Welcome to the CrossAmerica Partners fourth quarter 2019 earnings call. My name is Ellen and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Jon Benfield, Interim Chief Financial Officer.

Thank you operator. Good morning and thank you for joining us at CrossAmerica's fourth quarter and year-end 2019 earnings call. With me today are Charles Nifong, CEO and President and other members of our executive leadership team. Charles will provide some opening comments, a brief overview of CrossAmerica's operational performance and highlights from the full year and quarter and then I will discuss the financial results. At the end, we will open the call up to questions. I should point out that today's call will follow some presentation slides that we will utilize during this morning's event. These slides are available as part of the webcast and are posted on the CrossAmerica website. Before we begin, I would like to remind everyone that today's call, including the question-and-answer session, may include forward-looking statements regarding expected revenue, future plans, future operational metrics and opportunities and expectations of the organization. There can be no assurance that management's expectations, beliefs and projections will be achieved or that actual results will not differ from expectations. Please see CrossAmerica's filings with the Securities and Exchange Commission, including annual reports on Form 10-K and quarterly reports on Form 10-Q for a discussion of important factors that could affect our actual results. Forward-looking statements represent the judgment of CrossAmerica's management as of today's date and the organization disclaims any intent or obligation to update any forward-looking statements. During today's call, we may also provide certain performance measures that do not conform to U.S. Generally Accepted Accounting Principles or GAAP. We have provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of the earnings press release. Today's call is being webcast and a recording of this conference call will be available on CrossAmerica website for a period of 60 days. With that, I will now turn the call over to Charles.

Thank you Jon. We reported our full year and fourth quarter 2019 earnings results yesterday afternoon and I will briefly go through some of the highlights and strategic objectives. Then Jon will go through the financials in more detail in a few minutes. First, I wanted to say that it is a pleasure to be here this morning and to be back at the partnership. I was previously at the partnership until early 2015 leading the acquisitions, capital markets and strategy functions. In the period since then, I have been working in the wholesale and retail business with Joe Topper, currently our largest unitholder and Chairman of the Board. Second, I look forward to working with our team here at CrossAmerica. While there was some transition involved with the Circle K transaction at the senior management level, for the most part the core of the team is unchanged. Dave Hrinak, who was previously at the partnership for over a decade until 2017, is back as Executive Vice President of Wholesale. Jon Benfield, our Interim CFO has been with for CrossAmerica since its IPO in 2012. So there is a lot of continuity in management and at the same time, a healthy amount of change of leadership that will enable us to examine how we operate to find ways of being better. As part of his team, I will of course be working closely with Joe Topper, who is very much, along with our unitholders, will be looking to me and our team to increase unitholder value over the long term. Finally, in my new role, you can expect that I will be spending some time with the investment community as I will be attending investor and analyst meetings and conferences. So I look forward to meeting those of you that…

Thank you Charles. If you would please turn to slide 10, I would like to review our fourth quarter and full year results for the partnership. For the fourth quarter of 2019, we reported adjusted EBITDA of $25.6 million compared to $28.7 million for the same period of 2018, representing a decline of 11%. Our distributable cash flow for the fourth quarter of 2019 was $18.8 million versus $21 million in 2018, also a decrease of 11% year-over-year. Both adjusted EBITDA and distributable cash flow for the fourth quarter were impacted by lower fuel margin and the new lease accounting guidance that Charles mentioned earlier. Our distribution coverage on a paid basis for the fourth quarter of 2019 was 1.04 times versus 1.16 times for the fourth quarter of 2018. For the full year, our adjusted EBITDA was $103.7 million, representing a decline of 2% with distributable cash flow increasing 5% to $80.1 million. Our distribution coverage on a paid basis for the full year of 2019 was 1.11 times, which was an improvement over the 1.01 times that we experienced for the 12 months ended December 31, 2018. As Charles touched on earlier, we have adjusted both the three and 12 month periods of 2018 for the new lease accounting guidance that went into effect on January 1, 2019. We have provided reconciliations for the lease adjustments for 2018 in the appendix of the presentation slides. If you would turn to the next slide, slide 11, we ended the year with a leverage ratio as defined under our credit facility at 4.70 times and remain in compliance with our financial covenant ratios. We have sufficient liquidity to execute our plans and as of February 21, we had $79 million available on our credit facility with nominal capacity of $226…

[Operator Instructions]. We have a question from Dane Reinhardt with Baird. Please go ahead.

