Energy Transfer (ET) risk factors, FY2025 10-K

Risk Relating to the Partnership’s Business

1. 01Results of Operations and Financial Condition
2. 02Index to Financial Statements50% rewritten
3. 03Income from our midstream, transportation, terminalling and storage operations is exposed to risks due to fluctuations in the demand for and price of natural gas, NGLs, crude oil and refined products that are beyond our control
4. 04In the past, the prices of natural gas, NGLs, refined products and oil have been extremely volatile, and we expect this volatility to continue
5. 05Our operations (including Sunoco LP’s) are subject to federal, state, provincial and local laws and regulations in North America, the Greater Caribbean and Europe, relating to the environment, health, safety and security that require it to make substantial expendituresNew
6. 06or we may be required to make material expenditures for the remediation of contamination or pipeline integrity and safety mattersNew
7. 07General economic, financial, and political conditions, including the impact of tariffs, may materially adversely affect our results of operations and financial condition46% rewritten
8. 08Changes in U.S. administrative policy, including the imposition of or increases in tariffs on steel and/or other raw materials, changes to existing trade agreements and any resulting changes in international trade relations, may have an adverse effect on us50% rewritten
9. 09Our business could be negatively impacted by inflationary pressures which may decrease our operating margins and increase working capital investments required to operate our business45% rewritten
10. 10An impairment of goodwill and intangible assets could reduce our earnings21% rewritten
11. 11We depend on certain key producers for our supply of natural gas and the loss of any of these key producers could adversely affect our financial results
12. 12During 2025, two customers accounted for approximately 29% of our intrastate transportation and storage revenues. During 2025, four customers collectively accounted for 27% of our interstate transportation and storage revenues
13. 13We may be unable to retain or replace existing midstream, transportation, terminalling and storage customers or volumes due to declining demand or increased competition in crude oil, refined products, natural gas and NGL markets, which would reduce our revenues and limit our future profitability
14. 14We and our subsidiaries, including Sunoco LP and USAC, are exposed to the credit risk of our customers and derivative counterparties, and an increase in the nonpayment and nonperformance by our customers or derivative counterparties could reduce our ability to make distributions to our Unitholders
15. 15The profitability of certain activities in our natural gas gathering, processing, transportation and storage operations are largely dependent upon natural gas commodity prices, price spreads between two or more physical locations and market demand for natural gas and NGLs
16. 16We also enter into percent-of-proceeds arrangements, keep-whole arrangements, and processing fee agreements pursuant to which we agree to gather and process natural gas received from the producers
17. 17When we process the gas for a fee under processing fee agreements, we may guarantee recoveries to the producer. If recoveries are less than those guaranteed to the producer, we may suffer a loss by having to supply liquids or its cash equivalent to keep the producer whole
18. 18In order to maintain or increase throughput levels on our gathering systems and transportation pipeline systems and asset utilization rates at our treating and processing plants, we must continually contract for new natural gas supplies and natural gas transportation services
19. 19Our revenues depend on our customers’ ability to use our pipelines and third-party pipelines over which we have no control
20. 20The inability to continue to access lands owned by third parties could adversely affect our ability to operate and our financial results
21. 21Our storage operations are influenced by the overall forward market for crude oil and other products we store, and certain market conditions may adversely affect our financial and operating results
22. 22Competition for water resources or limitations on water usage for hydraulic fracturing could disrupt crude oil and natural gas production from shale formations
23. 23A natural disaster, catastrophe or other event could result in severe personal injury, property damage and environmental damage, which could curtail our operations and otherwise materially adversely affect our cash flow
24. 24Terrorist attacks aimed at our facilities could adversely affect our business, results of operations, cash flows and financial condition
25. 25Our business could be affected adversely by union disputes and strikes or work stoppages by unionized employees21% rewritten
26. 26Cybersecurity attacks, data breaches and other disruptions affecting us, or our service providers, could materially and adversely affect our business, operations, reputation, and financial results
27. 27Our operations could be disrupted if our information systems fail, causing increased expenses and loss of sales
28. 28Product liability claims and litigation could adversely affect our business and results of operations
