Q3 2025 Sunoco LP Earnings Call

Speaker #3: Greetings and welcome to Sunoco s third quarter 2020 Earnings Conference call . At this time , all participants are on a listen only mode .

Speaker #3: A question and answer session will follow the formal presentation . If anyone should require operator assistance during the conference , please press Star Zero on your telephone keypad .

Speaker #3: As a reminder , this conference is being recorded . I would now like to turn the conference over to your host , Scott .

Speaker #3: Thank you . You may begin .

Speaker #4: Thank you and good morning , everyone . On the call with me this morning are Joe Kim , Sunoco LP's president and chief executive officer .

Speaker #4: Karl Fails chief operating officer , Austin Harkness , chief commercial officer Brian Hand , chief sales officer . And Dylan Bramhall , chief financial officer .

Speaker #4: Today's call will contain forward looking statements . Please refer to our earnings release and SEC filings for risk factors and reconciliations of non-GAAP financial measures , including adjusted EBITDA and distributable cash flow .

Speaker #4: As adjusted . It has been another busy quarter for Sunoco , and I'd like to begin my remarks by providing a brief recap .

Speaker #4: Last week , we successfully completed the acquisition of parkland Corporation and a transaction valued at approximately $9 billion . This transaction has created the largest independent fuel distributor in the Americas and a leading operator of energy infrastructure .

Speaker #4: We are confident it will provide compelling financial benefits for our unitholders as our asset portfolio has evolved over the past several years , we have significantly improved the stability of our income while also strengthening our financial position and scale .

Speaker #4: Over the past 12 months , Sunoco and Parkland on a combined basis generated over $3 billion in pro forma adjusted EBITDA across our field .

Speaker #4: Business and our midstream operations . The parkland acquisition will be immediately accretive to distributable cash flow per common unit , and we expect over $250 million in synergies by 2028 , which will result in greater than 10% accretion .

Speaker #4: Additionally , our highly successful financing transactions executed in September outperformed our expectations and will deliver approximately $40 million of additional annual cash savings .

Speaker #4: This transaction , combined with our proven track record of disciplined capital allocation , will create greater financial flexibility for ongoing distribution growth . Solid free cash flow , and strengthened credit profile .

Speaker #4: Finally , I'm pleased to remind investors that tomorrow , Thursday , November 6th , Suncorp will begin trading on the New York Stock Exchange under the ticker Sun .

Speaker #4: See this new C Corp tracker broadens investment options . As a reminder , sun C is taxed as a corporation and issues a form 1099 , making it an attractive option for investors outside of the United States .

Speaker #4: Domestic institutional investors and personal retirement accounts . Now , turning to our financial and operating results . The third quarter continued Sunoco's strong financial and operational performance throughout 2025 .

Speaker #4: The partnership delivered a record third quarter with adjusted EBITDA of $496 million , compared to $470 million a year ago . Both excluding one time transaction related expenses .

Speaker #4: Distributable cash flow , as adjusted , came in at $326 million for the third quarter . In the third quarter , we spent approximately $115 million on growth capital and $42 million on maintenance capital .

Speaker #4: This includes the partnership's proportionate share of capital expenditures related to our two joint ventures with energy transfer of $16 million for growth capital .

Speaker #4: And $4 million for maintenance capital . Turning to the balance sheet , as of the end of the third quarter , a $1.5 billion revolving credit facility had no outstanding borrowings leveraged at the end of the quarter was approximately 3.9 times .

Speaker #4: Following the closing of the parkland transaction , our credit facility was increased by $1 billion to $2.5 billion , which will provide greater liquidity for the partnership .

Speaker #4: Moving forward . As of today , our credit facility is currently undrawn . On October 20th , we declared a distribution for the third quarter of 92.0 $0.02 per common unit or approximately $3.68 on an annualized basis .

Speaker #4: This represents an increase of 1.25% compared with the previous quarter , and resulted in a trailing 12 month coverage ratio of 1.8 times .

