UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: September 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to

Commission File Number: 001-35653

SUNOCO LP

(Exact name of registrant as specified in its charter) 

Delaware	30-0740483
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

8111 Westchester Drive, Suite 400, Dallas, Texas 75225

(Address of principal executive offices, including zip code)

(214) 981-0700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Units Representing Limited Partner Interests	SUN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging Growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes  ☐     No  ý

The registrant had 83,763,300 common units representing limited partner interests and 16,410,780 Class C units representing limited partner interests outstanding at October 28, 2022.

SUNOCO LP

FORM 10-Q

TABLE OF CONTENTS

	Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures about Market Risk	23
Item 4. Controls and Procedures	25
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	26
Item 1A. Risk Factors	26
Item 6. Exhibits	26

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

SUNOCO LP

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(unaudited)

	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	196	$	25
Accounts receivable, net	730		526
Receivables from affiliates	10		12
Inventories, net	776		534
Other current assets	151		95
Total current assets	1,863		1,192
Property and equipment	2,675		2,581
Accumulated depreciation	(1,007)		(914)
Property and equipment, net	1,668		1,667
Other assets:
Finance lease right-of-use assets, net	9		9
Operating lease right-of-use assets, net	514		517
Goodwill	1,588		1,568
Intangible assets	990		902
Accumulated amortization	(396)		(360)
Intangible assets, net	594		542
Other noncurrent assets	209		188
Investment in unconsolidated affiliate	129		132
Total assets	$	6,574	$	5,815
Liabilities and equity
Current liabilities:
Accounts payable	$	868	$	515
Accounts payable to affiliates	110		59
Accrued expenses and other current liabilities	326		291
Operating lease current liabilities	19		19
Current maturities of long-term debt	—		6
Total current liabilities	1,323		890
Operating lease noncurrent liabilities	519		521
Revolving line of credit	704		581
Long-term debt, net	2,670		2,668
Advances from affiliates	117		126
Deferred tax liability	151		114
Other noncurrent liabilities	112		104
Total liabilities	5,596		5,004
Commitments and contingencies (Note 10)
Equity:
Limited partners:
Common unitholders (83,763,300 units issued and outstanding as of September 30, 2022 and 83,670,950 units issued and outstanding as of December 31, 2021)	978		811
Class C unitholders - held by subsidiaries (16,410,780 units issued and outstanding as of September 30, 2022 and December 31, 2021)	—		—
Total equity	978		811
Total liabilities and equity	$	6,574	$	5,815

The accompanying notes are an integral part of these consolidated financial statements.

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SUNOCO LP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Dollars in millions, except per unit data)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Motor fuel sales	$	6,468	$	4,666	$	19,423	$	12,321
Non motor fuel sales	90		79		282		218
Lease income	36		34		106		103
Total revenues	6,594		4,779		19,811		12,642
Cost of sales and operating expenses:
Cost of sales	6,261		4,472		18,703		11,631
General and administrative	29		28		86		79
Other operating	86		70		250		192
Lease expense	16		15		47		44
Gain on disposal of assets	(3)		(4)		(8)		(12)
Depreciation, amortization and accretion	55		45		151		135
Total cost of sales and operating expenses	6,444		4,626		19,229		12,069
Operating income	150		153		582		573
Other income (expense):
Interest expense, net	(49)		(40)		(135)		(124)
Equity in earnings of unconsolidated affiliate	1		1		3		3
Loss on extinguishment of debt	—		—		—		(7)
Income before income taxes	102		114		450		445
Income tax expense	19		10		30		21
Net income and comprehensive income	$	83	$	104	$	420	$	424
Net income per common unit:
Basic	$	0.76	$	1.01	$	4.32	$	4.38
Diluted	$	0.75	$	1.00	$	4.27	$	4.33
Weighted average common units outstanding:
Basic	83,763,064		83,352,123		83,728,153		83,348,540
Diluted	84,831,037		84,549,277		84,769,526		84,364,321
Cash distributions per common unit	$	0.8255	$	0.8255	$	2.4765	$	2.4765

The accompanying notes are an integral part of these consolidated financial statements.

