Crossamerica Partners
Annual Report 2016

Plain-text annual report

FORM 10-KUNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549(Mark One)þANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________Commission File No. 001-35711CROSSAMERICA PARTNERS LP(Exact name of registrant as specified in its charter)Delaware(State or Other Jurisdiction of Incorporation or Organization) 45-4165414(I.R.S. Employer Identification No.)515 Hamilton Street, Suite 200Allentown, PA(Address of Principal Executive Offices) 18101(Zip Code)(610) 625-8000(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act: Common units representing limited partner interests, $0.01 par value per share listed on the NewYork Stock Exchange.Securities registered pursuant to Section 12(g) of the Act: None.Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes þ No oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). Yes þ No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K orany amendment to this Form 10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer þ Non-accelerated filer o Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þThe aggregate market value of the voting and non-voting common stock held by non-affiliates was approximately $471.2 million based on the last salesprice quoted as of June 30, 2016 on the New York Stock Exchange, the last business day of the registrant’s most recently completed second fiscal quarter.As of February 24, 2017, the registrant had outstanding 33,524,952 common units.Documents Incorporated by Reference: None.TABLE OF CONTENTS PAGEPART I Items 1., 1A., and 2. Business, Risk Factors and Properties1Item 1B. Unresolved Staff Comments29Item 3. Legal Proceedings29PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities31Item 6. Selected Financial Data34Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations37Item 7A. Quantitative and Qualitative Disclosures About Market Risk65Item 8. Financial Statements and Supplementary Data66Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure106Item 9A. Controls and Procedures106Item 9B. Other Information107PART III Item 10. Directors, Executive Officers and Corporate Governance108Item 11. Executive Compensation112Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters130Item 13. Certain Relationships and Related Transactions, and Director Independence132Item 14. Principal Accountant Fees and Services137PART IV Item 15. Exhibits and Financial Statement Schedules138 Signatures142PART ICOMMONLY USED TERMSThe following is a list of certain acronyms and terms generally used in the industry and throughout this document: CrossAmerica Partners LP and subsidiaries:CrossAmerica, the Partnership, we, us, ourCrossAmerica Partners LPLGP Operations LLCa wholly owned subsdiary of the PartnershipLGWLehigh Gas Wholesale LLCLGPRLGP Realty Holdings LPLGWSLehigh Gas Wholesale Services, Inc. and subsidiaries CrossAmerica Partners LP related and affiliated parties:CSTCST Brands, Inc. and subsidiariesCST Boardthe Board of Directors of CSTDMIDunne Manning Inc., an entity associated with Joseph V. Topper, Jr., a member of the Board and arelated partyDMSDunne Manning Stores LLC (formerly known as Lehigh Gas-Ohio, LLC), an entity associated withJoseph V. Topper, Jr., a member of the Board and a related party. DMS is an operator of retail motor fuelstations. DMS leases retail sites from us in accordance with a master lease agreement with us and DMSpurchases substantially all of its motor fuel for these sites from us on a wholesale basis under rack pluspricing. The financial results of DMS are not consolidated with oursGeneral PartnerCrossAmerica GP LLC, the General Partner of CrossAmericaCST Fuel SupplyCST Fuel Supply LP is the Parent of CST Marketing and SupplyCST Marketing and SupplyCST Marketing and Supply, LLC, a subsidiary of CST Fuel Supply, which provides wholesale fueldistribution to the majority of CST’s U.S. retail sites on a fixed markup per gallonTopper GroupJoseph V. Topper, Jr., collectively with those of his affiliates and family trusts that have ownershipinterests in our Predecessor Entities, including DMITopstarTopstar Enterprises, an entity associated with Joseph V. Topper, Jr. Topstar is an operator of retail sitesthat leases retail sites from us, but does not purchase fuel from us Recent Acquisitions:PMIPetroleum Marketers, Inc., acquired in April 2014Nice N EasyNice N Easy Grocery Shoppes, acquired in November 2014LandmarkLandmark Industries, acquired in January 2015EricksonErickson Oil Products, Inc., acquired in February 2015One StopM&J Operations, LLC, acquired in July 2015Franchised Holiday StoresThe franchised Holiday stores acquired by CrossAmerica from S/S/G Corporation in March 2016State Oil AssetsThe assets acquired from State Oil Company in September 2016 iOther Defined Terms: Amended Omnibus AgreementThe Amended and Restated Omnibus Agreement, dated October 1, 2014, as amended on February 17,2016 by and among CrossAmerica, the General Partner, DMI, DMS, CST Services and Joseph V.Topper, Jr., which amends and restates the original omnibus agreement that was executed in connectionwith CrossAmerica’s initial public offering on October 30, 2012. The terms of the Amended OmnibusAgreement were approved by the conflicts committee of the Board. Pursuant to the Amended OmnibusAgreement, CST Services agrees, among other things, to provide, or cause to be provided, to thePartnership the management services previously provided by DMI on substantially the same terms andconditions as were applicable to DMI under the Original Omnibus Agreement.ASCAccounting Standards CodificationASUAccounting Standards UpdateBoardBoard of Directors of our General PartnerBPBP p.l.c.Branded Motor FuelsMotor fuels that are purchased from major integrated oil companies and refiners under supplyagreements. We take legal title to the motor fuel when we receive it at the rack and generally arrange fora third-party transportation provider to take delivery of the motor fuel at the rack and deliver it to theappropriate sites in our network.Couche-TardAlimentation Couche-Tard Inc.(TSX: ATD.A ATD.B)DTWDealer tank wagon contracts, which are variable cent per gallon priced wholesale motor fuel distributionor supply contracts; DTW also refers to the pricing methodology under such contractsEBITDAEarnings before interest, taxes, depreciation and amortization, a non-GAAP financial measureEICPThe Partnership’s Executive Income Continuity Plan, as amendedExchange ActSecurities Exchange Act of 1934, as amendedExxonMobilExxonMobil CorporationFASBFinancial Accounting Standards BoardForm 10-KCrossAmerica’s Annual Report on Form 10-K for the year ended December 31, 2016GettyGetty Realty CorporationGP PurchaseCST’s purchase from Lehigh Gas Corporation of 100% of the membership interests in the sole memberof the General PartnerIDRsIncentive Distribution Rights, which are partnership interests on our common units that provide forspecial distributions associated with increasing distributions. CST is the owner of 100% of theoutstanding IDRs of CrossAmericaIDR PurchaseCST’s purchase of all of the membership interests in limited liability companies formed by the 2004Irrevocable Agreement of Trust of Joseph V. Topper, Sr. and the 2008 Irrevocable Agreement of Trust ofJohn B. Reilly, Jr., which owned all of the IDRs in Lehigh Gas Partners LP.Internal Revenue CodeInternal Revenue Code of 1986, as amendedIPOInitial public offering of CrossAmerica Partners LP on October 30, 2012IRSInternal Revenue ServiceLIBORLondon Interbank Offered RateMergerThe merger of Ultra Acquisition Corp. with CST, with CST surviving the merger as a wholly ownedsubsidiary of Circle K Stores Inc. See Merger Agreement belowMerger AgreementCST’s Agreement and Plan of Merger (the “Merger Agreement”) entered into on August 21, 2016 withCircle K Stores Inc., a Texas corporation (“Parent”), and Ultra Acquisition Corp., a Delaware corporationand an indirect, wholly owned subsidiary of Parent (“Merger Sub”). Under and subject to the terms andconditions of the Merger Agreement, Merger Sub will be merged with and into CST, with CST survivingthe Merger as a wholly owned subsidiary of Parent. Parent is a wholly owned subsidiary of AlimentationCouche-Tard Inc.MD&AManagement’s Discussion and Analysis of Financial Condition and Results of OperationsMotivaMotiva Enterprises, LLCiiNTICST’s new to industry stores opened after January 1, 2008, which is generally