CrossAmerica Partners LP [CAPL] Filings

10-Q 1 capl-20240630.htm 10-Q 10-Q

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 June 30, 2024

☐ 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.)

645 Hamilton Street, Suite 400 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 August 2, 2024, the registrant had outstanding 38,046,688 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 June 30, 2024 and December 31, 2023		1
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023		2
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023		3
Consolidated Statements of Equity and Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023		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		30
Item 4. Controls and Procedures		30

PART II - OTHER INFORMATION		30
Item 1. Legal Proceedings		30
Item 1A. Risk Factors		30
Item 6. Exhibits		31

SIGNATURE		32

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			CrossAmerica Partners LP, the Partnership, CAPL, we, us, our

Holdings			CAPL JKM Holdings LLC, an indirect wholly-owned subsidiary of CrossAmerica and sole member of CAPL JKM Partners

CAPL JKM Partners			CAPL JKM Partners LLC, a wholly-owned subsidiary of Holdings

Joe’s Kwik Marts			Joe’s Kwik Marts LLC, a wholly-owned subsidiary of CAPL JKM Partners

LGWS			Lehigh Gas Wholesale Services, Inc., an indirect wholly-owned subsidiary of CrossAmerica

CrossAmerica Partners LP related parties:

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

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 sites and purchases fuel from us.

Other Defined Terms:

AOCI			Accumulated other comprehensive income

ASU			Accounting Standards Update

Board			Board of Directors of our General Partner

Bonus Plan			The Performance-Based Bonus Compensation Policy is one of the key components of “at-risk” compensation. The 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.

CAPL Credit Facility			Credit Agreement, dated as of April 1, 2019, as amended by the First Amendment to Credit Agreement, dated as of November 19, 2019, and by the Second Amendment to Credit Agreement, dated as of July 28, 2021, and by the Third Amendment to Credit Agreement, dated as of November 9, 2022, and as amended and restated by the Amendment and Restatement Agreement, dated as of March 31, 2023, as amended by the First Amendment to Amendment and Restatement Agreement, dated as of February 20, 2024, among the Partnership and Lehigh Gas Wholesale Services, Inc., as borrowers, the guarantors from time to time party thereto, the lenders from time to time party thereto and Citizens Bank, N.A., as administrative agent.

DTW			Dealer tank wagon contracts, which are variable market-based 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

Exchange Act			Securities Exchange Act of 1934, as amended

Form 10-K			CrossAmerica’s Annual Report on Form 10-K for the year ended December 31, 2023

Internal Revenue Code			Internal Revenue Code of 1986, as amended


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

JKM Credit Facility		Credit Agreement, dated as of July 16, 2021, as amended on July 29, 2021 among CAPL JKM Partners, Holdings and Manufacturers and Traders Trust Company, as administrative agent, swingline lender and issuing bank. The Term Loan Facility was paid off and the JKM Credit Facility was terminated on March 31, 2023.

MD&A		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Omnibus Agreement		The Omnibus Agreement, effective January 1, 2020, by and among the Partnership, the General Partner and DMI. The terms of the 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 Omnibus Agreement, DMI agrees, among other things, to provide, or cause to be provided, to the Partnership certain management services at cost without markup.

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

SOFR		Secured Overnight Financing Rate

Term Loan Facility		$185 million delayed draw term loan facility provided under the JKM Credit Facility, which was paid off and terminated March 31, 2023

U.S. GAAP		U.S. Generally Accepted Accounting Principles

WTI		West Texas Intermediate crude oil

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CROSSAMERICA PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(Thousands of Dollars, except unit data)

(Unaudited)


	June 30,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	5,490		$	4,990
Accounts receivable, net of allowances of $755 and $709, respectively		38,931			31,185
Accounts receivable from related parties		88			437
Inventory		63,583			52,344
Assets held for sale		2,486			400
Current portion of interest rate swap contracts		6,478			9,321
Other current assets		8,499			9,845
Total current assets		125,555			108,522
Property and equipment, net		685,306			705,217
Right-of-use assets, net		142,126			148,317
Intangible assets, net		85,819			95,261
Goodwill		99,409			99,409
Deferred tax assets		818			759
Interest rate swap contracts, less current portion		4,873			687
Other assets		20,767			23,510
Total assets	$	1,164,673		$	1,181,682

LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt and finance lease obligations	$	3,183		$	3,083
Current portion of operating lease obligations		35,259			34,787
Accounts payable		75,281			68,986
Accounts payable to related parties		7,551			10,180
Accrued expenses and other current liabilities		24,298			23,674
Motor fuel and sales taxes payable		19,821			20,386
Total current liabilities		165,393			161,096
Debt and finance lease obligations, less current portion		786,674			753,880
Operating lease obligations, less current portion		111,946			118,723
Deferred tax liabilities, net		7,877			12,919
Asset retirement obligations		48,607			47,844
Interest rate swap contracts		430			3,535
Other long-term liabilities		51,925			52,934
Total liabilities		1,172,852			1,150,931

Commitments and contingencies (Note 11)

Preferred membership interests		29,073			27,744

Equity:
Common units— 38,027,194 and 37,983,154 units issued and outstanding at June 30, 2024 and December 31, 2023, respectively		(47,893	)		(2,392	)
Accumulated other comprehensive income		10,641			5,399
Total (deficit) equity		(37,252	)		3,007
Total liabilities and equity	$	1,164,673		$	1,181,682

The accompanying notes are an integral part of these consolidated financial statements.

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Operating revenues (a)	$	1,133,355		$	1,145,396		$	2,074,903		$	2,161,555
Costs of sales (b)		1,028,593			1,047,672			1,888,793			1,981,772
Gross profit		104,762			97,724			186,110			179,783

Operating expenses:
Operating expenses (c)		55,825			49,798			107,853			95,421
General and administrative expenses		7,892			7,475			14,730			13,214
Depreciation, amortization and accretion expense		18,446			19,298			37,167			39,118
Total operating expenses		82,163			76,571			159,750			147,753
Gain (loss) on dispositions and lease terminations, net		5,578			6,700			(11,228	)		4,933
Operating income		28,177			27,853			15,132			36,963
Other income, net		158			163			407			424
Interest expense		(14,208	)		(10,683	)		(24,749	)		(22,695	)
Income (loss) before income taxes		14,127			17,333			(9,210	)		14,692
Income tax expense (benefit)		1,703			2,797			(4,094	)		1,135
Net income (loss)		12,424			14,536			(5,116	)		13,557
Accretion of preferred membership interests		672			615			1,329			1,216
Net income (loss) available to limited partners	$	11,752		$	13,921		$	(6,445	)	$	12,341

Earnings (loss) per common unit
Basic	$	0.31		$	0.37		$	(0.17	)	$	0.33
Diluted	$	0.31		$	0.36		$	(0.17	)	$	0.32

Weighted-average common units:
Basic		38,027,194			37,952,950			38,010,739			37,946,676
Diluted		38,199,490			38,150,236			38,010,739			38,143,697

Supplemental information:
(a) includes excise taxes of:	$	82,394		$	76,191		$	153,106		$	146,075
(a) includes rent income of:		17,855			20,523			37,021			41,843
(b) excludes depreciation, amortization and accretion
(b) includes rent expense of:		5,192			5,658			10,611			11,212
(c) includes rent expense of:		4,497			3,911			8,439			7,709

The accompanying notes are an integral part of these consolidated financial statements.

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands of Dollars)

(Unaudited)


	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net (loss) income	$	(5,116	)	$	13,557
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion expense		37,167			39,118
Amortization of deferred financing costs		968			2,325
Credit loss expense		81			37
Deferred income tax (benefit) expense		(5,100	)		582
Equity-based employee and director compensation expense		574			1,123
Loss (gain) on dispositions and lease terminations, net		11,228			(4,933	)
Changes in operating assets and liabilities, net of acquisitions		(5,079	)		(4,546	)
Net cash provided by operating activities		34,723			47,263

Cash flows from investing activities:
Principal payments received on notes receivable		81			107
Proceeds from sale of assets		10,733			4,533
Capital expenditures		(11,411	)		(11,328	)
Lease terminations payments to Applegreen, including inventory purchases		(25,517	)		—
Net cash used in investing activities		(26,114	)		(6,688	)

Cash flows from financing activities:
Borrowings under revolving credit facilities		70,013			205,900
Repayments on revolving credit facilities		(36,500	)		(50,546	)
Repayments on the Term Loan Facility		—			(158,980	)
Payments of finance lease obligations		(1,513	)		(1,417	)
Payments of deferred financing costs		(74	)		(7,022	)
Distributions paid on distribution equivalent rights		(130	)		(111	)
Income tax distributions paid on preferred membership interests		—			(119	)
Distributions paid on common units		(39,905	)		(39,843	)
Net cash used in financing activities		(8,109	)		(52,138	)
Net increase (decrease) in cash and cash equivalents		500			(11,563	)

Cash and cash equivalents at beginning of period		4,990			16,054
Cash and cash equivalents at end of period	$	5,490		$	4,491

The accompanying notes are an integral part of these consolidated financial statements.

