CrossAmerica Partners LP

Previous wording

motor fuel price volatility, including as a result of the conflict in Ukraine or the war between Israel and Hamas;

Current wording

motor fuel price volatility, including as a result of the conflict in Ukraine or in the Middle East;

Previous wording

In our retail business, we attempt to pass along wholesale motor fuel price changes to our retail customers through “at the pump” retail price changes; however, market conditions do not always allow us to do so immediately. The timing of any related increase or decrease in “at the pump” retail prices is affected by competitive conditions in each geographic market in which we operate. As such, the prices we charge our customers for motor fuel and the gross profit we receive on our motor fuel sales can increase or decrease significantly over short periods of time.

Current wording

In our retail business, we attempt to pass along wholesale motor fuel price changes to our retail customers through “at the pump” retail price changes; however, market conditions do not always allow us to do so immediately. The timing of any related increase or decrease in “at the pump” retail prices is affected by competitive conditions in each geographic market in which we operate. As such, the prices we charge our customers for motor fuel and the gross profit we receive on our motor fuel sales can increase or decrease significantly over short periods of time. Further, we are assessed fees as a percentage of debit and credit card sales. Such fees increase as "at the pump" retail prices increase but without necessarily being accompanied by higher retail gross profits.

Previous wording

Inflation affects our financial performance by increasing certain components of cost of goods sold, such as fuel, merchandise, and credit card fees. Inflation also affects certain operating expenses, such as labor costs, certain leases, and general and administrative expenses. While our wholesale segment benefits from higher terms discounts as a result of higher fuel costs, inflation could and recently has negatively impacted our cost of goods sold and operating expenses. Although we have historically been able to pass on increased costs through price increases, there can be no assurance that we will be able to do so in the future.

Current wording

Inflation affects our financial performance by increasing certain components of cost of goods sold, such as fuel, merchandise, and credit card fees. Inflation also affects certain operating expenses, such as labor costs, certain leases, and general and administrative expenses. While our wholesale segment benefits from higher terms discounts as a result of higher fuel costs, inflation can negatively impact our cost of goods sold and operating expenses. Although we have historically been able to pass on increased costs through price increases, there can be no assurance that we will be able to do so in the future.

Previous wording

Operating revenues decreased $131 million (11%) and operating income increased $3 million (12%). Significant items impacting these results were:

Current wording

Operating revenues decreased $79 million (8%) and operating income increased $15 million. Significant items impacting these results were:

Previous 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.

Current wording

An $87 million (19%) decrease in our wholesale segment revenues primarily attributable to an 11% 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 8% due primarily to changes in crude oil prices during the course of the quarter compared to last year.

Previous 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.

Current wording

Our retail segment revenues increased $8 million (2%) for the first quarter of 2025 as compared to the first quarter of 2024, primarily attributable to a $13 million (17%) increase in merchandise revenues driven by an increase in our average company operated site count due to the conversion of certain lessee dealer sites to company operated sites. Retail fuel sales decreased $5 million (1%) due to a 5% decrease in the average retail fuel selling price due to the decrease in wholesale motor fuel prices as noted above. This decrease was partially offset by a 4% 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.

Previous 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.

Current wording

Cost of sales decreased $88 million (10%), 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.

Previous 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.

Current wording

Gross profit increased $8 million (10%), which was primarily driven by an increase in merchandise and motor fuel gross profit within our retail segment, partially offset by a decrease in 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 and system and information technology costs, partially offset by lower equity compensation expense.

Current wording

General and administrative expenses increased $0.8 million (12%) primarily driven by higher management fees and equity compensation expense, partially offset by lower acquisition-related costs.

Previous wording

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 wording

Depreciation, amortization and accretion expense increased $7.6 million (41%) primarily due to an $8.5 million increase in impairment charges in comparison to prior year, partially offset by the impact of assets becoming fully depreciated.

Previous 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.

Current wording

During the three months ended March 31, 2025, we recorded $5.6 million in net gains 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

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.

Current 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. 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.

Previous 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.

Current wording

Interest expense increased $2.3 million (22%) due to the maturity of three of our most favorable interest rate swap contracts on April 1, 2024.

Previous 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.

Current wording

We recorded an income tax benefit of $3.6 million and $5.8 million for the three months ended March 31, 2025 and 2024, respectively, driven by losses incurred by our taxable subsidiaries.

Previous wording

The increase in the company operated site count was primarily attributable to the conversion of certain lessee dealer and commission agent sites to company operated sites.

Current wording

The increase in the company operated site count was primarily attributable to the conversion of certain lessee dealer sites to company operated sites.