when CST begandesigning and operating its larger format stores that accommodate broader merchandise categories andfood offerings and have more fuel dispensers than its legacy storesNYSENew York Stock ExchangePartnership Agreementthe First Amended and Restated Agreement of Limited Partnership of CrossAmerica Partners LP, datedas of October 1, 2014, as amendedPlanIn connection with the IPO, the General Partner adopted the Lehigh Gas Partners LP 2012 IncentiveAward Plan, a long-term incentive plan for employees, officers, consultants and directors of the GeneralPartner and any of its affiliates who perform services for the PartnershipPredecessor EntitiesWholesale distribution business of Lehigh Gas-Ohio, LLC and real property and leasehold interestscontributed in connection with the IPOQSRQuick service restaurantRetail siteA general term to refer to convenience stores, including those operated by commission agents,independent dealers, CST, DMS or lessee dealers, as well as company operated sitesSECU.S. Securities and Exchange CommissionU.S. GAAPUnited States Generally Accepted Accounting PrinciplesUSTUnderground storage tanksValeroValero Energy Corporation and, where appropriate in context, one or more of its subsidiaries, or all ofthem taken as a wholeWTIWest Texas Intermediate crude oiliiiCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSThis Form 10-K includes forward-looking statements, including in the section entitled “Management’s Discussion and Analysis of Financial Condition andResults of Operations.” Forward-looking statements include the information concerning our possible or assumed future results of operations, businessstrategies, financing plans, competitive position, credit ratings, distribution growth, potential growth opportunities, potential operating performanceimprovements, potential improvements in return on capital employed, the effects of competition and the effects of future legislation or regulations. You canidentify our forward-looking statements by the words “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,”“predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “guidance,” “outlook,” “effort,” “target” and similarexpressions. Such statements are based on management’s current views and assumptions, and involve risks and uncertainties that could affect expectedresults. These forward-looking statements include, among other things, statements regarding:•future retail and wholesale gross profits, including gasoline, diesel and convenience store merchandise gross profits;•our anticipated level of capital investments, primarily through acquisitions, and the effect of these capital investments on our results of operations;•anticipated trends in the demand for, and volumes sold of, gasoline and diesel in the regions where we operate;•volatility in the equity and credit markets limiting access to capital markets;•our ability to integrate acquired businesses and to transition retail sites to lessee dealer operated sites;•expectations regarding environmental, tax and other regulatory initiatives; and•the effect of general economic and other conditions on our business.In general, we based the forward-looking statements included in this quarterly report on our current expectations, estimates and projections about ourcompany and the industry in which we operate. We caution you that these statements are not guarantees of future performance as they involve assumptionsthat, while made in good faith, may prove to be incorrect, and involve risks and uncertainties we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual outcomes and results may differ materiallyfrom what we have expressed or forecasted in the forward-looking statements. Any differences could result from a variety of factors, including the following:•CST’s Merger or its Merger Agreement and interim operating covenants contained therein;•the inability to satisfy the conditions specified in the Merger Agreement, including, without limitation, the receipt of necessary governmental orregulatory approvals required to complete the transactions contemplated by the Merger Agreement;•CST’s business strategy and operations and CST’s conflicts of interest with us and, post-merger, Couche-Tard’s business strategy and operations andCouche-Tard’s conflicts of interest with us;•availability of cash flow to pay the current quarterly distributions on our common units;•the availability and cost of competing motor fuels;•motor fuel price volatility or a reduction in demand for motor fuels;•competition in the industries and geographical areas in which we operate;•the consummation of financing, acquisition or disposition transactions and the effect thereof on our business;•our existing or future indebtedness;•our liquidity, results of operations and financial condition;•failure to comply with applicable tax and other regulations or governmental policies;•future legislation and changes in regulations or governmental policies or changes in enforcement or interpretations thereof;•future regulations and actions that could expand the non-exempt status of employees under the Fair Labor Standards Act;iv•future income tax legislation;•changes in energy policy;•increases in energy conservation efforts;•technological advances;•the impact of worldwide economic and political conditions;•the impact of wars and acts of terrorism;•weather conditions or catastrophic weather-related damage;•earthquakes and other natural disasters;•hazards and risks associated with transporting and storing motor fuel;•unexpected environmental liabilities;•the outcome of pending or future litigation; and•our ability to comply with federal, provincial and state laws and regulations, including those related to environmental matters, the sale of alcohol,cigarettes and fresh foods, employment, health benefits, including the Affordable Care Act, immigration, and international trade.You should consider the areas of risk described above, as well as those set forth in the section entitled “Risk Factors” included elsewhere in this Form 10-K,in connection with considering any forward-looking statements that may be made by us and our businesses generally. We cannot assure you that projectedresults or events reflected in the forward-looking statements will be achieved or will occur. The forward-looking statements included in this report are madeas of the date of this report. We undertake no obligation to publicly release any revisions to any forward-looking statements, to report events or to report theoccurrence of unanticipated events after the date of this report.vITEMS 1., 1A., and 2. BUSINESS, RISK FACTORS AND PROPERTIESOverviewWe are a Delaware limited partnership primarily engaged in the wholesale distribution of motor fuel and the ownership and leasing of real estate used in theretail distribution of motor fuel. We also generate revenues from the operation of retail sites.On October 1, 2014, CST completed the GP Purchase and IDR Purchase for $17 million in cash and approximately 2 million shares of CST common stock foraggregate consideration of approximately $90 million. On August 21, 2016, CST, the owner of our General Partner, entered into the Merger Agreement. As aresult, Circle K Stores Inc., a subsidiary of Couche-Tard, will, through its acquisition of CST, control CST’s interest in the General Partner and CST’s 19.8%limited partner interest in CrossAmerica as well as all of the IDRs. The Merger was approved by CST’s stockholders on November 16, 2016 and is subject tothe receipt of regulatory approvals in the United States and Canada. The Merger is currently expected to close in the second quarter of 2017. The GeneralPartner manages the operations and activities of CrossAmerica. The General Partner is managed and operated by the Board and executive officers of theGeneral Partner. As a result of the GP Purchase, CST controls the General Partner and has the right to appoint all members of the Board. Therefore, CSTcontrols the operations and activities of CrossAmerica even though CST does not own a majority of our outstanding limited partner units.Our principal executive offices address is 515 Hamilton Street, Suite 200, Allentown, PA 18101, and our telephone number is (610) 625-8000. Our commonunits trade on the NYSE under the symbol “CAPL.”The financial statements reflect the consolidated results of the Partnership and its wholly owned subsidiaries. Our primary operations are conducted by thefollowing