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What changed in CrossAmerica Partners LP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CrossAmerica Partners LP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+220 added−253 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-27)

Top changes in CrossAmerica Partners LP's 2024 10-K

220 paragraphs added · 253 removed · 192 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

25 edited+4 added−3 removed18 unchanged
Biggest changeIndependent Dealer • The independent dealer owns or leases the property and owns all motor fuel and convenience store inventory. • We contract to exclusively distribute motor fuel to the independent dealer at rack-plus pricing or, in some cases, DTW. • Under our distribution contracts, we agree to supply a particular branded motor fuel or unbranded motor fuel to a site or group of sites and arrange for all transportation. • Distribution contracts with independent dealers are typically seven to 15 years in length. • As of December 31, 2023, the average remaining distribution contract term was 4.6 years. 7 Lessee Dealer • We own or lease the property and then lease or sublease the site to a dealer. • The lessee dealer owns all motor fuel and retail site inventory and sets its own pricing and gross profit margins. • We collect wholesale motor fuel margins at rack-plus pricing or, in some cases, DTW. • Under our distribution contracts, we agree to supply a particular branded motor fuel or unbranded motor fuel to a site or group of sites and arrange for all transportation. • Exclusive distribution contracts with dealers who lease property from us run concurrent in length to the retail site’s lease period (generally three to 10 years). • Leases are generally triple net leases. • As of December 31, 2023, the average remaining lease agreement term was 2.6 years.
Biggest changeLessee Dealer • We own or lease the property and then lease or sublease the site to a dealer. • The lessee dealer owns all motor fuel and retail site inventory and sets its own pricing and gross profit margins. • We collect wholesale motor fuel margins at rack-plus pricing or, in some cases, DTW. • Under our distribution contracts, we agree to supply a particular branded motor fuel or unbranded motor fuel to a site or group of sites and arrange for all transportation. • Exclusive distribution contracts with dealers who lease property from us run concurrent in length to the retail site’s lease period (generally three to 10 years). • Leases are generally triple net leases. • As of December 31, 2024, the average remaining lease agreement term was 2.5 years. 8 Business Strategy and Objective Our primary business objective is to generate sufficient cash flows from operations to make quarterly cash distributions to our unitholders and, over time, to increase our quarterly cash distributions while maintaining discipline with leverage.
Our principal executive office address is 645 Hamilton Street, Suite 400, Allentown, PA 18101, and our telephone number is (610) 625-8000. Our common units trade on the NYSE under the ticker symbol “CAPL.” We conduct our business through two operating segments – wholesale and retail.
Our principal executive office address is 645 Hamilton Street, Suite 400, Allentown, PA 18101, and our telephone number is (610) 625-8000. Our common units trade on the NYSE under the ticker symbol “CAPL.” We conduct our business through two operating segments – retail and wholesale.
Subsequent to an acquisition and throughout the life cycle of a site, we evaluate the optimal operation of each site as company operated, lessee dealer or commission, or we consider strategic alternatives, including divesting the site, which can result in the site becoming an independent dealer site if we continue to supply fuel to it after its divestiture.
Subsequent to an acquisition and throughout the life cycle of a site, we evaluate the optimal operation of each site as company operated, commission or lessee dealer, or we consider strategic alternatives, including divesting the site, which can result in the site becoming an independent dealer site if we continue to supply fuel to it after its divestiture.
Income from LGWS generally is not Qualifying Income under Section 7704(d) of the Internal Revenue Code; and • Joe’s Kwik Marts, which owns and leases real estate and personal property at certain of our company operated sites. Joe’s Kwik Marts also sells motor fuels on a retail basis and sells convenience merchandise items to end customers.
Income from LGWS generally is not Qualifying Income under Section 7704(d) of the Internal Revenue Code; and • Joe’s Kwik Marts, which owns and leases real estate and personal property at certain of our company operated sites. Joe’s Kwik Marts also sells motor fuels on a retail basis and sells convenience merchandise to end customers.
In addition, LGWS sells motor fuel on a retail basis at sites operated by commission agents. LGWS also sells motor fuels on a retail basis and sells convenience merchandise items to end customers at company operated retail sites.
In addition, LGWS sells motor fuel on a retail basis at sites operated by commission agents. LGWS also sells motor fuels on a retail basis and sells convenience merchandise to end customers at company operated retail sites.
For approximately 60% of gallons sold, we receive a per gallon rate equal to the posted rack price, less any applicable discounts, plus transportation costs, taxes and a fixed rate per gallon of motor fuel. The remaining gallons are either retail sales or wholesale DTW contracts that provide for variable, market-based pricing.
For approximately 55% of gallons sold, we receive a per gallon rate equal to the posted rack price, less any applicable discounts, plus transportation costs, taxes and a fixed rate per gallon of motor fuel. The remaining gallons are either retail sales or wholesale DTW contracts that provide for variable, market-based pricing.
Since our IPO and through February 22, 2024, we have completed acquisitions for a total of approximately 1,000 fee and leasehold sites and 700 wholesale fuel supply contracts for total consideration of approximately $1.5 billion; • Enhance our real estate business’ cash flows by owning or leasing sites in prime locations; • Increase cash flows from our wholesale segment by expanding market share and growing rental income over time; • Increase cash flows from our retail segment by operating our retail sites efficiently with a focus on providing excellent value and service; • Maintain strong relationships with major integrated oil companies and refiners; and • Optimize the operations of our assets to the most appropriate format (lessee dealer, independent dealer, company operated, or commission) to maximize our investment return.
Since our IPO and through February 21, 2025, we have completed acquisitions for a total of approximately 1,000 fee and leasehold sites and 700 wholesale fuel supply contracts for total consideration of approximately $1.5 billion; • Enhance our real estate business’ cash flows by owning or leasing sites in prime locations; • Increase cash flows from our retail segment by operating our retail sites efficiently with a focus on providing excellent value and service; • Increase cash flows from our wholesale segment by expanding market share and growing rental income over time; • Maintain strong relationships with major integrated oil companies and refiners; and • Optimize the operations of our assets to the most appropriate format (lessee dealer, independent dealer, company operated, or commission) to maximize our investment return.
Company Operated • We own or lease the property, operate the retail site and retain all profits from motor fuel and retail site operations. • We own the merchandise inventory and retain the profits from the sale of convenience merchandise items. • We own the motor fuel inventory and set the motor fuel pricing. • We maintain inventory from the time of the purchase of motor fuel from third-party suppliers until the retail sale to the end customer.
Company Operated • We own or lease the property, operate the retail site and retain all profits from motor fuel and retail site operations. • We own the merchandise inventory and retain the profits from the sale of convenience merchandise. • We own the motor fuel inventory and set the motor fuel pricing. 7 • We maintain inventory from the time of the purchase of motor fuel from third-party suppliers until the retail sale to the end customer.
As a customer-centric company with a strong service culture, we constantly work to maintain our position as an employer of choice. This requires a commitment to workplace inclusion and safety, as well as competitive total compensation that meets the needs of our employees.
As a customer-centric company with a strong service culture, we constantly work to maintain our position as an employer of choice. This requires a commitment to workplace inclusion and safety, as well as competitive total compensation that meets the needs of Topper Group employees.
Environmental Laws and Regulations We are subject to extensive federal, state and local environmental laws and regulations, including those relating to USTs, the release or discharge of materials into the air, water and soil, waste management, pollution prevention measures, storage, handling, use and disposal of hazardous materials, the exposure of persons to hazardous materials, greenhouse gas emissions, and characteristics, composition, storage and sale of motor fuel and the health and safety of our employees.
Environmental Laws and Regulations We are subject to extensive federal, state and local environmental laws and regulations, including those relating to USTs, the release or discharge of materials into the air, water and soil, waste management, pollution prevention measures, storage, handling, use and disposal of hazardous materials, the exposure of persons to hazardous materials, greenhouse gas emissions, and characteristics, composition, storage and sale of motor fuel and the health and safety of Topper Group employees.
The Topper Group controls the sole member of our General Partner and has the ability to appoint all of the members of the Board and to control and manage the operations and activities of the Partnership. As of February 22, 2024, the Topper Group also has beneficial ownership of a 38.6% limited partner interest in the Partnership.
The Topper Group controls the sole member of our General Partner and has the ability to appoint all of the members of the Board and to control and manage the operations and activities of the Partnership. As of February 21, 2025, the Topper Group also has beneficial ownership of a 38.6% limited partner interest in the Partnership.
As of December 31, 2023, 244 employees of the Topper Group provided management services to us under the Omnibus Agreement. In addition, 2,277 store employees of the Topper Group provided services at our company operated sites. Our human capital resources objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
As of December 31, 2024, 257 employees of the Topper Group provided management services to us under the Omnibus Agreement. In addition, 2,896 store employees of the Topper Group provided services at our company operated sites. Our human capital resources objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
We are one of the ten largest independent distributors by motor fuel volume in the United States for ExxonMobil, BP and Motiva, and we also distribute Shell, Sunoco, Valero, Gulf, Citgo, Marathon and Phillips 66-branded motor fuels (approximately 94% of the motor fuel we distributed during 2023 was branded).
We are one of the ten largest independent distributors by motor fuel volume in the United States for ExxonMobil, BP and Marathon, and we also distribute Shell, Valero and Phillips 66-branded motor fuels (approximately 94% of the motor fuel we distributed during 2024 was branded).
Supplier Arrangements We distribute branded motor fuel under the Exxon, Mobil, BP, Shell, Sunoco, Valero, Gulf, Citgo, Marathon and Phillips 66 brands to our customers. Branded motor fuels are purchased from major integrated oil companies and refiners under supply agreements. For 2023, we purchased approximately 80% of our motor fuel from four suppliers.
Supplier Arrangements We distribute branded motor fuel under the Exxon, Mobil, BP, Shell, Marathon, Valero and Phillips 66 brands to our customers. Branded motor fuels are purchased from major integrated oil companies and refiners under supply agreements. For 2024, we purchased approximately 81% of our motor fuel from four suppliers.
As of December 31, 2023, we own or lease approximately 1,100 sites, of which we operate 295 as company operated sites. In all, including our company operated sites, we distributed motor fuel to approximately 1,700 sites located in 34 states.
As of December 31, 2024, we own or lease approximately 1,100 sites, of which we operate 365 as company operated sites. In all, including our company operated sites, we distributed motor fuel to approximately 1,600 sites located in 34 states.
Our Partnership Agreement does not require us to pay any distributions. 8 Our business strategy to achieve our objective of paying and, over time, increasing our quarterly cash distributions, is focused on the following key initiatives: • Expand within and beyond our existing markets through acquisitions.
Our business strategy to achieve our objective of paying and, over time, increasing our quarterly cash distributions, is focused on the following key initiatives: • Expand within and beyond our existing markets through acquisitions.
Gallons of Motor Fuel Distributed Year Ended December 31, Fuel Distribution Sites End of Year Segment 2023 2022 2021 2023 2022 2021 Independent dealers (a) Wholesale 518 496 550 632 663 666 Lessee dealers Wholesale 325 348 382 569 619 637 Company operated Retail 342 328 234 296 255 252 Commission agents (b) Retail 165 168 169 199 200 198 Total 1,350 1,340 1,335 1,696 1,737 1,753 (a) Gallons distributed to independent dealers include gallons distributed to sub-wholesalers and commercial accounts, which are not included in the site counts reported above.
Gallons of Motor Fuel Distributed Year Ended December 31, Fuel Distribution Sites End of Year Segment 2024 2023 2022 2024 2023 2022 Independent dealers (a) Wholesale 483 518 496 607 632 663 Lessee dealers Wholesale 261 325 348 434 569 619 Company operated Retail 389 342 328 365 296 255 Commission agents (b) Retail 166 165 168 229 199 200 Total 1,299 1,350 1,340 1,635 1,696 1,737 (a) Gallons distributed to independent dealers include gallons distributed to sub-wholesalers and commercial accounts, which are not included in the site counts reported above.
LGW records qualifying wholesale motor fuel distribution gross income and LGWS records the non-qualifying retail sale. • As of December 31, 2023, the average remaining motor fuel distribution and lease agreement term for our commission agents was 0.8 years.
LGW records qualifying wholesale motor fuel distribution gross income and LGWS records the non-qualifying retail sale. • As of December 31, 2024, the average remaining motor fuel distribution and lease agreement term for our commission agents was 1.2 years. Wholesale Segment The wholesale segment includes the wholesale distribution of motor fuel to lessee dealers and independent dealers.
The following table presents rental income (in millions) and the number of sites from which rental income was generated: Rental Income Year Ended December 31, Sites from which Rental Income was Generated End of Year Segment 2023 2022 2021 2023 2022 2021 Lessee dealers Wholesale $ 69.7 $ 71.3 $ 71.6 628 687 716 Company operated Retail 2.4 2.2 1.5 50 44 36 Commission agents Retail 10.2 10.6 10.1 188 185 184 Total $ 82.3 $ 84.1 $ 83.2 866 916 936 6 The financial statements reflect the consolidated results of the Partnership and its wholly owned subsidiaries.
Our lease agreements with third-party landlords have an average remaining lease term of 3.9 years as of December 31, 2024. 6 The following table presents rental income (in millions) and the number of sites from which rental income was generated: Rental Income Year Ended December 31, Sites from which Rental Income was Generated End of Year Segment 2024 2023 2022 2024 2023 2022 Lessee dealers Wholesale $ 57.8 $ 69.7 $ 71.3 490 628 687 Company operated Retail 2.7 2.4 2.2 47 50 44 Commission agents Retail 10.7 10.2 10.6 221 188 185 Total $ 71.2 $ 82.3 $ 84.1 758 866 916 The financial statements reflect the consolidated results of the Partnership and its wholly owned subsidiaries.
The amount of any distribution is subject to the discretion of the Board, and the Board may modify or revoke the cash distribution policy at any time.
The amount of any distribution is subject to the discretion of the Board, and the Board may modify or revoke the cash distribution policy at any time. Our Partnership Agreement does not require us to pay any distributions.
Major competitive factors include, among others, location, ease of access, product and service selection, motor fuel brands, pricing, customer service, store appearance and cleanliness. 9 Seasonality Our business exhibits substantial 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.
Major competitive factors for us include, among others, customer service, reliability and availability of products and price. 9 Seasonality Our business exhibits significant 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.
Operations Below is a summary of our revenues and operating income by segment (in thousands): Wholesale Retail 2023 2022 2021 2023 2022 2021 Revenues $ 2,290 $ 2,690 $ 2,143 $ 2,096 $ 2,277 $ 1,436 Operating income 91 94 87 97 107 56 Wholesale Segment The wholesale segment includes the wholesale distribution of motor fuel to lessee dealers and independent dealers.
Operations Below is a summary of our revenues and operating income by segment (in millions): Wholesale Retail 2024 2023 2022 2024 2023 2022 Revenues $ 1,872 $ 2,290 $ 2,690 $ 2,226 $ 2,096 $ 2,277 Operating income 77 91 94 93 97 107 Retail Segment The retail segment includes the sale of convenience merchandise at company operated sites and the retail sale of motor fuel at company operated and commission sites.
