Greetings, welcome to the Sunoco LP's fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott Grischow, Senior Vice President of Investor Relations and Treasury. Thank you, sir. You may begin. Thank you, and good morning, everyone. On the call with me this morning are Joe Kim, Sunoco LP's President and Chief Executive Officer, Karl Fails, Chief Operations Officer, Dylan Bramhall, Chief Financial Officer, and other members of the management team. Today's call will contain forward-looking statements that are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the partnership's future operations and financial performance. Actual results could differ materially, and the partnership undertakes 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 reconciliation of each financial measure. I'd like to start the call by looking at some of our fourth quarter and full year 2022 highlights. adjusted EBITDA for the fourth quarter was $238 million, compared to $198 million a year ago, an increase of 20%. The partnership sold 2 billion gallons in the fourth quarter, up 5% from the fourth quarter last year. Fuel margin for all gallons sold was $12.8 cents per gallon, compared to $0.12 per gallon a year ago. Total fourth quarter operating expenses were $138 million, an increase of $15 million from the same period last year. Fourth quarter distributable cash flow as adjusted was $153 million, compared- $143 million in the fourth quarter of 2021, yielding a coverage ratio of 1.8x. Our coverage ratio for the full year 2022 was 1.9x. On 25, January we declared an $0.8255 per unit distribution, consistent with last quarter. The stability of our business and history of delivering results continues to support a stable and secure distribution for our unitholders. Finally, on 30 November we completed the acquisition of Peerless Oil & Chemicals, Inc., an established terminal operator and fuel distributor within Puerto Rico and throughout the Caribbean. Now shifting over to our full year 2022 results and accomplishments. We delivered adjusted EBITDA of $919 million, up 22% from last year. Distributable cash flow as adjusted was $650 million, up 20% versus the prior year. We improved our coverage ratio to 1.9x, up from 1.6x in 2021 and 1.5x in 2020. Our liquidity position and balance sheet remain strong, with availability on our credit facility of approximately $600 million and leverage at the end of the year of 3.8x, below our target of 4.0x. Finally, our strong financial position allowed us to take advantage of a diversified set of growth opportunities in 2022, including the acquisition of Gladieux Energy and Peerless Oil & Chemicals. With all these accomplishments as a backdrop, we enter 2023 poised to continue to deliver strong results. I would like to take a moment to reaffirm our 2023 adjusted EBITDA guidance of between $850 million-$900 million. Underpinning this guidance are the following assumptions: fuel volumes of approximately 7.8 billion gallons and fuel margin of approximately $0.12 per gallon, total operating expenses of between $525 million-$535 million, maintenance capital of approximately $60 million, and growth capital of at least $150 million. Our strong distribution coverage and balance sheet continue to allow Sunoco to invest in growth opportunities, which will contribute additional value to our stakeholders for years to come. Stable-based business, combined with the contributions from acquisitions and organic growth, will continue to generate free cash flow and allow us to focus on the three pillars of our capital allocation strategy. First, to maintain a secure distribution for our unitholders. Second, to protect our balance sheet. Third, to continue to pursue disciplined investment in growth opportunities. Sunoco's consistent financial results throughout various macroeconomic environments have become the hallmark of our partnership. We expect 2023 will bring more of the same. With that, I will now turn the call over to Karl. Thanks, Scott. Good morning, everyone. Our team delivered yet another great quarter, supported by continued margin strength, consistent expense discipline, and solid operations from both our core business and our recent investments. Starting with volumes. We were up about 5% in the fourth quarter versus the fourth quarter of last year and flat with the third quarter of this year. We have continued to see improved volume performance relative to prior years as we have realized volume contributions from our capital deployed, both organic and through acquisitions. With respect to margins, the margin performance over the last few years continued in the fourth quarter. There are a few consistent themes that contributed to these margins. The fourth quarter began with a strong margin tailwind from dramatic price declines during the third quarter. Second, if we look at overall price movement during the fourth quarter, both gasoline and diesel futures ended the quarter about where they started, but there was significant price volatility during the quarter, which supported margins. In addition, we continued to see the benefit of higher breakeven margins. Finally, the investments that we have made over the past few years are contributing to the bottom line. Specifically, we had one month of our Peerless acquisition as well as a full quarter of our N. Y. Harbor blending operations. If we look at the entire year, our financial performance was a tale of two halves that clearly supports the asymmetric risk profile of our business that we have discussed before. In the first half of the year, we were able to demonstrate solid results during the headwinds of rising commodity prices, while