CAPL 10-K & 10-Q changes, risk factors and insider trading

Both the wholesale motor fuel distribution and the retail motor fuel and convenience store industries are characterized by intense competition and fragmentation.

Changes in credit or debit card expenses could reduce our gross profit, especially on motor fuel sold at company-operated and commission agent retail sites.

Our wholesale motor fuel sales are generated under contracts that must be renegotiated or replaced periodically.

Unitholders may be subject to limitationlimitations on their ability to deduct interest expense incurred by us.

our ability to borrow under the CAPL Credit Facility and access capital markets on favorable terms, or at all; and the amount, if any, of cash reserves established by our General Partner in its discretion.

we are unable to raise financing for such acquisitions on economically acceptable terms, for example, if the market price for our common units declines or if we are unable to raise additional debt capital;

For 2024,2025, motor fuel revenues accounted for 88%87% of our total revenues and motor fuel gross profit accounted for 54%55% of total gross profit. Wholesale motor fuel costs are directly related to, and fluctuate with, the price of crude oil. Volatility in the price of crude oil, and subsequently wholesale motor fuel prices, is caused by many factors, including general political, regulatory and economic conditions, acts of war, including as a result of the conflict in Ukraine or in the Middle East, geopolitical developments around Venezuela and Greenland, terrorism or armed conflict, instability in oil producing regions, particularly in the Middle East and South America, and the value of U.S. dollars relative to other foreign currencies, particularly those of oil producing nations. In addition, the supply of motor fuel and our wholesale purchase costs could be adversely affected in the event of a shortage or oversupply of product, which could result from, among other things, interruptions of fuel production at oil refineries, new supply sources, sustained increases or decreases in global demand or the fact that our motor fuel contracts do not guarantee an uninterrupted, unlimited supply of motor fuel.

Both the wholesale motor fuel distribution and the retail motor fuel and convenience store industries are characterized by intense competition and fragmentation, and our failure to effectively compete could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.

The markets for distribution of wholesale motor fuel and the sale of retail motor fuel and convenience products and services are highly competitive and fragmented, which results in narrow margins. We have numerous competitors, and some may have significantly greater resources and name recognition than we do. We rely on our ability to provide value added reliable services and to control our operating costs to maintain our margins and competitive position. If we were to fail to maintain the quality of our services, any or all of our wholesale customers could choose alternative distribution sources and expected retail customers could purchase from other retailers, each decreasing our margins. Furthermore, major integrated oil companies may decide to distribute their own products in direct competition with us, or large wholesale customers may attempt to buy directly from the major integrated oil companies. The occurrence of any of these events could have a material adverse effect on our business, results of operations and our ability to make distributions to our unitholders.

Changes in credit or debit card expenses could reduce our gross profit, especially on motor fuel sold at company-operated and commission agent retail sites.

A significant portion of sales at our company-operated and commission agent retail sites typically involve payment using credit or debit cards. We are assessed fees as a percentage of transaction amounts and not as a fixed dollar amount or percentage of our gross profits. Also, given the expansion of our retail business in recent years, a greater proportion of our sales is subject to such fees relative to prior years. Higher motor fuel prices result in higher credit and debit card expenses, and an increase in credit or debit card use or an increase in fees have a similar effect. Therefore, credit and debit card fees charged on motor fuel purchases that are more expensive as a result of higher motor fuel prices are not necessarily accompanied by higher gross profits. In fact, such fees may cause lower gross profits. Lower gross profits on motor fuel sales caused by higher fees may decrease our overall gross profit and could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.

Additionally, such funds may have eligibility requirements that not all of our current or anticipated sites will meet. We are required to comply with federal and state financial responsibility requirements to demonstrate that we have the ability to pay for remediation or to compensate third parties for damages incurred as a result of a release of regulated materials from our USTs. We meet these requirements primarily by maintaining insurance, which we purchase from private insurers. To the extent state funds or other responsible parties do not pay or delay payments for remediation, we will be obligated to make these payments, which, in the aggregate, could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders. We can give no assurance that these funds or responsible third parties are or will continue to remain viable.

