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DATE

May 5, 2026, 10 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Joseph Kim
  • Chief Financial Officer — Dylan Bramhall
  • Chief Operating Officer — Karl Fails
  • Chief Sales Officer — Brian Hahn
  • Chief Commercial Officer — Austin Harkness
  • Vice President of Investor Relations — Scott Grischow

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TAKEAWAYS

  • Adjusted EBITDA -- $867 million, excluding $9 million of onetime transaction expenses, benefiting from a $102 million gain on inventory sales.
  • Growth capital expenditure -- $106 million spent in the quarter, with an additional $93 million allocated to maintenance capital.
  • Distributable cash flow (as adjusted) -- $535 million was reported, following substantial inventory benefits and operating acquisitions.
  • Distribution per common unit -- $0.99 declared, representing a 6.25% total increase featuring a 5% onetime step-up and a 1.25% sequential quarterly increase.
  • Year-over-year quarterly distribution increase -- Over 10%, attributed to financial stability, accretive transactions, and growth projects.
  • Distribution coverage ratio -- 1.9x trailing 12 months, consistent with a stated target of at least 5% multiyear distribution growth.
  • Revolving credit facility availability -- $2.2 billion at quarter end, supporting liquidity objectives.
  • Leverage ratio -- Approximately 4x at quarter end, maintained in line with long-term targets.
  • Fuel distribution segment adjusted EBITDA -- $538 million, excluding $9 million transaction expenses; segment included a $92 million inventory benefit and a full Parkland quarter.
  • Fuel volume distributed -- 3.8 billion gallons, up 15% sequentially, and 82% year over year, with legacy Sunoco volumes up almost 6% despite flat U.S. demand.
  • Segment margin per gallon -- $0.17 reported versus $0.177 last quarter and $0.115 in the prior-year period, influenced by inventory gains and a 7-Eleven makeup payment.
  • Pipeline systems adjusted EBITDA -- $179 million, with volume at 1.3 million barrels per day, down sequentially and up versus the prior year.
  • Terminals segment adjusted EBITDA -- $107 million, compared to $87 million last quarter and $66 million prior year; throughput rose to approximately 1 million barrels per day.
  • Refining segment adjusted EBITDA -- $43 million, including a $10 million inventory benefit; refinery throughput was 22,000 barrels per day, down due to a planned 50-day maintenance turnaround.
  • Parkland and Tank wood acquisitions -- Germany's largest independent terminal operator status achieved; Tank wood adds 16 assets across Germany and Poland and is expected to be immediately accretive to distributable cash flow per unit for 2026.
  • Synergy delivery and targets -- Parkland acquisition synergies being realized, with $125 million in-year and $250 million plus run rate anticipated.
  • M&A activity -- $500 million in annual bolt-on acquisitions targeted for 2026; $200 million of bolt-ons already closed or signed year-to-date, excluding Tank wood.
  • Refining operations update -- Burnaby Refinery turnaround completed on time and on budget, with post-turnaround margins outperforming initial assumptions.
  • Global supply chain optimization -- Business flexibility highlighted by sourcing Hawaiian supply through the U.S. Gulf Coast via the Panama Canal during market disruptions.

SUMMARY

Sunoco (SUN +2.12%) executed multiple growth and optimization strategies this quarter, positioning itself as Germany’s largest independent terminal operator and immediately enhancing distributable cash flow per unit through key acquisitions. Refining operations in British Columbia exceeded both acquisition and guidance assumptions following a timely maintenance turnaround, while Sunoco demonstrated agile global logistics by shifting fuel supply paths to optimize costs. Management confirmed its ability to sustain multiyear distribution growth and affirmed full-year EBITDA guidance, independently of onetime gains from inventory optimizations.

