Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to Sunoco and Sunoco Corp Q3 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press the star 1. I would now like to turn the call over to Scott Grischow, Senior Vice President of Finance. Please go ahead.

Thank you and good morning everyone. On the call with me this morning are Joe Kim, President and Chief Executive Officer, Karl Fails, Chief Operating Officer, Austin Harkness, Chief Commercial Officer, Brian Hand, Chief Sales Officer, and Dylan Bramhall, Chief Financial Officer. Today's call will contain forward-looking statements that include expectations and assumptions regarding Snoqualpie's future operations and financial performance. Actual results could differ materially, and we undertake no obligation to update these statements based on subsequent events. Please refer to our earnings release as well as our filings with the SEC for a list of these factors. During today's call, we will also discuss certain non-GAAP financial measures, including adjusted EBITDA and distributable cash flow as adjusted. Please refer to the Sunoco LP website for reconciliation of each financial measure. The partnership continued its strong performance in 2026 with a record third quarter adjusted EBITDA of $1.06 billion, excluding approximately $11 million of one-time transaction expenses. Third quarter distributable cash flow as adjusted was $588 million. On October 22nd, we announced a distribution of approximately $1.01 for both Sunoco LP common units and Sunoco Corp shares. This represents a quarterly increase of 1.25% from the prior quarter, over 10% versus the third quarter of 2025. Our business continues to generate strong cash flow, resulting in a trailing 12-month coverage ratio of 2.1 times. Our balance sheet liquidity position remains strong. We had $2.3 billion in availability under our revolving credit facility at the end of the quarter and leverage was approximately 3.5 times, well below our long-term target. Finally, we spent $121 million on growth capital and $116 million on maintenance capital. I want to wrap up my comments by stating that our execution in 2026 has put us in an outstanding financial position. In less than one year since closing on the Parkland acquisition, we have already delivered double-digit growth to DCF per common unit while also getting our balance sheet below our long-term leverage target of four times. Investors have benefited from this execution through year-over-year distribution growth of over 10%. Finally, we have continued to execute on growth opportunities including the acquisition of Offen Petroleum for $600 million, which we closed last week. In summary, we expect our financial position will continue to strengthen, which will provide us with continued flexibility to pursue high return growth opportunities while maintaining a healthy balance sheet and a secure and growing distribution for our unit holders. With that, I will turn it over to Karl to walk through some additional thoughts on our third quarter performance.

Thanks, Scott. Good morning, everyone. As Scott outlined, we delivered record financial results in the third quarter. Our teams continued to optimize gross profit across fuel distribution, operate our midstream assets reliably, and capture a favorable market environment at the Burnaby Refinery. Let me walk through the performance of each segment. Starting with our fuel distribution segment, adjusted EBITDA was $532 million, excluding $9 million of transaction expenses. This compares with $516 million last quarter and $238 million in the third quarter of 2025, both excluding transaction expenses. We distributed approximately 4.2 billion gallons during the quarter and fuel margin was 16.8 cents per gallon. Volume was up slightly and margin was down slightly from last quarter. While industry demand indicators were mixed and varied by geography, The volatility in the market continued to provide opportunities for gross profit optimization, especially for a system with our scale. Volatility remained elevated, particularly in diesel, reflecting tight distillate inventories, global supply disruptions, refinery outages, and fall maintenance activity. Our scale, supply optionality, and commercial capabilities allowed us to respond to those market conditions. When you step back, our model continues to deliver on what it is designed to do. We do not manage the business for an individual quarterly volume or margin outcome. Instead, we manage for total fuel profit, EBITDA, and returns on deployed capital. The third quarter result demonstrates the value of applying that approach across a much larger geography. And more importantly, that geography continues to expand. As Scott shared earlier, we closed on the acquisition of Austin Petroleum last week. Thank you. Thank you. and welcome the new team members to Sunoco. In our pipeline system segment, adjusted EBITDA was $166 million compared with $190 million last quarter and $182 million in the third quarter of 2025. Throughput was approximately 1.3 million barrels per day, essentially flat with last quarter and the third quarter of 2025. Sequential reductions were related to lower contributions from our joint ventures and some FERC clawbacks we received in the first half of the year that did not repeat in the second half. However, the underlying characteristics of the segment remain consistent. The segment consists of critical infrastructure assets generating stable income with targeted opportunities to grow volumes, improve utilization and generate attractive returns from relatively modest capital investments. Moving on to our terminal segment. Adjusted EBITDA was $124 million. excluding $2 million of transaction expenses compared with $115 million last quarter and $76 million in the third quarter of 2025, both excluding transaction expenses. Throughput was approximately 1 million barrels per day in line with last quarter. Overall results were supported by a strong quarter in our transmix processing business as well as a continued contribution of our larger European network. This is another segment where the operating story is straightforward. The assets continue to generate stable results, and the expanded system gives us additional opportunities to increase utilization, support fuel distribution, and deploy growth capital where we have attractive customer-backed returns. Turning to our refinery segment, adjusted EBITDA was $238 million compared with $175 million last quarter. The Burnaby refinery throughput averaged 57,000 barrels per day during the quarter, slightly up from the second quarter. Refining margin topped $54 per barrel, and expenses were below $10 per barrel for the second quarter in a row. The market environment clearly remained favorable, but the financial result also reflects strong execution by the team. Our priorities at Burnaby remain safe and reliable operations, disciplined expense management, and positioning the facility to capture available market opportunities. We understand that refining margins will move over time. Our job is to manage what we can control and operate the facility with a long-term mindset. Before I wrap up, I want to share a few final thoughts. This was an outstanding quarter, but it is really a continuation of the same operating focus that we deliver quarter after quarter, year after year. We grow and integrate. We operate our assets reliably and efficiently. We fully capture market opportunities all through disciplined execution of our strategy. I will now turn it over to Joe to share his final thoughts. Joe?