Speaker #4: This marks the fourth consecutive quarterly increase in Sunoco's distribution , and is consistent with an annual distribution growth rate of at least 5% .

Speaker #4: I would like to conclude my remarks by financial position continues to be stronger than at any time in Sunoco's history . Our legacy business remains strong as exhibited by our record third quarter adjusted EBITDA .

Speaker #4: Prior to closing the parkland acquisition last week , we were on a path to achieve our 2025 adjusted EBITDA guidance and intent to provide formal 2026 guidance for the combined company early next year .

Speaker #4: With that, I will turn the call over to Karl to discuss our operational results, stating that our.

Speaker #5: Thanks , Scott . Good morning everyone . As Scott walked through , our teams have been very busy this quarter and the operational and financial results highlight the strength of our business and the benefits that come from accretive growth .

Speaker #5: We delivered strong results across all three segments. So let me walk through some of those details, starting with our fuel distribution segment.

Speaker #5: Adjusted EBITDA came in at $238 million , excluding $6 million of transaction related expenses , compared to $214 million in the second quarter and $253 million in the third quarter of last year .

Speaker #5: Volumes came in at 2.3 billion gallons during the quarter , up 5% from last quarter and up 7% compared to the third quarter of last year .

Speaker #5: This volume growth far outpaces total U.S. volume growth for both gasoline and diesel, showcasing that our investments are yielding tangible results in both our growth capital program and fuel distribution.

Speaker #5: Bolt on transactions reported margin for the second quarter was 10.7 cents per gallon , compared to 10.5 cents per gallon in the second quarter and 12.8 cents per gallon in the third quarter of 2020 .

Speaker #5: For . When we look at margins across our system , there are a few perspectives worth pointing out . First , we believe that break even margins continue to be supported by many of the same factors that we have discussed over the past few years , including inflation resulting in higher costs , limited overall volume growth across the industry , and higher interest rates .

Speaker #5: Second , we have seen some tempering of market volatility , which is not produced an outsized fuel profit quarter like we saw during the second and third quarters of last year .

Speaker #5: Even with that headwind , however , this has been a great year in our fuel distribution business . Once you normalize for the sale of our West Texas retail business in 2024 at a very attractive multiple , we expect that in 2025 , we will have grown segment EBITDA for the seventh year in a row .

Speaker #5: The business continues to deliver very strong results in our pipeline system segment . Adjusted EBITDA for the quarter was $182 million , compared to $177 million for the second quarter and $147 million for the third quarter of last year .

Speaker #5: All excluding transaction related expenses . Segment throughput was 1.3 million barrels per day , compared to 1.2 million barrels per day in the second quarter .

Speaker #5: And 1.2 million barrels per day in the third quarter of last year . During the quarter , we saw strong performance across all our pipeline systems on both volumes and gross profit .

Speaker #5: Turning to our terminal segment , we delivered adjusted EBITDA of $76 million , excluding $1 million of transaction related expenses compared to $73 million in the second quarter .

Speaker #5: And $70 million in the third quarter of last year . Both excluding transaction related expenses . Segment throughput was 656,000 barrels per day , down from 692,000 barrels per day in the second quarter .

Speaker #5: And 694,000 barrels per day in the third quarter of last year. Our mix of business continues to have a strong year, supported by good performance in our terminal assets across all our regions.

Speaker #5: We expect to finish the year strong in our two midstream segments , highlighting the stability of the underlying assets and the work that our teams have done to optimize the expense structure .

Speaker #5: With a focus on reliability and providing flexibility to our customers . Our third quarter results highlight our strong fuel distribution , growth driven by our capital deployment strategy , with a good mix of signing up new customers and bolt on M&A , which continues to deliver market share gains and stable earnings .

Speaker #5: This strategy is complemented by our midstream operations, with the Parkland transaction now closed. Our confidence in its highly accretive value has grown steadily over the past several months.

Speaker #5: It is another opportunity for us to deliver on our strengths , maintaining reliable operations , disciplined expense management , optimizing gross profit and effectively and creatively deploying capital .

Speaker #5: I will now turn the call over to Joe to provide his overall perspective . Joe .

