Sunoco LP (NYSE:SUN) Q1 2023 Earnings Conference Call May 2, 2023 10:00 AM ET
Company Participants
Scott Rachel - Senior Vice President, Finance and Treasurer
Joe Kim - President and Chief Executive Officer
Karl Fails - Chief Operations Officer
Dylan Bramhall - Chief Financial Officer
Conference Call Participants
Gabe Moreen - Mizuho
Ned Baramov - Wells Fargo
John Royall - JPMorgan
Operator
Greetings and welcome to the Sunoco LP’s First Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott Rachel, SVP, Finance and Treasurer. Please go ahead.
Scott Rachel
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 a reconciliation of each financial measure.
I’d like to start the call by looking at some of our first quarter highlights. Sunoco delivered a record first quarter, with adjusted EBITDA of $221 million compared to $191 million a year ago, an increase of 16%. The partnership sold 1.9 billion gallons in the first quarter, up 9% from the first quarter of last year. Fuel margin for all gallons sold was $0.129 per gallon compared to $0.124 per gallon a year ago. Fuel margin results include the benefit of the 7-Eleven makeup payment of $24 million.
Total first quarter operating expenses were $127 million, an increase of $3 million from the same period last year. We spent $29 million of growth capital in the first quarter and $8 million in maintenance capital. First quarter distributable cash flow as adjusted was $160 million compared to $142 million in the first quarter of 2022, yielding a current quarter coverage ratio of 1.8x and a trailing 12-month coverage ratio of 1.9x. On April 24, we declared an $0.842 per unit distribution, a 2% increase over last quarter. We plan to evaluate future distribution increases annually in the first quarter, balancing our financial metric targets and investment in growth opportunities.