Thanks, Karl. Good morning, everyone. We had an outstanding third quarter. Although 2026 is not quite over, I want to share some perspectives on this year as a whole. 2026 will be another record year for Sunoco. With three quarters completed and visibility into the fourth quarter, we're highly confident that we will surpass the top end of our guidance. This will be our eighth consecutive year of EBITDA growth. Obviously the Parkland acquisition is a big part of our recent success. We have already delivered approximately a 25% growth in DCF per common unit in less than one year of ownership. In addition, our pre-Parkland businesses are performing at a high level. Our portfolio has become more diversified with greater scale and geographic reach. Combining this enhanced portfolio with our proven business model, we're able to succeed in various commodity environments. 2026 is a good example of our ability to deliver outstanding results in a higher-priced volatile market. Looking further into the future, we believe volatility will persist. Agnostic of the direction of prices, we're confident that we'll deliver strong results in various scenarios. Let me wrap up with some final thoughts. We've had material accretive growth over the last five years, and we expect this to continue. Earlier this year, we provided a multi-year guidance of at least $500 million a year of bolt-on acquisitions. We exceeded this amount in 2026, and we expect this to be a modest bar in 2027 and beyond. In addition, we'll continue to deploy attractive organic growth capital. Bottom line, when you combine our portfolio of stable income streams with acquisitions and investments that are delivering on expected economics, our cash flow will continue to grow. We're in a strong position to continue to increase distributions while executing on creative growth and maintaining a strong balance sheet. Operator, that concludes our preferred remarks. You may open the line for questions.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to add a question, Please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and one follow-up question only. Thank you. Our first question comes from the line of Spiro Donis with Citi. Your line is open.

Hi, this is Chad on for Spiro. I'm just starting off on guidance. You're now trending over the 26 guidance range. Could you just provide kind of your latest thoughts on how the fourth quarter is shaping up versus your record third quarter results and maybe any outlook into 27?

Hey, Chad, this is Joe. I think the first takeaway is that 2026 is going to be another outstanding year for Sunoco. Obviously, the refinery has performed very well this year, but even if we had more cracks that were closer to the mid-cycle levels for this year, we would still surpass the guidance that we gave back in January. I think the key point is that all four business segments are performing very well, and we've delivered on our very high expectations on the Parkland acquisition, as well as other Smaller Acquisition. But I think the most important takeaway is that 2026 is not an outlier, but instead we're going to continue to grow our business. We are very well positioned for 2027 to be another record year, even if refining cracks are closer to the mid-cycle levels.

Perfect. Thank you. And just following up on fuel demand, I guess kind of in this elevated crude price volatile environment, what are you seeing with respect to the impact on fuel demand and margins as a result kind of going forward?

Yeah. Hey, Chad, this is Austin. Happy to walk you through kind of some of the themes that we're seeing across the portfolio. You know, if you start domestically, you know demand in the U.S. has been remarkably resilient despite all the fuel price volatility that we've seen recently so you know if you look at EIA data you know the monthly data shows that diesel is roughly flat on a year-over-year basis with gasoline you know demand being off low single digits year-over-year and then all this is against a backdrop of healthy margins despite the fact that we've had all this flat price volatility and haven't yet hit the part of the volatility curve where prices durably come off and margins widen. So we feel really good about kind of where the U.S. business is for the segment and kind of the outlook there. If you move to Canada, just as a reminder and point of reference, flat price volatility has actually been amplified in Canada relative to what we've seen in the U.S. So as an example, diesel recently touched $7 a gallon, USD equivalent there. And so some of the themes that we had touched on last quarter around demand starting to soften, you know, continue into Q3. So, you know, diesel and gasoline demands offload amid single digits. But as a reminder, that's a very strong margin environment. We've seen strong margins and durable margins likely in large part owed to the flat price volatility that we're seeing there. And then lastly, in the Caribbean, that continues to be its own kind of animal. We've got 20 plus markets that we operate in, each with their own demand and margin profiles. What I would just say there is, in general, the theme is The Caribbean has been a growth engine for us. It will continue to be a growth engine for us. And we expect that to be both on healthy volume growth and margin expansion. So all that said, if you followed our story, you all know that if demand softens from here, that paints a pretty bullish picture for what the margin environment looks like. And then also, as Joe mentioned in his opening remarks, You know, we built this portfolio and this segment to perform in a range of economic scenarios. And so we feel really well positioned to grow the segment from an EBITDA and fuel profit standpoint, durably into the future.