(b) Includes independent commission sites owned or leased by the commission agent. We also generate revenues through leasing or subleasing our real estate. We own or lease real and personal property and we lease or sublease that property to tenants, the substantial majority of which are wholesale customers as described above.
We own or lease real and personal property and we lease or sublease that property to tenants, the substantial majority of which are wholesale customers as described above. We own approximately 60% of our properties that we lease to our dealers or utilize in our retail business.
Retail Segment The retail segment includes the sale of convenience merchandise items at company operated sites and the retail sale of motor fuel at company operated and commission sites. Below is a description of the retail segment's principal customer groups.
Below is a description of the retail segment's principal customer groups.
The convenience store industry is highly competitive, fragmented and characterized by constant change in the number and type of retailers offering products and services of the type sold at our sites. We compete with other retail site chains, independently owned sites, motor fuel stations, supermarkets, drugstores, discount stores, dollar stores, club stores and hypermarkets.
As of December 31, 2024, our supply agreements had a weighted-average remaining term of approximately 6.0 years. Competition The convenience store industry is highly competitive, fragmented and characterized by constant change in the number and type of retailers offering products and services of the type sold at our sites.
Removed
We own approximately 60% of our properties that we lease to our dealers or utilize in our retail business. Our lease agreements with third-party landlords have an average remaining lease term of 4.5 years as of December 31, 2023.
Added
(b) Includes independent commission sites owned or leased by the commission agent. At our company operated sites, we also generate revenues from the retail sale of convenience merchandise.
Removed
Business Strategy and Objective Our primary business objective is to generate sufficient cash flows from operations to make quarterly cash distributions to our unitholders and, over time, to increase our quarterly cash distributions while maintaining discipline with leverage.
Added
Such revenues amounted to (in millions): Year Ended December 31, 2024 2023 2022 Food and merchandise sales $ 390 $ 316 $ 280 We also generate revenues through leasing or subleasing our real estate.
Removed
As of December 31, 2023, our supply agreements had a weighted-average remaining term of approximately 4.9 years. Competition Our wholesale segment competes with other motor fuel distributors. Major competitive factors for us include, among others, customer service, reliability and availability of products and price.
Added
Independent Dealer • The independent dealer owns or leases the property and owns all motor fuel and convenience store inventory. • We contract to exclusively distribute motor fuel to the independent dealer at rack-plus pricing or, in some cases, DTW. • Under our distribution contracts, we agree to supply a particular branded motor fuel or unbranded motor fuel to a site or group of sites and arrange for all transportation. • Distribution contracts with independent dealers are typically seven to 15 years in length. • As of December 31, 2024, the average remaining distribution contract term was 4.9 years.
Added
We compete with other retail site chains, independently owned sites, motor fuel stations, supermarkets, drugstores, discount stores, dollar stores, club stores and hypermarkets. Major competitive factors include, among others, location, ease of access, product and service selection, motor fuel brands, pricing, customer service, store appearance and cleanliness. Our wholesale segment competes with other motor fuel distributors.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

79 edited+6 added−13 removed278 unchanged
Biggest changeDistributions to a non-U.S. person that holds our common units will be reduced by U.S. federal withholding taxes imposed at the highest applicable U.S. federal income tax rate and such non-U.S. person will be required to file U.S. federal income tax returns and pay U.S. federal income tax, to the extent not previously withheld, on his, her or its allocable share of our taxable income and gain. 34 Under the Tax Cuts and Jobs Act, if a unitholder sells or otherwise disposes of a common unit, the transferee is required to withhold 10% of the amount realized by the transferor unless the transferor certifies that it is not a foreign person, and we are required to deduct and withhold from the transferee amounts that should have been withheld by the transferee but were not withheld.
Biggest changeDistributions to a non-U.S. person that holds our common units will be reduced by U.S. federal withholding taxes imposed at the highest applicable U.S. federal income tax rate and such non-U.S. person will be required to file U.S. federal income tax returns and pay U.S. federal income tax, to the extent not previously withheld, on his, her or its allocable share of our taxable income and gain.
Our success depends on our ability to anticipate and respond in a timely manner to changing consumer demands and preferences while continuing to sell products and services that remain relevant to the consumer and thus generally have a positive impact our overall merchandise gross profit.
Our success depends on our ability to anticipate and respond in a timely manner to changing consumer demands and preferences while continuing to sell products and services that remain relevant to the consumer and thus generally have a positive impact on our overall merchandise gross profit.
We believe that the success of our operations is dependent, in part, on the continuing favorable reputation, market value and name recognition associated with the branded motor fuel sold through our wholesale and retail segments.
We believe that the success of our operations is dependent, in part, on the continuing favorable reputation, market value and name recognition associated with the branded motor fuel sold through our retail and wholesale segments.
For example, our credit facilities may restrict our ability to: • make distributions if any potential default or event of default occurs; • incur additional indebtedness, including the issuance of certain preferred equity interests, or guarantee other indebtedness; 24 • grant liens or make certain negative pledges; • make certain advances, loans or investments; • make any material change to the nature of our business, including mergers, consolidations, liquidations and dissolutions; • make certain capital expenditures in excess of specified levels; • acquire another company; • enter into a sale-leaseback transaction or certain sales or leases of assets; • enter into certain affiliate transactions; or • make certain repurchases of equity interests.
For example, our credit facilities may restrict our ability to: • make distributions if any potential default or event of default occurs; • incur additional indebtedness, including the issuance of certain preferred equity interests, or guarantee other indebtedness; • grant liens or make certain negative pledges; • make certain advances, loans or investments; 24 • make any material change to the nature of our business, including mergers, consolidations, liquidations and dissolutions; • make certain capital expenditures in excess of specified levels; • acquire another company; • enter into a sale-leaseback transaction or certain sales or leases of assets; • enter into certain affiliate transactions; or • make certain repurchases of equity interests.
Examples of decisions that our General Partner may make in its individual capacity include: • how to allocate business opportunities among us and its affiliates; • whether to exercise its call right; and • whether or not to consent to any merger or consolidation of the Partnership or amendment to the Partnership Agreement. • provides that our General Partner and its officers and directors will not be liable for monetary damages to the Partnership or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our General Partner or its officers and directors, as the case may be, acted in bad faith or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; • provides that the General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted in reliance upon the advice or opinion (including an opinion of counsel) of such persons as to matters that the General Partner reasonably believes to be within such person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such advice or opinion; and • provides that our General Partner will not be in breach of its obligations under the Partnership Agreement or its fiduciary duties to us or our limited partners if a transaction with an affiliate or the resolution of a conflict of interest is: • approved by the independent conflicts committee of the Board, although our General Partner is not obligated to seek such approval; or • approved by the vote of a majority of the outstanding common units, excluding any common units owned by our General Partner and its affiliates.
Examples of decisions that our General Partner may make in its individual capacity include: • how to allocate business opportunities among us and its affiliates; • whether to exercise its call right; and • whether or not to consent to any merger or consolidation of the Partnership or amendment to the Partnership Agreement. • provides that our General Partner and its officers and directors will not be liable for monetary damages to the Partnership or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our General Partner or its officers and directors, as the case may be, acted in bad faith or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; • provides that the General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted in reliance upon the advice or opinion (including an opinion of counsel) of such persons as to matters that the General Partner reasonably believes to be within such person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such advice or opinion; and 28 • provides that our General Partner will not be in breach of its obligations under the Partnership Agreement or its fiduciary duties to us or our limited partners if a transaction with an affiliate or the resolution of a conflict of interest is: • approved by the independent conflicts committee of the Board, although our General Partner is not obligated to seek such approval; or • approved by the vote of a majority of the outstanding common units, excluding any common units owned by our General Partner and its affiliates.
These conflicts include the following situations, among others: • our General Partner is allowed to take into account the interests of parties other than us, such as the Topper Group, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders; • neither our Partnership Agreement nor any other agreement requires the Topper Group to pursue a business strategy that favors us; 26 • officers of our General Partner who provide services to us may devote time to affiliates of our General Partner and may be compensated for services rendered to such affiliate; • our Partnership Agreement limits the liability of and reduces fiduciary duties owed by our General Partner and also restricts the remedies available to unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty; • except in limited circumstances, our General Partner has the power and authority to conduct our business without unitholder approval; • our General Partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the creation, reductions or increases of cash reserves, each of which can affect the amount of cash that is available for distribution to our unitholders; • our General Partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus.
These conflicts include the following situations, among others: • our General Partner is allowed to take into account the interests of parties other than us, such as the Topper Group, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders; • neither our Partnership Agreement nor any other agreement requires the Topper Group to pursue a business strategy that favors us; • officers of our General Partner who provide services to us may devote time to affiliates of our General Partner and may be compensated for services rendered to such affiliate; • our Partnership Agreement limits the liability of and reduces fiduciary duties owed by our General Partner and also restricts the remedies available to unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty; • except in limited circumstances, our General Partner has the power and authority to conduct our business without unitholder approval; • our General Partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the creation, reductions or increases of cash reserves, each of which can affect the amount of cash that is available for distribution to our unitholders; • our General Partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus.
Such determination can affect the amount of cash available for distribution to our unitholders; • our General Partner may cause us to borrow funds in order to permit the payment of cash distributions; • our Partnership Agreement permits us to distribute up to $15 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus; • our Partnership Agreement does not restrict our General Partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with its affiliates on our behalf; • our General Partner intends to limit its liability regarding our contractual and other obligations; • our General Partner may exercise its right to call and purchase our common units if it and its affiliates own more than 80% of our common units; • our General Partner controls the enforcement of obligations that it and its affiliates owe to us; and • our General Partner decides whether to retain separate counsel, accountants or others to perform services for us.
Such determination can affect the amount of cash available for distribution to our unitholders; • our General Partner may cause us to borrow funds in order to permit the payment of cash distributions; • our Partnership Agreement permits us to distribute up to $15 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus; • our Partnership Agreement does not restrict our General Partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with its affiliates on our behalf; 26 • our General Partner intends to limit its liability regarding our contractual and other obligations; • our General Partner may exercise its right to call and purchase our common units if it and its affiliates own more than 80% of our common units; • our General Partner controls the enforcement of obligations that it and its affiliates owe to us; and • our General Partner decides whether to retain separate counsel, accountants or others to perform services for us.
For example, our Partnership Agreement: • provides that whenever our General Partner, the Board or any committee of the Board makes a determination or takes, or declines to take, any other action in its capacity as the general partner of the Partnership, our General Partner is required to make such determination, or take or decline to take such other action, in good faith, and will not be subject to any higher standard under any Delaware Act (as defined below), or any other law, rule or regulation, or at equity; • provides that any determination, act or failure to act by our General Partner will be deemed in good faith unless such party believed such determination, other action or failure to act, given the totality of the circumstance, was averse to the interests of the Partnership; • in any proceeding brought by the Partnership, any limited partner, or any Person who acquires an interest in a Partnership interest or any other Person who is bound by the Partnership Agreement, challenging such action, determination or failure to act, the Person bringing or prosecuting such proceeding shall have the burden of proving that such determination, action or failure to act was not in good faith; 28 • provides that whenever the General Partner makes a determination or takes or declines to take any other action in its individual capacity as opposed to in its capacity as the general partner of the Partnership, whether under the Partnership Agreement or any other agreement contemplated thereby, then the General Partner, or any affiliate thereof, is entitled to the fullest extent permitted by law, to make such determination or to take or decline to take such other action free of any fiduciary duty, duty of good faith, obligation imposed by Delaware Act, law, rule or in equity to the Partnership, any limited partner or any Person who acquires an interest in a Partnership interest or any other Person who is bound by the Partnership Agreement.
For example, our Partnership Agreement: • provides that whenever our General Partner, the Board or any committee of the Board makes a determination or takes, or declines to take, any other action in its capacity as the general partner of the Partnership, our General Partner is required to make such determination, or take or decline to take such other action, in good faith, and will not be subject to any higher standard under any Delaware Act (as defined below), or any other law, rule or regulation, or at equity; • provides that any determination, act or failure to act by our General Partner will be deemed in good faith unless such party believed such determination, other action or failure to act, given the totality of the circumstance, was averse to the interests of the Partnership; • in any proceeding brought by the Partnership, any limited partner, or any Person who acquires an interest in a Partnership interest or any other Person who is bound by the Partnership Agreement, challenging such action, determination or failure to act, the Person bringing or prosecuting such proceeding shall have the burden of proving that such determination, action or failure to act was not in good faith; • provides that whenever the General Partner makes a determination or takes or declines to take any other action in its individual capacity as opposed to in its capacity as the general partner of the Partnership, whether under the Partnership Agreement or any other agreement contemplated thereby, then the General Partner, or any affiliate thereof, is entitled to the fullest extent permitted by law, to make such determination or to take or decline to take such other action free of any fiduciary duty, duty of good faith, obligation imposed by Delaware Act, law, rule or in equity to the Partnership, any limited partner or any Person who acquires an interest in a Partnership interest or any other Person who is bound by the Partnership Agreement.
If market interest rates continue to increase, such variable-rate debt will create higher debt service requirements, which could adversely affect our cash flow and ability to make cash distributions. In exchange for accepting these risks, investors may expect to receive a higher rate of return than would otherwise be obtainable from lower-risk investments.
If market interest rates increase, such variable-rate debt will create higher debt service requirements, which could adversely affect our cash flow and ability to make cash distributions. In exchange for accepting these risks, investors may expect to receive a higher rate of return than would otherwise be obtainable from lower-risk investments.
Any material changes in payments terms, including payment discounts, or availability of trade credit provided by our principal suppliers, could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. We could be adversely affected by the creditworthiness and performance of our customers, suppliers and contract counterparties.
Any material changes in payment terms, including payment discounts, or availability of trade credit provided by our principal suppliers, could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. We could be adversely affected by the creditworthiness and performance of our customers, suppliers and contract counterparties.
Also, please read “Cautionary Statement Regarding Forward-Looking Statements.” Limited partner interests are inherently different from the capital stock of a corporation although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. 10 Risk Factor Summary Below is a summary of our risk factors: • We may not have sufficient distributable cash from operations to enable us to pay our quarterly distributions. • If we are unable to make acquisitions on economically acceptable terms, our future growth and ability to increase distributions to unitholders will be limited, and any acquisitions are subject to substantial risks. • Volatility in crude oil and wholesale motor fuel costs affect our business, financial condition and results of operations and our ability to make distributions to unitholders. • Seasonality in wholesale motor fuel costs and sales, as well as merchandise sales, affect our business, financial condition and results of operations and our ability to make distributions to unitholders. • Both the wholesale motor fuel distribution and the retail motor fuel industries are characterized by intense competition and fragmentation. • Changes in credit or debit card expenses could reduce our gross profit, especially on motor fuel sold at company-operated retail sites. • New entrants or increased competition in the convenience store industry could result in reduced gross profits. • General economic, financial and political conditions that are largely out of our control could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders. • Changes in consumer behavior and travel as a result of changing economic conditions, labor strikes or otherwise could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders. • Broad-based business or economic disruptions caused by health crises could adversely affect our business, financial condition, results of operations or cash available for distribution to our unitholders. • A shortage of qualified labor could have a material adverse effect on our business and results of operations. • We are subject to extensive government laws and regulations concerning store merchandise items, operations, employees, environmental matters and product quality specifications of motor fuel that we distribute and sell.
