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): July 19, 2017
CrossAmerica Partners LP
(Exact name of registrant as specified in its charter)
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Delaware |
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001-35711 |
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45-4165414 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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515 Hamilton Street, Suite 200 Allentown, PA |
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18101 |
(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (610) 625-8000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
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Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Item 7.01 Regulation FD Disclosure.
Furnished herewith as Exhibit 99.1 are slides that senior management of CrossAmerica Partners LP, a Delaware limited partnership (the “Partnership”), will be utilizing in presentations to analysts and investors. The slides are available on the Partnership’s website at www.crossamericapartners.com.
The information in this Current Report is being furnished pursuant to Regulation FD. The information in Item 7.01 and Exhibit 99.1 of Item 9.01 of this report, according to general instruction B.2., shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended. By filing this report on Form 8-K and furnishing this information, the Partnership makes no admission as to the materiality of any information in this report that the Partnership chooses to disclose solely because of Regulation FD.
Safe Harbor Statement
Statements contained in the exhibits to this report that state the Partnership’s or its management’s expectations or predictions of the future are forward-looking statements. It is important to note that the Partnership’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Partnership has filed with the Securities and Exchange Commission (the “SEC”). The Partnership undertakes no duty or obligation to publicly update or revise the information contained in this report, although the Partnership may do so from time to time as management believes is warranted. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. |
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Exhibit Description |
99.1 |
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Investor Presentation Slides of CrossAmerica Partners LP |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CrossAmerica Partners LP |
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By: |
CrossAmerica GP LLC |
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its general partner |
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By: |
/s/ Giovanna Rueda |
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Name: |
Giovanna Rueda |
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Title: |
Director, Legal Affairs and Corporate Secretary |
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Dated: July 19, 2017
EXHIBIT INDEX
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Exhibit No. |
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Exhibit Description |
99.1 |
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Investor Presentation Slides of CrossAmerica Partners LP |
Investor Update July 2017 Exhibit 99.1
Safe Harbor Statement Statements contained in this presentation that state the Partnership’s or management’s expectations or predictions of the future are forward-looking statements. The words “believe,” “expect,” “should,” “intends,” “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 Forms 10-Q or Form 10-K filed with the Securities and Exchange Commission and available on CrossAmerica’s website at www.crossamericapartners.com. If any of these factors materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement you see or hear during this presentation reflects our current views as of the date of this presentation with respect to future events. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.
CrossAmerica Overview
CrossAmerica Partners LP Overview Master limited partnership and leading wholesale fuels distributor, convenience store lessor, and c-store operator Distributes annually over 1 billion gallons of fuel Annual gross rental income over $80 million Operates 75 convenience stores 17.5% equity interest in CST Brands’ wholesale fuels business, approximately 1.8 billion gallons of annual fuel supply Over 1,250 locations – 501 owned sites 621 Lessee Dealers 394 Independent Dealers 75 Company Operated Sites 98 Commission Agents 71 Non-fuel Tenant Sites (rent only) Equity market capitalization of $880 million and enterprise value of $1.3 billion Note: All information is as of March 31, 2017
2012 Dunmore Oil Acquisition (Pennsylvania) Express Lane Acquisition (Florida) 2013 Rocky Top Acquisition (Tennessee) Rogers Acquisition (Tennessee) 2014 2014 2015 2016 Manchester Acquisition (Virginia) Atlas Acquisition (Chicago) Landmark Industries Acquisition (Texas) Dropdown of 5% interest in CST Fuel Supply Erickson Oil Products Acquisition (Upper Midwest) State Oil Acquisition (Chicago) Since IPO in October 2012, Over $800 Million in Acquisitions History of Growth Nice N Easy Acquisition (New York) Dropdown of 12.5% interest in CST Fuel Supply and 29 Stores One Stop Acquisition (West Virginia) S/S/G Corp Acquisition (Upper Midwest) Petroleum Marketers, Inc. Acquisition (WV/VA)
Drivers of Cash Flow Segment Gross Profit(1) Category Gross Profit(1) (1) Presented before intersegment eliminations. In addition, Rent is combined for the Wholesale and Retail Segments. 2016 $113 million $43 million $63 million $30 million $54 million 2015 $104 million $65 million $50 million $42 million $59 million $19 million Shift to more stable, qualifying cash flow
Financial Summary(1) (1) See the (i) reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow (DCF) to net income and (ii) the definitions of EBITDA, Adjusted EBITDA and DCF in the appendix of this presentation.
