Sunoco LP (SUN) Q4 2025 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Sunoco LP and the Sunoco Corp. LLC Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, 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 Sunoco LP'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 a reconciliation of each financial measure. Before reviewing our fourth quarter and full year 2025 financial results, I'd like to take a moment to briefly discuss some changes to our financial reporting format, which is included in today's earnings release. First, we have incorporated Parkland's legacy operations into our 3 segments and have also added a fourth reporting segment for our newly added refining operations. Second, today's and future earnings releases will include select financial information for Sunoco Corp. LLC, which we will refer to by its New York Stock Exchange ticker symbol of SUNC. As a reminder, SUNC's only asset is its limited partner interest in Sunoco LP. Because of its limited partner interest in SUN, SUNC consolidates Sunoco LP into its financial statements. Accordingly, on today's call and future calls, we do not intend to cover SUNC's results. Instead, we have included a schedule in our earnings release that reconciled SUNC's distribution from SUN with SUNC's distributable cash flow as well as a summarized consolidating balance sheet. SUNC began trading shortly after we closed the Parkland transaction and will be an attractive option to invest in Sunoco, especially for investors outside of the United States, institutional investors and in personal retirement accounts. We expect minimal corporate income taxes at SUNC for at least 5 years, which will allow for the SUNC distribution to remain very similar to Sunoco LP distribution for this period of time. Moving to this quarter's results. The fourth quarter marked the end of a transformative and record-setting year for Sunoco. We closed the Parkland transaction on October 31, and our team is now fully engaged in integration efforts that are progressing well. The partnership delivered record adjusted EBITDA of $706 million in the fourth quarter, excluding approximately $60 million of onetime transaction expenses. Karl will discuss the segment performance in his remarks. However, this consolidated result reflects the ongoing strength of our operations and the contribution from the Parkland acquisition. During the quarter, we spent $130 million on growth capital and $103 million on maintenance capital. Fourth quarter distributable cash flow as adjusted was $442 million. On January 27, we declared a distribution of $0.9317 per common unit for those Sunoco LP common units and Sunoco Corp. shares. This represents a 1.25% increase over the prior quarter and marks our fifth consecutive quarterly distribution increase. Our trailing 12-month coverage ratio finished the year at a strong 1.9x. We continue to see a multiyear path for an annual distribution growth rate of at least 5%. Looking at the full year 2025, adjusted EBITDA, excluding transaction-related expenses, came in at a record $2.12 billion, a 36% increase over the prior year. This record year reflected solid underlying growth in our base business, a full year of contribution from our NuStar acquisition in approximately 2 months from Parkland. Our balance sheet and liquidity position remains strong. We had $2.5 billion in availability under our revolving credit facility at the end of the year and leverage at the end of the quarter was approximately 4x, in line with our long-term target. In summary, our financial position continues to be stronger than at any time in SonocoC's history, which we believe will provide us with continued flexibility to balance pursuing high-return growth opportunities maintaining a healthy balance sheet and targeting a secure and growing distribution for our unitholders. With that, I will turn it over to Karl to walk through some additional thoughts on our fourth quarter performance.