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME

(Thousands of Dollars, except unit amounts)

(Unaudited)


	Limited Partners' Interest Common Unitholders					AOCI			Total Equity
	Units		Dollars			Dollars			Dollars
Balance at December 31, 2023		37,983,154	$	(2,392	)	$	5,399		$	3,007
Net loss		—		(17,540	)		—			(17,540	)
Other comprehensive income
Unrealized gain on interest rate swap contracts		—		—			9,131			9,131
Realized gain on interest rate swap contracts reclassified from AOCI into interest expense		—		—			(5,133	)		(5,133	)
Total other comprehensive income		—		—			3,998			3,998
Comprehensive (loss) income		—		(17,540	)		3,998			(13,542	)
Issuance of units related to 2023 Bonus Plan		17,136		381			—			381
Vesting of equity awards, net of units withheld for tax		26,904		598			—			598
Accretion of preferred membership interests		—		(657	)		—			(657	)
Distributions paid		—		(20,006	)		—			(20,006	)
Balance at March 31, 2024		38,027,194	$	(39,616	)	$	9,397		$	(30,219	)

Net income		—		12,424			—			12,424
Other comprehensive income
Unrealized gain on interest rate swap contracts		—		—			3,185			3,185
Realized gain on interest rate swap contracts reclassified from AOCI into interest expense		—		—			(1,941	)		(1,941	)
Total other comprehensive income		—		—			1,244			1,244
Comprehensive income		—		12,424			1,244			13,668
Accretion of preferred membership interests		—		(672	)		—			(672	)
Distributions paid		—		(20,029	)		—			(20,029	)
Balance at June 30, 2024		38,027,194	$	(47,893	)	$	10,641		$	(37,252	)

Balance at December 31, 2022		37,937,604	$	36,508		$	16,469		$	52,977
Net loss		—		(979	)		—			(979	)
Other comprehensive income
Unrealized gain on interest rate swap contracts		—		—			137			137
Realized gain on interest rate swap contracts reclassified from AOCI into interest expense		—		—			(3,055	)		(3,055	)
Total other comprehensive loss		—		—			(2,918	)		(2,918	)
Comprehensive loss		—		(979	)		(2,918	)		(3,897	)
Issuance of units related to 2022 Bonus Plan		15,346		322			—			322
Accretion of preferred membership interests		—		(601	)		—			(601	)
Distributions paid		—		(19,974	)		—			(19,974	)
Balance at March 31, 2023		37,952,950	$	15,276		$	13,551		$	28,827

Net income		—		14,536			—			14,536
Other comprehensive income
Unrealized gain on interest rate swap contracts		—		—			9,898			9,898
Realized gain on interest rate swap contracts reclassified from AOCI into interest expense		—		—			(4,322	)		(4,322	)
Total other comprehensive income		—		—			5,576			5,576
Comprehensive income		—		14,536			5,576			20,112
Accretion of preferred membership interests		—		(615	)		—			(615	)
Distributions paid		—		(19,980	)		—			(19,980	)
Balance at June 30, 2023		37,952,950	$	9,217		$	19,127		$	28,344

The accompanying notes are an integral part of these consolidated financial statements.

CROSSAMERICA PARTNERS LP

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. DESCRIPTION OF BUSINESS AND OTHER DISCLOSURES

Our business consists of:

•

the wholesale distribution of motor fuels;

•

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

•

the retail sale of motor fuels to end customers at retail sites operated by commission agents and ourselves; and

•

the operation of retail sites, including the sale of convenience merchandise to end customers.

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 June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 included in the consolidated financial statements has been derived from our unaudited financial statements. Financial information as of December 31, 2023 has been derived from our audited financial statements and notes thereto as of that date.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. 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.

Use of Estimates

The preparation of consolidated 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 consolidated 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.

Recently Adopted Accounting Pronouncements

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, "Improvements in Reportable Segment Disclosures." The amendments in this new guidance improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. These new disclosures will be required in our Annual Report on Form 10-K for the year ending December 31, 2024 and interim and annual reports thereafter. Although we do not anticipate the impact of adopting this guidance will be material, it will affect our disclosures related to our reportable segments starting in our Annual Report on Form 10-K for the year ending December 31, 2024.