Also, please read “Cautionary Statement Regarding Forward-Looking Statements.” Limited partner interests are inherently different from the capital stock of a corporation although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. 10 Risk Factor Summary Below is a summary of our risk factors: • We may not have sufficient distributable cash from operations to enable us to pay our quarterly distributions. • If we are unable to make acquisitions on economically acceptable terms, our future growth and ability to increase distributions to unitholders will be limited, and any acquisitions are subject to substantial risks. • Volatility in crude oil and wholesale motor fuel costs affect our business, financial condition and results of operations and our ability to make distributions to unitholders. • Seasonality in wholesale motor fuel costs and sales, as well as merchandise sales, affect our business, financial condition and results of operations and our ability to make distributions to unitholders. • Both the wholesale motor fuel distribution and the retail motor fuel industries are characterized by intense competition and fragmentation. • Changes in credit or debit card expenses could reduce our gross profit, especially on motor fuel sold at company-operated retail sites. • New entrants or increased competition in the convenience store industry could result in reduced gross profits. • General economic, financial and political conditions that are largely out of our control could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders. • Changes in consumer behavior, preferences and travel as a result of changing economic conditions, labor strikes or otherwise could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders. • Broad-based business or economic disruptions caused by health crises could adversely affect our business, financial condition, results of operations or cash available for distribution to our unitholders. • A shortage of qualified labor could have a material adverse effect on our business and results of operations. • We are subject to extensive government laws and regulations concerning store merchandise, operations, Topper Group employees, environmental matters and product quality specifications of motor fuel that we distribute and sell.
Our counsel has not rendered an opinion on the state, local or non-U.S. tax consequences of an investment in our common units. We will treat each purchaser of our common units as having the same tax characteristics on a per-unit basis without regard to the actual common units purchased.
Our counsel has not rendered an opinion on the state, local or non-U.S. tax consequences of an investment in our common units. 34 We will treat each purchaser of our common units as having the same tax characteristics on a per-unit basis without regard to the actual common units purchased.
We are subject to extensive government laws and regulations concerning store merchandise items and operations, and the cost of compliance with such laws and regulations can be material. Our business and properties are subject to extensive local, state and federal governmental laws and regulations relating to, among other things, the sale of alcohol and tobacco and public accessibility requirements.
We are subject to extensive government laws and regulations concerning store merchandise and operations, and the cost of compliance with such laws and regulations can be material. Our business and properties are subject to extensive local, state and federal governmental laws and regulations relating to, among other things, the sale of alcohol and tobacco and public accessibility requirements.
The cost of compliance and the ramifications of non-compliance could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 23 Any significant disruption to our service or access to our systems could adversely affect our business and results of operations.
The cost of compliance and the ramifications of non-compliance could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. Any significant disruption to our service or access to our systems could adversely affect our business and results of operations.
Our CAPL Credit Facility limits our ability to pay distributions upon the occurrence of the following events, among others: • failure to pay any principal when due or failure to pay any interest, fees or other amounts owed under our credit facility when due, subject to any applicable grace period; • failure of any representation or warranty in our credit agreement to be true and correct, and the failure of any representation or warranty in any other agreement delivered in connection with our credit facility to be true and correct in any material respect; • failure to perform or otherwise comply with the covenants in our credit facility or in other loan documents beyond the applicable notice and grace period; • any default in the performance of any obligation or condition beyond the applicable grace period relating to any other indebtedness of more than certain thresholds; • failure of the lenders to have a perfected first priority security interest in the collateral pledged by any loan party; • the entry of one or more judgments in excess of certain thresholds, to the extent any payments pursuant to the judgment are not covered by insurance; • a change in ownership or control of our General Partner or us; • a violation of the Employee Retirement Income Security Act of 1974, or “ERISA”; and • a bankruptcy or insolvency event involving us or any of our subsidiaries.
Our CAPL Credit Facility limits our ability to pay distributions upon the occurrence of the following events, among others: • failure to pay any principal when due or failure to pay any interest, fees or other amounts owed under our credit facility when due, subject to any applicable grace period; • failure of any representation or warranty in our credit agreement to be true and correct, and the failure of any representation or warranty in any other agreement delivered in connection with our credit facility to be true and correct in any material respect; • failure to perform or otherwise comply with the covenants in our credit facility or in other loan documents beyond the applicable notice and grace period; • any default in the performance of any obligation or condition beyond the applicable grace period relating to any other indebtedness of more than certain thresholds; • failure of the lenders to have a perfected first priority security interest in the collateral pledged by any loan party; • the entry of one or more judgments in excess of certain thresholds, to the extent any payments pursuant to the judgment are not covered by insurance; • a change in ownership or control of our General Partner or us; • a violation of the Employee Retirement Income Security Act of 1974, or “ERISA;” and • a bankruptcy or insolvency event involving us or any of our subsidiaries.
Changes in consumer behavior and travel as a result of changing economic conditions, labor strikes or otherwise could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
Changes in consumer behavior, preferences and travel as a result of changing economic conditions, labor strikes or otherwise could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
This effectively permits a “change of control” without the vote or consent of the unitholders. Our General Partner has a call right that may require unitholders to sell their common units at an undesirable time or price.
This effectively permits a “change of control” without the vote or consent of the unitholders. 29 Our General Partner has a call right that may require unitholders to sell their common units at an undesirable time or price.
The nature of these types of risks, which are often unpredictable, makes them difficult to plan for, or otherwise mitigate, and they are generally uninsurable, which compounds their potential impact on our business. Any such event could have a material adverse effect on our business, financial condition, results of operations and cash available for distributions to our unitholders.
The nature of these types of risks, which are often unpredictable, makes them difficult to plan for, or otherwise mitigate, and they are generally uninsurable, which compounds their potential impact on our business. Any such event could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.
Such reduction, if approved by the IRS, will be binding on any affected unitholders. 36 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Such reduction, if approved by the IRS, will be binding on any affected unitholders. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
The amount of cash we can distribute on our common units principally depends upon the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other things: • demand for motor fuel products in the markets we serve, including seasonal fluctuations, and the margin per gallon we earn selling and distributing motor fuel; • the wholesale price of motor fuel and its impact on the payment discounts we receive; • demand for merchandise and services in the markets we serve, including seasonal fluctuations, and the margin percentage we earn; • seasonal trends in the industries in which we operate; • supply, and the impact that severe storms could have to our suppliers’ and customers’ operations; • competition from other companies that sell motor fuel products or operate retail sites in our targeted market areas; • the inability to identify and acquire suitable sites or to negotiate acceptable leases for such sites; • the potential inability to obtain adequate financing to fund our expansion; • the level of our operating costs, including payments to the Topper Group under the Omnibus Agreement; • prevailing economic conditions; • regulatory actions affecting the supply of or demand for motor fuel, our operations, our existing contracts or our operating costs; and • volatility of prices for motor fuel.
The amount of cash we can distribute on our common units principally depends upon the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other things: • demand for motor fuel products in the markets we serve, including seasonal fluctuations, and the margin per gallon we earn selling and distributing motor fuel; • the wholesale price of motor fuel and its impact on the payment discounts we receive and the fees we pay on credit and debit card sales; • demand for merchandise and services in the markets we serve, including seasonal fluctuations, and the margin percentage we earn; • seasonal trends in the industries in which we operate; • supply, and the impact that severe storms could have to our suppliers’ and customers’ operations; • competition from other companies that sell motor fuel products or operate retail sites in our targeted market areas; • the inability to identify and acquire suitable sites or to negotiate acceptable leases for such sites; • the potential inability to obtain adequate financing to fund our expansion; • the level of our operating costs, including payments to the Topper Group under the Omnibus Agreement; • prevailing economic conditions; • regulatory actions affecting the supply of or demand for motor fuel, our operations, our existing contracts or our operating costs; and • volatility of prices for motor fuel.
Volatility in the price of crude oil, and subsequently wholesale motor fuel prices, is caused by many factors, including general political, regulatory and economic conditions, acts of war, including as a result of the conflict in Ukraine or the war between Israel and Hamas, terrorism or armed conflict, instability in oil producing regions, particularly in the Middle East and South America, and the value of U.S. dollars relative to other foreign currencies, particularly those of oil producing nations.
Volatility in the price of crude oil, and subsequently wholesale motor fuel prices, is caused by many factors, including general political, regulatory and economic conditions, acts of war, including as a result of the conflict in Ukraine or in the Middle East, terrorism or armed conflict, instability in oil producing regions, particularly in the Middle East and South America, and the value of U.S. dollars relative to other foreign currencies, particularly those of oil producing nations.
The cost of compliance with such laws and regulations may be material. • A significant decrease in demand for motor fuel, including increased consumer preference for alternative motor fuels or improvements in fuel efficiency, in the areas we serve would reduce our ability to make distributions to our unitholders. • Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business, operating results and financial condition. • Increased attention to environmental, social and governance (“ESG”) matters and conservation measures may adversely impact our business. • Unfavorable weather conditions could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders. • We depend on four principal suppliers for the majority of our motor fuel and one principal supplier for our merchandise. • Negative events or developments associated with our branded suppliers could have an adverse impact on our revenues. • We rely on our suppliers to provide trade credit to adequately fund our ongoing operations. • We could be adversely affected by the creditworthiness and performance of our customers, suppliers and contract counterparties. • Pending or future litigation could adversely affect our financial condition and results of operations. • The dangers inherent in the storage and transport of motor fuel could cause disruptions and could expose us to potentially significant losses, costs or liabilities. • We depend on third-party transportation providers for the transportation of all of our motor fuel. • Our motor fuel sales are generated under contracts that must be renegotiated or replaced periodically. • We rely on our information technology systems and network infrastructure to manage numerous aspects of our business and could be adversely affected by the failure to protect sensitive customer, employee or vendor data. • Our debt levels and debt covenants may limit our flexibility in obtaining additional financing and in pursuing other business opportunities and our ability to make distributions to unitholders. • A continued increase in interest rates may cause the market price of our common units to decline and a significant increase in interest rates could adversely affect our ability to service our indebtedness. • We do not own all of the land on which our sites and certain facilities are located, which could result in increased costs and disruptions to our operations. • We may not be able to lease sites we own or sub-lease sites we lease on favorable terms. • We rely on DMI and Circle K to indemnify us for any costs or expenses that we incur for certain environmental liabilities and third-party claims. 11 • The Topper Group controls us and may have conflicts of interest with us.
The cost of compliance with such laws and regulations may be material. • A significant decrease in demand for motor fuel, including increased consumer preference for alternative motor fuels or improvements in fuel efficiency, in the areas we serve would reduce our ability to make distributions to our unitholders. • Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business, operating results and financial condition. • Increased attention to environmental, social and governance (“ESG”) matters and conservation measures may adversely impact our business. • Unfavorable weather conditions could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders. • We depend on four principal suppliers for the majority of our motor fuel and one principal supplier for our merchandise. • Negative events or developments associated with our branded suppliers could have an adverse impact on our revenues. • We rely on our suppliers to provide trade credit to adequately fund our ongoing operations. • We could be adversely affected by the creditworthiness and performance of our customers, suppliers and contract counterparties. • Pending or future litigation could adversely affect our financial condition and results of operations. • The dangers inherent in the storage and transport of motor fuel could cause disruptions and could expose us to potentially significant losses, costs or liabilities. • We depend on third-party transportation providers for the transportation of all of our motor fuel. • Our motor fuel sales are generated under contracts that must be renegotiated or replaced periodically. • We rely on our information technology systems, network infrastructure and software as a service providers to manage numerous aspects of our business and could be adversely affected by the failure to protect sensitive customer, Topper Group employee or the Partnership's vendor data. • Our debt levels and debt covenants may limit our flexibility in obtaining additional financing and in pursuing other business opportunities and our ability to make distributions to unitholders. • An increase in interest rates may cause the market price of our common units to decline and a significant increase in or prolonged period of relatively higher interest rates could adversely affect our ability to service our indebtedness. • We do not own all of the land on which our sites and certain facilities are located, which could result in increased costs and disruptions to our operations. • We may not be able to lease sites we own or sub-lease sites we lease on favorable terms. • We rely on DMI and other third parties to indemnify us for any costs or expenses that we incur for certain environmental liabilities and third-party claims. 11 • The Topper Group controls us and may have conflicts of interest with us.
Recessionary economic conditions, higher interest rates, higher motor fuel and other energy costs, inflation, increases in commodity prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws or other economic factors may affect consumer spending or buying habits, and could adversely affect the demand for motor fuel and convenience items we will sell at our retail sites.
Recessionary economic conditions, higher interest rates, higher motor fuel and other energy costs, inflation, increases in commodity prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws or other economic factors may affect consumer spending or buying habits, and could adversely affect the demand for motor fuel and convenience merchandise we sell at our retail sites.
We are subject to extensive government laws and regulations concerning our employees, and the cost of compliance with such laws and regulations can be material. Regulations related to wages and other compensation affect our business.
We are subject to extensive government laws and regulations concerning our Topper Group employees, and the cost of compliance with such laws and regulations can be material. Regulations related to wages and other compensation affect our business.
We are exposed to risk related to the creditworthiness and performance of our customers, suppliers and contract counterparties. As of December 31, 2023, we had outstanding accounts receivable totaling $32 million.
We are exposed to risk related to the creditworthiness and performance of our customers, suppliers and contract counterparties. As of December 31, 2024, we had outstanding accounts receivable totaling $32 million.
Cyber-attacks are rapidly evolving and becoming increasingly sophisticated. A successful cyber-attack resulting in the loss of sensitive customer, employee or vendor data could adversely affect our reputation, results of operations, financial condition and liquidity, and could result in litigation against us or the imposition of penalties.
Cyber-attacks are rapidly evolving and becoming increasingly sophisticated. A successful cyber-attack resulting in the loss of sensitive customer, Topper Group employee or the Partnership's vendor data could adversely affect our reputation, results of operations, financial condition and liquidity, and could result in litigation against us or the imposition of penalties.
A tightening of credit in the financial markets or an increase in interest rates may make it more difficult for wholesale customers and suppliers to obtain financing and, depending on the degree to which it occurs, may cause a material increase in nonpayment or other nonperformance by our customers and suppliers.
A tightening of credit in the financial markets or an increase in or prolonged period of higher interest rates may make it more difficult for wholesale customers and suppliers to obtain financing and, depending on the degree to which it occurs, may cause a material increase in nonpayment or other nonperformance by our customers and suppliers.