Thanks, Scott. Good morning, everyone. Our results this quarter capped another record year for Sonoco as we meaningfully expanded our operations and significantly grew our cash flows. With the addition of the Parkland and TanQuid assets, we now operate a diversified footprint, spanning 32 countries and territories and have become the largest independent fuel distributor in the Americas. Each of our segments delivered strong performance in 2025 and are well positioned to contribute meaningfully toward achieving our 2026 guidance. Let me share some more perspective on our fourth quarter results by segment as well as some thoughts on our 2026 guidance we released last month. Starting with our fuel distribution segment. Adjusted EBITDA was $391 million, excluding $59 million of transaction expenses. This compares to $238 million last quarter, and $192 million in the fourth quarter of 2024, both excluding transaction expenses. This growth reflects continued strength in our legacy Sunoco operations, coupled with 2 months of contribution from Parkland. We distributed 3.3 billion gallons, up 44% versus last quarter and up 54% versus the fourth quarter of last year. We continue to see volume growth in our legacy Sunoco business with an increase of more than 2% over prior year compared to a relatively flat U.S. demand profile. This growth is a result of effectively deployed capital via our growth capital plan and roll-up M&A transactions. We have begun the work to optimize our volumes in Canada and the Caribbean as we implement our gross profit optimization approach that we have evolved over the years. Reported margin for the quarter was $0.177 per gallon compared to $0.107 per gallon last quarter and $0.106 per gallon for the fourth quarter of 2024. The much higher margin is a result of the addition of the legacy Parkland business to our portfolio that consists of higher-margin geographies and channels. We have also begun the process of evaluating the channels of operation in each geography to ensure the business is matched with the appropriate channel to optimize return on capital. When we step back and look at our fuel distribution business, we have a proven track record of delivering results in the U.S. and the Parkland assets easily fit into our business strategy there. The Caribbean business is proving to be just as good as we thought, stable income with the opportunity for growth, especially when it couples with our scale in supplying our East Coast business from the water. In Canada, as we dig into the operation, the business is even better than we expected, with higher stability and higher margins than our U.S. business, which we have proven is very stable. When you put the pieces together, the business is strong, and we are confident that we will continue to grow both fuel profit and EBITDA in the segment going forward. That confidence comes from a foundation of strong underlying businesses with good industry fundamentals. Higher breakeven margins and market volatility continued to support our fuel profit. Adding on our proven gross profit optimization approach, quick and thoughtful channel management evaluations and our capital deployment strategy only increases our optimism. The final layer comes from the greater scale enhanced geographic diversity and improved supply optionality, delivering synergies and enabling continued EBITDA growth. We are very excited about the future of our field distribution business. In our Pipeline Systems segment, adjusted EBITDA for the fourth quarter was $187 million compared to $182 million in the third quarter and $193 million in the fourth quarter of 2024, excluding transaction expenses. On the volume side, we reported 1.4 million barrels per day of throughput, up from the third quarter and consistent with fourth quarter of last year. Like last year, the fourth quarter was our strongest quarter of the year with seasonal strength in our agricultural supported markets as well as good performance across the rest of the system. Moving on to our terminal segment. Adjusted EBITDA for the fourth quarter was $87 million. This compares to $76 million in the third quarter and $61 million in the fourth quarter of 2024, all excluding the impact of transaction expenses, we reported around 715,000 barrels per day of throughput, which is up from both last quarter and the fourth quarter of last year. Earnings and volumes in this segment were boosted by the inclusion of terminals income from our Parkland acquisition. This segment continues to deliver stable results, and we're looking forward to the positive addition of our recently closed TanQuid acquisition in the first quarter. Turning to our new refining segment. Adjusted EBITDA for the fourth quarter was $41 million, excluding $1 million of transaction expenses. This reflects approximately 2 months of operations following the close of the Parkland transaction at the end of October. Refinery performance was much improved in 2025 compared to previous years, and we look forward to that trend continuing under our ownership. As we have stated before, the refinery is an important piece of the supply chain supporting our market-leading fuel distribution business in Western Canada. Our goal is to stabilize and improve operations regardless of what the market crack provides in terms of earnings. Before I wrap up, let me talk a little bit more about 2026. In early January, we shared our full year guidance. On the last call, we highlighted our confidence in the highly accretive value Parkland brings to our operations. And the guidance reflects this confidence with an adjusted EBITDA range of $3.1 billion to $3.3 billion. Supporting that EBITDA guidance were a few assumptions. First, that we would close on our TanQuid acquisition in the first quarter, and we accomplished that in January. Second, we expect to realize $125 million of the total $250 million annual synergy target in 2026 and as Scott mentioned earlier, the integration is going well, and we are well on track to deliver on synergies. Third, the guidance includes the planned 50-day maintenance turnaround at the refinery that began in late January. Turning to capital allocation. We expect maintenance capital to be in the $400 million to $450 million range, consistent with our much larger footprint and the refinery turnaround in the first quarter. Additionally, we continue to see very attractive opportunities to grow our business. This will come from a portfolio of at least $600 million of generally quick spend, quick return capital projects as well as acquisitions which we included in expected floor on for the first time. To summarize, 2025 was another record year for Sunoco, and we are well positioned for another record year in 2026. Our outlook is supported by disciplined expense management, a proven strategy of optimizing gross profit and effectively and accretively deploying capital. We entered the year with strong momentum and confidence in our ability to deliver sustained value for our investors. I will now turn it over to Joe to share his final thoughts. Joe?

