CrossAmerica Partners LP: Reports Third Quarter 2016 Results
(Thomson Reuters ONE) -
CrossAmerica Partners LP Reports Third Quarter 2016 Results
- Reported Third Quarter 2016 Operating Income and Net Income of $10.0 million
and $3.0 million, respectively
- Announced a quarterly distribution of $0.6075 per unit attributable to the
third quarter of 2016,
a 5.2% increase compared with the distribution attributable to the third
quarter of 2015
- Generated Third Quarter 2016 Adjusted EBITDA of $27.1 million and
Distributable Cash Flow of $21.3 million, respectively
- Reported Third Quarter 2016 Distribution Coverage Ratio of 1.06x
Allentown, PA November 7, 2016 - CrossAmerica Partners LP (NYSE: CAPL)
("CrossAmerica" or the "Partnership"), a leading wholesale fuels distributor and
owner and lessor of real estate used in the retail distribution of motor fuels,
today reported financial results for the third quarter ended September 30, 2016.
"Despite the comparison to a very strong fuel margin in the third quarter
2015, we generated solid cash flow this quarter thanks to our sustained focus on
integration and expense control," said Jeremy Bergeron, President of
CrossAmerica. "With the recent State Oil acquisition as well as various other
initiatives, we continue to position the Partnership for further growth, while
maintaining a strong balance sheet and coverage ratio."
Three Months
Consolidated Results
Operating income was $10.0 million for the third quarter 2016 compared to $14.8
million achieved in the third quarter 2015. The decrease in operating income
was due primarily to a decline in motor fuel gross profit in the wholesale and
retail segments, as the volatility and decline in wholesale gasoline prices
experienced in the third quarter 2015 did not repeat itself in the third quarter
2016, contracting Dealer-Tank-Wagon wholesale gross profits and retail gross
profits. On an intra-segment basis, CrossAmerica also experienced an additional
decline in retail gross profit as the Partnership continued to execute on its
strategy of converting company-operated stores to dealer-operated sites, moving
acquired assets out of the retail segment and into the wholesale segment. These
retail segment reductions were largely offset by an increase in rental income in
the wholesale segment and a reduction in operating and general and
administrative expenses. EBITDA was $22.5 million for the three month period
ended September 30, 2016, compared to $27.9 million for the same period in
2015. Adjusted EBITDA was $27.1 million for the third quarter 2016 compared to
$31.0 million for the same period in 2015. The decreases in EBITDA and Adjusted
EBITDA were driven primarily by the decline in operating income (Non-GAAP
measures, including EBITDA and Adjusted EBITDA, are described and reconciled to
the corresponding GAAP measures in the Supplemental Disclosure section of this
release).
Wholesale Segment
During the third quarter 2016, CrossAmerica distributed, on a wholesale basis,
267.1 million gallons of motor fuel at an average wholesale gross profit of
$0.053 per gallon, resulting in motor fuel gross profits of $14.2 million. For
the three month period ended September 30, 2015, CrossAmerica distributed, on a
wholesale basis, 284.1 million gallons of motor fuel at an average wholesale
gross profit of $0.061 per gallon, resulting in motor fuel gross profits of
$17.3 million. The decrease in motor fuel gross profit was primarily due to
contraction of margin per gallon as a result of a steeper decline in wholesale
fuel prices throughout the third quarter 2015 as compared to the third quarter
2016, which negatively impacted gross profits on the Dealer-Tank-Wagon priced
contracts. The prices paid to the Partnership's motor fuel suppliers for
wholesale motor fuel (which affects the cost of sales) are highly correlated to
the price of crude oil. The daily spot price of West Texas Intermediate crude
oil decreased approximately 20% during the third quarter of 2015 compared to
approximately 3% during the third quarter 2016. Further, West Texas
Intermediate crude oil prices were 4% lower during the third quarter 2016 as
compared to the same period for 2015, negatively impacting the payment terms
discount component of the Partnership's margins on rack-based contracts. There
was also a decline in motor fuel gallons sold as a result of the Partnership's
termination of low margin wholesale fuel supply contracts and other assets
acquired in the PMI acquisition, partially offset by the impact of the acquired
franchised Holiday stores.