the second half continued to show our ability to capitalize and deliver upside during favorable market conditions, all the while maintaining expense and capital discipline in any market environment. In regards to expenses, we did see an uptick in the fourth quarter from the third quarter. This is primarily due to the closing of our Peerless acquisition on 1st, December and other employee expenses. Expense management remains one of our core strengths, and as we always have been, we remain committed to achieving our 2023 expense guidance. As we look forward into all aspects of our 2023 business, we expect another strong year. As we sit here today, we don't know exactly what the overall economic conditions will be or where product prices will go. We do have much more confidence that breakeven margins will remain elevated and that commodity markets will remain volatile. As our business has shown over the past few years, regardless of the market condition, we expect solid results. Our portfolio of organic investments and acquisitions continues to deliver on expectations. We are especially excited about the 2023 opportunities provided with our most recent acquisition of Peerless. While we have only operated the business for a little over two months, our synergy capture is ahead of schedule, and we expect the business to outpace our original deal assumptions. More broadly, we are confident that we will continue to be successful in deploying capital, whether through organic growth or additional transactions. Before turning the time over to Joe, I will wrap up by stating that we are off to a very good start to 2023, and as expected, we'll continue to focus on delivering results for our stakeholders through our proven strategy of gross profit optimization, delivering on expenses, solid and efficient operations, and growing our core business. Joe. Thanks, Karl. Good morning, everyone. We delivered a very strong year in 2022. We came into the year financially healthy. We finished stronger than where we started. I'd like to point out a few financial highlights from 2022. Our business remains highly resilient within various macro environments. Our capital deployment continues to provide incremental EBITDA and DCF growth. As a result, we delivered a record year for both EBITDA and DCF. Our LTM coverage ratio is now around 1.9x, while our leverage ratio continues to stay below our 4x target. Looking forward, we expect 2023 to be another strong year. We provided guidance back in December. We're about a month and a half into the new year. We're off to a very good start. As you think about our business for 2023, keep in mind the following. Regardless of one's future outlook, we have a proven track record of performance through periods of economic and geopolitical volatility. Our portfolio of income stream and our ability to execute on our strategy has allowed us to deliver solid to strong results quarter after quarter. We will build on our history of strong expense management coupled with effective and responsible capital deployment. On the subject of growth, we will continue to look for value buy and investment opportunities to strengthen and vertically integrate both our midstream and fuel distribution business. All this built on keeping our balance sheet strong. Bottom line, we expect to have another strong year in 2023. Operator, that concludes our prepared remarks. You may open the line for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. We ask that you limit yourself to one question and a follow-up so that others may have the opportunity to ask questions. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Theresa Chen with Barclays. Please proceed with your question. Good morning, everyone. Congratulations on these solid results. My first question has to do with some of the demand commentary that Karl, you know, spelled out in his prepared remarks. I'm just curious to get a better sense of what is happening to base case demand across or baseline demand across your assets, given the volatility in the EIA data as well as just macro headwinds that the consumers are facing. If you could help us, you know, think about how that evolves in the first quarter of 2023 and throughout the year, that'd be very helpful. You bet. Thanks, Theresa. Thanks for the question. Just building on my prepared remarks, if we go back into, call it the back half of last year, and you look at the EIA data, you know, it had lagged the previous year. I think at different parts of the year it was close to what where we were in 2021. I think definitely in the back half, on a seasonal basis, that volume had kinda stagnated, and I think that's continued as we've come into 2023. You know, we've talked about our crystal ball not necessarily being totally clear as far as demand going forward, but at least that's what we've seen in our network, and it matches, I think, what the EIA data has said. You know, as it relates to us and overall economic situation, I think really the mechanism of breakeven margins that we've talked about kind of diminishes any impact on any volume slowdown that might be happening at least for our results. If you look at the economy and, you know, there's talk of some good low unemployment numbers, then maybe there's talk of recession, and I think our perspective is that we don't know exactly what the economy's gonna look like from a macro perspective going forward. From a volume and margin going into gross profit, we're very comfortable with what our business has yielded, and I think the last three years has shown that because, you know, we've seen various situations during those three years. Thank you for the