Circle K-CST Merger Update
Circle K Overview(1) As of July 12, 2017 As of June 30, 2017. Excludes recently announced agreement to acquire Holiday StationStores Inc, comprising 522 stores in the US Circle K is the global convenience brand of Alimentation Couche-Tard Inc. (“Couche-Tard”) Based in Laval, Quebec, Canada Largest independent convenience store operator in North America in terms of company-operated stores(2) 9,424 convenience stores throughout 42 US states and 10 Canadian provinces, including 8,077 with road transportation fuel 95,000 people employed throughout network Leader in convenience store and road transportation fuel retail in Europe, with presence in Scandinavian countries, Baltic states, Poland and Ireland 2,754 sites, majority of which offer road transportation fuel and convenience products 25,000 people employed throughout network Additional 1,700 Circle K branded stores operated by independent operators in other countries and territories Investment Grade Credit Rated BBB (Stable) by S&P Rated Baa2 (Stable) by Moody’s Market Cap of approximately CAD $36 billion TSX: ATD.A ATD.B
Transaction Overview Couche-Tard acquired CST Brands on June 28, 2017 Includes assets related to CrossAmerica Circle K, a subsidiary of Couche-Tard Organizational Relationship Upon Closing Couche-Tard controls the general partner of CrossAmerica Couche-Tard owns 21% of CrossAmerica limited partner units Couche-Tard owns 100% of CrossAmerica Incentive Distribution Rights (IDRs) CrossAmerica owns 17.5% interest in CST Fuel Supply Operating Subsidiaries 55% Limited Partner Interest CrossAmerica Partners LP NYSE: CAPL Public Unitholders Joseph Topper & Affiliates 25% Limited Partner Interest 100% Ownership Interest CST Brands, LLC US Operations CrossAmerica General Partner 100% Ownership Interest 100% Ownership Interest 17.5% Interest in CST Fuel Supply Alimentation Couche-Tard Inc. TSX: ATD.A ATD.B 100% General Partner Interest 20.5% Limited Partner Interest 100% IDR Interest
Vision & Strategy Couche-Tard Vision To become the world’s preferred destination for convenience and fuel CrossAmerica’s Strategy A leader in the wholesale distribution of motor fuels and leasing of fuel retail real estate, CrossAmerica is committed to serving our customers while increasing the value to our investors through measured growth and sound business execution The combined strategy is to leverage the strengths of each organization by simplifying the two businesses to Retail Operations at Circle K and Wholesale Operations at CrossAmerica
Step 1: Organizational Alignment Circle K US Wholesale Supply Business Wholly owned by Circle K, operates under the National Wholesale Fuels “NWF” name through nine distinct business units National presence, with regional concentration on the West Coast, Midwest and throughout the South CrossAmerica Partners LP Headquartered in Allentown, PA National presence, with regional concentration along the East Coast and Midwest 900 million gallons annually 700 dealer-operated sites 145 real estate controlled sites 1 billion gallons annually 1,100 dealer-operated sites 800 real estate controlled sites Complementary Geographic Reach National Wholesale Fuels CrossAmerica Partners
Step 1: Organizational Alignment Leverage each organization’s strengths and operate as one, national wholesale distribution organization – CrossAmerica Partners LP Will continue to be headquartered out of Allentown, PA Management and board composition Executive Officers Jeremy Bergeron, President and Chief Executive Officer Matt McCure, Vice President Operations Evan Smith, Vice President and Chief Financial Officer Giovanna Rueda, Director Legal Affairs and Corporate Secretary Board of Directors Alex Miller (Chairman), Sr. Vice President Global Fuels (Couche-Tard) Jean Bernier, Group President Global Fuels & Northeast Operations (Couche-Tard) Claude Tessier, Chief Financial Officer (Couche-Tard) Jeremy Bergeron, President and Chief Executive Officer Joe Topper, founder and former Chief Executive Officer JB Reilly, independent director Justin Gannon, independent director (Audit Committee Chair) Mickey Kim, independent director (Conflicts Committee Chair)
