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Mergers and Acquisitions | 12 Months Ended
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Dec. 31, 2024
Business Combinations [Abstract] |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | Acquisitions, Divestitures and Other Transactions NuStar Acquisition On May 3, 2024, we completed the acquisition of 100% of the common units 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 is expected to diversify the Partnership’s business, increase scale and provide vertical integration, as well as improving the Partnership’s credit profile and enhancing growth. 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:
| As of May 3, 2024
Total current assets | $ | 186 |
Property and equipment | 6,958 |
Operating 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 |
Operating lease non-current liabilities | 136 |
Deferred tax liabilities | 4 |
Other non-current liabilities | 82 |
Total liabilities | 3,967 |
Preferred units (3) | 801 |
Total consideration | 2,850 |
Cash acquired | 27 |
Total cash consideration, net of cash acquired | $ | 2,823 |
(1)Goodwill primarily represents expected commercial and operational synergies. None of the goodwill recorded as a result of this transaction is deductible for tax purposes. Goodwill of $16 million relates to our 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 year ended December 31, 2024 and 2023 are presented as if the NuStar acquisition had been completed on January 1, 2023.
|  |  | Year Ended December 31,
|  |  |  |  | 2024 |  | 2023
Revenues |  |  |  |  | $ | 23,215 |  |  | $ | 24,697 |
Net income |  |  |  |  | 802 |  |  | 483 |
Net income attributable to partners |  |  |  |  | 632 |  |  | 352 |
Basic net income per Common Unit |  |  |  |  | $ | 4.13 |  |  | $ | 2.60 |
Diluted net income per Common Unit |  |  |  |  | $ | 4.11 |  |  | $ | 2.58 |
The pro forma consolidated results of operations include adjustments to: •include the results of NuStar for all periods presented; •include 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; •includes $83 million of expenses representing one-time costs associated with completing the transaction; •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 December 31, 2024 included in our consolidated statement of operations were $949 million and $113 million, respectively. Expenses Related to the NuStar Acquisition As a result of the acquisition, we recognized $103 million of merger-related expenses during the year ended December 31, 2024, which are included in general and administrative expenses in our consolidated statement of operations. Zenith European Terminals Acquisition On March 13, 2024, we completed the 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 is expected to supply optimization for the Partnership’s existing East Coast business and continues its focus on growing its portfolio of stable midstream income. 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 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:
| As of March 13, 2024
Other current assets | $ | 6 |
Property and equipment | 204 |
Other non-current assets | 36 |
Deferred tax assets | 6 |
Current liabilities | (14) |
Deferred tax liabilities | (4) |
Other non-current liabilities | (43) |
Net assets | 191 |
Bargain purchase gain | (6) |
Total cash consideration, net of cash acquired | $ | 185 |
Zenith European terminals revenue and net income since the acquisition date to December 31, 2024 included in our consolidated statement of operations were $43 million and $8 million, respectively. 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. West Texas Sale On April 16, 2024, we completed the 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 a $586 million gain ($442 million, net of current tax expense of $179 million and deferred tax benefit of $35 million). ET-S Permian Effective July 1, 2024, SUN and Energy Transfer formed ET-S Permian, 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 the Partnership, 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 ET-S Permian. Energy Transfer contributed its Permian crude oil and produced water gathering assets and operations to ET-S Permian. 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 ET-S Permian. ET-S Permian 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 ET-S Permian. Energy Transfer serves as the operator of ET-S Permian. Upon formation, the SUN Permian entities were deconsolidated; however, no gain or loss was recorded in net income due to the common control nature of the transaction. As of December 31, 2024, the carrying value of the Partnership’s investment in ET-S Permian was $1.21 billion. As of December 31, 2024, ET-S Permian had current assets of $273 million, noncurrent assets of $3.61 billion, current liabilities of $106 million and noncurrent liabilities of $50 million. For the six months ended December 31, 2024, ET-S Permian recognized revenues of $8.70 billion, of which approximately $8.48 billion related to transactions with affiliates, operating income of $164 million and net income of $163 million. 2023 Acquisition On May 1, 2023, we completed the acquisition of 16 refined product terminals located across the East Coast and Midwest from Zenith Energy for approximately $111 million, including working capital. The purchase price was primarily allocated to property and equipment. 2022 Acquisitions On November 30, 2022, we completed the acquisition of Peerless for $67 million, net of cash acquired. Peerless is an established terminal operator that distributes fuel products to over 100 locations primarily within Puerto Rico. Management, with the assistance of an independent valuation firm, determined the fair value of assets and liabilities at the date of the acquisition. Goodwill acquired in connection with the acquisition is deductible for tax purposes. The following table summarizes the final allocation of the purchase price among the assets acquired and liabilities assumed:
|  | November 30, 2022
Other current assets |  | $ | 26 |
Property and equipment |  | 65 |
Goodwill |  | 11 |
Current liabilities |  | (15) |
Deferred tax liability |  | (11) |
Net assets |  | 76 |
Cash acquired |  | (9) |
Total cash consideration, net of cash acquired |  | $ | 67 |
On April 1, 2022, we completed the acquisition of a transmix processing and terminal facility in Huntington, Indiana from Gladieux Capital Partners, LLC for $252 million, net of cash acquired. Management, with the assistance of an independent valuation firm, determined the fair value of assets and liabilities at the date of the acquisition. Goodwill acquired in connection with the acquisition is deductible for tax purposes. The following table summarizes the final allocation of the purchase price among the assets acquired and liabilities assumed:
|  | April 1, 2022
Inventories |  | $ | 108 |
Other current assets |  | 56 |
Property and equipment |  | 73 |
Goodwill |  | 20 |
Intangible assets |  | 98 |
Current liabilities |  | (88) |
Net assets |  | 267 |
Cash acquired |  | (15) |
Total cash consideration, net of cash acquired |  | $ | 252 |

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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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