Company Quick10K Filing
CrossAmerica Partners
Price1.00 EPS-21,501,000
Shares-0 P/E-0
MCap-0 P/FCF-0
Net Debt522 EBIT46
TEV522 TEV/EBIT11
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-11
10-K 2020-12-31 Filed 2021-03-02
10-Q 2020-09-30 Filed 2020-11-05
10-Q 2020-06-30 Filed 2020-08-07
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-02-26
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-07
10-K 2018-12-31 Filed 2019-02-26
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-07
10-Q 2018-03-31 Filed 2018-05-08
10-K 2017-12-31 Filed 2018-02-27
10-Q 2017-09-30 Filed 2017-11-08
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2017-05-09
10-K 2016-12-31 Filed 2017-02-28
10-Q 2016-09-30 Filed 2016-11-08
10-Q 2016-06-30 Filed 2016-08-05
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-02-19
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-11-07
10-Q 2014-06-30 Filed 2014-08-11
10-Q 2014-03-31 Filed 2014-05-08
10-K 2013-12-31 Filed 2014-03-10
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-14
10-K 2012-12-31 Filed 2013-03-28
10-Q 2012-09-30 Filed 2012-12-10
8-K 2020-11-04
8-K 2020-11-02
8-K 2020-10-22
8-K 2020-09-15
8-K 2020-09-14
8-K 2020-08-06
8-K 2020-07-23
8-K 2020-05-06
8-K 2020-05-05
8-K 2020-04-23
8-K 2020-04-14
8-K 2020-04-07
8-K 2020-03-25
8-K 2020-02-25
8-K 2020-02-06
8-K 2020-01-22
8-K 2020-01-15
8-K 2020-01-15
8-K 2019-12-06
8-K 2019-11-19
8-K 2019-11-07
8-K 2019-10-29
8-K 2019-10-24
8-K 2019-09-05
8-K 2019-08-05
8-K 2019-07-18
8-K 2019-05-21
8-K 2019-05-06
8-K 2019-04-25
8-K 2019-04-01
8-K 2019-02-25
8-K 2019-01-29
8-K 2018-12-17
8-K 2018-11-06
8-K 2018-10-24
8-K 2018-08-06
8-K 2018-07-13
8-K 2018-07-09
8-K 2018-05-07
8-K 2018-04-25
8-K 2018-02-26
8-K 2018-02-23
8-K 2018-01-24

CAPL 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1.Description of Business and Other Disclosures
Note 2. Assets Held for Sale
Note 3. Inventories
Note 4. Property and Equipment
Note 5. Intangible Assets
Note 6. Debt
Note 7. Interest Rate Swap Contracts
Note 8. Related - Party Transactions
Note 9. Commitments and Contingencies
Note 10. Fair Value Measurements
Note 11. Equity - Based Compensation
Note 12. Income Taxes
Note 13. Net Income per Limited Partner Unit
Note 14. Segment Reporting
Note 15. Supplemental Cash Flow Information
Note 16. Subsequent Event - Acquisition of Assets From 7 - Eleven
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-2.1 capl-ex21_145.htm
EX-31.1 capl-ex311_11.htm
EX-31.2 capl-ex312_9.htm
EX-32.1 capl-ex321_12.htm
EX-32.2 capl-ex322_10.htm

CrossAmerica Partners Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
96076857638419202012201420172020
Assets, Equity
835665495325155-152012201420172020
Rev, G Profit, Net Income
1508316-51-118-1852012201420172020
Ops, Inv, Fin

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                         to                   

 

Commission File No. 001-35711

 

CROSSAMERICA PARTNERS LP

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

45-4165414

(State or Other Jurisdiction of
Incorporation or Organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

 

600 Hamilton Street, Suite 500

Allentown, PA

 

18101

(Zip Code)

(610) 625-8000

(Address of Principal Executive Offices)

 

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Units

CAPL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of May 6, 2021, the registrant had outstanding 37,874,868 common units.

TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

Commonly Used Defined Terms

 

i

 

 

 

PART I - FINANCIAL INFORMATION

 

1

Item 1. Financial Statements

 

1

Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020

 

1

Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020

 

2

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020

 

3

Consolidated Statements of Equity and Comprehensive Income for the Three Months Ended March 31, 2021 and 2020

 

4

Condensed Notes to Consolidated Financial Statements

 

5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

17

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

29

Item 4. Controls and Procedures

 

30

 

 

 

PART II - OTHER INFORMATION

 

30

Item 1. Legal Proceedings

 

30

Item 1A. Risk Factors

 

30

Item 6. Exhibits

 

30

 

 

 

SIGNATURE

 

31

 

 

 

 


 

 

COMMONLY USED DEFINED TERMS

 

The following is a list of certain acronyms and terms generally used in the industry and throughout this document:

 

 

CrossAmerica Partners LP and subsidiaries:

 

CrossAmerica Partners LP

 

CrossAmerica, the Partnership, we, us, our

 

 

 

LGW

 

Lehigh Gas Wholesale LLC

 

 

 

LGPR

 

LGP Realty Holdings LP

 

 

 

LGWS

 

Lehigh Gas Wholesale Services, Inc. and subsidiaries

 

 

 

CrossAmerica Partners LP related parties at any point during 2020 or 2021:

 

DMI

 

Dunne Manning Inc. (formerly Lehigh Gas Corporation), an entity affiliated with the Topper Group

 

 

 

DMP

 

Dunne Manning Partners LLC, an entity affiliated with the Topper Group and controlled by Joseph V. Topper, Jr. Since November 19, 2019, DMP has owned 100% of the membership interests in the sole member of the General Partner.

 

 

 

DMS

 

 

Dunne Manning Stores LLC (formerly known as Lehigh Gas-Ohio, LLC), an entity affiliated with the Topper Group. Through April 14, 2020, DMS was an operator of retail motor fuel stations. DMS leased retail sites from us in accordance with a master lease agreement and purchased a significant portion of its motor fuel for these sites from us on a wholesale basis under rack plus pricing. The financial results of DMS are not consolidated with ours.

 

 

 

General Partner

 

CrossAmerica GP LLC, the General Partner of CrossAmerica, a Delaware limited liability company, indirectly owned by the Topper Group.

 

 

 

Topper Group

 

Joseph V. Topper, Jr., collectively with his affiliates and family trusts that have ownership interests in the Partnership. Joseph V. Topper, Jr. is the founder of the Partnership and a member of the Board. The Topper Group is a related party and large holder of our common units

 

 

 

TopStar

 

TopStar Inc., an entity affiliated with a family member of Joseph V. Topper, Jr. TopStar is an operator of convenience stores that leases retail sites from us, and since April 14, 2020, also purchases fuel from us.

 

 

 

Other Defined Terms:

 

 

 

 

 

2020 Bonus Plan

 

The 2020 Performance-Based Bonus Compensation Policy is one of the key components of “at-risk” compensation. The 2020 Bonus Plan is utilized to reward short-term performance achievements and to motivate and reward employees for their contributions toward meeting financial and strategic goals.

 

 

 

ASC

 

Accounting Standards Codification

 

 

 

ASU

 

Accounting Standards Update

 

 

 

Board

 

Board of Directors of our General Partner

 

 

 

BP

 

BP p.l.c.

 

 

 

CDC

 

The Centers for Disease Control and Prevention

 

 

 

Circle K

 

Circle K Stores Inc., a Texas corporation, and a wholly owned subsidiary of Alimentation Couche-Tard Inc. (TSX: ATD.A ATD.B)

 

 

 

Circle K Omnibus Agreement

 

The Amended and Restated Omnibus Agreement, dated October 1, 2014, as amended effective January 1, 2016, February 1, 2018 and April 29, 2019 by and among CrossAmerica, the General Partner, DMI, DMS, CST Services and Joseph V. Topper, Jr., which amends and restates the original omnibus agreement that was executed in connection with CrossAmerica’s IPO on October 30, 2012. The terms of the Circle K Omnibus Agreement were approved by the independent conflicts committee of the Board. Pursuant to the Circle K Omnibus Agreement, CST Services agreed, among other things, to provide, or cause to be provided, to the Partnership certain management services.

