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What changed in CrossAmerica Partners LP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CrossAmerica Partners LP's 2024 and 2025 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 2025 report.

+246 added−230 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-27)

Top changes in CrossAmerica Partners LP's 2025 10-K

246 paragraphs added · 230 removed · 202 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

22 edited+3 added−0 removed25 unchanged
Biggest changeIn 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.
Biggest changeIn addition, LGWS sells motor fuels on a retail basis and sells convenience merchandise to end customers at company operated retail sites and sells motor fuel on a retail basis at sites operated by commission agents.
Our primary operations are conducted by the following consolidated wholly owned subsidiaries: • LGW and CAPL JKM Wholesale, which distribute motor fuels on a wholesale basis and generate Qualifying Income under Section 7704(d) of the Internal Revenue Code; • LGPR, which functions as the real estate holding company and holds assets that generate Qualifying Income under Section 7704(d) of the Internal Revenue Code; • LGWS, which owns and leases (or leases and sub-leases) real estate and personal property used in the retail sale of motor fuels, as well as provides maintenance and other services to its customers.
Our primary operations are conducted by the following consolidated wholly owned subsidiaries: • LGW and CAPL JKM Wholesale, which distribute motor fuels on a wholesale basis and generate Qualifying Income under Section 7704(d) of the Internal Revenue Code; • LGPR, which functions as our real estate holding company and holds assets that generate Qualifying Income under Section 7704(d) of the Internal Revenue Code; • LGWS, which owns and leases (or leases and sub-leases) real estate and personal property used in the retail sale of motor fuels, as well as provides maintenance and other services to its customers.
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.
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. 9 Our wholesale segment competes with other motor fuel distributors.
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.
For approximately 54% 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 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.
Since our IPO and through February 20, 2026, 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.
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.
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 56% of our properties that we lease to our dealers or utilize in our retail business.
Income from Joe’s Kwik Marts generally is not Qualifying Income under Sections 7704(d) of the Internal Revenue Code. Available Information Our internet website is www.crossamericapartners.com. Information on this website is not part of this Form 10-K.
Income from Joe’s Kwik Marts generally is not Qualifying Income under Section 7704(d) of the Internal Revenue Code. Available Information Our internet website is www.crossamericapartners.com. Information on this website is not part of this Form 10-K.
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.
As of December 31, 2025, our supply agreements had a weighted-average remaining term of approximately 5.6 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.
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.
As of December 31, 2025, 257 employees of the Topper Group provided management services to us under the Omnibus Agreement. In addition, 2,790 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.
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.
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 2025, we purchased approximately 79% of our motor fuel from four suppliers.
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.
LGW records qualifying wholesale motor fuel distribution gross income and LGWS records the non-qualifying retail sale. • As of December 31, 2025, the average remaining motor fuel distribution and lease agreement term for our commission agents was 1.6 years. Wholesale Segment The wholesale segment includes the wholesale distribution of motor fuel to lessee dealers and independent dealers.
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.
Major competitive factors for us include, among others, customer service, reliability and availability of products and price. Seasonality Our business is subject to 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.
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).
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 95% of the motor fuel we distributed during 2025 was branded).
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, 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.
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-based 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, 2025, the average remaining lease agreement term was 2.3 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 and investing in our existing assets to enhance long-term profitability.
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.
Such revenues amounted to (in millions): Year Ended December 31, 2025 2024 2023 Food and merchandise sales $ 407 $ 390 $ 316 We also generate revenues through leasing or subleasing our real estate.
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.
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-based 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 20 years in length. • As of December 31, 2025, the average remaining distribution contract term was 5.8 years.
Our retail sites are also subject to federal, state and/or local laws governing such matters as wage rates, overtime, working conditions and citizenship requirements. At the federal, state and local levels, there are proposals under consideration from time to time to increase minimum wage rates and modify or restrict immigration policies. Human Capital The Partnership has no direct employees.
Our retail sites are also subject to federal, state and/or local laws governing such matters as wage rates, overtime, working conditions and citizenship requirements. At the federal, state and local levels, there are proposals under consideration from time to time to increase minimum wage rates and modify or restrict immigration policies.
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.
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 20, 2026, the Topper Group also has beneficial ownership of a 38.5% limited partner interest in the Partnership.
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.
Our lease agreements with third-party landlords have an average remaining lease term of 3.3 years as of December 31, 2025. 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 2025 2024 2023 2025 2024 2023 Lessee dealers Wholesale $ 47.1 $ 57.8 $ 69.7 364 490 628 Company operated Retail 3.1 2.7 2.4 47 47 50 Commission agents Retail 12.3 10.7 10.2 212 221 188 Total $ 62.5 $ 71.2 $ 82.3 623 758 866 The financial statements reflect the consolidated results of the Partnership and its wholly owned subsidiaries.
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.
As of December 31, 2025, we own or lease approximately 1,000 sites, of which we operate 352 as company operated sites. In all, including our company operated sites, we distributed motor fuel to approximately 1,600 sites located in 34 states.
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.
Operations Below is a summary of our revenues and operating income by segment (in millions): Wholesale Retail 2025 2024 2023 2025 2024 2023 Revenues $ 1,568 $ 1,872 $ 2,290 $ 2,095 $ 2,226 $ 2,096 Operating income 73 77 91 98 93 97 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.
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.
Gallons of Motor Fuel Distributed Year Ended December 31, Fuel Distribution Sites End of Year Segment 2025 2024 2023 2025 2024 2023 Independent dealers (a) Wholesale 483 483 518 653 607 632 Lessee dealers Wholesale 206 261 325 333 434 569 Company operated Retail 378 389 342 352 365 296 Commission agents (b) Retail 164 166 165 231 229 199 Total 1,231 1,299 1,350 1,569 1,635 1,696 (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.
Added
The Petroleum Marketing Practices Act (the “PMPA”) is a federal law that governs the relationship between a refiner and a distributor, as well as between a distributor and branded dealer, pursuant to which the refiner or distributor permits a distributor or dealer to use a trademark in connection with the sale or distribution of motor fuel.
Added
Under the PMPA, we may not terminate or fail to renew a branded distributor contract, unless certain enumerated preconditions or grounds for termination or non-renewal are met and we also comply with the prescribed notice requirements. See the following risk factors in Item 1A.
Added
Risk Factors for additional regulations that impact our business: • 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. • 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. • We are subject to extensive federal, state and local environmental laws, and the cost of complying with such laws 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 matters and conservation measures may adversely impact our business. 10 Human Capital The Partnership has no direct employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

94 edited+16 added−9 removed260 unchanged
Biggest changeAlso, 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.
Biggest changeRisk 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. • Capital expenditures are subject to risks that could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders. • 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 and convenience store 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 and commission agent 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.
The amount of this decreased tax basis, with respect to the units sold will, in effect, become taxable income to that unitholder, if that unitholder sells such units at a price greater than that unitholder’s tax basis in those units, even if the sales price received is less than the original cost.
The amount of this decreased tax basis, with respect to the units sold will, in effect, become taxable income to that unitholder, if that unitholder sells such units at a price greater than that unitholder’s tax basis in those units, even if the sales price received is less than the original cost of such units to such unitholder.
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.
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. 11 • 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 wholesale 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. • The Topper Group controls us and may have conflicts of interest with us.
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.
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.
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.
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; 27 • 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; 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.
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.
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.
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; 29 • 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 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.
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; • 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 other general economic, financial and political risks include: • a general or prolonged decline in, or shocks to, regional or broader macro-economics; • regulatory changes that could impact the markets in which we operate, which could reduce demand for our goods and services or lead to pricing, currency, or other pressures; and 16 • deflationary economic pressures, which could hinder our ability to operate profitably in view of the challenges inherent in making corresponding deflationary adjustments to our cost structure.
