SAN ANTONIO -- CST Brands Inc. reported net income of $63 million for the three-month period ended Sept. 30, 2014, compared to net income was $42 million for the same period in 2013.
Operating revenues totaled $3.2 billion for third-quarter 2014 compared to $3.3 billion for the same period of 2013. The decrease was due to a decrease in the per gallon average selling price for the U.S. segment and sales volumes of motor fuel during the period.
Third-quarter 2014 motor fuel gross profit increased by $40 million or 52% when compared to the third quarter of 2013. Motor fuel gross profit (per gallon) in the U.S. for third-quarter 2014, after deducting credit-card fees, was 25 cents compared to 16 cents in third-quarter 2013, which was primarily caused by a declining crude oil and wholesale gasoline pricing environment combined with the company's fuel pricing strategy.
third quarter 2014 motor fuel gross profit increased by $40 million or 52% when compared to the third quarter of 2013.
U.S. merchandise gross profit increased 5% when compared to third-quarter 2013, primarily driven by improved food, beverage and snack categories across the company's network of stores.
Operating income was $104 million for third-quarter 2014 compared to $69 million for third-quarter 2013. Adjusted EBITDA was $139 million for the three month period ended Sept. 30, 2014 compared to $102 million for the same period in 2013. The increase in operating income and adjusted EBITDA was due primarily to an increase in motor fuel gross profit of $40 million in the U.S., partially offset by increases in operating expenses and general and administrative expenses of $3 million and $10 million, respectively, when compared to the same periods in 2013.
The increase in operating expenses was due to an increase in the number of company-operated convenience stores during 2014 and an increase in health care costs in the U.S. The increase in general and administrative expenses was the result of acquisition, legal and professional related expenses and new costs associated with being an independent, standalone, public company, including additional corporate personnel and associated benefits and stock-based compensation.
"We delivered strong results this quarter and finalized preparations for successful closings of the CrossAmerica and Nice N Easy transactions in October and November, respectively," said Kim Lubel, chairman and CEO of CST Brands. "We executed well, posting year-over-year operating income growth in both our U.S. and Canadian businesses, while further benefiting from a favorable fuel environment. We also continue to move forward toward our goal of opening thirty-eight new stores this year, as we have now opened 25 new sites in the U.S. and Canada during 2014."
The company has opened 19 new stores in the U.S. and six stores in Canada. The company currently expects to open a total of 28 new stores in the U.S. and 10 new stores in Canada during 2014.
CST Brands is one of the largest independent retailers of motor fuels and convenience merchandise in North America. Based in San Antonio, it has approximately 1,900 locations throughout the Southwestern United States and Eastern Canada. In the U.S., CST Corner Stores sell fuel and signature products such as Fresh Choices baked and packaged goods, U Force energy and sport drinks, Cibolo Mountain coffee, FC Soda and Flavors2Go fountain drinks. In Canada, CST is the exclusive provider of Ultramar fuel and its Dépanneur du Coin and Corner Stores sell signature Transit Café coffee and pastries. CST also owns the general partner of CrossAmerica Partners LP, a master limited partnership (MLP), and wholesale distributor of fuels, based in Allentown, Pa.
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