8-K
false 0001552275 0001552275 2025-03-20 2025-03-20

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

March 20, 2025

Date of Report (Date of earliest event reported)

SUNOCO LP

(Exact name of registrant as specified in its charter)

Delaware   001-35653   30-0740483
(State or other jurisdiction
of incorporation)		   (Commission File Number)   (IRS Employer
Identification No.)

8111 Westchester Drive, Suite 400

Dallas, TX 75225

(Address of principal executive offices, including zip code)

(214) 981-0700

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading Symbol(s)

  

Name of each exchange on which registered

Common Units Representing Limited Partner Interests   SUN   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition.

This Current Report on Form 8-K provides a pro forma statement of operations of Sunoco LP (the “Partnership”) for the twelve months ended December 31, 2024, as described in Item 8.01 below and which is incorporated into this Item 2.02 by reference, giving effect to the Partnership’s acquisition of NuStar Energy L.P., consummated on May 3, 2024 (the “NuStar Acquisition”), as well as the sale of certain assets of the Partnership in West Texas, New Mexico and Oklahoma, as if each had been consummated on January 1, 2024. The pro forma statement of operations is being updated for purposes of the Notes Offering (as defined below) and does not give effect to the Notes Offering.

The information contained in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

 

Item 7.01

Regulation FD Disclosure.

On March 20, 2025, the Partnership issued a press release announcing the commencement of the private offering of senior notes (the “Notes Offering”). A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 7.01 by reference.

In addition, on March 20, 2025, in connection with the Notes Offering, the Partnership provided an operational update to potential investors to the effect that, during March 2025, the Partnership entered into an agreement to acquire two Bermuda entities that own and operate associated German and Polish terminalling assets, including an aggregate of 15 associated fuel terminals in Germany and one in Poland, for aggregate cash consideration of less than €500 million, which the Partnership expects to fund with cash on hand and borrowings under its revolving credit facility and to consummate in the second quarter of 2025. Such entities, which are not expected to guarantee the revolving credit facility or the notes being offered in the Notes Offering, have aggregate secured indebtedness of approximately €296 million that the Partnership expects to remain in place upon closing of the transaction. The Notes Offering is not conditioned on the consummation of the acquisition, which remains subject to customary closing conditions, and the acquisition is not conditioned on the consummation of the Notes Offering.

The information contained in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act.

This Current Report on Form 8-K does not constitute an offer to sell, or the solicitation of an offer to buy, any security, including the notes issued in the Notes Offering.

In addition, the information contained in Item 8.01 of this Current Report on Form 8-K is incorporated into this Item 7.01 by reference.

 

Item 8.01

Other Events.

On March 20, 2025, in connection with the Notes Offering, the Partnership provided certain updated disclosures to potential investors that as of March 18, 2025, the Partnership had $2 million of cash and cash equivalents and outstanding borrowings of approximately $537 million under the Partnership’s revolving credit facility (excluding approximately $56 million in standby letters of credit) and additional available borrowing capacity of approximately $907 million.

 

2

Pro Forma Financials

This Current Report on Form 8-K provides a pro forma statement of operations attached as Exhibit 99.2 hereto:

 

  •  

Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2024; and

 

  •  

Notes to the Unaudited Pro Forma Condensed Combined Financial Statement.

In addition, the information contained in Item 2.02 of this Current Report on Form 8-K is incorporated into this Item 8.01 by reference.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
Number 

    

Description

  99.1     Press Release, dated March 20, 2025, announcing the Notes Offering.
  99.2     Sunoco LP unaudited pro forma combined financial information.
  104     Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SUNOCO LP
  By:   SUNOCO GP LLC,
    its General Partner
Date: March 20, 2025
  By:  

/s/ Rick Raymer

  Name:   Rick Raymer
  Title:   Vice President, Controller and Principal Accounting Officer

 

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Exhibit 99.1

 

LOGO

Sunoco LP Announces Private Offering of Senior Notes

DALLAS, March 20, 2025 – Sunoco LP (NYSE: SUN) (“Sunoco” or the “Partnership”) today announced a private offering (the “offering”) of senior notes due 2033 in an aggregate principal amount of $750 million (the “notes”).