Speaker #6: Thanks , Carl . Good morning everyone . We delivered a very strong third quarter , although 2025 is not quite over . I want to share some perspectives on this year as a whole .

Speaker #6: On the last earnings call , we stated that the back half of this year will outperform a good first half with the third quarter results in the books .

Speaker #6: As we stated, we are on track to deliver another record year. All three business segments are performing well. Our fuel distribution business continues to grow and provide stable earnings.

Speaker #6: Our pipeline and terminal segments also continue to perform at a high level . Last year's NuSTAR acquisition is proving to be outstanding . We have reduced expenses by 25% while improving gross profit and maintaining reliability .

Speaker #6: As for the parkland acquisition , let me start off by publicly welcoming the parkland employees to the Sunoco team with the closing complete , we posted a new investor presentation earlier this week .

Speaker #6: I want to highlight some key insights , both legacy Sunoco and Legacy Parkland are performing as expected . As I said earlier , Sunoco will have another record year .

Speaker #6: As for parkland , the 2025 year to date results have materially outperformed 2024 . When you combine the two businesses together , our diversified portfolio spans across the US , Canada .

Speaker #6: The greater Caribbean and Europe . We will deliver over 15 billion gallons of refined products . Scale is vital in our business and we are now the largest fuel distributor in the Americas , specifically within our midstream and fuel distribution portfolio .

Speaker #6: The parkland addition greatly enhanced our position in the Atlantic Basin . We have over 7 billion gallons of contracted fuel demand from eastern Canada to the US East Coast to the Caribbean to South America .

Speaker #6: Throughout this footprint , we also have a leading position of terminals and to expertise to manage waterborne and other sourcing options . Bottom line scale plus key assets equals a leading supply cost advantage moving forward , our immediate top two priorities are .

Speaker #6: Number one , integrating parkland . And number two , getting our balance sheet back to four times . Leverage , just like we did with the NuSTAR acquisition .

Speaker #6: We'll quickly make key decisions to integrate the two companies to achieve synergies as soon as possible. We expect more than $250 million in synergies.

Speaker #6: We are digging deep into every part of the acquired business . We will provide more precision and timing when we complete the process .

Speaker #6: As for the balance sheet , we expect to be back to our long term target leverage of four times within 12 months . This is faster than the timeline that we gave back in May .

Speaker #6: Let me wrap up . As Scott mentioned earlier , the parkland transaction is highly attractive with a greater than 10% accretion going forward .

Speaker #6: We expect free cash flow to be over $1 billion a year in the near future . The over 50% increase versus our standalone case puts us in a better position to execute on our capital allocation strategy , which is a creative investments , distribution , growth and a strong balance sheet .

Speaker #6: Operator that concludes our prepared remarks . You may open the line for questions .

Speaker #3: Thank you . At this time , we'll be conducting a question and answer session . If you'd like to ask a question , please press star one on your telephone keypad .

Speaker #3: A confirmation tone will indicate your line is in the question queue. You may press *2 if you'd like to remove your question from the queue.

Speaker #3: For participants with speaker equipment , it may be necessary to pick up your handset before pressing the star keys . One moment please , while we poll for questions .

Speaker #3: Our first question comes from Spiro Donas with Citi . Please proceed with your question .

Speaker #7: Thanks . Operator . Good morning , team . First question , Joe , maybe just to pick up on some of those closing comments around synergies looking like the floor now is sort of firmly around over 250 million here .

Speaker #7: I know you're a few days into this merger, but I also know you've been busy in the background getting ready for this integration.

Speaker #7: So, curious if you have a sense for just maybe how much above that $250 we should have in mind? Are these more commercial or cost in nature?

Speaker #7: And maybe . How are you thinking about the cadence of realizing those over the next three years ?

Speaker #5: Hey , Spiro , this is Carl . Good morning . Yeah , really ? To build on Joe's comments in his prepared remarks , there were really two updates that we provided in in the release and in the investor deck earlier .