Thanks, very helpful. Thanks for the time today.

Our next question comes from the line of Gabe Maureen with Mizuho. Your line is open.

Hey, good morning, everyone. You know, $500 million, I guess, is a pretty easy bogey to clear at this point. But Offen, nonetheless, was a pretty big transaction for you. Can you just talk about that asset as a fuel distributor versus others and what it may give you? And then also any chance of another acquisition announcement two days after earnings like you did with Offen?

Thanks, Gabe. That was Karl. Clearly, we're excited about Offen and Offen. In many ways, often is just a continuation of our roll-up strategy, but clearly it's on a much larger scale. So one of the pillars of our overall fuel distribution strategy is that scale matters. And that is not just from an aggregate basis, but also on a more regional view. So often gives us scale in areas of the U.S. that we haven't necessarily had scale before. So that really leads into the next benefit, which is supply optionality. So that larger scale in the Midwest, Mountain West region really integrates well into our footprint in Canada, in the South, Southwest, and a little bit further east. So it provides a lot of options for us to supply and integrate those markets into our much broader network. And then I think the last thing I'd mention is people. with often we picked up a couple of really good leaders that are going to help us on our much larger portfolio and we're excited to have them join the team.

Great. Thanks, Karl. And then maybe if I could just ask in terms of going back to the guidance for the year and the bump and I guess not giving a kind of specific range for where you might wind up for 2026, but just within the larger context of thinking about giving guidance going forward, particularly with Burnaby and the volatility in the backdrop here. Can you talk about how you're thinking about that in terms of laying out specific parameters for the market and what you want? You obviously want to show a rateable growth rate, I think, with the underlying business and how you would kind of go about communicating that.

Yeah. Hey, Gabe. This is Joe. As far as guidance, we'll follow the same kind of rhythm that we've done in the past. We'll provide guidance in early – early January of next year. I'll kind of reiterate what I said earlier. I want to reemphasize that 26 is not an outlier for us. Cracks were really great this year. At the same time, the point is that even if we assume a mid-cycle type level, we're going to see sun grow in 2027 and you should expect sun to grow in 2028. That's why we gave that guidance earlier this year. that we think that we can do bolt-on acquisitions of at least $500 million. This year, we should end up roughly about $1.5 billion in bolt-on acquisition. And if you add in our organic growth capital, we're well over $2 billion. And I said it in the prepared remarks, I think $500 million a year bolt-on acquisition is a modest bar. As we kind of look at all the different geographies we're in, we look at the different sectors we're in, and we see what's kind of coming to the market, what's not on the market, what those opportunities are, we feel really good about our growth and that's all with the foundation that all our businesses are performing very well.

Thanks, Jeff.

Next question comes from the line of Theresa Chen with Barclays. Your line is open.

Morning. Given the recent M&A activity across refining and the strength and margins, how are you thinking about the strategic value and long-term fit of Burnaby within your portfolio? Is there a valuation at which you would consider monetizing the asset?

Hey, Teresa, it's Joe. Here's the way that we look at the Burnaby Refinery. So, you know, I've talked to a lot of y'all many times. Our strategic intent was never to say that we're going to go buy a refinery and put it into the portfolio. But the parkland acquisition, as I said, we're already, you know, 25% DCF growth within a year. So that worked out tremendously for us. The way that I think you should look at our business is that If you look at our other three sectors, fuel distribution, our pipeline, and our terminals segment, they're stable and growing. And the way that I would look at the Burnaby Refinery is it's kind of an asymmetrical upside for us, where whenever cracks blow out, we're going to take that to the bottom line. But even if it goes back to a mid-cycle or slightly below mid-cycle level, we're going to continue to grow our overall business. So that's the way we're looking at it as far as Opportunistically, are we trying to grow the refining sector? And the answer is no. That's one scenario that I would say that we would look at is if there was a identical type of match to Parkland that came with a fantastic business that also happens to have a refinery, yeah, we'll take a look at that. But as far as on a standalone segment basis, we like the position we're in where we have three segments that are stable and growing. and we have the smaller segment that gives us asymmetrical upside in various environments.