Previous wording

The increase in the commission agent site count was primarily attributable to the conversion of certain lessee dealer sites to commission agent sites, partially offset by the conversion of certain commission agent sites to company operated sites.

Current wording

The increase in the commission agent site count was primarily attributable to the conversion of certain lessee dealer sites to commission agent sites, partially offset by the sale of certain commission agent sites in connection with our real estate rationalization effort.

Previous wording

Gross profit increased $30.2 million (16%) and operating income increased $3.3 million (5%). These results were impacted by:

Current wording

Gross profit increased $8.8 million (16%) and operating income increased $0.2 million (2%). These results were impacted by:

Previous 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.

Current wording

Our motor fuel gross profit increased $5.1 million (20%), attributable to a 10% increase in our margin per gallon for the three months ended March 31, 2025 as compared to the same period in 2024, driven by movements in crude oil prices within the two periods. In addition, volume increased 4% 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 $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.

Current wording

Our merchandise gross profit increased $3.5 million (16%), driven by an increase in the average company operated site count due to the conversion of certain lessee dealer sites to company operated sites.

Previous 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.

Current wording

Operating expenses increased $8.6 million (20%) driven by a 17% increase in the average company operated site count due to the conversion of certain lessee dealer sites to company operated sites.

Previous wording

The decrease in the independent dealer site count was primarily attributable to the net loss of contracts, partially offset by divestitures of certain lessee dealer sites but with continued fuel supply.

Current wording

The decrease in the independent dealer site count was primarily attributable to the net loss of contracts, partially offset by divestitures of certain lessee dealer and commission agent sites but with continued fuel supply.

Previous 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.

Current wording

The $1.2 million increase (8%) in motor fuel gross profit was primarily due to a 22% increase in our average fuel margin per gallon as compared to the same period of 2024, driven by movement in crude oil prices as well as better sourcing costs, partially offset by an 11% 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

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.

Current wording

Rent gross profit decreased $1.7 million (15%) for the first quarter of 2025 compared to the same period of 2024, primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the sale of certain lessee dealer sites in connection with our real estate rationalization effort.

Previous wording

We use the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges). Adjusted EBITDA represents EBITDA as further adjusted to exclude equity-based compensation expense, gains or losses on dispositions and lease terminations, net and certain discrete acquisition related costs, such as legal and other professional fees, separation benefit costs and certain other discrete non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cash interest expense, sustaining capital expenditures and current income tax expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by distributions paid on common units.

Current wording

We use the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income (loss) before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges). Adjusted EBITDA represents EBITDA as further adjusted to exclude equity-based compensation expense, gains or losses on dispositions and lease terminations, net and certain discrete acquisition related costs, such as legal and other professional fees, separation benefit costs and certain other discrete non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cash interest expense, sustaining capital expenditures and current income tax expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by distributions paid on common units.

Previous wording

The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S. GAAP financial measure, for each of the periods indicated (in thousands, except for Distribution Coverage Ratio):

Current wording

The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income (loss), the most directly comparable U.S. GAAP financial measure, for each of the periods indicated (in thousands, except for Distribution Coverage Ratio):

Previous wording

Under the Partnership Agreement, sustaining capital expenditures are capital expenditures made to maintain our long-term operating income or operating capacity. Examples of sustaining capital expenditures are those made to maintain existing contract volumes, including payments to renew existing distribution contracts, or to maintain our sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.

Current wording

Under the Partnership Agreement, sustaining capital expenditures are capital expenditures made to maintain our long-term operating income or operating capacity. Examples of sustaining capital expenditures are those made to maintain existing contract volumes or to maintain our sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.

Previous wording

Our principal liquidity requirements are to finance our operations, fund acquisitions, service our debt and pay distributions to our unitholders. We expect our ongoing sources of liquidity to include cash generated by operations, proceeds from sales of sites in connection with our real estate rationalization efforts, borrowings under the CAPL Credit Facility, and if available to us on acceptable terms, issuances of equity and debt securities. We regularly evaluate alternate sources of capital to support our liquidity requirements.

Current wording

Our principal liquidity requirements are to finance our operations, fund acquisitions, service our debt and pay distributions to our unitholders. We expect our ongoing sources of liquidity to include cash generated by operations, proceeds from sales of sites in connection with our real estate rationalization efforts, borrowings under the Credit Facility, and if available to us on acceptable terms, issuances of equity and debt securities. We regularly evaluate alternate sources of capital to support our liquidity requirements.

Previous wording

We believe that we will have sufficient cash flow from operations, borrowing capacity under the CAPL Credit Facility, access to capital markets and alternate sources of funding to meet our financial commitments, debt service obligations, contingencies, anticipated capital expenditures and partnership distributions. However, we are subject to business and operational risks that could adversely affect our cash flow. A material decrease in our cash flows would likely produce an adverse effect on our borrowing capacity as well as our ability to issue additional equity and/or debt securities and/or maintain or increase distributions to unitholders.

