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CrossAmerica Partners LP Reports Third Quarter 2021 Results
Источник: Nasdaq GlobeNewswire / 08 ноя 2021 16:15:00 America/New_York
Allentown, Nov. 08, 2021 (GLOBE NEWSWIRE) --
CrossAmerica Partners LP Reports Third Quarter 2021 Results
- Reported Third Quarter 2021 Operating Income of $12.6 million and Net Income of $8.9 million compared to Operating Income of $23.7 million and Net Income of $21.2 million for the Third Quarter 2020
- Generated Third Quarter 2021 Adjusted EBITDA of $35.9 million and Distributable Cash Flow of $30.4 million compared to Third Quarter 2020 Adjusted EBITDA of $30.0 million and Distributable Cash Flow of $29.7 million
- Reported Third Quarter 2021 Gross Profit for the Wholesale Segment of $48.2 million compared to $42.8 million of Gross Profit for the Third Quarter 2020
- Distributed 354.6 million wholesale fuel gallons during the Third Quarter 2021 at an average wholesale fuel margin per gallon of 9.6 cents compared to 327.4 million wholesale fuel gallons at an average wholesale fuel margin per gallon of 9.4 cents during the Third Quarter 2020, an increase of 8% in gallons distributed and an increase of 2% in margin per gallon
- Reported Third Quarter 2021 Gross Profit for the Retail Segment of $27.9 million compared to $19.5 million of Gross Profit for the Third Quarter 2020
- Retail segment sold 110.5 million retail fuel gallons during the Third Quarter 2021, including 49.4 million same store retail fuel gallons, a 14% increase compared to 43.2 million same store retail fuel gallons sold during the Third Quarter 2020
- The Distribution Coverage Ratio was 1.53 times for the three months ended September 30, 2021 and 1.22 times for the trailing twelve months ended September 30, 2021
- The Board of Directors of CrossAmerica’s General Partner declared a quarterly distribution of $0.5250 per limited partner unit attributable to the Third Quarter 2021
- Through September 30, 2021, CrossAmerica had closed on 98 properties related to the previously announced acquisition of 106 convenience store properties from 7-Eleven, Inc.
Allentown, PA November 8, 2021 – CrossAmerica Partners LP (NYSE: CAPL) (“CrossAmerica” or the “Partnership”), a leading wholesale fuels distributor, convenience store operator, and owner and lessor of real estate used in the retail distribution of motor fuels, today reported financial results for the third quarter ended September 30, 2021.
“We had another strong quarter despite continuing challenges from COVID and the crude oil price environment. As of today, we have also closed on substantially all of the assets from our 7-Eleven acquisition,” said Charles Nifong, CEO and President of CrossAmerica. “Our results this quarter reflect the benefit of these newly acquired assets as well as the positive impact of our ongoing strategic initiatives on our overall business. We remain highly focused on the successful integration of our new sites and on executing our strategic plan to further drive our profitability.”
Third Quarter Results
Consolidated Results
CrossAmerica reported Operating Income of $12.6 million and Net Income of $8.9 million or earnings of $0.23 per diluted common unit for the third quarter 2021. For the same period in 2020, the Partnership reported Operating Income of $23.7 million and Net Income of $21.2 million or $0.56 per diluted common unit. During the third quarter 2020, Operating and Net Income both benefited from a $12.9 million gain on dispositions, primarily driven by gains related to the properties sold in the asset exchanges with Circle K.
Adjusted EBITDA was $35.9 million for the third quarter 2021 compared to $30.0 million for the same period in 2020, representing an increase of 20% (see Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release).
Non-GAAP measures used in this release include EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. These Non-GAAP measures are further described and reconciled to their most directly comparable GAAP measures in the Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release.
Wholesale Segment
During the third quarter 2021, CrossAmerica’s Wholesale segment generated $48.2 million in gross profit compared to $42.8 million in gross profit for the third quarter 2020, representing an increase of 13%. The Partnership distributed, on a wholesale basis, 354.6 million gallons of motor fuel at an average wholesale gross profit of $0.096 per gallon, resulting in motor fuel gross profit of $34.1 million. For the three-month period ended September 30, 2020, CrossAmerica distributed, on a wholesale basis, 327.4 million gallons of fuel at an average wholesale gross profit of $0.094 per gallon, resulting in motor fuel gross profit of $30.7 million. The 11% increase in motor fuel gross profit was driven by an 8% increase in fuel volume distributed and a 2% increase in fuel margin per gallon. The main drivers of the volume increase were the continuing recovery from the COVID-19 Pandemic, as well as the acquisition of assets from 7-Eleven. The Partnership’s wholesale fuel margin benefited from higher terms discount as a result of the higher crude prices during the quarter and from increased volume to CrossAmerica’s company operated retail sites.