Examples of other general economic, financial and political risks include: • a general or prolonged decline in, or shocks to, regional or broader macro-economics; • regulatory changes that could impact the markets in which we operate, which could reduce demand for our goods and services or lead to pricing, currency, or other pressures; and • deflationary economic pressures, which could hinder our ability to operate profitably in view of the challenges inherent in making corresponding deflationary adjustments to our cost structure.
Further, our ability to insure these locations and the related cost of such insurance coverage could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 20 Additionally, many studies have discussed the relationship between greenhouse gas emissions and climate change.
Further, our ability to insure these locations and the related cost of such insurance coverage could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. Additionally, many studies have discussed the relationship between greenhouse gas emissions and climate change.
Erosion of the value of those brands could have an adverse impact on the volumes of motor fuel we sell, which in turn could have a material adverse effect on our business, financial condition, results of operations and ability to make distributions to our unitholders. We rely on our suppliers to provide trade credit to adequately fund our ongoing operations.
Erosion of the value of those brands could have an adverse impact on the volumes of motor fuel we sell, which in turn could have a material adverse effect on our business, financial condition, results of operations and ability to make distributions to our unitholders. 22 We rely on our suppliers to provide trade credit to adequately fund our ongoing operations.
However, the Topper Group, as the owner of our General Partner, or the Board may change such policy at any time at their discretion and could elect not to pay distributions for one or more quarters. In addition, the CAPL Credit Facility includes specified restrictions on our ability to make distributions.
However, the Topper Group, as the owner of our General Partner, or the Board may change such policy at any time at their discretion and could elect not to pay distributions for one or more quarters. In addition, the Credit Facility includes specified restrictions on our ability to make distributions.
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.
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.
As a result, we may make cash distributions during periods when we record losses for financial accounting purposes and may not make cash distributions during periods when we record net income for financial accounting purposes. 13 If we are unable to make acquisitions on economically acceptable terms, our future growth and ability to increase distributions to unitholders will be limited.
As a result, we may make cash distributions during periods when we record losses for financial accounting purposes and may not make cash distributions during periods when we record net income for financial accounting purposes. If we are unable to make acquisitions on economically acceptable terms, our future growth and ability to increase distributions to unitholders will be limited.
These developments could potentially have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 19 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.
These developments could potentially have a material adverse effect on our business, financial condition, results of operations and cash available for distribution 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.
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.
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. Tax gain or loss on the disposition of our common units could be more or less than expected.
If we are unable to successfully renegotiate or replace these contracts, then our business, financial condition and results of operations and ability to make distributions to unitholders could be adversely affected. Our motor fuel sales are generated under contracts that must be periodically renegotiated or replaced.
If we are unable to successfully renegotiate or replace these contracts, then our business, financial condition and results of operations and ability to make distributions to unitholders could be adversely affected. Our wholesale motor fuel sales are generated under contracts that must be periodically renegotiated or replaced.
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.
If our Omnibus Agreement is terminated, we may suffer interruptions to our business or increased costs to replace these services. 28 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.
Like all equity investments, an investment in our common units is subject to certain risks. Borrowings under the CAPL Credit Facility bear interest at variable rates, subject to interest rate swap contracts we entered into to hedge future changes in variable rates.
Like all equity investments, an investment in our common units is subject to certain risks. Borrowings under the Credit Facility bear interest at variable rates, subject to interest rate swap contracts we entered into to hedge future changes in variable rates.
Contracts with longer payment cycles or difficulties in enforcing contracts or collecting accounts receivable could lead to material fluctuations in our cash flows and could adversely impact our business, financial condition and results of operations. 21 Pending or future litigation could adversely affect our financial condition and results of operations.
Contracts with longer payment cycles or difficulties in enforcing contracts or collecting accounts receivable could lead to material fluctuations in our cash flows and could adversely impact our business, financial condition and results of operations. Pending or future litigation could adversely affect our financial condition and results of operations.
Our operations are subject to a variety of environmental laws and regulations, including those relating to emissions to the air (such as the federal Clean Air Act), discharges into water (such as the federal Clean Water Act), releases of hazardous and toxic substances and remediation of contaminated sites (such as the Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”)), and similar state and local laws and regulations. 18 Under CERCLA, we may, as the owner or operator, be liable for the costs of removal or remediation of contamination at our current locations or our former locations, whether or not we knew of, or were responsible for, the presence of such contamination.
Our operations are subject to a variety of environmental laws and regulations, including those relating to emissions to the air (such as the federal Clean Air Act), discharges into water (such as the federal Clean Water Act), releases of hazardous and toxic substances and remediation of contaminated sites (such as the Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”)), and similar state and local laws and regulations. 19 Under CERCLA, we may, as the owner or operator, be liable for the costs of removal or remediation of contamination at our current locations or our former locations, whether or not we knew of, or were responsible for, the presence of such contamination.
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.
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.
There are no limitations in our Partnership Agreement or our CAPL Credit Facility on our ability to issue additional common units, provided there is no default under the CAPL Credit Facility.
There are no limitations in our Partnership Agreement or our Credit Facility on our ability to issue additional common units, provided there is no default under the Credit Facility.
There can be no assurances that these and other scenarios resulting from a health crisis will not have a material and adverse impact on our business, financial condition, results of operations or cash available for distribution to our unitholders. 17 A continued prolonged shortage of qualified labor could have a material adverse effect on our business and results of operations.
There can be no assurances that these and other scenarios resulting from a health crisis will not have a material and adverse impact on our business, financial condition, results of operations or cash available for distribution to our unitholders. 18 A continued prolonged shortage of qualified labor could have a material adverse effect on our business and results of operations.
Our Partnership Agreement does not require us to pay any distributions at all. • We rely on the employees of the Topper Group to provide key management services to our business pursuant to the Omnibus Agreement. • Our General Partner has limited liability regarding our obligations. • If we distribute a significant portion of our cash available for distribution to our partners, our ability to grow and make acquisitions could be limited. • Our Partnership Agreement replaces, eliminates and modifies, as applicable, the duties, including the fiduciary duties, of our General Partner, the Board or any committee thereof, and modifies the burden of proof in any action brought against the General Partner, the Board or any committee thereof. • Our General Partner’s affiliates, including the Topper Group, may compete with us. • Holders of our common units have limited voting rights. • Our General Partner interest or the control of our General Partner may be transferred to a third party without unitholder consent, and our General Partner has a call right that may require unitholders to sell their common units at an undesirable time or price. • 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. • We may issue unlimited additional units without unitholder approval, which would dilute existing unitholder ownership interests, and our General Partner’s discretion in establishing cash reserves may reduce the amount of cash available for distribution to unitholders. • Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units. • Management fees and cost reimbursements due to our General Partner and the Topper Group for services provided to us or on our behalf will reduce cash available for distribution to our unitholders. • Our tax treatment depends in large part on our status as a partnership for U.S. federal income tax purposes. • We have subsidiaries that are treated as corporations for U.S. federal income tax purposes and are subject to entity-level U.S. federal, state and local income and 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. • Our unitholders are required to pay taxes on their share of income from us even if they do not receive any cash distributions from us. • Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us. • Tax gain or loss on the disposition of our common units could be more or less than expected. • Tax-exempt organizations and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them. • Our unitholders are subject to state and local income taxes and return filing requirements in states and localities where they do not live as a result of investing 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. • We prorate our items of income, gain, loss and deduction for U.S. federal income tax purposes and allocate them between transferors and transferees of our common units each month based upon the ownership of our common units on the first business day of each month and as of the opening of the applicable exchange on which our common units are listed, instead of on the basis of the date a particular common unit is transferred. • If a unitholder loans their common units to a short seller to cover a short sale of common units, they may be considered to have disposed of those common units for U.S. federal income tax purposes. • We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between our General Partner and the unitholders. • 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. 12 Risks Relating to Our Industry and Our Business We may not have sufficient distributable cash from operations to enable us to pay our quarterly distribution following the establishment of cash available for distribution and payment of fees and expenses.