  • Joseph Kim said, "We are already delivering on synergies, both expense and commercial, which puts us well on track to deliver on 10-plus percent accretion before our year 3 commitment."
  • Joseph Kim explained, "When you combine our ongoing accretive growth with the resilient-based business, we're stronger than any point since the establishment of Sunoco."
  • Commercial synergies are expected to reach at least a $250 million run rate, establishing a new baseline for integration benefits from the Parkland transaction.
  • Management stated there is "no symmetric risk if and when prices fall, that this gain is reversed," differentiating its inventory approach from sector peers.
  • Management is "on track to complete over $500 million of bolt-on acquisitions in 2026," driving further scale and geographic diversity beyond prior footprints.

INDUSTRY GLOSSARY

  • Crack spread: The difference between the purchase price of crude oil and the selling price of refined petroleum products, used to gauge refinery profitability.
  • Take-or-pay contract: An agreement where the buyer must either accept delivery of a product or pay a penalty, providing cash flow stability to the seller.
  • RBOB: Reformulated Blendstock for Oxygenate Blending; a gasoline futures contract widely used as a reference for U.S. wholesale motor fuel prices.
  • Contango: A market condition where the futures price of a commodity is higher than the expected spot price at contract maturity.
  • Backwardation: A market condition where the current price of a commodity is higher than its futures price, typically reflecting supply tightness or strong demand.

Full Conference Call Transcript

Scott Grischow: Thank you. 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 Hahn, Chief Sales Officer; and Dylan Bramhall, Chief Financial Officer. Today's call will contain forward-looking statements that include expectations and assumptions regarding Snokolp'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. The partnership started off 2026 with a strong quarter, delivering adjusted EBITDA of $867 million, excluding approximately $9 million of onetime transaction expenses. The first quarter benefited from a onetime gain on a sale of inventory of approximately $102 million. With the acquisition of Parkland Corporation here and the elevated commodity price environment in the first quarter, we proactively optimized our inventory levels, which resulted in this onetime gain. Karl will provide more detail on the impact from these inventory reduction efforts and discuss segment performance in his remarks.

We continued our growth efforts in the first quarter with the closing of the Tank wood acquisition on January 16. Following the acquisition, Sunoco is Germany's largest independent terminal operator with a network of 16 assets across Germany and Poland. We expect this acquisition to be immediately accretive to distributable cash flow per common unit in 2026. During the quarter, we spent $106 million on growth capital and $93 million maintenance capital. First quarter distributable cash flow as adjusted was $535 million. On April 21, we declared a distribution of $0.9899 per common unit for both Sunoco LP common units and Sunoco Corp. shares. This 6.25% increase represents a onetime step-up of 5% and a quarterly increase of 1.25%.

This distribution represents an increase of over 10% versus the first quarter of 2025 and as the result of Sunoco's continued financial stability, execution of highly accretive acquisitions and growth projects and confidence in future distribution increases. Our trailing 12-month coverage ratio was 1.9x, and we continue to target a multiyear distribution growth rate of at least 5%. Our balance sheet and liquidity position remains strong. We had $2.2 billion in availability under our revolving credit facility at the end of the quarter 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 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 unitholders. With that, I'll now turn it over to Karl to walk through some additional thoughts on our first quarter performance.

Karl Fails: Thanks, Scott. Good morning, everyone. Our results this quarter continued the trend of accretive and sustainable growth for Sunoco. As we benefited from a full quarter of operations from Parkland and the closing of our Tank wood acquisition in Europe. Each of our segments delivered strong performance in the first quarter, and they are all well positioned to contribute meaningfully toward achieving our 2026 EBITDA guidance. Starting with our fuel distribution segment. Adjusted EBITDA was $538 million, excluding $9 million of transaction expenses. This compares to $391 million last quarter, excluding transaction expenses and $220 million in the first quarter of 2025.