The prices paid by the Partnership to its motor fuel suppliers for wholesale motor fuel (which affects the cost of sales) are highly correlated to the price of crude oil. The average daily spot price of West Texas Intermediate crude oil during the third quarter 2021 was $70.58 per barrel, a 73% increase, compared to the average daily spot price of $40.89 per barrel during the same period in 2020.
CrossAmerica’s gross profit from rent for the Wholesale segment was $13.3 million for the third quarter 2021 compared to $11.9 million for the third quarter 2020, representing an increase of 12%. The increase in rent was primarily driven by $0.5 million in rent concessions that impacted the third quarter 2020.
Operating expenses increased $0.4 million or 4%, primarily as a result of increases in management fees and insurance expense.
Operating income for the Wholesale segment was $39.5 million for the third quarter 2021 compared to $34.5 million for the same period in 2020, an increase of 14%. As discussed above, the year-over-year increase was primarily driven by the increase in motor fuel gross profit.
Retail Segment
For the third quarter 2021, the Retail segment reported motor fuel gross profit of $7.8 million. For the same period in 2020, CrossAmerica generated motor fuel gross profit of $3.5 million. The $4.3 million or 122% increase in motor fuel gross profit was attributable to increased volume and higher fuel margins for the three months ended September 30, 2021 as compared to the same period in 2020.
The Retail segment sold 110.5 million of retail fuel gallons during the third quarter 2021, a 29% increase over third quarter 2020. This increased volume resulted from the increase in company operated sites as a result of the acquisition of assets from 7-Eleven as well as the continuing recovery from the COVID-19 Pandemic. Same store fuel volume for the third quarter 2021 increased to 49.4 million gallons from 43.2 million during the third quarter 2020, an increase of 14%.
CrossAmerica’s merchandise gross profit and other revenues increased $3.2 million and $0.5 million, respectively, as a result of the increase in company operated sites driven by the acquisition of assets from 7-Eleven. Merchandise gross profit percentage increased from 26.6% to 26.7% with same store merchandise sales flat for the third quarter 2021 when compared to the third quarter 2020. Same store merchandise sales increased 9% for the third quarter 2021 when compared to the third quarter 2019.
Operating expenses increased $6.7 million or 35% primarily due to a $4.4 million increase as a result of the acquisition of assets from 7-Eleven and higher employment costs at the company operated sites acquired in the April 2020 acquisition of retail and wholesale assets.
Operating income for the Retail segment was $2.0 million for the third quarter 2021 compared to $0.3 million for the third quarter 2020, primarily as a result of changes in operations noted above.
Acquisition Activity
As of September 30, 2021, CrossAmerica had closed on 98 sites for total consideration of $262.0 million, including inventory and other working capital, of its previously announced acquisition of 106 convenience store properties from 7-Eleven. As of November 4, 2021, the Partnership had closed on five additional properties for a purchase price of $10.4 million, including inventory and other working capital. CrossAmerica anticipates closing on the final three properties, once it is in receipt of all required operational licenses and permits.
Divestment of Assets
During the three and nine months ended September 30, 2021, CrossAmerica sold 14 and 23 properties for $4.9 million and $8.8 million in proceeds, respectively.
Liquidity and Capital Resources
As of September 30, 2021, CrossAmerica had $636.7 million outstanding under its CAPL Credit Facility and $160.0 million outstanding under its JKM Credit Facility. As of November 4, 2021, after taking into consideration debt covenant restrictions, approximately $84.6 million was available for future borrowings under the CAPL Credit Facility. Leverage, as defined in the CAPL Credit Facility, which excludes any pro forma EBITDA from CrossAmerica’s recent acquisition, was 5.4 times as of September 30, 2021. As of September 30, 2021, CrossAmerica was in compliance with its financial covenants under the credit facility.
Distributions
On October 21, 2021, the Board of the Directors of CrossAmerica’s General Partner (“Board”) declared a quarterly distribution of $0.5250 per limited partner unit attributable to the third quarter 2021. As previously announced, the distribution will be paid on November 10, 2021 to all unitholders of record as of November 3, 2021. The amount and timing of any future distributions is subject to the discretion of the Board as provided in CrossAmerica’s Partnership Agreement.