CrossAmerica's gross profit from its Other revenues for the wholesale segment,
which primarily consist of rental income, was $14.3 million for the third
quarter of 2016 compared to $12.6 million for the same period in 2015. The
increase in rental income was primarily associated with acquisitions completed
in 2015 and the continued conversion of company-operated stores to lessee dealer
sites.
Operating expenses for the wholesale segment decreased $0.6 million from $6.1
million to $5.5 million, primarily as a result of the divestiture of the
terminals acquired in the PMI acquisition.
Adjusted EBITDA for the wholesale segment was $27.0 million for the third
quarter of 2016 compared to $28.0 million for the same period in 2015. As
discussed above, the slight decrease was primarily driven by a decline in motor
fuel gross profit, partially offset by an increase in rental income and a
reduction in operating expenses (see Supplemental Disclosure Regarding Non-GAAP
Financial Information below).
Retail Segment
For the third quarter 2016, the Partnership sold 39.2 million gallons of motor
fuel at an average retail motor fuel gross profit of $0.050 per gallon, net of
commissions and credit card fees, resulting in motor fuel gross profits of $1.9
million. For the same period in 2015, CrossAmerica sold 61.6 million gallons in
its retail segment at an average gross profit of $0.120 per gallon, net of
commissions and credit card fees, resulting in motor fuel gross profit of $7.4
million. The decrease in motor fuel gross profit was primarily attributable to
a 37% decrease in retail fuel volumes due to the conversion of company-operated
stores to dealer-operated sites as well as a contraction of motor fuel gross
profits per gallon due to a steeper decline in wholesale motor fuel prices
throughout the third quarter 2015 as compared to the third quarter 2016. As
noted above, the daily spot price of West Texas Intermediate crude oil decreased
approximately 20% during the third quarter of 2015 compared to approximately 3%
during the third quarter of 2016.
During the quarter, the Partnership generated $7.6 million in gross profit from
merchandise and services versus $12.6 million for the same period in 2015.
Operating expenses for the retail segment decreased $5.6 million from $14.3
million for the third quarter 2015 to $8.7 million for the third quarter 2016.
Adjusted EBITDA for the retail segment was $2.0 million for the third quarter of
2016 compared to $7.3 million for the same period in 2015. The decreases in
merchandise and services gross profit, operating expenses and Adjusted EBITDA
were also primarily due to the dealerization strategy of converting company-
operated stores to dealer-operated sites, partially offset by the acquired
franchised Holiday stores (see Supplemental Disclosure Regarding Non-GAAP
Financial Information below).
Distributable Cash Flow and Distribution Coverage Ratio
Distributable Cash Flow was $21.3 million for the three month period ended
September 30, 2016 compared to $25.1 million for the same period in 2015. The
decrease in Distributable Cash Flow was due primarily to a decline in earnings
driven by a decline in motor fuel gross profit in the wholesale segment as
discussed above and a decline in gross profit in the Retail segment as discussed
above. This was partially offset by an increase in rental income and a reduction
in overall operating and general and administrative expenses. The decrease in
general and administrative expenses resulted primarily from the integration
efforts of prior year acquisitions. The Distribution Coverage Ratio was 1.06
times for the three months ended September 30, 2016 (see Supplemental Disclosure
Regarding Non-GAAP Financial Information below).
Nine Months
Operating income was $25.3 million for the nine months ended September 30, 2016
compared to $18.1 million achieved in the same period of 2015. The increase in
operating income was due primarily to an increase in the gross profit at the
Partnership's wholesale segment primarily driven by an increase in rental income
due to converting company-operated stores to dealer-operated sites, income from
the Partnership's equity interest in CST Fuel Supply due to an additional 12.5%
interest acquired in July 2015 and a reduction in overall operating expenses.
The Partnership's retail segment gross profit declined as a result of the
conversion of company-operated stores to dealer-operated sites as well as a
contraction of motor fuel gross profit per gallon due to a steeper decline in
wholesale motor fuel prices throughout the nine months of 2015 as compared to
the same period in 2016. Operating expenses in the retail segment declined as a
result of the dealerization strategy of converting company-operated stores to
dealer-operated sites. EBITDA was $63.8 million for the nine month period ended
September 30, 2016, up 18% over the $53.9 million for the same period in 2015.