thorough answer. Now that your coverage, leverage, free cash flow outlook, are, you know, in very healthy places, can you talk about, your, you know, volition to do, something bigger than the bolt-on acquisitions that you've been digesting over the past couple of years? Do you have, desires to get, you know, into a bigger way in other parts of the midstream value chain? Hey, Teresa, this is Joe. Yes. I think the simple answer is yes. I think the good news for us is that we continue to get financially healthier and healthier. From a capital allocation standpoint, the foundation remains exactly the same. We're gonna have secure distributions, we're gonna protect the balance sheet, and we're gonna grow. With increasing, you know, free cash flow for us, it's gonna give us even more opportunities. As far as the way that we're gonna look for acquisitions like we've done in the past is, number one, we're gonna look for stable income. Two, we're gonna look for growth opportunities. Three, we're gonna look for some synergy opportunities. Finally, we're gonna look for good value. If it's a small acquisition, we're gonna do that. If it's a big acquisition, it checks all four boxes, we'll definitely give it due attention. Thank you. Our next question comes from Elvira Scotto with RBC Capital Markets. Please proceed with your question. Oh, hey, thanks. Good morning, everyone. Just to kind of follow up on that, given the strength of your balance sheet and strong coverage, what are your thoughts on the distribution going forward? I mean, is there, you know, a target leverage or coverage you'd like to see? I mean, is a distribution increase, a potential going forward? Elvira, this is Joe again. I think what's really positive for investors is, you know, five or six years ago, there was talks about, you know, chatter about SUN cutting distribution. You fast-forward a couple years later, I think the discussion is SUN's distribution is very secure in volatile environments. We're talking about distribution increase. I think that's a positive, very positive direction for all of our investors. You know, with all that said, you know, what I've mentioned to Theresa, the foundation is still exactly the same: secure distributions, strong balance sheet and growth. As we increase our, our free cash flow, I think we're at the point where we can have those discussions. At the appropriate time, we'll make that determination, and at the appropriate time, we'll announce that to the street. Great. The other question that I had, you talked about the Peerless acquisition and how, you know, the synergies are running ahead of expectations and, you know, the acquisition itself, overall running ahead of expectations. Can you provide a little more detail around that? Then can you talk about some of the additional opportunities that you see directly as a result of that acquisition? Then finally, just talk broader about the M&A environment. Sure, Elvira. This is Karl. I'll talk about Peerless, and then Joe can probably give you a flavor on the overall M&A environment. If you look at our Peerless acquisition, it's really kind of a microcosm of our strategy, right? It's a solid fuel distribution company that had vertical integration with midstream terminal assets that they had their own brand, and they sold to commercial customers. You know, I think when we announced it last quarter and we talked about it just really fit in to our strategy. The good thing is that the margins and the volumes are stable, but if anything, I think under the previous ownership, they ran it really well, but there were some capital limitations. I think as we look at the opportunity for growth and folding that into our overall capital plan, you know, we're willing to grow that both by signing up new customers on the island, by, you know, potential, maybe even some smaller transactions on the island. They currently have a export business where they're exporting to neighboring Caribbean islands. You know, we can grow that. And then there's even a possibility of us, you know, expanding into a bigger presence in some of those neighboring islands, building off the infrastructure we have in Puerto Rico. I think that gives you a flavor of the kind of growth that we're looking at. As far as the base business and the synergies, I think, you know, we look... we've looked at M&A for a long time, and we definitely aren't necessarily conservative, overly conservative as we look at it. I think once we got ownership and got to know the team a little better, it was even more solid than we expected and the business even more resilient, with some of the price movements that happened. I think that gives you a good picture of why we're excited. Elvira, this is Joe. As far as kind of a more general M&A environment, the way I would characterize it is it's very similar to what we saw in 2022. We still believe there's value buys out there, especially for, strategics like Sun that bring material synergies to the table. I think a reasonable expectation is that we see 2023 being very similar to 2022. Great. Thank you very much. Our next question is from Spiro Dounis with Citi. Please proceed with your question. Thanks, operator. Good morning, guys. Two follow-ups on kind of what we already touched on, maybe just put a finer point on it. Just looking at guidance now, starting to look really conservative for 2023 and realize we've got a lot of the year left to go. You know, if I think about one of the biggest factors driving the difference in our model is, of course, these elevated margins that you're seeing. Just curious, maybe you could touch a little bit more on what is keeping margins