Speaker #5: One was the floor on the synergy number . And then the second was tightening our time on getting back to the four times leverage to within 12 months .

Speaker #5: And really that comes because of the confidence we have based on the work we've done in the last six months . There material synergies on both the expense and commercial sides .

Speaker #5: I think the best way to think about the expense side of things , whenever you put two large companies together , you get to leverage the scale to find efficiencies .

Speaker #5: And we've we've spent the integration planning period planning that . And I'd say , you know , already a lot of those plans were started to be executed .

Speaker #5: This weekend after we closed . Then you layer on that that we have a very strong track record of good expense discipline . And so we feel there's a lot of opportunity there .

Speaker #5: But on the commercial side , our scale helps us as well . The teams have begun putting together plans . Most of those are on the supply side , but they're also going to be some opportunities on how we go to market .

Speaker #5: That should yield results . As far as your question on the cadence , you should expect that when we issue guidance early next year , that we'll give more details on what that ramp looks like through year three , where the 250 plus should be able to be delivered .

Speaker #5: And as far as your question on the ultimate upside , looks like , you know , here's how we think about it . The two primary measures on this acquisition that we're focused on , and both of them are very visible to the street , are first that we meet our commitment on getting leverage back to four times within 12 months .

Speaker #5: And second , that we're going to show a double digit accretion on a DCF per LP unit basis . So synergies clearly are the strongest lever we have to hit those metrics .

Speaker #5: But at some point in the future , those are going to merge with with just improvements in growth in the base business that we've acquired .

Speaker #5: So , so bottom line is we feel very confident and we're going to hit on those metrics as we've laid out .

Speaker #7: Great . Thanks , Carl . Second one maybe just going to Sunoco Corp's dividend equivalency . It looks like the latest update points to minimal taxes for at least five years .

Speaker #7: Just curious , can you put a finer point on what that means for Sun Ce's dividend equivalency over that period ? And what's within your control to maybe push that out ?

Speaker #7: Even further ?

Speaker #4: Yeah , this is Scott . Look , there was no change to our two year dividend equivalency that we announced with the transaction in May .

Speaker #4: This was a feature that we granted as part of the Parkland transaction. Our intention is to keep the Sun CE distribution very similar to Sunoco LP past this time period.

Speaker #4: And having minimal corporate income taxes is the foundation for achieving that . And as we laid out in our investor materials , we expect this to be the case for at least five years .

Speaker #4: I will continue to pursue opportunities and strategies that allow us to minimize corporate taxes at sun C on an ongoing basis , namely by deploying capital on organic CapEx and acquisitions .

Speaker #4: Things of that nature. We'll update investors when appropriate on the outlook past the five-year period.

Speaker #7: Great . I'll leave it there . Thank you . Gentlemen .

Speaker #3: Our next question comes from Justin Jenkins with Raymond James . Please proceed with your question .

Speaker #8: Great . Thanks . I guess I'd like to start on on the distribution side of things . So obviously growing at a nice 5% clip , but but obviously a much bigger business and more stable business with a lot of free cash flow with parkland does does that give you the potential to , to eventually maybe push that growth target up over time ?

Speaker #8: Beyond the at least 5% window that you've looked at here recently?

Speaker #6: Hey , Justin , it's Joe , obviously . I think I've said it like a broken record . You know , quarter after quarter .

Speaker #6: You know , the foundation of our capital allocation is having a a stable , reliable and growing distribution . And I think the foundation of that is we continue to grow cash flow .

Speaker #6: I think we've stated a few times that for the eighth consecutive year , we've grown DCF per common unit , and we expect that to continue for the future .

Speaker #6: Our coverage is hovering , you know , around 1.8 , our balance sheet is in a good position . So when we said , I think last year that we expected multi-year distribution increase , we said that pre parkland , you add in parkland with double digit accretion .

Speaker #6: So we were in a good place before parkland . We're in a better place after parkland . As far as an exact amount for 2026 and above .

Speaker #6: We'll provide that as part of our kind of overall guidance early next year . But I think what you can take away that is that we're in a better position than we were even last year for meaningful distribution growth on a multi-year , multi-year path .