This growth reflects continued strength in our legacy Sunoco operations, coupled with a full quarter of operations from Parkland. It is also supported by our ongoing gross profit optimization and growth strategies both through roll-up acquisitions and growth capital. As Scott mentioned in his remarks, these results also include a onetime benefit of inventory reduction. The level of fuel inventory we hold is always a trade-off between holding more to provide reliable supply and carrying less to deliver better returns on capital. This is especially true as we grow our fuel distribution business. Naturally, our inventory also grows, but we frequently look to optimize our inventory levels to ensure we are delivering on our target returns.

This quarter, as a result of inventory reductions we delivered a $92 million benefit in this segment, unlocking additional cash to reinvest in future growth. While the size of the benefit was clearly impacted by market prices during the quarter, this was a result of active management of our inventory to a level that is sustainable on an ongoing basis. We distributed 3.8 billion gallons, up 15% versus last quarter, up 82% versus the first quarter of last year. We continue to see volume growth in our legacy Sunoco business with an increase of almost 6% and 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 continue to work on optimizing our volumes in the legacy Parkland assets as we implement our gross profit optimization approach that we've evolved over the years. Reported margin for the quarter was $0.17 per gallon compared to $0.177 per gallon last quarter and $0.115 per gallon for the first quarter of 2025. There were many factors influencing our margin this quarter with the 7-Eleven makeup payment, the gain on inventory reduction and the return of market volatility compensating for the margin compression experienced with dramatic increases in commodity prices during the quarter.

For reference, RBOB futures increased over $1.60 a gallon during the quarter with diesel futures increasing over $2 a gallon. In our Pipeline Systems segment, adjusted EBITDA for the first quarter was $179 million compared to $187 million last quarter and $172 million in the first quarter of 2025. On the volume side, we reported 1.3 million barrels per day of throughput, slightly down from the seasonally strong throughput last quarter and slightly up from the same quarter last year. This segment continues to provide steady and stable income. Moving on to our Terminals segment. Adjusted EBITDA for the first quarter was $107 million.

This compares to $87 million last quarter and $66 million in the first quarter of last year. We reported around 1 million barrels per day of throughput, which is up from both last quarter and the first quarter of last year. Growth in both earnings and volumes in this segment were supported by the inclusion of Tank wood and a full quarter of legacy Parkland operations. This segment continues to deliver stable results that predictably and accretively grow as we add to the portfolio. Turning to our refining segment. Adjusted EBITDA for the first quarter was $43 million compared to $41 million last quarter.

There was a $10 million benefit in this segment from our inventory reduction efforts that I discussed earlier. Refinery throughput was 22,000 barrels per day compared to 50,000 barrels per day last quarter. As we shared previously, throughput was down as a result of a planned 50-day maintenance turnaround that began at the end of January, which was completed on time and on budget. During the turnaround, we continue to meet regional demand by sourcing supply through our refinery tank farm. The refining margin was strong during the periods of refinery operation and that continues into the second quarter.

To provide more clarity to the market on our refinery performance, we posted an updated indicator crack on our website yesterday and expect to post updates at the beginning of each month. This calculation is intended to be an indicator of general profitability for the refinery using market prices. Before I wrap up, I wanted to make a few comments on the integration of the recent Parkland acquisition. The balance sheet has returned to our long-term target. We are already delivering on synergies, both expense and commercial, which puts us well on track to deliver on 10-plus percent accretion before our year 3 commitment. In summary, we continue to build on the strong momentum over the past few years.

Each of our segments is delivering, and we will continue to remain focused on safe and reliable operations, expense discipline and accretive growth. I will now turn it over to Joe to share his final thoughts. Joe?

Joseph Kim: Thanks, Karl, and good morning, everyone. Every quarter presents a new set of challenges. This first quarter provided more than most. Obviously, the events in the Middle East created a volatile market. Costs and prices rose dramatically and at times fell and went back up. Furthermore, normal supply patterns were disrupted specifically within Sonoco, we completed a turnaround at our Burnaby Refinery and made significant progress on the Parkland integration. And despite all these events, we still delivered an outstanding first quarter. More importantly, we're confident that we'll deliver on our full year EBITDA guidance even without the onetime gain from optimizing our inventory.

