Benzinga | Nov 4, 2020 04:47PM EST

CrossAmerica Appoints Eric Javidi As Chief Financial Officer

Allentown, Nov. 04, 2020 (GLOBE NEWSWIRE) --

CrossAmerica Partners LP Reports Third Quarter 2020 Results and Announces Appointment of New Chief Financial Officer

* Reported Third Quarter 2020 Operating Income of $23.7 million and Net Income of $21.2 million compared to Operating Income of $12.3 million and Net Income of $7.2 million for the Third Quarter 2019

* Generated Third Quarter 2020 Adjusted EBITDA of $30.0 million and Distributable Cash Flow of $29.7 million compared to Third Quarter 2019 Adjusted EBITDA of $29.0 million and Distributable Cash Flow of $25.7 million

* Reported Third Quarter 2020 Gross Profit for the Wholesale Segment of $42.8 million compared to $36.2 million of Gross Profit for the Third Quarter 2019

* Reported Third Quarter 2020 Gross Profit for the Retail Segment of $19.5 million compared to $4.9 million of Gross Profit for the Third Quarter 2019

* Distributed 327.4 million wholesale fuel gallons during the Third Quarter 2020 at an average wholesale fuel margin per gallon of 9.4 cents

* The Distribution Coverage Ratio for the current quarter was 1.50 times compared to 1.42 times for the comparable period of 2019. The Distribution Coverage Ratio was 1.24 times for the trailing twelve months ended September 30, 2020, as compared to 1.14 times for the trailing twelve months ended September 30, 2019

* The Board of Directors of CrossAmerica's General Partner declared a quarterly distribution of $0.5250 per limited partner unit attributable to the Third Quarter 2020

* Announced appointment of Eric Javidi as Chief Financial Officer, effective November 5, 2020



Allentown, PA November 4, 2020 -- CrossAmerica Partners LP (NYSE:CAPL) ("CrossAmerica" or the "Partnership"), a leading wholesale fuels distributor, convenience store operator, 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, 2020.

"As with last quarter, our operating results demonstrate the durability of our business model and validate the strategic actions we took earlier in the year. Our newly acquired assets added meaningfully to our results this quarter and our overall financial position continues to be strong," said Charles Nifong, CEO and President of CrossAmerica. "This quarter, we executed the final asset exchange transaction with Circle K, which positions the Partnership to now focus on future opportunities. Although COVID 19 continues to impact the business, we saw an overall improved operating environment in the quarter relative to the second quarter."

Third Quarter Results

Consolidated Results

Operating income was $23.7 million for the third quarter 2020 compared to $12.3 million achieved in the third quarter 2019. Net income was $21.2 million or $0.56 per diluted common unit for the third quarter 2020, compared to Net income of $7.2 million or $0.20 per diluted common unit for the same period in 2019. Adjusted EBITDA was $30.0 million for the third quarter 2020, a 3% increase when compared to $29.0 million for the same period in 2019. The increases in Operating and Net income and Adjusted EBITDA were primarily driven by the positive impact from all the transactions completed over the past year, partially offset by the impact of the COVID-19 Pandemic. During the three months ended September 30, 2020, Operating and Net income also benefited from $11.4 million in gains related to properties sold in asset exchanges with Circle K along with $2.2 million in gains in connection with the Partnership's ongoing real estate rationalization effort.

Non-GAAP measures used in this release include EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. These Non-GAAP measures are further described and reconciled to their most directly comparable GAAP measures in the Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release.