Due to general macroeconomic factors, the Topper Group has experienced labor shortages in certain geographies. Outside suppliers that we rely on have also experienced shortages of qualified labor.
Due to general macroeconomic factors, the Topper Group has from time to time experienced labor shortages in certain geographies. Outside suppliers that we rely on have also experienced shortages of qualified labor.
Our business and our reputation could be adversely affected by the failure to protect sensitive customer, employee or vendor data, whether as a result of cyber security attacks or otherwise, or to comply with applicable regulations relating to data security and privacy.
Our business and our reputation could be adversely affected by the failure to protect sensitive customer, Topper Group employee or the Partnership's vendor data, whether as a result of cyber security attacks or otherwise, or to comply with applicable regulations relating to data security and privacy.
To the extent escrow accounts, insurance and/or payments from DMI are not sufficient to cover any such costs or expenses, our business, financial condition and results of operations and ability to make distributions to unitholders could be adversely affected.
To the extent escrow accounts, insurance and/or payments from DMI and/or other third parties are not sufficient to cover any such costs or expenses, our business, financial condition and results of operations and ability to make distributions to unitholders could be adversely affected.
In certain areas where our retail sites are located, state or local laws limit the retail sites’ hours of operation or their sale of alcoholic beverages, tobacco products, possible inhalants and lottery tickets, in particular to minors.
In certain areas where our retail sites are located, state or local laws limit the retail sites’ hours of operation or their sale of alcoholic beverages, tobacco products, inhalants, skills games and lottery tickets, in particular to minors.
If our General Partner exercised its call right, the effect would be to take us private and, following the deregistering of the units, we would no longer be subject to the reporting requirements of the Exchange Act. As of February 22, 2024, the Topper Group beneficially owned approximately 38.6% of our outstanding common units.
If our General Partner exercised its call right, the effect would be to take us private and, following the deregistering of the units, we would no longer be subject to the reporting requirements of the Exchange Act. As of February 21, 2025, the Topper Group beneficially owned approximately 38.6% of our outstanding common units.
We depend on our IT systems and network infrastructure to manage numerous aspects of our business and provide analytical information to management. These systems are an essential component of our business and growth strategies, and a serious disruption to them could significantly limit our ability to manage and operate our business efficiently.
We depend on our IT systems, network infrastructure and software as a service providers to manage numerous aspects of our business and provide analytical information to management. These systems are an essential component of our business and growth strategies, and a serious disruption to them could significantly limit our ability to manage and operate our business efficiently.
A significant increase in interest rates could adversely affect our ability to service our indebtedness. The increased cost could make the financing of our business activities more expensive. These added expenses could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.
A significant increase in interest rates or prolonged period of relatively higher interest rates could adversely affect our ability to service our indebtedness. The increased cost could make the financing of our business activities more expensive. These added expenses could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.
Imposition of any additional such taxes on us or an increase in the existing tax rates would reduce the cash available for distribution to our unitholders. 32 Our Partnership Agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that results in us becoming subject to either: (a) entity-level taxation for U.S. federal, state, local and/or foreign income and/or withholding tax purposes to which we were not subject prior to such enactment, modification or interpretation, and/or (b) an increased amount of one or more of such taxes (including as a result of an increase in tax rates), then the minimum quarterly distribution amounts and the target distribution amounts may be adjusted (i.e., reduced) to reflect the impact of that law on us.
Our Partnership Agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that results in us becoming subject to either: (a) entity-level taxation for U.S. federal, state, local and/or foreign income and/or withholding tax purposes to which we were not subject prior to such enactment, modification or interpretation, and/or (b) an increased amount of one or more of such taxes (including as a result of an increase in tax rates), then the minimum quarterly distribution amounts and the target distribution amounts may be adjusted (i.e., reduced) to reflect the impact of that law on us.
We rely on our information technology ("IT") systems and network infrastructure to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
We rely on our information technology ("IT") systems, network infrastructure and software as a service providers to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
As of February 22, 2024, the Topper Group beneficially owned approximately 38.6% of our outstanding common units. Our General Partner interest or the control of our General Partner may be transferred to a third party without unitholder consent.
As of February 21, 2025, the Topper Group beneficially owned approximately 38.6% of our outstanding common units. Our General Partner interest or the control of our General Partner may be transferred to a third party without unitholder consent.
If our Omnibus Agreement is terminated, we may suffer interruptions to our business or increased costs to replace these services. 27 The liability of the Topper Group and Couche-Tard is limited under our Omnibus Agreement and Circle K Omnibus Agreement and we have agreed to indemnify the Topper Group and Couche-Tard against certain liabilities, which may expose us to significant expenses.
If our Omnibus Agreement is terminated, we may suffer interruptions to our business or increased costs to replace these services. The liability of the Topper Group is limited under our Omnibus Agreement and we have agreed to indemnify the Topper Group against certain liabilities, which may expose us to significant expenses.
The General Partner may reduce cash available for distribution by establishing cash reserves for the proper conduct of our business, to comply with applicable law or agreements to which we are a party or to provide funds for future distributions to partners. These cash reserves will affect the amount of cash available for distribution to unitholders.
The General Partner may reduce cash available for distribution by establishing cash reserves for the proper conduct of our business, to comply with applicable law or agreements to which we are a party or to provide funds for future distributions to partners.
We may not be able to take any of these actions on satisfactory terms, or at all. A continued increase in interest rates may cause the market price of our common units to decline and a significant increase in interest rates could adversely affect our ability to service our indebtedness.
We may not be able to take any of these actions on satisfactory terms, or at all. An increase in interest rates may cause the market price of our common units to decline and a significant increase in or prolonged period of relatively higher interest rates could adversely affect our ability to service our indebtedness.
Global health concerns, similar to the COVID-19 Pandemic, could result in social, economic and labor instability that adversely affect employee, customer, vendor, distribution channel and other business partner relationships, and in so doing could adversely affect our business, financial condition, results of operations and cash flows.
Global health concerns could result in social, economic and labor instability that adversely affect employee, customer, vendor, distribution channel and other business partner relationships, and in so doing could adversely affect our business, financial condition, results of operations and cash flows.
Volatility in crude oil and wholesale motor fuel costs affect our business, financial condition and results of operations and our ability to make distributions to unitholders. For 2023, motor fuel revenues accounted for 90% of our total revenues and motor fuel gross profit accounted for 55% of total gross profit.
Volatility in crude oil and wholesale motor fuel costs affect our business, financial condition and results of operations and our ability to make distributions to unitholders. For 2024, motor fuel revenues accounted for 88% of our total revenues and motor fuel gross profit accounted for 54% of total gross profit.
Our Partnership Agreement does not limit the number of additional limited partner interests, including limited partner interests that rank senior to the common units that we may issue at any time without the approval of our unitholders.
We may issue unlimited additional units without unitholder approval, which would dilute existing unitholder ownership interests. Our Partnership Agreement does not limit the number of additional limited partner interests, including limited partner interests that rank senior to the common units that we may issue at any time without the approval of our unitholders.
Our General Partner may therefore cause us to incur indebtedness or other obligations that are nonrecourse to our General Partner. Our Partnership Agreement provides that any action taken by our General Partner to limit its liability is not a breach of our General Partner’s fiduciary duties, even if we could have obtained more favorable terms without the limitation on liability.
Our Partnership Agreement provides that any action taken by our General Partner to limit its liability is not a breach of our General Partner’s fiduciary duties, even if we could have obtained more favorable terms without the limitation on liability.
Our General Partner has limited liability regarding our obligations. Our General Partner has limited liability under contractual arrangements between us and third parties so that the counterparties to such arrangements have recourse only against our assets, and not against our General Partner or its assets.
Our General Partner has limited liability under contractual arrangements between us and third parties so that the counterparties to such arrangements have recourse only against our assets, and not against our General Partner or its assets. Our General Partner may therefore cause us to incur indebtedness or other obligations that are nonrecourse to our General Partner.
Conflicts of interest may arise in the future between us and our unitholders, on the one hand, and the affiliates of our General Partner and the Topper Group, on the other hand.
Conflicts of interest may arise in the future between us and our unitholders, on the one hand, and the affiliates of our General Partner and the Topper Group, on the other hand. In resolving these conflicts, the Topper Group may favor its own interests over the interests of our unitholders.
The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public or private markets, including sales by the Topper Group or other large holders. As of February 22, 2024, we had 37,983,154 common units outstanding.
The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public or private markets, including sales by the Topper Group or other large holders. As of February 21, 2025, we had 38,059,702 common units outstanding.
In 2023, our wholesale business purchased approximately 80% of its motor fuel from four suppliers and our retail business purchased approximately 49% of its merchandise from one supplier.
In 2024, our wholesale business purchased approximately 81% of its motor fuel from four suppliers and our retail business purchased approximately 50% of its merchandise from one supplier.
In addition, if we distribute a significant portion of our cash available for distribution, our growth may lag behind the growth of businesses that reinvest all of their cash to expand ongoing operations.
To the extent we are unable to finance growth externally, distributing a significant portion of our cash available for distribution may impair our ability to grow. 27 In addition, if we distribute a significant portion of our cash available for distribution, our growth may lag behind the growth of businesses that reinvest all of their cash to expand ongoing operations.
As such, we are subject to the possibility that we are unable to renew such leases or are only able to do so with increased costs or more onerous terms, which could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 25 We may not be able to lease sites we own or sub-lease sites we lease on favorable terms and any such failure could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
As such, we are subject to the possibility that we are unable to renew such leases or are only able to do so with increased costs or more onerous terms, which could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.
Pursuant to the Bipartisan Budget Act of 2015, if the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it (and some states) may assess and collect any resulting taxes (including any applicable interest and penalties) directly from us.
If the IRS makes audit adjustments to our income tax returns, it (and some states) may assess and collect any resulting taxes (including any applicable penalties and interest) directly from us.
Further, a penetration of our systems or a third-party’s systems or other misappropriation or misuse of personal information could subject us to business, regulatory, litigation and reputation risk, which could have a negative effect on our business, financial condition and results of operations.
Further, a penetration of our systems or a third-party’s systems or other misappropriation or misuse of personal information could subject us to business, regulatory, litigation and reputation risk, which could have a negative effect on our business, financial condition and results of operations. 23 Our debt levels and debt covenants may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.
The Omnibus Agreement and the Circle K Omnibus Agreement provide that we must indemnify the Topper Group and Couche-Tard for certain liabilities, including any liabilities incurred by the Topper Group and Couche-Tard attributable to the operating and administrative services provided to us under the agreement, other than liabilities resulting from the Topper Group’s or Couche-Tard’s bad faith, fraud, or willful misconduct, as applicable.
The Omnibus Agreement provides that we must indemnify the Topper Group for certain liabilities, including any liabilities incurred by the Topper Group attributable to the operating and administrative services provided to us under the agreement, other than liabilities resulting from the Topper Group’s bad faith, fraud, or willful misconduct, as applicable. Our General Partner has limited liability regarding our obligations.
We rely on DMI to indemnify us for any costs or expenses that we incur for environmental liabilities and third-party claims, regardless of when a claim is made, that are based on environmental conditions in existence prior to the closing of the IPO at our Predecessor Entity’s sites.
Certain third parties, including DMI, have indemnified us for any costs or expenses that we incur for environmental liabilities and third-party claims, regardless of when a claim is made, that are based on environmental conditions in existence prior to specified dates at certain of our sites.
Our unitholders may not receive cash distributions from us equal to their share of our taxable income or even equal to the actual tax due with respect to that income. 33 A unitholder’s share of our taxable income, and its relationship to any distributions we make, may be affected by a variety of factors, including our economic performance, which may be affected by numerous business, economic, regulatory, legislative, competitive and political uncertainties beyond our control, and certain transactions in which we might engage.
A unitholder’s share of our taxable income, and its relationship to any distributions we make, may be affected by a variety of factors, including our economic performance, which may be affected by numerous business, economic, regulatory, legislative, competitive and political uncertainties beyond our control, and certain transactions in which we might engage.
If we do not respond appropriately to a health crisis, or if customers do not perceive our response to be adequate for a particular region or our business as a whole, we could suffer damage to our reputation, which could materially adversely affect our business, financial condition and results of operations in the future.
If we do not respond appropriately to a health crisis, or if customers do not perceive our response to be adequate for a particular region or our business as a whole, we could suffer damage to our reputation.
If the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it (and some states) may assess and collect any resulting taxes (including any applicable penalties and interest) directly from us, in which case we may require our unitholders and former unitholders to reimburse us for such taxes (including any applicable penalties or interest) or, if we are required to bear such payment, our cash available for distribution to our unitholders might be substantially reduced.
It also could affect the amount of taxable gain from our unitholders’ sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to our unitholders’ U.S. federal income tax returns without the benefit of additional deductions. 35 If the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it (and some states) may assess and collect any resulting taxes (including any applicable penalties and interest) directly from us, in which case we may require our unitholders and former unitholders to reimburse us for such taxes (including any applicable penalties or interest) or, if we are required to bear such payment, our cash available for distribution to our unitholders might be substantially reduced.
In resolving these conflicts, the Topper Group may favor its own interests over the interests of our unitholders. 29 Holders of our common units have limited voting rights and are not entitled to elect our General Partner or the directors of the Board, which could reduce the price at which the common units will trade.
Holders of our common units have limited voting rights and are not entitled to elect our General Partner or the directors of the Board, which could reduce the price at which the common units will trade.
Liabilities to partners on account of their partnership interests and liabilities that are non-recourse to the Partnership are not counted for purposes of determining whether a distribution is permitted. 31 It may be determined that the right, or the exercise of the right by the limited partners as a group, to (i) remove or replace our General Partner, (ii) approve some amendments to our Partnership Agreement or (iii) take other action under our Partnership Agreement constitutes “participation in the control” of our business.
It may be determined that the right, or the exercise of the right by the limited partners as a group, to (i) remove or replace our General Partner, (ii) approve amendments to our Partnership Agreement or (iii) take other action under our Partnership Agreement constitutes “participation in the control” of our business.
Such indemnification survives the termination of the Circle K Omnibus Agreement. DMI is the beneficiary of escrow accounts created to cover the cost to remediate certain environmental liabilities. In addition, DMI maintains insurance policies to cover environmental liabilities and/or, where available, participates in state programs that may also assist in funding the costs of environmental liabilities.
These third parties may be the beneficiary of escrow accounts created to cover the cost to remediate certain environmental liabilities. In addition, these third parties may maintain insurance policies to cover environmental liabilities and/or, where available, participates in state programs that may also assist in funding the costs of environmental liabilities.
The U.S. also initiated tariffs on certain foreign goods and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods. In response, certain foreign governments imposed retaliatory tariffs on goods that their countries import from the U.S.
The U.S. government imposes tariffs on certain foreign goods from time to time and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods.
Additionally, any future issuance of additional common units or other securities, including to our affiliates, will not be subject to the NYSE’s shareholder approval rules that apply to a corporation. Accordingly, unitholders will not have the same protections afforded to corporations (other than “controlled companies”) that are subject to all of the NYSE corporate governance requirements.
