CrossAmerica Partners(CAPL) - 2019 Q3 - Quarterly Report

Financial Performance - Operating revenues for Q3 2019 were $559,736,000, a decrease of 16.6% from $670,810,000 in Q3 2018[20] - Gross profit for Q3 2019 was $41,145,000, down 6.0% from $43,798,000 in Q3 2018[20] - Net income attributable to limited partners for Q3 2019 was $7,165,000, compared to $5,308,000 in Q3 2018, representing a 35.0% increase[20] - Operating income for Q3 2019 was $12,349,000, slightly down from $13,652,000 in Q3 2018, a decrease of 9.6%[20] - Revenues from fuel sales to external customers in the Wholesale segment were $426,161,000, while the Retail segment generated $99,935,000[161] - The limited partners' interest in net income for the three months ended September 30, 2019, was $7.032 million, compared to $5.175 million for the same period in 2018[153] Assets and Liabilities - Total current assets increased to $56,246,000 as of September 30, 2019, from $50,862,000 at December 31, 2018, a growth of 10.0%[17] - Total assets reached $919,061,000 as of September 30, 2019, compared to $866,922,000 at December 31, 2018, reflecting a 6.0% increase[17] - Total liabilities increased to $827,269,000 as of September 30, 2019, up from $755,989,000 at December 31, 2018, a rise of 9.4%[17] - Total current liabilities increased to $130,080,000 as of September 30, 2019, from $88,448,000 at December 31, 2018, an increase of 47.0%[17] - As of September 30, 2019, total debt and finance lease obligations amounted to $527.2 million, a slight increase from $522.9 million as of December 31, 2018[82] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2019, was $69,502,000, compared to $57,270,000 for the same period in 2018, representing an increase of approximately 21.5%[25] - Capital expenditures for the nine months ended September 30, 2019, totaled $(18,398,000), an increase from $(10,217,000) in the same period of 2018, indicating a significant investment in growth[25] - Net cash used in investing activities was $(13,447,000) for the nine months ended September 30, 2019, compared to $(4,941,000) in the prior year, reflecting increased capital outlays[25] - The balance of cash and cash equivalents at the end of the period was $5,385,000, up from $3,791,000 at the end of September 30, 2018, showing improved liquidity[25] Equity and Distributions - The total equity for common unitholders at September 30, 2019, was $91,792,000, reflecting a decrease from $116,912,000 at the same time in 2018, indicating potential challenges in equity retention[29] - Distributions paid per common unit remained consistent at $0.5250 for the quarters ended March 31, June 30, and September 30, 2019[156] - The total cash distribution for the quarter ended September 30, 2019, was $18,115 thousand[156] Lease and Asset Management - The adoption of new lease accounting guidance resulted in the recognition of right-of-use assets totaling $133.3 million and lease liabilities of $135.9 million effective January 1, 2019[40] - The company recorded a net adjustment to equity of $28.9 million due to the adoption of the new lease accounting guidance[43] - The company recorded impairment charges totaling $1.8 million during the three and nine months ended September 30, 2019, related to certain sites classified within assets held for sale[75] - The company has a revolving credit facility with a balance of $504 million as of September 30, 2019, compared to $498 million at the end of 2018[82] Operational Changes - The company dealerized 46 company-operated sites in the Upper Midwest during Q3 2019, transitioning them to lessee dealers[167] - As of September 30, 2019, the company no longer has any company-operated sites, focusing solely on wholesale and commission operations[169] - The company completed upgrades of dispensers and rebranding of substantially all Jet-Pep Assets sites in Q3 2019, anticipating a positive impact on volume and fuel margin[305] Revenue Sources - Rental income from Circle K for the three months ended September 30, 2019, was $3.4 million, down 19.8% from $4.2 million in the prior year[107] - Income from CST Fuel Supply equity interests was $3.9 million for the three months ended September 30, 2019, compared to $3.5 million for the same period in 2018, reflecting an increase of 11.4%[108] - Total motor fuel purchases from Circle K amounted to $82.3 million for the three months ended September 30, 2019, up 56.2% from $52.7 million in 2018[112] Tax and Compliance - The effective tax rate differs from the combined federal and state statutory rate primarily because only the corporate subsidiary is subject to income tax[150] - The company recorded an income tax benefit of $(1.2) million for the three months ended September 30, 2019[150]