SunocoCorp LLCSUNC
SunocoCorp LLC Leases Disclosure
Lease Accounting
Lessee Accounting
The Partnership leases retail stores, other property, plant and equipment under non-cancellable operating leases whose initial terms are typically to 15 years, with options that permit renewals for additional periods. At the inception of each, we determine if the arrangement is a lease or contains an embedded lease and review the facts and circumstances of the arrangement
to classify leased assets as operating or finance under Topic 842. The Partnership has elected not to record any leases with terms of 12 months or less on our consolidated balance sheets.
At this time, the majority of active leases within our portfolio are classified as operating leases. Operating leases are included in operating lease right-of-use assets, net, operating lease current liabilities and operating lease non-current liabilities on our consolidated balance sheets. Finance leases represent a small portion of the active lease agreements and are included in other non-current assets and long-term debt, net on our consolidated balance sheets. The right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make minimum lease payments arising from the lease for the duration of the lease term.
Most leases include one or more options to renew, with renewal terms that can extend the lease term from to 10 years or greater. The exercise of lease renewal options is typically at our discretion. Additionally, many leases contain early termination clauses, however early termination typically requires the agreement of both parties to the lease. At lease inception, all renewal options reasonably certain to be exercised are considered when determining the lease term. At this time, the Partnership does not have leases that include options to purchase or automatic transfer of ownership of the leased property to the Partnership. The depreciable life of leased assets and leasehold improvements are limited by the expected lease term.
To determine the present value of future minimum lease payments, we use the implicit rate when readily determinable. At this time, many of our leases do not provide an implicit rate, therefore to determine the present value of minimum lease payments we use our incremental borrowing rate based on the information available at lease commencement date. The right-of-use assets also include any lease payments made and exclude lease incentives.
Minimum rent payments are expensed on a straight-line basis over the term of the lease. In addition, some leases may require additional contingent or variable lease payments based on factors specific to the individual agreement. Variable lease payments we are typically responsible for include payment of real estate taxes, maintenance expenses and insurance.
The components of lease expense consisted of the following:
| Year Ended December 31, | ||||||||||||||
| Lease cost | Classification | 2025 | 2024 | |||||||||||
| Operating lease costs: | ||||||||||||||
| Operating lease cost | Lease expense | $ | 96 | $ | 50 | |||||||||
| Finance lease costs: | ||||||||||||||
| Amortization of leased assets | Depreciation, amortization and accretion | 4 | 1 | |||||||||||
| Interest on lease liabilities | Interest expense | 3 | 2 | |||||||||||
| Short-term lease cost | Lease expense | 7 | 4 | |||||||||||
| Variable lease cost | Lease expense | 11 | 18 | |||||||||||
| Sublease income | Lease income | (35) | (45) | |||||||||||
| Net lease cost | $ | 86 | $ | 30 | ||||||||||
| Lease term and discount rate | December 31, 2025 | December 31, 2024 | |||||||||
| Weighted average remaining lease term (years) | |||||||||||
| Operating leases | 16 | 19 | |||||||||
| Finance leases | 11 | 18 | |||||||||
| Weighted average discount rate (%) | |||||||||||
| Operating leases | 6 | % | 6 | % | |||||||
| Finance leases | 5 | % | 6 | % | |||||||
| Year Ended December 31, | |||||||||||
| Other information | 2025 | 2024 | |||||||||
| Cash paid for amount included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | (92) | $ | (49) | |||||||
| Operating cash flows from finance leases | (4) | (1) | |||||||||
| Financing cash flows from finance leases | (1) | (1) | |||||||||
| Leased assets obtained in exchange for new finance lease liabilities | 1 | — | |||||||||
| Leased assets obtained in exchange for new operating lease liabilities | 279 | 3 | |||||||||
Maturities of lease liabilities as of December 31, 2025 were as follows:
| Operating leases | Finance leases | Total | |||||||||||||||
| 2026 | $ | 240 | $ | 16 | $ | 256 | |||||||||||
| 2027 | 196 | 15 | 211 | ||||||||||||||
| 2028 | 171 | 15 | 186 | ||||||||||||||
| 2029 | 149 | 12 | 161 | ||||||||||||||
| 2030 | 138 | 6 | 144 | ||||||||||||||
| Thereafter | 1,445 | 53 | 1,498 | ||||||||||||||
| Total lease payments | 2,339 | 117 | 2,456 | ||||||||||||||
| Less: interest | 873 | 30 | 903 | ||||||||||||||
| Present value of lease liabilities | $ | 1,466 | $ | 87 | $ | 1,553 | |||||||||||
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 lessor agreements contain -year terms with renewal options to extend and early termination options based on established terms specific to the individual agreement. Additionally, we lease certain of our storage tanks in exchange for a fixed fee, subject to an annual consumer price index adjustment.
Minimum future lease payments receivable as of December 31, 2025 were as follows:
| 2026 | $ | 154 | ||||||
| 2027 | 124 | |||||||
| 2028 | 98 | |||||||
| 2029 | 78 | |||||||
| 2030 | 68 | |||||||
| Thereafter | 369 | |||||||
| Total undiscounted cash flows | $ | 891 | ||||||
The balances of property, plant and equipment that are being leased to third parties were as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Land and improvements | $ | 698 | $ | 513 | |||||||
| Buildings, equipment and leasehold improvements | 1,045 | 556 | |||||||||
| Pipelines | 377 | 217 | |||||||||
| Product storage and related facilities | 410 | 283 | |||||||||
| Right of way | 105 | — | |||||||||
| Other | 81 | 39 | |||||||||
| Construction work-in-process | 54 | 64 | |||||||||
| Total property, plant and equipment | 2,770 | 1,672 | |||||||||
| Less: Accumulated depreciation | (829) | (449) | |||||||||
| Property, plant and equipment, net | $ | 1,941 | $ | 1,223 | |||||||
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.