Energy Transfer LP

4. INVENTORIES

Inventories consisted of the following:

Inventories consist principally of natural gas held in storage, NGLs and refined products, crude oil and spare parts, all of which are valued at the lower of cost or net realizable value utilizing the weighted-average cost method, except as described below.

Sunoco LP’s fuel inventories are stated at the lower of cost or market using the LIFO method, except for certain fuel inventories in the Caribbean as discussed below. As of September 30, 2026 and December 31, 2025, Sunoco LP’s fuel inventory balance included lower of cost or market reserves ofnil and $472 million, respectively. At September 30, 2026, the replacement cost of Sunoco LP’s fuel inventories accounted for using the LIFO method exceeded the carrying value by approximately $395 million.

For the three months ended September 30, 2026 and 2025, the Partnership’s cost of products sold included favorable inventory valuation adjustments of $19 million and $10 million, respectively, which increased net income. For the nine months ended September 30, 2026 and 2025, the Partnership’s cost of products sold included favorable inventory valuation adjustments of $445 million and $31 million, respectively, which increased net income.

During the three months ended March 31, 2026, Sunoco LP reduced its overall fuel inventories, resulting in a LIFO liquidation. Based on the assumed impact to cost of products sold if the liquidated inventories had been replaced, the effect of the LIFO liquidation was an increase of $102 million to pre-tax income, or $0.03 per common unit (excluding any income tax impact or any assumed changes to distributions) for the nine months ended September 30, 2026, with no impact to the three months ended September 30, 2026. 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.

Certain of Sunoco LP’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 $179 million and $88 million as of September 30, 2026 and December 31, 2025, respectively.