Current wording

We believe that we will have sufficient cash flow from operations, borrowing capacity under the Credit Facility, access to capital markets and alternate sources of funding to meet our financial commitments, debt service obligations, contingencies, anticipated capital expenditures and partnership distributions. However, we are subject to business and operational risks that could adversely affect our cash flow. A material decrease in our cash flows would likely produce an adverse effect on our borrowing capacity as well as our ability to issue additional equity and/or debt securities and/or maintain or increase distributions to unitholders.

Previous 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.

Current wording

Net cash provided by operating activities increased $9 million for the three months ended March 31, 2025 compared to the same period in 2024. This increase was primarily due to a $10 million net generation of cash flow from changes in working capital, stemming from timing of settlement of rebates owed by our fuel suppliers and improved inventory management, partially offset by higher interest expense driven by the maturity of three of our most favorable interest rate swap contracts on April 1, 2024.

Previous 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.

Current wording

We incurred capital expenditures of $10 million and $6 million for the three months ended March 31, 2025 and 2024, respectively. We received $9 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort for the three months ended March 31, 2025. We paid $20 million to Applegreen related to lease terminations and inventory purchases during the three months ended March 31, 2024.

Previous 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.

Current wording

We paid $20 million in distributions for each of the three months ended March 31, 2025 and 2024. For the three months ended March 31, 2025 and 2024, we made total net borrowings on our credit facilities of $11 million and $42 million, respectively.

Previous wording

Taking the interest rate swap contracts into account, our effective interest rate on our CAPL Credit Facility at September 30, 2024 was 6.5% (our applicable margin was 2.25% as of September 30, 2024). Letters of credit outstanding at September 30, 2024 totaled $5.3 million.

Current wording

Taking the interest rate swap contracts into account, the effective interest rate on our Credit Facility at March 31, 2025 was 6.1% (our applicable margin was 2.25% as of March 31, 2025). Letters of credit outstanding at March 31, 2025 totaled $4.4 million.

Previous wording

The amount of availability under our CAPL Credit Facility at November 1, 2024, after taking into consideration debt covenant restrictions, was $101 million.

Current wording

The amount of availability under our Credit Facility at May 2, 2025, after taking into consideration debt covenant restrictions, was $87.2 million.

Previous wording

We make investments to expand, upgrade and enhance existing assets. We categorize our capital requirements as either sustaining capital expenditures, growth capital expenditures or acquisition capital expenditures. Sustaining capital expenditures are those capital expenditures required to maintain our long-term operating income or operating capacity. Growth capital expenditures, which include individual site purchases, and acquisition capital expenditures are those capital expenditures that we expect will increase our operating income or operating capacity over the long term. We have the ability to fund our capital expenditures by additional borrowings under our CAPL Credit Facility, or, if available to us on acceptable terms, accessing the capital markets and issuing additional equity, debt securities or other options, such as the sale of assets. Our ability to access the capital markets may have an impact on our ability to fund acquisitions. We may not be able to complete any offering of securities or other options on terms acceptable to us, if at all.

Current wording

We make investments to expand, upgrade and enhance existing assets. We categorize our capital requirements as either sustaining capital expenditures, growth capital expenditures or acquisition capital expenditures. Sustaining capital expenditures are those capital expenditures required to maintain our long-term operating income or operating capacity. Growth capital expenditures, which include individual site purchases, and acquisition capital expenditures are those capital expenditures that we expect will increase our operating income or operating capacity over the long term. We have the ability to fund our capital expenditures by additional borrowings under our Credit Facility, or, if available to us on acceptable terms, accessing the capital markets and issuing additional equity, debt securities or other options, such as the sale of assets. Our ability to access the capital markets may have an impact on our ability to fund acquisitions. We may not be able to complete any offering of securities or other options on terms acceptable to us, if at all.

Previous wording

See Note 1 for information on our concentration risks related to our customers, fuel suppliers, fuel carriers and merchandise suppliers.

Current wording

See Note 1 for information on our concentration risks related to our fuel suppliers, fuel carriers and merchandise suppliers.

Previous wording

There is no new accounting guidance effective or pending adoption that has had or is anticipated to have a material impact on our financial statements. See Note 1 to the financial statements for information on new accounting guidance that will impact segment reporting and income tax disclosures.

Current wording

There is no new accounting guidance effective or pending adoption that has had or is anticipated to have a material impact on our financial statements. See Note 1 to the financial statements for information on new accounting guidance that will impact future disclosures.