 


 

 

 

 

COVID-19 Pandemic

 

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. In March 2020, the World Health Organization declared the outbreak a pandemic.

 

 

 

CST

 

CST Brands LLC, which merged into Circle K Stores. Inc. on February 28, 2020, and subsidiaries, indirectly owned by Circle K.

 

 

 

CST Fuel Supply

 

CST Fuel Supply LP is indirectly owned by Circle K and is the parent of CST Marketing and Supply, LLC, CST’s wholesale motor fuel supply business, which provides wholesale fuel distribution to the majority of CST’s legacy U.S. retail convenience stores on a fixed markup per gallon. From July 1, 2015 through March 25, 2020, we owned a 17.5% limited partner interest in CST Fuel Supply.

 

 

 

CST Fuel Supply Exchange

 

Exchange Agreement, dated November 19, 2019, between the Partnership and Circle K, which closed effective March 25, 2020. Pursuant to the Exchange Agreement, Circle K transferred to the Partnership certain owned and leased convenience store properties and related assets (including fuel supply agreements) and wholesale fuel supply contracts covering additional sites, and, in exchange, the Partnership transferred to Circle K 100% of the limited partnership units it held in CST Fuel Supply.

 

 

 

CST Services

 

CST Services LLC, a wholly owned subsidiary of Circle K

 

 

 

DTW

 

Dealer tank wagon contracts, which are variable cent per gallon priced wholesale motor fuel distribution or supply contracts. DTW also refers to the pricing methodology under such contracts

 

 

 

EBITDA

 

Earnings before interest, taxes, depreciation, amortization and accretion, a non-GAAP financial measure

 

 

 

EMV

 

Payment method based upon a technical standard for smart payment cards, also referred to as chip cards

 

 

 

Equity Restructuring Agreement

 

On January 15, 2020, the Partnership entered into an Equity Restructuring Agreement with the General Partner and Dunne Manning CAP Holdings II LLC (“DM CAP Holdings”), a wholly owned subsidiary of DMP. Pursuant to the Equity Restructuring Agreement, all of the outstanding IDRs of the Partnership, all of which were held by DM CAP Holdings, were cancelled and converted into 2,528,673 newly-issued common units representing limited partner interests in the Partnership based on a value of $45 million and calculated using the 20 business day volume weighted average trading price of our common units ended five business days prior to the execution of the Equity Restructuring Agreement. This transaction closed on February 6, 2020.

 

 

 

Exchange Act

 

Securities Exchange Act of 1934, as amended

 

 

 

ExxonMobil

 

ExxonMobil Corporation

 

 

 

FASB

 

Financial Accounting Standards Board

 

 

 

Form 10-K

 

CrossAmerica’s Annual Report on Form 10-K for the year ended December 31, 2020

 

 

 

GP Purchase

 

Purchase by DMP from subsidiaries of Circle K of: 1) 100% of the membership interests in the sole member of the General Partner; 2) 100% of the Incentive Distribution Rights issued by the Partnership; and 3) an aggregate of 7,486,131 common units of the Partnership. These transactions closed on November 19, 2019.

 

 

 

IDRs

 

Incentive Distribution Rights represented the right to receive an increasing percentage of quarterly distributions after the target distribution levels were achieved. As a result of the GP Purchase, DMP owned 100% of the outstanding IDRs from November 19, 2019 through February 6, 2020.