Thanks, Karl. Good morning, everyone. We came into 2025 financially healthy, and we finished the year bigger and stronger than where we started. Within a very eventful year, there are a few highlights that I want to point out. First, our legacy Sunoco business remains resilient. All segments performed well in 2025, and we delivered on our guidance. And more importantly, we expect continued strong performance. All segments are off to a good start and independently, 2026 would have been another record year for Sunoco legacy assets. Second, we expect the Parkland acquisition to be a home run. Karl and Scott have already discussed the material progress we've made on creating value for our stakeholders. But I think it's worthwhile to take a step back and look at the bigger picture. The Parkland acquisition will be another example of our ability to deliver on value-creating growth year after year. There is growth and there's value-creating growth. We delivered value creating growth for our unitholders. Let me provide a couple of examples. First, our DCF per common unit continues to grow. Sonoco is the only AMZI constituent to grow DCF per common unit for each of the last 8 years, and we expect this to continue. Second, our credit profile continues to improve. We are already ahead of schedule with our leverage back to 4x. Our balance sheet is in a very good position. I'll finish with the final thought. We have earned a solid reputation as a defensive play within the midstream sector. given our ability to deliver strong results and volatile commodity environments as well as macro challenges such as inflation and even pandemics. I think it is well deserved, and we remain well positioned to differentiate ourselves within future challenges. But let's also recognize that we're an attractive growth play. The products that we move and distribute will continue to fuel the U.S. and other economies across the world for decades to come. We have positioned ourselves as a consolidator. With the addition of Parkland and TanQuid, we're now a bigger company. In our case, bigger means more scale, more scale equates to more synergies and more synergies mean continued value-creating growth. We have a strong track record of identifying and delivering on growth. Thus, we stated in our January guidance that we have at least $500 million of bolt-on acquisition opportunities each year for the foreseeable future. This is beyond our growth capital. Simply put, we are uniquely positioned as both a thoughtful defensive play as well as an attractive growth story. As a result, we have never reduced our distribution, but instead, we have increased our distribution for the last 3 years. With Parkland and other investments, we're in an even better position to continue distribution growth for both SUN and SUNC unitholders expect a minimum of 5% annual growth in 2026 and continued growth over a multiyear period. Operator, that concludes our prepared remarks. You may open the line for questions.

[Operator Instructions] Our first question comes from the line of Theresa Chen from Barclays.

Maybe beginning with the fundamentals of the fuel distribution business. How is demand trending across your footprint pro forma Parkland? And on the $0.177 per gallon metric, can you walk us through the drivers of the result this quarter here? And how much of that performance was driven by structural versus maybe more transient factors in your view? And from your perspective, is this CPG sustainable over the medium to long term? Or what would you consider as a good run rate or a normalized CPG. And to completely close this loop, is there a specific CPG level that underlie your $250 million synergy target as well?

Theresa, this is Austin. Let me maybe start in sort of reverse order answering your question. So starting with CPG, as you pointed out, as a result of the transaction, our margin profile has evolved higher. Whether to put stock in $0.177 and pegging that as the new water line, I think is probably it's directionally accurate in terms of direction and magnitude. But with precision, I think we've always said a couple of caveats. One, there's going to be quarter-to-quarter variability in our CPG numbers. And then second, as Karl shared in his prepared remarks, as a result of this acquisition, we're going to be breaking out and executing against our playbook on gross profit optimization and channel management. And so for those reasons, there might be movement in both our volume and CPG numbers independent of what the market might afford. And in terms of do we have a specific number in mind, historically, we haven't we don't target or solve for a CPG number. What we solve for as we've shared in the past, is fuel profit and sustained EBITDA growth over time. And so with that said, in terms of drivers, it might make sense to walk through the different geographic regions in our kind of newly expanded portfolio now and what's driving that? Because essentially, what you're going to -- what we found is Parkland had more street margin exposure in their portfolio than the legacy Sunoco business. And we've always said we were very specific and selective in where we want that street margin exposure in the geographies that Parkland had exposure to, we really like. So, starting with the U.S. business. I think the story is pretty familiar. Demand from an EIA standpoint has been flat to slightly off toward the end of the year on a year-over-year basis. Obviously, Sunoco outperformed those trends, given our deployment of growth capital. And then on the margin side, we continue to see a bullish margin environment buoyed by elevated breakevens. And so if demand moves one way or the other relative to trend, if it exceeds trend, we're well positioned to participate in that environment. If it underperforms trend, obviously, as we've seen in the past, you guys know that, that creates a pretty bullish margin environment for us to operate in. And so we feel really good about the U.S. business. And then turning to Canada, as we shared and Joe and Carl shared in the prepared remarks, we're really excited about the Canadian business and the closer we get to it, the more we like it. And that's for a couple of reasons. If you think about demand, from a trend standpoint, Canadian refined product demand tends to mirror that in the U.S. albeit on a relative basis, it's been stronger in recent years. So where the U.S. has been flat to slightly off on a year-over-year basis, Canada has been flat to slightly up over the last couple of years. And the margin environment is actually very strong. So where we have street margin exposure in Canada are markets that structurally look and feel very similar to the West Coast in the U.S. and the Northeast, where you have high barriers to entry, highly regulated markets, high real estate costs, high labor costs. And if you followed our story, you know that those things are highly correlated with strong margin environments. So we feel really good about the business. And overall, the Canadian business is going to be an outstanding addition to our portfolio. And then moving on to the Caribbean. Matt, we continue to be really excited about the Caribbean. I think it's important to remember that we talk about the Caribbean as if it's the singular monolithic region. The reality is we deliver refined products to 25 different jurisdictions in the region, 22 of which we have onshore business in. And so each of those are going to come with their own specific volume and demand -- or volume and margin profiles. What I will say largely is volume is very strong in the region. A lot of that's driven by markets where exposure like in South America, where, for example, a country like Guyana, where we're the major share player has had 20-plus percent GDP growth over the last 3 years. and Suriname is likely up next, given the offshore oil discoveries in both of those countries. But across the region, we've seen strong demand. And then on the margin side of things, the markets kind of fall into 1 of 2 categories. What we've seen is there's highly regulated pricing environments, which has actually had the result of stabilizing margins higher for all participants in those markets. And then there's the more kind of free market open competition markets where our share, our global supply chain and our scale allow us to enjoy and command a significant margin advantage over other participants in the market. So just to wrap it all up, I think overall, I think we've proven over the years the consistency and resiliency of the field distribution segment and our ability to grow EBITDA year-over-year. And now with our addition of the Canadian business and the Caribbean business, we're better positioned than ever in the segment to continue to grow EBITDA going forward.

