UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 3, 2014
CrossAmerica Partners LP
(Exact name of registrant specified in its charter)
| Delaware | 001-35711 | 45-4165414 | ||
| (State or Other Jurisdiction Of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
645 West Hamilton Street, Suite 500
Allentown, PA 18101
(Address of principal executive offices, zip code)
(610) 625-8000
Registrant’s telephone number, including area code
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year |
On December 3, 2014, the board of directors of CrossAmerica GP LLC, the general partner (the “General Partner”) of CrossAmerica Partners LP (the “Partnership”), approved the Second Amendment (the “Second Amendment”) to First Amended and Restated Agreement of Limited Partnership of the Partnership, as amended (the “Partnership Agreement”).
The Second Amendment amends the definition of “Conflicts Committee” in Section 1.1 of the Partnership Agreement to state that the members of the conflicts committee may not be officers or employees of the General Partner or directors, officers or employees of its affiliates, including CST Brands, Inc., the indirect owner of the General Partner, may not hold any ownership interest in the General Partner or any of its affiliates that is determined by the board of directors of the General Partner to be likely to have an adverse impact on the ability of such director to fulfill his or her obligations as a member of the Conflicts Committee, and must meet the independence standards established by the New York Stock Exchange and the Securities Exchange Act of 1934, as amended (the “Act”) to serve on an audit committee of a board of directors.
The Second Amendment was approved pursuant to Section 13.1(d) of the Partnership Agreement, which provides that the General Partner, without the approval of any other partner of the Partnership, may amend any provision of the Partnership Agreement to reflect a change that the General Partner determines does not adversely affect the limited partners of CrossAmerica in any material respect.
A copy of the Amendment is filed as Exhibit 3.1 to this Current Report and is incorporated into this Item 5.03 by reference.
| Item 7.01. | Regulation FD Disclosure |
On December 9, 2014, the Partnership will be presenting at the Wells Fargo Securities 13th 2014 Energy Symposium in New York, New York. The presentation and accompanying slide presentation for the event will be available on the Webcasts & Presentations page of the Partnership’s website at www.crossamericapartners.com. A copy of the slide presentation for the event is attached as Exhibit 99.1 to this Current Report and is incorporated into this Item 7.01 by reference. The information in this Item 7.01 and Exhibit 99.1 attached hereto is intended to be furnished under Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Act, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
| Exhibit No. |
Exhibit Description | |
| 3.1 | Second Amendment to First Amended and Restated Agreement of Limited Partnership of CrossAmerica Partners LP, dated as of December 3, 2014 | |
| 99.1 | Investor Presentation by CrossAmerica Partners LP | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CrossAmerica Partners LP | ||||||
| By: | CrossAmerica Partners GP LLC | |||||
| its general partner | ||||||
| Dated: December 9, 2014 | By: | /s/ Gérard J. Sonnier | ||||
| Name: | Gérard J. Sonnier | |||||
| Title: | Corporate Secretary | |||||
Exhibit Index
| Exhibit |
Exhibit Description | |
| 3.1 | Second Amendment to First Amended and Restated Agreement of Limited Partnership of CrossAmerica Partners LP, dated as of December 3, 2014 | |
| 99.1 | Investor Presentation by CrossAmerica Partners LP | |
Exhibit 3.1
SECOND AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
CROSSAMERICA PARTNERS LP
THIS SECOND AMENDMENT TO FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CROSSAMERICA PARTNERS LP (previously known as Lehigh Gas Partners LP), as amended by the First Amendment dated as of October 1, 2014 (as so amended, this “Amendment”), dated as of December 3, 2014, is entered into by CrossAmerica GP LLC, a Delaware limited liability company, as the general partner (the “General Partner”), pursuant to its authority granted in Section 13.1(d) of the First Amended and Restated Agreement of Limited Partnership, dated as of October 30, 2012 (the “Partnership Agreement”). Capitalized terms used but not defined herein are used as defined in the Partnership Agreement.
WHEREAS, Section 13.1(d) of the Partnership Agreement provides that the General Partner, without the approval of any other Partner, may amend any provision of the Partnership Agreement to reflect a change that the General Partner determines does not adversely affect the Limited Partners in any material respect; and
WHEREAS, the Board of Directors of the General Partner has determined that the standard set forth in Section 13.1(d) is satisfied; and
WHEREAS, the General Partner deems it in the best interest of the Partnership to effect this Amendment in order to clarify the definition of “Conflicts Committee”.