Adjusted EBITDA was $76.4 million for the nine month period ended September
30, 2016 compared to $65.6 million for the same period in 2015, representing an
increase of 17%. The increases in EBITDA and Adjusted EBITDA were driven
primarily by the increase in operating income (see Supplemental Disclosure
Regarding Non-GAAP Financial Information below).
Acquisition of State Oil Assets
On September 27, 2016, CrossAmerica closed on the previously announced purchase
of certain assets of State Oil Company, consisting of 57 controlled sites (56
fee sites and 1 leased site) being operated as 55 Lessee Dealer accounts and 2
Non-Fuel tenant locations, as well as 25 Independent Dealer accounts and certain
other assets.
All of the approximately $41.8 million of cash consideration for this
acquisition, including working capital, was financed under the Partnership's
credit facility. The Partnership expects the acquisition to be immediately
accretive to distributable cash flow to limited partners.
Liquidity and Capital Resources
As of November 4, 2016, after taking into consideration debt covenant
constraints, approximately $53.0 million was available for future borrowings
under the Partnership's revolving credit facility. In connection with future
acquisitions, the revolving credit facility requires, among other things, that
CrossAmerica have, after giving effect to such acquisition, at least, in the
aggregate, $20 million of borrowing availability under the revolving credit
facility and unrestricted cash on the balance sheet on the date of such
acquisition.
Distributions
On October 24, 2016, the Board of the Directors of CrossAmerica's General
Partner declared a quarterly distribution of $0.6075 per limited partner unit
attributable to the third quarter of 2016. As previously announced, the
distribution will be paid on November 15, 2016 to all unitholders of record as
of November 4, 2016. The amount and timing of any future distributions is
subject to the discretion of the Board of Directors of CrossAmerica's General
Partner. Based on current expectations, CrossAmerica anticipates growing per
unit distributions in 2016 by 5%-7% over 2015 levels while targeting the long-
term goal of maintaining an annual coverage ratio of at least 1.1x (see
Supplemental Disclosure Regarding Non-GAAP Financial Information below).
Conference Call
The Partnership will host a conference call on November 8, 2016 at 9:00 a.m.
Eastern Time (8:00 a.m. Central Time) to discuss 2016 third quarter earnings
results. The conference call numbers are 888-517-2513 or 847-619-6533 and the
passcode for both is 5854572#. A live audio webcast of the conference call and
the related earnings materials, including reconciliations of any non-GAAP
financial measures to GAAP financial measures and any other applicable
disclosures, will be available on that same day on the investor section of the
CrossAmerica website (www.crossamericapartners.com). A slide presentation for
the conference call will also be available on the investor section of the
Partnership's website. To listen to the audio webcast, go to
http://www.crossamericapartners.com/en-us/investors/eventsandpresentations.
After the live conference call, a replay will be available for a period of
thirty days. The replay numbers are 888-843-7419 or 630-652-3042 and the
passcode for both is 5854572#. An archive of the webcast will be available on
the investor section of the CrossAmerica website at
www.crossamericapartners.com/en-us/investors/eventsandpresentations within 24
hours after the call for a period of sixty days.