consolidated wholly owned subsidiaries:•LGW, which distributes motor fuels on a wholesale basis and generates qualified income under Section 7704(d) of the Internal Revenue Code;•LGPR, which functions as the real estate holding company of CrossAmerica and holds assets that generate rental income that is qualifying underSection 7704(d) of the Internal Revenue Code; and•LGWS, which owns and leases (or leases and sub-leases) real estate and personal property used in the retail distribution of motor fuels, as well asprovides maintenance and other services to its customers. In addition, LGWS distributes motor fuels on a retail basis and sells conveniencemerchandise items to end customers at company operated retail sites and sells motor fuel on a retail basis at sites operated by commission agents.Income from LGWS generally is not qualifying income under Section 7704(d) of the Internal Revenue Code.We conduct our business through two operating segments, Wholesale and Retail. As of December 31, 2016, we distributed motor fuel to nearly 1,200 siteslocated in 29 states (Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts,Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Tennessee,Texas, Virginia, West Virginia and Wisconsin).As part of our business strategy with CST, we intend, when favorable market conditions exist and pending approval by our Board’s independent conflictscommittee and the approval of the executive committee of the CST Board and mutual agreement upon terms and other conditions, to purchase equityinterests at fair market value in CST Fuel Supply, over time. The Merger Agreement prohibits, among other things, CST from selling its tangible andintangible properties or assets to us between August 21, 2016 and completion of the Merger. As such, there can be no assurance we will be able to purchaseequity interests in CST Fuel Supply in the future. As of December 31, 2016, our total limited partner interest in CST Fuel Supply was 17.5%. See Note 15 fordiscussion of the July 2016 refund of a portion of the purchase price paid in 2015 by us to CST Fuel Supply associated with the reduction in wholesaledistribution volume resulting from CST’s sale of its California and Wyoming assets.1In 2015, we issued our common units as consideration in the purchase of equity interests in CST Fuel Supply and the real property associated with some ofCST’s NTI retail sites. In addition, we also issued, and may continue to issue, our common units as payment for charges and expenses incurred by us under theAmended Omnibus Agreement. There is no obligation for CST to accept partnership units in lieu of cash for amounts due under the Amended OmnibusAgreement. Pursuant to a common unit purchase program announced in September 2015, CST has, from time to time, also acquired our common unitsthrough open market purchases. At December 31, 2016, after giving effect to these transactions, CST owned 19.8% of our limited partner interests.Available InformationOur internet website is www.crossamericapartners.com. Information on this website is not part of this Form 10-K. Annual reports on our Form 10-K, quarterlyreports on our Form 10-Q and our current reports on Form 8-K filed with (or furnished to) the SEC are available on this website free of charge, soon after suchmaterial is filed or furnished. In this same location, we also post our corporate governance guidelines, code of ethics and business conduct and the charters ofthe committees of our Board. These documents are available in print to any unitholder that makes a written request to CrossAmerica Partners L.P. Attn:Corporate Secretary, 515 Hamilton Street, Suite 200, Allentown, Pennsylvania 18101.CST’s internet website is www.CSTBrands.com. Information on this website is not part of this Form 10-K. Annual reports on Form 10-K, quarterly reports onForm 10-Q and current reports on Form 8-K filed with (or furnished to) the SEC are available on this website free of charge, soon after such material is filed orfurnished. In this same location, CST also posts its corporate governance guidelines, code of ethics and business conduct and the charters of the committeesof the CST Board. These documents are available in print to any stockholder that makes a written request to CST Brands, Inc. Attn: Corporate Secretary,19500 Bulverde Road, Suite 100, San Antonio, Texas 78259.OperationsWholesale SegmentOur primary operation is the wholesale distribution of motor fuel. Our Wholesale segment generated 2016 revenues of $1.6 billion. We are one of the tenlargest independent distributors by volume in the United States for ExxonMobil, BP and Motiva (Shell), and we also distribute Chevron, Sunoco, Valero,Gulf, Citgo, Marathon and Phillips 66-branded motor fuels (approximately 83% of the motor fuel we distributed during 2016 was branded). We receive afixed mark-up per gallon on approximately 87% of gallons sold to our customers. The remaining gallons are primarily DTW priced contracts with ourcustomers. These contracts provide for variable, market based pricing. An increase in DTW gross profit results from the acquisition cost of wholesale motorfuel declining at a faster rate as compared to the rate retail motor fuel prices decline. Conversely, our DTW motor fuel gross profit declines when the cost ofwholesale motor fuel increases at a faster rate as compared to the rate retail motor fuel prices increase.Regarding our supplier relationships, a majority of our total gallons purchased are subject to discounts for prompt payment and other rebates and incentives,which are recorded within cost of sales. Prompt payment discounts are based on a percentage of the purchase price of motor fuel. As such, the dollar value ofthese discounts increase and decrease corresponding with motor fuel prices. Therefore, in periods of lower wholesale motor fuel prices, our gross profit isnegatively affected and, in periods of higher wholesale motor fuel prices, our gross profit is positively affected (as it relates to these discounts). Based on ourcurrent volumes, we estimate a $10 per barrel change in the price of crude oil would impact our overall annual wholesale motor fuel gross profit byapproximately $2.2 million related to these payment discounts.2The following table highlights the aggregate volume of motor fuel distributed by our Wholesale segment to each of our principal customer groups by gallonssold for the periods (in millions): Year Ended December 31, Wholesale Fuel Distribution End of YearSites 2016 2015 2014 2016 2015 2014Gallons of motor fuel distributed to: Independent dealers362.3 418.1 396.9 403 370 416Lessee dealers268.4 169.7 143.8 420 290 205DMS164.6 177.6 224.0 153 191 197CST78.9 77.3 4.9 43 43 21Company operated retail sites84.7 133.1 45.1 73 115 87Commission agents75.7 75.6 73.0 95 66 75Total1,034.6 1,051.4 887.7 1,187 1,075 1,001Independent Dealer Sites•The independent dealer owns or leases the property and owns all motor fuel and convenience store inventory.•We contract to exclusively distribute motor fuel to the independent dealer at a fixed mark-up per gallon or, in some cases, DTW.•Distribution contracts with independent dealers are typically 7 to 10 years in length.•As of December 31, 2016, the average remaining distribution contract term was 5.6 years.Lessee Dealer Sites•We own or lease the property and then lease or sublease the site to a dealer.•The lessee dealer owns all motor fuel and retail site inventory and sets its own pricing and gross profit margins.•We collect wholesale motor fuel margins at a fixed mark-up per gallon or, in some cases, DTW.•Under our distribution contracts, we agree to supply a particular branded motor fuel or unbranded motor fuel to a site or group of sites and arrange for alltransportation.•Exclusive distribution contracts with dealers who lease property from us run concurrent in length to the retail site’s lease period (generally 3 to 10 years).•Leases are generally triple net leases.•As of December 31, 2016, the average remaining lease agreement term was 3.9 years.DMS Sites•We own or lease the property and then lease or sublease the site to DMS.•We entered into a 15-year motor fuel distribution agreement with DMS pursuant to which we distribute to DMS motor fuel at a fixed mark-up per gallon.•We entered into 15-year triple-net lease agreements with DMS pursuant to which DMS leases sites from us.•DMS owns motor fuel and retail site inventory and sets its own pricing and gross profit margin.