NOW, THEREFORE, it is hereby agreed as follows:
A. Amendments. Section 1.1 of the Partnership Agreement is hereby amended to restate the following definition:
“Conflicts Committee” means a committee of the Board of Directors composed entirely of two or more directors, each of whom (a) is not an officer or employee of the General Partner (b) is not an officer or employee of any Affiliate of the General Partner or a director of any Affiliate of the General Partner (other than any Group Member), (c) is not a holder of any ownership interest in the General Partner or any of its Affiliates, including any Group Member, that is determined by the Board of Directors, after reasonable inquiry, to be likely to have an adverse impact on the ability of such director to fulfill his or her obligations as a member of the Conflicts Committee, and (d) meets the independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act and the rules and regulations of the Commission thereunder and by the National Securities Exchange on which any class of Partnership Interests is listed for or admitted to trading.
B. Agreement in Effect. Except as hereby amended, the Partnership Agreement shall remain in full force and effect.
C. Applicable Law. This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of laws.
D. Severability. Each provision of this Amendment shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Amendment that are valid, enforceable and legal.
[Signatures on following page]
IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.
| GENERAL PARTNER: | ||
| CrossAmerica GP LLC | ||
| By: | Gérard J. Sonnier | |
| Name: | Gérard J. Sonnier | |
| Title: | Corporate Secretary | |
 Exhibit 99.1 |
 2
Forward Looking and Cautionary Statements
This presentation and oral statements made regarding the subjects of this
presentation may contain forward-looking statements, which may include,
but are not limited to, statements regarding our plans, objectives, expectations and intentions and other statements that are
not historical facts, including statements identified by words such as
"outlook," "intends," "plans," "estimates," "believes," "expects,"
"potential," "continues," "may," "will,"
"should," "seeks," "approximately," "predicts," "anticipates," "foresees," or the negative version of
these words or other comparable expressions. All statements addressing
operating performance, events, or developments that the Partnership expects
or anticipates will occur in the future, including statements relating to revenue growth and earnings or earnings per
unit growth, as well as statements expressing optimism or pessimism about future
operating results, are forward-looking statements within the meaning of
the Reform Act. The forward-looking statements are based upon our current views and assumptions regarding
future events and operating performance and are inherently subject to significant
business, economic and competitive uncertainties and contingencies and
changes in circumstances, many of which are beyond our control. The statements in this presentation are made as of
the date of this presentation, even if subsequently made available by us on our
website or otherwise. We do not undertake any obligation to update or
revise these statements to reflect events or circumstances occurring after the date of this presentation.
Although the Partnership does not make forward-looking statements unless it
believes it has a reasonable basis for doing so, the Partnership cannot
guarantee their accuracy. Achieving the results described in these statements involves a number of risks,
uncertainties and other factors that could cause actual results to differ
materially, including the factors discussed in this presentation and those
described in the “Risk Factors” section of the Partnership’s
Form 10-K filed on March 10, 2014 and subsequent filings, with the
Securities and Exchange Commission as well as in the Partnership’s other
filings with the Securities and Exchange Commission. No undue reliance
should be placed on any forward-looking statements. |
 3
•
CrossAmerica Partners LP (“CAPL”
or
“CrossAmerica”) is a leading wholesale distributor
of motor fuels and owner and lessee of real estate
related to retail fuel distribution. Its Predecessor
was founded in 1992
Focused on distributing fuels to and owning
and leasing sites located in prime locations
•
CST Brands, Inc. acquired its general partner,
CrossAmerica GP, LLC, and all outstanding IDRs
on October 1, 2014
•
Equity market capitalization of $777 million and
enterprise value of $1,010 million as of 9/30/14
•
As of 9/30/2014, distribute to 1,079 locations
primarily in the Northeastern United States,
Florida, Tennessee, Virginia, Illinois, Indiana and
Ohio
650
owned
or
leased
sites
(1)
Also distribute to 429 independent dealer
sites
and
through
18
sub-wholesalers
(1)
•
Distributed 664.5 million gallons of motor fuel in
the nine month period ending September 30, 2014
CrossAmerica Partners Overview
Top
10
Distributor
for
(2)
:
(1)
As of September 30, 2014.
