8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 4, 2020

CrossAmerica Partners LP

(Exact name of registrant as specified in its charter)

Delaware	001-35711	45-4165414
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

600 Hamilton Street, Suite 500 Allentown, PA	18101
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (610) 625-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.02 Results of Operations and Financial Condition.

On November 4, 2020, the Partnership issued a press release announcing the financial results for CrossAmerica for the quarter ended September 30, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

Furnished herewith as Exhibit 99.2 are slides that senior management of CrossAmerica will utilize in CrossAmerica’s 2020 third quarter earnings call. The slides are available on the Webcasts & Presentations page of CrossAmerica’s website at www.crossamericapartners.com.

The information in Item 2.02, Item 7.01 and Exhibits 99.1 and 99.2 of Item 9.01 of this report, according to general instruction B.2., shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended. By furnishing this information, the Partnership makes no admission as to the materiality of such information that the Partnership chooses to disclose solely because of Regulation FD.

Safe Harbor Statement

Statements contained in the exhibits to this report that state the Partnership’s or its management’s expectations or predictions of the future are forward-looking statements. It is important to note that the Partnership’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Partnership has filed with the Securities and Exchange Commission (the “SEC”). The Partnership undertakes no duty or obligation to publicly update or revise the information contained in this report, although the Partnership may do so from time to time as management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1	Press Release dated November 4, 2020 regarding CrossAmerica’s earnings
99.2	Investor Presentation Slides of CrossAmerica
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CrossAmerica Partners LP
By:	CrossAmerica GP LLC
	its general partner
By:	/s/ Keenan D. Lynch
	Name:	Keenan D. Lynch
	Title:	General Counsel and Corporate Secretary

Dated: November 4, 2020

EX-99.1

Exhibit 99.1

CrossAmerica Partners LP Reports Third Quarter 2020 Results and Announces Appointment of New Chief Financial Officer

- Reported Third Quarter 2020 Operating Income of $23.7 million and Net Income of $21.2 million compared to Operating Income of $12.3 million and Net Income of $7.2 million for the Third Quarter 2019

- Generated Third Quarter 2020 Adjusted EBITDA of $30.0 million and Distributable Cash Flow of $29.7 million compared to Third Quarter 2019 Adjusted EBITDA of $29.0 million and Distributable Cash Flow of $25.7 million

- Reported Third Quarter 2020 Gross Profit for the Wholesale Segment of $42.8 million compared to $36.2 million of Gross Profit for the Third Quarter 2019

- Reported Third Quarter 2020 Gross Profit for the Retail Segment of $19.5 million compared to $4.9 million of Gross Profit for the Third Quarter 2019

- Distributed 327.4 million wholesale fuel gallons during the Third Quarter 2020 at an average wholesale fuel margin per gallon of 9.4 cents

- The Distribution Coverage Ratio for the current quarter was 1.50 times compared to 1.42 times for the comparable period of 2019. The Distribution Coverage Ratio was 1.24 times for the trailing twelve months ended September 30, 2020, as compared to 1.14 times for the trailing twelve months ended September 30, 2019

- 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 2020  

- Announced appointment of Eric Javidi as Chief Financial Officer, effective November 5, 2020

Allentown, PA November 4, 2020 – 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, 2020.

“As with last quarter, our operating results demonstrate the durability of our business model and validate the strategic actions we took earlier in the year.  Our newly acquired assets added meaningfully to our results this quarter and our overall financial position continues to be strong,” said Charles Nifong, CEO and President of CrossAmerica. “This quarter, we executed the final asset exchange transaction with Circle K, which positions the Partnership to now focus on future opportunities. Although COVID 19 continues to impact the business, we saw an overall improved operating environment in the quarter relative to the second quarter.”