Developments aimed at reducing greenhouse gas emissions’ contribution to climate change may decrease the demand or increase the cost for our major product, petroleum-based motor fuel. Attitudes toward this product and its relationship to the environment may significantly affect our effectiveness in marketing our product and sales. Efforts to steer the public toward non-petroleum-based fuel dependent modes of transportation such as electric, hybrid, battery powered, hydrogen or other alternative fuel-powered motor vehicles may foster a negative perception toward motor fuel or increase costs for our product, thus affecting the public’s attitude toward our primary product. Further, changing consumer preferences or driving habits could lead to new forms of fueling destinations or potentially fewer customer visits to our sites, resulting in a decrease in gasoline sales and/or sales of merchandise and food at our company operated sites. In addition, higher prices could reduce the demand for gasoline and the products and services we offer at our convenience stores and adversely impact our sales. New technologies that increase fuel efficiency or offer alternative vehicle power sources or laws or regulations to increase fuel efficiency, reduce consumption or offer alternative vehicle power sources may result in decreased demand for petroleum-based motor fuel. A number of new legal incentives, regulatory requirements and executive initiatives, including the Clean Power Plan (“CPP”), the Affordable Clean Energy (“ACE”) rule that the Environmental Protection Agency (the “EPA”) has proposed to replace the CPP, the Corporate Average Fuel Economy ("CAFE") regulations issued by the U.S. National Highway Traffic Safety Administration that set fuel economy standards for fleets and various government subsidies such as the extension of certain tax credits for renewable energy, have made these alternative forms of energy and electric vehicles more competitive. We may also incur increased costs for our product, which we may not be able to pass along to our customers. These developments could potentially have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.

We store motor fuel in storage tanks at our retail sites. In addition, at lessee dealer sites, although the lessee dealer owns the fuel inventory stored in the storage tanks, we own the storage tanks and lease them to the lessee dealer. These operations are subject to significant hazards and risks inherent in storing and transporting motor fuel. These hazards and risks include, but are not limited to, fires, explosions, traffic accidents, spills, discharges and other releases, any of which could result in distribution difficulties and disruptions, environmental pollution, governmentally imposed fines or cleanup obligations, personal injury or wrongful death claims and other damage to our properties and the properties of others.

Our wholesale motor fuel sales are generated under contracts that must be renegotiated or replaced periodically. If we are unable to successfully renegotiate or replace these contracts, then our business, financial condition and results of operations and ability to make distributions to unitholders could be adversely affected.

Our wholesale motor fuel sales are generated under contracts that must be periodically renegotiated or replaced. We may be unable to renegotiate or replace these contracts when they expire, and the terms of any renegotiated contracts may not be as favorable as the contracts they replace. Whether these contracts are successfully renegotiated or replaced is often times subject to factors beyond our control. Such factors include fluctuations in motor fuel prices, counterparty ability to pay for or accept the contracted volumes and a competitive marketplace for the services offered by us. If we cannot successfully renegotiate or replace our contracts or must renegotiate or replace them on less favorable terms, sales from these arrangements could decline, which could have a material adverse effect on our business, financial condition, results of operations and cash available for distribution to our unitholders.

We have a significant amount of debt. As of December 31, 2024,2025, we had $767.5$692.3 million of total debt and $68.9$227.8 million of availability under our revolving CAPLthe Credit Facility. Our level of indebtedness could have important consequences to us, including the following:

Like all equity investments, an investment in our common units is subject to certain risks. Borrowings under the CAPL Credit Facility bear interest at variable rates, subject to interest rate swap contracts we entered into to hedge future changes in variable rates. If market interest rates increase, such variable-rate debt will create higher debt service requirements, which could adversely affect our cash flow and ability to make cash distributions. In exchange for accepting these risks, investors may expect to receive a higher rate of return than would otherwise be obtainable from lower-risk investments. Accordingly, as interest rates rise, the ability of investors to obtain higher risk-adjusted rates of return by purchasing government-backed debt securities may cause a corresponding decline in demand for riskier investments generally, including yield-based equity investments such as publicly traded limited partnership interests. Reduced demand for our common units resulting from investors seeking other more favorable investment opportunities may cause the trading price of our common units to decline.

