1 and July 1 of each year. Sunoco LP used the net proceeds from the private offering to repay its $600 million of 5.750% senior notes due 2025 and to repay a portion of the outstanding borrowings under its revolving credit facility.

Credit Facilities and Commercial Paper

Five-Year Credit Facility

The Partnership’s revolving credit facility (the “Five-Year Credit Facility”) allows for unsecured borrowings up to $5.00 billion until April 11, 2027, and up to $4.84 billion until April 11, 2029. The Five-Year Credit Facility contains an accordion feature, under which the total aggregate commitment may be increased up to $7.00 billion under certain conditions.

As of March 31, 2025, the Five-Year Credit Facility had $605 million of outstanding borrowings, all of which consisted of commercial paper. The amount available for future borrowings was $4.37 billion, after accounting for outstanding letters of credit in the amount of $23 million. The weighted average interest rate on the total amount outstanding as of March 31, 2025 was 4.60%.

Sunoco LP Credit Facilities

As of March 31, 2025, Sunoco LP’s credit facility, which matures in May 2029, had no outstanding borrowings and $56 million in standby letters of credit. The unused availability on Sunoco LP’s credit facility as of March 31, 2025 was $1.44 billion. The weighted average interest rate on the total amount outstanding as of March 31, 2025 was 6.53%.

Upon the closing of Sunoco LP’s acquisition of NuStar, 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, 2025, this facility had no outstanding borrowings.

USAC Credit Facility

As of March 31, 2025, USAC’s credit facility, which matures in December 2026, had $805 million of outstanding borrowings and $1 million outstanding letters of credit. As of March 31, 2025, USAC’s credit facility had $795 million of remaining unused availability of which, due to restrictions related to compliance with the applicable financial covenants, $740 million was available to be drawn. The weighted average interest rate on the total amount outstanding as of March 31, 2025 was 6.96%.

Compliance with our Covenants

We and our subsidiaries were in compliance with all requirements, tests, limitations and covenants related to our debt agreements as of March 31, 2025.