SUN - Earnings call transcript Q3 2019

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Operator

Greetings, and welcome to Sunoco LP Third Quarter 2019 Earnings Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded.

At this time I'll turn the conference over to Scott Grischow, Vice President of Investor Relations and Treasury.

begin. now may You

Scott Grischow

good and morning you everyone. Thank

and call Sunoco for LP's the Chief reminder Officer; Operations that with team. the Officer; me Kim, Joe Financial Officer Chief Fails, are today's morning Karl members President A Miller, of management this Tom On other and call release, Executive to Chief with uncertainties to refer Please differ other forward-looking list as as that filings factors a earnings our well contain SEC factors. will risks, could these statements the materially. to subject and cause results of our actual

financial we including flow During also to for measure. today's call, will Please of adjusted. EBITDA discuss the cash certain distributable reconciliation non-GAAP LP website financial a measures and Sunoco refer adjusted each as

I operating financial this Before I will turn review results. the and Tom, quarter's call to over

partnership For of net recorded the income quarter $XX the million.

adjusted quarter third XXXX compared quarter XXXX of EBITDA was million, million. $XXX with Third $XXX

of a Third cash one-time quarter million benefit field supplier. $XX results a to included XXXX with approximately related a settlement

this remove from $XXX you million adjusted year ago. have a $XXX one-time would quarter's If to million increased benefit, this EBITDA

adjusted distributable $XXX flow as was quarter Third million. cash

On last an unit $X.XXXX October quarter. same the XX, we distribution, declared as per

quarter operational billion ago, our at from contribution driven the record totaled a year's third gallon fuel X.XX volume organic high the growth of Looking XXXX gallons a per from one-time acquisitions, million in $XX cash last our year $X.XXX X% and of up performance, by year by benefit, excluding $X.XXX gross profit margin gallon, optimization was efforts. ago. Fuel per fuel increased margin a

to turn now will call over Tom. I the

Tom Miller

results strong We quarter. and third good Scott Thanks everyone. the delivered morning in

guidance margins We context. above in results our record sold these put volumes me with range. annual Let

see profit we still our optimization into gross tangible well we're Although efforts, benefits.

deliver new long-term up sign added customers quickly with to continue EBITDA. that contracts We

that strong allow And focused same to controlling the to line. we remain results these bottom drop time, expenses on at the

$XXX expenses quarter third the operating from total ago. year X% million work down For a

previous $XXX below guidance expect For annual well million. XXXX, to be of our we

capital million $XX be million and the for $XX totaled totaled we spend maintenance capital, Growth for expect quarter to quarter. million in $XX year. around to Moving the the

expect we projects in approximately million. J.C. million. least total $XXX XXXX in growth you roughly an XXXX, of For at $XX $XXX factor to million, additional investment in will spend our investment Nolan, When

continue deliver investment investments roll distribution acquisitions. fuel attractive have high and to fuel We These historical returns find organic organic done with opportunities. return been our distribution consistent with up

expect financially additional projects our Looking we while within disciplined to forward, remaining invest in the confines framework. organic of

J.C. of our X.X leverage venture. joint the leveraging including Nolan coverage, quarter third was made investment times On in subject the

our third $XXX as earlier Scott of coverage yielding of month was mentioned adjusted million, ratio X.X. a X.X DCF trailing As quarter with coverage XX

at the results quarter, strength fourth our million. previously high be above and XXXX we year our expectations adjusted for the year EBITDA based of Finally, to now $XXX or our end the range guided to $XXX of full to project on date million

turn With closing I'll Joe the call for that, over thoughts. his Joe? to

Joe Kim

strong very on Tom. morning controls. delivered tight Thanks everyone. a strong cost while We quarter. Good executing volumes, had record third margins We

commodity environments different been the is transaction. resiliency has X-Eleven through of business our evidenced underlying Our highly The business strong. since

quarter have importantly, to more after We quality results continue. delivered expect quarter we this and