Step 1: Organizational Alignment We expect to achieve over $10 million in annual cost synergies at CrossAmerica Half in the first year and the remainder in the following three years Combining organizations and centralizing functions Strengthening relationships with many of our key fuel, equipment and service suppliers Additional top-line synergy opportunities Utilize Circle K turnkey branding and franchise programs that can complement our dealer offerings for backcourt support While cash flow will initially remain separate (NWF and CAPL), both organizations will benefit from a centralized, aligned structure New, board approved, management fee structure will be established to properly assign cost to the respective entities
Step 2: Simplify Structure Key part of the strategy is to simplify the two businesses to Retail Operations at Circle K and Wholesale Operations at CrossAmerica Provide clear understanding, and line-of-sight, with how EBITDA is earned in each organization and growth will occur Unwind cash flow entanglement within Circle K Maximizes qualified income at CrossAmerica Will execute in a measured way to ensure sustained levels of cash flow at CrossAmerica to support ongoing distribution growth strategy Circle K operated retail sites no longer core to retail business strategy Portion of National Wholesale Fuels business 17.5% interest in CST Fuel Supply (5 cpg on 1.8 billion annual gallons) Fuel supply to approximately 50 retail sites from prior CST acquisitions Properties from prior dropdowns and acquisitions (earning non-qualified rental income today) Certain CAPL retail assets in upper Midwest *Assets being evaluated for exchange with Circle K *Assets being evaluated for exchange with CrossAmerica *While our evaluation of assets with Circle K is intended to simplify the operating structure of each entity, there can be no assurances of completion of any transaction. Any such transaction will require the approval of the conflicts committee of the board of directors of the General Partner.
Step 3: Execute Growth Strategy CrossAmerica will have a long runway of growth opportunities through third party M&A strategy and dropdowns Third party M&A greatly enhanced with Circle K alignment Acquisition of Circle K non-core retail sites National Wholesale Fuels Acquisition of initial interest as part of asset exchange evaluation Remainder of interest dependent upon rate of execution of 3rd party M&A, distribution growth strategy and capital structure needs Financed through various sources Anticipate 50/50 debt and equity financing structure Cash flow from operations Sale-leaseback opportunities Added financing strength with an investment-grade rated general partner
Step 3: Execute Growth Strategy Distribution growth CrossAmerica has grown distributions for 12 consecutive quarters Will continue to grow, with pace of growth dependent upon market conditions and financing strategy Incentive Distribution Rights Currently at 25% split-level Will continue to monitor to ensure alignment between GP and LP unitholders to generate long-term, sustainable growth Coverage ratio Continue to target long-term coverage ratio of 1.1x annually Leverage ratio Target long-term leverage ratio of approximately 4.0x
Summary of Benefits Continuity with a sponsor whose management culture is aligned with CrossAmerica Immediate organizational alignment captures synergies and maximizes talent and offerings within both organizations Simplify cash flow structure to maximize qualified income and provide clear line-of-sight into EBITDA generation and growth Long runway for growth opportunities through dropdowns and 3rd party M&A Flexible financing opportunities Creates a leading national wholesale distributor MLP, with stable cash flow, solid balance sheet, and great opportunity for sustained distribution growth for many years to come with supportive, investment grade sponsor Alignment with national, publicly traded organization providing talent, synergy capture and immediate exposure to highly populated Northeast region Increases scale in US fuel distribution with additional 1+ billion gallons under management Provides ongoing platform to monetize operations no longer core to Retail Strategy, while still earning residual cash flow in the business through IDR and LP interest in CAPL Establishes a partner to execute M&A to maximize invested capital on assets core to each other’s strategy and investor base Significant value enhancement through CrossAmerica IDR and LP distribution growth