Wholesale Segment

During the third quarter 2020, CrossAmerica's Wholesale segment generated $42.8 million in gross profit compared to $36.2 million in gross profit for the third quarter 2019, representing an increase of 18%. The Partnership distributed, on a wholesale basis, 327.4 million gallons of motor fuel at an average wholesale gross profit of $0.094 per gallon, resulting in motor fuel gross profit of $30.7 million. For the three-month period ended September 30, 2019, CrossAmerica distributed, on a wholesale basis, 260.3 million gallons of fuel at an average wholesale gross profit of $0.080 per gallon, resulting in motor fuel gross profit of $20.8 million. The 47% increase in motor fuel gross profit was driven by a 26% increase in fuel volume distributed and an 18% increase in fuel margin per gallon. The main drivers of the volume increase were the asset exchanges with Circle K, the CST Fuel Supply Exchange and the acquisition of retail and wholesale assets, partially offset by the impact of the COVID-19 Pandemic. The increase in fuel margin per gallon was primarily driven by dealer tank wagon (DTW) margins resulting from a favorable price environment in the quarter and an increase in overall DTW volume. With the acquisition of retail and wholesale assets earlier this year, in addition to an overall increase in wholesale volume, the percentage of variable-priced business has increased from 18% of the gallons sold to CrossAmerica's customers for the third quarter 2019 to 28% of the gallons sold to its customers for the third quarter 2020. This increase was partially offset by lower terms discounts as a result of lower crude prices.

The prices paid by the Partnership to its motor fuel suppliers for wholesale motor fuel (which affects the cost of sales) are highly correlated to the price of crude oil. The average daily spot price of West Texas Intermediate crude oil during the third quarter 2020 was $40.89 per barrel, a 27% decrease, as compared to the average daily spot price of $56.34 per barrel during the same period in 2019.

CrossAmerica's gross profit from Rent for the Wholesale segment was $11.9 million for the third quarter 2020 compared to $14.3 million for the third quarter 2019, representing a decrease of 17%. The decrease in rent was primarily driven by terminating leases at sites the Partnership previously leased to other parties but now operates itself as part of the acquisition of retail and wholesale assets earlier this year, partially offset by the impact of the conversion of 46 company operated sites to dealer operated sites in the third quarter 2019 and the CST Fuel Supply Exchange.

Operating income for the Wholesale segment was $34.5 million for the third quarter 2020 compared to $31.5 million for the same period in 2019, an increase of 9%. As discussed above, the year-over-year increase was primarily driven by an increase in motor fuel gross profit, partially offset by the decrease in rent margin discussed above and the decrease in income from CST Fuel Supply as a result of the CST Fuel Supply Exchange.

Retail Segment

For the third quarter 2020, the Retail Segment reported motor fuel gross profit of $3.5 million. For the same period in 2019, CrossAmerica generated motor fuel gross profit of $1.2 million. The $2.2 million or 180% increase in motor fuel gross profit is attributable to a 119% increase in volume driven by the increase in company operated and commission sites as a result of the April 2020 acquisition of retail and wholesale assets and the March 2020 CST Fuel Supply Exchange, partially offset by the conversion of 46 company operated sites to dealer operated sites in the third quarter 2019 and the impact of the COVID-19 Pandemic. In addition, CrossAmerica realized a 28% higher average margin per gallon as the higher retail fuel margins at its company operated sites comprised a larger percentage of the overall retail fuel margins in 2020 as compared to 2019.

Merchandise gross profit increased $10.3 million, rent gross profit increased $0.3 million or 17% and operating expenses increased $14.8 million due to the factors listed above. Excluding rent expense, operating expenses at CrossAmerica's company operated sites increased $11.5 million. The average company operated site count increased by 123 sites and the operating expenses on a per-store basis decreased 4% relative to the third quarter 2019. Additionally, a greater percentage of the Partnership's company operated sites are leased than in the prior year, and so the rent component of operating expenses at the company operated sites increased $3.3 million.

Operating income for the Retail segment was $0.3 million for the third quarter 2020 compared to $0.5 million for the third quarter 2019, primarily as a result of changes in operations noted above.