 

 

 

Internal Revenue Code

 

Internal Revenue Code of 1986, as amended

 

 

 

IPO

 

Initial public offering of CrossAmerica Partners LP on October 30, 2012

 

 

 

LIBOR

 

London Interbank Offered Rate

 

 

 

MD&A

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

i


 

Marathon

 

Marathon Petroleum Company LP

 

 

 

Motiva

 

Motiva Enterprises LLC

 

 

 

Partnership Agreement

 

Second Amended and Restated Agreement of Limited Partnership of CrossAmerica Partners LP, dated as of February 6, 2020

 

 

 

Predecessor Entity

 

Wholesale distribution contracts and real property and leasehold interests contributed to the Partnership in connection with the IPO

 

 

 

SEC

 

U.S. Securities and Exchange Commission

 

 

 

Terms Discounts

 

Discounts for prompt payment and other rebates and incentives from our suppliers for a majority of the gallons of motor fuel purchased by us, which are recorded within cost of sales. Prompt payment discounts are based on a percentage of the purchase price of motor fuel.

 

 

 

Topper Group Omnibus

Agreement

 

The Topper Group Omnibus Agreement, effective January 1, 2020, by and among the Partnership, the General Partner and DMI. The terms of the Topper Group Omnibus Agreement were approved by the independent conflicts committee of the Board, which is composed of the independent directors of the Board. Pursuant to the Topper Group Omnibus Agreement, DMI agrees, among other things, to provide, or cause to be provided, to the Partnership certain management services at cost without markup.

 

 

 

U.S. GAAP

 

U.S. Generally Accepted Accounting Principles

 

 

 

Valero

 

Valero Energy Corporation and, where appropriate in context, one or more of its subsidiaries, or all of them taken as a whole

 

 

 

WTI

 

West Texas Intermediate crude oil

 

 

ii


 

 

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CROSSAMERICA PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(Thousands of Dollars, except unit data)

(Unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

954

 

 

$

513

 

Accounts receivable, net of allowances of $344 and $429, respectively

 

 

31,001

 

 

 

28,519

 

Accounts receivable from related parties

 

 

935

 

 

 

931

 

Inventory

 

 

24,357

 

 

 

23,253

 

Assets held for sale

 

 

10,548

 

 

 

9,898

 

Other current assets

 

 

13,069

 

 

 

11,707

 

Total current assets

 

 

80,864

 

 

 

74,821

 

Property and equipment, net

 

 

561,762

 

 

 

570,856

 

Right-of-use assets, net

 

 

170,116

 

 

 

167,860

 

Intangible assets, net

 

 

88,340

 

 

 

92,912

 

Goodwill

 

 

88,764

 

 

 

88,764

 

Other assets

 

 

20,091

 

 

 

19,129

 

Total assets

 

$

1,009,937

 

 

$

1,014,342

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of debt and finance lease obligations

 

$

2,677

 

 

$

2,631

 

Current portion of operating lease obligations

 

 

32,977

 

 

 

31,958

 

Accounts payable

 

 

67,197

 

 

 

63,978

 

Accounts payable to related parties

 

 

5,855

 

 

 

5,379

 

Accrued expenses and other current liabilities

 

 

22,028

 

 

 

23,267

 

Motor fuel and sales taxes payable

 

 

20,594

 

 

 

19,735

 

Total current liabilities

 

 

151,328

 

 

 

146,948

 

Debt and finance lease obligations, less current portion

 

 

539,841

 

 

 

527,299

 

Operating lease obligations, less current portion

 

 

143,017

 

 

 

141,380

 

Deferred tax liabilities, net

 

 

15,189

 

 

 

15,022

 

Asset retirement obligations

 

 

41,590

 

 

 

41,450

 

Other long-term liabilities

 

 

31,566

 

 

 

32,575

 

Total liabilities

 

 

922,531

 

 

 

904,674

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Common units—37,874,868 and 37,868,046 units issued and

   outstanding at March 31, 2021 and December 31, 2020, respectively

 

 

87,614

 

 

 

112,124

 

Accumulated other comprehensive loss

 

 

(208

)

 

 

(2,456

)

Total equity

 

 

87,406

 

 

 

109,668

 

Total liabilities and equity

 

$

1,009,937

 

 

$

1,014,342

 

 

See Condensed Notes to Consolidated Financial Statements.

iii


CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Thousands of Dollars, except unit and per unit amounts)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Operating revenues (a)

 

$

657,284

 

 

$

391,695

 

Costs of sales (b)

 

 

602,416

 

 

 

355,966

 

Gross profit

 