The interest rate on the CAPL Credit Facility is variable; therefore, we have exposure to movements in interest rates, subject to our interest rate swap contracts. A significant increase in interest rates or prolonged period of relatively higher interest rates could adversely affect our ability to service our indebtedness. The increased cost could make the financing of our business activities more expensive. These added expenses could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.

The CAPL Credit Facility contains operating and financial restrictions that may limit our business, financing activities and ability to make distributions to unitholders.

The operating and financial restrictions and covenants in the CAPL Credit Facility and any future financing agreements could adversely affect our ability to finance future operations or capital needs or to engage, expand or pursue our business activities. For example, our credit facilities may restrict our ability to:

Our CAPL Credit Facility limits our ability to pay distributions upon the occurrence of the following events, among others:

The Board has adopted a cash distribution policy pursuant to which we intend to distribute quarterly an amount at least equal to the minimum quarterly distribution of $0.4375 per unit on all of our units to the extent we have sufficient cash from our operations after the establishment of reserves and the payment of our expenses. However, the Topper Group, as the owner of our General Partner, or the Board may change such policy at any time at their discretion and could elect not to pay distributions for one or more quarters. In addition, the CAPL Credit Facility includes specified restrictions on our ability to make distributions.

In addition, if we distribute a significant portion of our cash available for distribution, our growth may lag behind the growth of businesses that reinvest all of their cash to expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. There are no limitations in our Partnership Agreement or our CAPL Credit Facility on our ability to issue additional common units, provided there is no default under the CAPL Credit Facility. The incurrence of additional commercial borrowings or other debt to finance our growth strategy would result in increased interest expense, which, in turn, may impact the cash available for distribution to our unitholders.

The anticipated after-tax benefit of an investment in our common units depends largely on our being treated as a partnership for U.S. federal income tax purposes. First, a partnership is exemptgenerally fromnot subject to U.S. federal income tax, and the partnership’s income is instead allocated to the partners for inclusion on their tax returns. Second, under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, and before January 1, 2026, the partner may also deduct from the partnership’s taxable income allocable to such partner an amount equal to 20% of such qualified business income (subject to certain limits), resulting in a lower effective tax rate for the partner with respect to the partnership’s income. A publicly traded partnership, such as us, may be treated as a corporation, instead of being treated as a partnership, for U.S. federal income tax purposes unless 90% or more of its gross income for every taxable year it is publicly traded consists of Qualifying Income. Based on our current operations we believe that we will be able to satisfy this requirement and, thus, be treated as a partnership, rather than a corporation, for U.S. federal income tax purposes. However, a substantial change in our business, or a change in current U.S. federal income tax law, could also cause us to be treated as a corporation for U.S. federal income tax purposes or otherwise subject us to entity-level taxation.

We conduct a portion of our operations and business through one or more direct and indirect subsidiaries that are treated as C corporations for U.S. federal income tax purposes. We may electchoose to conduct additional operations through these corporate subsidiaries in the future. These corporate subsidiaries are subject to corporate-level taxes at the corporate tax rate, which is currently 21% for federal taxes, and willare also likely be subject to state (and possibly local) income tax at varying rates, on their taxable income. Any suchSuch entity level taxes will reduce the cash available for distribution to us and, in turn, to unitholders. If the IRS were to successfully assert that these corporations have more tax liability than we anticipate or legislation were enacted that increased the corporate tax rate, our cash available for distribution to unitholders would be further reduced. Distributions from any such C corporation will generally be taxed again to unitholders as dividend income to the extent of current and accumulated earnings and profits of such C corporation. The maximum U.S. federal income tax rate applicable to qualified dividend income that is allocable to individuals is 20% (plus an additional 3.8% Medicare tax on net investment income where applicable). An individual unitholder's share of dividend and interest income from C corporation subsidiaries would constitute portfolio income that could not be offset by the unitholder's share of our other losses or deductions.