Distributable Cash Flow and Distribution Coverage Ratio

Distributable Cash Flow was $29.7 million for the three-month period ended September 30, 2020, compared to $25.7 million for the same period in 2019. The 16% increase in Distributable Cash Flow was primarily due to the increase in operating income in the Wholesale Segment and a decrease in cash interest. Both periods benefited from a current tax benefit related primarily to bonus depreciation on eligible assets acquired in the asset exchanges and capital expenditures. The Distribution Coverage Ratio for the current quarter was 1.50 times compared to 1.42 times for the third quarter 2019. The Distribution Coverage Ratio was 1.24 times for the trailing twelve months ended September 30, 2020, as compared to 1.14 times for the trailing twelve months ended September 30, 2019 (see Supplemental Disclosure Regarding Non-GAAP Financial Measures section of this release).

Liquidity and Capital Resources

As of October 29, 2020, after taking into consideration debt covenant restrictions, approximately $235 million was available for future borrowings under the Partnership's revolving credit facility, an increase of $32 million and $143 million, respectively, in availability compared to June 30, 2020 and December 31, 2019. As of September 30, 2020, CrossAmerica had $507.5 million outstanding under its revolving credit facility. Leverage, as defined under CrossAmerica's credit facility, was 3.83 times as of September 30, 2020, compared to 3.96 times as of June 30, 2020 and 4.70 times as of December 31, 2019.

Distributions

On October 22, 2020, the Board of the Directors of CrossAmerica's General Partner ("Board") declared a quarterly distribution of $0.5250 per limited partner unit attributable to the third quarter 2020. As previously announced, the distribution will be paid on November 10, 2020 to all unitholders of record as of November 3, 2020. The amount and timing of any future distributions is subject to the discretion of the Board as provided in CrossAmerica's Partnership Agreement.

Completion of Asset Exchange Transactions with Circle K

On December 17, 2018, CrossAmerica and Circle K announced an agreement to exchange assets in a series of transactions. During the third quarter 2020, the two entities completed the sixth and final asset exchange as outlined below:

*On September 15, 2020, the sixth exchange was completed and entailed Circle K transferring to the Partnership 23 (17 fee; 6 leased) U.S. company-operated convenience and fuel retail stores having an aggregate value of approximately $20.4 million, and the Partnership transferred to Circle K the real property for four of the CrossAmerica properties having an aggregate value of approximately $20.0 million. As the sixth exchange was the final exchange contemplated by the Asset Exchange Agreement, Circle K also transferred a $6.7 million cash payment to the Partnership in connection with the closing, in accordance with the terms of the Asset Exchange Agreement.

Divestment of Assets

During the third quarter 2020, CrossAmerica, as part of its ongoing real estate rationalization effort, divested a total of seven properties, and received $3.8 million in connection with these sales. Through the first nine months ended September 30, 2020, CrossAmerica has sold 20 properties and received $13.3 million in proceeds.

Appointment of Eric Javidi as Chief Financial Officer

The Board appointed Mr. Javidi as Chief Financial Officer of the partnership effective November 5, 2020. Jon Benfield, the Interim Chief Financial Officer, will remain with the partnership and was appointed Chief Accounting Officer, effective November 5, 2020.

Mr. Javidi was most recently President and CEO of Southcross Holdings L.P. Prior to joining Southcross Holdings, he was a Managing Director at Kayne Anderson Capital Advisors, L.P., where he was primarily focused on investments within the energy infrastructure space. Prior to joining Kayne Anderson, Mr. Javidi held positions as an investment banker with UBS, Barclays and Lehman Brothers, focused on the global energy industry.

"It is an honor to welcome Eric to the CrossAmerica team as our new CFO," said Charles Nifong, President & Chief Executive Officer of CrossAmerica. "Eric has a solid record of achievement and brings to the partnership strong leadership and a wealth of financial and strategic acumen. I also thank Jon Benfield for his tremendous efforts in the interim CFO role during a challenging period. He did an outstanding job. With Eric and Jon in their new roles, the financial function of the partnership, and the partnership overall, is well positioned for future success."

Eric Javidi stated; "It is an exciting time to join CrossAmerica. The Partnership has made significant strategic progress over the past year; I look forward to building on that momentum and delivering value to the unitholders."