Thank you for that detailed answer Austin. Maybe turning to the infrastructure outlook. Can you walk us through the pro forma terminaling portfolio post integration of Parkland and Tankland? And how do the assets now position you across the Atlantic and Pacific basins amid evolving product flows? And where do you see the most attractive growth opportunities from here within your portfolio?

Yes, Theresa, this is Karl. Yes. We've got -- as you point out, across the geographies that Austin just talked about in each one of those geographies, and then if you add Europe into the mix, we have critical infrastructure in each of those markets. And I think it varies by market, but our general approach and view is in many of those markets, I'd say the Caribbean is probably the easiest one to think about our infrastructure really supports and is foundational for our fuel distribution business. In other markets, take Europe, we don't have a fuel distribution business yet, but the assets that we've picked up are highly utilized and very important infrastructure to -- in the supply chain of those markets. And then we have other geographies, whether it's in the West Coast or in the Northeast, where our terminal and pipeline network supports other people's moving product around as well as our own business. And so I think we have examples of each end of that spectrum and we've talked about the opportunity for this vertical integration between our field distribution business and our assets. But we've also talked about how all parties are welcome, and we have customers because our overall approach is to fully utilize the assets that we have. So as we go forward, I think the same playbook is applicable. We think there's more runway to go. I think there's there's more opportunity, whether it's through kind of quick hitting capital projects that we've talked about or additional M&A opportunities to grow that footprint.

Our next question comes from the line of Jeremy Tonet from JPMorgan Securities LLC.

This is Eli on for Jeremy. Just wanted to start on the outlook for bolt-on M&A, which I know you touched on in opening remarks. I'm not sure if this has historically been part of forward guidance, but if we think about the $500 million annual target with respect to your guide, should we think about sort of execution there as upside to the guide? And the long-term outlook, I know you guys executed a roll up earlier in the year. So just thinking about contributions from that and the overall strategy with respect to guidance.