If the IRS contests the U.S. federal income tax positions we take, the market for our common units may be adversely impacted and the costs of any contest will reduce our cash available for distribution to our unitholders. We have not requested any ruling from the IRS with respect to our treatment as a partnership for U.S. federal income tax purposes or any other U.S. federal income tax matter affecting us. The IRS may adopt positions that differ from the conclusions of our counsel expressed in our disclosures or from the positions we take. It may be necessary to resort to administrative or court proceedings to sustain some or all of our counsel’s conclusions or the positions we take, and such positions may ultimately not be sustained. A court may not agree with some or all of our counsel’s conclusions or the positions we take. Any contest with the IRS may materially and adversely impact the market for our common units and the price at which they trade. In addition, the costs of any contest with the IRS, which will be borne indirectly by our unitholders and our General Partner, will result in a reduction in cash available for distribution.

Unitholders may be subject to limitationlimitations on their ability to deduct interest expense incurred by us.

If a unitholder sells common units, the unitholder will recognize a gain or loss equal to the difference between the amount realized and that unitholder’s tax basis in those common units. Distributions per common unit in excess of a unitholder’s allocable share of our net taxable income result in a net decrease in that unitholder’s tax basis in its common units. The amount of this decreased tax basis, with respect to the units sold will, in effect, become taxable income to that unitholder, if that unitholder sells such units at a price greater than that unitholder’s tax basis in those units, even if the sales price received is less than the original cost.cost of such units to such unitholder. Furthermore, a substantial portion of the amount realized, whether or not representing gain, may be taxed as ordinary income due to potential recapture of depreciation and amortization deductions and certain other items. In addition, because the amount realized includes a unitholder’s share of our non-recourse liabilities, if a unitholder sells units, that unitholder may incur a tax liability in excess of the amount of cash received from the sale.

If a unitholder sells or otherwise disposes of a common unit, the transferee is required to withhold 10% of the amount realized by the transferor unless the transferor certifies that it is not a foreign person, and we are required to deduct and withhold from the transferee amounts that should have been withheld by the transferee but were not withheld. The Department of the Treasury and the IRS have issued final regulations providing guidance on the application of these rules for transfers of certain publicly traded partnership interests, includingsuch as transfers of our common units, that are generally applicable to transfers occurring on or after January 1, 2023. Under these regulations, the “amount realized” on a transfer of our common units will generally be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor. Such broker will generally be responsible for the 10% withholding obligation, and we will generally not be required to withhold from the transferee amounts that should have been withheld by the broker but were not withheld. Quarterly distributions made to our foreign unitholders on or after January 1, 2023 may also be subject to withholding under these rules to the extent a portion of a distribution is attributable to an amount in excess of our cumulative net income that has not previously been distributed. Any tax-exempt organization or non-U.S. person should consult its tax advisor before investing in our common units, including to discuss the potential impact of tax withholding on distributions on or sales or other taxable dispositions of our common units.

In addition to U.S. federal income taxes, our unitholders will likelymay be subject to other taxes, such as state and local income taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do business or own property, even if they do not live in any of those jurisdictions. Our unitholders will likelymay be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with those requirements. We currently conduct business in 34 states (see “Item 2. Properties”). Each unitholder mustshould assessconsult their tax advisor regarding the need to file and pay income tax in these statesstates, as well as any other state or local jurisdictions, on their allocated share of partnership taxable income. We may own property or conduct business in other states, localities or foreign countries in the future. It is the responsibility of each unitholder to file all U.S. federal, state, local and foreign tax returns. In certain states, tax losses may not produce a tax benefit in the year incurred and also may not be available to offset income in subsequent tax years. Some states may require us, or we may elect, to withhold a percentage of income from amounts to be distributed to a unitholder not otherwise exempt from withholding, who is not a resident of the state. Withholding, the amount of which may be greater or less than a particular unitholders’ income tax liability to the state, generally does not relieve a nonresident unitholder from the obligation to file a state income tax return. Amounts withheld may be treated as if distributed to unitholders for purposes of determining the amounts distributed by us. Our counsel has not rendered an opinion on the state, local or non-U.S. tax consequences of an investment in our common units.