Appendix
2016 Highlights Acquisitions 31 stores acquired from S/S/G Corp (Franchised Holiday Stores), approx. 26 million annual fuel gallons 55 lessee dealer and 25 independent dealer accounts acquired from State Oil, approx. 60 million annual gallons Portfolio Optimization Continued dealerization process with 77 sites dealerized in 2016 Closed on a $25 million sale-leaseback transaction (17 properties in the Chicago market) Expense Reduction Reduced expenses (operating and G&A) 21% from 2015 to 2016 Capital Strength Leverage, as defined under our credit facility, was 4.2 times as of 12/31/16 Amended credit facility to provide additional borrowing flexibility and sale-leaseback optionality Sustained Distribution Growth Grew annual distributions 6.1% in 2016 compared to 2015 11 consecutive quarters of distribution growth Couche-Tard/Circle K merger with CST Brands Announced in August 2016 Potential strategic benefit to CrossAmerica Closed on June 28, 2017
Growth Drivers Capital Discipline Executed M&A strategy with two accretive acquisitions in 2016 Leveraged real estate with sale-leaseback transaction Unlocked additional capacity with credit facility enhancements Sustaining CapEx of less than $1 million in 2016 Portfolio Optimization 77 sites dealerized in 2016 Lowering expenses Stabilizing cash flow Partnership-wide Expense Control Reduced expenses $23 million or 21% from 2015 to 2016 Despite growing EBITDA(1) 15% (1) See the (i) reconciliation of EBITDA, Adjusted EBITDA and Distributable Cash Flow (DCF) to net income and (ii) the definitions of EBITDA, Adjusted EBITDA and DCF in the appendix of this presentation.
Overview of Business Segments Wholesale Fuels Distributor Convenience Store Lessor Convenience Store Operator Purchase and sale of wholesale motor fuel Distribute branded and unbranded fuel (83% of the motor fuel we distributed in 2016 was branded) Distribute motor fuel to over 1,200 sites located in 29 states In 2016, 87% of our gallons sold were based on a fixed mark-up per gallon Provide fuel to several different types of customer sites, including independent dealers, lessee dealers, affiliated dealers, CST, our company-operated stores (Retail Segment) and commission agents Lease or sublease real and personal property to tenants Sites used in the retail distribution of motor fuels Lease agreements are generally 3-10 years Leases are generally triple net leases As of 12/31/16, 810 sites generating rental income We own 57% of our properties that we lease to our dealers or utilize in our retail business Operation of convenience stores Primarily through our Erickson and S/S/G Corporation (Franchised Holiday) stores Own or lease the property Retain all profits from motor fuel and convenience store operations Own the motor fuel inventory at the sites and set the motor fuel pricing at the sites As of 12/31/16, operating 76 retail sites Manage commission agent sites CAPL owns fuel inventory and sets the retail price, earning retail fuel profit As of 12/31/16, owned/leased 95 commission agent sites (Retail Segment) WHOLESALE SEGMENT RETAIL SEGMENT
Wholesale Segment Wholesale Fuel Supply Averaged 5.2 cpg in 2016 on 1.04 billion gallons Historically averaged 5-7 cpg margin Fluctuates based on value of prompt-payment discounts and other factors, including dealer-tank-wagon margins Supply Contracts 83% of supply contracts are branded supply and earn prompt-pay discounts and other rebates and incentives 17% of supply contracts are unbranded supply arrangements and offer no additional discounts Dealer Contracts 87% of distribution contracts are spot based, or rack+ fixed contracts 13% of distribution contracts are dealer-tank-wagon, or rack-to-retail variable contracts Rental Income Generate rental income at 810 sites, Earned Gross Rental Income of $75 million in 2016 Pay rent on underlying leases at 310 sites, Paid $18 million in annual rent expense in 2016 Recognized Net Rental Income of $57 million in 2016 2016 Wholesale Gross Profit Dollars $54 million $59 million