Distributable Cash Flow and Distribution Coverage Ratio
Distributable Cash Flow was $30.4 million for the three-month period ended September 30, 2021, compared to $29.7 million for the same period in 2020. The 2% increase in Distributable Cash Flow was primarily due to the overall performance of both the Wholesale and Retail segments, offset by a $3.8 million tax benefit recorded in the third quarter 2020. The Distribution Coverage Ratio for the current quarter was 1.53 times compared to 1.50 times for the third quarter 2020. For the trailing twelve-month periods ended September 30, 2021 and September 30, 2020, the Distribution Coverage Ratio was 1.22 and 1.24 times, respectively (see Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release).
Conference Call
The Partnership will host a conference call on November 9, 2021 at 9:00 a.m. Eastern Time to discuss third quarter 2021 earnings results. The conference call numbers are 800-774-6070 or 630-691-2753 and the passcode for both is 8674133#. A live audio webcast of the conference call and the related earnings materials, including reconciliations of non-GAAP financial measures to GAAP financial measures and any other applicable disclosures, will be available on that same day on the investor section of the CrossAmerica website (www.crossamericapartners.com). A slide presentation for the conference call will also be available on the investor section of the Partnership’s website. To listen to the audio webcast, go to https://caplp.gcs-web.com/webcasts-presentations. After the live conference call, an archive of the webcast will be available on the investor section of the CrossAmerica website at https://caplp.gcs-web.com/webcasts-presentations within 24 hours after the call for a period of sixty days.
CROSSAMERICA PARTNERS LP
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars, except unit data)September 30, December 31, 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 8,247 $ 513 Accounts receivable, net of allowances of $339 and $429, respectively 39,169 28,519 Accounts receivable from related parties 836 931 Inventory 39,552 23,253 Assets held for sale 3,901 9,898 Other current assets 18,290 11,707 Total current assets 109,995 74,821 Property and equipment, net 756,642 570,856 Right-of-use assets, net 170,939 167,860 Intangible assets, net 120,308 92,912 Goodwill 100,115 88,764 Other assets 22,006 19,129 Total assets $ 1,280,005 $ 1,014,342 LIABILITIES AND EQUITY Current liabilities: Current portion of debt and finance lease obligations $ 9,923 $ 2,631 Current portion of operating lease obligations 34,828 31,958 Accounts payable 85,717 63,978 Accounts payable to related parties 9,205 5,379 Accrued expenses and other current liabilities 24,527 23,267 Motor fuel and sales taxes payable 23,233 19,735 Total current liabilities 187,433 146,948 Debt and finance lease obligations, less current portion 795,626 527,299 Operating lease obligations, less current portion 141,979 141,380 Deferred tax liabilities, net 13,917 15,022 Asset retirement obligations 45,430 41,450 Other long-term liabilities 34,071 32,575 Total liabilities 1,218,456 904,674 Commitments and contingencies Equity: Common units—37,891,701 and 37,868,046 units issued and
outstanding at September 30, 2021 and December 31, 2020, respectively61,396 112,124 Accumulated other comprehensive income (loss) 153 (2,456 ) Total equity 61,549 109,668 Total liabilities and equity $ 1,280,005 $ 1,014,342 CROSSAMERICA PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars, Except Unit and Per Unit Amounts)Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Operating revenues (a) $ 985,122 $ 591,022 $ 2,501,740 $ 1,381,119 Costs of sales (b) 909,391 528,750 2,306,047 1,225,470 Gross profit 75,731 62,272 195,693 155,649 Income from CST Fuel Supply equity interests — — — 3,202 Operating expenses: Operating expenses (c) 34,548 27,508 95,021 63,328 General and administrative expenses 9,903 5,363 24,429 15,440 Depreciation, amortization and accretion expense 19,118 18,590 56,732 51,867 Total operating expenses 63,569 51,461 176,182 130,635 Gain on dispositions and lease terminations, net 426 12,881 375 79,237 Operating income 12,588 23,692 19,886 107,453 Other income, net 127 143 419 358 Interest expense (4,928 ) (3,522 ) (12,295 ) (13,183 ) Income before income taxes 7,787 20,313 8,010 94,628 Income tax benefit (1,065 ) (892 ) (1,664 ) (3,868 ) Net income 8,852 21,205 9,674 98,496 IDR distributions — — — (133 ) Net income available to limited partners $ 8,852 $ 21,205 $ 9,674 $ 98,363 Basic and diluted earnings per common unit $ 0.23 $ 0.56 $ 0.26 $ 2.64 Weighted-average limited partner units: Basic common units 37,887,493 37,867,647 37,877,273 37,202,087 Diluted common units 37,906,799 37,868,610 37,898,036 37,202,087 Supplemental information: (a) includes excise taxes of: $ 62,427 $ 47,222 $ 156,180 $ 95,929 (a) includes rent income of: 21,498 19,747 62,832 62,859 (b) excludes depreciation, amortization and accretion (b) includes rent expense of: 5,968 6,036 17,912 19,088 (c) includes rent expense of: 3,353 3,310 9,814 5,832 CROSSAMERICA PARTNERS LP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)Nine Months Ended September 30, 2021 2020 Cash flows from operating activities: Net income $ 9,674 $ 98,496 Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation, amortization and accretion expense 56,732 51,867 Amortization of deferred financing costs 1,182 781 Credit loss expense 70 1,014 Deferred income tax benefit (2,199 ) (4,047 ) Equity-based employee and director compensation expense 1,096 83 Gain on dispositions and lease terminations, net (375 ) (87,225 ) Changes in operating assets and liabilities, net of acquisitions 10,087 25,534 Net cash provided by operating activities 76,267 86,503 Cash flows from investing activities: Principal payments received on notes receivable 151 246 Proceeds from Circle K in connection with CST Fuel Supply Exchange — 23,049 Proceeds from sale of assets 11,012 13,757 Capital expenditures (32,370 ) (24,439 ) Cash paid in connection with acquisitions, net of cash acquired (261,993 ) (28,244 ) Net cash used in investing activities (283,200 ) (15,631 ) Cash flows from financing activities: Borrowings under revolving credit facilities 167,000 159,098 Repayments on revolving credit facilities (43,452 ) (170,580 ) Borrowings under the Term Loan Facility 159,950 — Payments of finance lease obligations (1,944 ) (1,830 ) Payments of deferred financing costs (7,135 ) — Distributions paid on distribution equivalent rights (93 ) (8 ) Distributions paid to holders of the IDRs — (133 ) Distributions paid on common units (59,659 ) (57,871 ) Net cash provided by (used in) financing activities 214,667 (71,324 ) Net increase (decrease) in cash and cash equivalents 7,734 (452 ) Cash and cash equivalents at beginning of period 513 1,780 Cash and cash equivalents at end of period $ 8,247 $ 1,328 Segment Results
Wholesale
The following table highlights the results of operations and certain operating metrics of the Wholesale segment (thousands of dollars, except for the number of distribution sites and per gallon amounts):
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Gross profit: Motor fuel–third party $ 18,180 $ 15,505 $ 52,232 $ 40,722 Motor fuel–intersegment and related party 15,943 15,181 33,633 38,023 Motor fuel gross profit 34,123 30,686 85,865 78,745 Rent gross profit 13,264 11,853 38,730 38,244 Other revenues 795 290 2,658 1,705 Total gross profit 48,182 42,829 127,253 118,694 Income from CST Fuel Supply equity interests (a) — — — 3,202 Operating expenses (8,686 ) (8,329 ) (29,608 ) (26,912 ) Operating income $ 39,496 $ 34,500 $ 97,645 $ 94,984 Motor fuel distribution sites (end of period): (b) Motor fuel–third party Independent dealers (c) 676 683 676 683 Lessee dealers (d) 643 672 643 672 Total motor fuel distribution–third party sites 1,319 1,355 1,319 1,355 Motor fuel–intersegment and related party Commission agents (Retail segment) (d) 200 211 200 211 Company operated retail sites (Retail segment) (e) 248 149 248 149 Total motor fuel distribution–intersegment and
related party sites448 360 448 360 Motor fuel distribution sites (average during the period): Motor fuel-third party distribution 1,325 1,345 1,330 1,253 Motor fuel-intersegment and related party distribution 395 364 368 327 Total motor fuel distribution sites 1,720 1,709 1,698 1,580 Volume of gallons distributed (in thousands) Third party 244,545 242,826 700,645 613,250 Intersegment and related party 110,087 84,541 277,392 195,008 Total volume of gallons distributed 354,632 327,367 978,037 808,258 Wholesale margin per gallon $ 0.096 $ 0.094 $ 0.088 $ 0.097 (a) Represents income from CrossAmerica’s equity interest in CST Fuel Supply. The CST Fuel Supply Exchange closed on March 25, 2020.