CROSSAMERICA PARTNERS LP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars, Except per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------------- ------------------------------
September 30, September 30,
--------------------------- ------------------------------
2016 2015 2016 2015
------------- ------------- --------------- --------------
Operating
revenues((a)) $ 487,950 $ 627,802 $ 1,368,334 $ 1,758,395
Cost of sales((b)) 448,812 576,833 1,251,491 1,628,528
------------- ------------- --------------- --------------
Gross profit 39,138 50,969 116,843 129,867
------------- ------------- --------------- --------------
Income from CST Fuel
Supply equity 4,022 4,198 12,318 6,473
Operating expenses:
Operating expenses 14,224 20,370 45,754 57,781
General and
administrative
expenses 6,142 8,443 18,068 26,503
Depreciation,
amortization and
accretion expense 13,432 13,431 40,594 36,344
------------- ------------- --------------- --------------
Total operating
expenses 33,798 42,244 104,416 120,628
------------- ------------- --------------- --------------
Gain on sales of
assets, net 631 1,907 525 2,359
------------- ------------- --------------- --------------
Operating income 9,993 14,830 25,270 18,071
Other income, net (59 ) 87 375 336
Interest expense (5,634 ) (4,867 ) (16,403 ) (13,888 )
------------- ------------- --------------- --------------
Income before income
taxes 4,300 10,050 9,242 4,519
Income tax expense
(benefit) 1,308 (134 ) 851 (2,722 )
------------- ------------- --------------- --------------
Consolidated net
income 2,992 10,184 8,391 7,241
Less: Net income
attributable to
noncontrolling
interests 3 21 9 14
------------- ------------- --------------- --------------
Net income
attributable to
CrossAmerica limited
partners 2,989 10,163 8,382 7,227
------------- ------------- --------------- --------------
Distributions to CST
as holder of the
incentive
distribution
rights (877 ) (428 ) (2,456 ) (793 )
------------- ------------- --------------- --------------
Net income available
to CrossAmerica
limited partners $ 2,112 $ 9,735 $ 5,926 $ 6,434
------------- ------------- --------------- --------------
Net income (loss)
per CrossAmerica
limited partner
unit:
Basic earnings per
common unit $ 0.06 $ 0.29 $ 0.18 $ 0.23
Diluted earnings per
common unit $ 0.06 $ 0.29 $ 0.18 $ 0.23
Basic and diluted
earnings per
subordinated unit $ - $ 0.29 $ 0.18 $ 0.23
Weighted-average
CrossAmerica limited
partner units:
Basic common units 33,366,380 25,518,876 31,714,462 20,043,565
Diluted common units 33,391,096 25,568,795 31,766,802 20,137,338
Basic and diluted
subordinated units - 7,525,000 1,537,956 7,525,000
------------- ------------- --------------- --------------
Total diluted common
and subordinated
units 33,391,096 33,093,795 33,304,758 27,662,338
------------- ------------- --------------- --------------
Distribution paid
per common and
subordinated units $ 0.6025 $ 0.5625 $ 1.7925 $ 1.6525
Distribution
declared (with
respect to each
respective period)
per common and
subordinated units $ 0.6075 $ 0.5775 $ 1.8075 $ 1.6875
Supplemental
information:
(a) Includes excise
taxes of: $ 19,698 $ 28,224 $ 59,902 $ 75,448
(a) Includes
revenues from fuel
sales to related
parties of: $ 99,891 $ 126,932 $ 280,330 $ 365,072
(a) Includes income
from rentals of: $ 19,752 $ 17,801 $ 59,634 $ 46,829
(b) Includes
expenses from fuel
sales to related
parties of: $ 96,384 $ 123,264 $ 270,149 $ 354,735
(b) Includes
expenses from
rentals of: $ 5,103 $ 4,387 $ 14,870 $ 12,317
Segment Results
Wholesale
The following table highlights the results of operations and certain operating
metrics of the Wholesale segment (thousands of dollars, except for the number of
distribution sites and per gallon amounts):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- ------------------------
2016 2015 2016 2015
------------ ------------ ------------ -----------
Gross profit:
Motor fuel-third party $ 8,157 $ 8,757 $ 21,283 $ 22,426
Motor fuel-intersegment and
related party 6,086 8,558 19,004 22,618
------------ ------------ ------------ -----------
Motor fuel gross profit 14,243 17,315 40,287 45,044
Rent and other((a)) 14,263 12,621 43,162 32,599
------------ ------------ ------------ -----------
Total gross profit 28,506 29,936 83,449 77,643
------------ ------------ ------------ -----------
Income from CST Fuel Supply 12,318 6,473
equity((b)) 4,022 4,198