 

54,868

 

 

 

35,729

 

 

 

 

 

 

 

 

 

 

Income from CST Fuel Supply equity interests

 

 

 

 

 

3,202

 

Operating expenses:

 

 

 

 

 

 

 

 

Operating expenses (c)

 

 

29,403

 

 

 

10,723

 

General and administrative expenses

 

 

7,650

 

 

 

4,480

 

Depreciation, amortization and accretion expense

 

 

18,031

 

 

 

17,227

 

Total operating expenses

 

 

55,084

 

 

 

32,430

 

(Loss) gain on dispositions and lease terminations, net

 

 

(648

)

 

 

70,931

 

Operating (loss) income

 

 

(864

)

 

 

77,432

 

Other income, net

 

 

88

 

 

 

137

 

Interest expense

 

 

(3,497

)

 

 

(5,540

)

(Loss) income before income taxes

 

 

(4,273

)

 

 

72,029

 

Income tax benefit

 

 

(306

)

 

 

(32

)

Net (loss) income

 

 

(3,967

)

 

 

72,061

 

IDR distributions

 

 

 

 

 

(133

)

Net (loss) income available to limited partners

 

$

(3,967

)

 

$

71,928

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per common unit

 

$

(0.10

)

 

$

2.00

 

 

 

 

 

 

 

 

 

 

Weighted-average limited partner units:

 

 

 

 

 

 

 

 

Basic common units

 

 

37,869,259

 

 

 

35,994,972

 

Diluted common units (d)

 

 

37,891,130

 

 

 

35,995,933

 

 

 

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 

 

(a) includes excise taxes of:

 

$

43,705

 

 

$

14,937

 

(a) includes rent income of:

 

 

20,472

 

 

 

22,688

 

(b) excludes depreciation, amortization and accretion

 

 

 

 

 

 

 

 

(b) includes rent expense of:

 

 

5,913

 

 

 

6,920

 

(c) includes rent expense of:

 

 

3,196

 

 

 

 

(d) Diluted common units were not used in the calculation of diluted earnings per common unit for the three months ended

      March 31, 2021 because to do so would have been antidilutive.

 

 

See Condensed Notes to Consolidated Financial Statements.

 

 

1


 

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands of Dollars)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(3,967

)

 

$

72,061

 

Adjustments to reconcile net (loss) income to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

Depreciation, amortization and accretion expense

 

 

18,031

 

 

 

17,227

 

Amortization of deferred financing costs

 

 

260

 

 

 

261

 

Credit loss expense

 

 

31

 

 

 

91

 

Deferred income tax benefit

 

 

(590

)

 

 

(136

)

Equity-based employee and director compensation expense

 

 

368

 

 

 

31

 

Loss (gain) on dispositions and lease terminations, net

 

 

648

 

 

 

(70,931

)

Changes in operating assets and liabilities, net of acquisitions

 

 

2,887

 

 

 

(810

)

Net cash provided by operating activities

 

 

17,668

 

 

 

17,794

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Principal payments received on notes receivable

 

 

47

 

 

 

87

 

Proceeds from Circle K in connection with CST Fuel Supply Exchange

 

 

 

 

 

15,935

 

Proceeds from sale of assets

 

 

931

 

 

 

5,032

 

Capital expenditures

 

 

(10,621

)

 

 

(5,382

)

Net cash (used in) provided by investing activities

 

 

(9,643

)

 

 

15,672

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Borrowings under the revolving credit facility

 

 

34,500

 

 

 

19,000

 

Repayments on the revolving credit facility

 

 

(21,539

)

 

 

(26,500

)

Payments of long-term debt and finance lease obligations

 

 

(633

)

 

 

(595

)

Distributions paid on distribution equivalent rights

 

 

(31

)

 

 

(1

)

Distributions paid to holders of the IDRs

 

 

 

 

 

(133

)

Distributions paid on common units

 

 

(19,881

)

 

 

(18,110

)

Net cash used in financing activities

 

 

(7,584

)

 

 

(26,339

)

Net increase in cash and cash equivalents

 

 

441

 

 

 

7,127

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

513

 

 

 

1,780

 

Cash and cash equivalents at end of period

 

$

954

 

 

$

8,907

 

 

See Condensed Notes to Consolidated Financial Statements.