Third Quarter Results

Consolidated Results

Operating income was $23.7 million for the third quarter 2020 compared to $12.3 million achieved in the third quarter 2019. Net income was $21.2 million or $0.56 per diluted common unit for the third quarter 2020, compared to Net income of $7.2 million or $0.20 per diluted common unit for the same period in 2019. Adjusted EBITDA was $30.0 million for the third quarter 2020, a 3% increase when compared to $29.0 million for the same period in 2019. The increases in Operating and Net income and Adjusted EBITDA were primarily driven by the positive impact from all the transactions completed over the past year, partially offset by the impact of the COVID-19 Pandemic. During the three months ended September 30, 2020, Operating and Net income also benefited from $11.4 million in gains related to properties sold in asset exchanges with Circle K along with $2.2 million in gains in connection with the Partnership’s ongoing real estate rationalization effort.

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 2020, CrossAmerica’s Wholesale segment generated $42.8 million in gross profit compared to $36.2 million in gross profit for the third quarter 2019, representing an increase of 18%. The Partnership distributed, on a wholesale basis, 327.4 million gallons of motor fuel at an average wholesale gross profit of $0.094 per gallon, resulting in motor fuel gross profit of $30.7 million. For the three-month period ended September 30, 2019, CrossAmerica distributed, on a wholesale basis, 260.3 million gallons of fuel at an average wholesale gross profit of $0.080 per gallon, resulting in motor fuel gross profit of $20.8 million. The 47% increase in motor fuel gross profit was driven by a 26% increase in fuel volume distributed and an 18% increase in fuel margin per gallon. The main drivers of the volume increase were the asset exchanges with Circle K, the CST Fuel Supply Exchange and the acquisition of retail and wholesale assets, partially offset by the impact of the COVID-19 Pandemic. The increase in fuel margin per gallon was primarily driven by dealer tank wagon (DTW) margins resulting from a favorable price environment in the quarter and an increase in overall DTW volume. With the acquisition of retail and wholesale assets earlier this year, in addition to an overall increase in wholesale volume, the percentage of variable-priced business has increased from 18% of the gallons sold to CrossAmerica’s customers for the third quarter 2019 to 28% of the gallons sold to its customers for the third quarter 2020. This increase was partially offset by lower terms discounts as a result of lower crude prices.

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 2020 was $40.89 per barrel, a 27% decrease, as compared to the average daily spot price of $56.34 per barrel during the same period in 2019.  

CrossAmerica’s gross profit from Rent for the Wholesale segment was $11.9 million for the third quarter 2020 compared to $14.3 million for the third quarter 2019, representing a decrease of 17%. The decrease in rent was primarily driven by terminating leases at sites the Partnership previously leased to other parties but now operates itself as part of the acquisition of retail and wholesale assets earlier this year, partially offset by the impact of the conversion of 46 company operated sites to dealer operated sites in the third quarter 2019 and the CST Fuel Supply Exchange.

Operating income for the Wholesale segment was $34.5 million for the third quarter 2020 compared to $31.5 million for the same period in 2019, an increase of 9%. As discussed above, the year-over-year increase was primarily driven by an increase in motor fuel gross profit, partially offset by the decrease in rent margin discussed above and the decrease in income from CST Fuel Supply as a result of the CST Fuel Supply Exchange.

2

Retail Segment

For the third quarter 2020, the Retail Segment reported motor fuel gross profit of $3.5 million. For the same period in 2019, CrossAmerica generated motor fuel gross profit of $1.2 million. The $2.2 million or 180% increase in motor fuel gross profit is attributable to a 119% increase in volume driven by the increase in company operated and commission sites as a result of the April 2020 acquisition of retail and wholesale assets and the March 2020 CST Fuel Supply Exchange, partially offset by the conversion of 46 company operated sites to dealer operated sites in the third quarter 2019 and the impact of the COVID-19 Pandemic. In addition, CrossAmerica realized a 28% higher average margin per gallon as the higher retail fuel margins at its company operated sites comprised a larger percentage of the overall retail fuel margins in 2020 as compared to 2019.

Merchandise gross profit increased $10.3 million, rent gross profit increased $0.3 million or 17% and operating expenses increased $14.8 million due to the factors listed above. Excluding rent expense, operating expenses at CrossAmerica’s company operated sites increased $11.5 million. The average company operated site count increased by 123 sites and the operating expenses on a per-store basis decreased 4% relative to the third quarter 2019. Additionally, a greater percentage of the Partnership’s company operated sites are leased than in the prior year, and so the rent component of operating expenses at the company operated sites increased $3.3 million.