Because a unitholder that lends common units to a “short seller” to cover a short sale of common units may be considered to have disposed of the loaned common units, the unitholder may not be treated for U.S. federal income tax purposes as a partner with respect to those common units during the period of the loan to the short seller and the unitholder may recognize gain or loss from such deemed disposition. Moreover, during the period of the loan of common units to the short seller, any of our income, gain, loss or deduction with respect to such common units may not be reportable by the respective unitholder, and any cash distributions received by the unitholder as to those common units could be fully taxable to them as ordinary income. Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to consult a tax advisor to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from loaning their common units.advisor.

A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income, gain or loss being allocatedallocable to our unitholders for U.S. federal income tax purposes. It also could affect the amount of taxable gain from our unitholders’ sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to our unitholders’ U.S. federal income tax returns without the benefit of additional deductions.

If the IRS makes audit adjustments to our income tax returns, it (and some states) may assess and collect any resulting taxes (including any applicable penalties and interest) directly from us. We will generally have the ability to shift any such tax liability to our General Partner and our unitholders in accordance with their interests in us during the year under audit, but there can be no assurance that we will be able to do so (or will choose to do so) under all circumstances, or that we will be able to (or choose to) effect corresponding shifts in state income or similar tax liability resulting from the IRS adjustment in states in which we do business in the year under audit or in the adjustment year. If we make payments of taxes, penalties and interest resulting from audit adjustments, we may require our unitholders and former unitholders to reimburse us for such taxes (including any applicable penalties or interest) or, if we are required to bear such payment, our cash available for distribution to our unitholders might be substantially reduced. Additionally, we may be required to allocate an adjustment disproportionately among our unitholders, causingwhich could cause the publicly traded units to have different capital accounts,account balances that differ from one another, unless the IRS issues further guidance.

Inflation affects our financial performance by increasing certain components of cost of goods sold, such as fuel, merchandise, and credit card fees. Inflation also affects certain operating expenses, such as labor costs, certain leases, and general and administrative expenses. While our wholesale segment benefits from higher terms discounts as a result of higher fuel costs, inflation can negatively impact our cost of goods sold and operating expenses. Although we have historically been able to pass on increased costs through price increases, there can be no assurance that we will be able to do so in the future.

Three of our most favorable interest rate swap contracts matured April 1, 2024. AsSee aNote result12 to the financial statements for additional information regarding the impact of thesethe maturitiesmaturity andof due to increases in interest rates in general, our effectivethose interest rate hasswap increasedcontracts duringon 2024our asinterest compared to 2023 and 2022, respectively.expense.

On March 31, 2023, we amended and restated the CAPL Credit Facility and terminated the JKM Credit Facility. See Note 11 to the financial statements for additional information.

Operating revenues decreased $288$436 million (7%11%) and operating income decreasedincreased $18$27 million (20%38%). These results were driven by:

Cost of sales decreased $304$440 million (8%12%), due primarily to lower wholesale volume anda lower cost per gallon,gallon and lower volume, partially offset by an increase in merchandise cost of sales driven by the same drivers as discussed above.

Gross profit increased $16$4.4 million (4%1%), which was primarily drivendue byto an increase in merchandisemotor fuel and motor fuelmerchandise gross profit withinin our retail segment, partially offset by a decrease in motor fuel and rent gross profit withinin our wholesale segment. See "“Segment Results"” for additional gross profit analyses.

General and administrative expenses increaseddecreased $1.7$0.8 million (6%3%) primarily driven by higherlower managementacquisition-related feescosts and systemlegal and information technology costs,fees, partially offset by lowerhigher equitymanagement compensation expense.fees.