Operationally, our refining team completed the turnaround on budget, our fuel distribution and midstream teams maintain reliable supply for our customers. And finally, we're on track to deliver 10% plus accretion from the Parkland acquisition. We have proven year after year and crisis after crisis that we can distinguish ourselves in challenging environments. And thus, we have gained a reputation as a strong defensive play. However, we're also a proven growth play. Already this year, we closed on the Tank wood acquisition in Europe, a multi-island acquisition in the Caribbean and various smaller field distribution bolt-on acquisitions in the U.S. We're on track to complete over $500 million of bolt-on acquisitions in 2026.

Separately and in totality, these are immediately accretive while maintaining our balance sheet target. When you combine our ongoing accretive growth with the resilient-based business, we're stronger than any point since the establishment of Sunoco LP. As a result, we're able to announce a meaningful increase in our quarterly distribution 2 weeks ago. The decision to materially increase the distribution had to meet the following criteria: maintain a strong coverage ratio, protect our balance sheet, remain a growth company and finally, provide a clear path to increase distributions quarter after quarter over a multiyear time frame. We're confident the answer is yes on all these factors. Operator, that concludes our prepared remarks. You may open the line for questions.

Operator: [Operator Instructions] Our first question comes from the line of Justin Jenkins with Raymond James.

Justin Jenkins: I guess maybe just to start on a housekeeping item here, the inventory gain. You gave us a lot of detail on the impact here in the quarter. And I think, Karl, you suggested you're at an overall level you're comfortable with, but does that inventory level fluctuate with where commodity prices sit -- or how should we think about the moving pieces going forward here?

Karl Fails: Yes. Thanks, Justin. This is Karl. Yes, as I talked in my prepared remarks, inventory decisions are really a trade-off between supply reliability and return on capital. And as part of that inventory management, we use derivatives to hedge inventory in the normal course of business. So as you mentioned, based on market conditions, we actively manage those inventory positions. So in periods of high prices and steep backwardation like we've had in the past few months will typically draw. And then in the less frequent periods of contango, we would build and our hedging practices are set up accordingly to make sure we can optimize that.

I think if you look at what we reported in the first quarter, that's just a larger step we took as a result of a lot of the growth that we've done over the last 6 to 9 months, including the recent Parkland acquisition. So the level that we reduce our inventory, too, we feel is responsible and we could stay there for a long time some of those minor optimizations that I talked about base to market conditions, yes, we'll continue to do regularly. But this $100 million was sized and impacted by the higher prices, but it's something that we would have done regardless to manage our business.

And it does differ from some of the other companies that have reported so far in the quarter, talking about timing-related inventory impacts because like I said, we're confident we can operate at this level going forward, and there is no symmetric risk if and when prices fall, that this gain is reversed.

Justin Jenkins: That's helpful. Second question here on the distribution. Certainly, the step-up in the quarter very well received. I guess, how does this play into your overall views on capital allocation for the long term? And then maybe for 2026, more specifically, Joe, you hinted at this, but presumably, this shows a very high degree of confidence in your outlook for the year, even if it might be just a little too soon to update the guidance. Is that right?

Joseph Kim: Justin, this is Joe. Just to build off on Carlson, I'll take your first question first. On the inventory optimization, that was just a result of gossip and good timing. With that said, the recent 5% step up, we would have done with or without the inventory optimization. As far as kind of giving you some better background as to our step up in our capital allocation, think maybe kind of talking through how we made this decision would be helpful. Our past investments have paid off, especially the NuStar acquisition we did 2 years ago in the Parkland acquisition we did last year. And just as importantly, our base business has proven to be year after year very resilient.