Wholesale Segment – Fuel Fuel Volume Distributed by Brand (2016, gallons in millions) UNBRANDED Distributed 1.04 billion gallons of motor fuel in 2016 71% increase from IPO year of 2012 OTHER BRANDS
Wholesale Segment – Rent Rental Income (annuity stream) has become a sizable portion of cash flow contribution We own nearly 60% of all sites from which we generate rental income Gross Rental Income grew 25% from 2015 to 2016 Own convenient fueling locations in areas of high consumer demand Many of our sites are located in markets where limited availability of undeveloped real estate provides us a first mover advantage Due to prime locations, owned real estate sites have high alternate use values, which provides additional risk mitigation
Retail Segment Own/Lease and Operate 76 Convenience Stores(1) All located in Minnesota and Wisconsin Operate under three store brands FreedomValu, Holiday, or SuperAmerica Merchandise and Services In 2016, averaged sales of $3,790 pspd at 24.6% margin Ongoing process to convert retail sites to lessee dealers Own/Lease 95 Commission Agent Sites(1) Other category is primarily rental income from agents operating the sites CAPL owns fuel inventory and sets pricing, earning retail fuel profit CAPL pays agent a commission to operate the site based on gallons sold Retail Fuel Margin In 2016, Retail Segment averaged 2,780 gallons PSPD, with a 5.3 cpg margin In addition, Wholesale Segment distributes to the Retail Segment, capturing qualifying wholesale fuel supply income 2016 Retail Gross Profit Dollars $9 million $30 million $4 million (1) As of December 31, 2016
Portfolio Optimization Continued focus on managing expenses and execution of our integration strategy Divested of low-margin, high-expense commercial fuels business acquired with PMI acquisition Divestiture was cash flow positive despite 80 million gallon reduction of wholesale fuel supply Continue to apply our processes and systems to reduce operating and general & administrative expenses following acquisitions Converted 77 Company Operated sites to Lessee Dealer accounts in 2016, yielding a more stable, qualifying income cash flow stream Company Operated Wholesale Fuel Margin Retail Fuel Margin Retail Merchandise Margin Operating Expenses Income Taxes Lessee Dealer Wholesale Fuel Margin Rental Income Company Operated Site Count (end of period)
Operating Results Operating Results (in thousands, except for per gallon and site count) 2016 2015 % Change WHOLESALE Motor Fuel Distribution Sites (period avg.) 1,128 1,064 6% Volume of Gallons Distributed 1,034,585 1,051,357 (2%) Wholesale Fuel Margin per Gallon $0.052 $0.056 (7%) Sites Generating Rental Income 810 691 17% Rental & Other Gross Profit (Net) $58,672 $45,757 28% RETAIL Company Operated Sites (period avg.) 86 132 (35%) Commission Agent Sites (period avg.) 71 70 1% Volume of Retail Gallons Distributed 159,721 211,243 (24%) Retail Fuel Margin per Gallon $0.053 $0.092 (42%) General, Admin. & Operating Expenses $85,230 $108,467 (21%)
Executing with Measured Growth Declared distribution attributable to first quarter of $0.6175 per unit 0.5 cent per unit increase over distributions attributable to fourth quarter 2016 Increased annual per unit distribution by 6% for 2016 over 2015 Continue to target a long-term distribution coverage ratio of at least 1.1x, while continuing to grow distributions Further strengthened balance sheet with recent sale-leaseback transaction and amendments to credit facility Ended 2016 with leverage ratio of 4.2x, as defined under our credit facility Continue to demonstrate financial flexibility to execute growth strategy in any market cycle Acquisition of our GP by a U.S. subsidiary of Couche-Tard presents even more opportunity for growth