Additionally, any future issuance of additional common units or other securities, including to our affiliates, will not be subject to the NYSE’s shareholder approval rules that apply to a corporation.
Under our Partnership Agreement and pursuant to a registration rights agreement that we have entered into, the Topper Group has registration rights relating to the offer and sale of any units that it holds, subject to certain limitations. 30 We may issue unlimited additional units without unitholder approval, which would dilute existing unitholder ownership interests.
In addition, we have agreed to provide registration rights to the Topper Group. Under our Partnership Agreement and pursuant to a registration rights agreement that we have entered into, the Topper Group has registration rights relating to the offer and sale of any units that it holds, subject to certain limitations.
In addition, we expect to rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures. To the extent we are unable to finance growth externally, distributing a significant portion of our cash available for distribution may impair our ability to grow.
In addition, we expect to rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures.
To the extent escrow accounts, insurance and/or payments from DMI are not sufficient to cover any such costs or expenses, our business, liquidity and results of operations could be adversely affected.
There are certain sites that were acquired by us with existing environmental liabilities that are not covered by escrow accounts, state funds or insurance policies. To the extent escrow accounts, insurance and/or payments from DMI and other third parties are not sufficient to cover any such costs or expenses, our business, liquidity and results of operations could be adversely affected.
Tax Risks Our tax treatment depends in large part on our status as a partnership for U.S. federal income tax purposes and our otherwise not being subject to a material amount of U.S. federal, state and local income or franchise tax.
Accordingly, unitholders will not have the same protections afforded to corporations (other than “controlled companies”) that are subject to all of the NYSE corporate governance requirements. 31 Tax Risks Our tax treatment depends in large part on our status as a partnership for U.S. federal income tax purposes and our otherwise not being subject to a material amount of U.S. federal, state and local income or franchise tax.
The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.
An individual unitholder's share of dividend and interest income from C corporation subsidiaries would constitute portfolio income that could not be offset by the unitholder's share of our other losses or deductions. 32 The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.
If the IRS were to successfully challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders. 35 If a unitholder lends its common units to a short seller to cover a short sale of common units, the unitholder may be considered to have disposed of those common units for U.S. federal income tax purposes.
If a unitholder lends its common units to a short seller to cover a short sale of common units, the unitholder may be considered to have disposed of those common units for U.S. federal income tax purposes.
We cannot provide any assurance that the margins on our wholesale distribution of motor fuels to these sites will be adequate to offset unfavorable lease terms. The occurrence of these events could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.
We cannot provide any assurance that the margins on our wholesale distribution of motor fuels to these sites will be adequate to offset unfavorable lease terms.
Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units.
These cash reserves will affect the amount of cash available for distribution to unitholders. 30 Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units.
Tax gain or loss on the disposition of our common units could be more or less than expected. If a unitholder sells common units, the unitholder will recognize a gain or loss equal to the difference between the amount realized and that unitholder’s tax basis in those common units.
If a unitholder sells common units, the unitholder will recognize a gain or loss equal to the difference between the amount realized and that unitholder’s tax basis in those common units. Distributions per common unit in excess of a unitholder’s allocable share of our net taxable income result in a decrease in that unitholder’s tax basis in its common units.
In particular, weakening economic conditions may result in decreases in miles driven and discretionary consumer spending and travel, which affect spending on motor fuel and convenience items.
In particular, weakening economic conditions may result in decreases in miles driven and discretionary consumer spending and travel, which affect spending on motor fuel and convenience merchandise. In addition, changes in the types of products and services demanded by consumers may adversely affect our sales and gross profit.
Our debt levels and debt covenants may limit our flexibility in obtaining additional financing and in pursuing other business opportunities. We have a significant amount of debt. As of December 31, 2023, we had $756 million of total debt and $164.5 million of availability under our revolving CAPL Credit Facility.
We have a significant amount of debt. As of December 31, 2024, we had $767.5 million of total debt and $68.9 million of availability under our revolving CAPL Credit Facility.
The Circle K Omnibus Agreement provides that DMI must indemnify us for any costs or expenses that we incur for environmental liabilities and third-party claims, regardless of when a claim is made, that are based on environmental conditions in existence prior to the closing of the IPO at our Predecessor Entity’s sites.
The occurrence of these events could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 25 We rely on DMI and other third parties to indemnify us for any costs or expenses that we incur for environmental liabilities and third-party claims, regardless of when a claim is made, that are based on environmental conditions in existence prior to specified dates at certain of our sites.
Additionally, negative publicity or perception surrounding motor fuel suppliers could adversely affect reputation and brand image, which may negatively affect our motor fuel sales and gross profit. Similarly, advanced technology and increased use of electric or hybrid cars or cars using alternative fuels would reduce demand for motor fuel.
Similarly, advanced technology and increased use of electric or hybrid cars or cars using alternative fuels would reduce demand for motor fuel.
Treasury Regulations allow a similar monthly convention, but such regulations do not specifically authorize the use of the proration method we have adopted.
Treasury Regulations allow a similar monthly convention, but such regulations do not specifically authorize the use of the proration method we have adopted. If the IRS were to successfully challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.
In addition, changes in the types of products and services demanded by consumers or labor strikes in the construction industry or other industries that employ customers who visit sites, may adversely affect our sales and gross profit.
Further, labor strikes in the construction industry or other industries that employ customers who visit sites may adversely affect our sales and gross profit. Additionally, negative publicity or perception surrounding motor fuel suppliers could adversely affect reputation and brand image, which may negatively affect our motor fuel sales and gross profit.
To the extent escrow accounts, insurance and/or payments from Circle K are not sufficient to cover any such costs or expenses, our business, financial condition and results of operations and ability to make distributions to unitholders could be adversely affected.
We may not be able to lease sites we own or sub-lease sites we lease on favorable terms and any such failure could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
Under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income, and in the case of taxable years beginning before January 1, 2022, any deduction allowable for depreciation, amortization or depletion.
Our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income,” which is computed without regard to any business interest expense or business interest income. 33 Tax gain or loss on the disposition of our common units could be more or less than expected.
Removed
The previous U.S. presidential administration indicated its intent to adopt a new approach to trade policy. For example, in 2018, the U.S. government reached a new trade agreement with the Canadian and Mexican governments that replaced the North America Free Trade Agreement with the United States-Mexico-Canada Agreement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+3 added−2 removed3 unchanged
Biggest changeTo protect our information systems from cybersecurity threats, we seek to use best-in-class security tools that help prevent, identify, escalate, investigate, resolve and recover from identified security incidents in a timely manner. These include, but are not limited to, internal reporting and monitoring and detection tools.
Biggest changeOur cybersecurity risk management program is guided by the National Institute of Standards and Technology Cybersecurity Framework. To protect our information systems from cybersecurity threats, we seek to use best-in-class security tools that help prevent, identify, escalate, investigate, resolve and recover from identified security incidents in a timely manner.
ITEM 1C. CYBERSECURITY We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws.
ITEM 1C. CYBERSECURITY We recognize the importance of assessing, identifying, managing and mitigating material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to Topper Group employees or customers and violation of data privacy or security laws.
Our systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of personal information (of third parties and employees) and other data, confidential information or intellectual property.
Our systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of personal information (of third parties and Topper Group employees) and other data, confidential information or intellectual property.
For further information on cybersecurity risks and potential related impacts on us, see "Risk Factors – Our business and our reputation could be adversely affected by the failure to protect sensitive customer, employee or vendor data, whether as a result of cyber security attacks or otherwise, or to comply with applicable regulations relating to data security and privacy." The Director of Information Technology is responsible for overseeing the information security program as well as members of the Information Technology department that execute our program with oversight by members of our senior leadership team.
For further information on cybersecurity risks and potential related impacts on us, see "Risk Factors – Our business and our reputation could be adversely affected by the failure to protect sensitive customer, Topper Group employee or the Partnership's vendor data, whether as a result of cyber security attacks or otherwise, or to comply with applicable regulations relating to data security and privacy." The Director of Technology Services is responsible for overseeing the information security program as well as members of the Information Technology department that execute our program with oversight by members of our senior leadership team.
To date, these incidents have not had a material impact on our service, systems or business and we do not believe cybersecurity risks from these prior incidents are reasonably likely to materially affect our operations.
To date, these incidents have no t had a material impact on our service, systems or business and we do not believe cybersecurity risks from these prior incidents are reasonably likely to materially affect our operations.
These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan, and report to the Audit Committee on any appropriate items.
These individuals are informed about, and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan, and report to the Board on any appropriate items.
Substantially all our locations are branded fuel locations for which sensitive debit and credit card transactions for fuel or merchandise products or services do not pass through our networks; rather, such information passes through the branded fuel supplier’s (or its service providers’) networks.
Substantially all our locations are branded fuel locations for which sensitive data related to debit and credit card transactions for fuel or merchandise products or services does not pass through our networks; rather, such information passes through the branded fuel supplier’s (or its service providers’) networks.
We also maintain a third party security operations service to identify, prioritize, assess, mitigate and remediate risks. We rely on the third parties we use to implement security programs commensurate with their risk, and we cannot ensure in all circumstances that their efforts will be successful.
These include, but are not limited to, internal reporting and monitoring and detection tools. We also maintain a third party security operations service to identify, prioritize, assess, mitigate and remediate risks. We rely on the third parties we use to implement security programs commensurate with their risk, and we cannot ensure in all circumstances that their efforts will be successful.
The Audit Committee of the Board oversees our cybersecurity risk and receives regular reports from our Director of Information Technology on various cybersecurity matters, including risk assessments, mitigation strategies, areas of emerging risks, incidents and industry trends, and other areas of importance. 37
The Board oversees our annual enterprise risk assessment, where we assess key risks within the company, including security and technology risks and cybersecurity threats. The Board receives regular reports from our Director of Technology Services on various cybersecurity matters, including risk assessments, mitigation strategies, areas of emerging risks, incidents and industry trends, and other areas of importance.
We have an enterprise-wide information security platform, which is part of our enterprise risk assessment process and designed to protect, detect, respond to and manage reasonably foreseeable cybersecurity risks and threats.
However, in the ordinary course of our business, we collect and store sensitive data of certain of our dealer and tenant customers, suppliers and other business partners. We have an enterprise-wide information security platform, which is part of our enterprise risk assessment process and designed to protect, detect, respond to and manage reasonably foreseeable cybersecurity risks and threats.
Removed
We also provide employee training to support identification of and how to respond to cyber attacks. The results of these assessments are reported to the Audit Committee of the Board.
Added
We conduct “tabletop” exercises during which we simulate cybersecurity incidents to help us prepare to respond to a cybersecurity incident and to identify areas for potential improvement. We also provide employee training to support identification of and how to respond to cyber attacks.
Removed
The Board oversees our annual enterprise risk assessment, where we assess key risks within the company, including security and technology risks and cybersecurity threats.
Added
The results of these assessments are reported to the Board. 36 We also have implemented an incident response plan that is designed to facilitate our response to cybersecurity incidents and escalation of cybersecurity incidents deemed to have a moderate or higher business impact, even if immaterial to us, to our executive officers, other members of our senior management team and other internal stakeholders.
Added
This plan is designed to provide our executive officers and other members of our senior management team with the information needed to assess the materiality of a cybersecurity incident and the need for public disclosure.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur site count includes those involved in our wholesale and retail segments.
Biggest changeWe also distribute fuel to sites located in South Dakota and Vermont. Our site count includes those involved in our retail and wholesale segments. As of December 31, 2024, our wholesale and retail segments operate in 33 and 27 states, respectively.
Our principal executive offices are in Allentown, Pennsylvania in approximately 37,000 square feet of leased office space.
Our principal executive offices are in Allentown, Pennsylvania in approximately 37,000 square feet of leased office space. 37
The following table provides a summary of our sites acquired, changes between customer groups or sold during 2023: Lessee Dealers Company Operated Commission Agents Total Number at beginning of year 691 255 185 1,131 Acquired — 2 1 3 Changes between customer groups (43 ) 39 4 — Divested (16 ) — (2 ) (18 ) Number at end of year (a) 632 296 188 1,116 (a) Excludes independent commission sites and includes sites where we collect rent but to which we do not distribute motor fuel as well as closed sites.
The following table provides a summary of our sites acquired, changes between customer groups or sold during 2024: Lessee Dealers Company Operated Commission Agents Total Number at beginning of year 632 296 188 1,116 Acquired 1 — — 1 Changes between customer groups (110 ) 72 38 — Divested (29 ) (3 ) (5 ) (37 ) Number at end of year (a) 494 365 221 1,080 (a) Excludes independent commission sites and includes sites where we collect rent but to which we do not distribute motor fuel as well as closed sites.
PROPERTIES The following table shows the aggregate number of sites we owned or leased by customer group at December 31, 2023: Owned Sites Leased Sites Total Sites Lessee dealers 359 273 632 Company operated 169 127 296 Commission agents 146 42 188 Total 674 442 1,116 We conduct business at sites located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, West Virginia, Wisconsin and Vermont.
PROPERTIES The following table shows the aggregate number of sites we owned or leased by customer group at December 31, 2024: Owned Sites Leased Sites Total Sites Lessee dealers 267 227 494 Company operated 213 152 365 Commission agents 166 55 221 Total 646 434 1,080 We own or lease properties located in Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNone of these proceedings, separately or in the aggregate, are expected to have a material adverse effect on our financial position, results of operations or cash flows.
Biggest changeWe believe that it is not reasonably possible that these proceedings, separately or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed6 unchanged
Biggest changeThe factors that we believe will be the primary drivers of our cash generated from operations are changes in demand for motor fuels, the number of sites to which we distribute motor fuels, the margin per gallon we are able to generate at such sites and the profitability of sites we own and lease, including our company operated sites.
Biggest changeThe factors that we believe will be the primary drivers of our cash generated from operations are changes in demand for motor fuels, the number of sites to which we distribute motor fuels, the margin per gallon we are able to generate at such sites, our merchandise sales at our company operated sites and the profitability of sites we own and lease, including our company operated sites.
Our cash distribution policy, established by our General Partner, is to distribute each quarter an amount at least equal to the minimum quarterly distribution of $0.4375 per unit on all units ($1.75 per unit on an annualized basis). The distribution declared by the Board on January 22, 2024 was $0.5250 per unit (or $2.10 per unit on an annualized basis).
Our cash distribution policy, established by our General Partner, is to distribute each quarter an amount at least equal to the minimum quarterly distribution of $0.4375 per unit on all units ($1.75 per unit on an annualized basis). The distribution declared by the Board on January 22, 2025 was $0.5250 per unit (or $2.10 per unit on an annualized basis).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of February 22, 2024, we had 37,983,154 common units outstanding, held by approximately 29 holders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES As of February 21, 2025, we had 38,059,702 common units outstanding, held by approximately 29 holders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

64 edited+15 added−42 removed57 unchanged
Biggest changeA material decrease in our cash flows would likely produce an adverse effect on our borrowing capacity as well as our ability to issue additional equity and/or debt securities and/or maintain or increase distributions to unitholders. 48 Cash Flows The following table summarizes cash flow activity (in thousands): Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 117,083 $ 161,317 $ 95,468 Net cash used in investing activities (28,181 ) (46,398 ) (298,690 ) Net cash (used in) provided by financing activities (99,966 ) (106,513 ) 210,357 Operating Activities Net cash provided by operating activities decreased $44 million in 2023 compared to 2022 primarily attributable to lower fuel margins in 2023 and an increase in interest expense driven by higher interest rates.