start. fourth solid off Looking a is to quarter forward to the

end or As the mentioned, our to we guidance. at EBITDA expect Tom be the XXXX high above original

brand. grow finalizing evaluating third first our midstream continue on In and process the return fuel quarter the to completed we and of we pipeline, in the delivery projects attractive Nolan distribution Moving midstream the distribution, executed sectors. and projects both on future. we're we in the J.C. on within Within more identified and have Sunoco growth to fuel the

to and we business our going of up organic be We our a forward. part efforts, have expect ramped this reputable

we're still for fewer with or opportunity act growth be acquisition. clear, the organic comes it. at in When acquisitions. right we'll let We actively on the increased year price, looking this have me balanced right But

very results close have me our year-to-date we targets. on stating by been and strong, will deliver XXXX Let our

We we to forward expect our our this be and guidance December. insights as next look XXXX just sharing strong. year And to

concludes line remarks, prepared you Operator, may our for that questions. the open

Operator

Thank be a you. you. question-answer-session. Thank [Operator At Instructions] this we'll time conducting

the first with Sharon Our question. question Fargo. from your is Lui line with Wells of Please proceed

Sharon Lui

color Empire whether and of you interest? Hi, package could just good whether is that market on the assets today you I'm what recent you're morning. can wondering on M&A Petroleum if deal provide in seeing comment or some the

Joe Kim

this is Sharon, morning. Hi, Good Joe.

don't we across deals we our that As far that on look that a as a opportunities comment table. deals Obviously, we the has capable Empire or out those. most come very to as team comment other But don't deals at are have rule, any there, that public. are on on and deal M&A

as far in we're question As M&A environment. your about what other seeing the

in distribution after developed Fast we've look the sector, fuel grow I I the opportunities this pipeline said as that. And to of out we're year And X-Eleven we still capability that because internal the capability. building think in I growth. a transaction, of back do the chosen organic kind that forward you acquisitions relied focus past we XXXX, in distribution and to came to fuel to to past, us, projects. year, we and our on For heavily have organic this of acquisition we've really if mentioned on our have we good

more future. that those in far the organic a same. distribution we're we're on as focus we seeing think think growth year. at, on year start looking and pretty much the And that's what sector AMID the the acquisition, still midstream opportunities some will the the we doing this But as acquisition fuel those on we coming up of is in on side and opportunities, great, we the than and ago, did So less

Sharon Lui

this Okay, great. on anticipate that similar Do growth guess I be focus next your year? year of And the spending. could you for organic given level CapEx to

Joe Kim

Yeah.

in look like CapEx, you look you whenever think a I at think at don't I again, vacuum. growth So it should

to you in it of I totality. kind have at look think

So I then forward. work work backwards and

So of In about roll in worth we're capital. about growth prepared And spent million. haven't acquisition. $XXX XXX XXXX, roughly $XX roughly mentioned year-to-date up million 'XX, roll in acquisition. as million done the Tom up remarks, we anticipating And we did in any about we

we our the like growth. acquisition with especially and So fuel side, the and We even go – for can build, with buy or it's terminals, fuel we decision like us, AMID us. on we distribution for an organic distribution out or grow J.C. buy-build midstream a either side do Nolan did did or can really in

be guidance for specific December provide that next like would I So a very think on In more year, verses basis. XXXX XXXX. we'll

Sharon Lui

Thank you. great. Okay,

Joe Kim

you. Thank

Operator

[Operator you. you. to for I'll time, back Thank At Scott Thank Grischow Instructions] this floor turn remarks. closing the

Scott Grischow

call Have Please day. this us feel Well, for free a everyone with out follow questions up to to everyone on reach joining to great thanks, talk the soon. and any morning. us we'll

Operator

concludes conference. This today's

this your disconnect We for may your participation. at lines You time. you thank

Sunoco (SUN) 7 Nov 192019 Q3 Earnings call transcript