Sunoco (NYSE:SUN) executives highlighted record fourth-quarter and full-year results, progress integrating the Parkland acquisition, and plans for continued distribution growth during the partnership’s earnings call.
Reporting changes and introduction of SUNC
Senior Vice President of Finance Scott Grischow said Sunoco has updated its financial reporting format to incorporate Parkland’s legacy operations into the partnership’s three existing segments and to add a fourth reporting segment for newly added refining operations. The company also began including select financial information for SunocoCorp LLC, referred to as SUNC, in earnings releases.
Grischow said SUNC “will be an attractive option to invest in Sunoco,” particularly for investors outside the U.S., institutional investors, and retirement accounts. Management expects minimal corporate income taxes at SUNC for at least five years, which it said should allow SUNC’s distribution to remain “very similar” to Sunoco LP’s distribution during that period.
Fourth-quarter results: record EBITDA and higher distribution
Grischow said the fourth quarter capped “a transformative and record-setting year,” noting the Parkland transaction closed on Oct. 31 and that integration efforts are “progressing well.” Sunoco reported record adjusted EBITDA of $706 million for the fourth quarter, excluding approximately $60 million of one-time transaction expenses.
During the quarter, Sunoco spent $130 million on growth capital and $103 million on maintenance capital. Fourth-quarter distributable cash flow (as adjusted) was $442 million.
On Jan. 27, Sunoco declared a distribution of $0.9317 per common unit for both Sunoco LP common units and SunocoCorp shares, representing a 1.25% increase over the prior quarter and the fifth consecutive quarterly distribution increase. Grischow said the trailing 12-month coverage ratio ended the year at 1.9x, and management reiterated it sees a multi-year path for annual distribution growth of at least 5%.
Full-year 2025: record EBITDA, leverage around 4x
For full-year 2025, Sunoco reported adjusted EBITDA of $2.12 billion, excluding transaction-related expenses, which Grischow said was a 36% increase over the prior year and a record for the partnership. Management attributed the performance to “solid underlying growth” in the base business, a full year of contribution from a newer acquisition, and approximately two months of Parkland results.
Grischow said Sunoco ended the year with $2.5 billion of availability under its revolving credit facility and leverage of approximately 4x, which he said is in line with the company’s long-term target. CEO Joe Kim added that Sunoco is “already ahead of schedule” in returning leverage to 4x.
Segment performance: fuel distribution growth and new refining segment
Chief Operating Officer Karl Fails said Sunoco’s footprint now spans 32 countries and territories with the addition of Parkland and Tanquid assets, and described the company as the “largest independent fuel distributor in the Americas.”
- Fuel distribution: Fourth-quarter adjusted EBITDA was $391 million, excluding $59 million of transaction expenses, compared with $238 million in the third quarter and $192 million in the year-ago quarter (both excluding transaction expenses). Volumes totaled 3.3 billion gallons, up 44% sequentially and 54% year over year. Fails said legacy Sunoco volumes increased more than 2% year over year despite a “relatively flat U.S. demand profile,” which he attributed to deployed growth capital and roll-up M&A. Reported margin was $0.177 per gallon, which he said reflected the addition of Parkland’s “higher-margin geographies and channels.”
- Pipeline systems: Fourth-quarter adjusted EBITDA was $187 million, compared with $182 million in the third quarter and $193 million in the year-ago quarter (excluding transaction expenses). Throughput was 1.4 million barrels per day, up from the third quarter and consistent with the year-ago quarter. Fails cited seasonal strength in agricultural-supported markets.
- Terminals: Fourth-quarter adjusted EBITDA was $87 million, compared with $76 million in the third quarter and $61 million in the year-ago quarter (excluding transaction expenses). Throughput was about 715,000 barrels per day. Fails said the segment benefited from Parkland terminals income and noted the “positive addition” of the recently closed Tanquid acquisition in the first quarter.
- Refining: In the newly reported segment, fourth-quarter adjusted EBITDA was $41 million, excluding $1 million of transaction expenses, reflecting roughly two months of operations after the Parkland close. Fails said refinery performance was “much improved” in 2025 versus prior years and called the refinery an important supply-chain asset supporting fuel distribution in Western Canada.
2026 outlook: EBITDA guidance, synergy targets, and M&A “floor”
Management reiterated 2026 adjusted EBITDA guidance of $3.1 billion to $3.3 billion. Fails said the outlook assumes the Tanquid acquisition closes in the first quarter (which the company completed in January), realization of $125 million of a $250 million annual synergy target in 2026, and a planned 50-day maintenance turnaround at the refinery that began in late January.
Sunoco expects 2026 maintenance capital of $400 million to $450 million, reflecting the larger footprint and the refinery turnaround. Fails also outlined growth plans that include a portfolio of at least $600 million of “quick spend, quick return” capital projects, plus acquisitions.
Kim said Sunoco provided a baseline expectation of at least $500 million of bolt-on acquisition opportunities each year “for the foreseeable future,” beyond growth capital. In Q&A, he said this amount is intended as a floor and would be pursued across Sunoco’s expanded footprint, with “best projects” selected among the U.S., Canada, the Caribbean, and Europe. Kim said doing materially more than $500 million in 2026 could provide upside depending on timing.
On synergies, Fails said Sunoco’s focus is delivering quickly, and he expects the company to exit 2026 “well north” of $125 million on a run-rate basis. He also stressed the importance of the underlying base business alongside synergy capture.
Management reiterated expectations for distribution growth, with Kim stating the company expects a minimum of 5% annual growth in 2026 and “continued growth over a multiyear period,” while balancing distribution objectives with balance sheet priorities and growth investment.
About Sunoco (NYSE:SUN)
Sunoco LP (NYSE: SUN) is an independent master limited partnership that specializes in the distribution and marketing of transportation fuels and related products. The company operates through two primary segments: wholesale fuel distribution and retail marketing. In wholesale distribution, Sunoco supplies branded fuels to distributors, commercial customers and resellers across the United States. Its retail marketing arm operates a network of company‐owned and franchised Sunoco branded service stations and convenience stores, providing gasoline, diesel, ethanol blends and lubricants to consumers.
Sunoco’s product portfolio extends beyond traditional fuels to include biofuels, specialty chemicals and on‐road diesel treated to meet ultra‐low sulfur requirements.
