Sunoco LP

3. Acquisitions, Divestitures and Other Transactions

Acquisitions

NuStar

On May 3, 2024, we completed the previously announced acquisition of NuStar Energy L.P. (“NuStar”). Under the terms of the agreement, NuStar common unitholders received 0.400 SUN common units for each NuStar common unit. In connection with the acquisition, we issued approximately 51.5 million common units, which had a fair value of approximately $2.85 billion, assumed debt totaling approximately $3.5 billion including approximately $56 million of lease related financing obligations and assumed preferred units with a fair value of approximately $800 million. NuStar has approximately 9,500 miles of pipeline and 63 terminal and storage facilities that store and distribute crude oil, refined products, renewable fuels, ammonia and specialty liquids.

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. The following table summarizes the allocation of the purchase price among assets acquired and liabilities assumed:

(1)Goodwill primarily represents expected commercial and operational synergies and is subject to change based on final purchase price allocations. None of the goodwill recorded as a result of this transaction is deductible for tax purposes. Goodwill of $16 million relates to the Fuel Distribution segment.

(2)Intangible assets, net comprised $151 million of favorable contracts, with a remaining weighted average life of approximately 7 years, and $44 million of customer relationships, with a remaining weighted average life of approximately 15 years.

(3)Subsequent to the closing of the NuStar acquisition, the Partnership redeemed all outstanding NuStar preferred units, totaling $784 million, redeemed NuStar's subordinated notes totaling $403 million and repaid and terminated the NuStar credit facility totaling $455 million.

Subsequent to the NuStar acquisition, the Partnership purchased a property previously leased by NuStar and cancelled the lease, resulting in an impairment of $50 million based on the value of comparable real property.

Pro Forma Results of Operations

The following unaudited pro forma consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 are presented as if the NuStar acquisition had been completed on January 1, 2023.

The pro forma consolidated results of operations include adjustments to:

•include the results of NuStar for all periods presented;

•include the incremental expenses associated with the fair value adjustments recorded as a result of applying the acquisition method of accounting;

•include incremental interest expense related to financing the transactions;

•adjust for one-time expenses; and

•adjust for relative changes in ownership resulting from the acquisition.

The pro forma information is not necessarily indicative of the results of operations that would have occurred had the NuStar acquisition been made at the beginning of the periods presented or the future results of the combined operations.

NuStar's revenue and net income since the acquisition date to September 30, 2024 included in our consolidated statement of operations were $583 million and $56 million, respectively.

Expenses related to the NuStar Acquisition

As a result of the acquisition, we recognized $97 million of merger-related expenses during the nine months ended September 30, 2024.

Zenith European Terminals

On March 13, 2024, we completed the previously announced acquisition of liquid fuels terminals in Amsterdam, Netherlands and Bantry Bay, Ireland from Zenith Energy for €170 million ($185 million), including working capital. 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. Management, with the assistance of a third party valuation specialist, determined the preliminary 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. The following table summarizes the allocation of the purchase price among assets acquired and liabilities assumed:

Other Acquisition

On August 30, 2024, we acquired a terminal in Portland, Maine for approximately $24 million, including working capital. The purchase price was primarily allocated to property and equipment.

Divestiture

West Texas Sale

On April 16, 2024, we completed the previously announced sale of 204 convenience stores located in West Texas, New Mexico and Oklahoma to 7-Eleven, Inc. for approximately $1.0 billion, including customary adjustments for fuel and merchandise inventory. As part of the sale, SUN also amended its existing take-or-pay fuel supply agreement with 7-Eleven, Inc. to incorporate additional fuel gross profit. As a result of the sale, the Partnership recorded $598 million gain ($451 million, net of current tax expense of $178 million and deferred tax benefit of $31 million).

Other Transactions

Permian Joint Venture

Effective July 1, 2024, SUN and Energy Transfer formed a joint venture combining their respective crude oil and produced water gathering assets in the Permian Basin. Pursuant to the 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 July 14, 2024, in a cashless transaction, SUN contributed all of its Permian crude oil gathering assets and operations to the joint venture. Additionally, Energy Transfer contributed its Permian crude oil and produced water gathering assets and operations to the joint venture. Energy Transfer’s long-haul crude pipeline network that provides transportation of crude oil out of the Permian Basin to Nederland, Houston, and Cushing is excluded from the joint venture.

The joint venture operates more than 5,000 miles of crude oil and water gathering pipelines with crude oil storage capacity in excess of 11 million barrels.

SUN holds a 32.5% interest with Energy Transfer holding the remaining 67.5% interest in the joint venture.

Upon formation, the SUN Permian entities were deconsolidated, and the net book value of the related assets was recorded as the initial carrying value of SUN's equity method investment in the joint venture. As of September 30, 2024, the carrying value of the Partnership’s investment in the joint venture was $1.28 billion.

As of September 30, 2024, the Permian joint venture had current assets of $275 million, noncurrent assets of $3.51 billion, current liabilities of $86 million and noncurrent liabilities of $42 million. For the three months ended September 30, 2024, the Permian joint venture recognized revenues of $3.7 billion, of which approximately $3.6 billion related to transactions with affiliates, operating income of $91 million and net income of $90 million.