Depreciation, amortization and accretion expense decreasedincreased $1.2$13.6 million (2%18%) primarily due to assetsan becoming fully depreciated, partially offset by a $3.6$18.6 million increase in impairment chargescharges, inpartially comparisonoffset toby priorthe year.impact of assets becoming fully depreciated.

We recorded income tax expense (benefit) expenseof of$8.3 million and ($3.4) million and $2.5 million for 20242025 and 2023,2024, respectively, driven by income generated (losses incurred) incomeby generatedour taxable subsidiaries, including gains and losses on sales of sites owned by our taxable subsidiaries.

The increasedecrease in the company operated site count from December 31, 2023 to December 31, 2024 was primarily attributable to the sale of certain company operated sites in connection with our real estate rationalization effort, partially offset by the conversion of certain lessee dealer and commission agent sites to company operated sites.

The increase in the commission agent site count was primarily attributable to the conversion of certain lessee dealer sites to commission agent sites, partially offset by the conversionsale of certain commission agent sites toin companyconnection operatedwith sites.our real estate rationalization effort.

Gross profit increased $36$12.5 million (14%4%) and operating income decreasedincreased $3.2$4.0 million (3%4%). These results were drivenimpacted by:

Our motor fuel gross profit increased $12$6.3 million (9%4%), attributable to a volume increase of 9% due primarily to an5% increase in our margin per gallon during 2025 compared to 2024, driven by movements in crude oil prices within the two years. In addition, our average retail site count increased 4% due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by the sale of certain company operated and commission agent sites in connection with our real estate rationalization effort. This increase was partially offset by a volume decrease of 2% due primarily to a decrease in volume in our base business.

Operating expenses increased $39$8.5 million (25%4%) driven by a 25%4% increase in the average company operatedretail site count due to the conversion of certain lessee dealer sites to company operated and commission agent sites, partially offset by the sale of certain company operated and commission agent sites toin companyconnection operatedwith sites.our real estate rationalization effort.

The decreaseincrease in the independent dealer site count from December 31, 2023 to December 31, 2024 was primarily attributable to the net loss of contracts, partially offset by divestituressale of certain lessee dealerdealer, company operated and commission agent sites but with continued fuel supply.supply, partially offset by the net loss of independent dealer contracts.

Gross profit decreased $20$8.1 million (16%7%) and operating income decreased $14$3.4 million (15%4%). These results were drivenimpacted by:

The $9.8$0.6 million (1%) decrease (13%) in motor fuel gross profit was primarily due to a 12%7% decrease in volume driven by the conversion of certain lessee dealer sites to company operated and commission agent sites andsites, the net loss of independent dealer contracts.contracts and a decrease in volume in our base business. These decreases were partially offset by the sale of certain company operated and commission agent sites but with continued fuel supply, thereby converting the site to an independent dealer site and for which the volume is included in the wholesale segment. In addition, our average fuel margin per gallon decreasedincreased 2%7% as compared to 2023,2024, driven by thebetter movementssourcing ofcosts, partially offset by lower prompt payment discounts associated with lower crude oil prices.

Rent gross profit decreased $9.8$7.9 million (19%), primarily due to the sale of certain lessee dealer sites in connection with our real estate rationalization effort as well as the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the real estate rationalization effort.sites.

Operating expenses decreased $6.2$4.7 million (16%15%), primarily due to the sale of certain lessee dealer sites in connection with our real estate rationalization effort as well as the conversion of certain lessee dealer sites to company operated and commission agent sites as well as the real estate rationalization effort.sites.

We use the non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net income (loss) before deducting interest expense, income taxes and depreciation, amortization and accretion (which includes certain impairment charges). Adjusted EBITDA represents EBITDA as further adjusted to exclude equity-based compensation expense, gains or losses on dispositions and lease terminations, net and certain discrete acquisition related costs, such as legal and other professional fees, 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 distributions paid on common units.

See "Results of Operations–Gain (loss) on dispositions and Lease Terminations, net."