(b) In addition, as of September 30, 2021 and 2020, CrossAmerica distributed motor fuel to 14 sub-wholesalers who distributed to additional sites.
(c) The decrease in the independent dealer site count was primarily attributable to loss of contracts, most of which were lower margin, partially offset by the increase in independent dealer sites as a result of the real estate rationalization effort and the resulting reclassification of the sites from a lessee dealer or commission site to an independent dealer site when CrossAmerica continues to supply the sites after divestiture.
(d) The decreases in the lessee dealer and commission agent site counts were primarily attributable to the real estate rationalization effort.
(e) The increase in the company operated site count was primarily attributable to the 98 company operated sites from the acquisition of assets from 7-Eleven.Retail
The following table highlights the results of operations and certain operating metrics of the Retail segment (in thousands, except for the number of retail sites):
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Gross profit: Motor fuel $ 7,750 $ 3,487 $ 18,120 $ 7,176 Merchandise 15,543 12,305 37,876 21,689 Rent 2,266 1,858 6,190 5,527 Other revenue 2,310 1,825 6,480 3,046 Total gross profit 27,869 19,475 68,666 37,438 Operating expenses (25,862 ) (19,179 ) (65,413 ) (36,416 ) Operating income $ 2,007 $ 296 $ 3,253 $ 1,022 Retail sites (end of period): Commission agents (a) 200 211 200 211 Company operated retail sites (b) 248 149 248 149 Total system sites at the end of the period 448 360 448 360 Total system operating statistics: Average retail fuel sites during the period 395 359 368 289 Volume of gallons sold (in thousands) 110,523 85,902 278,564 177,855 Commission agents statistics: Average retail fuel sites during the period 201 209 203 196 Company operated retail site statistics: Average retail fuel sites during the period 194 150 165 93 Same store fuel volume (c) 49,444 43,232 n/a n/a Same store merchandise sales (c) $ 43,604 $ 43,605 n/a n/a Merchandise gross profit percentage 26.7 % 26.6 % 26.8 % 26.1 % (a) The decrease in the commission site count was primarily attributable to the real estate rationalization effort.
(b) The increase in the company operated site count was primarily attributable to the 98 company operated sites from the acquisition of assets from 7-Eleven.
(c) Same store fuel volume and same store merchandise sales include aggregated individual store results for all stores that had fuel volume or merchandise sales in all months for both periods. Same store merchandise sales includes store and cigarette sales and excludes branded food sales and other revenues such as lottery commissions and car wash sales. Since CrossAmerica did not have any company operated sites in 2020, until the acquisition of retail and wholesale assets closed in April 2020, there are no same store metrics to present for the nine months ended September 30, 2021 and 2020.Supplemental Disclosure Regarding Non-GAAP Financial Measures
CrossAmerica uses the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income available to the Partnership before deducting interest expense, income taxes, depreciation, amortization and accretion (which includes certain impairment charges). Adjusted EBITDA represents EBITDA as further adjusted to exclude equity-based employee and director 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 benefit or expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by the weighted average diluted common units and then dividing that result by the distributions paid per limited partner unit.
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are used as supplemental financial measures by management and by external users of the CrossAmerica financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess the financial performance without regard to financing methods, capital structure or income taxes and the ability to incur and service debt and to fund capital expenditures. In addition, Adjusted EBITDA is used to assess the operating performance of the CrossAmerica business on a consistent basis by excluding the impact of items which do not result directly from the wholesale distribution of motor fuel, the leasing of real property, or the day to day operations of the Partnership’s retail site activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are also used to assess the ability to generate cash sufficient to make distributions to the Partnership’s unitholders.