•As of December 31, 2016, the average remaining term on our motor fuel distribution agreements with DMS was 10.8 years. The average remaining termon our lease agreements with DMS was 11.2 years.3CST Sites•In conjunction with the joint acquisitions of Nice N Easy and Landmark with CST, we own the property and lease the retail sites to CST. Concurrentlywith these acquisitions, we entered into a 10-year motor fuel distribution agreement with CST, pursuant to which we distribute to CST motor fuels at afixed mark-up per gallon.•We lease sites to CST under a 10-year triple-net master lease agreement.•CST owns all motor fuel and retail site inventory and sets its own pricing and gross profit margin.•As of December 31, 2016, the remaining term on our fuel distribution agreement was 7.9 years. The average remaining term on our lease agreements withCST was 8.2 years.Rental IncomeWe also generate revenues through leasing or subleasing our real estate. We own or lease real and personal property and we lease or sublease to tenants, thesubstantial majority of which are wholesale customers as described above. As such, we manage our real estate leasing activities congruently with ourwholesale business. We own approximately 57% of our properties that we lease to our dealers or utilize in our retail business. Our lease agreements with thirdparty landlords have an average remaining lease term of 7.8 years as of December 31, 2016. Not all of the rental income we earn is a qualified source ofincome. Rental income from CST is not qualifying income.CST Fuel SupplyAs of December 31, 2016, our total limited partner interest in CST Fuel Supply was 17.5%. We receive pro rata distributions from CST Fuel Supply related toCST Marketing and Supply’s distribution of fuel to the majority of CST’s U.S. retail sites.Retail SegmentOur Retail segment generated 2016 revenues of $467 million. We own or lease and operate retail sites. Subsequent to an acquisition, we evaluate theeventual long-term operation of each retail site acquired: (a) to be converted into a lessee dealer or (b) other strategic alternatives, including divestiture orlonger term operation as a retail site. By converting retail sites into lessee dealers, we continue to benefit from motor fuel distribution volumes as well asrental income from lease or sublease arrangements while reducing operating expenses. For the year ended December 31, 2016, we converted 77 companyoperated retail sites in our Retail segment to lessee dealers in our Wholesale segment. As of December 31, 2016, we continue to operate 76 retail sites,including three liquor stores to which we do not distribute fuel on a wholesale basis.Company Operated Sites•We own or lease the property, operate the retail site and retain all profits from motor fuel and retail site operations.•We own the motor fuel inventory at the sites and set the motor fuel pricing at the sites.•We maintain inventory from the time of the purchase of motor fuel from third party suppliers until the retail sale to the end customer. On average, wemaintain approximately 5-days’ worth of motor fuel sales in inventory at each site.•LGW distributes on a wholesale basis all of the motor fuel required by our company operated sites, which owns the motor fuel inventory anddistributes motor fuel to retail customers. LGW records qualifying wholesale motor fuel distribution gross income and LGWS records the non-qualifying retail distribution gross income.Commission Sites•We own or lease the property and then lease or sublease the site to the commission agent, who pays rent to us and operates all the non-fuel relatedoperations at the sites for its own account.•We own the motor fuel inventory at the sites, set the motor fuel pricing at the sites, and generate revenue from the retail sale of motor fuels to the endcustomer.•We pay the commission agent a commission for each gallon of fuel sold at the site.•LGW distributes motor fuel on a wholesale basis to LGWS, which owns the motor fuel inventory and distributes motor fuel to commission sites.LGW records qualifying wholesale motor fuel distribution gross income and LGWS records the non-qualifying retail gross income.4•As of December 31, 2016, the average remaining fuel distribution and lease agreement term was 2.7 years.The following chart depicts how motor fuel is procured and distributed to our customer groups and how convenience merchandise items are procured anddistributed to our company owned and operated retail sites. The chart also depicts the relationship of our real estate activities to our customer groups.Business Strategy and ObjectiveOur primary business objective is to generate sufficient cash flows from operations to make quarterly cash distributions to our unitholders and, over time, toincrease our quarterly cash distributions. The amount of any distribution is subject to the discretion of the Board, and the Board may modify or revoke thecash distribution policy at any time. Our Partnership Agreement does not require us to pay any distributions.Our business strategy to achieve our objective of paying and, over time, increasing our quarterly cash distributions, is focused on the following keyinitiatives:•Expand within and beyond our existing markets through acquisitions. Since our IPO and through February 24, 2017, we have completedacquisitions for a total of over 500 fee and leasehold sites for total consideration of approximately $0.9 billion;•Enhance our real estate business’ cash flows by owning or leasing sites in prime locations;•Increase our wholesale motor fuel distribution business by expanding market share;•Maintain strong relationships with major integrated oil companies and refiners;•Utilize operating knowledge to grow retail gross profits after the acquisition of retail sites; and•As part of our business strategy with CST, we intend, when favorable market conditions exist and pending approval by the Board’s independentconflicts committee and the approval of the executive committee of the board of directors of CST and mutual agreement upon terms and otherconditions, to purchase equity interests at fair market value in CST Fuel Supply, over time. The Merger Agreement prohibits, among other things,CST from selling its tangible and intangible properties or assets to us between August 21, 2016 and completion of the Merger. As such, there can beno assurance we will be able to purchase equity interests in CST Fuel Supply in the future. As of December 31, 2016, our total equity interest in CSTFuel Supply was 17.5%.5See “Risk Factors—Risks Relating to CST’s Merger” for certain risks that could effect our ability to execute these key initiatives.We believe our competitive strengths will allow us to capitalize on our strategic opportunities, including:•Stable cash flows from real estate rent income and wholesale motor fuel distribution;•Established history of acquiring sites and successfully integrating these sites and operations into our existing business;•Long-term relationships with major integrated oil companies and other key suppliers;•Retail site operating expertise; and•Prime real estate locations in areas with high traffic and considerable motor fuel consumption.Supplier ArrangementsWe distribute branded motor fuel under the Exxon, Mobil, BP, Shell, Chevron, Sunoco, Valero, Gulf, Citgo and Marathon brands to our customers. Brandedmotor fuels are purchased from major integrated oil companies and refiners under supply agreements. For the year ended December 31, 2016, our wholesalebusiness purchased approximately 30%, 25% and 24% of its motor fuel from ExxonMobil, BP and Motiva (Shell), respectively. We purchase the motor fuelat the supplier’s applicable terminal rack price, which typically changes daily. Certain suppliers offer volume rebates or incentive payments to drive volumesand provide an incentive for branding new locations. Certain suppliers require that all or a portion of any such incentive payments be repaid to the supplierin the event that the sites are rebranded within a stated number of years. We also purchase unbranded motor fuel for distribution at a rack price. As ofDecember 31, 2016, our supply agreements had a weighted-average remaining term of approximately 2.3 years.CompetitionOur wholesale motor fuel distribution business competes with other motor fuel distributors. Major competitive factors for us include, among others, customerservice, price and quality of service