Speaker #8: Great . Appreciate that , Joe . Second question is on Hurricane Melissa . Impacts . Certainly you've you've had some presence in the Caribbean over time in parkland .

Speaker #8: Is is a bigger business in the Caribbean . Anything that that you want to highlight here in terms of of impacts from the hurricane itself on , on the broader Caribbean portfolio for the fourth quarter and into 2026 .

Speaker #9: Yeah . Hey , Justin , this is Austin . You know , first I just start with , you know , on the human side of things , our thoughts are with the people in the region .

Speaker #9: You know , and the loss of life and property associated with the storm . This was a powerful storm from a business standpoint .

Speaker #9: Specifically , the impact to to our portfolio was largely limited to the Jamaica business . And , you know , fortunately , all the employees in the region have been accounted for .

Speaker #9: I think , you know , this is a credit to the team . We've got a fantastic team down there , you know , from the work they did , including their meticulous preparation in advance of the storm , making sure that the area was as prepared as possible to the swift recovery or swift response .

Speaker #9: I should say bringing , you know , necessary people , supplies , resources into the island to to assist with recovery efforts . Just to put the business impact into a little bit more perspective .

Speaker #9: You know , Jamaica is one of 25 jurisdictions in markets that that we serve in the Caribbean region . And so overall , we don't expect there to be any material impact to our fourth quarter results for the segment or 2026 and beyond .

Speaker #9: But that's in no way intended to minimize . Obviously , the human impact . And devastation to to some of the folks that were impacted in the region .

Speaker #8: Thanks .

Speaker #10: Guys .

Speaker #3: Our next from Theresa Chen with Barclays Bank . Please proceed with your question .

Speaker #11: Good morning everyone . Looking at your comprehensive asset base at this point , could you share your perspective on potential opportunities for your West Coast terminalling assets , as well as any incremental profitability upside for the Burnaby refinery ?

Speaker #11: In light of ongoing California refinery closures ?

Speaker #5: Yeah . Theresa , good morning . This is Karl . I think here's what I'd say . I'll start with the refinery . One is we're thankful and you see the results that the refinery team has delivered this year on improved reliability .

Speaker #5: That's really been our focus . And will be our focus going forward on on the refinery operation . Clearly , California , there have been plenty of refinery shutdowns and different things in the news .

Speaker #5: Our strong asset base on the West Coast , while it's not as big as on the East coast , is growing , and I think there's going to be opportunities so .

Speaker #5: Well , I don't know exactly how the markets are going to shape out over the next two or 3 or 4 think our track record shows that when product flows shift , that we have the scale and expertise to be able to take advantage of them .

Speaker #5: So the refinery really is the platform for our fuel distribution business in Western Canada . And we have a key assets down through the Pacific Northwest and into California .

Speaker #5: So if refinery shutdowns continue and the West Coast of the U.S. and Canada become import markets, we should have the opportunity to supply from our refinery in Canada, or we should have facilities that enable imports coming in from outside the U.S.

Speaker #5: So I think we're well positioned to be able to take advantage of whatever , wherever the years . I shake out .

Speaker #11: Got it . Thank you . And what are your expectations regarding how the recently announced , refined product pipeline projects could impact or create opportunities for your own Gulf Coast ?

Speaker #11: Mid-Continent refined product pipeline infrastructure , as well as your fuel distribution assets in pads two and five .

Speaker #5: Yeah , Theresa , I think my answer is is pretty similar to the California question . I think the well , we don't comment specifically on on certain competitors projects .

Speaker #5: I think those pipeline open seasons and projects that you mentioned really are an indication of some of the changes in US refined product flows as a result of refinery shutdowns in California .

Speaker #5: So I think the same principles are in play . We have a field distribution business that we've have a track record of taking advantage of changes in product flows .

Speaker #5: We now have an asset portfolio , terminals on the West Coast , some pipeline systems in the Mid-con and in Texas that we can use to invest in to provide services for either our own business or our customers .

