CrossAmerica Partners LP
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
CAPL$19.77+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0000950170-24-056002
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-093061
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 170 previous paragraphs and 198 current paragraphs.
137 unchanged; 24 reworded; 30 added; 9 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
Three of our most favorable interest rate swap contracts matured April 1, 2024. As a result and due to increases in interest rates in general, our effective interest rate has increased for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023.
Current report
Operating revenues decreased $12 million (1%) and operating income increased $0.3 million (1%). Significant items impacting these results were:
Current report
Our wholesale segment revenues decreased $74 million (12%) primarily attributable to a 12% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the net loss of independent dealer contracts.
Current report
Our retail segment revenues increased $62 million (11%) primarily attributable to a 9% increase in volume due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a decrease in volume in our base business. Merchandise revenues increased $22 million (26%) driven by an increase in our average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Current report
General and administrative expenses increased $0.4 million (6%) primarily driven by higher management fees.
Current report
During the three months ended June 30, 2023, we recorded a $6.1 million net gain in connection with our ongoing real estate rationalization effort and a $0.6 million net gain on lease terminations and asset disposals.
Current report
Interest expense increased $3.5 million (33%) primarily due to the maturity of three of our most favorable interest rate swap contracts on April 1, 2024 in addition to the general increase in interest rates between the two periods.
Current report
Income tax expense
Current report
Operating revenues
Current report
Cost of sales
Current report
General and administrative expenses
Current report
Depreciation, amortization and accretion expense
Current report
Gain (loss) on dispositions and lease terminations, net
Current report
During the six months ended June 30, 2023, we recorded a $6.2 million net gain in connection with our ongoing real estate rationalization effort and a $1.3 million net loss on lease terminations and asset disposals.
Current report
Interest expense
Current report
We recorded an income tax (benefit) expense of $(4.1) million and $1.1 million for the six months ended June 30, 2024 and 2023, respectively, driven by (losses incurred) income generated by our taxable subsidiaries.
Current report
Gross profit decreased $3.6 million (11%) and operating income decreased $0.9 million (4%). These results were impacted by:
Current report
Operating expenses decreased $2.7 million (28%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Current report
Gross profit decreased $7.8 million (12%) and operating income decreased $4.5 million (10%). These results were impacted by:
Current report
Motor fuel gross profit
Current report
Rent gross profit
Current report
Rent gross profit decreased $4.0 million (16%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Current report
Operating expenses decreased $3.4 million (17%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Current report
Gross profit increased $10.6 million (16%) and operating income increased $1.9 million (7%). These results were impacted by:
Current report
Gross profit increased $14.2 million (12%) and operating income decreased $1.6 million (4%). These results were impacted by:
Current report
Our motor fuel gross profit increased $2.8 million (5%) attributable to a volume increase of 6% due primarily to an increase in the average retail site count due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a decrease in volume in our base business.
Current report
Our merchandise gross profit and other revenues increased $8.9 million (21%) and $2.6 million (36%), respectively, driven by an increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Current report
Operating expenses increased $15.8 million (21%) driven by a 25% increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Current report
See "Results of Operations–Gain (loss) on dispositions and lease terminations, net."
Current report
Net cash provided by operating activities decreased $13 million for the six months ended June 30, 2024 compared to the same period in 2023, primarily attributable to the weaker results in the first quarter of 2024 as well as an increase in interest expense driven by the maturity of three of our most favorable interest rate swap contracts on April 1, 2024.
Removed paragraphs (9)
Previous report
Given our interest rate swap contracts, our effective interest rate did not change significantly between the first quarter of 2023 and the first quarter of 2024. However, three of our most favorable interest rate swap contracts matured April 1, 2024. See Item 3 for additional information regarding the impact of the maturity of those interest rate swap contracts on our future interest expense.
Previous report
Gross profit
Previous report
During the three months ended March 31, 2023, we recorded a $2.0 million loss on lease terminations and asset disposals, partially offset by a $0.2 million gain in connection with our ongoing real estate rationalization effort.
Previous report
Gross profit decreased $4.2 million (14%) and operating income decreased $3.6 million (17%). These results were impacted by:
Previous report
Operating expenses decreased $0.6 million (7%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Previous report
Gross profit increased $3.5 million (7%) and operating income decreased $3.5 million (24%). These results were impacted by:
Previous report
Gross profit
Previous report
See "Results of Operations–Loss on Dispositions and Lease Terminations, net."