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SUNOCO LP

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in millions)

(unaudited)

Balance at December 31, 2021	$	811
Cash distribution to unitholders	(88)
Unit-based compensation	5
Net income	216
Balance at March 31, 2022	944
Cash distribution to unitholders	(88)
Unit-based compensation	3
Net income	121
Balance at June 30, 2022	980
Cash distribution to unitholders	(89)
Unit-based compensation	4
Net income	83
Balance at September 30, 2022	$	978
Balance at December 31, 2020	$	632
Cash distribution to unitholders	(88)
Unit-based compensation	4
Other	(4)
Net income	154
Balance at March 31, 2021	698
Cash distribution to unitholders	(88)
Unit-based compensation	3
Net income	166
Balance at June 30, 2021	779
Cash distribution to unitholders	(88)
Unit-based compensation	5
Net income	104
Balance at September 30, 2021	$	800

The accompanying notes are an integral part of these consolidated financial statements.

3

SUNOCO LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

(unaudited)

	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net income	$	420	$	424
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	151		135
Amortization of deferred financing fees	3		6
Gain on disposal of assets	(8)		(12)
Loss on extinguishment of debt	—		7
Non-cash unit-based compensation expense	12		12
Deferred income tax	38		3
Inventory valuation adjustment	(81)		(168)
Equity in earnings of unconsolidated affiliate	(3)		(3)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net	(165)		(245)
Receivables from affiliates	2		2
Inventories, net	(53)		57
Other assets	(36)		(79)
Accounts payable	292		379
Accounts payable to affiliates	51		(16)
Accrued expenses and other current liabilities	20		24
Other noncurrent liabilities	(3)		(14)
Net cash provided by operating activities	640		512
Cash flows from investing activities:
Capital expenditures	(97)		(92)
Distributions from unconsolidated affiliate in excess of cumulative earnings	5		6
Cash paid for acquisition, net of cash acquired	(252)		(6)
Proceeds from disposal of property and equipment	18		27
Net cash used in investing activities	(326)		(65)
Cash flows from financing activities:
Payments on long-term debt	(1)		(442)
Revolver borrowings	2,995		878
Revolver repayments	(2,872)		(628)
Distributions to unitholders	(265)		(264)
Net cash used in financing activities	(143)		(456)
Net increase (decrease) in cash and cash equivalents	171		(9)
Cash and cash equivalents at beginning of period	25		97
Cash and cash equivalents at end of period	$	196	$	88
Supplemental disclosure of non-cash investing activities:
Change in note payable to affiliate	$	(6)	$	5

The accompanying notes are an integral part of these consolidated financial statements.

4

SUNOCO LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

(unaudited)

1.Organization and Principles of Consolidation

As used in this document, the terms “Partnership,” “SUN,” “we,” “us,” and “our” should be understood to refer to Sunoco LP and our consolidated subsidiaries, unless the context clearly indicates otherwise.

We are a Delaware master limited partnership. We are managed by our general partner, Sunoco GP LLC (our “General Partner”), which is owned by Energy Transfer LP (“Energy Transfer”). As of September 30, 2022, Energy Transfer owned 100% of the limited liability company interests in our General Partner, 28,463,967 of our common units, which constitutes a 28.4% limited partner interest in us, and all of our incentive distribution rights ("IDRs").

The consolidated financial statements are composed of Sunoco LP, a publicly traded Delaware limited partnership, and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

On April 1, 2022, we completed the previously announced acquisition of a transmix processing and terminal facility in Huntington, Indiana from Gladieux Capital Partners, LLC for $252 million, net of cash acquired. Management, with the assistance of a third party valuation firm, has determined the fair value of assets and liabilities at the date of the acquisition. Goodwill acquired in connection with the acquisition is deductible for tax purposes.

	April 1, 2022
Inventories	$	108
Other current assets	56
Property and equipment	73
Goodwill	20
Intangible assets	98
Current liabilities	(88)
Net assets	267
Cash acquired	(15)
Total cash consideration, net of cash acquired	$	252

Certain items have been reclassified for presentation purposes to conform to the accounting policies of the consolidated entity. These reclassifications had no material impact on operating income, net income and comprehensive income, the balance sheets or statements of cash flows.