Speaker #5: Obviously , when things change , sometime their assets that are impacted negatively , but we'll have assets that are impacted positively . So as we look at that all together and our ability to work with our customers to see where we can help meet their strategic objectives , we feel really good about our ability to benefit from these changes .

Speaker #11: Thank you .

Speaker #3: As a reminder , if you'd like to ask a question , please press Star One on your telephone keypad . One moment please .

Speaker #3: While we pull for questions . Our next question comes from Jeremy Tonet with J.P. Morgan . Please proceed with your question .

Speaker #12: Hey, this is Eli on for Jeremy. I just wanted to start on the outlook. I guess what went into the decision not to update the 2025 guide today to include parkland contributions?

Speaker #12: Would that be part of the tank ? Would asset closing and yeah , just thoughts there and then maybe onto 26 and kind of early thoughts there .

Speaker #12: I think you said you'd released guidance earlier next year versus maybe December this year . Just what are the kind of key puts and takes based business and synergies to expect as components to the 26 guide ?

Speaker #12: Thanks , Eli .

Speaker #6: This is Joe . Let me start with 25 . You know , I think the obvious reason is we just closed on parkland and and one of the statements we made earlier is that we expect to close on tank Wood in the fourth quarter .

Speaker #6: So trying to get , you know , put too much precision on when tank and tank was going to happen , you know , it gave us a good reason to be sure about what we're going to provide for guidance for next year instead of just giving an update in 25 .

Speaker #6: The other thing is , is that for the reason why we typically have given guidance in December of every year , we pushed it to early next year .

Speaker #6: We just got all the budgets that parkland put together for their business . Going through that with a fine tooth comb . We .

Speaker #6: Based business is going to perform like, and we'll, and that'll be a significant part of our guidance for next year. As far as early thoughts on 2026, I can give you a few things.

Speaker #6: I think that might be helpful . First of all , the parkland business is performing year to date better than 2024 , so we're starting with a really good baseline with parkland .

Speaker #6: Secondly , for Sunoco Legacy business , we continue to grow . We've grown year after year , and 2026 on a standalone basis .

Speaker #6: Won't be any different . And I think Carl talked in depth about the synergies . You know , we increased the we put the at least 250 million synergies .

Speaker #6: We think this is going to be an outstanding acquisition for us . We're in the process of going through more precision and exact timing and all that will come together when we give guidance .

Speaker #6: But I think the takeaway is , is that we feel even better about this acquisition than when we announced it in May . And we're well positioned to have another outstanding year in 2026 .

Speaker #12: Awesome. And then, maybe just back to the base business. I think you talked about kind of just steady improvement there.

Speaker #12: Maybe in the fuel distribution side , just thinking about the CPG margins following the integration of Pki's assets , you know , how should we think about those , you know , margins trending as we move forward ?

Speaker #12: I know you you guys are the largest fuel distributor in North America , and you have a lot of economies of scale . So , you know , should we see any kind of upward pressure on those margins going forward ?

Speaker #6: Yeah . Eli , let me give you a couple of thoughts about about more on the segment basis . And I'll give you the pieces .

Speaker #6: And then when we give guidance to all that , all this will kind of tie out together . First of all , we'll start with the PKI parkland , US business .

Speaker #6: Their legacy business . I think it's been well documented that they've had some struggles over the last few years . The exact reason , the detail , the insider view .

Speaker #6: We don't have the exact details yet , but we will . And then but here's what I think to give you clarity on the US business , we view , we view Parkland's US fuel distribution business .

Speaker #6: Just like a bolt on acquisition . We've done time , you know , over and over again . So you know we're going to we're going to channel manage it for income stability .

Speaker #6: We're going to do gross profit optimization . We're going to cut expenses . So in due time , pretty darn quickly , we expect the parkland , US business that struggle to perform in line with what Sunoco has done year after year .

Speaker #6: So we feel very positive about that . As far as the Canadian business , the way that I would probably look at it is they've had they've had strong third quarter results .