Previous report
Net cash provided by operating activities decreased $5.7 million for the three months ended March 31, 2024 compared to the same period in 2023, primarily attributable to lower fuel margins, partially offset by a $3.3 million net generation of cash flow from changes in working capital stemming from timing of settlement of fuel purchases during the first quarter of 2023.
Reworded paragraphs (24)
Previous wording
During the first quarter of 2024, we paid $19.9 million of cash and accrued an additional $1.2 million of cash paid in April 2024. In addition, we recorded a non-cash write-off of deferred rent income of $1.4 million during the first quarter of 2024. See Note 2 to the financial statements for additional information.
Current wording
During the six months ended June 30, 2024, we paid $25.5 million of cash and recorded a non-cash write-off of deferred rent income of $1.5 million. See Note 2 to the financial statements for additional information.
Previous wording
The prices paid to our motor fuel suppliers for wholesale motor fuel (which affects our cost of sales) are highly correlated to the price of crude oil. The crude oil commodity markets are highly volatile, and the market prices of crude oil, and, correspondingly, the market prices of wholesale motor fuel, experience significant and rapid fluctuations. For approximately 58% of gallons sold, we receive a per gallon rate equal to the posted rack price, less any applicable discounts, plus transportation costs, taxes and a fixed rate per gallon of motor fuel. The remaining gallons are either retail sales or wholesale DTW contracts that provide for variable, market-based pricing.
Current wording
The prices paid to our motor fuel suppliers for wholesale motor fuel (which affects our cost of sales) are highly correlated to the price of crude oil. The crude oil commodity markets are highly volatile, and the market prices of crude oil, and, correspondingly, the market prices of wholesale motor fuel, experience significant and rapid fluctuations. For approximately 56% of gallons sold, we receive a per gallon rate equal to the posted rack price, less any applicable discounts, plus transportation costs, taxes and a fixed rate per gallon of motor fuel. The remaining gallons are either retail sales or wholesale DTW contracts that provide for variable, market-based pricing.
Previous wording
Through March 31, 2024, we have converted 31 of the 59 sites included in the Applegreen Acquisition and transitioned these sites from lessee dealer sites in the wholesale segment to company operated sites in the retail segment. See Note 2 to the financial statements for additional information.
Current wording
We converted the 59 sites included in the Applegreen Acquisition and transitioned these sites from lessee dealer sites in the wholesale segment to company operated sites in the retail segment. See Note 2 to the financial statements for additional information.
Previous wording
Gross profit decreased $0.7 million (1%), which was primarily driven by a decrease in motor fuel and rent gross profit within our wholesale segment, partially offset by an increase in merchandise gross profit driven by the conversion of certain lessee dealer and commission agent sites to company operated sites. See “Results of Operations—Segment Results” for additional gross profit analyses.
Current wording
Gross profit increased $7 million (7%), which was primarily driven by an increase in merchandise and motor fuel gross profit within our retail segment, partially offset by a decrease in motor fuel and rent gross profit within our wholesale segment. See “Results of Operations—Segment Results” for additional gross profit analyses.
Previous wording
Depreciation, amortization and accretion expense decreased $1.1 million (6%) primarily due to assets becoming fully depreciated.
Current wording
Depreciation, amortization and accretion expense decreased $0.9 million (4%) primarily due to assets becoming fully depreciated.
Previous wording
Loss on dispositions and lease terminations, net
Current wording
Gain (loss) on dispositions and lease terminations, net
Previous wording
We recorded an income tax benefit of $5.8 million and $1.7 million for the three months ended March 31, 2024 and 2023, respectively, driven by income (losses) generated by our taxable subsidiaries.
Current wording
We recorded income tax expense of $1.7 million and $2.8 million for the three months ended June 30, 2024 and 2023, respectively, driven by income generated by our taxable subsidiaries.
Previous wording
Operating revenues decreased $75 million (7%) and operating income decreased $22 million. Significant items impacting these results were:
Current wording
Operating revenues decreased $87 million (4%) and operating income decreased $22 million (59%). Significant items impacting these results were:
Previous wording
A $74 million (14%) decrease in our wholesale segment revenues primarily attributable to a 9% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the net loss of independent dealer contracts. In addition, our average wholesale selling price decreased 5% due primarily to changes in crude oil prices during the course of the quarter compared to last year.