and availability of products.The convenience store industry is highly competitive and characterized by ease of entry and constant change in the number and type of retailers offeringproducts and services of the type we sell in our retail sites. We compete with other retail site chains, independently owned retail sites, motor fuel stations,supermarkets, drugstores, discount stores, dollar stores, club stores and hypermarkets. Major competitive factors include, among others, location, ease ofaccess, product and service selection, motor fuel brands, pricing, customer service, store appearance, and cleanliness.SeasonalityOur business exhibits substantial seasonality due to our wholesale and retail sites being located in certain geographic areas that are affected by seasonalweather and temperature trends and associated changes in retail customer activity during different seasons. Historically, sales volumes have been highest inthe second and third quarters (during the summer activity months) and lowest during the winter months in the first and fourth quarters.Trade Names, Service Marks and TrademarksWe are a wholesale distributor of motor fuel for various major integrated oil companies and are licensed to market/resell motor fuel under their respectivemotor fuel brands.We are not aware of any facts that would negatively affect our continuing use of any trademarks, trade names or service marks.Environmental Laws and RegulationsWe are subject to extensive federal, state and local environmental laws and regulations, including those relating to USTs, the release or discharge of materialsinto the air, water and soil, waste management, pollution prevention measures, storage, handling, use and disposal of hazardous materials, the exposure ofpersons to hazardous materials, greenhouse gas emissions, and characteristics, composition, storage and sale of motor fuel and the health and safety of ouremployees. We incorporate by reference into this section our disclosures included in Note 2 under the captions “Environmental Matters” and “AssetRetirement Obligations” and Note 11 under the caption “Asset Retirement Obligations” of the notes to the consolidated financial statements includedelsewhere in this Form 10-K.6Other Regulatory MattersOur retail sites are subject to regulation by federal, state, and/or local agencies and to licensing and regulations by state and local health, sanitation, safety,fire and other departments relating to the development and operation of retail sites, including regulations relating to zoning and building requirements andthe preparation and sale of food.Our retail operations are also subject to federal, state, and/or local laws governing such matters as wage rates, overtime, working conditions and citizenshiprequirements. At the federal, state and local levels where we operate, there are proposals under consideration from time to time to increase minimum wagerates and modify or restrict immigration policies.EmployeesAs of December 31, 2016, we had 744 employees who provide services to our retail operations, all of whom are employed by one of our subsidiaries.The General Partner manages our operations and activities. Under the Amended Omnibus Agreement, employees of CST provide management services to us.As of December 31, 2016, pursuant to the Amended Omnibus Agreement, 87 employees of CST provided exclusive management services to us.7RISK FACTORSIf any of the following risks were to occur, our business, financial condition or results of operations could be materially and adversely affected. In that case,we might not be able to pay distributions on our common units, the trading price of our common units could decline and you could lose all or part of yourinvestment. Also, please read “Cautionary Statement Regarding Forward-Looking Statements.”Limited partner interests are inherently different from the capital stock of a corporation although many of the business risks to which we are subject aresimilar to those that would be faced by a corporation engaged in a similar business.On August 21, 2016, CST, the owner of our General Partner, entered into the Merger Agreement. As a result, Circle K Stores Inc., a subsidiary of Couche-Tard, will, through its acquisition of CST, control CST’s interest in the General Partner and CST’s 19.8% limited partner interest in CrossAmerica as well asall of the incentive distribution rights. The Merger is currently expected to close in the second quarter of 2017.Risks Relating to CST’s MergerThe pending Merger could adversely impact our business and strategic plans for growth.Until its closing, the Merger will continue to require the time and attention of CST’s management, and may increase the challenge of recruiting and retainingtalented and skilled personnel, which in turn could impact the level of services CST is able to provide to us. The Merger Agreement contains certainrestrictions on our operations and, as a result, our revenue, operating results, growth in distributable cash flow and financial condition could be adverselyimpacted.Upon closing of the Merger, we could incur significant severance costs.Under the EICP, the Merger is considered a change in control event. Any participants in the EICP who experience a qualifying termination event upon orfollowing consummation of the Merger will be entitled to certain payments and benefits that would be reimbursable by us, which could be material andadversely affect the amount of cash available for distribution.Upon the closing of the Merger, Couche-Tard will control us, and may have conflicts of interest with us.Upon the closing of the Merger, Couche-Tard will have control of our General Partner, and will have the right to remove, appoint and approve the GeneralPartner’s Board and appointment of officers; decisions regarding our strategic direction, including acquisitions; the timing and amount of distributions, ifany; and other matters affecting our capital structure; and other significant decisions that could impact our financial results, the amount of cash available fordistribution and our liquidity.Upon the closing of the Merger, Couche-Tard will control the General Partner of CST Fuel Supply.Upon the closing of the Merger, Couche-Tard will control the general partner of CST Fuel Supply and its wholly owned subsidiary, CST Marketing andSupply. The Partnership owns a 17.5% limited partner interest in CST Fuel Supply and derives substantial economic benefit from distributions made by CSTFuel Supply; however, there is no contractual obligation on CST, or Couche-Tard upon the closing of the merger, to make distributions from CST FuelSupply, and the decisions as the timing and amount of any distributions are controlled by CST and, upon the closing the Merger, Couche-Tard. Any decreasein the distributions from CST Fuel Supply could be material and adversely affect the amount of cash available for distribution.Risks Relating to Our Industry and Our BusinessWe may not have sufficient distributable cash from operations to enable us to pay our quarterly distribution following the establishment of cash availablefor distribution and payment of fees and expenses.We may not have sufficient cash each quarter to pay our current quarterly distribution or any distribution.The amount of cash we can distribute on our units principally depends upon the amount of cash we generate from our operations, which will fluctuate fromquarter to quarter based on, among other things:•demand for motor fuel products in the markets we serve, including seasonal fluctuations, and the margin per gallon we earn selling and distributingmotor fuel;•the wholesale price of motor fuel and its impact on the payment discounts we receive;•seasonal trends in the industries in which we operate;8•the impact that severe storms could have to our suppliers’ operations;•competition from other companies that sell motor fuel products or operate retail sites in our targeted market areas;•the inability to identify and acquire suitable sites or to negotiate acceptable leases for such sites;•the potential inability to obtain adequate financing to fund our expansion;•the level of our operating costs, including the amount and manner in which payments to CST are made under the Amended Omnibus Agreement;•prevailing economic conditions;•regulatory actions affecting the supply of or demand for motor fuel, our operations, our existing contracts or our operating costs; and•volatility of prices for