(2)
Based on 2013 volume. |
 4
Investment Highlights
•
Acquisition Pipeline of Fuel Distribution
and Real Estate Assets from CST
Brands
•
Stable Cash Flows from Rental Income
and Wholesale Fuel Distribution
•
Established History of Completing and
Integrating Acquisitions
•
Long-Term Relationships with Major
Integrated Oil Companies and Refiners
•
Prime Real Estate Locations in Areas
with High Traffic
•
Financial Flexibility to Pursue
Acquisitions and Expansion
Opportunities
BP Station
Union Centre Blvd., West Chester, OH
(Metro Cincinnati) |
 5
CrossAmerica Operations
Industry Value Chain
Pipeline / Storage
Non-Qualifying MLP Income
Retail Fuel Distribution
Rental Income from
Equipment
Inside Store Sales
Gasoline Station
Wholesale Distributor
Qualifying MLP Income
Wholesale Distribution
Rental Income from Real Estate
(from non-affiliated parties)
•
Stable cash flow
•
Margin per gallon
•
Limited commodity exposure
•
Multi-year contracts
•
Stable cash flow
•
Prime locations
•
Multi-year contracts
Rental Income from Affiliates |
 Sites Where
CrossAmerica Partners LP Supplies Wholesale Motor Fuels
as of September 30, 2014
CAPL Legacy
Acquisitions since IPO
Note: Excludes Nice ‘N Easy acquisition sites
Geographic diversity will increase
as the Partnership adds New to
Industry (“NTI”) sites from CST in
its core markets in the Southwest
CrossAmerica Portfolio Overview
6 |
 7
•
Utilize relationship with CST to
maintain and grow cash flow
•
Own or lease sites in prime
locations
and
seek
to
enhance
cash flow
•
Expand within and beyond core
geographic markets through
acquisitions
•
Increase motor fuel distribution
business
by
expanding
market
share
•
Maintain
strong
relationships
with
major integrated oil companies and
refiners
•
Manage risk and mitigate
exposure
to environmental liabilities
CrossAmerica Strategy
Shell Station
Route 17, Hasbrouck Heights, NJ |
 8
CST Brands Acquisition of CAPL’s General Partner
•
On
August
6,
2014,
CAPL
announced
the
acquisition
of
its
general
partner
and
IDRs
by
CST
Brands; closing occurred October 1, 2014
•
CAPL continues to operate as a separate, publicly traded MLP
•
Creates a leading platform in the industry with fuel distribution and retail
operations expertise •
Transaction transformed CAPL into a sponsor-backed MLP
•
Drop-down asset sales from CST provide CAPL with an expanded set of external
opportunities
•
Provides CAPL with more than 5 years of drop-down opportunities from
CST’s U.S. wholesale fuel supply business and New-To-Industry
(NTI) real property assets •
“Best”
of both organizations –
c-store operations, wholesale fuel distribution and M&A
expertise
•
Joe Topper remains President and CEO of CAPL
•
Topper retains approximately 32% ownership stake in CAPL –
did not sell any units in
transaction with CST |
 9
Transaction Benefits for CAPL Unitholders
•
Expected to provide for both greater certainty of and an increased rate of future
distribution growth
•
Greater certainty of drop-down asset acquisitions versus third-party
acquisitions
•
Creates an enhanced platform with which to pursue third-party acquisitions
jointly with CST
•
Lessens over time CAPL’s concentration with LGO (a private affiliate) and
increases its concentration with CST (a publicly traded company)
•
Increases the geographic and brand diversity of CAPL’s current
portfolio |
 10
Stable Cash Flows
Wholesale Distribution Cash Flows
•
•
LGO wholesale supply agreement has 15-year initial term and
had an average remaining term of approximately 13.8 years
as of December 31, 2013
•
Our wholesale supply agreements prohibit the purchase of
motor fuel from other distributors
Rental Income Cash Flows
•
Lease agreements with lessee dealers generally have a 3
year initial term and had an average remaining term of 2.5
years as of December 31, 2013
•
Lease agreements with commission agents generally range
from 5 to 10 years and had an average remaining term of 5.3
years as of December 31, 2013
•
LGO lease agreements have an initial term of 15 years and
an average remaining term of approximately 14.1 years as of
December 31, 2013
•
Our lease agreements require the lessees to purchase their
motor fuel from us
(1)
Wholesale Distribution Margin Per Gallon represents revenues from fuel sales minus
costs from fuel sales (including amounts to affiliates) divided by the
gallons of motor fuel distributed. (2)
YE (Year End) represents twelve months ended December 31 of the applicable year and
2012 PF (Pro Forma) represents 2012 pro forma as presented on Form 8-K
filed with the SEC on March 26, 2013. 3Q 2014 represents the quarter ending
September 30, 2014. (3)
Rental income is rental income from lessee dealers and from affiliates. Information
in 3QA represents annualized rental income for the nine month period ending
September 30, 2014. Wholesale
Distribution
Margin
Per
Gallon
(1)(2)
Rental
Income
(2)(3)
Average Margin: $0.0656
Lessee dealer wholesale agreements generally have 3 year
initial terms and a remaining term of 2.5 years as of
December 31, 2013
$-
$0.010
$0.020
$0.030
$0.040
$0.050
$0.060
$0.070
$0.080
YE
2009
YE
2010
YE
2011
PF
2012
YE
2013
LTM
9/30/14
$0.053
$0.060
$0.072
$0.070
$0.070
$0.068
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
YE
2009
YE
2010
YE
2011
PF
2012
YE
2013
3QA
2014
20.8
19.1
20.5
25.2
41.6
43.0
10 |
 11
Prime Real Estate Locations
•
We own and lease sites that provide
convenient fueling locations in areas of
high consumer demand
•
We own or lease sites in sixteen states
(1)
Six of the states are in the top ten
states for consumers of gasoline in
the United States
(2)
Five of the states are in the top ten
states for consumers of on-highway
diesel fuel in the United States
(2)
•
Limited availability of undeveloped real
estate in many of our markets presents a
high barrier to entry for the development of
competing sites
•
Due to prime locations, owned real estate
sites have high alternate use values, which
provides additional risk mitigation
(1)
As of September 30, 2014.