Biggest changeCash Flows The following table summarizes cash flow activity (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 87,782 $ 117,083 $ 161,317 Net cash used in investing activities (16,309 ) (28,181 ) (46,398 ) Net cash used in financing activities (73,082 ) (99,966 ) (106,513 ) Operating Activities Net cash provided by operating activities decreased $29 million primarily attributable to weaker results in the first and fourth quarters of 2024 relative to the same periods of 2023, as well as a $10 million increase in cash paid for interest expense driven by the maturity of three of our most favorable interest rate swap contracts on April 1, 2024.
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. 47 The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S.
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. The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S.
Historically, sales volumes have been highest in the second and third quarters (during the summer months) and lowest during the winter months in the first and fourth quarters. Impact of Inflation Inflation affects our financial performance by increasing certain components of cost of goods sold, such as fuel, merchandise, and credit card fees.
Historically, sales volumes have been highest in the second and third quarters (during the summer months) and lowest during the winter months in the first and fourth quarters. 40 Impact of Inflation Inflation affects our financial performance by increasing certain components of cost of goods sold, such as fuel, merchandise, and credit card fees.
The judgments made in the determination of the estimated fair value assigned to the assets acquired, the liabilities assumed and any noncontrolling interest in the investee, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financial statements in periods after acquisition, such as through depreciation and amortization.
The judgments made in the determination of the estimated fair value assigned to the assets acquired, the liabilities assumed and any noncontrolling interest in the investee, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the consolidated financial statements in periods after acquisition, such as through depreciation and amortization.
For approximately 60% of gallons sold, we receive a per gallon rate equal to the posted rack price, less any applicable discounts, plus transportation costs, taxes and a fixed rate per gallon of motor fuel. The remaining gallons are either retail sales or wholesale DTW contracts that provide for variable, market-based pricing.
For approximately 55% of gallons sold, we receive a per gallon rate equal to the posted rack price, less any applicable discounts, plus transportation costs, taxes and a fixed rate per gallon of motor fuel. The remaining gallons are either retail sales or wholesale DTW contracts that provide for variable, market-based pricing.
If the estimated fair value of a reporting unit is less than the carrying value, an impairment charge is recognized for the deficit up to the amount of goodwill recorded. At both December 31, 2023 and 2022, we had goodwill totaling $99.4 million.
If the estimated fair value of a reporting unit is less than the carrying value, an impairment charge is recognized for the deficit up to the amount of goodwill recorded. At both December 31, 2024 and 2023, we had goodwill totaling $99.4 million.
(b) The decrease in the independent dealer site count from December 31, 2022 to December 31, 2023 was primarily attributable to the net loss of contracts, partially offset by divestitures of certain lessee dealer sites but with continued fuel supply.
(b) The decrease in the independent dealer site count from December 31, 2023 to December 31, 2024 was primarily attributable to the net loss of contracts, partially offset by divestitures of certain lessee dealer sites but with continued fuel supply.
Investing Activities In 2023, we incurred capital expenditures of $35 million driven by image upgrades funded primarily through incentives from our fuel suppliers, rebranding of certain sites, site upgrades, including store remodels and site purchases. We received $6 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort.
We received $35 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort. In 2023, we incurred capital expenditures of $35 million driven by image upgrades funded primarily through incentives from our fuel suppliers, rebranding of certain sites, site upgrades, including store remodels and site purchases.
Contractual Obligations, Contingencies, Off Balance Sheet Arrangements and Concentration Risks Our contractual obligations primarily include payments of debt and finance lease obligations and related interest payments and operating lease obligations. 50 As discussed previously, our CAPL Credit Facility matures March 31, 2028. In addition, we have finance lease obligations that expire in 2027 and operating leases that expire through 2041.
Contractual Obligations, Contingencies, Off Balance Sheet Arrangements and Concentration Risks Our contractual obligations primarily include payments of debt and finance lease obligations and related interest payments and operating lease obligations. As discussed previously, our CAPL Credit Facility matures March 31, 2028. In addition, we have finance lease obligations that expire in 2027 and operating leases that expire through 2044.
Asset acquisitions are generally accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis.
Asset acquisitions are generally accounted for by allocating the cost of the acquisition, including acquisition costs, to the individual assets acquired and liabilities assumed on a relative fair value basis.
Results of Operations We have omitted discussion of the earliest of the three years covered by our consolidated financial statements presented in this Annual Report because that disclosure was already included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 28, 2023.
Results of Operations We have omitted discussion of the earliest of the three years covered by our consolidated financial statements presented in this Annual Report because that disclosure was already included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 26, 2024.
Acquisition and Financing Activity Our results of operations and financial condition are also impacted by our acquisition and financing activities as summarized below. 2021 • From late June 2021 through December 31, 2021, we closed on the purchase of 103 sites of our 106-site acquisition from 7-Eleven. 2022 • In February 2022, we closed on the final three properties of our 106-site acquisition from 7-Eleven. 42 • In March 2022, Holdings issued $25 million in preferred membership interests. • On November 9, 2022, we closed on the acquisition of assets from CSS. 2023 • On March 31, 2023, we amended and restated the CAPL Credit Facility and terminated the JKM Credit Facility.
Acquisition and Financing Activity Our results of operations and financial condition are also impacted by our acquisition and financing activities as summarized below. 2022 • In February 2022, we closed on the final three properties of our 106-site acquisition from 7-Eleven. • In March 2022, Holdings issued $25 million in preferred membership interests. • On November 9, 2022, we closed on the acquisition of assets from CSS. 2023 • On March 31, 2023, we amended and restated the CAPL Credit Facility and terminated the JKM Credit Facility.
Segment Results We present the results of operations of our segments consistent with how our management views the business. 44 Wholesale The following table highlights the results of operations and certain operating metrics of our wholesale segment.
Segment Results We present the results of operations of our segments consistent with how our management views the business. 43 Retail The following table highlights the results of operations and certain operating metrics of our retail segment.
Inflation also affects certain operating expenses, such as labor costs, certain leases, and general and administrative expenses. While our wholesale segment benefits from higher terms discounts as a result of higher fuel costs, inflation could and recently has negatively impacted our cost of goods sold and operating expenses.
Inflation also affects certain operating expenses, such as labor costs, certain leases, and general and administrative expenses. While our wholesale segment benefits from higher terms discounts as a result of higher fuel costs, inflation can negatively impact our cost of goods sold and operating expenses.
The Amendment, among other things, modifies the definition of Consolidated EBITDA contained in the CAPL Credit Facility to permit the full addback of certain lease termination expenses incurred in connection with the Applegreen Acquisition and the addback of other lease termination expenses incurred in connection with future transactions, subject to certain terms and conditions.
The Amendment, among other things, modified the definition of Consolidated EBITDA contained in the Credit Agreement to permit the full addback of certain lease termination expenses incurred in connection with the Applegreen Acquisition and the addback of other lease termination expenses incurred in connection with other transactions, subject to certain terms and conditions.
Taking the interest rate swap contracts into account, our effective interest rate on our CAPL Credit Facility at December 31, 2023 was 4.9% (our applicable margin was 2.25% as of December 31, 2023). Letters of credit outstanding under our CAPL Credit Facility at December 31, 2023 totaled $4.5 million.
Taking the interest rate swap contracts into account, our effective interest rate on our CAPL Credit Facility at December 31, 2024 was 6.2% (our applicable margin was 2.25% as of December 31, 2024). Letters of credit outstanding under our CAPL Credit Facility at December 31, 2024 totaled $5.3 million.
The income statement includes the results of operations for each acquisition from their respective date of acquisition. 52 Whether we account for a transaction as an asset acquisition or a business combination, determining the fair value of assets and liabilities requires management’s judgment, the utilization of independent valuation experts and involves the use of significant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items.
Whether we account for a transaction as an asset acquisition or a business combination, determining the fair value of assets and liabilities requires management’s judgment, the utilization of independent valuation experts and involves the use of significant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among other items.
We received $13 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort. Financing Activities In 2023, we paid $80 million in distributions to our unitholders. We made net repayments of $9 million on our credit facility.
We received $6 million in proceeds primarily from the sale of sites in connection with our real estate rationalization effort. Financing Activities In 2024, we paid $80 million in distributions to our unitholders. We made net borrowings of $12 million on our credit facility. In 2023, we paid $80 million in distributions to our unitholders.
For information on our significant accounting policies, see Note 2 to the financial statements. Critical Accounting Policies and Estimates We prepare our financial statements in conformity with U.S. GAAP.
New Accounting Policies No new accounting guidance significantly impacted our business in 2024. For information on our significant accounting policies, see Note 2 to the financial statements. 49 Critical Accounting Policies and Estimates We prepare our financial statements in conformity with U.S. GAAP.
The Partnership will also acquire for cash the inventory at the locations. The terms of the Partnership’s existing leases with Applegreen Midwest, LLC and Applegreen Florida, LLC can be extended to 2049 and 2048, respectively, including all renewal options.
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.
GAAP financial measure, for each of the periods indicated (in thousands, except for the Distribution Coverage Ratio): Year Ended December 31, 2023 2022 2021 Net income $ 42,592 $ 63,696 $ 21,654 Interest expense 43,743 32,100 18,244 Income tax expense (benefit) 2,525 714 (3,225 ) Depreciation, amortization and accretion expense 77,158 80,625 77,852 EBITDA 166,018 177,135 114,525 Equity-based employee and director compensation expense 3,031 2,294 1,311 Gain on dispositions and lease terminations, net (a) (4,737 ) (1,143 ) (2,037 ) Acquisition-related costs (b) 1,460 1,508 9,461 Adjusted EBITDA 165,772 179,794 123,260 Cash interest expense (40,456 ) (29,312 ) (16,382 ) Sustaining capital expenditures (c) (7,654 ) (7,164 ) (4,161 ) Current income tax expense (d) (953 ) (2,466 ) (548 ) Distributable Cash Flow $ 116,709 $ 140,852 $ 102,169 Distributions paid on common units $ 79,712 $ 79,625 $ 79,552 Distribution Coverage Ratio 1.46x 1.77x 1.28x (a) See "Results of Operations–Gain on Dispositions and Lease Terminations, net." (b) Relates to certain acquisition-related costs, such as legal and other professional fees, separation benefit costs and purchase accounting adjustments associated with recent acquisitions.
GAAP financial measure, for each of the periods indicated (in thousands, except for the Distribution Coverage Ratio): Year Ended December 31, 2024 2023 2022 Net income $ 22,453 $ 42,592 $ 63,696 Interest expense 52,320 43,743 32,100 Income tax expense (benefit) (3,433 ) 2,525 714 Depreciation, amortization and accretion expense 75,983 77,158 80,625 EBITDA 147,323 166,018 177,135 Equity-based employee and director compensation expense 1,508 3,031 2,294 Gain on dispositions and lease terminations, net (a) (4,966 ) (4,737 ) (1,143 ) Acquisition-related costs (b) 1,674 1,460 1,508 Adjusted EBITDA 145,539 165,772 179,794 Cash interest expense (50,384 ) (40,456 ) (29,312 ) Sustaining capital expenditures (c) (8,287 ) (7,654 ) (7,164 ) Current income tax expense (d) (864 ) (953 ) (2,466 ) Distributable Cash Flow $ 86,004 $ 116,709 $ 140,852 Distributions paid on common units $ 79,854 $ 79,712 $ 79,625 Distribution Coverage Ratio 1.08x 1.46x 1.77x (a) See "Results of Operations–Gain (loss) on dispositions and Lease Terminations, net." (b) Relates to certain acquisition-related costs, such as legal and other professional fees, separation benefit costs and purchase accounting adjustments associated with recent acquisitions.
A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors or other owners, members or participants.
We did not close any major acquisitions in 2024. 50 A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors or other owners, members or participants.
Examples of sustaining capital expenditures are those made to maintain existing contract volumes, including payments to renew existing distribution contracts, or to maintain our sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business. (d) Excludes income tax incurred on the sale of sites.
Examples of sustaining capital expenditures are those made to maintain existing contract volumes or to maintain our sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.
Capital Expenditures We make investments to expand, upgrade and enhance existing assets. We categorize our capital requirements as either sustaining capital expenditures, growth capital expenditures or acquisition capital expenditures. Sustaining capital expenditures are those capital expenditures required to maintain our long-term operating income or operating capacity.
We categorize our capital requirements as either sustaining capital expenditures, growth capital expenditures or acquisition capital expenditures. Sustaining capital expenditures are those capital expenditures required to maintain our long-term operating income or operating capacity.
The narrative following these tables provides an analysis of the results of operations of that segment (thousands of dollars, except for the number of distribution sites and per gallon amounts): Year Ended December 31, 2023 2022 2021 Gross profit: Motor fuel gross profit $ 72,680 $ 73,378 $ 70,221 Rent gross profit 50,873 50,852 50,736 Other revenues 5,248 6,509 3,721 Total gross profit 128,801 130,739 124,678 Operating expenses (37,988 ) (37,072 ) (37,906 ) Operating income $ 90,813 $ 93,667 $ 86,772 Motor fuel distribution sites (end of period): (a) Independent dealers (b) 632 663 666 Lessee dealers (c) 569 619 637 Total motor fuel distribution sites 1,201 1,282 1,303 Average motor fuel distribution sites 1,235 1,286 1,325 Volume of gallons distributed 842,636 844,486 931,288 Margin per gallon $ 0.086 $ 0.087 $ 0.075 (a) In addition, we distributed motor fuel to sub-wholesalers who distributed to additional sites.
The narrative following these tables provides an analysis of the results of operations of that segment (thousands of dollars, except for the number of distribution sites and per gallon amounts): Year Ended December 31, 2024 2023 2022 Gross profit: Motor fuel gross profit $ 62,892 $ 72,680 $ 73,378 Rent gross profit 41,122 50,873 50,852 Other revenues 4,601 5,248 6,509 Total gross profit 108,615 128,801 130,739 Operating expenses (31,754 ) (37,988 ) (37,072 ) Operating income $ 76,861 $ 90,813 $ 93,667 Motor fuel distribution sites (end of period): (a) Independent dealers (b) 607 632 663 Lessee dealers (c) 434 569 619 Total motor fuel distribution sites 1,041 1,201 1,282 Average motor fuel distribution sites 1,093 1,235 1,286 Volume of gallons distributed 743,535 842,636 844,486 Margin per gallon $ 0.085 $ 0.086 $ 0.087 (a) In addition, we distributed motor fuel to sub-wholesalers who distributed to additional sites.