Conference Call

The Partnership will host a conference call on November 5, 2020 at 9:00 a.m. Eastern Time to discuss third quarter 2020 earnings results. The conference call numbers are 800-774-6070 or 630-691-2753 and the passcode for both is 7265208#. A live audio webcast of the conference call and the related earnings materials, including reconciliations of 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 https://caplp.gcs-web.com/webcasts-presentations. After the live conference call, an archive of the webcast will be available on the investor section of the CrossAmerica website at https://caplp.gcs-web.com/webcasts-presentations within 24 hours after the call for a period of sixty days.

CROSSAMERICA PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(Thousands of Dollars, except unit data)

September 30, December 31, 2020 2019 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,328 $ 1,780 Accounts receivable, net of allowances 35,302 38,051 of $992 and $557, respectivelyAccounts receivable from related parties 2,960 4,299 Inventory 22,368 6,230 Assets held for sale 17,093 13,231 Other current assets 9,180 5,795 Total current assets 88,231 69,386 Property and equipment, net 565,288 565,916 Right-of-use assets, net 171,006 120,767 Intangible assets, net 97,599 44,996 Goodwill 88,764 88,764 Other assets 19,325 21,318 Total assets $ 1,030,213 $ 911,147 LIABILITIES AND EQUITY Current liabilities: Current portion of debt and finance lease $ 2,585 $ 2,471 obligationsCurrent portion of operating lease 32,437 23,485 obligationsAccounts payable 71,384 57,392 Accounts payable to related parties 4,298 431 Accrued expenses and other current 21,905 16,382 liabilitiesMotor fuel and sales taxes payable 20,627 12,475 Total current liabilities 153,236 112,636 Debt and finance lease obligations, less 522,050 534,859 current portionOperating lease obligations, less current 143,939 100,057 portionDeferred tax liabilities, net 15,410 19,369 Asset retirement obligations 41,015 35,589 Other long-term liabilities 34,488 30,240 Total liabilities 910,138 832,750 Commitments and contingencies Equity: Common units?(37,868,046 and 34,494,441 unitsissued and 123,076 78,397 outstanding at September 30, 2020 andDecember 31, 2019, respectively)Accumulated other comprehensive loss (3,001 ) ? Total equity 120,075 78,397 Total liabilities and equity $ 1,030,213 $ 911,147

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Thousands of Dollars, Except Unit and Per Unit Amounts)

(Unaudited)

Three Months Ended September Nine Months Ended September 30, 30, 2020 2019 2020 2019 Operating $ 591,022 $ 559,736 $ 1,381,119 $ 1,637,050 revenues(a)Costs of sales 528,750 518,591 1,225,470 1,517,458 (b)Gross profit 62,272 41,145 155,649 119,592 Income from CSTFuel Supply ? 3,927 3,202 11,087 equity interestsOperating expenses:Operating 27,508 12,978 63,328 42,541 expensesGeneral andadministrative 5,363 3,937 15,440 12,464 expensesDepreciation,amortization and 18,590 14,063 51,867 39,620 accretionexpenseTotal operating 51,461 30,978 130,635 94,625 expensesGain (loss) ondispositions andlease 12,881 (1,745 ) 79,237 (2,173 )terminations,netOperating income 23,692 12,349 107,453 33,881 Other income, 143 168 358 352 netInterest expense (3,522 ) (6,532 ) (13,183 ) (21,105 )Income before 20,313 5,985 94,628 13,128 income taxesIncome tax (892 ) (1,180 ) (3,868 ) (690 )benefitNet income 21,205 7,165 98,496 13,818 IDR ? (133 ) (133 ) (399 )distributionsNet incomeavailable to $ 21,205 $ 7,032 $ 98,363 $ 13,419 limited partners Basic anddiluted earnings $ 0.56 $ 0.20 $ 2.64 $ 0.39 per common unit Weighted-averagelimited partner units:Basic common 37,867,647 34,453,162 37,202,087 34,447,185 unitsDiluted common 37,868,610 34,464,027 37,202,087 34,447,723 units (c) Supplemental information:(a) Includes $ 47,222 $ 21,292 $ 95,929 $ 61,642 excise taxes of:(a) Includes 19,747 22,921 62,859 66,519 rent income of:(b) Includes 6,036 7,003 19,088 20,475 rent expense of:(c) Diluted common units were not used in the calculation of diluted earningsper common unit for the nine months ended

September 30, 2020 because to do so would have been antidilutive.