Additional Information: $0.5031 on an annual basis = $2.01 $0.5469 on an annual basis = $2.19 $0.6563 on an annual basis = $2.63 Q1 2017 Distribution = $0.6175, on an annual basis = $2.47 Incentive Distribution Rights If cash distributions to our unitholders exceed $0.5031 per unit in any quarter, CrossAmerica unitholders and the incentive distribution rights held by CST will receive distributions according to the percentage allocations shown in the chart to the right $0.5031 $0.5469 $0.6563 ↑ Unitholder Distribution IDR Distribution Lower Tier Unitholder Distribution Lower Tier IDR Distribution
Non-GAAP Financial Measures Non-GAAP Financial Measures We use non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income available to us before deducting interest expense, income taxes and depreciation, amortization and accretion. 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 our financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess our financial performance without regard to financing methods, capital structure or income taxes and the ability to incur and service debt and to fund capital expenditures. In addition, Adjusted EBITDA is used to assess the operating performance of our business on a consistent basis by excluding the impact of items which do not result directly from the wholesale distribution of motor fuel, the leasing of real property, or the day to day operations of our retail site activities. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are also used to assess the ability to generate cash sufficient to make distributions to our unit-holders. We believe the presentation of EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio provides useful information to investors in assessing 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 our industry, our definitions may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
Non-GAAP Reconciliation The following table presents reconciliations of EBITDA, Adjusted EBITDA, and Distributable Cash Flow to net income, the most directly comparable U.S. GAAP financial measure, for each of the periods indicated (in thousands, except for per unit amounts): Year Ended December 31, 2016 2015 2014 Net income (loss) available to CrossAmerica limited partners $ 7,312 $ 10,051 $ (6,407 ) Interest expense 22,757 18,493 16,631 Income tax (benefit) (453 ) (3,542 ) (1,354 ) Depreciation, amortization and accretion 54,412 48,227 33,285 EBITDA 84,028 73,229 42,155 Equity funded expenses related to incentive compensation and the Amended Omnibus Agreement(a) 16,060 14,036 11,958 Gain on sales of assets, net (198 ) (2,719 ) (1,653 ) Acquisition-related costs(b) 3,318 4,412 7,481 Working capital adjustment 335 — — Inventory fair value adjustments 91 1,356 1,483 Adjusted EBITDA 103,634 90,314 61,424 Cash interest expense (20,974 ) (16,689 ) (13,851 ) Sustaining capital expenditures(c) (798 ) (1,318 ) (3,104 ) Current income tax expense (234 ) (2,574 ) (406 ) Distributable Cash Flow $ 81,628 $ 69,733 $ 44,063 Weighted average diluted common and subordinated units 33,367 29,086 19,934 (f) Distributions paid per limited partner unit(d) $ 2.40 $ 2.23 $ 2.08 Distribution coverage ratio(e) 1.02 x 1.08 x 1.06 x (a)As approved by the independent conflicts committee of the Board and the executive committee of CST and its board of directors, the Partnership and CST mutually agreed to settle certain amounts due under the terms of the Amended Omnibus Agreement in limited partnership units of the Partnership. (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 our sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business. (d)On January 26, 2017, the Board approved a quarterly distribution of $0.6125 per unit attributable to the fourth quarter of 2016. The distribution is payable on February 13, 2017 to all unitholders of record on February 6, 2017. (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. (f)Amount includes approximately 6,000 diluted units that are not included in the calculation of diluted earnings per unit on the face of the income statement because to do so would be anti-dilutive.