Current wording
Our wholesale segment revenues decreased $148 million (13%) primarily attributable to a 10% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the net loss of independent dealer contracts. In addition, our average wholesale selling price decreased 3% due primarily to changes in crude oil prices during the course of the first half of 2024 compared to the same period in 2023.
Previous wording
Our retail segment revenues remained relatively flat for the first quarter of 2024 as compared to the first quarter of 2023. Our average retail selling price of fuel decreased 5% from the first quarter of 2023 to the first quarter of 2024, partially offset by a 2% increase in volume due to the conversion of certain lessee dealer sites to company operated sites, partially offset by a decrease in volume in our base business. Lastly, merchandise revenues increased $11.2 million (17%) driven by an increase in our average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Current wording
Our retail segment revenues increased $61 million (6%) for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily attributable to a 6% increase in volume due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a decrease in volume in our base business. Merchandise revenues increased $33 million (22%) driven by an increase in our average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Previous wording
Cost of sales decreased $74 million (8%), due primarily to lower wholesale volume and lower cost per gallon, partially offset by the increase in merchandise cost of sales driven by the same drivers as discussed above.
Current wording
Cost of sales decreased $93 million (5%), due primarily to lower wholesale volume and lower cost per gallon, partially offset by an increase in merchandise cost of sales driven by the same drivers as discussed above.
Previous wording
General and administrative expenses increased $1.1 million (19%) primarily driven by higher legal fees and acquisition-related costs.
Current wording
General and administrative expenses increased $1.5 million (11%) primarily driven by higher management fees, legal fees and acquisition related costs, partially offset by lower equity incentive compensation expense.
Previous wording
During the three months ended March 31, 2024, we recorded a $15.9 million loss on lease termination with Applegreen, including a $1.4 million non-cash write-off of deferred rent income. See Note 2 to the financial statements for additional information. In addition, we recorded $0.9 million of other losses on lease terminations and asset disposals, including non-cash write-offs of deferred rent income.
Current wording
During the six months ended June 30, 2024, we recorded a $16.0 million loss on lease termination with Applegreen, including a $1.5 million non-cash write-off of deferred rent income (see Note 2 to the financial statements for additional information). In addition, we recorded $1.7 million of other losses on lease terminations and asset disposals, including non-cash write-offs of deferred rent income. We recorded a $6.5 million net gain in connection with our ongoing real estate rationalization effort.
Previous wording
Interest expense decreased $1.5 million (12%) due to the $1.1 million write-off of deferred financing costs in the first quarter of 2023 as a result of the amendment and restatement of the CAPL Credit Facility and termination of the JKM Credit Facility.
Current wording
Interest expense increased $2.1 million (9%) due to the maturity of three of our most favorable interest rate swap contracts on April 1, 2024 in addition to the general increase in interest rates, partially offset by the $1.1 million write-off of deferred financing costs in the first quarter of 2023 as a result of the amendment and restatement of the CAPL Credit Facility and termination of the JKM Credit Facility.
Previous wording
The $2.1 million decrease (13%) in motor fuel gross profit was primarily due to a 9% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites and the net loss of independent dealer contracts. In addition, our average fuel margin per gallon decreased 4% as compared to the same period of 2023, driven by the movements of crude oil prices within the two periods.
Current wording
The $1.3 million decrease (7%) in motor fuel gross profit was primarily due to a 12% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites and the net loss of independent dealer contracts, partially offset by an increase in fuel margin per gallon of 5% as compared to the same period of 2023, driven by the movements of crude oil prices within the two periods.
Previous wording
The average spot price of WTI crude oil increased 2% from $75.93 per barrel for the first quarter of 2023 to $77.50 per barrel for the first quarter of 2024. See “Significant Factors Affecting our Profitability—The Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross Profit.”
Current wording
The average spot price of WTI crude oil increased 11% from $73.54 per barrel for the second quarter of 2023 to $81.81 per barrel for the second quarter of 2024. See “Significant Factors Affecting our Profitability—The Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross Profit.”
Previous wording
Rent gross profit decreased $1.8 million (14%) for the first quarter of 2024 compared to the same period of 2023, primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Current wording
Rent gross profit decreased $2.2 million (17%) for the second quarter of 2024 compared to the same period of 2023, primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Previous wording
Our motor fuel gross profit decreased $0.7 million (3%) attributable to a 3% decrease in margin per gallon for the three months ended March 31, 2024 as compared to the same period in 2023, driven by the movements in crude oil prices within the two periods. Volume increased 2% due primarily to an increase in the average retail site count due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a decrease in volume in our base business.
