Document

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 $598 million gain ($461 million, net of current tax expense of $199 million and deferred tax benefit of $62 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 statements included herein.

The unaudited pro forma condensed combined statements of income assume that the NuStar Merger and West Texas Asset Sale were consummated on January 1, 2023. The unaudited pro forma condensed combined statements of income should be read in conjunction with (i) Sunoco’s Annual Report on Form 10-K for the year ended December 31, 2023, (ii) Sunoco LP’s revised description of the business, financial statements as of December 31, 2023 and 2022, and for the years ended December 31, 2023, 2022 and 2021, and Management's Discussion and Analysis of Financial Condition and Results of Operations included in Exhibit 99.2 to its Form 8-K filed October 15, 2024, (iii) NuStar’s Annual Report on Form 10-K for the year ended December 31, 2023, (iv) NuStar’s Quarterly Report on Form 10-Q for the period ended March 31, 2024 and (v) Sunoco’s Quarterly Report on Form 10-Q for the period ended June 30, 2024.

The unaudited pro forma combined financial statements have 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 statements are for illustrative purposes only and are 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 are they 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.


	Sunoco Historical		NuStar Historical		NuStar Transaction Accounting Adjustments			Sunoco Pro Forma for NuStar Merger		West Texas Transaction Accounting Adjustments			Sunoco Pro Forma for NuStar Merger and West Texas Sale




REVENUES	$	23,068	$	1,634	$	(5)	a	$	24,697	$	(710)	f	$	23,987
COSTS AND EXPENSES:
Cost of sales	21,703		408		(5)		a	22,106		(642)		f	21,464
General and administrative	126		130		83		b	339		—			339
Other operating	424		372		—			796		(32)		f	764
Gain on disposal of assets	(7)		(41)		—			(48)		—			(48)
Depreciation, amortization and accretion	187		255		128		c	570		(16)		f	554
Total costs and expenses	22,433		1,124		206			23,763		(690)			23,073
OPERATING INCOME	635		510		(211)			934		(20)			914
OTHER INCOME (EXPENSE):
Interest expense, net	(217)		(241)		26		c	(432)		—			(432)
Equity in earnings of unconsolidated affiliates	5		—		—			5		—			5
Other, net	7		10		—			17		598		g	615
INCOME BEFORE INCOME TAX EXPENSE	430		279		(185)			524		578			1,102
Income tax expense	36		5		—			41		137		g	178
NET INCOME AND COMPREHENSIVE INCOME	394		274		(185)			483		441			924
Less: Incentive distribution rights	77		—		48		d	125		—			125
Less: Distributions on unvested unit awards	6		—		—			6		—			6
NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS	$	311	$	274	$	(233)		$	352	$	441		$	793

NET INCOME PER COMMON UNIT:
Basic	$	3.70						$	2.60				$	5.85
Diluted	$	3.65						$	2.58				$	5.80

WEIGHTED AVERAGE COMMON UNITS OUTSTANDING:
Common units - basic	84,081,083				51,543,100			135,624,183					135,624,183
Dilutive effect of unvested awards	1,012,414				—			1,012,414					1,012,414
Common units - diluted	85,093,497				51,543,100			136,636,597					136,636,597


	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	$	11,673	$	523	$	(1)	a	$	12,195	$	(151)	f	$	12,044
COSTS AND EXPENSES:
Cost of sales	10,624		126		(1)		a	10,749		(134)		f	10,615
General and administrative	170		150		(83)		b	237		—			237
Other operating	257		116		—			373		(8)		f	365
Gain on disposal of assets	54		—		—			54		—			54
Depreciation, amortization and accretion	121		86		43		c	250		(2)		f	248
Total cost and expenses	11,226		478		(41)			11,663		(144)			11,519
OPERATING INCOME	447		45		40			532		(7)			525
OTHER INCOME (EXPENSE):
Interest expense, net	(158)		(83)		9		c	(232)		—			(232)
Equity in earnings of unconsolidated affiliates	4		—		—			4		—			4
Other, net	594		1		—			595		(598)		g	(3)
INCOME BEFORE INCOME TAX EXPENSE	887		(37)		49			899		(605)			294
Income tax expense	156		1		—			157		(137)		g	20
NET INCOME AND COMPREHENSIVE INCOME	731		(38)		49			742		(468)			274
Less: Incentive distribution rights	72		—		12		d	84		—			84
Less: Distributions on unvested unit awards	3		—		—			3		—			3
NET INCOME ATTRIBUTABLE TO COMMON UNITHOLDERS	$	656	$	(38)	$	37		$	655	$	(468)		$	187

NET INCOME PER COMMON UNIT:
Basic	$	6.50						$	4.84				$	1.38
Diluted	$	6.45						$	4.82				$	1.37

WEIGHTED AVERAGE COMMON UNITS OUTSTANDING:
Common units - basic	100,848,078				34,362,067		e	135,210,145					135,210,145
Dilutive effect of unvested awards	808,998				—			808,998					808,998
Common units - diluted	101,657,076				34,362,067			136,019,143					136,019,143


	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
Gain on disposal of assets	—		—		—
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)
Equity in earnings of unconsolidated affiliates	—		—		—
Other, net	2		(1)		1
INCOME BEFORE INCOME TAX EXPENSE	44		(81)		(37)
Income tax expense	1		—		1
NET INCOME AND COMPREHENSIVE INCOME	$	43	$	(81)	$	(38)

The unaudited pro forma combined financial statements give effect to the NuStar Merger and the West Texas Asset Sale. The unaudited pro forma condensed combined statements of income for the year ended December 31, 2023 and for the six months ended June 30, 2024 give effect to the transactions as if both transactions had occurred on January 1, 2023.

These unaudited pro forma combined financial statements are presented for illustrative purposes only. The pro forma adjustments are based upon available information and assumptions described below. The unaudited pro forma combined financial statements are 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 do they 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 statements do 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 statements 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.