Our Partnership Agreement does not require us to pay any distributions at all. • We rely on the employees of the Topper Group to provide key management services to our business pursuant to the Omnibus Agreement. • Our General Partner has limited liability regarding our obligations. • If we distribute a significant portion of our cash available for distribution to our partners, our ability to grow and make acquisitions could be limited. • Our Partnership Agreement replaces, eliminates and modifies, as applicable, the duties, including the fiduciary duties, of our General Partner, the Board or any committee thereof, and modifies the burden of proof in any action brought against the General Partner, the Board or any committee thereof. • Our General Partner’s affiliates, including the Topper Group, may compete with us. • Holders of our common units have limited voting rights. • Our General Partner interest or the control of our General Partner may be transferred to a third party without unitholder consent, and our General Partner has a call right that may require unitholders to sell their common units at an undesirable time or price. • 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. • We may issue unlimited additional units without unitholder approval, which would dilute existing unitholder ownership interests, and our General Partner’s discretion in establishing cash reserves may reduce the amount of cash available for distribution to unitholders. • Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units. • Management fees and cost reimbursements due to our General Partner and the Topper Group for services provided to us or on our behalf will reduce cash available for distribution to our unitholders. • Our tax treatment depends in large part on our status as a partnership for U.S. federal income tax purposes. • We have subsidiaries that are treated as corporations for U.S. federal income tax purposes and are subject to entity-level U.S. federal, state and local income and 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. • Our unitholders are required to pay taxes on their share of income from us even if they do not receive any cash distributions from us. 12 • Unitholders may be subject to limitations on their ability to deduct interest expense incurred by us. • Tax gain or loss on the disposition of our common units could be more or less than expected. • Tax-exempt organizations and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them. • Our unitholders are subject to state and local income taxes and return filing requirements in states and localities where they do not live as a result of investing 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. • We prorate our items of income, gain, loss and deduction for U.S. federal income tax purposes and allocate them between transferors and transferees of our common units each month based upon the ownership of our common units on the first business day of each month and as of the opening of the applicable exchange on which our common units are listed, instead of on the basis of the date a particular common unit is transferred. • If a unitholder loans their common units to a short seller to cover a short sale of common units, they may be considered to have disposed of those common units for U.S. federal income tax purposes. • We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between our General Partner and the unitholders. • 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.
Our unitholders will likely be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with those requirements. We currently conduct business in 34 states (see “Item 2. Properties”).
Our unitholders may be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with those requirements. We currently conduct business in 34 states (see “Item 2. Properties”).
If we are unable to procure product or recover these costs through increased sales, our ability to meet our financial obligations could be adversely affected. Failure to comply with these regulations could result in substantial penalties. 22 Our motor fuel sales are generated under contracts that must be renegotiated or replaced periodically.
If we are unable to procure product or recover these costs through increased sales, our ability to meet our financial obligations could be adversely affected. Failure to comply with these regulations could result in substantial penalties. Our wholesale motor fuel sales are generated under contracts that must be renegotiated or replaced periodically.
Reduced demand for our common units resulting from investors seeking other more favorable investment opportunities may cause the trading price of our common units to decline. The interest rate on the CAPL Credit Facility is variable; therefore, we have exposure to movements in interest rates, subject to our interest rate swap contracts.
Reduced demand for our common units resulting from investors seeking other more favorable investment opportunities may cause the trading price of our common units to decline. 25 The interest rate on the Credit Facility is variable; therefore, we have exposure to movements in interest rates, subject to our interest rate swap contracts.
The actual ratio of taxable income to cash distributions could be higher or lower than expected, and any differences could be material and could materially affect the value of our common units. Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us.
The actual ratio of taxable income to cash distributions could be higher or lower than expected, and any differences could be material and could materially affect the value of our common units. Unitholders may be subject to limitations on their ability to deduct interest expense incurred by us.
We may be unable to make accretive acquisitions for any of the following reasons: • we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts for them; • we are unable to raise financing for such acquisitions on economically acceptable terms, for example, if the market price for our common units declines; • we are outbid by competitors; or • we or the seller are unable to obtain any necessary consents.
We may be unable to make accretive acquisitions for any of the following reasons: • we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts for them; • we are unable to raise financing for such acquisitions on economically acceptable terms, for example, if the market price for our common units declines or if we are unable to raise additional debt capital; • we are outbid by competitors; or • we or the seller are unable to obtain any necessary consents.
In addition to U.S. federal income taxes, our unitholders will likely be subject to other taxes, such as state and local income taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do business or own property, even if they do not live in any of those jurisdictions.
In addition to U.S. federal income taxes, our unitholders may be subject to other taxes, such as state and local income taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do business or own property, even if they do not live in any of those jurisdictions.
The Department of the Treasury and the IRS have issued final regulations providing guidance on the application of these rules for transfers of certain publicly traded partnership interests, including transfers of our common units, that are generally applicable to transfers occurring on or after January 1, 2023.
The Department of the Treasury and the IRS have issued final regulations providing guidance on the application of these rules for transfers of certain publicly traded partnership interests, such as transfers of our common units, that are generally applicable to transfers occurring on or after January 1, 2023.
The IRS may challenge our valuation methods and allocations of income, gain, loss and deduction between our General Partner and certain of our unitholders. A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income, gain or loss being allocated to our unitholders for U.S. federal income tax purposes.
The IRS may challenge our valuation methods and allocations of income, gain, loss and deduction between our General Partner and certain of our unitholders. A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income, gain or loss allocable to our unitholders for U.S. federal income tax purposes.
The markets for distribution of wholesale motor fuel and the sale of retail motor fuel are highly competitive and fragmented, which results in narrow margins. We have numerous competitors, and some may have significantly greater resources and name recognition than we do.
The markets for distribution of wholesale motor fuel and the sale of retail motor fuel and convenience products and services are highly competitive and fragmented, which results in narrow margins. We have numerous competitors, and some may have significantly greater resources and name recognition than we do.
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. 33 We have subsidiaries that are treated as corporations for U.S. federal income tax purposes and are subject to entity-level U.S. federal, state and local income and franchise tax.
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.
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, geopolitical developments around Venezuela and Greenland, 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.
In addition, the actual amount of cash we will have available for distribution will depend on other factors such as: • the level and timing of capital expenditures we make; • the level and timing of sales of sites in connection with our real estate optimization plan; • the restrictions contained in our credit facilities; • our debt service requirements and other liabilities; • the cost of acquisitions, if any; • fluctuations in our working capital needs; • our ability to borrow under the CAPL Credit Facility and access capital markets on favorable terms, or at all; and • the amount, if any, of cash reserves established by our General Partner in its discretion.
In addition, the actual amount of cash we will have available for distribution will depend on other factors such as: • the level and timing of capital expenditures we make; • the level and timing of sales of sites in connection with our real estate optimization plan; 13 • the restrictions contained in our credit facilities; • requirements under agreements related to our debt and preferred membership interests and other liabilities; • the cost of acquisitions, if any; • fluctuations in our working capital needs; • our ability to borrow under the Credit Facility and access capital markets on favorable terms, or at all; and • the amount, if any, of cash reserves established by our General Partner in its discretion.
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 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. 26 Our ability to comply with the covenants and restrictions contained in our credit facilities may be affected by events beyond our control, including prevailing economic, financial and industry conditions.