2.Summary of Significant Accounting Policies

Interim Financial Statements

The accompanying interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Pursuant to Regulation S-X, certain information and disclosures normally included in the annual financial statements have been condensed or omitted. The interim consolidated financial statements and notes included herein should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission ("SEC") on February 18, 2022.

Significant Accounting Policies

As of September 30, 2022, there have been no changes in the Partnership's significant accounting policies from those described in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 18, 2022.

Motor Fuel and Sales Taxes

Certain motor fuel and sales taxes are collected from customers and remitted to governmental agencies either directly by the Partnership or through suppliers. The Partnership’s accounting policy for wholesale direct sales to dealers, distributors and commercial customers is to exclude the collected motor fuel tax from sales and cost of sales.

For retail locations where the Partnership holds inventory, including commission agent locations, motor fuel sales and motor fuel cost of sales include motor fuel taxes. Such amounts were $76 million and $88 million for the three months ended September 30, 2022 and 2021, respectively, and $219 million and $252 million for the nine months ended September 30, 2022 and 2021,

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respectively. Merchandise sales and cost of merchandise sales are reported net of sales tax in the consolidated statements of operations and comprehensive income.

3.Accounts Receivable, net

Accounts receivable, net, consisted of the following:

	September 30, 2022		December 31, 2021
	(in millions)
Accounts receivable, trade	$	587	$	428
Credit card receivables	45		37
Vendor receivables for rebates and branding	42		35
Other receivables	57		28
Allowance for expected credit losses	(1)		(2)
Accounts receivable, net	$	730	$	526

4.Inventories, net 

Fuel inventories are stated at the lower of cost or market using the last-in-first-out (“LIFO”) method. As of September 30, 2022 and December 31, 2021, the Partnership’s fuel inventory balance included lower of cost or market reserves of $40 million and $121 million, respectively. The fuel inventory replacement cost was $6 million higher than the fuel inventory balance as of September 30, 2022. For the three and nine months ended September 30, 2022 and 2021, the Partnership’s consolidated statements of operations and comprehensive income did not include any material amounts of income from the liquidation of LIFO fuel inventory. For the three months ended September 30, 2022 and 2021, the Partnership’s cost of sales included unfavorable and favorable inventory adjustments of $40 million and $9 million, respectively, and for the nine months ended September 30, 2022 and 2021, the Partnership’s cost of sales included favorable inventory adjustments of $81 million and $168 million, respectively.

Inventories, net, consisted of the following:

	September 30, 2022		December 31, 2021
	(in millions)
Fuel	$	765	$	526
Other	11		8
Inventories, net	$	776	$	534

5.Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	September 30, 2022		December 31, 2021
	(in millions)
Wage and other employee-related accrued expenses	$	26	$	23
Accrued tax expense	162		152
Accrued insurance	23		22
Accrued interest expense	51		31
Dealer deposits	23		21
Accrued environmental expense	7		7
Other	34		35
Total	$	326	$	291

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6.Long-Term Debt 

Long-term debt consisted of the following:

	September 30, 2022		December 31, 2021
	(in millions)
Sale leaseback financing obligation	$	85	$	91
Credit Facility	704		581
6.000% Senior Notes Due 2027	600		600
5.875% Senior Notes Due 2028	400		400
4.500% Senior Notes Due 2029	800		800
4.500% Senior Notes Due 2030	800		800
Finance leases	9		9
Total debt	3,398		3,281
Less: current maturities	—		6
Less: debt issuance costs	24		26
Long-term debt, net	$	3,374	$	3,249

Revolving Credit Agreement

On April 7, 2022, we entered into a Second Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent, Collateral Agent, Swingline Lender and a letter of credit issuer (the “Credit Facility”). The Credit Facility amended and restated the former revolving credit facility entered into on July 27, 2018. The Credit Facility is a $1.50 billion revolving credit facility, expiring April 7, 2027 (which date may be extended in accordance with the terms of the Credit Facility). The Credit Facility can be increased from time to time upon our written request, subject to certain conditions, up to an additional $500 million.