Operating income for the Retail segment was $0.3 million for the third quarter 2020 compared to $0.5 million for the third quarter 2019, primarily as a result of changes in operations noted above.

Distributable Cash Flow and Distribution Coverage Ratio

Distributable Cash Flow was $29.7 million for the three-month period ended September 30, 2020, compared to $25.7 million for the same period in 2019. The 16% increase in Distributable Cash Flow was primarily due to the increase in operating income in the Wholesale Segment and a decrease in cash interest. Both periods benefited from a current tax benefit related primarily to bonus depreciation on eligible assets acquired in the asset exchanges and capital expenditures. The Distribution Coverage Ratio for the current quarter was 1.50 times compared to 1.42 times for the third quarter 2019. The Distribution Coverage Ratio was 1.24 times for the trailing twelve months ended September 30, 2020, as compared to 1.14 times for the trailing twelve months ended September 30, 2019 (see Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release).

Liquidity and Capital Resources

As of October 29, 2020, after taking into consideration debt covenant restrictions, approximately $235 million was available for future borrowings under the Partnership’s revolving credit facility, an increase of $32 million and $143 million, respectively, in availability compared to June 30, 2020 and December 31, 2019. As of September 30, 2020, CrossAmerica had $507.5 million outstanding under its revolving credit facility. Leverage, as defined under CrossAmerica’s credit facility, was 3.83 times as of September 30, 2020, compared to 3.96 times as of June 30, 2020 and 4.70 times as of December 31, 2019.

Distributions

On October 22, 2020, 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 2020. As previously announced, the distribution will be paid on November 10, 2020 to all unitholders of record as of November 3, 2020. The amount and timing of any future distributions is subject to the discretion of the Board as provided in CrossAmerica’s Partnership Agreement.

3

Completion of Asset Exchange Transactions with Circle K

On December 17, 2018, CrossAmerica and Circle K announced an agreement to exchange assets in a series of transactions. During the third quarter 2020, the two entities completed the sixth and final asset exchange as outlined below:

• On September 15, 2020, the sixth exchange was completed and entailed Circle K transferring to the Partnership 23 (17 fee; 6 leased) U.S. company-operated convenience and fuel retail stores having an aggregate value of approximately $20.4 million, and the Partnership transferred to Circle K the real property for four of the CrossAmerica properties having an aggregate value of approximately $20.0 million. As the sixth exchange was the final exchange contemplated by the Asset Exchange Agreement, Circle K also transferred a $6.7 million cash payment to the Partnership in connection with the closing, in accordance with the terms of the Asset Exchange Agreement.

Divestment of Assets

During the third quarter 2020, CrossAmerica, as part of its ongoing real estate rationalization effort, divested a total of seven properties, and received $3.8 million in connection with these sales. Through the first nine months ended September 30, 2020, CrossAmerica has sold 20 properties and received $13.3 million in proceeds.  

Appointment of Eric Javidi as Chief Financial Officer

The Board appointed Mr. Javidi as Chief Financial Officer of the partnership effective November 5, 2020.  Jon Benfield, the Interim Chief Financial Officer, will remain with the partnership and was appointed Chief Accounting Officer, effective November 5, 2020.  

Mr. Javidi was most recently President and CEO of Southcross Holdings L.P. Prior to joining Southcross Holdings, he was a Managing Director at Kayne Anderson Capital Advisors, L.P., where he was primarily focused on investments within the energy infrastructure space. Prior to joining Kayne Anderson, Mr. Javidi held positions as an investment banker with UBS, Barclays and Lehman Brothers, focused on the global energy industry.

“It is an honor to welcome Eric to the CrossAmerica team as our new CFO,” said Charles Nifong, President & Chief Executive Officer of CrossAmerica. “Eric has a solid record of achievement and brings to the partnership strong leadership and a wealth of financial and strategic acumen. I also thank Jon Benfield for his tremendous efforts in the interim CFO role during a challenging period.  He did an outstanding job. With Eric and Jon in their new roles, the financial function of the partnership, and the partnership overall, is well positioned for future success.”