CROSSAMERICA PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands of Dollars)

(Unaudited)

Nine Months Ended September 30, 2020 2019 Cash flows from operating activities: Net income $ 98,496 $ 13,818 Adjustments to reconcile net income to net cashprovided by

operating activities:Depreciation, amortization and accretion expense 51,867 39,620 Amortization of deferred financing costs 781 776 Credit loss expense 1,014 259 Deferred income tax (benefit) expense (4,047 ) 4,099 Equity-based employee and director compensation 83 547 expense(Gain) loss on dispositions and lease (87,225 ) 2,173 terminations, netChanges in operating assets and liabilities, net 25,534 8,210 of acquisitionsNet cash provided by operating activities 86,503 69,502 Cash flows from investing activities: Principal payments received on notes receivable 246 803 Proceeds from sale of assets to Circle K 23,049 3,148 Proceeds from sale of property and equipment 13,757 1,000 Capital expenditures (24,439 ) (18,398 )Cash paid in connection with acquisitions, net of (28,244 ) ? cash acquiredNet cash used in investing activities (15,631 ) (13,447 ) Cash flows from financing activities: Borrowings under the revolving credit facility 159,098 68,442 Repayments on the revolving credit facility (170,580 ) (62,442 )Payments of long-term debt and finance lease (1,830 ) (1,708 )obligationsPayment of deferred financing costs ? (3,441 )Distributions paid on distribution equivalent (8 ) (63 )rightsDistributions paid to holders of the IDRs (133 ) (399 )Distributions paid on common units (57,871 ) (54,250 )Net cash used in financing activities (71,324 ) (53,861 )Net (decrease) increase in cash and cash (452 ) 2,194 equivalentsCash and cash equivalents at beginning of period 1,780 3,191 Cash and cash equivalents at end of period $ 1,328 $ 5,385

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, 2020 2019 2020 2019 Gross profit: Motor fuel?third party $ 15,505 $ 13,392 $ 40,722 $ 32,805 Motor fuel?intersegment and 15,181 7,451 38,023 21,844 related partyMotor fuel gross profit 30,686 20,843 78,745 54,649 Rent gross profit 11,853 14,331 38,244 41,530 Other revenues 290 990 1,705 2,319 Total gross profit 42,829 36,164 118,694 98,498 Income from CST Fuel Supply ? 3,927 3,202 11,087 equity interests(a)Operating expenses (8,329 ) (8,572 ) (26,912 ) (24,098 )Operating income $ 34,500 $ 31,519 $ 94,984 $ 85,487 Motor fuel distribution sites (end of period):(b)Motor fuel?third party Independent dealers(c) 683 370 683 370 Lessee dealers(d) 667 662 667 662 Total motor fueldistribution?third party 1,350 1,032 1,350 1,032 sitesMotor fuel?intersegment and related partyDMS (related party)(e) ? 68 ? 68 Circle K(f) 5 28 5 28 Commission agents (Retail 211 169 211 169 segment)(g)Company operated retail sites 149 ? 149 0 (Retail segment)(h)Total motor fueldistribution?intersegment 365 265 365 265

and related party sitesMotor fuel distribution sites(average during the

period):Motor fuel-third party 1,345 965 1,253 909 distributionMotor fuel-intersegment andrelated party 364 302 327 336

distributionTotal motor fuel distribution 1,709 1,267 1,580 1,245 sitesVolume of gallons distributed (in thousands)Third party 242,826 188,261 613,250 514,058 Intersegment and related 84,541 72,026 195,008 236,064 partyTotal volume of gallons 327,367 260,287 808,258 750,122 distributed Wholesale margin per gallon $ 0.094 $ 0.080 $ 0.097 $ 0.073

(a) Represents income from CrossAmerica's equity interest in CST Fuel Supply.