29. 29We do not control, and therefore may not be able to cause or prevent certain actions by, certain of our joint ventures
30. 30The use of derivative financial instruments could result in material financial losses by us35% rewritten
31. 31Increasing levels of congestion in the Houston Ship Channel could result in a diversion of business to less busy ports
32. 32The costs of providing pension and other postretirement health care benefits and related funding requirements are subject to changes in pension fund values, changing demographics and fluctuating actuarial assumptions and may have a material adverse effect on our financial results
33. 33Mergers among customers and competitors could result in lower volumes being shipped on our pipelines or products stored in or distributed through our terminals, or reduced crude oil marketing margins or volumes
34. 34Fraudulent activity or misuse of proprietary data involving our outsourcing partners could expose us to additional liability
35. 35Our debt level and debt agreements may limit our ability to make distributions to Unitholders and may limit our future financial and operating flexibility
36. 36The debt level and debt agreements of our subsidiaries, including Sunoco LP and USAC, may limit the distributions we receive from these subsidiaries, as well as our future financial and operating flexibility
37. 37We do not have the same flexibility as other types of organizations to accumulate cash, which may limit cash available to service our debt or to repay debt at maturity
38. 38Increases in interest rates could materially adversely affect our business, results of operations, cash flows and financial condition20% rewritten
39. 39An increase in interest rates could impact demand for our storage capacity
40. 40A downgrade of our credit ratings could impact our and our subsidiaries’ liquidity, access to capital and costs of doing business, and maintaining credit ratings is under the control of independent third parties
41. 41Our results of operations and our ability to grow and to make distributions to Unitholders will depend in part on our ability to make acquisitions that are accretive to our distributable cash flow per unit
42. 42Capital projects may require significant amounts of debt and equity financing, which may not be available to us on acceptable terms, or at all
43. 43The Inflation Reduction Act of 2022 could decrease demand for crude oil and natural gas and could impose new costs on our operations75% rewritten
44. 44If we do not continue to construct new pipelines, our future growth could be limited
45. 45Expanding our business by constructing new pipelines and related facilities subjects us to risks47% rewritten
46. 46We are affected by competition from other midstream, transportation, terminalling and storage companies
47. 47In markets served by our NGL pipelines, we compete with other pipeline companies and barge, rail and truck fleet operations. We also face competition with other storage and fractionation facilities based on fees charged and the ability to receive, distribute and/or fractionate the customer’s products
48. 48We, Sunoco LP and USAC may not be able to fully execute our growth strategy if we encounter increased competition for qualified assets
49. 49We compete with other businesses in our market with respect to attracting and retaining qualified employees
50. 50Increased regulation of hydraulic fracturing or produced water disposal could result in reductions or delays in crude oil and natural gas production in our areas of operation, which could adversely impact our business and results of operations20% rewritten
51. 51Legal or regulatory actions related to the Dakota Access Pipeline could cause an interruption to current or future operations, which could have an adverse effect on our business and results of operations
52. 52Laws, regulations and policies governing interstate natural gas pipeline rates could affect the ability of our interstate pipelines to establish rates, to charge rates that would cover future increases in its costs, or to continue to collect rates that cover current costs
53. 53Our interstate natural gas pipelines are subject to laws, regulations and policies governing terms and conditions of service, which could adversely affect our business and results of operations
54. 54Rate regulation or market conditions may not allow us to recover the full amount of increases in the costs of our crude oil, NGL and refined products pipeline operations73% rewritten
55. 55rate increase and the annual percentage change in cost of service reported by the pipeline. Initial comments were due June 16, 2020, and reply comments were due July 16, 2020New
56. 56State regulatory measures could adversely affect the business and operations of our midstream and intrastate pipeline and storage assets
57. 57Certain of our assets may become subject to regulation
58. 58We may incur significant costs and liabilities resulting from performance of pipeline integrity programs and related repairs
59. 59Federal and state legislative and regulatory initiatives relating to pipeline safety that require the use of new or more stringent safety controls or result in more stringent enforcement of applicable legal requirements could subject us to increased capital costs, operational delays and costs of operation40% rewritten
