Sunoco LP (NYSE:SUN) Q3 2023 Earnings Conference Call November 1, 2023 10:00 AM ET
Company Participants
Scott Grischow - Senior Vice President, Finance and Treasurer
Joseph Kim - President and Chief Executive Officer
Karl Fails - Chief Operations Officer
Dylan Bramhall - Chief Financial Officer
Conference Call Participants
Theresa Chen - Barclays Capital
Spiro Dounis - Citigroup
John Royall - JPMorgan
Selman Akyol - Stifel
Ned Baramov - Wells Fargo
Operator
Greetings, and welcome to Sunoco LP's Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Scott Grischow, Senior Vice President of Finance and Investor Relations. Thank you. You may begin.
Scott Grischow
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 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.
The third quarter brought a continuation of Sunoco's strong financial performance throughout 2023. The partnership generated adjusted EBITDA of $257 million compared to $276 million a year ago. Fuel volumes for the quarter were 2.1 billion gallons, up 7% from the third quarter of last year. Fuel margin on all gallons sold was $0.13 per gallon compared to $0.139 per gallon a year ago. Total third quarter operating expenses were $141 million, an increase of $10 million from the same period last year. This year-over-year increase was attributable to the Peerless and Zenith acquisitions.
During the third quarter, we spent $31 million of growth capital and $14 million in maintenance capital. Third quarter distributable cash flow as adjusted was $181 million compared to $196 million in the third quarter of 2022, yielding a current quarter coverage ratio of 2x and a trailing 12-month coverage ratio of 1.9x. On October 20th, we declared an $0.842 per unit distribution consistent with last quarter. As you may recall, we increased our distribution by 2% in the first quarter of 2023, and we will determine our next distribution increase next year in the first quarter.