Greetings. Welcome to Sunoco L. P. 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. Please note this conference is being recorded. At this time, I'll turn the conference over to Scott Grishow, 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 Carl Sales, Chief Operations Officer and other members of the 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 $1,000,000 Q3 2019 adjusted EBITDA was $192,000,000 compared with Q3 2018 of $208,000,000 3rd quarter 2018 results included a one time cash benefit of approximately $25,000,000 related to a settlement with the fuel supplier. If you remove this one time benefit, this quarter's adjusted EBITDA would have increased to $192,000,000 from $183,000,000 a year ago. 3rd quarter distributable cash flow as adjusted was $133,000,000 On October 25, we declared an $0.82.55 per unit distribution, the same as last quarter.
Looking at our operational performance, fuel volume in the 3rd quarter totaled a record high of 2,110,000,000 gallons, up 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 $25,000,000 one time cash benefit, fuel margin increased by $0.02 per gallon from a year ago. I will now turn the call over to Tom. Thanks, Scott, and good morning, everyone. We delivered strong results in the Q3.
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 that 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 Q3, total operating expenses were $134,000,000 down 4% from a year ago. For 2019, we expect to be well below our previous annual guidance of $540,000,000 Moving to capital, maintenance spend totaled $13,000,000 for the quarter and we expect to be around $40,000,000 for the year. Growth capital totaled $33,000,000 in the quarter.
For 2019, we expect to spend at least $115,000,000 When you factor in an additional investment in J. C. Nolan of approximately $45,000,000 our 2019 investment in growth projects will total roughly $160,000,000 We continue to find and deliver high return organic investment opportunities. These organic fuel distribution investments have been done with attractive returns consistent with our historical fuel distribution roll up acquisitions. Looking forward, we expect to invest in additional organic projects while remaining within the confines of our financially disciplined framework.
On the subject of leveraging coverage, our 3rd quarter leverage was 4.5 times including the investment made in J. C. Nolan joint venture. As Scott mentioned earlier, our DCF as adjusted was $133,000,000 yielding a 3rd quarter coverage ratio of 1.5 with trailing 12 month coverage of 1.3. Finally, based on the strength of our year to date results and our expectations for the Q4, we now project full year 2019 adjusted EBITDA to be at the high end or above our previously guided range of $610,000,000 to $650,000,000 With that, I'll now turn the call over to Joe for his closing thoughts.
Joe?
Thanks, Tom. Good morning, everyone. We delivered a very strong Q3. We had record volumes, strong margins, while executing on tight cost controls. Our underlying business is strong.
The resiliency of our business through different commodity environments has been highly evident since the 711 transaction. We have delivered quality results quarter after quarter and more importantly, we expect this to continue. Looking forward, the 4th quarter is off to a solid start. As Tom mentioned, we expect our 2019 EBITDA to be at the high end or above the original guidance. Moving on to growth, we have identified and executed on attractive return projects within both the midstream and fuel distribution sectors.
In the Q3, we completed our first deliveries on the J. C. Nolan pipeline and we're in the process of evaluating and finalizing more midstream projects in the future. Within field distribution, we continue to grow the Sunoco brand. We have ramped up our organic efforts and we expect this to be a ratable part of our business going forward.
We have balanced our increase in organic growth this year with fewer acquisitions. But let me be clear, we're still actively looking for acquisitions. When the right opportunity comes at the right price, we'll act on it. Let me close by stating our results year to date have been very strong and we will deliver on our 2019 targets. We expect next year to be just as strong and we look forward to sharing our insights and our 2020 guidance this December.
Operator, that concludes our prepared remarks. You may open the line for questions.
Thank you. At this time, we'll be conducting a question and answer Our first question is from the line of Sharon Lee with Wells Fargo. Please proceed with your question.
Hi, good morning. Just wondering if you could provide some color on what you're seeing in the M and A market today and whether you can comment on the recent Empire Petroleum deal, whether that package of assets were of interest?
Sharon, this is Joe. Good morning. As far as the Empire deal and or any other deals that are out there, we don't comment on those. Obviously, we have a very capable M and A team that has opportunities to look at very many on most deals that come across our table. But as a rule, we don't comment on deals that are public.
As far as your other question about where we're seeing the M and A environment, For us, I think that in the past, I mentioned we have a really good pipeline of acquisition opportunities in the fuel distribution sector and we still have that. This year, we've chosen to focus on our organic growth. And if you kind of look back to 20 18 after we came out of the 711 transaction, we relied heavily on our field distribution acquisitions to grow because as I said in the past, we're building that internal capability to do organic projects. Fast forward to this year and we've developed that capability. So we focused more on organic growth this year, but what we're seeing in the field distribution sector as far as opportunities, we think that's pretty much the same.
And on the midstream side, we did the Aemet acquisition less than a year ago and that acquisition is doing great and those opportunities we're still looking at and we think some of those will start coming up in the future.
Okay, great. And I guess given your focus on organic spending, do you anticipate for next year that the level of growth CapEx could be similar to this year?
Yes. So again, I think like whenever you look at growth CapEx, I don't think you should look at it in a vacuum. I think you have to kind of look at it in totality. So I'll work backwards and then work forward. So in 2018, we spent roughly about $70,000,000 in growth capital and we did about $300,000,000 worth of roll up acquisition.
In 2019, as Tom mentioned in the prepared remarks, we're anticipating about $160,000,000 and year to date, we haven't done any roll up acquisitions. So for us, especially even on the field distribution side and the midstream side, it's really a buy build decision for us. We can either do an acquisition in fuel distribution or buy terminals like we did with AMIT or we can go out and build like we did with J. C. Nolan or grow our organic growth.
So next year, I think, will be more like 2019 versus 2018. In December, we'll provide guidance for that on a very specific basis.
Okay, great. Thank you.
Thank you. Thank
you. Thank you. At this time, I'll turn the floor back to Scott Curcio for closing remarks.
Well, thanks everyone for joining us on the call this morning. Please feel free to reach out to us with any follow-up questions and we'll talk to everyone soon. Have a great day.
This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.