Any acquisitions involve potential risks, including, among other things: • the validity of our assumptions about revenues, demand, capital expenditures and operating costs of the acquired business or assets, as well as assumptions about achieving synergies with our existing business; • the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets, including liabilities arising from the operation of the acquired businesses or assets prior to our acquisition, for which we are not indemnified or for which the indemnity is inadequate; • the costs associated with additional debt or equity capital, which may result in a significant increase in our interest expense and financial leverage resulting from any additional debt incurred to finance the acquisition, or the issuance of additional common units on which we will make distributions, either of which could offset the expected accretion to our unitholders from any such acquisition and could be exacerbated by volatility in the equity or debt capital markets; • a failure to realize anticipated benefits, such as increased available distributable cash flow, an enhanced competitive position or new customer relationships; • the inability to timely and effectively integrate the operations of recently acquired businesses or assets, particularly those in new geographic areas or in new lines of business; • unforeseen difficulties operating in new and existing product areas or new and existing geographic areas; • a decrease in our liquidity by using a significant portion of our available cash or borrowing capacity to finance the acquisition; • the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges; • performance from the acquired assets and businesses that is below the forecasts we used in evaluating the acquisition; • a significant increase in our working capital requirements; • competition in our targeted market areas; • customer or key employee loss from the acquired businesses and the inability to hire, train or retain qualified personnel to manage and operate such acquired businesses; and • diversion of our management’s attention from other business concerns. 14 In addition, our ability to purchase or lease additional sites involves certain potential risks, including the inability to identify and acquire suitable sites or to negotiate acceptable leases or subleases for such sites and difficulties in adapting our distribution and other operational and management systems to an expanded network of sites.
Any acquisitions involve potential risks, including, among other things: • the validity of our assumptions about revenues, demand, capital expenditures and operating costs of the acquired business or assets, as well as assumptions about achieving synergies with our existing business; • the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets, including liabilities arising from the operation of the acquired businesses or assets prior to our acquisition, for which we are not indemnified or for which the indemnity is inadequate; 14 • the costs associated with additional debt or equity capital, which may result in a significant increase in our interest expense and financial leverage resulting from any additional debt incurred to finance the acquisition, or the issuance of additional common units on which we will make distributions, either of which could offset the expected accretion to our unitholders from any such acquisition and could be exacerbated by volatility in the equity or debt capital markets; • a failure to realize anticipated benefits, such as increased available distributable cash flow, an enhanced competitive position or new customer relationships; • the inability to timely and effectively integrate the operations of recently acquired businesses or assets, particularly those in new geographic areas or in new lines of business; • unforeseen difficulties operating in new and existing product areas or new and existing geographic areas; • a decrease in our liquidity by using a significant portion of our available cash or borrowing capacity to finance the acquisition; • the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges; • performance from the acquired assets and businesses that is below the forecasts we used in evaluating the acquisition; • a significant increase in our working capital requirements; • competition in our targeted market areas; • customer or key employee loss from the acquired businesses and the inability to hire, train or retain qualified personnel to manage and operate such acquired businesses; and • diversion of our management’s attention from other business concerns.
The anticipated after-tax benefit of an investment in our common units depends largely on our being treated as a partnership for U.S. federal income tax purposes. First, a partnership is exempt from U.S. federal income tax, and the partnership’s income is instead allocated to the partners for inclusion on their tax returns.
The anticipated after-tax benefit of an investment in our common units depends largely on our being treated as a partnership for U.S. federal income tax purposes. First, a partnership is generally not subject to U.S. federal income tax, and the partnership’s income is instead allocated to the partners for inclusion on their tax returns.
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.
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.
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.
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 20, 2026, the Topper Group beneficially owned approximately 38.5% of our outstanding common units.
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.
We are exposed to risk related to the creditworthiness and performance of our customers, suppliers and contract counterparties. As of December 31, 2025, we had outstanding accounts receivable totaling $29 million.
While we have invested significant amounts in the protection of our IT systems and maintain what we believe are adequate security controls over individually identifiable customer, employee and vendor data provided to us, a breakdown or a breach in our systems that results in the unauthorized release of individually identifiable customer or other sensitive data could nonetheless occur.
While we have invested significant amounts in the protection of our IT systems and maintain what we believe are adequate security controls over individually identifiable customer, employee and vendor data provided to us, a breakdown or a breach in our systems that results in the unauthorized release of individually identifiable customer or other sensitive data could nonetheless occur. 24 Cyber-attacks are rapidly evolving and becoming increasingly sophisticated.
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 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.
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.
As of February 20, 2026, the Topper Group beneficially owned approximately 38.5% 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.
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 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.
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.
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 20, 2026, we had 38,135,078 common units outstanding.
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 store motor fuel in storage tanks at our retail sites. These operations are subject to significant hazards and risks inherent in storing and transporting motor fuel.
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 store motor fuel in storage tanks at our retail sites.
The operating and financial restrictions and covenants in the CAPL Credit Facility and any future financing agreements could adversely affect our ability to finance future operations or capital needs or to engage, expand or pursue our business activities.
The Credit Facility contains operating and financial restrictions that may limit our business, financing activities and ability to make distributions to unitholders. The operating and financial restrictions and covenants in the Credit Facility and any future financing agreements could adversely affect our ability to finance future operations or capital needs or to engage, expand or pursue our business activities.
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.
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 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 2025, our wholesale business purchased approximately 79% of its motor fuel from four suppliers and our retail business purchased approximately 53% of its merchandise from one supplier.
Any such entity level taxes will reduce the cash available for distribution to us and, in turn, to unitholders. If the IRS were to successfully assert that these corporations have more tax liability than we anticipate or legislation were enacted that increased the corporate tax rate, our cash available for distribution to unitholders would be further reduced.
If the IRS were to successfully assert that these corporations have more tax liability than we anticipate or legislation were enacted that increased the corporate tax rate, our cash available for distribution to unitholders would be further reduced.
We depend on third-party transportation providers for the transportation of all of our motor fuel. Thus, a significant change or shortage of drivers and/or providers or a significant change in our relationship or commercial terms with any of these providers could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
Thus, a significant change or shortage of drivers and/or providers or a significant change in our relationship or commercial terms with any of these providers could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
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.
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.
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.
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.
In addition, our obligations under our credit facilities will be secured by substantially all of our assets, and if we are unable to repay our indebtedness under our credit facilities, the lenders could seek to foreclose on such assets.
We might not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, our obligations under our credit facilities will be secured by substantially all of our assets, and if we are unable to repay our indebtedness under our credit facilities, the lenders could seek to foreclose on such assets.
A significant change in any of these factors, including a significant decrease in consumer demand (other than typical seasonal variations), could materially affect our motor fuel and merchandise volumes, motor fuel gross profit and overall customer traffic, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 15 Both the wholesale motor fuel distribution and the retail motor fuel industries are characterized by intense competition and fragmentation, and our failure to effectively compete could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.
A significant change in any of these factors, including a significant decrease in consumer demand (other than typical seasonal variations), could materially affect our motor fuel and merchandise volumes, motor fuel gross profit and overall customer traffic, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.
From time to time, in connection with an offering of our common units, we may state an estimate of the ratio of federal taxable income to cash distributions that a purchaser of our common units in that offering may receive in a given period.
A unitholder’s ratio of its share of taxable income to the cash received by it may also be affected by changes in law. 34 From time to time, in connection with an offering of our common units, we may state an estimate of the ratio of federal taxable income to cash distributions that a purchaser of our common units in that offering may receive in a given period.
Terrorist attacks and threatened or actual war or armed conflict may adversely affect our business. Our business is affected by general economic conditions and fluctuations in consumer confidence and spending, which can decline as a result of numerous factors outside of our control.