CrossAmerica believes the presentation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio provides useful information to investors in assessing the financial condition and results of operations. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio have important limitations as analytical tools because they exclude some but not all items that affect net income. Additionally, because EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio may be defined differently by other companies in the industry, the Partnership’s definitions may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
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 per unit amounts):
Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income available to limited partners $ 8,852 $ 21,205 $ 9,674 $ 98,363 Interest expense 4,928 3,522 12,295 13,183 Income tax benefit (1,065 ) (892 ) (1,664 ) (3,868 ) Depreciation, amortization and accretion expense 19,118 18,590 56,732 51,867 EBITDA 31,833 42,425 77,037 159,545 Equity-based employee and director compensation expense 342 35 1,096 83 Gain on dispositions and lease terminations, net (a) (426 ) (12,881 ) (375 ) (79,237 ) Acquisition-related costs (b) 4,141 385 8,502 2,578 Adjusted EBITDA 35,890 29,964 86,260 82,969 Cash interest expense (4,267 ) (3,261 ) (11,113 ) (12,401 ) Sustaining capital expenditures (c) (975 ) (745 ) (3,407 ) (1,792 ) Current income tax (expense) benefit (d) (214 ) 3,784 (548 ) 7,452 Distributable Cash Flow $ 30,434 $ 29,742 $ 71,192 $ 76,228 Weighted-average diluted common units 37,907 37,869 37,898 37,202 Distributions paid per limited partner unit (e) $ 0.5250 $ 0.5250 $ 1.5750 $ 1.5750 Distribution Coverage Ratio (f) 1.53x 1.50x 1.19x 1.30x (a) CrossAmerica recorded gains on the sale of sites in connection with its ongoing real estate rationalization effort of $0.4 million and $1.5 million for the three and nine months ended September 30, 2021, respectively. During the three months ended September 30, 2020, CrossAmerica recorded gains on the sale of CAPL properties in connection with the asset exchange with Circle K of $11.4 million and $19.3 million for the three and nine months ended September 30, 2020, respectively. The Partnership also recorded gains on the sale of sites in connection with its ongoing real estate rationalization effort of $2.2 million and $4.0 million for the three and nine months ended September 30, 2020, respectively. During the nine months ended September 30, 2020, CrossAmerica recorded a $67.6 million gain on the sale of its 17.5% investment in CST Fuel Supply. Also, during the nine months ended September 30, 2020, CrossAmerica recorded a loss on lease terminations, including the non-cash write-off of deferred rent income associated with these leases, of $10.9 million.
(b) Relates to certain discrete acquisition related costs, such as legal and other professional fees, separation benefit costs and certain purchase accounting adjustments associated with recently acquired businesses.
(c) Under the Partnership Agreement, sustaining capital expenditures are capital expenditures made to maintain CrossAmerica’s 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 CrossAmerica’s sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.
(d) Consistent with prior divestitures, the current income tax expense (benefit) excludes income tax incurred on the sale of sites.
(e) On October 21, 2021, the Board approved a quarterly distribution of $0.5250 per unit attributable to the third quarter of 2021. The distribution is payable on November 10, 2021 to all unitholders of record on November 3, 2021.
(f) The distribution coverage ratio is computed by dividing Distributable Cash Flow by the weighted-average diluted common units and then dividing that result by the distributions paid per limited partner unit.About CrossAmerica Partners LP
CrossAmerica Partners LP is a leading wholesale distributor of motor fuels, convenience store operator, and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is indirectly owned and controlled by entities affiliated with Joseph V. Topper, Jr., the founder of CrossAmerica Partners and a member of the board of the general partner since 2012. Formed in 2012, CrossAmerica Partners LP is a distributor of branded and unbranded petroleum for motor vehicles in the United States and distributes fuel to approximately 1,800 locations and owns or leases approximately 1,200 sites. With a geographic footprint covering 34 states, the Partnership has well-established relationships with several major oil brands, including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, Citgo, Marathon and Phillips 66. CrossAmerica Partners LP ranks as one of ExxonMobil’s largest distributors by fuel volume in the United States and in the top 10 for additional brands. For additional information, please visit www.crossamericapartners.com.
Contact
Investor Relations: Randy Palmer, rpalmer@caplp.com or 210-742-8316
Cautionary Statement Regarding Forward-Looking Statements
Statements contained in this release that state the Partnership’s or management’s expectations or predictions of the future are forward-looking statements. The words “believe,” “expect,” “should,” “intends,” “estimates,” “target” and other similar expressions identify forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For more information concerning factors that could cause actual results to differ from those expressed or forecasted, see CrossAmerica’s Form 10-K or Forms 10-Q filed with the Securities and Exchange Commission, and available on CrossAmerica’s website at www.crossamericapartners.com. The Partnership undertakes no obligation to publicly update or revise any statements in this release, whether as a result of new information, future events or otherwise.
Note to Non-United States Investors: This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100%) of CrossAmerica Partners LP’s distributions to non-U.S. investors as attributable to income that is effectively connected with a United States trade or business. Accordingly, CrossAmerica Partners LP’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.