60. 60Our business involves the generation, handling and disposal of hazardous substances, hydrocarbons and wastes which activities are subject to environmental and worker health and safety laws and regulations that may cause us to incur significant costs and liabilities42% rewritten
61. 61Climate change legislation or regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the services we provide38% rewritten
62. 62A climate-related decrease in demand for crude oil, natural gas and other hydrocarbon products could negatively affect our business
63. 63Increased attention to ESG matters and conservation measures may adversely impact our business30% rewritten
64. 64The swaps regulatory provisions of the Dodd-Frank Act and the rules adopted thereunder could have an adverse effect on our ability to use derivative instruments to mitigate the risks of changes in commodity prices and interest rates and other risks associated with our business
65. 65Additional deepwater drilling laws and regulations, delays in the processing and approval of drilling permits and exploration, development, oil spill-response and decommissioning plans, and other related developments may have a material adverse effect on our business, financial condition, or results of operations20% rewritten
66. 66Our business is subject to federal, state and local laws and regulations that govern the product quality specifications of the petroleum products that we store and transport

Risks Relating to Our Partnership Structure

1. 67Issuance of Common Units or Other Classes of Equity
2. 68We may issue an unlimited number of limited partner interests or other classes of equity without the consent of our Unitholders, which will dilute Unitholders’ ownership interest in us and may increase the risk that we will not have sufficient available cash to maintain or increase our per unit distribution level
3. 69Cash distributions are not guaranteed and may fluctuate with our performance and other external factors
4. 70Our general partner’s absolute discretion in determining the level of cash reserves may adversely affect our ability to make cash distributions to Unitholders
5. 71Unitholders may have liability to repay distributions
6. 72The NYSE does not require a publicly traded partnership like us to comply with certain corporate governance requirements
7. 73The control of our general partner may be transferred to a third-party without Unitholder consent
8. 74The majority owner of our general partner has rights that protect him against dilution
9. 75Cost reimbursements due to our general partner may be substantial and may reduce our ability to pay the distributions to Unitholders
10. 76Holders of our Common Units have limited voting rights and are not entitled to elect our general partner or its directors
11. 77results in a voting interest in the Partnership of 27%. As a result of this and other limitations, it may be more difficult to remove the general partner
12. 78Unitholders may not have limited liability if a court finds that limited partner actions constitute control of our business
13. 79Our general partner has a limited call right that may require Unitholders to sell their units at an undesirable time or price
14. 80We have a holding company structure in which our subsidiaries conduct our operations and own our operating assets
15. 81The interruption of distributions to us from our operating subsidiaries and equity investees may affect our ability to satisfy our obligations and to make distributions to our partners
16. 82Our subsidiaries are not prohibited from competing with us
17. 83Sunoco LP and USAC may issue additional common units, which may increase the risk that each Partnership will not have sufficient available cash to maintain or increase its per unit distribution level
18. 84A reduction in Sunoco LP’s distributions will disproportionately affect the amount of cash distributions to which Energy Transfer is entitled44% rewritten
19. 85Sunoco LP’s financial condition and results of operations are influenced by changes in the prices of motor fuel, which may adversely impact margins, customers’ financial condition and the availability of trade credit
20. 86The industries in which Sunoco LP operates are subject to seasonal trends, which may cause its operating costs to fluctuate, affecting its cash flow
21. 87The dangers inherent in the storage and transportation of motor fuel, crude oil, refinery feedstock, refined petroleum products and anhydrous ammonia could cause disruptions in Sunoco LP’s operations and could expose them to potentially significant losses, costs or liabilities
22. 88Sunoco LP’s pipelines, fuel storage terminals and refinery operations are subject to operational and business risks which may adversely affect its financial condition, results of operations, cash flows and ability to make distributions to its unitholders44% rewritten
23. 89Negative events or developments associated with Sunoco LP’s branded suppliers could have an adverse impact on its revenues61% rewritten
24. 90The wholesale motor fuel distribution industry and convenience store industry are characterized by intense competition and fragmentation and impacted by new entrants. Failure to effectively compete could result in lower margins
25. 91Sunoco LP does not own all of the land on which its retail service stations are located, and Sunoco LP leases certain facilities and equipment, and Sunoco LP is subject to the possibility of increased costs to retain necessary land use which could disrupt its operations