Eric Javidi stated; “It is an exciting time to join CrossAmerica.  The Partnership has made significant strategic progress over the past year; I look forward to building on that momentum and delivering value to the unitholders.”

Conference Call

The Partnership will host a conference call on November 5, 2020 at 9:00 a.m. Eastern Time to discuss third quarter 2020 earnings results. The conference call numbers are 800-774-6070 or 630-691-2753 and the passcode for both is 7265208#. 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.

4

CROSSAMERICA PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(Thousands of Dollars, except unit data)

	September 30,			December 31,
	2020			2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,328		$	1,780
Accounts receivable, net of allowances of $992 and $557, respectively		35,302			38,051
Accounts receivable from related parties		2,960			4,299
Inventory		22,368			6,230
Assets held for sale		17,093			13,231
Other current assets		9,180			5,795
Total current assets		88,231			69,386
Property and equipment, net		565,288			565,916
Right-of-use assets, net		171,006			120,767
Intangible assets, net		97,599			44,996
Goodwill		88,764			88,764
Other assets		19,325			21,318
Total assets	$	1,030,213		$	911,147
LIABILITIES AND EQUITY
Current liabilities:
Current portion of debt and finance lease obligations	$	2,585		$	2,471
Current portion of operating lease obligations		32,437			23,485
Accounts payable		71,384			57,392
Accounts payable to related parties		4,298			431
Accrued expenses and other current liabilities		21,905			16,382
Motor fuel and sales taxes payable		20,627			12,475
Total current liabilities		153,236			112,636
Debt and finance lease obligations, less current portion		522,050			534,859
Operating lease obligations, less current portion		143,939			100,057
Deferred tax liabilities, net		15,410			19,369
Asset retirement obligations		41,015			35,589
Other long-term liabilities		34,488			30,240
Total liabilities		910,138			832,750
Commitments and contingencies
Equity:
Common units—(37,868,046 and 34,494,441 units issued and    outstanding at September 30, 2020 and December 31, 2019, respectively)		123,076			78,397
Accumulated other comprehensive loss		(3,001	)		—
Total equity		120,075			78,397
Total liabilities and equity	$	1,030,213		$	911,147

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CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Thousands of Dollars, Except Unit and Per Unit Amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Operating revenues(a)	$	591,022		$	559,736		$	1,381,119		$	1,637,050
Costs of sales(b)		528,750			518,591			1,225,470			1,517,458
Gross profit		62,272			41,145			155,649			119,592
Income from CST Fuel Supply equity interests		—			3,927			3,202			11,087
Operating expenses:
Operating expenses		27,508			12,978			63,328			42,541
General and administrative expenses		5,363			3,937			15,440			12,464
Depreciation, amortization and accretion expense		18,590			14,063			51,867			39,620
Total operating expenses		51,461			30,978			130,635			94,625
Gain (loss) on dispositions and lease terminations, net		12,881			(1,745	)		79,237			(2,173	)
Operating income		23,692			12,349			107,453			33,881
Other income, net		143			168			358			352
Interest expense		(3,522	)		(6,532	)		(13,183	)		(21,105	)
Income before income taxes		20,313			5,985			94,628			13,128
Income tax benefit		(892	)		(1,180	)		(3,868	)		(690	)
Net income		21,205			7,165			98,496			13,818
IDR distributions		—			(133	)		(133	)		(399	)
Net income available to limited partners	$	21,205		$	7,032		$	98,363		$	13,419
Basic and diluted earnings per common unit	$	0.56		$	0.20		$	2.64		$	0.39
Weighted-average limited partner units:
Basic common units		37,867,647			34,453,162			37,202,087			34,447,185
Diluted common units (c)		37,868,610			34,464,027			37,202,087			34,447,723
Supplemental information:
(a) Includes excise taxes of:	$	47,222		$	21,292		$	95,929		$	61,642
(a) Includes rent income of:		19,747			22,921			62,859			66,519
(b) Includes rent expense of:		6,036			7,003			19,088			20,475
(c) Diluted common units were not used in the calculation of diluted earnings per common unit for the nine months ended       September 30, 2020 because to do so would have been antidilutive.