motor fuel.In addition, the actual amount of cash we will have available for distribution will depend on other factors such as:•the level of capital expenditures we make;•the restrictions contained in our credit facility;•our debt service requirements;•the cost of acquisitions;•fluctuations in our working capital needs;•our ability to borrow under our credit facility to make distributions to our unitholders; and•the amount, if any, of cash reserves established by our General Partner in its discretion. There is no guarantee that we will distribute quarterly cash distributions to our unitholders in any quarter. See “Item 5. Market for Registrant’s CommonEquity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Cash Distribution Policy.”The amount of cash we have available for distribution to unitholders depends primarily on our cash flow rather than on our profitability, which mayprevent us from making cash distributions, even during periods when we record net income.The amount of cash we have available for distribution depends primarily on our cash flow, and not solely on profitability, which will be affected by non-cashitems. As a result, we may make cash distributions during periods when we record losses for financial accounting purposes and may not make cashdistributions during periods when we record net income for financial accounting purposes.If we are unable to make acquisitions on economically acceptable terms, our future growth and ability to increase distributions to unitholders will belimited.Our strategy to grow our business and increase distributions to unitholders is dependent on our ability to make acquisitions that result in an increase in cashflow. Our growth strategy is based, in large part, on our expectation of ongoing divestitures of retail and wholesale fuel distribution assets by industryparticipants. We may be unable to make accretive acquisitions for any of the following reasons:•we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts for them;•we are unable to raise financing for such acquisitions on economically acceptable terms, for example if the market price for our common unitsdeclines;•we are outbid by competitors; or•we or the seller are unable to obtain any necessary consents.If we are unable to make acquisitions on economically acceptable terms, our future growth and ability to increase distributions to unitholders will be limited.In addition, if we consummate any future acquisitions, our capitalization and results of operations may9change significantly. We may also consummate acquisitions, which at the time of consummation we believe will be accretive, but ultimately may not beaccretive. If any of these events occurred, our future growth could be adversely affected.Any acquisitions are subject to substantial risks that could adversely affect our business, financial condition and results of operations and reduce ourability to make distributions to unitholders.Any acquisitions involve potential risks, including, among other things:•the validity of our assumptions about revenues, capital expenditures and operating costs of the acquired business or assets, as well as assumptionsabout achieving synergies with our existing business;•the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets, including liabilitiesarising from the operation of the acquired businesses or assets prior to our acquisition, for which we are not indemnified or for which the indemnityis inadequate;•the costs associated with additional debt or equity capital, which may result in a significant increase in our interest expense and financial leverageresulting from any additional debt incurred to finance the acquisition, or the issuance of additional common units on which we will makedistributions, either of which could offset the expected accretion to our unitholders from any such acquisition and could be exacerbated byvolatility in the equity or debt capital markets;•a failure to realize anticipated benefits, such as increased available distributable cash flow, enhanced competitive position or new customerrelationships;•the inability to timely and effectively integrate the operations of recently acquired businesses or assets, particularly those in new geographic areas orin new lines of business;•a decrease in our liquidity by using a significant portion of our available cash or borrowing capacity to finance the acquisition;•the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges;•performance from the acquired assets and businesses that is below the forecasts we used in evaluating the acquisition;•a significant increase in our working capital requirements;•competition in our targeted market areas;•customer or key employee loss from the acquired businesses; and•diversion of our management’s attention from other business concerns.In addition, our ability to purchase or lease additional sites involves certain potential risks, including the inability to identify and acquire suitable sites or tonegotiate acceptable leases or subleases for such sites and difficulties in adapting our distribution and other operational and management systems to anexpanded network of sites.Our reviews of businesses or assets proposed to be acquired are inherently imperfect because it generally is not feasible to perform an in-depth review ofbusinesses and assets involved in each acquisition. Even a detailed review of assets and businesses may not necessarily reveal existing or potential problems,nor will it permit a buyer to become sufficiently familiar with the assets or businesses to fully assess their deficiencies and potential. For example, inspectionsmay not always be performed on every asset, and environmental problems, such as groundwater contamination, are not necessarily observable even when aninspection is undertaken. Unitholders will not have the opportunity to evaluate the economic, financial and other relevant information that we will considerin determining the application of our funds and other resources toward the acquisition of certain businesses or assets.Volatility in crude oil and wholesale motor fuel costs affect our business, financial condition and results of operations and our ability to makedistributions to unitholders.For the year ended December 31, 2016, motor fuel revenue accounted for 89% of our total revenues and motor fuel gross profit accounted for 40% of totalgross 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 subsequentlywholesale motor fuel prices, is caused by many factors, including general political conditions, acts of war or terrorism, 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 producingnations. In addition, the supply10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 thatour motor fuel contracts do not guarantee an uninterrupted, unlimited supply of motor fuel.Significant increases and volatility in wholesale motor fuel costs could result in lower gross profit dollars, as an increase in the retail price of motor fuel couldimpact consumer demand for motor fuel and convenience merchandise and could result in lower wholesale motor fuel gross profit dollars. Dramatic increasesin oil prices reduce retail motor fuel gross profits, because wholesale motor fuel costs typically increase faster than retailers are able to pass them along tocustomers. In addition, significant decreases in oil prices and the corresponding decreases in wholesale motor fuel sales prices can result in lower revenuesand gross profit margins, as our wholesale motor fuel gross profits include discounts from our suppliers calculated as a percentage of the cost of wholesalemotor fuel. As the market prices of crude oil, and, correspondingly, the market prices of wholesale motor fuel, experience significant and rapid fluctuations,we attempt to pass along wholesale motor fuel price changes to our customers through retail price changes; however, we are not always able to do soimmediately. The timing of any related increase or decrease in sales prices is affected by competitive conditions in each geographic market in which weoperate. As such, our revenues and gross profit for motor fuel can increase or decrease significantly and rapidly over short periods of time and potentiallyadversely impact our business, financial condition, results of operations and ability to make distributions to our unitholders. The volatility in crude oil andwholesale motor fuel costs and sales prices makes it extremely difficult to forecast future