CrossAmerica Partners LP
For the period ended Sep 30, 2024. Filed Nov 6, 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.
Sep 30, 2024 · Filed Nov 6, 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 2024-06-30; filed 2024-08-08.
0000950170-24-093061
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000950170-24-122489
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 198 previous paragraphs and 197 current paragraphs.
145 unchanged; 43 reworded; 9 added; 8 removed; 2 previous and 0 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 (9)
Current report
Depreciation, amortization and accretion expense increased $1.6 million (9%) primarily due to a $3.2 million increase in impairment charges during the three months ended September 30, 2024 as compared to the same period of 2023, partially offset by the impact of assets becoming fully depreciated.
Current report
Income tax (benefit) expense
Current report
Gross profit increased $16.0 million (24%) and operating income increased $4.9 million (19%). These results were impacted by:
Current report
Gross profit decreased $5.2 million (16%) and operating income decreased $4.3 million (18%). These results were impacted by:
Current report
Operating expenses decreased $0.9 million (10%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Current report
Gross profit decreased $13.0 million (14%) and operating income decreased $8.7 million (13%). These results were impacted by:
Current report
Rent gross profit decreased $6.9 million (18%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Current report
Operating expenses decreased $4.3 million (15%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites.
Current report
As part of our evaluation of the highest and best use class of trade for each of our properties, we anticipate continuing to divest certain assets, often lower performing properties. These sales are likely to continue to generate gains or impairment charges depending on the site, and may result in reductions in gross profit in the wholesale and retail segments. For many of these divestitures, we anticipate continuing to supply the sites with fuel through long-term supply contracts.
Removed paragraphs (8)
Previous 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.
Previous report
Income tax benefit
Previous report
Gross profit decreased $3.6 million (11%) and operating income decreased $0.9 million (4%). These results were impacted by:
Previous 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.
Previous report
Gross profit decreased $7.8 million (12%) and operating income decreased $4.5 million (10%). These results were impacted by:
Previous 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.
Previous 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.
Previous report
Gross profit increased $14.2 million (12%) and operating income decreased $1.6 million (4%). These results were impacted by:
Reworded paragraphs (43)
Previous wording
anticipated trends in the demand for, and volumes sold of, gasoline and diesel in the regions where we operate;
Current wording
anticipated trends in the demand for, and volumes sold of, gasoline, diesel and convenience merchandise products in the regions where we operate;
Previous 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.
Current wording
During the first half of 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 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.
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 55% 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
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 wording
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 nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023.
Previous 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.
Current wording
During the first half of 2024, 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
Operating revenues decreased $12 million (1%) and operating income increased $0.3 million (1%). Significant items impacting these results were:
Current wording
Operating revenues decreased $131 million (11%) and operating income increased $3 million (12%). Significant items impacting these results were:
Previous wording
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 wording
Our wholesale segment revenues decreased $164 million (26%) primarily due to a 14% decrease in our average wholesale fuel selling price. The average spot price of WTI crude oil decreased 7% to $76.43 per barrel for the third quarter of 2024, compared to $82.25 per barrel for the third quarter of 2023. In addition, volume decreased 14% 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.
Previous wording
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 wording
Our retail segment revenues increased $33 million (6%) primarily attributable to a 12% increase in volume due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a 9% decrease in the average retail fuel price from the third quarter of 2023 to the third quarter of 2024 due to the decrease in wholesale motor fuel prices as noted above. Merchandise revenues increased $21 million (23%) 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 $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.
Current wording
Cost of sales decreased $142 million (13%), 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
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.
Current wording
Gross profit increased $11 million (11%), 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
General and administrative expenses increased $0.4 million (6%) primarily driven by higher management fees.
Current wording
General and administrative expenses increased $0.4 million (6%) primarily driven by higher management fees and system and information technology costs, partially offset by lower equity compensation expense.
Previous wording
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 wording
During the three months ended September 30, 2024, we recorded a $5.3 million net gain in connection with our ongoing real estate rationalization effort, partially offset by $0.6 million of net losses on lease terminations and asset disposals.
Previous wording
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 wording
Interest expense increased $3.6 million (34%) primarily due to the maturity of three of our most favorable interest rate swap contracts on April 1, 2024.
Previous 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.
Current wording
We recorded income tax expense of $2.4 million and $1.5 million for the three months ended September 30, 2024 and 2023, respectively, driven by income generated by our taxable subsidiaries.
Previous wording
Operating revenues decreased $87 million (4%) and operating income decreased $22 million (59%). Significant items impacting these results were:
Current wording
Operating revenues decreased $218 million (6%) and operating income decreased $19 million (31%). Significant items impacting these results were:
Previous 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.
Current wording
Our wholesale segment revenues decreased $312 million (18%) 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. In addition, our average wholesale selling price decreased 7% due primarily to movements in crude oil prices within the two periods.