 

 

2


 

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME

(Thousands of Dollars, except unit amounts)

(Unaudited) 

 

 

Limited Partners’ Interest

 

 

Incentive

 

 

Accumulated other

 

 

 

 

 

 

 

Common

Unitholders

 

 

Distribution

Rights

 

 

comprehensive loss

 

 

Total Equity

 

 

 

Units

 

 

Dollars

 

 

Dollars

 

 

Dollars

 

 

Dollars

 

Balance at December 31, 2020

 

 

37,868,046

 

 

$

112,124

 

 

$

 

 

$

(2,456

)

 

$

109,668

 

Net loss

 

 

 

 

 

(3,967

)

 

 

 

 

 

 

 

 

(3,967

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Unrealized gain on interest rate swap contracts

 

 

 

 

 

 

 

 

 

 

 

2,017

 

 

 

2,017

 

   Realized loss on interest rate swap contracts

      reclassified from AOCI into interest expense

 

 

 

 

 

 

 

 

 

 

 

231

 

 

 

231

 

Total other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

2,248

 

 

 

2,248

 

Comprehensive (loss) income

 

 

 

 

 

(3,967

)

 

 

 

 

 

2,248

 

 

 

(1,719

)

Issuance of units related to 2020 Bonus Plan

 

 

6,822

 

 

 

126

 

 

 

 

 

 

 

 

 

126

 

Tax effect from intra-entity transfer of assets

 

 

 

 

 

(757

)

 

 

 

 

 

 

 

 

(757

)

Distributions paid

 

 

 

 

 

(19,912

)

 

 

 

 

 

 

 

 

(19,912

)

Balance at March 31, 2021

 

 

37,874,868

 

 

$

87,614

 

 

$

 

 

$

(208

)

 

$

87,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2019

 

 

34,494,441

 

 

$

78,397

 

 

$

 

 

$

 

 

$

78,397

 

Net income

 

 

 

 

 

71,928

 

 

 

133

 

 

 

 

 

 

72,061

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Unrealized loss on interest rate swap contracts

 

 

 

 

 

 

 

 

 

 

 

(786

)

 

 

(786

)

   Realized gain on interest rate swap contract

      reclassified from AOCI into interest expense

 

 

 

 

 

 

 

 

 

 

 

(11

)

 

 

(11

)

Total other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(797

)

 

 

(797

)

Comprehensive income (loss)

 

 

 

 

 

71,928

 

 

 

133

 

 

 

(797

)

 

 

71,264

 

Issuance of units to the Topper Group in connection

   with the Equity Restructuring Agreement

 

 

2,528,673

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions paid

 

 

 

 

 

(18,111

)

 

 

(133

)

 

 

 

 

 

(18,244

)

Balance at March 31, 2020

 

 

37,023,114

 

 

$

132,214

 

 

$

 

 

$

(797

)

 

$

131,417

 

 

See Condensed Notes to Consolidated Financial Statements.

 

 

3


 

Note 1.DESCRIPTION OF BUSINESS AND OTHER DISCLOSURES

Our business consists of:

 

the wholesale distribution of motor fuels;

 

the owning or leasing of retail sites used in the retail distribution of motor fuels and, in turn, generating rental income from the lease or sublease of the retail sites;

 

the retail sale of motor fuels to end customers at retail sites operated by commission agents or, since April 14, 2020, ourselves; and

 

since April 14, 2020, the operation of retail sites, including the sale of convenience merchandise to end customers. We had no company operated sites from September 30, 2019 through April 14, 2020.