Our business is affected by general economic conditions and fluctuations in consumer confidence and spending, which can decline as a result of numerous factors outside of our control.
Second, under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, and before January 1, 2026, the partner may also deduct from the partnership’s taxable income allocable to such partner an amount equal to 20% of such qualified business income (subject to certain limits), resulting in a lower effective tax rate for the partner with respect to the partnership’s income.
Second, the partner may also deduct from the partnership’s taxable income allocable to such partner an amount equal to 20% of such qualified business income (subject to certain limits), resulting in a lower effective tax rate for the partner with respect to the partnership’s income.
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.
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.
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.
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.
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.
In resolving these conflicts, the Topper Group may favor its own interests over the interests of our unitholders. 30 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.
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.
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. 32 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.
We have subsidiaries that are treated as corporations for U.S. federal income tax purposes and are subject to entity-level U.S. federal, state and local income and franchise tax. We conduct a portion of our operations and business through one or more direct and indirect subsidiaries that are treated as C corporations for U.S. federal income tax purposes.
We conduct a portion of our operations and business through one or more direct and indirect subsidiaries that are treated as C corporations for U.S. federal income tax purposes. We may choose to conduct additional operations through these corporate subsidiaries in the future.
If we violate any of the restrictions, covenants, ratios or tests in our credit facilities, the debt issued under the credit facilities may become immediately due and payable, and our lenders’ commitment to make further loans to us may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments.
If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any of the restrictions, covenants, ratios or tests in our credit facilities, the debt issued under the credit facilities may become immediately due and payable, and our lenders’ commitment to make further loans to us may terminate.
Each unitholder must assess the need to file and pay income tax in these states on their allocated share of partnership taxable income. We may own property or conduct business in other states, localities or foreign countries in the future. It is the responsibility of each unitholder to file all U.S. federal, state, local and foreign tax returns.
Each unitholder should consult their tax advisor regarding the need to file and pay income tax in these states, as well as any other state or local jurisdictions, on their allocated share of partnership taxable income. We may own property or conduct business in other states, localities or foreign countries in the future.
Additionally, we may be required to allocate an adjustment disproportionately among our unitholders, causing the publicly traded units to have different capital accounts, unless the IRS issues further guidance.
Additionally, we may be required to allocate an adjustment disproportionately among our unitholders, which could cause the publicly traded units to have capital account balances that differ from one another, unless the IRS issues further guidance.
In addition, failure to comply with environmental regulations, including the Clean Air Act, the Clean Water Act or CERCLA, or an increase in regulations could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.
In addition, failure to comply with environmental regulations, including the Clean Air Act, the Clean Water Act or CERCLA, or an increase in regulations could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. 20 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.
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.
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.
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.
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.
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.
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.
Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters.
Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters. 21 In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.
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.
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. 31 We may issue unlimited additional units without unitholder approval, which would dilute existing unitholder ownership interests.
Wholesale motor fuel costs are directly related to, and fluctuate with, the price of crude oil.
For 2025, motor fuel revenues accounted for 87% of our total revenues and motor fuel gross profit accounted for 55% of total gross profit. Wholesale motor fuel costs are directly related to, and fluctuate with, the price of crude oil.
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.
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.
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.
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.
We may elect to conduct additional operations through these corporate subsidiaries in the future. These corporate subsidiaries are subject to corporate-level taxes at the corporate tax rate, which is currently 21% for federal taxes, and will also likely be subject to state (and possibly local) income tax at varying rates, on their taxable income.
These corporate subsidiaries are subject to corporate-level taxes at the corporate tax rate, which is currently 21% for federal taxes, and are also subject to state (and local) income tax at varying rates, on their taxable income. Such entity level taxes will reduce the cash available for distribution to us and, in turn, to unitholders.
Any tax-exempt organization or non-U.S. person should consult its tax advisor before investing in our common units, including to discuss the potential impact of tax withholding on distributions on or sales or other taxable dispositions of our common units.
Any tax-exempt organization or non-U.S. person should consult its tax advisor before investing in our common units, including to discuss the potential impact of tax withholding on distributions on or sales or other taxable dispositions of our common units. 35 Our unitholders are subject to state and local income taxes and return filing requirements in states and localities where they do not live as a result of investing in our common units.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe 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.
Biggest changeWe 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.
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.
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. 37 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.
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.
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. The results of these assessments are reported to the Board.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe 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.
Biggest changeThe following table provides a summary of our sites acquired, changes between customer groups or sold during 2025: Lessee Dealers Company Operated Commission Agents Total Number at beginning of year 494 365 221 1,080 Acquired 2 2 1 5 Changes between customer groups (37 ) 21 16 — Divested (67 ) (33 ) (12 ) (112 ) Number at end of year (a) 392 355 226 973 (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.
Our principal executive offices are in Allentown, Pennsylvania in approximately 37,000 square feet of leased office space. 37
Our principal executive offices are in Allentown, Pennsylvania in approximately 37,000 square feet of leased office space.
We 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.
We also distribute fuel to sites located in Colorado, Michigan, South Dakota and Vermont. Our site count includes those involved in our retail and wholesale segments. As of December 31, 2025, our wholesale and retail segments operate in 33 and 27 states, respectively.
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.
PROPERTIES The following table shows the aggregate number of sites we owned or leased by customer group at December 31, 2025: Owned Sites Leased Sites Total Sites Lessee dealers 186 206 392 Company operated 201 154 355 Commission agents 162 64 226 Total 549 424 973 38 We own or lease properties located in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, 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 changeAdditional information regarding legal proceedings is included in Note 16 to the financial statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 38 PART II
Biggest changeAdditional information regarding legal proceedings is included in Note 16 to the financial statements. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 39 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn general, we expect that cash distributed for each quarter will equal cash generated from operations less cash needed for maintenance capital expenditures, accrued but unpaid expenses (including the management fee to the Topper Group), reimbursement of expenses incurred by our General Partner, debt service and other contractual obligations and reserves for future operating and capital needs or for future distributions to our partners.
Biggest changeIn general, we expect that cash distributed for each quarter will equal cash generated from operations less cash needed for maintenance capital expenditures, accrued but unpaid expenses (including the management fee to the Topper Group), reimbursement of expenses incurred by our General Partner, debt service, distributions on the preferred membership interests and other contractual obligations and reserves for future operating and capital needs or for future distributions to our partners.
We expect that the Board will reserve excess cash, from time to time, in an effort to sustain or permit gradual or consistent increases in quarterly distributions. Restrictions in our CAPL Credit Facility could limit our ability to pay distributions upon the occurrence of certain events. See “Item 7.
We expect that the Board will reserve excess cash, from time to time, in an effort to sustain or permit gradual or consistent increases in quarterly distributions. Restrictions in our Credit Facility could limit our ability to pay distributions upon the occurrence of certain events. See “Item 7.
Modification of our cash distribution policy may result in distributions of amounts less than, or greater than, our minimum quarterly distribution, and revocation of our cash distribution policy could result in no distributions at all. In addition, our CAPL Credit Facility includes certain restrictions on our ability to make cash distributions. ITEM 6. [Reserved]
Modification of our cash distribution policy may result in distributions of amounts less than, or greater than, our minimum quarterly distribution, and revocation of our cash distribution policy could result in no distributions at all. In addition, our Credit Facility includes certain restrictions on our ability to make cash distributions. ITEM 6. [Reserved]
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).
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 21, 2026 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 21, 2025, we had 38,059,702 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 20, 2026, we had 38,135,078 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

70 edited+25 added−19 removed47 unchanged
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.