Under the Partnership Agreement, 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 or to maintain our sites in conditions suitable to operate or lease, such as parking lot or roof replacement/renovation, or to replace equipment required to operate the existing business.

ForExcludes 2024,$4.9 excludesmillion and $1.9 million of current income tax incurred on sales of sites.sites for 2025 and 2024, respectively.

Our principal liquidity requirements are to finance our operations, fund acquisitions, service our debt and pay distributions to our unitholders. We expect our ongoing sources of liquidity to include cash generated by operations, proceeds from sales of sites in connection with our real estate rationalization efforts, borrowings under the CAPL Credit Facility, and if available to us on acceptable terms, issuances of equity and debt securities. We regularly evaluate alternate sources of capital to support our liquidity requirements.

Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, acquisitions, distributions on the preferred membership interests and partnership distributions, will depend on our future operating performance, which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many of which are beyond our control. As a normal part of our business, depending on market conditions, we will, from time to time, consider opportunities to repay, redeem, repurchase or refinance our indebtedness. Changes in our operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may cause us to seek additional debt or equity financing in future periods.

We believe that we will have sufficient cash flow from operations, borrowing capacity under the CAPL Credit Facility, access to capital markets and alternate sources of funding to meet our financial commitments, debt service obligations, contingencies, anticipated capital expendituresexpenditures, distributions on the preferred membership interests and partnership distributions. However, we are subject to business and operational risks that could adversely affect our cash flow. A material decrease in our cash flows would likely produce an adverse effect on our borrowing capacity as well as our ability to issue additional equity and/or debt securities and/or maintain or increase distributions to unitholders.

In 2025 and 2024, we incurred capital expenditures of $36 million and $26 millionmillion, respectively, driven by site upgrades, including store remodels, rebranding of certain sites, image upgrades funded primarily through incentives from our fuel suppliers and site purchases. WeIn paid2025 $26and 2024, we received proceeds of $104 million to Applegreen related to lease terminations and inventory purchases. We received $35 millionmillion, in proceedsrespectively, primarily from the sale of sites in connection with our real estate rationalization effort. In 2024, we also paid $26 million to Applegreen related to lease terminations and inventory purchases.

In 2025 and 2024, we paid $80 million in distributions to our unitholders. WeIn 2025 and 2024, respectively, we made net (repayments) borrowings of $(75) million and $12 million on our credit facility.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Operating revenues decreasedincreased $20.6$217 million (2%23%) and operating income increaseddecreased $21.7$6.2 million.million (15%). Significant items impacting these results were:

Cost of sales decreasedincreased $28.5$205 million (4%24%), due primarilyto toa higher cost per gallon, partially offset by lower volume,volume drivendue byto the same drivers as discussed above.

Gross profit increased $7.8$11.8 million (9%12%) due primarily to an increase in motor fuel and merchandise gross profit in both our retail segment, partially offset by a decrease in motor fuel and rent gross profit in our wholesale segment.segments. See “Results of Operations—Segment Results” for additional gross profit analyses.

General and administrative expenses decreasedincreased $1.2$0.2 million (15%4%) primarily driven by lowerhigher legal fees and equity compensation expense.expense, partially offset by lower acquisition-related costs.

Depreciation, amortization and accretion expense decreased $9.2$6.6 million (35%28%) primarily due to a $7.3$4.9 million decrease in impairment charges in comparison to prior year, as well as lower depreciation expense resulting from the impact of our site sales.

During the three months ended MarchJune 31,30, 2026, we recorded $6.3$1.1 million in net gains in connection with our ongoing real estate rationalizationoptimization effort, partially offset by $0.2 million of net losses on lease terminations and asset disposals.effort.

During the three months ended MarchJune 31,30, 2025, we recorded $5.6$29.7 million in net gains in connection with our ongoing real estate rationalizationoptimization effort, partially offset by $0.6$1.3 million of net losses on lease terminations and asset disposals.