Previous 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.
Current wording
Our retail segment revenues increased $95 million (6%) for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily attributable to an 8% increase in volume due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a 5% decrease in the average retail fuel selling price due to the decrease in wholesale motor fuel prices as noted above. Merchandise revenues increased $54 million (23%) 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 $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 wording
Cost of sales decreased $235 million (8%), 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
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 wording
Gross profit increased $17 million (6%), 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
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.
Current wording
General and administrative expenses increased $1.9 million (10%) primarily driven by higher management fees, legal fees, system and information technology costs and acquisition related costs, partially offset by lower equity incentive compensation expense.
Previous wording
Depreciation, amortization and accretion expense decreased $0.9 million (4%) primarily due to assets becoming fully depreciated.
Current wording
Depreciation, amortization and accretion expense decreased $0.3 million (1%) primarily due to assets becoming fully depreciated, partially offset by a $2.9 million increase in impairment charges during the nine months ended September 30, 2024 as compared to the same period of 2023.
Previous 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.
Current wording
During the nine months ended September 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 $2.3 million of other losses on lease terminations and asset disposals, including non-cash write-offs of deferred rent income. We recorded an $11.8 million net gain in connection with our ongoing real estate rationalization effort.
Previous wording
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 wording
During the nine months ended September 30, 2023, we recorded a $6.3 million net gain in connection with our ongoing real estate rationalization effort and a $1.1 million net loss on lease terminations and asset disposals.
Previous 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.
Current wording
Interest expense increased $5.7 million (17%) 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
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 wording
We recorded an income tax (benefit) expense of $(1.7) million and $2.6 million for the nine months ended September 30, 2024 and 2023, respectively, driven by (losses incurred) income generated by our taxable subsidiaries.
Previous 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.
Current wording
Our motor fuel gross profit increased $9.5 million (26%) attributable to a volume increase of 12% 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. In addition, our margin per gallon increased 9% for the three months ended September 30, 2024 as compared to the same period in 2023, driven by movements in crude oil prices within the two periods.
Previous 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.
Current wording
Our merchandise gross profit and other revenues increased $5.1 million (20%) and $1.0 million (26%), 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 $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.
Current wording
Operating expenses increased $11.1 million (27%) driven by a 27% 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
Gross profit increased $10.6 million (16%) and operating income increased $1.9 million (7%). These results were impacted by:
Current wording
Gross profit increased $30.2 million (16%) and operating income increased $3.3 million (5%). These results were impacted by:
Previous wording
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 wording
Our motor fuel gross profit increased $12.4 million (13%) attributable to a volume increase of 8% 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. In addition, our margin per gallon increased 3% for the nine months ended September 30, 2024 as compared to the same period in 2023, driven by movements in crude oil prices within the two periods.
Previous wording
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 wording
Our merchandise gross profit and other revenues increased $14.0 million (21%) and $3.6 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.
Previous wording
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 wording
Operating expenses increased $26.9 million (23%) 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.
Previous wording
The decrease in the lessee dealer site count was primarily attributable to the conversion of certain lessee dealer sites to company operated sites, including through the Applegreen Acquisition, and our real estate rationalization effort.
Current wording
The decrease in the lessee dealer site count was primarily attributable to the conversion of certain lessee dealer sites to company operated and commission agent sites, including through the Applegreen Acquisition, and our real estate rationalization effort.
Previous 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.
Current wording
The $1.9 million decrease (10%) in motor fuel gross profit was primarily due to a 14% 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 4% 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 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.”
Current wording
The average spot price of WTI crude oil decreased 7% from $82.25 per barrel for the third quarter of 2023 to $76.43 per barrel for the third 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 $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.
Current wording
Rent gross profit decreased $2.9 million (23%) for the third 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
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 wording
The $5.3 million decrease (10%) 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.
Previous wording
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.
Current wording
Net cash provided by operating activities decreased $2.3 million for the nine months ended September 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. Changes in working capital drove an increase in cash flow from operating activities for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to timing of settlement with our fuel suppliers.
Previous 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.
Current wording
We incurred capital expenditures of $19 million and $22 million for the nine months ended September 30, 2024 and 2023, respectively. We paid $26 million to Applegreen related to lease terminations and inventory purchases during the nine months ended September 30, 2024. We received $18 million and $5 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort for the nine months ended September 30, 2024 and 2023, respectively.
Previous 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.
Current wording
We paid $60 million in distributions for each of the nine months ended September 30, 2024 and 2023. For the nine months ended September 30, 2024 and 2023, we made total net borrowings (repayments) on our credit facilities of $16 million and ($3) 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.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Depreciation, amortization and accretion expense decreased $2.0 million (5%) primarily due to assets becoming fully depreciated.
Previous report — wording carried 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.”