(c) The decrease in the lessee dealer site count from December 31, 2022 to December 31, 2023 was primarily attributable to the conversion of certain lessee dealer sites to company operated sites, largely in the second quarter of 2023, the conversion of certain lessee dealer sites to commission sites, largely in the fourth quarter of 2023, and our real estate rationalization effort.
(c) The decrease in the lessee dealer site count from December 31, 2023 to December 31, 2024 was primarily attributable to the conversion of certain lessee dealer sites to company operated and commission agent sites, including through the Applegreen Acquisition, and our real estate rationalization effort.
The narrative following these tables provides an analysis of the results of operations of that segment (in thousands, except for the number of retail sites and per gallon amounts): Year Ended December 31, 2023 2022 2021 Gross profit: Motor fuel $ 138,729 $ 146,546 $ 79,318 Merchandise 89,847 76,135 55,117 Rent 9,120 9,797 8,681 Other revenue 15,771 12,554 9,159 Total gross profit 253,467 245,032 152,275 Operating expenses (156,758 ) (137,636 ) (96,173 ) Operating income $ 96,709 $ 107,396 $ 56,102 Retail sites (end of period): Company operated retail sites (a) 296 255 252 Commission agents (b) 199 200 198 Total retail segment sites 495 455 450 Total retail segment statistics: Volume of gallons sold 506,535 496,634 403,850 Average retail fuel sites 476 452 389 Margin per gallon, before deducting credit card fees and commissions $ 0.369 $ 0.396 $ 0.280 Company operated site statistics: Average retail fuel sites 283 253 187 Margin per gallon, before deducting credit card fees $ 0.400 $ 0.426 $ 0.309 Merchandise gross profit percentage 28.4 % 27.2 % 26.4 % Commission site statistics: Average retail fuel sites 193 199 202 Margin per gallon, before deducting credit card fees and commissions $ 0.306 $ 0.336 $ 0.238 (a) The increase in the company operated site count from December 31, 2022 to December 31, 2023 was primarily attributable to the conversion of certain lessee dealer and commission agent sites to company operated sites, largely during the second quarter of 2023.
The narrative following these tables provides an analysis of the results of operations of that segment (in thousands, except for the number of retail sites and per gallon amounts): Year Ended December 31, 2024 2023 2022 Gross profit: Motor fuel $ 150,916 $ 138,729 $ 146,546 Merchandise 109,910 89,847 76,135 Rent 9,411 9,120 9,797 Other revenue 19,467 15,771 12,554 Total gross profit 289,704 253,467 245,032 Operating expenses (196,232 ) (156,758 ) (137,636 ) Operating income $ 93,472 $ 96,709 $ 107,396 Retail sites (end of period): Company operated retail sites (a) 365 296 255 Commission agents (b) 229 199 200 Total retail segment sites 594 495 455 Total retail segment statistics: Volume of gallons sold 554,490 506,535 496,634 Average retail fuel sites 569 476 452 Margin per gallon, before deducting credit card fees and commissions $ 0.368 $ 0.369 $ 0.396 Company operated site statistics: Average retail fuel sites 354 283 253 Margin per gallon, before deducting credit card fees $ 0.394 $ 0.400 $ 0.426 Merchandise gross profit percentage 28.2 % 28.4 % 27.2 % Commission site statistics: Average retail fuel sites 215 193 199 Margin per gallon, before deducting credit card fees and commissions $ 0.309 $ 0.306 $ 0.336 (a) The increase in the company operated site count from December 31, 2023 to December 31, 2024 was primarily attributable to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Whether we will be able to execute acquisitions will depend on market conditions, availability of suitable acquisition targets at attractive terms, acquisition-related compliance with customary regulatory requirements, and our ability to finance such acquisitions on favorable terms and in compliance with our debt covenant restrictions. New Accounting Policies No new accounting guidance significantly impacted our business in 2023.
Additionally, we will pursue acquisition targets that fit into our strategy. Whether we will be able to execute acquisitions will depend on market conditions, availability of suitable acquisition targets at attractive terms, acquisition-related compliance with customary regulatory requirements, and our ability to finance such acquisitions on favorable terms and in compliance with our debt covenant restrictions.
This guidance applies to over 90% of our revenues as the only primary revenue stream outside the scope of this guidance is rental income. 51 Revenues from the delivery of motor fuel are recorded at the time of delivery to our customers, by which time the price is fixed, title to the products has transferred and payment has either been received or collection is reasonably assured, net of applicable discounts and allowances.
Revenues from the delivery of motor fuel are recorded at the time of delivery to our customers, by which time the price is fixed, title to the products has transferred and payment has either been received or collection is reasonably assured, net of applicable discounts and allowances.
All other terms and conditions of the CAPL Credit Facility remain in full force and effect. 41 Significant Factors Affecting our Profitability The Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross Profit The prices paid to our motor fuel suppliers for wholesale motor fuel (which affects our cost of sales) are highly correlated to the price of crude oil.
Significant Factors Affecting our Profitability The Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross Profit The prices paid to our motor fuel suppliers for wholesale motor fuel (which affects our cost of sales) are highly correlated to the price of crude oil.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Gross profit decreased $1.9 million (1%) and operating income decreased $2.9 million (3%).
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Gross profit increased $36 million (14%) and operating income decreased $3.2 million (3%).
If this threshold is met, the set is not a business. If this threshold is not met, we determine whether the set meets the definition of a business. We did not close any major acquisitions in 2023.
If this threshold is met, the set is not a business. If this threshold is not met, we determine whether the set meets the definition of a business.
The purchase price is recorded for assets acquired and liabilities assumed based on fair value. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired is recorded as goodwill.
The purchase price is recorded for assets acquired and liabilities assumed based on fair value. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired is recorded as goodwill. The income statement includes the results of operations for each acquisition from their respective date of acquisition.
Our consolidated statements of income are as follows (in thousands): Year Ended December 31, 2023 2022 2021 Operating revenues $ 4,386,263 $ 4,967,424 $ 3,579,259 Cost of sales 4,003,995 4,591,653 3,302,306 Gross profit 382,268 375,771 276,953 Operating expenses: Operating expenses 194,746 174,708 134,079 General and administrative expenses 27,031 25,575 30,930 Depreciation, amortization and accretion expense 77,158 80,625 77,852 Total operating expenses 298,935 280,908 242,861 Gain on dispositions and lease terminations, net 4,737 1,143 2,037 Operating income 88,070 96,006 36,129 Other income, net 790 504 544 Interest expense (43,743 ) (32,100 ) (18,244 ) Income before income taxes 45,117 64,410 18,429 Income tax expense (benefit) 2,525 714 (3,225 ) Net income 42,592 63,696 21,654 Accretion of preferred membership interests 2,488 1,726 — Net income available to limited partners $ 40,104 $ 61,970 $ 21,654 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Consolidated Results Operating revenues decreased $581 million (12%) and operating income decreased $7.9 million (8%).
Our consolidated statements of income are as follows (in thousands): Year Ended December 31, 2024 2023 2022 Operating revenues $ 4,098,288 $ 4,386,263 $ 4,967,424 Cost of sales 3,699,969 4,003,995 4,591,653 Gross profit 398,319 382,268 375,771 Operating expenses: Operating expenses 227,986 194,746 174,708 General and administrative expenses 28,756 27,031 25,575 Depreciation, amortization and accretion expense 75,983 77,158 80,625 Total operating expenses 332,725 298,935 280,908 Gain on dispositions and lease terminations, net 4,966 4,737 1,143 Operating income 70,560 88,070 96,006 Other income, net 780 790 504 Interest expense (52,320 ) (43,743 ) (32,100 ) Income before income taxes 19,020 45,117 64,410 Income tax (benefit) expense (3,433 ) 2,525 714 Net income 22,453 42,592 63,696 Accretion of preferred membership interests 2,561 2,488 1,726 Net income available to limited partners $ 19,892 $ 40,104 $ 61,970 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Consolidated Results Operating revenues decreased $288 million (7%) and operating income decreased $18 million (20%).
On February 20, 2024, in connection with the Applegreen Acquisition, we entered into an amendment (the “Amendment”) to the CAPL Credit Facility.
See Note 3 to the financial statements for additional information. Amendment of CAPL Credit Facility On February 20, 2024, in connection with our Applegreen Acquisition, we entered into an amendment (the “Amendment”) to the CAPL Credit Facility.
Gain on dispositions and lease terminations, net During 2023 and 2022, respectively, we recorded $6.5 million and $3.5 million in net gains related to sites sold in connection with our ongoing real estate rationalization effort, partially offset by net losses on lease terminations and asset disposals.
In addition, we recorded $2.4 million of other net losses on lease terminations and asset disposals. During 2023, we recorded $6.5 million in net gains in connection with our ongoing real estate rationalization effort, partially offset by net losses on lease terminations and asset disposals.
Accretion of preferred membership interests In connection with the issuance of preferred membership interests in March 2022 as further discussed in Note 18 to the financial statements, we recorded accretion in 2023 and 2022 of $2.5 million and $1.7 million, respectively.
Accretion of preferred membership interests As further discussed in Note 18 to the financial statements, we recorded accretion on the preferred membership interests totaling $2.6 million and $2.5 million for 2024 and 2023, respectively.
Income tax expense We recorded income tax expense of $2.5 million and $0.7 million for 2023 and 2022, respectively, driven by the income generated by our taxable subsidiaries.
Income tax expense We recorded income tax (benefit) expense of ($3.4) million and $2.5 million for 2024 and 2023, respectively, driven by (losses incurred) income generated by our taxable subsidiaries.
Although we have historically been able to pass on increased costs through price increases, there can be no assurance that we will be able to do so in the future. Impact of Interest Rates Increases in interest rates (particularly SOFR) have increased our interest expense as further described below.
Although we have historically been able to pass on increased costs through price increases, there can be no assurance that we will be able to do so in the future. Impact of Interest Rates Three of our most favorable interest rate swap contracts matured April 1, 2024.
Lastly, merchandise revenues increased $35.8 million (13%) driven by an increase in the company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites as well as stronger performance in the base business.
Merchandise revenues increased $74 million (23%) driven by an increase in our average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Our results for 2024 are anticipated to be impacted by the following: • We continue to consider the highest and best use class of trade for each of our properties, which may result in the conversion of sites from one class of trade to another and ultimately increases or decreases in the gross profit for the wholesale and retail segments. • Given increases in SOFR during 2023 and the timing of when certain interest rate swaps expire during 2024 and the rates that were locked in under those swaps, we anticipate higher interest expense in 2024 relative to 2023.
Our results for 2025 are anticipated to be impacted by the following: • We continue to consider the highest and best use class of trade for each of our properties, which may result in the conversion of sites from one class of trade to another and ultimately increases or decreases in the gross profit for the wholesale and retail segments.
Distributions Distribution activity for 2023 was as follows (in thousands): Quarter Ended Record Date Payment Date Cash Distribution (per unit) Cash Distribution (in thousands) December 31, 2022 February 3, 2023 February 10, 2023 $ 0.5250 $ 19,918 March 31, 2023 May 3, 2023 May 10, 2023 0.5250 19,925 June 30, 2023 August 4, 2023 August 11, 2023 0.5250 19,934 September 30, 2023 November 3, 2023 November 10, 2023 0.5250 19,935 December 31, 2023 February 2, 2024 February 9, 2024 0.5250 19,941 The amount of any distribution is subject to the discretion of the Board, which may modify or revoke our cash distribution policy at any time.
We paid $7 million of deferred financing costs in connection with amending and restating the CAPL Credit Facility and terminating the JKM Credit Facility in the first quarter of 2023. 47 Distributions Distribution activity for 2024 was as follows (in thousands): Quarter Ended Record Date Payment Date Cash Distribution (per unit) Cash Distribution (in thousands) December 31, 2023 February 2, 2024 February 9, 2024 $ 0.5250 $ 19,941 March 31, 2024 May 3, 2024 May 10, 2024 0.5250 19,964 June 30, 2024 August 2, 2024 August 9, 2024 0.5250 19,974 September 30, 2024 November 4, 2024 November 13, 2024 0.5250 19,975 December 31, 2024 February 3, 2025 February 13, 2025 0.5250 19,981 The amount of any distribution is subject to the discretion of the Board, which may modify or revoke our cash distribution policy at any time.
Depreciation, amortization and accretion expense Depreciation, amortization and accretion expense decreased $3.5 million (4%) primarily driven by a $2.0 million decrease in impairment charges in comparison to prior year, as well as assets becoming fully depreciated.
Depreciation, amortization and accretion expense Depreciation, amortization and accretion expense decreased $1.2 million (2%) primarily due to assets becoming fully depreciated, partially offset by a $3.6 million increase in impairment charges in comparison to prior year.
It also includes a discussion of our debt, capital requirements, other matters impacting our liquidity and capital resources and an outlook for our business. • New Accounting Policies —This section describes new accounting pronouncements that we have already adopted, those that we are required to adopt in the future and those that became applicable in the current year as a result of new circumstances. • Critical Accounting Policies and Estimates —This section describes the accounting policies and estimates that we consider most important for our business and that require significant judgment. 39 Recent Developments Amendment and Restatement of CAPL Credit Facility On March 31, 2023, the Partnership and its subsidiary, LGWS (together with the Partnership, the “Borrowers”), amended and restated the CAPL Credit Facility.
It also includes a discussion of our debt, capital requirements, other matters impacting our liquidity and capital resources and an outlook for our business. • New Accounting Policies —This section describes new accounting pronouncements that we have already adopted, those that we are required to adopt in the future and those that became applicable in the current year as a result of new circumstances. • Critical Accounting Policies and Estimates —This section describes the accounting policies and estimates that we consider most important for our business and that require significant judgment. 39 Recent Developments 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 CAPL Credit Facility contains financial covenants related to leverage and interest coverage as further described in Note 11 to the financial statements. These financial covenants and other covenants may restrict or limit our ability to make distributions, incur additional indebtedness, make certain capital expenditures or dispose of assets in excess of specified levels, among other restrictions.
These financial covenants and other covenants may restrict or limit our ability to make distributions, incur additional indebtedness, make certain capital expenditures or dispose of assets in excess of specified levels, among other restrictions. Capital Expenditures We make investments to expand, upgrade and enhance existing assets.
You are encouraged to reference Part II, Item 7, within that report, for a discussion of our financial condition and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
You are encouraged to reference Part II, Item 7, within that report, for a discussion of our financial condition and results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022. 41 Consolidated Income Statement Analysis Below is an analysis of our consolidated statements of income and provides the primary reasons for significant increases and decreases in the various income statement line items from period to period.
In addition, volume increased 2% due to the site count increase stemming from the conversion of certain lessee dealer sites to company operated and commission sites. • Our merchandise gross profit and other revenues increased $13.7 million (18%) and $3.2 million (26%), respectively, driven by an increase in the company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites, in addition to an increase in sales and margin percentage in our base business.