Eli, this is Joe. Like I said in my prepared remarks, I think we have a highly attractive long-term growth story. The foundation of that is we're in a very good financial position. We've invested wisely and our free cash flow continues to grow. So we have more dollars to spend on growth on a going-forward basis. And as Karl and Austin talked about the Parkland acquisition and with our entrant to Europe, we've greatly expanded our scale and our geographies. So not too long ago, we were basically a U.S.-only business. Now we have investment opportunities in U.S., Canada, Greater Caribbean and Europe. The U.S. is going to still remain our foundation. Like for example, last year, we did over 10 small bolt-on acquisitions in the U.S. alone. And we could have probably done a lot more but we kind of slowed down because we had the Parkland acquisition we're closing on. So the runway of doing these, we gave the guidance of $500 million, we could probably do that alone in the U.S. Then you add on Canada, Greater Caribbean and you add on Europe, you can see why we think that providing guidance of doing at least $500 million, we think is a floor and is very reasonable for us for next year and for multiple years to come. On the valuation standpoint, the landscape hasn't changed that much for us. We think the valuations are still highly attractive. And the reason why we believe that is because we're one of the very few, may be only company in this sector that can bring material synergies to the table. So valuation remains in the same ballpark. But as we get bigger and we have more scale, we remain efficient being a low-cost provider, we get advantage economics. That's why we felt very comfortable this year providing a bolt-on guidance for our investors. As far as -- you mentioned a question about guidance. Here's the way I think you should think about it. If we do more than materially more than $500 million in 2026, yes, that gives us some upside for '26. It depends on the timing of that. But I think the way you should think about it is that that's the floor, and that's a sustainable floor on a multiyear basis which gives us kind of a year-after-year growth in our story.

Awesome. Appreciate the color there. And then thinking about the impact of these bolt-ons maybe with respect to the SUNC dividend and SUN distribution equivalents, I know you extended that equivalence recently. But if we think about sort of these bolt-ons helping avoid any tax leakage has the team considered extending that guidance? Again, I know you already extended it, but just in the context of SUN and SUNC, the way they trade. Just thinking about the long-term kind of tax protection there?

Yes. Eli, this is Scott. In our investor materials that we published last year, we talked about the fact that we expect minimal corporate income taxes for at least 5 years. A lot of that was predicated on our outlook for the business itself and certainly continuing to invest in the business either through acquisitions or growth capital will help us manage that tax profile going forward. So as we sit here today, there's really no change to that minimal corporate income taxes for at least 5 years, which, again, has given us confidence that the distribution between SUNC and Sunoco LP will continue for that period of time.

Let me add one other thing to that. I think one of your -- where you're going with the question is that we gave the 5-year -- at least 5 years with, I would say, probably a modest assumption of growth we believe we're going to grow materially. So any type of material growth on top of that will put us in a better position on a going-forward basis.

[Operator Instructions] Our next question comes from the line of Selman Akyol from Stifel.

So just a point of clarification real quick. On the $500 million in bolt-on acquisitions, would that all be U.S.-based? Or would that be across your entire footprint now?

It's Joe. It will be across the whole footprint. And I guess the point I was trying to make earlier is that the U.S. is kind of the foundation. And on a U.S. alone, we may be able to do that just on U.S. alone. But the way we're going to look at it is best projects win. So now we get to choose between U.S., Caribbean, Europe, Canada. And then so the best projects are the ones we're going to take -- we're going to look at first. But in totality, it's the whole kind of a global perspective.

Got it. And then last week, there was a revision on the greenhouse gases endangerment finding. So rolling back sort of greenhouse gas as a threat to public health. Can you guys just talk about how that may be impacting you or what you think that might do?

Yes. It's early stages. So more clarity is going to come out in the future. But there's some initial thoughts. In the short run, there is no effect on SUN, longer term, it is bullish for refined products, other variables equal. Additionally, any time there's any legislation that creates potentially state-by-state specs and add complexity that's always going to be good for SUN. We thrive in those environments whenever there's complexity and we have the team and scale to source from all different areas. So that's going to be bullish for us. On a personal level, and I think I speak for many people, the elimination of the annoying start-stop engine cutoff function, I think, is going to be a really good development.

Okay. And then last one for me. You've kind of teased it up several times where you talk about distribution growth of at least 5% and then listening to all your comments, things seem to be going exceedingly well, your outlook seems to be very confident and very bright. So what does it actually take to see something on the plus side of 5%?

Yes. So here's the most important takeaway. We have a multiyear growth in distribution. For this year, we raised the 2% 3 years ago, 4% of -- 4% 2 years ago, and we raised a little bit over 5% last year. And this year, we stated at a minimum 5%. As far as an exact amount, we haven't determined that yet, but then the takeaway is going to be on a multiyear basis. We're in a really good position. It's not just distribution. We're going to take care of our balance sheet. We're going to remain a growth company. So -- we fully -- you can tell from our results, and you could tell from the guidance, you can tell from the tone of this call, we think that we're going to continue to grow our business. And we're going to grow DCF per common unit our cash flows are going to expand. We're in a very good position from a capital allocation standpoint. We're going to have more dollars to deploy to all 3 areas. The exact allocation, that's our job to optimize that to make sure that we don't just take care of the short run before the long run. So stay tuned. We'll -- as the year goes on, we'll provide more clarity at to the exact allocation, but the takeaway should be the number is growing. So we're going to have more options to deploy that in all 3 areas.