CROSSAMERICA PARTNERS LP

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures.” The amendments in this new guidance require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. This new guidance also requires certain new disclosures such as income taxes paid disaggregated by federal, state and foreign taxes and further disaggregated by individual jurisdictions in which income taxes paid exceeds a quantitative threshold. This new guidance also eliminates certain previously required disclosures. We will adopt this new guidance effective January 1, 2025. Although we do not anticipate the impact of adopting this guidance will be material, it will affect our disclosures related to income taxes.

Certain other new accounting pronouncements have become effective for our financial statements during 2024, but the adoption of these pronouncements did not materially impact our financial position, results of operations or disclosures.

Concentration Risk

For the six months ended June 30, 2024 and 2023, respectively, we purchased approximately 81% and 80% of our motor fuel from four suppliers. Approximately 23% of our motor fuel gallons sold for each of the six months ended June 30, 2024 and 2023 were delivered by two carriers.

For the six months ended June 30, 2024 and 2023, respectively, approximately 18% and 29% of our rent income was from five multi-site operators.

For the six months ended June 30, 2024 and 2023, respectively, approximately 49% and 47% of our merchandise was purchased from one supplier.

Note 2. APPLEGREEN ACQUISITION AND LEASE TERMINATION

On January 26, 2024, we entered into an agreement (the “Applegreen Purchase Agreement”) to acquire certain assets from Applegreen Midwest, LLC and Applegreen Florida, LLC (collectively, the “Sellers”) (the “Applegreen Acquisition”). The assets were acquired via the termination of the Partnership’s existing lease agreements with the Sellers at 59 locations, for total consideration of $16.9 million. The transaction closed on a rolling basis by site beginning during the first quarter of 2024 and ending in April 2024. The Partnership also acquired for cash the inventory at the locations. The terms of the Partnership’s leases with Applegreen Midwest, LLC and Applegreen Florida, LLC could have been extended to 2049 and 2048, respectively, including all renewal options. The Applegreen Purchase Agreement contains customary representations and warranties of the parties as well as indemnification obligations by the Sellers and the Partnership, respectively, to each other.

Of the 59 locations, 31 locations converted during the first quarter of 2024 and the remaining locations converted in April 2024. This transaction resulted in the transition of these lessee dealer sites to company operated sites.

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. We recorded these transactions as follows (in thousands):


Cash consideration
Lease termination payments	$	16,983
Inventory purchases		8,534
Total cash paid		25,517

Inventory		8,534
Equipment		2,530
Loss on lease termination		14,453
Non-cash write-off of deferred rent income		1,515
Total loss on lease termination	$	15,968

CROSSAMERICA PARTNERS LP

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3. ASSETS HELD FOR SALE

We have classified seven sites and two sites as held for sale at June 30, 2024 and December 31, 2023, respectively, which are expected to be sold within one year of such classification. Assets held for sale were as follows (in thousands):


	June 30,			December 31,
	2024			2023
Land	$	1,656		$	240
Buildings and site improvements		1,200			380
Equipment		1,387			418
Total		4,243			1,038
Less accumulated depreciation		(1,757	)		(638	)
Assets held for sale	$	2,486		$	400

The Partnership has continued to focus on divesting lower performing assets. During the three and six months ended June 30, 2024, we sold ten sites for $11.9 million in proceeds (which includes $1.3 million of proceeds initially placed in a Section 1031 exchange escrow account), resulting in a net gain of $6.5 million. During the three and six months ended June 30, 2023, we sold six and seven properties for $7.8 million and $8.2 million in proceeds (both of which include $3.8 million of proceeds initially placed in a Section 1031 exchange escrow account), resulting in net gains of $6.1 million and $6.2 million, respectively.

See Note 5 for information regarding impairment charges primarily recorded upon classifying sites within assets held for sale.

Note 4. INVENTORY

Inventory consisted of the following (in thousands):


	June 30,		December 31,
	2024		2023
Merchandise	$	34,471	$	26,081
Motor fuel		29,112		26,263
Inventory	$	63,583	$	52,344

See Notes 2 and 15 for information regarding the Applegreen Acquisition and other conversions of lessee dealer sites to company operated sites, which caused a significant portion of the increase in inventory.