Operating expenses((a)) (5,498 ) (6,117 ) (18,796 ) (20,815 )
------------ ------------ ------------ -----------
Adjusted EBITDA((c)) $ 27,030 $ 28,017 $ 76,971 $ 63,301
Motor fuel distribution
sites (end of period):((d))
Motor fuel-third party
Independent dealers((e)) 404 374 404 374
Lessee dealers((f)) 420 283 420 283
------------ ------------ ------------ -----------
Total motor fuel
distribution-third party
sites 824 657 824 657
------------ ------------ ------------ -----------
Motor fuel-intersegment and
related party
Affiliated dealers (related
party)((g)) 179 196 179 196
CST (related party) 43 43 43 43
Commission agents (Retail
segment) 67 71 67 71
Company-operated retail
convenience stores (Retail
segment)((h)) 75 121 75 121
------------ ------------ ------------ -----------
Total motor fuel
distribution-intersegment
and
related party sites 364 431 364 431
------------ ------------ ------------ -----------
Motor fuel distribution sites (average
during the period):
Motor fuel-third party
distribution 749 626 724 616
Motor fuel-intersegment and
related party
distribution 366 468 387 444
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ----------------------
2016 2015 2016 2015
----------- ----------- ----------- ----------
Total volume of gallons
distributed (in thousands) 267,121 284,089 769,194 795,027
Motor fuel gallons distributed
per site per day:((i))
Motor fuel-third party
Total weighted average motor
fuel distributed-third
party 2,270 2,467 2,225 2,448
Independent dealers 2,415 2,748 2,395 2,772
Lessee dealers 2,119 2,033 2,034 1,889
Motor fuel-intersegment and
related party
Total weighted average motor
fuel distributed-
intersegment and related party 3,074 3,086 2,902 2,942
Affiliated dealers (related
party) 2,592 2,670 2,501 2,531
CST (related party) 5,201 5,244 5,078 5,085
Commission agents (Retail
segment) 3,108 2,969 3,015 2,897
Company-operated retail
convenience stores (Retail
segment) 2,992 3,070 2,614 2,900
Wholesale margin per gallon-
total system $ 0.053 $ 0.061 $ 0.052 $ 0.057
Wholesale margin per gallon-
third party((j)) $ 0.050 $ 0.058 $ 0.046 $ 0.051
Wholesale margin per gallon-
intersegment and related
party $ 0.059 $ 0.064 $ 0.062 $ 0.064
(a) Prior to 2016, CrossAmerica netted lease executory costs such as real
estate taxes, maintenance, and utilities that were paid and re-billed to
customers on the Partnership's statement of operations. During the first quarter
of 2016, CrossAmerica began accounting for such amounts as rent income and
operating expenses and reflected this change in presentation retrospectively.
This change resulted in a $2.9 million and $7.9 million increase in rent and
other income and operating expenses for the three and nine months ended
September 30, 2015.
(b) Represents income from the Partnership's equity interest in CST Fuel
Supply.
(c) Please see the reconciliation of the segment's Adjusted EBITDA to
consolidated net income under the heading "Results of Operations-Non-GAAP
Financial Measures."
(d) In addition, as of September 30, 2016 and 2015, CrossAmerica distributed
motor fuel to 14 sub-wholesalers who distribute to additional sites.
(e) The increase in the independent dealer site count was primarily
attributable to 21 independent dealer contracts assigned to CrossAmerica by CST
and 25 wholesale fuel supply contracts acquired in the State Oil acquisition,
partially offset by 16 terminated motor fuel supply contracts that were not
renewed.
(f) The increase in the lessee dealer site count was primarily attributable
to converting 79 company-operated convenience stores in the Retail segment to
the lessee dealer customer group in the Wholesale segment between September
30, 2015 and September 30, 2016 and the 52 sites acquired in the September 2016
State Oil acquisition.
(g) The decrease in the affiliated dealers site count was primarily due to
sites converted to a third party lessee dealer customer group or severed from an
affiliated lease.
(h) The decrease in the company-operated retail site count was primarily
attributable to 79 company-operated convenience stores being converted to dealer
sites between September 30, 2015 and September 30, 2016, partially offset by the
31 sites acquired in the March 2016 Holiday acquisition.
(i) Does not include the motor fuel gallons distributed to sub-wholesalers.
(j) Includes the wholesale gross margin for motor fuel distributed to sub-
wholesalers.