Sunoco intends to use the net proceeds from the offering to repay indebtedness, including by redeeming in full NuStar Logistics, L.P.’s 5.750% senior notes due 2025 (the “NuStar 2025 Notes”) and repaying a portion of the outstanding borrowings under Sunoco’s revolving credit facility.

The offering of the notes has not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, the notes may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Sunoco plans to offer and sell the notes only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.

This news release is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction. Additionally, this news release shall not constitute a notice of redemption under the indenture governing the NuStar 2025 Notes.

About Sunoco LP

Sunoco LP (NYSE: SUN) is an energy infrastructure and fuel distribution master limited partnership operating in over 40 U.S. states, Puerto Rico, Europe, and Mexico with an extensive network of approximately 14,000 miles of pipeline and over 100 terminals for midstream operations. Sunoco’s general partner is owned by Energy Transfer LP (NYSE: ET).

Forward-Looking Statements

This news release may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal law, including without limitation statements regarding the offering. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, and other factors that are difficult to predict and many of which are beyond management’s control. An extensive list of factors that can affect future results are discussed in Sunoco’s Annual Report on Form 10-K and any other documents filed from time to

time with the Securities and Exchange Commission. Sunoco undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.

Contacts

Scott Grischow

Treasurer, Senior Vice President – Finance

(214) 840-5660, [email protected]

Erik Gulbrandsen

Director – Investor Relations and Capital Markets

(214) 840-5684, [email protected]

SOURCE Sunoco LP

Exhibit 99.2

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma combined financial information of Sunoco reflects the pro forma impacts of multiple transactions, each of which is described in the following sections. The NuStar Merger and West Texas Asset Sale (both of which terms are defined below) were completed in the second quarter of 2024.

NuStar Merger. On May 3, 2024, Sunoco completed the previously announced acquisition of NuStar (“NuStar Merger”). Under the terms of the agreement, NuStar common unitholders received 0.400 Sunoco 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. The assets acquired in the NuStar Merger included 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.

West Texas Asset Sale. On April 16, 2024, Sunoco completed the previously announced sale of 204 convenience stores located in West Texas, New Mexico, and Oklahoma to 7-Eleven, Inc. (“West Texas Asset Sale”) for approximately $1.0 billion, including customary adjustments for fuel and merchandise inventory. As part of the sale, Sunoco also amended its existing take-or-pay fuel supply agreement with 7-Eleven, Inc. to incorporate additional fuel gross profit. Upon the completion of the sale, the Partnership recorded a $586 million gain ($442 million, net of current tax expense of $179 million and deferred tax benefit of $35 million).

The unaudited pro forma combined financial information does not reflect the pro forma impacts of Sunoco’s recently completed acquisition of liquid fuel terminals in Amsterdam, Netherlands and Bantry Bay, Ireland, because such pro forma impacts are not significant to Sunoco’s historical financial statements or to the pro forma combined financial statement included herein.

The unaudited pro forma condensed combined statement of income assume that the NuStar Merger and West Texas Asset Sale were consummated on January 1, 2024. The unaudited pro forma condensed combined statement of income should be read in conjunction with (i) Sunoco’s Annual Report on Form 10-K for the year ended December 31, 2024 and (ii) NuStar’s Quarterly Report on Form 10-Q for the period ended March 31, 2024.

The unaudited pro forma combined financial statement has been prepared in accordance with Article 11 of Regulation S-X, as amended by Release No. 33-10786. The pro forma adjustments included herein include those adjustments that reflect the accounting for the respective transactions in accordance with U.S. GAAP (“transaction accounting adjustments”). Adjustments to reflect synergies and/or dis-synergies related to the respective transactions (“management adjustments”), which are elective pro forma adjustments under Release No. 33-10786, have not been reflected herein.