motor fuel gross profits or predict the effect that future wholesalecosts and sales price fluctuations will have on our operating results and financial condition.Seasonality in wholesale motor fuel costs and sales, as well as merchandise sales, affect our business, financial condition and results of operations and ourability to make distributions to unitholders.Oil prices, wholesale motor fuel costs, motor fuel sales volumes, motor fuel gross profits and merchandise sales often experience seasonal fluctuations. Forexample, consumer demand for motor fuel typically increases during the summer driving season and typically falls during the winter months. Travel,recreation and construction are typically higher in these months in the geographic areas in which we operate, increasing the demand for motor fuel andmerchandise that we sell. Therefore, our revenues are typically higher in the second and third quarters of our fiscal year. A significant change in any of thesefactors, including a significant decrease in consumer demand (other than typical seasonal variations), could materially affect our motor fuel and merchandisevolumes, motor fuel gross profit and overall customer traffic, which in turn could have a material adverse effect on our business, financial condition, results ofoperations and cash available for distributions to our unitholders.Both the wholesale motor fuel distribution and the retail motor fuel industries are characterized by intense competition and fragmentation, and our failureto effectively compete could adversely affect our business, financial condition and results of operations and reduce our ability to make distributions tounitholders.The markets for distribution of wholesale motor fuel and the sale of retail motor fuel 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 valueadded 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 ourservices, wholesale customers could choose alternative distribution sources and retail customers could purchase from other retailers, each decreasing ourmargins. Furthermore, there can be no assurance that major integrated oil companies will not decide to distribute their own products in direct competitionwith us or that large wholesale customers will not attempt to buy directly from the major integrated oil companies. The occurrence of any of these eventscould have a material adverse effect on our business, results of operations and our ability to make distributions.Changes in credit or debit card expenses could reduce our gross profit, especially on motor fuel sold at our company operated retail sites.A significant portion of our sales at our company operated retail sites involve payment using credit or debit cards. We are assessed fees as a percentage oftransaction amounts and not as a fixed dollar amount or percentage of our gross profits. Higher motor fuel prices result in higher credit and debit cardexpenses, and an increase in credit or debit card use or an increase in fees would have a similar effect. Therefore, credit and debit card fees charged on motorfuel 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 maycause lower gross profits. Lower gross profits on motor fuel sales caused by higher fees may decrease our overall gross profit and could have a materialadverse effect on our business, financial condition, results of operations and cash available for distributions to our unitholders.General economic conditions that are largely out of our control could adversely affect our business, financial condition and results of operations andreduce our ability to make distributions to unitholders.Recessionary economic conditions, higher interest rates, higher motor fuel and other energy costs, inflation, increases in commodity11prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws or other economic factors may affectconsumer spending or buying habits, and could adversely affect the demand for motor fuel and convenience items we sell at our retail sites. Unfavorableeconomic conditions, higher motor fuel prices and unemployment levels can affect consumer confidence, spending patterns and miles driven, with manycustomers “trading down” to lower priced products in certain categories when unfavorable conditions exist. These factors can lead to sales declines in bothmotor fuel and general merchandise, and in turn have an adverse impact on our business, financial condition and results of operations.A tightening of credit in the financial markets or an increase in interest rates may make it more difficult for wholesale customers and suppliers to obtainfinancing and, depending on the degree to which it occurs, there may be a material increase in the nonpayment or other nonperformance by our customersand suppliers. Even if our credit review and analysis mechanisms work properly, we may experience financial losses in our dealings with these third parties. Amaterial increase in the nonpayment or other nonperformance by our wholesale customers and/or suppliers could adversely affect our business, financialcondition, results of operations and cash available for distributions to our unitholders.Changes in consumer behavior and travel as a result of changing economic conditions, labor strikes or otherwise could adversely affect our business,financial condition and results of operations and reduce our ability to make distributions to unitholders.In the retail motor fuel industry, customer traffic is generally driven by consumer preferences and spending trends, growth rates for commercial truck trafficand trends in travel and weather. Changes in economic conditions generally, or in the regions in which we operate, could adversely affect consumer spendingpatterns and travel in our markets. In particular, weakening economic conditions may result in decreases in miles driven and discretionary consumer spendingand travel, which affect spending on motor fuel and convenience items. In addition, changes in the types of products and services demanded by consumers orlabor strikes in the construction industry or other industries that employ customers who visit our stores, may adversely affect our sales and gross profit.Additionally, negative publicity or perception surrounding motor fuel suppliers could adversely affect their reputation and brand image, which maynegatively affect our motor fuel sales and gross profit. Similarly, advanced technology and increased use of “green” automobiles (e.g., those automobiles thatdo not use petroleum-based motor fuel or that are powered by hybrid engines) would reduce demand for motor fuel. Our success depends on our ability toanticipate and respond in a timely manner to changing consumer demands and preferences while continuing to sell products and services that remain relevantto the consumer and thus will positively impact overall merchandise gross profit.Legal, technological, political and scientific developments regarding climate change and fuel efficiency may decrease demand for motor fuel.Developments aimed at reducing greenhouse gas emissions’ contribution to climate change may decrease the demand or increase the cost for our majorproduct, petroleum-based motor fuel. Attitudes toward this product and its relationship to the environment may significantly affect our effectiveness inmarketing our product and sales. Government efforts to steer the public toward non-petroleum-based fuel dependent modes of transportation may foster anegative perception toward motor fuel or increase costs for our product, thus affecting the public’s attitude toward our major product. New technologies thatincrease fuel efficiency or offer alternative vehicle power sources or laws or regulations to increase fuel efficiency, reduce consumption or offer alternativevehicle power sources may result in decreased demand for petroleum-based motor fuel. We may also incur increased costs for our product which we may notbe able to pass along to our customers. These developments could potentially have a material adverse effect on our business, financial condition, results ofoperations and cash available for distributions to our unitholders.Future tobacco legislation, campaigns to discourage smoking, increased use of tobacco alternatives, increases in tobacco taxes and wholesale costincreases of tobacco products could adversely affect our business, financial condition and results of operations and reduce our ability to makedistributions to unitholders.Sales of tobacco products