Retail
The following table highlights the results of operations and certain operating
metrics of the Retail segment (thousands of dollars, except for the number of
convenience stores and per gallon amounts):
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2016 2015 2016 2015
----------- ----------- ----------- -----------
Gross profit:
Motor fuel $ 1,948 $ 7,377 $ 6,838 $ 16,723
Merchandise and services 7,614 12,575 23,362 32,434
Other 1,057 937 3,049 3,085
----------- ----------- ----------- -----------
Total gross profit 10,619 20,889 33,249 52,242
----------- ----------- ----------- -----------
Operating expenses (8,726 ) (14,253 ) (26,958 ) (36,966 )
Acquisition-related costs 142 - 142 -
Inventory fair value
adjustments((a)) - 650 91 1,356
----------- ----------- ----------- -----------
Adjusted EBITDA((b)) $ 2,035 $ 7,286 $ 6,524 $ 16,632
----------- ----------- ----------- -----------
Retail sites (end of period):
Commission agents 67 71 67 71
Company-operated convenience
stores((c)) 78 121 78 121
----------- ----------- ----------- -----------
Total system sites at the end
of the period 145 192 145 192
----------- ----------- ----------- -----------
Total system operating
statistics:
Average retail sites during the
period((c)) 142 229 155 209
Motor fuel sales (gallons per
site per day) 3,002 2,925 2,828 2,899
Motor fuel gross profit per
gallon, net of credit card
fees and commissions $ 0.050 $ 0.120 $ 0.057 $ 0.101
Commission agents statistics:
Average retail sites during the
period 66 72 66 72
Motor fuel sales (gallons per
site per day) 3,056 2,941 2,991 2,892
Motor fuel gross profit per
gallon, net of credit card
fees and commissions $ 0.014 $ 0.019 $ 0.016 $ 0.026
Company-operated convenience store retail
site statistics:
Average fueling sites during
the period((c)) 76 157 89 137
Motor fuel sales (gallons per
site per day) 2,955 2,917 2,707 2,900
Motor fuel gross profit per
gallon, net of credit card
fees $ 0.082 $ 0.166 $ 0.090 $ 0.141
Merchandise and services sales
(per site per day)((d)) $ 4,337 $ 3,622 $ 3,816 $ 3,352
Merchandise and services gross
profit percentage, net
of credit card fees 24.2 % 24.4 % 24.5 % 26.4 %
(a) The inventory fair value adjustments represent the write-offs of the
step-up in value ascribed to inventory acquired in the One Stop acquisition for
the three months ended September 30, 2015 and in the Holiday acquisition for the
nine months ended September 30, 2016 and in the Erickson and One Stop
acquisitions for the nine months ended September 30, 2015.
(b) Please see the reconciliation of CrossAmerica's segment Adjusted EBITDA to
consolidated net income under the heading "Supplemental Disclosure Regarding
Non-GAAP Financial Measures."
(c) The decrease in retail sites relates to the conversion of 79 company-
operated sites to lessee dealer since September 30, 2015, partially offset by
the 34 Holiday sites acquired since September 30, 2015.
(d) Includes the results from car wash sales and commissions from lottery,
money orders, air/water/vacuum services and ATM fees.
Supplemental Disclosure Regarding Non-GAAP Financial Measures
CrossAmerica uses non-GAAP financial measures EBITDA, Adjusted EBITDA,
Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net
income available to CrossAmerica limited partners before deducting interest
expense, income taxes and depreciation, amortization and accretion. Adjusted
EBITDA represents EBITDA as further adjusted to exclude equity funded expenses
related to incentive compensation and the Amended Omnibus Agreement, gains or
losses on sales of assets, certain discrete acquisition related costs, such as
legal and other professional fees and severance expenses associated with
recently acquired companies, and certain other discrete non-cash items arising
from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA
less cash interest expense, sustaining capital expenditures and current income
tax expense. Distribution Coverage Ratio is computed by dividing Distributable
Cash Flow by the weighted average diluted common and subordinated units and then
dividing that result by the distributions paid per limited partner unit.
EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
are used as supplemental financial measures by management and by external users
of CrossAmerica's financial statements, such as investors and lenders. EBITDA
and Adjusted EBITDA are used to assess the Partnership's financial performance
without regard to financing methods, capital structure or income taxes and the
ability to incur and service debt and to fund capital expenditures. In addition,
Adjusted EBITDA is used to assess the operating performance of CrossAmerica's
business on a consistent basis by excluding the impact of items which do not
result directly from the wholesale distribution of motor fuel, the leasing of
real property, or the day to day operations of the Partnership's retail
convenience store activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow
and Distribution Coverage Ratio are also used to assess the ability to generate
cash sufficient to make distributions to CrossAmerica's unit-holders.
The Partnership believes the presentation of EBITDA, Adjusted EBITDA,
Distributable Cash Flow and Distribution Coverage Ratio provides useful
information to investors in assessing the financial condition and results of
operations. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio should not be considered alternatives to net income or any other
measure of financial performance or liquidity presented in accordance with U.S.
GAAP. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage
Ratio have important limitations as analytical tools because they exclude some
but not all items that affect net income. Additionally, because EBITDA, Adjusted
EBITDA, Distributable Cash Flow and Distribution Coverage Ratio may be defined
differently by other companies in CrossAmerica's industry, the Partnership's
definitions may not be comparable to similarly titled measures of other
companies, thereby diminishing their utility.
The following table presents reconciliations of EBITDA, Adjusted EBITDA, and
Distributable Cash Flow to net income, the most directly comparable U.S. GAAP
financial measure, for each of the periods indicated (in thousands, except for
per unit amounts):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- ------------------------
2016 2015 2016 2015
------------ ------------ ------------ -----------
Net income available to
CrossAmerica limited
partners $ 2,112 9,735 $ 5,926 6,434
Interest expense 5,634 4,867 16,403 13,888
Income tax expense (benefit) 1,308 (134 ) 851 (2,722 )
Depreciation, amortization
and accretion 13,432 13,431 40,594 36,344
------------ ------------ ------------ -----------
EBITDA $ 22,486 $ 27,899 $ 63,774 $ 53,944
Equity funded expenses
related to incentive
compensation and the Amended
Omnibus Agreement((a)) 3,572 3,065 10,197 9,257
Gain on sales of assets, net (631 ) (1,907 ) (525 ) (2,359 )
Acquisition related
costs((b)) 1,659 1,256 2,882 3,408
Inventory fair value
adjustments - 650 91 1,356
------------ ------------ ------------ -----------
Adjusted EBITDA $ 27,086 $ 30,963 $ 76,419 $ 65,606
Cash interest expense (5,306 ) (4,689 ) (15,355 ) (12,604 )
Sustaining capital
expenditures((c)) (209 ) (208 ) (538 ) (1,035 )
Current income tax expense (317 ) (946 ) (782 ) (2,433 )
------------ ------------ ------------ -----------
Distributable Cash Flow $ 21,254 $ 25,120 $ 59,744 $ 49,534
------------ ------------ ------------ -----------
Weighted average diluted
common and subordinated
units 33,391 33,094 33,305 27,662
Distributions paid per
limited partner unit((d)) $ 0.6025 $ 0.5625 $ 1.7925 $ 1.6525
Distribution coverage
ratio((e)) 1.06 x 1.35 x 1.00 x 1.08 x
(a) As approved by the independent conflicts committee of the Board of
Directors of the General Partner and the executive committee of CST and its
board of directors, CrossAmerica and CST mutually agreed to settle certain
amounts due under the terms of the Amended Omnibus Agreement in limited
partnership units.
(b) Relates to certain discrete acquisition related costs, such as legal and
other professional fees, severance expenses and purchase accounting adjustments
associated with recently acquired businesses.
(c) Under the First Amended and Restated Partnership Agreement of
CrossAmerica, as amended, sustaining capital expenditures are capital
expenditures made to maintain our long-term operating income or operating
capacity. Examples of sustaining capital expenditures are those made to maintain
existing contract volumes, including payments to renew existing distribution
contracts, or to maintain CrossAmerica's sites in conditions suitable to lease,
such as parking lot or roof replacement/renovation, or to replace equipment
required to operate the existing business.
(d) The board of directors of CrossAmerica's General Partner approved a
quarterly distribution of $0.6075 per unit attributable to the third quarter of
2016. The distribution is payable on November 15, 2016 to all unitholders of
record on November 4, 2016.
