Sunoco LP

Greetings.

Welcome to the Sonico LP's 2020, first quarter 2020 earnings call. At this time, all participants are in a listen only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Scott Grischow.

You may begin. Thank you and good morning, everyone. On the call with me this morning are Joe Kim, SNOCO LP's President and Chief Executive Officer, Tom Miller, Chief Financial Officer, Karl Fails, Chief Operations Officer, and other members of the management team. A reminder that 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. including expectations and assumptions related to the impact of the COVID-19 pandemic. 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 reconciliation of each financial measure. Before I turn the call over to Tom, I will review financial and operating results for the first quarter of 2020. The partnership recorded a net loss of $128 million. This net loss included a $227 million non-cash inventory adjustment, resulting from the sharp decline in the price of RBOB during the quarter. Adjusted EBITDA was $209 million compared to $153 million in the first quarter of 2019. Fuel volumes totaled 1.9 billion gallons, down 2% from a year ago. First quarter volumes did not reflect a full quarter's impact of shelter-in-place orders, as these were not put into effect until the last two weeks of March for most of the states in which we operate. Fuel margin was 13.1 cents per gallon, up from 9.9 cents per gallon for the same period last year. The year-over-year increase was supported by a favorable commodity price environment and a $13 million makeup payment under the fuel supply agreement with 7-Eleven. This payment reflects the shortfall over the last 12 months of the contract. As a reminder, we recognize any makeup payment under the fuel supply agreement at the end of the contract year, which ends on March 31st. Total operating expenses for the quarter increased to $143 million, which includes an expected $16 million credit loss expense. The increase was primarily due to the financial impact of COVID-19 and lower oil prices on our energy services business. This was more than offset by an $18 million favorable legal settlement and non-motor fuel income. First quarter, distributable cash flows adjusted was $159 million, yielding a coverage ratio of 1.84 times and a trailing 12-month coverage ratio of 1.49 times. And on April 2nd, we declared an 82.55 cent per unit distribution, the same as last quarter. I will now turn the call over to Tom.