(b) In addition, as of September 30, 2020 and 2019, CrossAmerica distributed motor fuel to 14 and 13 sub-wholesalers who distributed to additional sites, respectively.

(c) The increase in the independent dealer site count was primarily attributable to the 288 independent dealer contracts acquired in the CST Fuel Supply Exchange and the asset exchange with Circle K which resulted in 26 Circle K sites being converted to independent dealers.

(d) The increase in the lessee dealer site count was primarily attributable to the 72 lessee dealer sites acquired in the asset exchanges with Circle K, the 18 lessee dealer sites acquired in the CST Fuel Supply Exchange and converting sites operated by DMS to lessee dealer sites, partially offset by the acquisition of retail and wholesale assets that resulted in the termination of leases at 48 lessee dealer sites and the real estate rationalization effort.

(e) The decrease in the DMS site count was primarily attributable to the acquisition of retail and wholesale assets that resulted in the termination of 54 leases with DMS and conversion of DMS sites to lessee dealer sites.

(f) The decrease in the Circle K site count was primarily attributable to the asset exchange with Circle K, which resulted in 26 Circle K sites being converted to independent dealer sites.

(g) The increase in the commission site count was primarily attributable to the 37 commission sites acquired in the CST Fuel Supply Exchange.

(h) The increase in the company operated site count was primarily attributable to the 154 company operated sites from the acquisition of retail and wholesale assets.

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 retail sites, gallons sold per day and per gallon amounts):

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Gross profit: Motor fuel $ 3,487 $ 1,247 $ 7,176 $ 4,683 Merchandise(a) 12,305 1,964 21,689 10,169 Rent 1,858 1,587 5,527 4,514 Other revenue(a) 1,825 131 3,046 1,507 Total gross profit 19,475 4,929 37,438 20,873 Operating expenses (19,179 ) (4,406 ) (36,416 ) (18,443 )Operating income $ 296 $ 523 $ 1,022 $ 2,430 Retail sites (end of period):Commission agents(b) 211 169 211 169 Company operated retail 149 ? 149 ? sites(c)Total system sites at 360 169 360 169 the end of the period Total system operating statistics:Average retail fuel 359 196 289 219 sites during the periodMotor fuel sales(gallons per site per 2,601 2,173 2,892 2,154 day)Motor fuel gross profitper gallon, net ofcredit card $ 0.041 $ 0.032 $ 0.040 $ 0.036

fees and commissions Commission agents statistics:Average retail fuel 209 169 196 170 sites during the periodMotor fuel gross profitper gallon, net ofcredit card $ 0.015 $ 0.015 $ 0.015 $ 0.015

fees and commissions Company operated retail site statistics:Average retail fuel 150 27 93 48 sites during the periodMotor fuel gross profitper gallon, net ofcredit card $ 0.066 $ 0.129 $ 0.078 $ 0.101

feesMerchandise gross profitpercentage, net ofcredit 26.6 % 20.5 % 26.1 % 21.2 %

card fees(a)

(a) CrossAmerica reclassified revenues related to certain ancillary items such as car wash revenue, lottery commissions and ATM commissions from merchandise margin to other revenues to conform to the current year presentation, which amounted to $0.1 million and $1.5 million for the three and nine months ended September 30, 2019, respectively. This reclassification also impacted the merchandise gross profit percentages reported for the 2019 periods.

(b) The increase in the commission site count was primarily attributable to the 37 commission sites acquired in the CST Fuel Supply Exchange.

(c) The increase in the company operated site count was primarily attributable to the 154 company operated sites from the acquisition of retail and wholesale assets.