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. 47 Cash Flows The following table summarizes cash flow activity (in thousands): Year Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 91,496 $ 87,782 $ 117,083 Net cash provided by (used in) investing activities 68,441 (16,309 ) (28,181 ) Net cash used in financing activities (160,181 ) (73,082 ) (99,966 ) Operating Activities Net cash provided by operating activities increased $4 million compared to 2024, primarily due to higher fuel margins in 2025 and a decrease in interest expense driven by lower rates and a lower average outstanding debt balance.
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.
Examples of sustaining capital expenditures are those made to maintain existing contract volumes or to maintain our sites in conditions suitable to operate or lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.
We expect our ongoing sources of liquidity to include cash generated by operations, proceeds from sales of sites in connection with our real estate rationalization efforts, borrowings under the CAPL Credit Facility, and if available to us on acceptable terms, issuances of equity and debt securities. We regularly evaluate alternate sources of capital to support our liquidity requirements.
We expect our ongoing sources of liquidity to include cash generated by operations, proceeds from sales of sites in connection with our real estate rationalization efforts, borrowings under the Credit Facility, and if available to us on acceptable terms, issuances of equity and debt securities. We regularly evaluate alternate sources of capital to support our liquidity requirements.
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.
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. 46 The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S.
Incremental costs incurred to obtain certain contracts with customers are deferred and amortized over the contract term and are included in other noncurrent assets on the balance sheets. Amortization of such costs are classified as a reduction of operating revenues. Revenues from the sale of convenience store products are recognized at the time of sale to the customer.
Incremental costs incurred to obtain certain contracts with customers are deferred and amortized over the contract term and are included in other noncurrent assets on the consolidated balance sheets. Amortization of such costs are classified as a reduction of operating revenues. Revenues from the sale of convenience store products are recognized at the time of sale to the customer.
Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates. Valuation allowances are reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred tax asset.
Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates. 52 Valuation allowances are reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred tax asset.
Goodwill Goodwill represents the excess of the fair value of the consideration conveyed to acquire a business over the fair value of the net assets acquired. Goodwill is not amortized, but instead is tested for impairment at the reporting unit level at least annually, and more frequently if events and circumstances indicate that the goodwill might be impaired.
Goodwill Goodwill represents the excess of the fair value of the consideration conveyed to acquire a business over the fair value of net assets of businesses acquired. Goodwill is not amortized, but instead is tested for impairment at the reporting unit level at least annually, and more frequently if events and circumstances indicate that the goodwill might be impaired.
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.
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.
Two of the key differences in accounting for transactions as asset acquisitions as compared to business combinations are summarized below: • Transaction costs are capitalized as a component of the cost of the assets acquired rather than expensed as incurred; • Goodwill is not recognized.
Two of the key differences in accounting for transactions as asset acquisitions as compared to business combinations are summarized below: • Transaction costs are capitalized as a component of the cost of the assets acquired rather than expensed as incurred; 51 • Goodwill is not recognized.
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.
See Note 11 to the financial statements for additional information. • 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.
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.
Segment Results We present the results of operations of our segments consistent with how our management views the business. Retail The following table highlights the results of operations and certain operating metrics of our retail segment.
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.
For approximately 54% 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.
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.
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, 2024, filed with the SEC on February 26, 2025.
MD&A is organized as follows: • Recent Developments —This section describes significant recent developments. • Significant Factors Affecting Our Profitability —This section describes the most significant factors impacting our results of operations. • Results of Operations —This section provides an analysis of our results of operations on a consolidated basis and for each of our segments as well as a discussion of non-GAAP financial measures. • Liquidity and Capital Resources —This section provides a discussion of our financial condition and cash flows.
MD&A is organized as follows: • Significant Factors Affecting Our Profitability —This section describes the most significant factors impacting our results of operations. • Results of Operations —This section provides an analysis of our results of operations on a consolidated basis and for each of our segments as well as a discussion of non-GAAP financial measures. • Liquidity and Capital Resources —This section provides a discussion of our financial condition and cash flows.
LGW and CAPL JKM Wholesale collect motor fuel taxes, which consist of various pass-through taxes collected from customers on behalf of taxing authorities and remits such taxes directly to those taxing authorities. LGW’s and CAPL JKM Wholesale’s accounting policy is to exclude the taxes collected and remitted from wholesale revenues and cost of sales and account for them as liabilities.
LGW and CAPL JKM Wholesale collect motor fuel taxes, which consist of various pass-through taxes collected from customers on behalf of taxing authorities and remit such taxes directly to those taxing authorities. LGW’s and CAPL JKM Wholesale’s accounting policy is to exclude the taxes collected and remitted from wholesale revenues and cost of sales and account for them as liabilities.
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.
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, 2025 and 2024, we had goodwill totaling $99.4 million.
The Applegreen Acquisition as well as other conversions of lessee dealer sites to company operated and commission agent sites are anticipated to increase gross profit and operating expenses in the retail segment and reduce gross profit in the wholesale segment. • As part of our evaluation of the highest and best use class of trade for each of our properties, we anticipate continuing to divest certain assets, often lower performing properties.
Conversions of lessee dealer sites to company operated and commission agent sites are anticipated to increase gross profit and operating expenses in the retail segment and reduce gross profit in the wholesale segment. • As part of our evaluation of the highest and best use class of trade for each of our properties, we anticipate continuing to divest certain assets, often lower performing properties.
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.
Our results for 2026 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 and operating income for the wholesale and retail segments.
Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, acquisitions, and partnership distributions, will depend on our future operating performance, which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control.
Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, acquisitions, distributions on the preferred membership interests and partnership distributions, will depend on our future operating performance, which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control.
(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.
(d) Excludes $4.9 million and $1.9 million of current income tax incurred on sales of sites for 2025 and 2024, respectively. 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.
We have the ability to fund our capital expenditures by additional borrowings under our CAPL Credit Facility, or, if available to us on acceptable terms, accessing the capital markets and issuing additional equity, debt securities or other options, such as the sale of assets.
We have the ability to fund our capital expenditures by additional borrowings under our Credit Facility, or, if available to us on acceptable terms, accessing the capital markets and issuing additional equity, debt securities or other options, such as the sale of assets. Our ability to access the capital markets may have an impact on our ability to fund acquisitions.
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.
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.
These sales are likely to continue to generate gains or impairment charges depending on the site, and may result in reductions in gross profit in the wholesale and retail segments. For many of these divestitures, we anticipate continuing to supply the sites with fuel through long-term supply contracts. We will continue to evaluate acquisitions on an opportunistic basis.
These sales are likely to continue to generate gains or impairment charges depending on the site, and may result in reductions in gross profit and operating income in the wholesale and retail segments. For many of these divestitures, we anticipate continuing to supply the sites with fuel through long-term supply contracts.
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.
Cost of sales Cost of sales decreased $440 million (12%), due primarily to a lower cost per gallon and lower volume, partially offset by an increase in merchandise cost of sales driven by the same drivers as discussed above.
This guidance applies to over 90% of our revenues as the only primary revenue stream outside the scope of this guidance is rental income.
This guidance applies to substantially all of our revenues as the only primary revenue stream outside the scope of this guidance is rental income.
See Note 11 to the financial statements for additional information on our debt and finance lease obligations, Note 12 for information on interest rate swap contracts and Note 13 for information on our operating lease obligations.
See Notes 11 and 24 to the financial statements for additional information on our debt and finance lease obligations, Note 12 for information on interest rate swap contracts, Note 13 for information on our operating lease obligations and Note 18 for information on the preferred membership interests.
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.
Of the December 31, 2025 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. See Note 9 to the financial statements for additional information. Tax Matters As a limited partnership, we are not subject to federal and state income taxes.
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.