6

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands of Dollars)

(Unaudited)

	Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Net income	$	98,496		$	13,818
Adjustments to reconcile net income to net cash provided by    operating activities:
Depreciation, amortization and accretion expense		51,867			39,620
Amortization of deferred financing costs		781			776
Credit loss expense		1,014			259
Deferred income tax (benefit) expense		(4,047	)		4,099
Equity-based employee and director compensation expense		83			547
(Gain) loss on dispositions and lease terminations, net		(87,225	)		2,173
Changes in operating assets and liabilities, net of acquisitions		25,534			8,210
Net cash provided by operating activities		86,503			69,502
Cash flows from investing activities:
Principal payments received on notes receivable		246			803
Proceeds from sale of assets to Circle K		23,049			3,148
Proceeds from sale of property and equipment		13,757			1,000
Capital expenditures		(24,439	)		(18,398	)
Cash paid in connection with acquisitions, net of cash acquired		(28,244	)		—
Net cash used in investing activities		(15,631	)		(13,447	)
Cash flows from financing activities:
Borrowings under the revolving credit facility		159,098			68,442
Repayments on the revolving credit facility		(170,580	)		(62,442	)
Payments of long-term debt and finance lease obligations		(1,830	)		(1,708	)
Payment of deferred financing costs		—			(3,441	)
Distributions paid on distribution equivalent rights		(8	)		(63	)
Distributions paid to holders of the IDRs		(133	)		(399	)
Distributions paid on common units		(57,871	)		(54,250	)
Net cash used in financing activities		(71,324	)		(53,861	)
Net (decrease) increase in cash and cash equivalents		(452	)		2,194
Cash and cash equivalents at beginning of period		1,780			3,191
Cash and cash equivalents at end of period	$	1,328		$	5,385

7

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,
	2020			2019			2020			2019
Gross profit:
Motor fuel–third party	$	15,505		$	13,392		$	40,722		$	32,805
Motor fuel–intersegment and related party		15,181			7,451			38,023			21,844
Motor fuel gross profit		30,686			20,843			78,745			54,649
Rent gross profit		11,853			14,331			38,244			41,530
Other revenues		290			990			1,705			2,319
Total gross profit		42,829			36,164			118,694			98,498
Income from CST Fuel Supply equity interests(a)		—			3,927			3,202			11,087
Operating expenses		(8,329	)		(8,572	)		(26,912	)		(24,098	)
Operating income	$	34,500		$	31,519		$	94,984		$	85,487
Motor fuel distribution sites (end of period):(b)
Motor fuel–third party
Independent dealers(c)		683			370			683			370
Lessee dealers(d)		667			662			667			662
Total motor fuel distribution–third party sites		1,350			1,032			1,350			1,032
Motor fuel–intersegment and related party
DMS (related party)(e)		—			68			—			68
Circle K(f)		5			28			5			28
Commission agents (Retail segment)(g)		211			169			211			169
Company operated retail sites (Retail segment)(h)		149			—			149			0
Total motor fuel distribution–intersegment    and related party sites		365			265			365			265
Motor fuel distribution sites (average during the    period):
Motor fuel-third party distribution		1,345			965			1,253			909
Motor fuel-intersegment and related party    distribution		364			302			327			336
Total motor fuel distribution sites		1,709			1,267			1,580			1,245
Volume of gallons distributed (in thousands)
Third party		242,826			188,261			613,250			514,058
Intersegment and related party		84,541			72,026			195,008			236,064
Total volume of gallons distributed		327,367			260,287			808,258			750,122
Wholesale margin per gallon	$	0.094		$	0.080		$	0.097		$	0.073

(a) Represents income from CrossAmerica’s equity interest in CST Fuel Supply.

(b) In addition, as of September 30, 2020 and 2019, CrossAmerica distributed motor fuel to 14 and 13 sub-wholesalers who distributed to additional sites, respectively.

(c) The increase in the independent dealer site count was primarily attributable to the 288 independent dealer contracts acquired in the CST Fuel Supply Exchange and the asset exchange with Circle K which resulted in 26 Circle K sites being converted to independent dealers.