We recorded income tax expense (benefit) of $2.5$3.3 million and ($3.6)$3.9 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, driven by income generated (losses incurred) by our taxable subsidiaries.

The decrease in the company operated site count was primarily attributable to the sale of certain company operated sites in connection with our real estate rationalizationoptimization effort, partially offset by the conversion of certain lessee dealer sites to company operated sites.effort.

The decrease in the commission agent site count was primarily attributable to the sale of certain commission agent sites in connection with our real estate rationalizationoptimization effort, partially offset by the conversion of certain lessee dealer sites to commission agent sites.effort.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Our motor fuel gross profit increased $8.7$7.7 million (28%20%), attributable to a 29%33% increase in our margin per gallon for the three months ended March 31, 2026 as compared to the same period in 2025 due to greater volatility in the price of crude oil for the three months ended MarchJune 31,30, 2026 as compared to the same period of 2025. This increase was partially offset by a volume decrease of 7%12% due primarily to a 4%decrease in volume in our base business as well as a decrease in our average retail site count due to the sale of certain company operated sites in connection with our real estate optimization effort as well as a decrease in volume in our base business.effort.

Our merchandise gross profit increased $2.0$0.5 million (8%2%) due primarily to an increase in sales in our base business as well as an increase in our merchandise gross profit percentage. TheseThis increasesincrease werewas partially offset by a 6% reduction in our average company operated site count due primarily to the sale of certain company operated sites in connection with our real estate optimization effort.

Operating expenses decreased $1.7$2.1 million (3%4%) driven by a 4%decrease in store labor as well as a decrease in the average retail site count due to the sale of certain company operated and commission agent sites in connection with our real estate optimization effort, partially offset by the conversion of certain lessee dealer sites to company operated and commission agent sites.effort.

The decrease in the lessee dealer site count was primarily attributable to the sale of certain lessee dealer sites in connection with our real estate rationalizationoptimization effort (generally with continued fuel supply, thereby converting the site to an independent dealer site) as well as the conversion of certain lessee dealer sites to company operated and commission agent sites.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Gross profit decreasedincreased $3.3$2.2 million (13%9%) and operating income decreasedincreased $2.6$3.0 million (13%17%). These results were impacted by:

Operating expenses decreased $0.7$0.8 million (10%11%), primarily due to the sale of certain lessee dealer sites in connection with our real estate rationalizationoptimization effort as well as the conversion of certain lessee dealer sites to company operated and commission agent sites.effort.

Excludes $0.5 million of current income tax expense incurred on the sales of sites for the first quarter of 2026.sites.

Our principal liquidity requirements are to finance our operations, fund acquisitions, service our debt and pay distributions to our unitholders. We expect our ongoing sources of liquidity to include cash generated by operations, proceeds from sales of sites in connection with our real estate rationalizationoptimization efforts, borrowings under the Credit Facility, and if available to us on acceptable terms, issuances of equity and debt securities. We regularly evaluate alternate sources of capital to support our liquidity requirements.

Net cash provided by operating activities increased $13$23 million for the threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025, primarily due to stronger operating results in 2026 and a decrease in interest expense driven by a lower average outstanding debt balance as well as a lower average SOFR rate.rate, partially offset by higher income tax payments in 2026 compared to 2025.

We incurred capital expenditures of $3$11 million and $10$22 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. We received $13$16 million and $9$73 million in proceeds primarily from the sale of sites in connection with our real estate rationalizationoptimization effort for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. We also paid $1.8 million as a final payment in connection with a prior-year acquisition.

We paid $20$40 million in distributions for each of the threesix months ended MarchJune 31,30, 2026 and 2025. For the threesix months ended MarchJune 31,30, 2026 and 2025, we made total net (repayments) borrowings on the Credit Facility of ($10)$21 million and $11$41 million, respectively.

The amount of any distribution is subject to the discretion of the Board, which may modifyreduce or revokeeliminate ourthe cash distribution policy at any time. Our Partnership Agreement does not require us to pay any distributions. As such, there can be no assurance we will continue to pay distributions in the future.