As a result, our DCF per common unit has grown materially, and we believe a step-up followed by continued quarterly distribution increases would be highly valued by our unitholders. As far as the step-up, we wanted that step-up to be material. But at the same time, we didn't want to affect our ability to increase distributions over a multiyear period nor affect our ability to continue to grow. And we think that the actions that we've taken recently have put us in a very good position to achieve these goals. As far as -- I think, Justin, if I understand you correctly, the second part of the question was really more about guidance. Is that how I should read it?

Justin Jenkins: Yes. Yes.

Joseph Kim: The 1 key message that I hope that you and the rest of the people on this call take away from today is that we're going to have an outstanding year and deliver on guidance. That's even after you take out the onetime inventory optimization. Our established practice is not to give guidance after the first quarter unless there's a major acquisition. So is the question -- is there upside, of course. However, the amount is still to be determined, and our history shows that we're good at capturing the upside as well as protecting the downside.

Operator: Our next question comes from the line of Spiro Dounis with Citigroup.

Charles Douglas Bryant: This is Chad on for Spiro. Just starting off, could you provide an update on how the conflict in the Middle East is impacting your business and trends today? And have you started to see any demand impacts from the higher prices yet?

Unknown Executive: Yes. Chad. Yes, let me -- I'll answer your questions kind of in order there in terms of impact to our operations given the current market volatility and then I can touch on margins and demand separately. If you take a step back, given our scale, supply chain optionality and logistics capabilities, it's really -- the business really shines during these types of periods of extreme market volatility. Just to give you 1 example, we normally supply our Hawaii business out of South Korea. What we're finding though right now is it's actually economical to load vessels out of the U.S. Gulf Coast and supply the business via the Panama Canal.

I share that because that's really only a move that's available if you have our scale and logistics capabilities. There's literally countless other examples of how our operations have been impacted by some of the global disruption of product flows, but that's not always a bad thing. In fact, in our world, a lot of times, that can mean value creation. Just quickly touching on margins. We've always talked about flat price volatility, being bullish for margins in the long run. But the way that you get there is margins compress as flat prices on the way up, but then it widens disproportionately on the way down. And I'd say you get an overall kind of net bullish margin environment.

If you were to pull an RBOB or ULSD chart for year-to-date, I think what you'd find is we've been on a pretty sharp up and to the right for -- essentially through the first 4.5 months or 4 months in a week of the year. Despite that, we just closed out a really strong first quarter for the segment. The second quarter is off to a great start. And we haven't even gotten to the part of the story where flat price comes off and margins widen. So we feel really good about where we're positioned there. And then I think you mentioned a question around impact to consumer demand. We haven't seen any evidence of demand destruction yet.

I say that because it's kind of a function of how high flat prices go and for how long they remain there. That said, I think those of you who follow our story know that if we do encounter a scenario where there's demand destruction that creates a really strong margin environment as retailers are forced to respond to rising breakeven by taking price. So all that said, we're out of the gate really strong to start the year, and we feel really good about both the second quarter and delivering on an outstanding 2026.

Charles Douglas Bryant: Okay. Got it. That's very helpful. And just wanted to get your thoughts on kind of your M&A outlook with the current macro environment in 2 quarters of sort of the pro forma business. it sounds like you're tracking the $500 million of annual M&A cadence this year. But has there been any changes in the way that you view M&A as a cadence or a scale standpoint from your business yet?

Joseph Kim: Chad, this is Joe. The simple answer is no. We view it exactly the way that we outlined it late last year and early this year. So just to kind of give you an update if you take a step back and you look at all the recent acquisitions that we've done, we've greatly expanded our scale and our geographic footprint. It wasn't too long ago that we were a U.S.-only business predominantly on the East Coast and in the South. Now we have investment opportunities in the U.S., Canada, Latin America, Greater Caribbean and Europe.

And so to give you an example, already this year, we have almost $200 million of bolt-on M&A that are either closed or signed are going to be closed in the very near future. And this doesn't include the $500 million plus tank with acquisition that we started the year with. So the $500 million a year plus bolt-on acquisition is very reasonable for us. And bottom line, we're in a good position to deliver on an attractive long-term growth story.