The financial statements reflect the consolidated results of the Partnership and its wholly owned subsidiaries. Our primary operations are conducted by the following consolidated wholly owned subsidiaries:

 

LGW, which distributes motor fuels on a wholesale basis and generates qualifying income under Section 7704(d) of the Internal Revenue Code;

 

LGPR, which functions as our real estate holding company and holds assets that generate qualifying rental income under Section 7704(d) of the Internal Revenue Code; and

 

LGWS, which owns and leases (or leases and sub-leases) real estate and personal property used in the retail sale of motor fuels, as well as provides maintenance and other services to its customers. In addition, LGWS sells motor fuel on a retail basis at sites operated by commission agents. Since our acquisition of retail and wholesale assets that closed on April 14, 2020, LGWS also sells motor fuels on a retail basis and sells convenience merchandise items to end customers at company operated retail sites. Income from LGWS generally is not qualifying income under Section 7704(d) of the Internal Revenue Code.

Interim Financial Statements

These unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and the Exchange Act. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Management believes that the disclosures made are adequate to keep the information presented from being misleading. The financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10-K. Financial information as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 included in the consolidated financial statements has been derived from our unaudited financial statements. Financial information as of December 31, 2020 has been derived from our audited financial statements and notes thereto as of that date.

Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Our business exhibits seasonality due to our wholesale and retail sites being located in certain geographic areas that are affected by seasonal weather and temperature trends and associated changes in retail customer activity during different seasons. Historically, sales volumes have been highest in the second and third quarters (during the summer activity months) and lowest during the winter months in the first and fourth quarters. The COVID-19 Pandemic has impacted our business and these seasonal trends typical in our business. See the “COVID-19 Pandemic” section below.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results and outcomes could differ from those estimates and assumptions. On an ongoing basis, management reviews its estimates based on currently available information. Changes in facts and circumstances could result in revised estimates and assumptions.

4


CROSSAMERICA PARTNERS LP

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

Significant Accounting Policies

Certain new accounting pronouncements have become effective for our financial statements during 2021, but the adoption of these pronouncements did not materially impact our financial position, results of operations or disclosures.

Concentration Risk

Approximately 12% of our rent income for the three months ended March 31, 2021 and 2020 was from one multi-site operator.

For the three months ended March 31, 2021, our wholesale business purchased approximately 33%, 23%, 12% and 10% of its motor fuel from ExxonMobil, BP, Motiva and Marathon, respectively. For the three months ended March 31, 2020, our wholesale business purchased approximately 24%, 23%, 13% and 11% of its motor fuel from ExxonMobil, BP, Motiva and Circle K, respectively. No other fuel suppliers accounted for 10% or more of our motor fuel purchases during the three months ended March 31, 2021 and 2020.

Approximately 17% and 15% of our motor fuel gallons sold for the three months ended March 31, 2021 and 2020, respectively, were delivered by one carrier.

Prior Year Acquisitions

We completed six tranches of the asset exchange with Circle K on May 21, 2019, September 5, 2019, February 25, 2020, April 7, 2020, May 5, 2020 and September 15, 2020. With the closing of the sixth tranche, the transactions contemplated under the Asset Exchange Agreement we entered into with Circle K on December 17, 2018 (“Asset Exchange Agreement”) have concluded. Through these transactions, we acquired 191 sites in exchange for the real property at 56 sites as well as 17 sites previously owned and operated by the Partnership. Although we no longer collect rent from the sites divested in these transactions, we continue to distribute fuel on a wholesale basis to them.

Effective March 25, 2020, we closed on the CST Fuel Supply Exchange. Through this transaction, we acquired 33 sites, wholesale fuel supply to 331 additional sites and $14.1 million in proceeds in exchange for our investment in CST Fuel Supply.

On April 14, 2020, we closed on the acquisition of retail and wholesale assets. Through these transactions, we expanded the retail operations of the Partnership by 169 sites (154 company operated sites and 15 commission sites) through a combination of (1) entering into new leasing arrangements with related parties as the lessee for 62 sites and (2) terminating contracts where we were previously the lessor and fuel supplier under dealer arrangements for 107 sites which then became company operated sites. As a result of the Asset Purchase Agreement, we have expanded our wholesale fuel distribution by 110 sites, including 53 third-party wholesale dealer contracts, and supply of the 62 newly leased sites.