elevated right now in this market, and what of those factors could possibly reverse as the year goes on to bring that down? Or is it looking pretty resilient at this point? Spiro, this is Joe. Let me take the first part of that on guidance, and then I'll turn it up to Karl talking about margins. As far as guidance, we just gave guidance in December, so we're a month and a half into the year. I think I stated it on my prepared remarks, Karl stated it on his prepared remarks, we're off to a very good start, and we finished up to the fourth quarter very strong. You know, it's a month and a half in. I think it is a bad habit for companies to update guidance every couple of months, and we're not gonna get into that bad habit. As the year progresses, more data, if there's material change, we'll provide guidance, revised guidance to the street. We did that twice last year with upward guidance. Like I think you characterized it. It is very early, but understand your point. Yeah. As far as the margin strength goes, Spiro, you know, I mentioned a number of factors in my prepared remarks, and some of those, I think are quarter-to-quarter dependent. The majority of those, as we look into the near future, will continue. I'll kind of put them in those two buckets, right? The price movement that we saw down, with prices moving dramatically down in the third quarter and then carried a tailwind into the fourth quarter. Yeah, you know, we're gonna have periods like the first half of last year where prices are moving up, and then we'll have periods like the second half where prices are moving down and you'll have some variation in margins based on that. The other factors that I mentioned, though, related to volatility of prices as well as kind of overall higher breakeven margins and then the contributions of our, you know, capital deployment, whether it's through organic or through M&A, those are gonna continue. I wouldn't necessarily see a change in 2023 or even maybe in 2024 based on those. You know, that gives us confidence as we look forward that, as Joe said, our business is strong. We expect to have another really good year this year. Got it. That's helpful color. Second one, it has caused a little bit of noise around the first quarter, but just the 7-Eleven makeup payment's kind of been a feature of the last few years. I know sometimes it's harder to predict, but just curious if you can give us any sort of guidance on what that could look like in 1Q. Sure. Yeah. I'm always careful to not, you know, disclose 7-Eleven's volumes. I think it's fair to say that we're expecting a higher makeup payment this year than last year, that'd be a fair assumption. Okay, got it. One more, if I could sneak it in. Perhaps most importantly, should I assume that next year's December Analyst Day will be in Puerto Rico? We can talk about it. Okay. All right. We'll stay tuned. Thanks, guys. Thanks, Spiro. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Ned Baramov with Wells Fargo. Please proceed with your question. Hey, good morning. Thanks for taking the questions. There was a small leak on the Colonial Pipeline in January. I guess one line was down for several days. Could you talk about the potential impact to you, if any, and maybe touch on the volume trends in January and February? As far as the Colonial outage, it had no material impact on us. I think the only other comment I'd make is, you know, our supply network is diverse enough and the supply team does a really good job of making sure we have optionality and we're tuned to the market. Clearly if in an extended outage, that would have an impact, but something like what happened, it didn't really impact us. As far as volume trends in January and February, I guess I'll build off one of my earlier answers, Ned, and say kinda that stagnation of volume of kinda volume growth on a seasonal basis that we saw at the back half of last year has continued into the first couple of months. Again, we think that that has a material impact on our overall, performance and earnings, but that's what we're seeing. Got it. My second one is on OpEx. I guess guidance was reaffirmed, expenses increased in the fourth quarter, and you did note that this was partially due to the Peerless acquisition. Just annualizing the fourth quarter, OpEx gets me to roughly $550 million, I guess, for 2023. Could you talk about what gets you to the low end and the high end of your guidance range? Sure, Ned. For those of you who've been following us for a while, OpEx management is something that we take pride in and is very important and core to what we do. I'll talk about Q4 and then our 2023 guidance. In Q4, I mentioned a couple of things in my prepared remarks. There was a little bit of Peerless in there and some other kinda catch-up or one-time expenses for the year. If you look at the difference between where we ended the year in 2022 and our guidance, even the upper end of our guidance range for 2023, that is entirely explained by our Peerless acquisition. If you take a step back and think about that, I don't know many other companies that are saying that they're flat year-over-year in this inflationary environment. If anything, we think that differentiates us versus our competition. Thanks for that, Karl. That's all I had. You bet. We have reached the end of our question and answer session. I would now like to turn the floor back over to Scott Grischow for closing comments. Thanks everyone for joining us on the call this morning. As always, if you have any follow-up questions, please feel free to reach out to me directly. Have a great day. This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.