Operator: Our next question comes from the line of Theresa Chen with Barclays.

Theresa Chen: First question is related to the Burnaby Refinery. Post your planned turnaround, how are operations trending at this point? And given the significant disruption to the liquids markets over the past 2 months plus following the Middle East conflict -- can you talk about your ability to capture these elevated margins not only on the West Coast of North America, but broadly across the Pacific Basin into Asia and Australia, given your fleet of assets from an infrastructure perspective as well as the refining facility at Burnaby.

Karl Fails: Yes, Theresa. Thanks for the question. This is Karl. As Joe and I mentioned in our prepared remarks, the team and the refinery did a great job delivering on the turnaround on time and on budget, and that really allowed us to restart the refinery in the back part of the quarter into the higher cracks that were in the market. Our -- we've used this phrase a lot, but our crystal ball is in perfect as far as how long those refining margins will last. But I think the possibility of a period of longer cracks is reasonable and would be a tailwind for overall results.

If you look at that, the refinery business, it really is a foundational piece of our overall business in British Columbia. And most of the refinery production goes into that market in British Columbia, -- and so I think that's a tailwind for that overall business that we'll be able to see the results as we go through the year. Now clearly, so far into the year, the refinery is outperforming assumptions we made for the Parkland acquisition or even the midpoint of our guidance, as Joe talked about. The refinery is an important part of the portfolio. not a large part of the portfolio. It's our smallest segment, but it fits well into our overall business.

When there are big price movements, and we have the higher cracks that can help offset some of the margin compression that Lawson talked about in our fuel distribution business and the opposite is also true. And as far as your broader question for the rest of the Pacific I think Austin has come do a great job of looking at what the market is giving us and supplying as an example of how we supply Hawaii, of choosing the options we have to supply our base business in the most economical way possible and then finding additional opportunities to supply fuel to new customers. So yes, I think there's going to be opportunity.

Theresa Chen: And going back to your earlier comments about synergies post the acquisitions and the broader more comprehensive set of assets you have under 1 portfolio now. Can you speak to the progress made both on the commercial side as well as any existing cost synergies still to be harvested at this point and what your outlook is for that?

Karl Fails: Yes, I think the outlook is good. You know us, and we've looked backwards on various acquisitions we've done. We start the synergy process even before we close, and that was true in the Parkland acquisition. So there were changes that we made, particularly on the expense side as soon as we took ownership in the fourth quarter, and those are continuing. I think the breadth of the Parkland portfolio means that, that runway of getting to the end result on the expense side takes a little longer than some of the other deals we've done, but that work is all going well.

I think on the commercial side, there are significant commercial synergies that we outlined over the last year since we announced the Parkland deal and many of those have already been delivered. Many are in flight, and there are some still to come. So our guidance was based on $125 million of in-year synergies and to be able to hit that number, we needed to exit the year much higher than that, and we're still on pace with that and expect that to continue and us to the final kind of run rate of $250 million plus, we feel very comfortable with, and that should be a floor. You bet.

Operator: Next question comes from the line of Gabriel Moreen with Mizuho.

Gabriel Moreen: Can I maybe just ask for an update on sort of the midstream side of things and to the extent you're planning to spend on the capital there this year. I noticed that your parent announced an expansion in the Bayou Bridge going into same game. So just curious if maybe that would necessitate more storage there, for example..

Karl Fails: Yes, Gabe, this is Karl again. Clearly, our midstream portfolio, we really like, whether it's the pipeline systems assets, our terminal network. Joe talked about, we're excited to have tanked as part of that portfolio. So -- we spend capital on those, whether it's maintenance capital to keep our tanks ready to go when market opportunities come or some growth capital. I think our current portfolio is we're always looking for opportunities for larger projects. But as we sit here right now, I think our sweet spot is kind of the these small to midsize projects.

