Sunoco LP (NYSE:SUN) Q3 2019 Earnings Conference Call - Final Transcript
Nov 07, 2019 • 10:30 am ET
Greetings and welcome to Sunoco LP Third Quarter 2019 Earnings Call. [Operator Instructions] A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.
At this time, I'll turn the conference over to Scott Grischow, Vice President of Investor Relations and Treasury. You may now 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; Tom Miller, Chief Financial Officer; Karl Fails, Chief Operations Officer and other members of management team.
A reminder, that today's call will contain forward-looking statements subject to risks, uncertainties and other factors that could cause actual results to differ materially. 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.
Before I turn the call over to Tom, I will review this quarter's financial and operating results. For the quarter, the Partnership recorded net income of $66 million. Third quarter 2019 adjusted EBITDA was $192 million compared with third quarter 2018 of $208 million. Third quarter 2018 results included a one-time cash benefit of approximately $25 million related to a settlement with a fuel supplier. If you remove this onetime benefit this quarter's adjusted EBITDA would have increased $192 million from $183 million a year ago.
Third quarter, distributable cash flow as adjusted was $133 million. On October 25th, we declared in $82.55 per unit distribution, the same as last quarter.
Looking at our operational performance, fuel volume in the third quarter totaled a record high of 2.11 billion gallons of 5% from a year ago, driven by the contribution of our 2018 acquisitions, organic growth and gross profit optimization efforts. Fuel margin was $0.116 per gallon, excluding last year's $25 million one-time cash benefit, fuel margin increased by $0.2 per gallon from a year ago.
I will now turn the call over to Tom.
Thomas R. Miller
Thanks Scott and good morning everyone. We delivered strong results in the third quarter. Let me put these results in context.
We sold record volumes with margins above our annual guidance range. Although we're well into our gross profit optimization efforts, we still see tangible benefits. We continue to sign up new customers with long-term contracts to quickly deliver added EBITDA. And at the same time, we remain focused on controlling expenses that allow these strong results to drop to the bottom line. For the third quarter, total operating expenses were $134 million down 4% from a year ago.
For 2019, we expect to be well below our previous annual guidance of $540 million.
Moving to capital maintenance spend totaled $13 million for the quarter and we expect to be around $40 million for the year. Growth capital totaled $33 million in the quarter, for 2019