Note 5. PROPERTY AND EQUIPMENT

Property and equipment, net consisted of the following (in thousands):


	June 30,			December 31,
	2024			2023
Land	$	322,485		$	326,571
Buildings and site improvements		362,180			365,528
Leasehold improvements		17,023			16,434
Equipment		360,434			356,160
Construction in progress		8,969			4,462
Property and equipment, at cost		1,071,091			1,069,155
Accumulated depreciation and amortization		(385,785	)		(363,938	)
Property and equipment, net	$	685,306		$	705,217

We recorded impairment charges of $0.2 million and $0.4 million during the three months ended June 30, 2024 and 2023, and $0.5 million and $0.8 million during the six months ended June 30, 2024 and 2023, respectively, included within depreciation, amortization and accretion expenses on the statements of operations. These impairment charges were primarily related to sites initially classified within assets held for sale in connection with our ongoing real estate rationalization effort.

CROSSAMERICA PARTNERS LP

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 6. INTANGIBLE ASSETS

Intangible assets consisted of the following (in thousands):


	June 30, 2024						December 31, 2023
	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount
Wholesale fuel supply contracts/rights	$	194,626	$	110,263	$	84,363	$	234,501	$	140,714	$	93,787
Trademarks/licenses		2,133		814		1,319		2,078		761		1,317
Covenant not to compete		200		63		137		200		43		157
Total intangible assets	$	196,959	$	111,140	$	85,819	$	236,779	$	141,518	$	95,261

Note 7. DEBT

Our balances for long-term debt and finance lease obligations were as follows (in thousands):


	June 30,		December 31,
	2024		2023
CAPL Credit Facility	$	789,513	$	756,000
Finance lease obligations		9,552		11,064
Total debt and finance lease obligations		799,065		767,064
Current portion		3,183		3,083
Noncurrent portion		795,882		763,981
Deferred financing costs, net		9,208		10,101
Noncurrent portion, net of deferred financing costs	$	786,674	$	753,880

The CAPL Credit Facility is a $925 million revolving credit facility maturing March 31, 2028 that is secured by substantially all of the Partnership’s assets.

Letters of credit outstanding totaled $5.3 million and $4.5 million at June 30, 2024 and December 31, 2023, respectively.

Taking the interest rate swap contracts into account, the effective interest rate on our CAPL Credit Facility at June 30, 2024 was 6.7% (our applicable margin was 2.25% as of June 30, 2024). See Note 8 for additional information on our interest rate swap contracts.

The CAPL Credit Facility contains certain financial covenants. The Partnership is required to maintain a Consolidated Leverage Ratio (as defined in the CAPL Credit Facility) of (i) for each fiscal quarter ending March 31, 2024, June 30, 2024 and September 30, 2024, not greater than 5.00 to 1.00, and (ii) for each fiscal quarter ending December 31, 2024 and thereafter, not greater than 4.75 to 1.00. For the quarter during a Specified Acquisition Period (as defined in the CAPL Credit Facility), such threshold will be increased by increasing the numerator thereof by 0.5, but such numerator may not exceed 5.25 to 1.00. Upon the occurrence of a Qualified Note Offering (as defined in the CAPL Credit Facility), the Consolidated Leverage Ratio threshold when not in a Specified Acquisition Period is increased to

CrossAmerica Partners LP [CAPL] Filings
10-Q	[2024-08-08]
10-Q	[2024-05-09]
10-K	[2024-02-27]
10-Q	[2023-11-08]
10-Q	[2023-08-08]
10-Q	[2023-05-09]
10-K	[2023-02-28]
10-Q	[2022-11-08]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-09]
10-Q	[2021-08-10]
10-Q	[2021-05-11]
10-K	[2021-03-02]
10-Q	[2020-11-05]
10-Q	[2020-08-07]
10-Q	[2020-05-07]
10-K	[2020-02-26]
10-Q	[2019-11-08]
10-Q	[2019-08-06]
10-Q	[2019-05-07]
10-K	[2019-02-26]
10-Q	[2018-11-07]
10-Q	[2018-08-07]
10-Q	[2018-05-08]
10-K	[2018-02-27]
10-Q	[2017-11-08]
10-Q	[2017-08-08]
10-Q	[2017-05-09]
10-K	[2017-02-28]
10-Q	[2016-11-08]
10-Q	[2016-08-05]
10-Q	[2016-05-06]
10-K	[2016-02-19]
10-Q	[2015-11-06]
10-Q	[2015-08-07]
10-Q	[2015-05-08]
10-K	[2015-02-27]
10-Q	[2014-11-07]
10-Q	[2014-08-11]
10-Q	[2014-05-08]
10-K	[2014-03-10]
10-Q	[2013-11-12]
10-Q	[2013-08-09]
10-Q	[2013-05-14]
10-K	[2013-03-28]
10-Q	[2012-12-10]
S-1	[2012-05-11]