Investing Activities In 2025 and 2024, we incurred capital expenditures of $36 million and $26 million, respectively, driven by site upgrades, including store remodels, rebranding of certain sites, image upgrades funded primarily through incentives from our fuel suppliers and site purchases.
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.
GAAP financial measure, for each of the periods indicated (in thousands, except for the Distribution Coverage Ratio): Year Ended December 31, 2025 2024 2023 Net income $ 41,833 $ 22,453 $ 42,592 Interest expense 48,140 52,320 43,743 Income tax expense (benefit) 8,253 (3,433 ) 2,525 Depreciation, amortization and accretion expense 89,587 75,983 77,158 EBITDA 187,813 147,323 166,018 Equity-based employee and director compensation expense 1,854 1,508 3,031 Gain on dispositions and lease terminations, net (a) (44,229 ) (4,966 ) (4,737 ) Acquisition-related costs (b) 576 1,674 1,460 Adjusted EBITDA 146,014 145,539 165,772 Cash interest expense (46,201 ) (50,384 ) (40,456 ) Sustaining capital expenditures (c) (8,522 ) (8,287 ) (7,654 ) Current income tax expense (d) (3,505 ) (864 ) (953 ) Distributable Cash Flow $ 87,786 $ 86,004 $ 116,709 Distributions paid on common units $ 80,007 $ 79,854 $ 79,712 Distribution Coverage Ratio 1.10x 1.08x 1.46x (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.
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.
Gross profit Gross profit increased $4.4 million (1%), primarily due to an increase in motor fuel and merchandise gross profit in our retail segment, partially offset by a decrease in rent gross profit in our wholesale segment. See “Segment Results” for additional gross profit analyses. Operating expenses See “Segment Results” for additional analyses.
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.
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.
The amount of deferred tax assets ultimately realized may differ materially from the estimates utilized in the computation of valuation allowances and may materially impact the financial statements in the future.
The amount of deferred tax assets ultimately realized may differ materially from the estimates utilized in the computation of valuation allowances and may materially impact the consolidated financial statements in the future. See Note 20 to the financial statements for additional information.
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.
Letters of credit outstanding under our Credit Facility at December 31, 2025 totaled $4.9 million. The amount of availability under our Credit Facility at February 20, 2026, after taking into consideration debt covenant restrictions, was $216.6 million. The Credit Facility contains financial covenants related to leverage and interest coverage as further described in Note 11 to the financial statements.
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.
These results were impacted by: Motor fuel gross profit The $0.6 million (1%) decrease in motor fuel gross profit was primarily due to a 7% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites, the net loss of independent dealer contracts and a decrease in volume in our base business.
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.
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 believe that we will have sufficient cash flow from operations, borrowing capacity under the CAPL Credit Facility, access to capital markets and alternate sources of funding to meet our financial commitments, debt service obligations, contingencies, anticipated capital expenditures and partnership distributions. However, we are subject to business and operational risks that could adversely affect our cash flow.
We believe that we will have sufficient cash flow from operations, borrowing capacity under the Credit Facility, access to capital markets and alternate sources of funding to meet our financial commitments, debt service obligations, contingencies, anticipated capital expenditures, distributions on the preferred membership interests and partnership distributions.
Revenue Recognition The core principle of accounting guidance on revenue recognition is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.
We believe the following policies to be the most critical in understanding the judgments that are involved in preparing our financial statements. 50 Revenue Recognition The core principle of accounting guidance on revenue recognition is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.
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.
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 2025.
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.
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, 2025 2024 2023 Gross profit: Motor fuel $ 157,239 $ 150,916 $ 138,729 Merchandise 116,235 109,910 89,847 Rent 9,885 9,411 9,120 Other revenue 18,834 19,467 15,771 Total gross profit 302,193 289,704 253,467 Operating expenses (204,693 ) (196,232 ) (156,758 ) Operating income $ 97,500 $ 93,472 $ 96,709 Retail sites (end of period): Company operated retail sites (a) 352 365 296 Commission agents (b) 231 229 199 Total retail sites 583 594 495 Total retail segment statistics: Volume of gallons sold 542,137 554,490 506,535 Average retail fuel sites 594 569 476 Margin per gallon, before deducting credit card fees and commissions $ 0.386 $ 0.368 $ 0.369 Company operated site statistics: Average retail fuel sites 361 354 283 Margin per gallon, before deducting credit card fees $ 0.414 $ 0.394 $ 0.400 Merchandise gross profit percentage 28.5 % 28.2 % 28.4 % Commission site statistics: Average retail fuel sites 233 215 193 Margin per gallon, before deducting credit card fees and commissions $ 0.320 $ 0.309 $ 0.306 (a) The decrease in the company operated site count was primarily attributable to the sale of certain company operated sites in connection with our real estate rationalization effort, partially offset by the conversion of certain lessee dealer sites to company operated sites.
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).
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). In addition, we recorded $2.4 million of other net losses on lease terminations and asset disposals.
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.
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, 2025 2024 2023 Gross profit: Motor fuel gross profit $ 62,333 $ 62,892 $ 72,680 Rent gross profit 33,218 41,122 50,873 Other revenues 4,963 4,601 5,248 Total gross profit 100,514 108,615 128,801 Operating expenses (27,019 ) (31,754 ) (37,988 ) Operating income $ 73,495 $ 76,861 $ 90,813 Motor fuel distribution sites (end of period): (a) Independent dealers (b) 653 607 632 Lessee dealers (c) 333 434 569 Total motor fuel distribution sites 986 1,041 1,201 Average motor fuel distribution sites 1,007 1,093 1,235 Volume of gallons distributed 688,673 743,535 842,636 Margin per gallon $ 0.091 $ 0.085 $ 0.086 (a) In addition, we distributed motor fuel to sub-wholesalers who distributed to additional sites. 45 (b) The increase in the independent dealer site count was primarily attributable to the sale of certain lessee dealer, company operated and commission agent sites but with continued fuel supply, partially offset by the net loss of independent dealer contracts.
We may not be able to complete any offering of securities or other options on terms acceptable to us, if at all. 48 The following table outlines our capital expenditures and acquisitions (in thousands): Year Ended December 31, 2024 2023 2022 Sustaining capital $ 8,287 $ 7,654 $ 7,164 Growth 18,031 26,974 23,187 Lease termination payments to Applegreen, including inventory purchases 25,517 — — Acquisitions — — 29,594 Total capital expenditures and acquisitions $ 51,835 $ 34,628 $ 59,945 A significant portion of our growth capital expenditures are discretionary and we regularly review our capital plans in light of anticipated proceeds from sales of sites.
The following table outlines our capital expenditures and acquisitions (in thousands): Year Ended December 31, 2025 2024 2023 Sustaining capital $ 8,522 $ 8,287 $ 7,654 Growth 27,207 18,031 26,974 Lease termination payments to Applegreen, including inventory purchases — 25,517 — Total capital expenditures and acquisitions $ 35,729 $ 51,835 $ 34,628 A significant portion of our growth capital expenditures are discretionary and we regularly review our capital plans in light of anticipated proceeds from sales of sites.
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%).
Our consolidated statements of income are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Operating revenues $ 3,662,534 $ 4,098,288 $ 4,386,263 Cost of sales 3,259,827 3,699,969 4,003,995 Gross profit 402,707 398,319 382,268 Operating expenses: Operating expenses 231,712 227,986 194,746 General and administrative expenses 27,988 28,756 27,031 Depreciation, amortization and accretion expense 89,587 75,983 77,158 Total operating expenses 349,287 332,725 298,935 Gain on dispositions and lease terminations, net 44,229 4,966 4,737 Operating income 97,649 70,560 88,070 Other income, net 577 780 790 Interest expense (48,140 ) (52,320 ) (43,743 ) Income before income taxes 50,086 19,020 45,117 Income tax expense (benefit) 8,253 (3,433 ) 2,525 Net income 41,833 22,453 42,592 Accretion of preferred membership interests 2,720 2,561 2,488 Net income available to limited partners $ 39,113 $ 19,892 $ 40,104 42 Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Consolidated Results Operating revenues decreased $436 million (11%) and operating income increased $27 million (38%).