8

(d) The increase in the lessee dealer site count was primarily attributable to the 72 lessee dealer sites acquired in the asset exchanges with Circle K, the 18 lessee dealer sites acquired in the CST Fuel Supply Exchange and converting sites operated by DMS to lessee dealer sites, partially offset by the acquisition of retail and wholesale assets that resulted in the termination of leases at 48 lessee dealer sites and the real estate rationalization effort.

(e) The decrease in the DMS site count was primarily attributable to the acquisition of retail and wholesale assets that resulted in the termination of 54 leases with DMS and conversion of DMS sites to lessee dealer sites.

(f) The decrease in the Circle K site count was primarily attributable to the asset exchange with Circle K, which resulted in 26 Circle K sites being converted to independent dealer sites.

(g) The increase in the commission site count was primarily attributable to the 37 commission sites acquired in the CST Fuel Supply Exchange.

(h) The increase in the company operated site count was primarily attributable to the 154 company operated sites from the acquisition of retail and wholesale assets.

Retail

The following table highlights the results of operations and certain operating metrics of the Retail segment (thousands of dollars, except for the number of retail sites, gallons sold per day and per gallon amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Gross profit:
Motor fuel	$	3,487		$	1,247		$	7,176		$	4,683
Merchandise(a)		12,305			1,964			21,689			10,169
Rent		1,858			1,587			5,527			4,514
Other revenue(a)		1,825			131			3,046			1,507
Total gross profit		19,475			4,929			37,438			20,873
Operating expenses		(19,179	)		(4,406	)		(36,416	)		(18,443	)
Operating income	$	296		$	523		$	1,022		$	2,430
Retail sites (end of period):
Commission agents(b)		211			169			211			169
Company operated retail sites(c)		149			—			149			—
Total system sites at the end of the period		360			169			360			169
Total system operating statistics:
Average retail fuel sites during the period		359			196			289			219
Motor fuel sales (gallons per site per day)		2,601			2,173			2,892			2,154
Motor fuel gross profit per gallon, net of credit card    fees and commissions	$	0.041		$	0.032		$	0.040		$	0.036
Commission agents statistics:
Average retail fuel sites during the period		209			169			196			170
Motor fuel gross profit per gallon, net of credit card    fees and commissions	$	0.015		$	0.015		$	0.015		$	0.015
Company operated retail site statistics:
Average retail fuel sites during the period		150			27			93			48
Motor fuel gross profit per gallon, net of credit card    fees	$	0.066		$	0.129		$	0.078		$	0.101
Merchandise gross profit percentage, net of credit    card fees(a)		26.6	%		20.5	%		26.1	%		21.2	%

(a) CrossAmerica reclassified revenues related to certain ancillary items such as car wash revenue, lottery commissions and ATM commissions from merchandise margin to other revenues to conform to the current year presentation, which amounted to $0.1 million and $1.5 million for the three and nine months ended September 30, 2019, respectively. This reclassification also impacted the merchandise gross profit percentages reported for the 2019 periods.

9

(b) The increase in the commission site count was primarily attributable to the 37 commission sites acquired in the CST Fuel Supply Exchange.

(c) The increase in the company operated site count was primarily attributable to the 154 company operated sites from the acquisition of retail and wholesale assets.    

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, certain discrete acquisition related costs, such as legal and other professional fees and separation benefit costs and certain other discrete non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cash interest expense, sustaining capital expenditures and current income tax expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by 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,
	2020			2019			2020			2019
Net income available to limited partners	$	21,205		$	7,032		$	98,363		$	13,419
Interest expense		3,522			6,532			13,183			21,105
Income tax benefit		(892	)		(1,180	)		(3,868	)		(690	)
Depreciation, amortization and accretion expense		18,590			14,063			51,867			39,620
EBITDA		42,425			26,447			159,545			73,454
Equity-based employee and director compensation expense		35			221			83			547
Loss (gain) on dispositions and lease terminations, net(a)		(12,881	)		1,745			(79,237	)		2,173
Acquisition-related costs(b)		385			538			2,578			1,943
Adjusted EBITDA		29,964			28,951			82,969			78,117
Cash interest expense		(3,261	)		(6,301	)		(12,401	)		(20,329	)
Sustaining capital expenditures(c)		(745	)		(466	)		(1,792	)		(1,229	)
Current income tax benefit(d)		3,784			3,561			7,452			4,789
Distributable Cash Flow	$	29,742		$	25,745		$	76,228		$	61,348
Weighted-average diluted common units		37,869			34,464			37,202			34,448
Distributions paid per limited partner unit(e)	$	0.5250		$	0.5250		$	1.5750		$	1.5750
Distribution Coverage Ratio(f)	1.50x			1.42x			1.30x			1.13x