As of September 30, 2022, the balance on the Credit Facility was $704 million, and $7 million in standby letters of credit were outstanding. The unused availability on the Credit Facility at September 30, 2022 was $0.8 billion. The weighted average interest rate on the total amount outstanding at September 30, 2022 was 5.11%. The Partnership was in compliance with all financial covenants at September 30, 2022.

Fair Value of Debt

The estimated fair value of debt is calculated using Level 2 inputs. The fair value of debt as of September 30, 2022 is estimated to be approximately $3.0 billion, based on outstanding balances as of the end of the period using current interest rates for similar securities. 

7.Other Noncurrent Liabilities

Other noncurrent liabilities consisted of the following:

	September 30, 2022		December 31, 2021
	(in millions)
Asset retirement obligations	$	82	$	79
Accrued environmental expense, long-term	11		12
Other	19		13
Total	$	112	$	104

8.Related-Party Transactions

We are party to fee-based commercial agreements with various affiliates of Energy Transfer for pipeline, terminalling and storage services. We also have agreements with subsidiaries of Energy Transfer for the purchase and sale of fuel.

Our investment in the J.C. Nolan pipeline (a joint venture with Energy Transfer) was $129 million and $132 million as of September 30, 2022 and December 31, 2021, respectively. In addition, we recorded income on the unconsolidated joint venture of $1 million for each of the three months ended September 30, 2022 and 2021 and $3 million for each of the nine months ended September 30, 2022 and 2021.

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Summary of Transactions

Related party transactions with affiliates for the three and nine months ended September 30, 2022 and 2021 were as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Motor fuel sales to affiliates	$	16	$	7	$	44	$	16
Bulk fuel purchases from affiliates	$	458	$	461	$	1,701	$	1,213

Significant affiliate balances and activity related to the consolidated balance sheets are as follows:

•Net advances from affiliates were $117 million and $126 million as of September 30, 2022 and December 31, 2021, respectively, related to treasury services agreements with Energy Transfer.

•Net accounts receivable from affiliates were $10 million and $12 million as of September 30, 2022 and December 31, 2021, respectively, which were primarily related to motor fuel sales to affiliates.

•Net accounts payable to affiliates were $110 million and $59 million as of September 30, 2022 and December 31, 2021, respectively, attributable to operational expenses and bulk fuel purchases.

9.Revenue

Disaggregation of Revenue

We operate our business in two primary segments, Fuel Distribution and Marketing and All Other. We disaggregate revenue within the segments by channels.

The following table depicts the disaggregation of revenue by channel within each segment:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in millions)
Fuel Distribution and Marketing Segment
Distributor	$	2,757	$	2,328	$	8,510	$	6,066
Dealer	1,211		983		3,692		2,565
Unbranded wholesale	1,859		804		5,315		2,216
Commission agent	443		384		1,361		1,043
Non motor fuel sales	29		21		111		51
Lease income	35		33		99		98
Total	6,334		4,553		19,088		12,039
All Other Segment
Motor fuel	198		167		545		431
Non motor fuel sales	61		58		171		167
Lease income	1		1		7		5
Total	260		226		723		603
Total revenue	$	6,594	$	4,779	$	19,811	$	12,642

Contract Balances with Customers

The balances of the Partnership’s contract assets and contract liabilities as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022		December 31, 2021
	(in millions)
Contract balances
Contract asset	$	182	$	157
Accounts receivable from contracts with customers	$	631	$	463
Contract liability	$	—	$	—

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Costs to Obtain or Fulfill a Contract

For the three and nine months ended September 30, 2022, the Partnership recognized $6 million and $16 million, respectively, and $6 million and $15 million for the three and nine months ended September 30, 2021, respectively, of amortization on capitalized costs incurred to obtain contracts.