Our next question comes from the line of Elvira Scotto from RBC Capital Markets.

On M&A, I have a couple of questions on M&A. I guess, first, where do you see the greatest opportunity? Is it terminals, fuel distribution. And then my second question on M&A. Is there a gating item on M&A? You talked about sort of a $500 million floor. You've become a much bigger, more diversified company. I mean, is there a ceiling or anything that would keep you from doing more substantial M&A?

Elvira, it's Joe. As far as the greater opportunity, the answer is all of the above. We're going to grow our midstream business. We're going to grow our fuel distribution business, and we're going to grow in all the geographies that we're in right now. So that's the position that we like being in. We're not so focused on a single geography or so focused on a single segment of our business. And the way we're going to do it is that we have growing growth capital, some of the Parkland acquisitions that we acquired, for example, like in Guyana, Suriname, we've already had 3 terminal projects in the works in those markets. So we're going to get some natural growth from being in the right market with the right business from a decision between which one, I would go back to capital discipline and choosing the best projects. And we've got a wide range of opportunities, and we'll pick the best projects. As far as your question about a gating item or ceiling, probably a little bit of clarification on the guidance we gave. We said at least $500 million of bolt-on acquisition. That's not saying that we think that's a target acquisition number. And based on the fact that we're already back to our 4x leverage within 3 or 4 months -- 2 months. So we're going to take care of our balance sheet. If we were -- I think after the Parkland transaction, we said we'll be back between 12 to 18 months. Well, we got back a lot quicker. So now we're in even a better position to grow on a going-forward basis. $500 million as I thought, was a pretty low bar for us to at least give the street that these bolt-on acquisitions aren't just sporadic that we may pick up a few this year, maybe a few a couple of years now, they're ratable and the fact that U.S. is a super highly fragmented market on the field distribution side. So we have ample opportunities as far as Canada and the Greater Caribbean it's not as fragmented as the U.S., but there's plenty of opportunities. And I keep emphasizing scale matters in this business. Whenever you're the biggest player with the most efficiencies regardless of what the market valuation is, we have the opportunity to take a turn or 2 or more down that acquisition. So that becomes highly attractive to us. So I would give guidance to -- that we think that $500 million of bolt-on acquisitions, this doesn't include growth capital. It doesn't include. Bigger opportunistic acquisition. But as a baseline, I think you should view us is that we have a solid layer of organic growth capital and we have a solid layer of bolt-on M&A.

That's very helpful. And then my next question is, now that you've closed on Parkland, you've had it for a few months, how do you feel about your synergy target? And you have a very good track record of exceeding these targets on your acquisitions. So do you think there's a possibility of exceeding your target here?

Yes, Elvira, this is Karl. Yes, we're very excited about Parkland. I think Austin gave a good rundown of the various geographies from the fuel distribution side. And I'd say from the other parts of the business that we picked up, I think we're equally excited. Yes, I think our past history would show if you were deciding to take the over the under, I would take the over on us delivering on our synergies also. I think our main focus is delivering on the synergies quickly. And so for us to be -- to deliver in year in 2026, $125 million. Clearly, we'll be ramping up through the year. Some of those activities already started in the fourth quarter. And so we should exit the year well north of that $125 million on a run rate basis. But the other thing that's super important is the base business. And so our view on how strong that base business is and the sustainability of that going forward is just as important. And so it's really the combination of those factors that gives us confidence in the 2016 guidance and then going forward in '27 and '28. Joe mentioned in his last answer, the 2 metrics that we look at in totality that are the most important. It's really where our leverage sits. And are we delivering on our commitments on growing the DCF per LP unit. And we're very confident in those for this year and beyond. And I guess bottom line is, I think NuStar was a home run acquisition and Parkland is going to be another home run acquisition for us.

Thank you. At this time, I would now like to turn the conference back over to Scott Grischow for closing remarks.

Thanks for joining us on the call today. There are a lot of exciting things to look forward to in 2026 for Sunoco, and we look forward to updating you across the year. In the meantime, please feel free to reach out if you have any questions. Thanks for tuning in, and we appreciate your support.

This concludes today's conference call. Thank you for participating. You may now disconnect.