(e) The distribution coverage ratio is computed by dividing Distributable
Cash Flow by the weighted average diluted common and subordinated units and then
dividing that result by the distributions paid per limited partner unit.
The following table reconciles segment Adjusted EBITDA to consolidated Adjusted
EBITDA (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- ------------------------
2016 2015 2016 2015
------------ ------------ ------------ -----------
Adjusted EBITDA - Wholesale
segment $ 27,030 $ 28,017 $ 76,971 $ 63,301
Adjusted EBITDA - Retail
segment 2,035 7,286 6,524 16,632
------------ ------------ ------------ -----------
Adjusted EBITDA - Total
segment $ 29,065 $ 35,303 $ 83,495 $ 79,933
------------ ------------ ------------ -----------
Reconciling items:
Elimination of intersegment
profit in ending inventory
balance 13 144 145 (18 )
General and administrative
expenses (6,142 ) (8,443 ) (18,068 ) (26,503 )
Other income, net (59 ) 87 375 336
Equity funded expenses
related to incentive
compensation and the Amended
Omnibus Agreement 3,572 3,065 10,197 9,257
Working capital adjustment 335 - 335 -
Acquisition related costs 1,182 1,256 2,405 3,408
Net (income) loss
attributable to
noncontrolling interests (3 ) (21 ) (9 ) (14 )
Distributions to incentive
distribution right holders (877 ) (428 ) (2,456 ) (793 )
------------ ------------ ------------ -----------
Consolidated Adjusted EBITDA $ 27,086 $ 30,963 $ 76,419 $ 65,606
------------ ------------ ------------ -----------
About CrossAmerica Partners LP
CrossAmerica Partners is a leading wholesale distributor of motor fuels and
owner and lessor of real estate used in the retail distribution of motor
fuels. Its general partner, CrossAmerica GP LLC, is a wholly owned subsidiary of
CST Brands, Inc., one of the largest independent retailers of motor fuels and
convenience merchandise in North America. Formed in 2012, CrossAmerica Partners
LP is a distributor of branded and unbranded petroleum for motor vehicles in the
United States and distributes fuel to approximately 1,190 locations and owns or
leases more than 880 sites. With a geographic footprint covering 29 states, the
Partnership has well-established relationships with several major oil brands,
including ExxonMobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, Citgo, Marathon
and Phillips 66. CrossAmerica Partners ranks as one of ExxonMobil's largest
distributors by fuel volume in the United States and in the top 10 for
additional brands. For additional information, please visit
www.crossamericapartners.com.
Contacts
Investors: Karen Yeakel, Executive Director - Investor Relations, 610-625-8005
Randy Palmer, Executive Director - Investor Relations, 210-692-2160
Safe Harbor Statement
Statements contained in this release that state the Partnership's or
management's expectations or predictions of the future are forward-looking
statements. The words "believe," "expect," "should," "intends," "estimates,"
"target" and other similar expressions identify forward-looking statements. It
is important to note that actual results could differ materially from those
projected in such forward-looking statements. For more information concerning
factors that could cause actual results to differ from those expressed or
forecasted, see CrossAmerica's Form 10-K or Forms 10-Q filed with the Securities
and Exchange Commission, and available on the CrossAmerica's website at
www.crossamericapartners.com. The Partnership undertakes no obligation to
publicly update or revise any statements in this release, whether as a result of
new information, future events or otherwise.
Note to Non-United States Investors: This release is intended to be a qualified
notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees
should treat one hundred percent (100%) of CrossAmerica Partners LP's
distributions to non-U.S. investors as attributable to income that is
effectively connected with a United States trade or business. Accordingly,
CrossAmerica Partners LP's distributions to non-U.S. investors are subject to
federal income tax withholding at the highest applicable effective tax rate.
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: CrossAmerica Partners LP via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 07.11.2016 - 22:20 Uhr
Sprache: Deutsch
News-ID 505474
Anzahl Zeichen: 48999
contact information:
Town:
Allentown
Kategorie:
Business News
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"CrossAmerica Partners LP: Reports Third Quarter 2016 Results"
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