10.Commitments and Contingencies

Litigation

We have at various points and may in the future become involved in various legal proceedings arising out of our operations in the normal course of business. These proceedings would be subject to the uncertainties inherent in any litigation, and we regularly assess the need for accounting recognition or disclosure of these contingencies. We would expect to defend ourselves vigorously in all such matters. Based on currently available information, we believe it is unlikely that the outcome of known matters would have a material adverse impact on our financial condition, results of operations or cash flows.

Lessee Accounting

The details of the Partnership's operating and finance lease liabilities are as follows:

	September 30,
Lease Term and Discount Rate	2022		2021
Weighted-average remaining lease term (years)
Operating leases	23		22
Finance leases	28		29
Weighted-average discount rate (%)
Operating leases	6	%	6	%
Finance leases	4	%	4	%

	Nine Months Ended September 30,
Other information	2022		2021
	(in millions)
Cash paid for amount included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(37)	$	(37)
Operating cash flows from finance leases	$	—	$	(1)
Financing cash flows from finance leases	$	—	$	(1)
Leased assets obtained in exchange for new finance lease liabilities	$	—	$	9
Leased assets obtained in exchange for new operating lease liabilities	$	16	$	1

Maturity of lease liabilities (as of September 30, 2022)	Operating leases		Finance leases		Total
	(in millions)
2022 (remainder)	$	12	$	—	$	12
2023	48		—		48
2024	47		—		47
2025	47		—		47
2026	46		—		46
Thereafter	788		15		803
Total lease payment	988		15		1,003
Less: interest	450		6		456
Present value of lease liabilities	$	538	$	9	$	547

Lessor Accounting

The Partnership leases or subleases a portion of its real estate portfolio to third party companies as a stable source of long-term revenue. Our lessor and sublease portfolio consists mainly of operating leases with convenience store operators. At this time, most

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lessor agreements contain 5-year terms with renewal options to extend and early termination options based on established terms specific to the individual agreement.

11.Income Tax Expense

As a partnership, we are generally not subject to federal income tax and most state income taxes. However, the Partnership conducts certain activities through corporate subsidiaries which are subject to federal and state income taxes.

Our effective tax rate differs from the statutory rate primarily due to Partnership earnings that are not subject to U.S. federal and most state income taxes at the Partnership level. A reconciliation of income tax expense from continuing operations at the U.S. federal statutory rate of 21% to net income tax expense is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in millions)
Income tax expense at statutory federal rate	$	21	$	24	$	95	$	94
Partnership earnings not subject to tax	(6)		(18)		(72)		(79)
State and local tax, net of federal benefit	4		2		7		5
Other	—		2		—		1
Net income tax expense	$	19	$	10	$	30	$	21

12.Equity

As of September 30, 2022, Energy Transfer and its subsidiaries owned 28,463,967 common units, which constitutes a 28.4% limited partner interest in the Partnership. As of September 30, 2022, our wholly-owned consolidated subsidiaries owned 16,410,780 Class C units representing limited partner interests in the Partnership (the “Class C Units”) and the public owned 55,299,333 common units.

Common Units

The change in our outstanding common units for the nine months ended September 30, 2022 was as follows: 

	Number of Units
Number of common units at December 31, 2021	83,670,950
Vested phantom units exercised	92,350
Number of common units at September 30, 2022	83,763,300

Allocation of Net Income

Our Partnership Agreement contains provisions for the allocation of net income and loss to the unitholders. For purposes of maintaining partner capital accounts, the Partnership Agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Normal allocations according to percentage interests are made after giving effect to incentive cash distributions, which are allocated 100% to Energy Transfer.

The calculation of net income allocated to common unitholders was as follows (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Attributable to Common Units
Distributions	$	69	$	68	$	207	$	206
Distributions (in excess of) less than net income	(6)		16		154		159
Common unitholders' interest in net income	$	63	$	84	$	361	$	365

Cash Distributions

Our Partnership Agreement sets forth the calculation used to determine the amount and priority of cash distributions that the common unitholders receive.