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(a) 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) Excludes current income tax incurred on the sale of sites.

(e) On October 22, 2020, the Board approved a quarterly distribution of $0.5250 per unit attributable to the third quarter of 2020. The distribution is payable on November 10, 2020 to all unitholders of record on November 3, 2020.

(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 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 1,700 locations and owns or leases approximately 1,100 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.

11

EX-99.2

November 2020 Third Quarter 2020 Earnings Call Exhibit 99.2

Forward Looking Statements Statements contained in this presentation that state the Partnership’s or management’s expectations or predictions of the future are forward-looking statements. The words “believe,” “expect,” “should,” “intends,” “anticipates,” “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 annual reports on Form 10-K, quarterly reports on Form 10-Q and other reports filed with the Securities and Exchange Commission and available on the Partnership’s website at www.crossamericapartners.com. If any of these factors materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement you see or hear during this presentation reflects our current views as of the date of this presentation with respect to future events. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.

CrossAmerica Business Overview Charles Nifong, CEO & President

Third Quarter Operating Results OPERATING RESULTS (in thousands, except for per gallon amounts) Three Months ended September 30, 2020 2019 % Change Total Volume of Gallons Distributed 327,367 260,287 26% Wholesale Fuel Margin per Gallon $0.094 $0.080 18% Wholesale Fuel Gross Profit $30,686 $20,843 47% Rental Gross Profit (Net) (Wholesale & Retail) $13,711 $15,918 (14%) Operating Expenses $27,508 $12,978 112% General & Administrative Expenses $5,363 $3,937 36% Net Income $21,205 $7,165 196% Adjusted EBITDA $29,964 $28,951 3% Distributable Cash Flow $29,742 $25,745 16% Volumes benefited from recent transactions but impacted by COVID-19 throughout the quarter Wholesale fuel gross profit driven by both an increase in volume and strong fuel margin per gallon Rental gross profit down due to termination of leases in connection with acquisition of retail and wholesale assets Increase in expenses reflect closed asset exchanges and acquisitions Note: See the reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow (or “DCF”) to net income and the definitions of EBITDA, Adjusted EBITDA and DCF in the appendix of this presentation.

Third Quarter Update Completed the remaining asset exchange with Couche-Tard/Circle K Entered into the asset exchange agreement as of 12/17/18#: Completed the final exchange of assets on September 15, 2020 CrossAmerica received 23 (17 fee and 6 leased) properties with a fair value of approximately $20.4 million Couche-Tard/Circle K received the real property for four properties with a fair value of approximately $20.0 million CrossAmerica also received a cash payment of $6.7 million in connection with the closing of the final asset exchange Continue with real estate rationalization effort Divested seven properties during the third quarter for a total of $3.8 million #Additional details regarding the asset exchange agreement are included in a joint (Couche-Tard and CrossAmerica) press release and Form 8-K filing, both issued on December 17, 2018, along with Form 8-K filings issued on May 22, 2019, September 5, 2019, February 26, 2020 , April 8, 2020 and September 15, 2020 and on Form 10-Q for the quarter ended March 31, 2020 filed on May 6, 2020 and available on the CrossAmerica website at www.crossamericapartners.com.