These results were driven by: Gross profit • Our motor fuel gross profit increased $12 million (9%) attributable to a volume increase of 9% due primarily to an increase in the average retail site count due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a decrease in volume in our base business. • Our merchandise gross profit and other revenues increased $20 million (22%) and $3.7 million (23%), respectively, driven by an increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites.
Gross profit Gross profit increased $6.5 million (2%), which was primarily driven by an increase in merchandise gross profit driven by the conversion of certain lessee dealer and commission agent sites to company operated sites, partially offset by a decrease in motor fuel gross profit within our retail segment. See "Segment Results" for additional gross profit analyses.
Gross profit Gross profit increased $16 million (4%), which was primarily driven by an increase in merchandise and motor fuel gross profit within our retail segment, partially offset by a decrease in motor fuel and rent gross profit within our wholesale segment. See "Segment Results" for additional gross profit analyses. 42 Operating expenses See “Segment Results” for additional analyses.
In addition, volume increased 2% due primarily to an increase in site count due to the conversion of certain lessee dealer sites to company operated and commission sites.
(b) The increase in the commission agent site count was primarily attributable to the conversion of certain lessee dealer sites to commission agent sites, partially offset by the conversion of certain commission agent sites to company operated sites.
As such, there can be no assurance we will continue to pay distributions in the future. 49 Debt As of December 31, 2023, our debt and finance lease obligations consisted of the following (in thousands): CAPL Credit Facility $ 756,000 Finance lease obligations 11,064 Total debt and finance lease obligations 767,064 Current portion 3,083 Noncurrent portion 763,981 Deferred financing costs, net 10,101 Noncurrent portion, net of deferred financing costs $ 753,880 See “Recent Developments—Amendment to CAPL Credit Facility” and Note 11 to the financial statements for information regarding the amendment of the CAPL Credit Facility and the termination of the JKM Credit Facility.
Debt As of December 31, 2024, our debt and finance lease obligations consisted of the following (in thousands): CAPL Credit Facility $ 767,500 Finance lease obligations 7,936 Total debt and finance lease obligations 775,436 Current portion 3,266 Noncurrent portion 772,170 Deferred financing costs, net 8,238 Noncurrent portion, net of deferred financing costs $ 763,932 See “Recent Developments—Amendment to CAPL Credit Facility” and Note 11 to the financial statements for information regarding the amendment of the CAPL Credit Facility.
Liquidity and Capital Resources Liquidity Our principal liquidity requirements are to finance our operations, fund acquisitions, service our debt and pay distributions to our unitholders.
(d) For 2024, excludes $1.9 million of current income tax incurred on sales of sites. 46 Liquidity and Capital Resources Liquidity Our principal liquidity requirements are to finance our operations, fund acquisitions, service our debt and pay distributions to our unitholders.
Operating expenses Operating expenses increased $19.1 million (14%) driven by an increase in the company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites. In addition, store labor increased, in part due to expanding hours of operation at many of our company operated sites.
Operating expenses Operating expenses increased $39 million (25%) driven by a 25% increase in the average company operated site count due to the conversion of certain lessee dealer and commission agent sites to company operated sites. 44 Wholesale The following table highlights the results of operations and certain operating metrics of our wholesale segment.
See “Significant Factors Affecting our Profitability—The Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross Profit.” Volume was flat compared to 2022 due to the volume generated by the acquisition of assets from CSS, offset by the net loss of independent dealer contracts and the conversion of certain lessee dealer sites to company operated and commission sites. 43 • A $181 million (8%) decrease in our retail segment revenues primarily attributable to a 13% decrease in the average retail selling price per gallon in 2023 as compared to 2022 generally due to the decrease in wholesale motor fuel prices noted above.
In addition, our average wholesale selling price decreased 7% due primarily to movements in crude oil prices within the two years. • Our retail segment revenues increased $130 million (6%) in 2024 as compared to 2023, primarily attributable to a 9% increase in volume due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by a 6% decrease in the average retail fuel selling price due to the decrease in wholesale motor fuel prices as noted above.
In addition, we wrote off $1.1 million in deferred financing costs in the first quarter of 2023 as a result of the amendment and restatement of the CAPL Credit Facility and termination of the JKM Credit Facility.
Interest expense Interest expense increased $8.6 million (20%) due to the maturity of three of our most favorable interest rate swap contracts on April 1, 2024 in addition to the general increase in interest rates, partially offset by the $1.1 million write-off of deferred financing costs in the first quarter of 2023 as a result of the amendment and restatement of the CAPL Credit Facility and termination of the JKM Credit Facility.
Our Partnership Agreement does not require us to pay any distributions.
Our Partnership Agreement does not require us to pay any distributions. As such, there can be no assurance we will continue to pay distributions in the future.
Cost of sales Cost of sales decreased $588 million (13%), which was a result of the decrease in wholesale motor fuel prices, partially offset by the increase in merchandise cost of sales driven by the conversion of certain lessee dealer and commission agent sites to company operated sites discussed above.
These results were driven by: Motor fuel gross profit The $9.8 million decrease (13%) in motor fuel gross profit was primarily due to a 12% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites and the net loss of independent dealer contracts.
Our ability to access the capital markets may have an impact on our ability to fund acquisitions. We may not be able to complete any offering of securities or other options on terms acceptable to us, if at all.
Our ability to access the capital markets may have an impact on our ability to fund acquisitions.
Lastly, many other cost categories increased due primarily to inflation. 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 before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges).
EBITDA represents net income before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges).
After taking into consideration debt covenant restrictions and the scheduled change in our maximum leverage ratio from 5.25:1.00 to 5.00:1.00 for the first quarter of 2024, the amount of availability under our CAPL Credit Facility at February 22, 2024 was $125.4 million.
The amount of availability under our CAPL Credit Facility at December 31, 2024, after taking into consideration debt covenant restrictions, was $68.9 million. The CAPL Credit Facility contains financial covenants related to leverage and interest coverage as further described in Note 11 to the financial statements.
Of the December 31, 2023 balance, $54.7 million was assigned to the wholesale reporting unit and $44.7 million was assigned to the retail reporting unit.
Of the December 31, 2024 balance, $54.7 million was assigned to the wholesale reporting unit and $44.7 million was assigned to the retail reporting unit. No goodwill was impaired for any period presented. 51 Tax Matters As a limited partnership, we are not subject to federal and state income taxes.
Rent gross profit Rent gross profit was flat for 2023 as compared to 2022 primarily due to $2.1 million of rent increases from our customers as well as the reopening of closed sites, partially offset by a $2.1 million decrease in rent gross profit due to the conversion of certain lessee dealer sites to company operated sites. 45 Other revenues Other revenues decreased $1.3 million (19%) due primarily to lower dealer contract termination fees and the conversion of certain lessee dealer sites to company operated and commission sites.
In addition, fuel margin per gallon decreased 2% compared to 2023, driven by the movements of crude oil prices. Rent gross profit Rent gross profit decreased $9.8 million (19%), primarily due to the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the real estate rationalization effort.
In addition, 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. This transaction will result in the conversion of these lessee dealer sites to company operated sites.
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. During the first half of 2024, we paid $25.5 million of cash as consideration and for the purchase of inventory and recorded a non-cash write-off of deferred rent income of $1.5 million.
In 2022, we incurred capital expenditures of $30 million driven by site purchases, site upgrades, including store remodels, car wash build-outs, EMV upgrades and rebranding of certain sites, including the sites acquired from 7-Eleven. We paid $28 million in connection with the acquisition of assets from CSS and $2 million in connection with the closing of sites acquired from 7-Eleven.
Investing Activities In 2024, we incurred capital expenditures of $26 million driven by site upgrades, including store remodels, rebranding of certain sites, image upgrades funded primarily through incentives from our fuel suppliers and site purchases. We paid $26 million to Applegreen related to lease terminations and inventory purchases.
Subsequent Events 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 will be 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 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 in the first quarter of 2024 and ending in April 2024 and resulted in the transition of these lessee dealer sites to company operated sites.
Removed
As amended, the CAPL Credit Facility provides for an increase of the senior secured revolving credit facility from $750 million to $925 million and extends the maturity date from April 1, 2024 to March 31, 2028.
Added
Further, we are assessed fees as a percentage of debit and credit card sales. Such fees increase as "at the pump" retail prices increase but without necessarily being accompanied by higher retail gross profits.
Removed
The credit facility can be increased from time to time upon the Partnership’s written request, subject to certain conditions, up to an additional $350 million. The aggregate amount of the outstanding loans and letters of credit under the CAPL Credit Facility cannot exceed the combined revolving commitments then in effect.
Added
As a result of these maturities and due to increases in interest rates in general, our effective interest rate has increased during 2024 as compared to 2023 and 2022, respectively.
Removed
Certain subsidiaries of the Borrowers are guarantors ("Guarantors") of all of the obligations under the CAPL Credit Facility. All obligations under the CAPL Credit Facility are secured by substantially all of the Partnership’s assets and substantially all of the assets of the Guarantors.
Added
See Note 11 to the financial statements for additional information. 2024 • During the first half of 2024, we converted the 59 sites included in the Applegreen Acquisition and transitioned these sites from lessee dealer sites in the wholesale segment to company operated sites in the retail segment. See Note 3 to the financial statements for additional information.
Removed
Borrowings under the credit facility bear interest, at the Partnership’s option, at (1) a rate equal to the secured overnight financing rate (“SOFR”), for interest periods of one, three or six months, plus a margin ranging from 1.75% to 2.75% per annum depending on the Partnership’s Consolidated Leverage Ratio (as defined in the CAPL Credit Facility) plus a customary credit spread adjustment or (2) (a) an alternative base rate equal to the greatest of (i) the federal funds rate plus 0.5% per annum, (ii) SOFR for one month interest periods plus 1.00% per annum or (iii) the rate of interest established by the Agent (as defined in the CAPL Credit Facility), from time to time, as its prime rate, plus (b) a margin ranging from 0.75% to 1.75% per annum depending on the Partnership’s Consolidated Leverage Ratio.
Added
These results were driven by: Operating revenues • Our wholesale segment revenues decreased $418 million (18%) primarily due to a 12% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the net loss of independent dealer contracts.
Removed
In addition, the Partnership incurs a commitment fee based on the unused portion of the credit facility at a rate ranging from 0.25% to 0.45% per annum depending on the Partnership’s Consolidated Leverage Ratio. The Partnership also has the right to borrow swingline loans under the CAPL Credit Facility in an amount up to $35.0 million.
Added
Cost of sales Cost of sales decreased $304 million (8%), due primarily to lower wholesale volume and lower cost per gallon, partially offset by an increase in merchandise cost of sales driven by the same drivers as discussed above.
Removed
Swingline loans bear interest at the base rate plus the applicable alternative base rate margin. Letters of credit may be issued under the CAPL Credit Facility up to an aggregate amount of $65.0 million. Letters of credit are subject to a 0.125% fronting fee and other customary administrative charges.
Added
General and administrative expenses General and administrative expenses increased $1.7 million (6%) primarily driven by higher management fees and system and information technology costs, partially offset by lower equity compensation expense.
Removed
Letters of credit accrue a fee at a rate based on the applicable margin of SOFR loans. The CAPL Credit Facility also contains certain financial covenants.
Added
Gain (loss) on dispositions and lease terminations, net During 2024, we recorded $23.3 million in net gains in connection with our ongoing real estate rationalization effort. We also recorded a $16.0 million loss on lease termination with Applegreen, including a $1.5 million non-cash write-off of deferred rent income (see Note 3 to the financial statements for additional information).
Removed
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, 2023, June 30, 2023, September 30, 2023 and December 31, 2023, not greater than 5.25 to 1.00, (ii) for each fiscal quarter ending March 31, 2024, June 30, 2024 and September 30, 2024, not greater than 5.00 to 1.00, and (iii) for each fiscal quarter ending December 31, 2024 and thereafter, not greater than 4.75 to 1.00.
Added
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Gross profit decreased $20 million (16%) and operating income decreased $14 million (15%).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe do not currently engage in hedging activities for these purchases due to our pricing structure that allows us to generally pass on price changes to our customers and related parties. A material amount of our total gallons purchased are subject to prompt payment discounts for prompt payment and other rebates and incentives, which are recorded within cost of sales.
Biggest changeThese purchases are generally made pursuant to contracts or at market prices established with the supplier. We do not currently engage in hedging activities for these purchases due to our pricing structure that allows us to generally pass on price changes to our customers.
Based on our current volumes, we estimate a $10 per barrel change in the price of crude oil would impact our annual wholesale motor fuel gross profit by approximately $2.6 million related to these payment discounts. Foreign Currency Risk Our operations are located in the U.S., and therefore are not subject to foreign currency risk.
Based on our current volumes, we estimate a $10 per barrel change in the price of crude oil would impact our annual wholesale motor fuel gross profit by approximately $2.7 million related to these payment discounts. Foreign Currency Risk Our operations are located in the U.S., and therefore are not subject to foreign currency risk. 52
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk is the risk of loss arising from adverse changes in market rates and prices.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk is the risk of loss arising from adverse changes in market rates and prices. The principal market risks to which we are exposed are interest rate risk and commodity price risk.
Prompt payment discounts are based on a percentage of the purchase price of motor fuel. As such, the dollar value of these discounts increases and decreases corresponding with motor fuel prices.
A material amount of our total gallons purchased are subject to prompt payment discounts and other rebates and incentives, which are recorded within cost of sales. Prompt payment discounts are based on a percentage of the purchase price of motor fuel. As such, the dollar value of these discounts increases and decreases corresponding with motor fuel prices.
A one percentage point change in SOFR would impact annual interest expense by approximately $1.6 million. Commodity Price Risk We purchase gasoline and diesel fuel from several suppliers at costs that are subject to market volatility. These purchases are generally made pursuant to contracts or at market prices established with the supplier.
A one percentage point change in SOFR would impact annual interest expense by approximately $3.7 million. See Note 12 to the financial statements for information regarding our interest rate swap contracts. Commodity Price Risk We purchase gasoline and diesel fuel from several suppliers at costs that are subject to market volatility.
The principal market risks to which we are exposed are interest rate risk and commodity price risk. 53 Interest Rate Risk As of December 31, 2023, we had $756.0 million outstanding on our CAPL Credit Facility. Our outstanding borrowings bear interest at SOFR plus an applicable margin.
Interest Rate Risk As of December 31, 2024, we had $767.5 million outstanding on our CAPL Credit Facility. Our outstanding borrowings bear interest at SOFR plus an applicable margin. Taking the interest rate swap contracts into account, our effective interest rate on our CAPL Credit Facility at December 31, 2024 was 6.2%.
Removed
See Note 12 to the financial statements for information regarding the amendment of three interest rate swap contracts and the entry into six additional interest rate swap contracts. Taking the interest rate swap contracts into account, our effective interest rate on our CAPL Credit Facility at December 31, 2023 was 4.9%.

Other CAPL 10-K year-over-year comparisons