Supplemental Disclosure Regarding Non-GAAP Financial Measures

CrossAmerica uses the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income available to the Partnership before deducting interest expense, income taxes, depreciation, amortization and accretion (which includes certain impairment charges). Adjusted EBITDA represents EBITDA as further adjusted to exclude equity-based employee and director compensation expense, gains or losses on dispositions and lease terminations, net, certain discrete acquisition related costs, such as legal and other professional fees and separation benefit costs 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. The Distribution Coverage Ratio is computed by dividing Distributable Cash Flow by the weighted average diluted common 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 the CrossAmerica financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess the 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 the CrossAmerica 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 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 the Partnership's unitholders.

CrossAmerica 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 the 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, 2020 2019 2020 2019 Net income available to $ 21,205 $ 7,032 $ 98,363 $ 13,419 limited partnersInterest expense 3,522 6,532 13,183 21,105 Income tax benefit (892 ) (1,180 ) (3,868 ) (690 )Depreciation,amortization and 18,590 14,063 51,867 39,620 accretion expenseEBITDA 42,425 26,447 159,545 73,454 Equity-based employeeand director 35 221 83 547 compensation expenseLoss (gain) ondispositions and lease (12,881 ) 1,745 (79,237 ) 2,173 terminations, net(a)Acquisition-related 385 538 2,578 1,943 costs(b)Adjusted EBITDA 29,964 28,951 82,969 78,117 Cash interest expense (3,261 ) (6,301 ) (12,401 ) (20,329 )Sustaining capital (745 ) (466 ) (1,792 ) (1,229 )expenditures(c)Current income tax 3,784 3,561 7,452 4,789 benefit(d)Distributable Cash Flow $ 29,742 $ 25,745 $ 76,228 $ 61,348 Weighted-average diluted 37,869 34,464 37,202 34,448 common unitsDistributions paid per $ 0.5250 $ 0.5250 $ 1.5750 $ 1.5750 limited partner unit(e)Distribution Coverage 1.50x 1.42x 1.30x 1.13x Ratio(f)

2 CrossAmerica recorded gains on the sale of CAPL properties in connection with the asset exchange with Circle K of $11.4 million and $19.3 million for the three and nine months ended September 30, 2020, respectively. The Partnership also recorded gains on the sale of sites in connection with its ongoing real estate rationalization effort of $2.2 million and $4.0 million for the three and nine months ended September 30, 2020, respectively. During the nine months ended September 30, 2020, CrossAmerica recorded a $67.6 million gain on the sale of its 17.5% investment in CST Fuel Supply. Also, during the nine months ended September 30, 2020, CrossAmerica recorded a loss on lease terminations, including the non-cash write-off of deferred rent income associated with these leases, of $10.9 million.

4 Relates to certain discrete acquisition related costs, such as legal and other professional fees, separation benefit costs and certain purchase accounting adjustments associated with recently acquired businesses.

6 Under the Partnership Agreement, sustaining capital expenditures are capital expenditures made to maintain CrossAmerica's 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.

8 Excludes current income tax incurred on the sale of sites.

10 On October 22, 2020, the Board approved a quarterly distribution of $0.5250 per unit attributable to the third quarter of 2020. The distribution is payable on November 10, 2020 to all unitholders of record on November 3, 2020.

12 The distribution coverage ratio is computed by dividing Distributable Cash Flow by the weighted-average diluted common units and then dividing that result by the distributions paid per limited partner unit.





About CrossAmerica Partners LP

CrossAmerica Partners LP is a leading wholesale distributor of motor fuels and owner and lessee of real estate used in the retail distribution of motor fuels. Its general partner, CrossAmerica GP LLC, is indirectly owned and controlled by entities affiliated with Joseph V. Topper, Jr., the founder of CrossAmerica Partners and a member of the board of the general partner since 2012. 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 1,700 locations and owns or leases approximately 1,100 sites. With a geographic footprint covering 34 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 LP 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.

Contact

Investor Relations: Randy Palmer, rpalmer@caplp.com or 210-742-8316

Cautionary Statement Regarding Forward-Looking Statements

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 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.