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.
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, operating lease obligations and distributions on the preferred membership interests. 49 As discussed previously, our Credit Facility matures March 31, 2028.
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.
Gain on dispositions and lease terminations, net During 2025, we recorded $45.9 million in net gains in connection with our ongoing real estate rationalization effort, partially offset by $1.7 million of net losses on lease terminations and asset disposals. During 2024, we recorded $23.3 million in net gains in connection with our ongoing real estate rationalization effort.
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%).
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Gross profit decreased $8.1 million (7%) and operating income decreased $3.4 million (4%).
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.
Distributions Distribution activity for 2025 was as follows (in thousands): Quarter Ended Record Date Payment Date Cash Distribution (per unit) Cash Distribution (in thousands) December 31, 2024 February 3, 2025 February 13, 2025 $ 0.5250 $ 19,981 March 31, 2025 May 5, 2025 May 15, 2025 0.5250 20,001 June 30, 2025 August 4, 2025 August 14, 2025 0.5250 20,012 September 30, 2025 November 3, 2025 November 13, 2025 0.5250 20,013 December 31, 2025 February 2, 2026 February 12, 2026 0.5250 20,021 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.
Revenues from leasing arrangements for which we are the lessor are recognized ratably over the term of the underlying lease. In transactions in which we sell and lease back property, we apply guidance from ASC 606–Revenue from Contracts with Customers in determining whether the transfer of the property should be accounted for as a sale.
In transactions in which we sell and lease back property, we apply guidance from ASC 606–Revenue from Contracts with Customers in determining whether the transfer of the property should be accounted for as a sale. Specifically, we assess if we have satisfied a performance obligation by transferring control of the property.
Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions. We believe the following policies to be the most critical in understanding the judgments that are involved in preparing our financial statements.
Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions.
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.
Rent gross profit Rent gross profit decreased $7.9 million (19%), primarily due to the sale of certain lessee dealer sites in connection with our real estate rationalization effort as well as the conversion of certain lessee dealer sites to company operated and commission agent sites.
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.
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. See Note 24 to the financial statements for information regarding an amendment of the finance lease referenced above.
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.
Depreciation, amortization and accretion expense Depreciation, amortization and accretion expense increased $13.6 million (18%) primarily due to an $18.6 million increase in impairment charges, partially offset by the impact of assets becoming fully depreciated.
Specifically, we assess if we have satisfied a performance obligation by transferring control of the property. Accounts receivable primarily result from the sale of motor fuels to customers. Our accounts receivable is generally considered as having a similar risk profile. Credit is extended to a customer based on an evaluation of the customer’s financial condition.
Accounts receivable primarily result from the sale of motor fuels to customers. Our accounts receivable is generally considered as having a similar risk profile. Credit is extended to a customer, generally a dealer or a commission agent, based on an evaluation of the customer’s financial condition prior to entering into fuel supply and/or lease agreements.
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.
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, 2024 as compared to the year ended December 31, 2023.
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.
Acquisition and Financing Activity Our results of operations and financial condition are also impacted by our acquisition and financing activities as summarized below. • On March 31, 2023, we amended and restated the Credit Facility and terminated the JKM Credit Facility.
EBITDA represents net income before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges).
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 (loss) before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges).
(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.
(c) The decrease in the lessee dealer site count was primarily attributable to the sale of certain lessee dealer sites in connection with our real estate rationalization effort (generally with continued fuel supply, thereby converting the site to an independent dealer site) as well as the conversion of certain lessee dealer sites to company operated and commission agent sites.
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.
In 2025 and 2024, we received proceeds of $104 million and $35 million, respectively, primarily from the sale of sites in connection with our real estate rationalization effort. In 2024, we also paid $26 million to Applegreen related to lease terminations and inventory purchases. Financing Activities In 2025 and 2024, we paid $80 million in distributions to our unitholders.
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”).
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. 40 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.
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.
Operating expenses Operating expenses increased $8.5 million (4%) driven by a 4% 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 the sale of certain company operated and commission agent sites in connection with our real estate rationalization effort.
We made net repayments of $9 million on our credit facility.
In 2025 and 2024, respectively, we made net (repayments) borrowings of $(75) million and $12 million on our credit facility.
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.
This increase was partially offset by a volume decrease of 2% due primarily to a decrease in volume in our base business. • Our merchandise gross profit increased $6.3 million (6%), driven by a 2% increase in the average company operated site count due to the conversion of certain lessee dealer sites to company operated sites, partially offset by the sale of certain company operated sites in connection with our real estate rationalization effort.
Operating expenses Operating expenses decreased $6.2 million (16%), 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. 45 Non-GAAP Financial Measures We use the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio.
Operating expenses Operating expenses decreased $4.7 million (15%), primarily due to the sale of certain lessee dealer sites in connection with our real estate rationalization effort as well as the conversion of certain lessee dealer sites to company operated and commission agent sites.
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.
Critical Accounting Policies and Estimates We prepare our financial statements in conformity with U.S. GAAP.
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.
Inflation also affects certain operating expenses, such as labor costs, certain leases, and general and administrative expenses. 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.
(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.
In addition, our average retail site count increased 4% due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by the sale of certain company operated and commission agent sites in connection with our real estate rationalization effort.
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.
General and administrative expenses General and administrative expenses decreased $0.8 million (3%) primarily driven by lower acquisition-related costs and legal fees, partially offset by higher management fees.
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.
Our Partnership Agreement does not require us to pay any distributions.
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.
Wholesale The following table highlights the results of operations and certain operating metrics of our wholesale segment.
(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.
(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 sale of certain commission agent sites in connection with our real estate rationalization effort. 44 Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Gross profit increased $12.5 million (4%) and operating income increased $4.0 million (4%).
Removed
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.
Added
Impact of Interest Rates Three of our most favorable interest rate swap contracts matured April 1, 2024. See Note 12 to the financial statements for additional information regarding the impact of the maturity of those interest rate swap contracts on our interest expense.
Removed
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.
Added
See Note 3 to the financial statements for additional information. 41 Class of Trade Conversions and Divestitures We consider the highest and best use class of trade for each of our properties, which results in the conversion of sites from one class of trade to another and ultimately increases or decreases in the gross profit and operating income for the wholesale and retail segments.
Removed
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.
Added
See Note 22 to the financial statements for additional information. As part of our evaluation of the highest and best use class of trade for each of our properties, we divest certain assets, often lower performing properties. These sales generate gains or impairment charges depending on the site; see Notes 4 and 7 to the financial statements for additional information.
Removed
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.
Added
These sales result in reductions in gross profit and operating income in the wholesale and retail segments. For many of these divestitures, we continue to supply the sites with fuel through long-term supply contracts.
Removed
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.
Added
When we sell a lessee dealer site with continued fuel supply, the site is converted from a lessee dealer site to an independent dealer site but remains in the wholesale segment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed3 unchanged
Biggest changeInterest 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%.
Biggest changeInterest Rate Risk As of December 31, 2025, we had $692 million outstanding on our 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 Credit Facility at December 31, 2025 was 5.6%.
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.
A one percentage point change in SOFR would impact annual interest expense by approximately $2.9 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.
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
Based on our current volumes, we estimate a $10 per barrel change in the price of crude oil would impact our annual motor fuel gross profit by approximately $2.4 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.

Other CAPL 10-K year-over-year comparisons