CrossAmerica Financial Overview Jon Benfield, Interim Chief Financial Officer

Third Quarter Results Summary OPERATING RESULTS (in thousands, except for distributions per unit and coverage) Three Months ended September 30, 2020 2019 % Change Net Income $21,205 $7,165 196% Gross Profit $62,272 $41,145 51% Adjusted EBITDA $29,964 $28,951 3% Distributable Cash Flow $29,742 $25,745 16% Weighted Avg. Diluted Units 37,869 34,464 10% Distribution Paid per LP Unit $0.5250 $0.5250 0% Distribution Attributable to Each Respective Period per LP Unit $0.5250 $0.5250 0% Distribution Coverage (Paid Basis – current quarter) 1.50x 1.42x 5% Distribution Coverage (Paid Basis – trailing twelve months) 1.24x 1.14x 9% Note: See the reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow (or “DCF”) to net income and the definitions of EBITDA, Adjusted EBITDA and DCF in the appendix of this presentation.

Capital Strength Leverage, as defined under our credit facility, was 3.83X as of September 30, 2020 Increase in credit facility availability Maintain Distribution Rate Distributable Cash Flow of $30.0 million for the three-month period ended September 30, 2020 Distribution rate of $0.5250 per unit ($2.10 per unit annualized) attributable to the third quarter of 2020 TTM coverage ratio to 1.24 times for period ending 09/30/20 from 1.14 times for the TTM ending 09/30/19 Financial Position Leverage and coverage Capital expenditures Note: See the reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow (or “DCF”) to net income and the definitions of EBITDA, Adjusted EBITDA and DCF in the appendix of this presentation.

Appendix Third Quarter 2020 Earnings Call

Non-GAAP Financial Measures We use the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income available to us before deducting interest expense, income taxes and depreciation, amortization and accretion, which includes certain impairment charges. Adjusted EBITDA represents EBITDA as further adjusted to exclude equity-based employee and director compensation expense, gains or losses on dispositions and lease terminations, certain acquisition related costs, such as legal and other professional fees and separation benefit costs, and certain other non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cash interest expense, sustaining capital expenditures and current income tax expense. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by 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 our financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess our 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 our operating performance of our 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 our retail site activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are also used to assess our ability to generate cash sufficient to make distributions to our unit-holders. We believe the presentation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio provides useful information to investors in assessing our 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 our industry, our definitions may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Non-GAAP Reconciliation 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, 2020 2019 2020 2019 Net income available to limited partners $ 21,205 $ 7,032 $ 98,363 $ 13,419 Interest expense 3,522 6,532 13,183 21,105 Income tax expense (benefit) (892 ) (1,180 ) (3,868 ) (690 ) Depreciation, amortization and accretion expense 18,590 14,063 51,867 39,620 EBITDA 42,425 26,447 159,545 73,454 Equity-based employee and director compensation expense 35 221 83 547 Loss (gain) on dispositions and lease terminations, net(a) (12,881 ) 1,745 (79,237 ) 2,173 Acquisition-related costs(b) 385 538 2,578 1,943 Adjusted EBITDA 29,964 28,951 82,969 78,117 Cash interest expense (3,261 ) (6,301 ) (12,401 ) (20,329 ) Sustaining capital expenditures(c) (745 ) (466 ) (1,792 ) (1,229 ) Current income tax benefit(d) 3,784 3,561 7,452 4,789 Distributable Cash Flow $ 29,742 $ 25,745 $ 76,228 $ 61,348 Weighted-average diluted common units 37,869 34,464 37,202 34,448 Distributions paid per limited partner unit(e) $ 0.5250 $ 0.5250 $ 1.5750 $ 1.5750 Distribution Coverage Ratio(f) 1.50x 1.42x 1.30x 1.13x 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. 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. 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. Excludes current income tax incurred on the sale of sites. On October 22, 2020, the Board approved a quarterly distribution of $0.5250 per unit attributable to the third quarter of 2020. The distribution is payable on November 10, 2020 to all unitholders of record on November 3, 2020. 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.  

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Document and Entity Information - Tagging Pending	Nov. 04, 2020
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 04, 2020
Entity Registrant Name	CrossAmerica Partners LP
Entity Central Index Key	0001538849
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	DE
Entity File Number	001-35711
Entity Tax Identification Number	45-4165414
Entity Address, Address Line One	600 Hamilton Street
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Allentown
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18101
City Area Code	610
Local Phone Number	625-8000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Units
Trading Symbol	CAPL
Security Exchange Name	NYSE