And so we have a portfolio of those and then really looking for accretive M&A and any projects we do in the midstream space would be to optimize and to help us gain synergies on the M&A. So that -- as we sit here today, that can change down the road, but that's our current plan.

Gabriel Moreen: And then maybe I can follow up. I think 7-Eleven is doing a bit of portfolio repositioning in terms of their store base. Can you just talk about whether there's any implications at the 7-Eleven from any of those moves?

Joseph Kim: Gabe, it's Joe. As far as -- we've got a great relationship with 7-Eleven. So as far as the supply agreement we have with them, nothing changes on that one. That's a rock solid take-or-pay contract with highly profitable investment-grade company. So we feel good on that one. As far as the 7-Eleven doing portfolio optimization, obviously, with our scale and our geographic footprint, anytime there's anything on the market, I think we're a viable partner for a lot of people that are looking to exit and we -- with the synergies we bring to the table, we're always going to be competitive.

Gabriel Moreen: Joe, maybe if I just squeeze 1 more in, the M&A question from a different angle. Is the current volatile backdrop making it easier to transact in your mind or harder. I'm just curious what your thoughts are on there.

Joseph Kim: Yes. harder, easier, I would probably say all things equal, maybe harder overall may be more opportunistically better for Sunoco. I think we have -- we know what we're good at and scale and geographic diversity -- and given our midstream assets, especially on the term level, we're in a good position. So I think from that standpoint, it's not going to affect us. As far as now that we're more than just a U.S. company and we're in various geographies. As far as opportunities in foreign markets, there's always going to be some level of tension between countries. The extent of it and Magia always kind of evolving.

But the 1 thing that we do believe in is that cross-border foreign investment is going to continue across the world, and we're in a good position to find the right assets wherever it may be. And with the synergies that we bring to the table, we're going to be in a good position to be highly competitive.

Operator: [Operator Instructions] Our next question comes from the line of Ned Baramov with Wells Fargo.

Ned Baramov: Could you maybe talk about the interplay between Burnaby refining margins and the margins on the fuel distribution side in British Columbia. Does the higher crack spread imply lower potential FD margin? Or is this market also not seeing any change in demand from higher fuel prices as you commented earlier.

Karl Fails: Yes, Ned, this is Karl. I'll try to pull together to answer your question, a couple of points that Austin made in his overall answer on margins. and then some of the things I talked about at Burnaby. The short answer is -- as far as the refinery margin, the fuel distribution margin, as we look at it, we use internal transfer prices like most people do, and those are based on the market. So as most we can run the business while we like having the integrated margin, and we're always making choices to optimize the overall result for Sunoco, as we're looking at those 2 businesses, we also look at them independently.

And so I think on the overall margin and consumer demand question, I think Austin hit the nail on the head that those margins will adjust -- and I would expect that the overall fuel gross profit and the EBITDA that we get in British Columbia should stay the same or grow over time the refining margin is going to vary more, right? That's going to really flow based on supply/demand going on in the world. And so right now, we're in a period of higher cracks, but -- while we manage that supply chain as an integrated supply chain.

I wouldn't necessarily imply that when refinery cracks are high, that the fuel distribution margins are low, sometimes they're both higher together. Hopefully, that answers the first question.

Ned Baramov: Yes, very clear. And then second 1 on the housekeeping side. Was the Burnaby turnaround spending included in your $93 million of maintenance CapEx for the quarter?

Karl Fails: Yes. And there was some component of growth CapEx there as well that was included in our reported capital.

Operator: Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Scott for closing remarks.

Scott Grischow: Well, thank you for joining us on the call today and for your continued interest in Sunoco. As we said, there's a lot of great things to look forward to in 2026, and we look forward to updating you across the year. Please reach out if you have any questions. Thanks for tuning in, and I always appreciate your support.

Operator: Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.