Speaker #6: I'm not surprised these assets in Canada and fuel distribution perform well year after year. The Canadian assets have some key elements that I really like.

Speaker #6: First of all , they got scale . We got scale . You know , 1 in 5 fuel stations is fueled by parkland .

Speaker #6: So incredible scale in parkland in Canada . Secondly , the Canadian relative to the US , they've had a long history of sustained higher margins than us .

Speaker #6: We don't think this is going to change. And finally, we have channel management opportunities. We've done that with every acquisition we've made.

Speaker #6: We've taken the assets and we'll put it into the right channel where we think we can have the most income stability . So from a Canadian field distribution side , we think this is going to be additive to our overall fuel distribution portfolio .

Speaker #6: And the Caribbean . We see you know these are a bunch of niche markets with high margins . And we think this is going to continue .

Speaker #6: We have history in niche markets like Hawaii . And Puerto Rico . And then some of these markets also have have material GDP growth in some of these areas .

Speaker #6: So we think will will share in the upside . So if you put it all together I feel better about our fuel distribution portfolio .

Speaker #6: And that's the reason why we thought parkland was a great fit for us .

Speaker #12: Great . I'll leave it there . Thanks .

Speaker #3: Our next question comes from Ned Bahramov with Wells Fargo . Please proceed with your question .

Speaker #13: Hey , good morning . Thanks for taking the questions . I want to stay on the legacy Sunoco US fuel distribution business here .

Speaker #13: A few factors in play . On the one hand , the ongoing government shutdown and some signs of weaker fuel demand don't seem constructive for volumes .

Speaker #13: But on the other hand , as Carol pointed out , your CapEx program and roll transactions year to date , add gallons to your system .

Speaker #13: Either way , you've already demonstrated an ability to protect the overall contribution from this segment across different environments . Just wanted to check if there is a change in how you think about the prospects of the fuel distribution business in the next 6 to 12 months .

Speaker #9: Yeah , this is Austin . You know , I think you you hit it . Overall , I think what we're seeing from a fuel volume standpoint is , you know , in the US more broadly , demand for refined products is roughly flat year over year .

Speaker #9: There has been maybe some softening in recent months, but you know, our legacy business has outperformed the broader segment, right?

Speaker #9: We're up mid to high single digits for Q3 on volumes . And a lot of that , as you pointed out , is owed to our capital allocation strategy and growth capital deployment , including growth CapEx and some of the bolt on accretive M&A that we did in the first half of this year .

Speaker #9: That's that's yielding benefits in Q3 and beyond . In terms of , you know , changes to to expectations . You know , we actually see the fundamentals , you know , as strong for the segment as they've ever been .

Speaker #9: The business is healthy. With our combined asset base now, including the parkland acquisition, we're well positioned to continue our historical trend of growing EBITDA for the segment year over year.

Speaker #9: Going forward .

Speaker #13: Great . And I guess a quick question on on growth capital . Could you could you talk about the key areas of investment for Sunoco in the third quarter , other than the 16 million contribution to the gathering JV or are you still primarily spending in support of the fuel distribution business , or are there organic opportunities in your pipeline and terminals segments ?

Speaker #5: Yeah , Ned , this is Carl . Our growth capital is spread across all of our segments . But really it is in a best project wins type of mentality .

Speaker #5: And I , you know , obviously we haven't done any large projects in our pipeline systems or terminal segments . But there's there's plenty of what we'd call smaller to medium sized optimization type projects .

Speaker #5: Some of them unlock more opportunities with our fuel distribution business . Some of them unlock more readable income from third party customers . So really , I it's fuel distribution pipelines and terminals all have growth capital in addition to our parts of the JVs .

Speaker #13: Thank you . That's all I had .

Speaker #3: We have reached the end of the question and answer session . I'd now like to turn the call back over to Scott for closing comments .

Speaker #4: Thanks for joining us on the call today . As we said , there are a lot of great things to look forward to in 2025 and beyond for Sunoco , and we look forward to updating you going forward .

Speaker #4: Please reach out if you have any questions . Thanks for tuning in and always appreciate your support .