The unaudited pro forma combined financial statement is for illustrative purposes only and is not necessarily indicative of the financial results that would have occurred if the NuStar Merger and/or West Texas Asset Sale had been consummated on the dates indicated, nor is it necessarily indicative of the financial position or results of operations in the future. The pro forma adjustments, as described in the accompanying notes, are based upon available information and certain assumptions that are believed to be reasonable as of the date of this document. The unaudited pro forma combined financial information includes certain non-recurring transaction-related adjustments, as discussed in the accompanying notes.

The unaudited pro forma adjustments are based on available information and certain assumptions that management believes are reasonable under the circumstances. The unaudited pro forma combined financial information is presented for informational purposes only, and is not intended to be a projection of future results. All pro forma adjustments and their underlying assumptions are described more fully in the notes to the unaudited pro forma combined financial information.

 

1

SUNOCO LP

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

For the Year Ended December 31, 2024

(in millions, except units and per unit data)

 

     Sunoco
Historical		     NuStar
Historical(1)		     NuStar
Merger
Transaction
Accounting
Adjustments		     Sunoco Pro
Forma for
NuStar
Merger		     West Texas
Asset Sale
Transaction
Accounting
Adjustments		     Sunoco Pro
Forma for
NuStar
Merger and
West Texas
Asset Sale		  

REVENUES

    $ 22,693     $ 523     $ (1 ) a    $ 23,215     $ (179 ) e    $ 23,036  

COSTS AND EXPENSES:

             

Cost of sales

      20,595       126       (1 ) a      20,720       (159 ) e      20,561  

General and administrative

      277       150       —       427       —       427  

Other operating

      617       116       —       733       (12 ) e      721  

Loss on disposal of assets

      45       —       —       45       —       45  

Depreciation, amortization and accretion

      368       86       43  b      497       —       497  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total cost and expenses

      21,902       478       42       22,422       (171 )      22,251  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

OPERATING INCOME

      791       45       (43 )      793       (8 )      785  

OTHER INCOME (EXPENSE):

             

Interest expense, net

      (391 )      (83 )      9  b      (465 )      (1 ) e      (466 ) 

Equity in earnings of unconsolidated affiliates

      60       —       —       60       —       60  

Gain on West Texas Asset Sale

      586       —       —       586       —       586  

Loss on extinguishment of debt

      (2 )      —       —       (2 )      —       (2 ) 

Other, net

      5       1       —       6       (2 ) e      4  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

INCOME BEFORE INCOME TAX EXPENSE

      1,049       (37 )      (34 )      978       (11 )      967  

Income tax expense

      175       1       —       176       —       176  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NET INCOME

      874       (38 )      (34 )      802       (11 )      791  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Less: Net income attributable to noncontrolling interests

      8       —       —       8       8    

Less: Incentive distribution rights

      145       —       12  c      157       —       157  

Less: Distributions on unvested unit awards

      5       —       —       5       —       5  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS

    $ 716     $ (38 )    $ (46 )    $ 632     $ (11 )    $ 621  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

2

     Sunoco
Historical		      NuStar
Historical(1)		      NuStar
Merger
Transaction
Accounting
Adjustments		     Sunoco Pro
Forma for
NuStar
Merger		      West Texas
Asset Sale
Transaction
Accounting
Adjustments		      Sunoco Pro
Forma for
NuStar
Merger and
West Texas
Asset Sale		  

NET INCOME PER COMMON UNIT:

                 

Basic

    $ 6.04           $ 4.66         $ 4.58  
  

 

 

          

 

 

        

 

 

  

Diluted

    $ 6.00           $ 4.63         $ 4.55  
  

 

 

          

 

 

        

 

 

  

WEIGHTED AVERAGE COMMON UNITS OUTSTANDING:

                 

Common units – basic

      118,529,390           51,543,100  d      135,710,423           135,710,423  

Dilutive effect of unvested awards

      812,648           —       816,476           816,476  
  

 

 

        

 

 

    

 

 

        

 

 

  

Common units – diluted

      119,342,038           51,543,100       136,526,899           136,526,899  

 

 

(1)

NuStar Historical represents amounts from January 1, 2024 to April 30, 2024, the four month period prior to the NuStar Merger. The following reconciles amounts previously reported by NuStar for the three months ended March 31, 2024 to amounts reported above as NuStar Historical:

 

     NuStar Quarter
Ended
March 31, 2024		     NuStar Month
Ended April 30,
2024		     NuStar
Historical		  

REVENUES

    $ 391     $ 132     $ 523  

COSTS AND EXPENSES:

       

Cost of sales

      94       32       126  

General and administrative

      42       108       150  

Other operating

      86       30       116  

Depreciation, amortization and accretion

      65       21       86  
  

 

 

    

 

 

    

 

 

  

Total cost and expenses

      287       191       478  
  

 

 

    

 

 

    

 

 

  

OPERATING INCOME

      104       (59 )      45  

OTHER INCOME (EXPENSE):

       

Interest expense, net

      (62 )      (21 )      (83 ) 

Other, net

      2       (1 )      1  
  

 

 

    

 

 

    

 

 

  

INCOME BEFORE INCOME TAX EXPENSE

      44       (81 )      (37 ) 

Income tax expense

      1       —       1  
  

 

 

    

 

 

    

 

 

  

NET INCOME

    $ 43     $ (81 )    $ (38 ) 
  

 

 

    

 

 

    

 

 

  

 

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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENT

1. BASIS OF PRESENTATION

The unaudited pro forma combined financial statement gives effect to the NuStar Merger and the West Texas Asset Sale. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2024 gives effect to the transactions as if both transactions had occurred on January 1, 2024.

These unaudited pro forma combined financial statement is presented for illustrative purposes only. The pro forma adjustments are based upon available information and assumptions described below. The unaudited pro forma combined financial statement is not necessarily indicative of what the actual results of operations or financial position of Sunoco would have been if the transactions had in fact occurred on the dates or for the periods indicated, nor does it purport to project the results of operations or financial position of Sunoco for any future periods or as of any date. The unaudited pro forma combined financial statement does not give effect to any cost savings, operating synergies, and revenue enhancements expected to result from the transactions or the costs to achieve these cost savings, operating synergies, and revenue enhancements.

The unaudited pro forma combined financial statement includes material estimates and assumptions related to purchase price accounting for the NuStar Merger and are discussed further below.

The unaudited pro forma combined financial statement should be read in conjunction with the historical consolidated financial statements and related notes of Sunoco and NuStar. The pro forma condensed combined statement of income includes transaction adjustments for certain non-recurring items, including the estimated transaction-related expenses included in note 2.a. below.

2. NUSTAR MERGER TRANSACTION ACCOUNTING ADJUSTMENTS

 

  a.

Represents the elimination of intercompany activity between Sunoco and NuStar.

 

  b.

To record incremental depreciation and amortization expense related to estimated fair values recorded in purchase accounting, based on the estimated fair values recorded in purchase accounting, as summarized in Sunoco’s Form 10-K for the year ended December 31, 2024.

 

  c.

To record additional incentive distributions assumed to be paid to Energy Transfer LP (as holder of Sunoco’s incentive distribution rights) based on the total of 51.5 million Sunoco common units issued as consideration and the actual distributions declared by Sunoco in the first quarter of 2024.

 

  d.

Represents weighted average of the 51.5 million Sunoco common units issued as consideration.

3. WEST TEXAS ASSET SALE TRANSACTION ACCOUNTING ADJUSTMENTS

 

  e.

To eliminate activity related to Sunoco’s West Texas business.

 

4