(2)
Source EIA. As of December 31, 2012
CAPL Controlled Sites by State
(1)
Pennsylvania
22%
New Jersey
16%
Massachusetts
11%
Virginia
13%
Ohio
12%
Tennessee
8%
Florida
7%
New Hampshire
3%
Illinois
2%
West Virginia
2%
New York
1%
Maine
1%
IN, KY, MD, DE
<1% each |
 12
Branded Fuel Suppliers
•
One of the ten largest independent distributors by
volume in the U.S. for ExxonMobil, BP and Shell
branded fuels
Also distribute Valero, Sunoco, Chevron,
Citgo and Gulf-branded motor fuels
•
Prompt payment history and good credit standing
with suppliers allow us to receive certain term
discounts on fuel purchases, which increases
wholesale profitability
•
Branded fuel is perceived by retail customers as
higher quality and commands a price premium
CAPL
Fuel
Distribution
by
Brand
(1)
(1)
As of September 30, 2014
Brands Distributed
Supplier
% of Total Motor
Fuel Distributed
ExxonMobil
39%
BP
27%
Shell
20%
Valero
3%
Chevron
1%
Sunoco
1%
Gulf
1%
Total
91% |
 13
Growth Through Acquisitions
•
In place pipeline of fuel and real estate
acquisitions from CST
•
CST distributed 1.9 billion gallons in the
U.S. in 2013
•
CST’s current domestic gallons plus
growth from future new to industry (“NTI”)
site builds available for the Partnership to
acquire through drop down acquisitions
•
CST acquisition of general partner enhances the
Partnership’s ability to do third party acquisitions
•
Wholesale marketing remains a fragmented and
local industry
•
Long history of successfully sourcing and
executing acquisitions
Predecessor completed over 12
acquisitions of 10 or more sites
Over $300 million in completed
acquisitions in the 25 months since our
IPO
•
Established relationships with oil majors,
customers, industry contacts and brokers to
source new acquisitions
Acquisitions Since Our IPO
(1)
(1)
Site count excludes non-c-store sites acquired in PMI acquisition.
Primary Supply Transactions Since Our IPO
Sites
Acquired
(Fee &
Leasehold)
Manchester
2
45 Independent Dealers
5 Subjobbers
10.7
Atlas
11
55 Wholesale Supply
2 Commission Marketers
39.3
Total
13
50.0
Total
Consideration
($ million)
Acquisition
Supply Contracts
Acquired
Dunmore
24
29.0
Express Lane
47
45.2
Rogers
17
21.1
Rocky Top
33
36.9
PMI
87
59.5
Nice 'N Easy
23
65.0
Total
231
256.7
Acquisition
Sites Acquired
(Fee &
Leasehold)
Total
Consideration
($ million) |
 14
Distributions
Recent Distribution History
(1) (2)
(1)
The
2
quarter
2014
DCF
/
unit
excludes
$7.1
million
in
acquisition
related
expenses
associated with the Atlas and PMI acquisitions that were closed during the
quarter (2)
The DCF / unit is based on the weighted average diluted unit count for the period
indicated •
Our primary business objective is to make
quarterly cash distributions to our unitholders
and, over time, to increase our quarterly cash
distributions
•
Distribution / unit has grown 22% in the 24
months since our IPO
•
Increased our distribution in 6 out of the 7 full
quarters in which we have been public
•
Our success in acquiring and integrating
acquisitions fuels our ability to increase
distributions
•
Committed to a prudent, sustainable distribution
growth rate
Quarterly Distribution
Per Unit
0.5025
$
0.5125
$
0.5125
$
0.5225
$
0.5325
$
Distribution Per Unit on
Annualized Basis
2.01
$
2.05
$
2.05
$
2.09
$
2.13
$
% increase from prior
quarter
5.2%
2.0%
0.0%
2.0%
1.9%
Quarterly DCF / Unit
0.7316
$
0.5833
$
0.3870
$
0.7073
$
0.7002
$
Ratio of DCF / Per Unit
Distribution
1.5x
1.1x
0.8x
1.4x
1.3x
1st
Quarter
2014
4th
Quarter
2013
3rd
Quarter
2013
2nd
Quarter
2014
3rd
Quarter
2014
nd |