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Cash distributions paid or declared during 2022 were as follows:

	Limited Partners
Payment Date	Per Unit Distribution		Total Cash Distribution		Distribution to IDR Holders
	(in millions, except per unit amounts)
November 18, 2022	$	0.8255	$	69	$	18
August 19, 2022	$	0.8255	$	69	$	18
May 19, 2022	$	0.8255	$	69	$	18
February 18, 2022	$	0.8255	$	69	$	18

13.Segment Reporting

Our consolidated financial statements reflect two reportable segments, Fuel Distribution and Marketing and All Other.

We report Adjusted EBITDA by segment as a measure of segment performance. We define Adjusted EBITDA as earnings before net interest expense, income tax expense and depreciation, amortization and accretion expense, non-cash unit-based compensation expense, gains and losses on disposal of assets and non-cash impairment charges, unrealized gains and losses on commodity derivatives, inventory adjustments, and certain other operating expenses reflected in net income that we do not believe are indicative of ongoing core operations. Inventory adjustments that are excluded from the calculation of Adjusted EBITDA represent changes in lower of cost or market reserves on the Partnership's inventory. These amounts are unrealized valuation adjustments applied to fuel volumes remaining in inventory at the end of the period.

The following table presents financial information by segment for the three and nine months ended September 30, 2022 and 2021: 

	Three Months Ended September 30,
	2022								2021
	Fuel Distribution and Marketing		All Other		Intercompany Eliminations		Totals		Fuel Distribution and Marketing		All Other		Intercompany Eliminations		Totals
	(in millions)
Revenue
Motor fuel sales	$	6,270	$	198			$	6,468	$	4,499	$	167			$	4,666
Non motor fuel sales	29		61				90		21		58				79
Lease income	35		1				36		33		1				34
Intersegment sales	141		—		(141)		—		117		—		(117)		—
Total revenue	$	6,475	$	260	$	(141)	$	6,594	$	4,670	$	226	$	(117)	$	4,779
Net income and comprehensive income							$	83							$	104
Depreciation, amortization and accretion							55								45
Interest expense, net							49								40
Income tax expense							19								10
Non-cash unit-based compensation expense							4								5
Gain on disposal of assets							(3)								(4)
Unrealized loss on commodity derivatives							23								2
Inventory adjustments							40								(9)
Equity in earnings of unconsolidated affiliate							(1)								(1)
Adjusted EBITDA related to unconsolidated affiliate							2								3
Other non-cash adjustments							5								3
Adjusted EBITDA	$	250	$	26			$	276	$	186	$	12			$	198
Capital expenditures	$	32	$	10			$	42	$	34	$	10			$	44
Total assets as of September 30, 2022 and December 31, 2021, respectively	$	5,575	$	999			$	6,574	$	4,825	$	990			$	5,815

11

	Nine Months Ended September 30,
	2022								2021
	Fuel Distribution and Marketing		All Other		Intercompany Eliminations		Totals		Fuel Distribution and Marketing		All Other		Intercompany Eliminations		Totals
	(in millions)
Revenue
Motor fuel sales	$	18,878	$	545			$	19,423	$	11,890	$	431			$	12,321
Non motor fuel sales	111		171				282		51		167				218
Lease income	99		7				106		98		5				103
Intersegment sales	419		—		(419)		—		299		—		(299)		—
Total revenue	$	19,507	$	723	$	(419)	$	19,811	$	12,338	$	603	$	(299)	$	12,642
Net income and comprehensive income							$	420							$	424
Depreciation, amortization and accretion							151								135
Interest expense, net							135								124
Income tax expense							30								21
Non-cash unit-based compensation expense							12								12
Gain on disposal of assets and impairment charges							(8)								(12)
Loss on extinguishment of debt							—								7
Unrealized loss (gain) on commodity derivatives							3								(5)
Inventory adjustments							(81)								(168)
Equity in earnings of unconsolidated affiliate							(3)								(3)
Adjusted EBITDA related to unconsolidated affiliate							7								7
Other non-cash adjustments							15								14
Adjusted EBITDA	$	624	$	57			$	681	$	530	$	26			$	556
Capital expenditures	$	78	$	19			$	97	$