Current wording
Our motor fuel gross profit increased $3.6 million (10%) attributable to a volume increase of 9% due primarily to an increase in the average retail site count due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a decrease in volume in our base business.
Previous wording
Our merchandise gross profit and other revenues increased $3.3 million (18%) and $1.1 million (33%), respectively, driven by an increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Current wording
Our merchandise gross profit and other revenues increased $5.6 million (23%) and $1.5 million (38%), respectively, driven by an increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Previous wording
Operating expenses increased $7.0 million (20%) driven by a 22% increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Current wording
Operating expenses increased $8.8 million (22%) driven by a 28% increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Previous wording
We incurred capital expenditures of $6 million for each of the three months ended March 31, 2024 and 2023. We paid $19.9 million to Applegreen related to lease terminations and inventory purchases during the three months ended March 31, 2024. We received $0.6 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort for the three months ended March 31, 2023.
Current wording
We incurred capital expenditures of $11 million for each of the six months ended June 30, 2024 and 2023. We paid $26 million to Applegreen related to lease terminations and inventory purchases during the six months ended June 30, 2024. We received $11 million and $5 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
We paid $20 million in distributions for each of the three months ended March 31, 2024 and 2023. For the three months ended March 31, 2024 and 2023, we made total net borrowings on our credit facilities of $42 million and $13 million, respectively. We paid $7 million of deferred financing costs in connection with amending and restating the CAPL Credit Facility and terminating the JKM Credit Facility in the first quarter of 2023.
Current wording
We paid $40 million in distributions for each of the six months ended June 30, 2024 and 2023. For the six months ended June 30, 2024 and 2023, we made total net borrowings (repayments) on our credit facilities of $34 million and ($4) million, respectively. We paid $7 million of deferred financing costs in connection with amending and restating the CAPL Credit Facility and terminating the JKM Credit Facility in the first quarter of 2023.
Previous wording
Taking into account the interest rate swap contracts that were effective beyond April 1, 2024, the effective interest rate on our CAPL Credit Facility at March 31, 2024 was 6.7% (our applicable margin was 2.25% as of March 31, 2024). Letters of credit outstanding at March 31, 2024 totaled $5.3 million.
Current wording
Taking the interest rate swap contracts into account, our effective interest rate on our CAPL Credit Facility at June 30, 2024 was 6.7% (our applicable margin was 2.25% as of June 30, 2024). Letters of credit outstanding at June 30, 2024 totaled $5.3 million.
Previous wording
The amount of availability under our CAPL Credit Facility at May 3, 2024, after taking into consideration debt covenant restrictions, was $96 million.
Current wording
The amount of availability under our CAPL Credit Facility at August 2, 2024, after taking into consideration debt covenant restrictions, was $116 million.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Cost of sales decreased $19 million (2%), due primarily to lower total volume, partially offset by an increase in merchandise cost of sales driven by the same drivers as discussed above.
Current report — wording carried from elsewhere
During the three months ended June 30, 2024, we recorded a $6.5 million net gain in connection with our ongoing real estate rationalization effort, partially offset by $0.9 million of net losses on lease terminations and asset disposals, including non-cash write-offs of deferred rent income.
Current report — wording carried from elsewhere
Gross profit increased $6 million (4%), which was primarily driven by an increase in merchandise and motor fuel gross profit within our retail segment, partially offset by a decrease in motor fuel and rent gross profit within our wholesale segment. See “Results of Operations—Segment Results” for additional gross profit analyses.
Current report — wording carried from elsewhere
See “Results of Operations—Segment Results” for analyses.
Current report — wording carried from elsewhere
Depreciation, amortization and accretion expense decreased $2.0 million (5%) primarily due to assets becoming fully depreciated.
Current report — wording carried from elsewhere
The $3.4 million decrease (10%) in motor fuel gross profit was primarily due to a 10% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites and the net loss of independent dealer contracts.
Current report — wording carried from elsewhere
The average spot price of WTI crude oil increased 7% from $74.73 per barrel for the first six months ended June 30, 2023 to $79.69 per barrel for the six months ended June 30, 2024. See “Significant Factors Affecting our Profitability—The Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross Profit.”