Thank you. And I want to go back to Austin's comment about demand elasticity, taking into account, you know, your comment about not hitting the part of the volatility curve that would impact demand and margins at this point. But it does feel that the market has been testing that threshold for some time. Where do you see that in selection point today?

Yeah. Hey, Teresa. You know, it's a good question. I think it's one that's on a lot of our minds. But frankly, it's not one that we spend a lot of time thinking about because our guess is likely going to be wrong. I think what we have seen is there's a couple of different themes that we can talk to. One is When there's flat price volatility, the degree and direction in which it's going to impact demand is really a question of how high does price go and for how long, right? And so to your point, I think we've seen extended periods of pretty significant volatility, but demand has been holding up. As to when demand gets impacted, I think is anyone's guess. What I would say is we've built a portfolio, just going back to my earlier comments and Joe's opening remarks, we've built a portfolio to perform in a range of economic conditions. And I think Given our scale, the supply chain optionality, the logistics capabilities that Karl referenced earlier, we feel really well positioned, regardless of what the macroeconomic future kind of holds, that we're going to be well positioned to grow the segments EBITDA well into the future.

Thank you. Next question comes from the line of Vratan Reddy with JP Morgan. Your line is open.

Hey, good morning. Thanks for taking my question. I wanted to start on the fuel distribution segment, and maybe if you guys could just speak to strengthen margins there, your outlook, and the synergies you still have left to capture in that segment.

Yeah, this is Austin. Just going back to some of the earlier comments that have been shared, I think we feel really good about where margins are right now. I think for those that are maybe newer to the story, We don't really solve for margin or volume independently. It's more a story around fuel profit and optimizing for EBITDA growth on a year-over-year basis. There's always going to be some quarter-to-quarter volatility, but as mentioned earlier and then I think implied relative to Teresa's question a moment ago, we feel really good about where margins are right now given where flat price volatility has been and the fact that prices haven't durably come off. which is where we tend to see the most margin expansion.

Thanks for that. And then in pipelines, is there anything that we should note this quarter, a little softer versus expectations beyond seasonality?

Yeah, I mean, I mentioned a couple of things in my prepared remarks. I don't know that there's a lot more color to add other than, you know, just like in most of our segments, we look at it on a rolling 12-month sort of basis. So... There's always quarter to quarter fluctuations, whether it's certain contracts or certain pricing or certain kind of timing variations. But overall, we're really happy with our pipeline business. And as Joe mentioned earlier, I think both of our midstream segments, terminals and pipelines, provide a lot of stability in our portfolio.

Got it. Thank you.

and again if you would like to add a question please press star then the number one on your telephone keypad and our final question comes from the line of Ned Baramo with Wells Fargo your line is open hi good morning thanks for taking the question could the planned pipeline

which is linking the Midwest, MidCon, and Gulf Coast refinery supply to Arizona, Nevada, and California together with the recently completed refined products pipeline expansion into Denver and the Denver airport. Could this tighten product balances in the MidCon and potentially increase demand for northbound shipments from the Gulf Coast? And if yes, do you Is there a role for Sunoco to play in this rerouting of flows?

Yeah, Ned. I mean, the short answer is yes. I mean, there are obviously a lot of hypotheticals in what you've laid out. I know there are other pipeline companies that have announced projects that can impact the product flows in the middle part of the U.S. I'd say here's our view is... if those projects are built and product flows change we've experienced that a lot in our history and we are well positioned particularly in the mid-continent we have our pipeline system that kind of flows north in the mid-continent but I'd extend that to the broader kind of point that Jill made earlier given our portfolio I mean we've intentionally put together the portfolio we have to be able to understand and take advantage of lots of different product shifts or supply chain shifts, whether they're a tailwind like the hypothetical that you gave us could be, or even if they're a headwind, we can find some other way in other parts of our business to continue to grow year after year.

Understood. And then a quick housekeeping item on operating expenses in the fuel distribution segment. It seems OPEX was well below our forecast. Can you maybe just talk about drivers behind the lower number and how sustainable this is going forward?

Hey Ned, this is Scott. You know, I'd offer a couple comments there. I think one, being a low-cost operator has always been a focus for us and the decline you saw in Q3 is another example of that. Second, the Parkland integration efforts continue and that also contributed to the sequential decline. I think moving forward, There may be some ups and downs sequentially, but looking forward to 2027, we expect an overall decline relative to 26.

Perfect. Thank you.

That concludes the question and answer session. I would now like to turn the call back over to Scott Grischow for closing remarks.

Well, thank you for joining us on the call today, and we appreciate the continued interest in Sunoco. Please feel free to reach out if you have any follow-up questions. This concludes today's call.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.