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Acquisitions and Divestitures | 9 Months Ended
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Sep. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Mergers, Acquisitions and Dispositions Disclosures | ACQUISITIONS, DIVESTITURES AND OTHER TRANSACTIONS Energy Transfer’s Acquisition WTG Midstream On July 15, 2024, Energy Transfer completed the previously announced acquisition of 100% of the membership interest in WTG Midstream Holdings LLC (“WTG Midstream”). Consideration for the transaction was comprised of $2.28 billion in cash and approximately 50.8 million newly issued Energy Transfer common units, which had a fair value of approximately $833 million. The acquired assets include approximately 6,000 miles of complementary gas gathering pipelines that extended Energy Transfer’s network in the Midland Basin. Also, as part of the transaction, the Partnership added eight gas processing plants with a total capacity of approximately 1.3 Bcf/d, and two additional processing plants that were under construction at closing. Since closing the transaction, one of these 200 MMcf/d processing plants was placed into service. The WTG Midstream acquisition was recorded using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their estimated fair values on the date of acquisition with any excess purchase price over the fair value of net assets acquired recorded to goodwill. Determining the fair value of acquired assets requires management’s judgment and the utilization of a third-party valuation specialist, if applicable, and involves the use of significant estimates and assumptions. Acquired assets were valued based on a combination of the discounted cash flow, the guideline company and the reproduction and replacement methods. The following table summarizes the assumed allocation of the purchase price among the assets acquired and liabilities assumed:
| At July 15, 2024
Total current assets | $ | 334 |
Property, plant and equipment, net | 3,109 |
Lease right-of-use assets, net | 8 |
Intangible assets, net | 20 |
Total assets | 3,471 |
Total current liabilities | 394 |
Non-current operating lease liabilities | 5 |
Other non-current liabilities | 20 |
Total liabilities | 419 |
Total consideration | 3,052 |
Cash received | 45 |
Total consideration, net of cash received | $ | 3,007 |
Sunoco LP’s Acquisitions NuStar On May 3, 2024, Sunoco LP completed the previously announced acquisition of all of the common units of NuStar Energy L.P. (“NuStar”). Under the terms of the merger agreement, NuStar common unitholders received 0.400 Sunoco LP common units for each NuStar common unit. In connection with the acquisition, Sunoco LP 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 NuStar acquisition was recorded using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their estimated fair values on the date of acquisition with any excess purchase price over the fair value of net assets acquired recorded to goodwill. Determining the fair value of acquired assets requires management’s judgment and the utilization of a third-party valuation specialist, if applicable, and involves the use of significant estimates and assumptions. Acquired assets were valued based on a combination of the discounted cash flow, the guideline company and the reproduction and replacement methods. The following table summarizes the assumed allocation of the purchase price among the assets acquired and liabilities assumed:
| At May 3, 2024
Total current assets | $ | 186 |
Property, plant and equipment, net | 6,958 |
Lease right-of-use assets, net | 136 |
Goodwill (1) | 16 |
Intangible assets, net (2) | 195 |
Other non-current assets | 127 |
Total assets | 7,618 |
Total current liabilities | 245 |
Long-term debt, less current maturities (3) | 3,500 |
Non-current operating lease liabilities | 136 |
Deferred income taxes | 4 |
Other non-current liabilities | 82 |
Total liabilities | 3,967 |
Preferred units (3) | 801 |
Total consideration | 2,850 |
Cash received | 27 |
Total consideration, net of cash received | $ | 2,823 |
(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. (2)Intangible assets, net comprised of $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, Sunoco LP redeemed all outstanding NuStar preferred units totaling $784 million, redeemed NuStar’s subordinated notes totaling $403 million and repaid the outstanding balance on the NuStar credit facility totaling $455 million. Subsequent to the NuStar acquisition, Sunoco LP 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. Zenith European Terminals On March 13, 2024, Sunoco LP completed the previously announced acquisition of liquid fuels terminals in Amsterdam, Netherlands and Bantry Bay, Ireland from Zenith Energy for approximately €170 million ($185 million), which was allocated $6 million to other current assets, $204 million to property, plant and equipment, $36 million to other non-current assets and $7 million to goodwill. In connection with this transaction, Sunoco LP also assumed $14 million in current liabilities, $11 million in deferred income taxes and $43 million in other non-current liabilities. Other Acquisition On August 30, 2024, Sunoco LP acquired a terminal in Portland, Maine for approximately $24 million, including working capital. The purchase price was primarily allocated to property, plant and equipment. Sunoco LP’s Divestiture West Texas Sale On April 16, 2024, Sunoco LP completed the previously announced sale of 204 convenience stores located in West Texas, New Mexico and Oklahoma to 7-Eleven, Inc. for approximately $1.00 billion, including customary adjustments for fuel and merchandise inventory. As part of the sale, Sunoco LP 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, Sunoco LP recorded a $598 million gain ($451 million, net of current tax expense of $178 million and deferred tax benefit of $31 million). Joint Venture Transaction Permian Joint Venture Effective July 1, 2024, Energy Transfer and Sunoco LP 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 and Energy Transfer Crude Marketing, LLC dated July 14, 2024, in a cashless transaction, Sunoco LP 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. Energy Transfer holds a 67.5% interest with Sunoco LP holding the remaining 32.5% interest in the joint venture.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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