Hi. Good morning guys. Just one quick one for me. I was wondering how much of a step down you guys were expecting in CapEx this year considering that rebranding in Alabama is done? Or if there any expectations for further spending around the acquisitions or asset exchanges that you guys have?

Thanks, Dane, for your question. I think what we anticipate for 2020 is CapEx to still be higher than it has been historically. We still have some EMV chip card upgrades to do at our dispensers. But you are right, the blip in 2019 from Hurricane Michael and the Alabama rebranding is largely done.

Okay. Thank you. How big is the M&A market for you guys? I know there has been talks with other companies in the market. I don't know how much you comment on that or how much more you see on that front?

This is Charles. So obviously we are continuingly being brought deals to us. I would say we touched on our margin, our focus really especially for the first, at least for the first half of the year is on closing the acquisitions that we have already announced and making sure that they are integrated. And so while we will look at the M&A market, really our focus in on making sure that we close these acquisitions and integrate them effectively into the organization.

Okay. Thank guys. That's it for me.

Thank you.

[Operator Instructions]. Our next question is from Sharon Lui with Wells Fargo. Please go ahead.

Hi. Good morning.

Hi. Good morning.

Just wondering if you could maybe bridge the fourth quarter results to what you are expecting for full year in 2020? I think you mentioned that you are still comfortable with guidance. Just if you can provide any details in terms of how you would get to like an annualized fourth quarter number versus like full year 2020 of your expectation?

Well, obviously if you look at our fourth quarter, there are still a number of assets that aren't in there for the acquisitions that we have announced. So we have still got the remaining asset exchanges to complete. We have got the transaction involving the exchange of the CST Fuel Supply for the national wholesale fuel assets from Circle K come onboard and we have got retail transactions coming over. So there is a lot going on from that. Annualizing our fourth quarter is not going to indicative of what the partnership is going to look like in a few months when all those transactions come onboard. So I don't know, I would not say that exercise is, in and of itself, all that useful but if you look again with our guidance that we provided, we provided the impact of what all the things together should do in aggregate also adjusted for the expected timing of when those acquisitions will come online for us.

Okay. So the main benefit would be from those transactions. Is there any, I guess, underlying assumptions in terms of what margins may look like or expenses?

Well, obviously on the expense side, I wouldn't -- for the core business that we have in place today, there is not going to be a dramatic change in expense structure there. We will continue to do things to improve on the margin at that. But you are going to see and particularly with bringing the retail over, that's going to change what our financials look like because there is a cost structure embedded with that that will come over and that will add on the operating expense side and also for G&A, so that those results won't look comparable when you look at the fourth quarter again. But net net, those transactions are positive for us and will result in an increased EBITDA for the partnership.

Okay. And then just I guess a question on maintenance CapEx. It increased during the fourth quarter. Is this a good run rate going forward?

So, on maintenance CapEx, Sharon, I think what you should see is, we have been in that $1 million to $2 million territory for a number of years now. I think that's what we would anticipate going forward with the exception that bringing on the retail will bring with it some maintenance CapEx as well.

But again, I would reiterate that the expectations for that maintenance CapEx are already built into the numbers that we provided for guidance, particularly as it relates to the distributable cash flow numbers that we put for guidance for full year 2020.

Okay. All right. Thank you.

[Operator Instructions]. I am showing no further questions in queue at time.

Yes. So for everyone out there, thank you for joining us today. We appreciate your interest in the partnership. We have a lot of work to do this year and we are working hard to execute our plans. And then for our investors on the line, we want you to know that we are focused on our ultimate goal of creating value for you, our unitholders and that's the focus of what we are trying to do here at the partnership.

Thank you for joining today's call and if you have further questions, please don't hesitate to reach out to us. Thank you very much.