26. 92Sunoco LP is subject to federal laws related to the Renewable Fuel Standard36% rewritten
27. 93Sunoco LP is subject to federal, state and local laws and regulations that govern the product quality specifications of refined petroleum products it purchases, stores, transports, and sells to its distribution customers
28. 94If third-party pipelines and other facilities interconnected to Sunoco LP’s fuel storage terminals and transmix processing facilities become partially or fully unavailable to transport refined products, Sunoco LP’s revenues could be adversely affected
29. 95The third parties on whom Sunoco LP relies for transportation services to its fuel storage terminals and transmix processing facilities are subject to complex federal, state, and other laws that could adversely affect Sunoco LP’s financial condition and results of operations40% rewritten
30. 96Sunoco LP could be subject to liabilities from its assets that predate the acquisition of those assets, but that are not covered by indemnification rights Sunoco LP has against the sellers of the assets
31. 97Sunoco LP operates assets outside of the United States, which exposes it to different legal and regulatory requirements and additional risk
32. 98Sunoco LP’s investment in the Burnaby Refinery is subject to operational risks, including commodity price and pricing pressure and environment, health and safety hazards. If any of the operational risks materialize, our financial condition or results of operations could be materially and adversely affectedNew
33. 99Additionally, Sunoco LP contracts with third parties for the supply of crude oil and other feedstock to the Burnaby Refinery. Crude oil sourced by the Burnaby Refinery is delivered from Alberta by the Trans Mountain Pipeline (“TMPL”)New
34. 100Sunoco LP faces a variety of risks related to its entry into the refinery business following the completion of the Parkland acquisitionNew
35. 101USAC’s customers may choose to vertically integrate their operations by purchasing and operating their own compression fleet, increasing the number of compression units they currently own or using alternative technologies for enhancing crude oil production
36. 102A significant portion of USAC’s services are provided to customers on a month-to-month basis, and USAC cannot be sure that such customers will continue to utilize its services26% rewritten

Risks Related to Conflicts of Interest

1. 103The fiduciary duties of our general partner’s officers and directors may conflict with those of SunocoCorp’s, Sunoco LP’s or USAC’s respective managing member or general partners, as applicable83% rewritten
2. 104Potential conflicts of interest may arise among our general partner, its affiliates and us. Our general partner and its affiliates have limited fiduciary duties to us, which may permit them to favor their own interests to the detriment of us
3. 105Our Partnership Agreement limits our general partner’s fiduciary duties to us and restricts the remedies available for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty
4. 106Our general partner’s absolute discretion in determining the level of cash reserves may adversely affect our ability to make cash distributions to our Unitholders
5. 107Affiliates of our general partner may compete with us
6. 108The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis
7. 109If the IRS contests the federal income tax positions we take, the market for our units may be adversely affected and the costs of any such contest will reduce cash available to pay our debt securities and for distributions to our Unitholders
8. 110Unitholders are required to pay taxes on their share of our income even if they do not receive any cash distributions from us
9. 111Tax gain or loss on disposition of our units could be more or less than expected
10. 112Tax-exempt entities face unique tax issues from owning our units that may result in adverse tax consequences to them
11. 113Non-United States Unitholders will be subject to United States taxes and withholding with respect to their income and gain from owning our units
12. 114We have subsidiaries that will be treated as corporations for federal income tax purposes and subject to corporate-level income taxes
13. 115We treat each purchaser of units as having the same tax benefits without regard to the actual units purchased. The IRS may challenge this treatment, which could result in a Unitholder owing more tax and may adversely affect the value of the units33% rewritten
14. 116be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the dispositionNew
15. 117We have adopted certain valuation methodologies in determining Unitholder’s allocations of income, gain, loss and deduction. The IRS may challenge these methods or the resulting allocations, and such a challenge could adversely affect the value of our Common Units
16. 118Unitholders will likely be subject to state and local taxes and income tax return filing requirements in jurisdictions where they do not live as a result of investing in our units
17. 119Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us
18. 120The treatment of Energy Transfer Preferred Units is uncertain, and distributions on Energy Transfer Preferred Units (other than Series I Preferred Units) may not be eligible for the 20% deduction for qualified publicly traded partnership income