have historically accounted for a significant portion of our total sales of retail site merchandise. Increases in wholesale cigarettecosts and tax increases on tobacco products, as well as future legislation, national and local campaigns to discourage smoking in the U.S., and increased useof tobacco alternatives such as electronic cigarettes, may have an adverse effect on the demand for tobacco products, and therefore reduce our revenues andprofits. Competitive pressures in our markets can make it difficult to pass price increases on to our customers. These factors could materially and adverselyaffect our retail price of cigarettes, cigarette unit volume and sales, merchandise gross profit and overall customer traffic. Reduced sales of tobacco productsor smaller gross profits on the sales we make could have a material adverse effect on our business, financial condition, results of operations and cash availablefor distributions to our unitholders.Currently, major cigarette manufacturers offer substantial rebates to retailers. We include these rebates as a component of our gross profit. In the event theserebates are no longer offered, or decreased, our profit from cigarette sales will decrease accordingly. In addition, reduced retail display allowances oncigarettes offered by cigarette manufacturers negatively affect gross profits. These factors could materially affect our retail price of cigarettes, cigarette unitvolume and revenues, merchandise gross profit and12overall customer traffic, which could in turn have a material adverse effect on our business, financial condition, results of operations and cash available fordistributions to our unitholders.We are subject to extensive government laws and regulations, and the cost of compliance with such laws and regulations can be material.Our business and properties are subject to extensive local, state and federal governmental laws and regulations relating to, among other things, environmentalconditions, the sale of alcohol, tobacco and money orders, employment conditions, including minimum wage requirements, and public accessibilityrequirements. The cost of compliance with these laws and regulations can have a material adverse effect on our operating results and financial condition. Inaddition, failure to comply with local, state, provincial and federal laws and regulations to which our operations are subject may result in penalties and coststhat could adversely affect our business and our operating results.In certain areas where our retail sites are located, state or local laws limit the retail sites’ hours of operation or their sale of alcoholic beverages, tobaccoproducts, possible inhalants and lottery tickets, in particular to minors. Failure to comply with these laws could adversely affect our revenues and results ofoperations because these state and local regulatory agencies have the power to revoke, suspend or deny applications for and renewals of permits and licensesrelating to the sale of these products or to seek other remedies, such as the imposition of fines or other penalties. Moreover, these laws may impact our salesvolumes in general, as customers who purchase certain products such as alcoholic beverages typically buy other products when they shop. Laws that curtailthe consumer’s ability to buy certain products at our retail sites may curtail consumer demand for other products that we sell.If a portion of our workforce were to create or become part of a labor union, we could be forced to increase our compensation levels in order to avoid workdisruptions or stoppages. Any appreciable increase in the statutory minimum wage or unionization of our workforce could result in an increase in our laborcosts and such cost increase, or the penalties for failing to comply with such statutory minimums, could adversely affect our business, financial condition,results of operations and cash available for distributions to our unitholders.Further, U.S. health care reform legislation requires us to provide additional health insurance benefits to our employees, or health insurance coverage toadditional employees, and has increased our costs and expenses.Any changes in the laws or regulations described above that are adverse to us and our properties could affect our operating and financial performance. Inaddition, new regulations are proposed from time to time which, if adopted, could have a material adverse effect on our operating results and financialcondition.We are subject to extensive government laws and regulations concerning our employees, and the cost of compliance with such laws and regulations can bematerial.Regulations related to wages and other compensation affect our business. Any appreciable increase in applicable employment laws and regulations,including the statutory minimum wage, exemption levels or overtime regulations could result in an increase in labor costs and such cost increase, or thepenalties for failing to comply with such statutory minimums, could adversely affect our business, financial condition, results of operations and cashavailable for distributions to our unitholders.Further, the Affordable Care Act and related reforms make and will continue to make sweeping and fundamental changes to the U.S. health care system. Thisrequires us to provide additional health insurance benefits to the employees providing services to us, or health insurance coverage to additional employees,and as a result may increase our costs and expenses. In addition, we are directly and indirectly affected by new tax legislation and regulation and theinterpretation of tax laws and regulations. This includes potential changes in tax laws or the interpretation of tax laws relating to incentive compensationsuch as profit interests. Changes in such legislation, regulation or interpretation could have an adverse effect on our incentive compensation structures andthereby affect our operating results and financial condition.Any changes in the employment, benefit plan, tax or labor laws or regulations described above that are adverse to us could affect our operating and financialperformance. In addition, new regulations are proposed from time to time which, if adopted, could have a material adverse effect on our employmentpractices, operating results and financial condition.We are subject to extensive federal, state and local environmental laws, and the cost of complying with such laws may be material.Our operations are subject to a variety of environmental laws and regulations, including those relating to emissions to the air, discharges into water, releasesof hazardous and toxic substances and remediation of contaminated sites. Under various federal, state and local laws and regulations, we may, as the owner oroperator, be liable for the costs of removal or remediation of contamination at our current locations or our former locations, whether or not we knew of, orwere responsible for, the presence13of such contamination. In particular, as an owner and operator of motor fueling stations, we face risks relating to petroleum product contamination that otherretail site operators not engaged in such activities would not face. The remediation costs and other costs required to clean up or treat contaminated sites couldbe substantial. Contamination on and from our current or former locations may subject us to liability to third parties or governmental authorities for injuriesto persons, property or natural resources and may adversely affect our ability to sell or rent our properties or to borrow money using such properties ascollateral.In the U.S., persons who dispose of or arrange for the disposal or treatment of hazardous or toxic substances at third party sites may also be liable for the costsof removal or remediation of such substances at these disposal sites although such sites are not owned by such persons. Our current and historic operation ofmany locations and the disposal of contaminated soil and groundwater wastes generated during cleanups of contamination at such locations could expose usto such liability.We are subject to extensive environmental laws and regulations regulating USTs and vapor recovery systems. Compliance with existing and futureenvironmental laws regulating such tanks and systems may require significant expenditures. In the U.S., we pay fees to state “leaking UST” trust funds instates where they exist. These state trust funds are expected to pay or reimburse us for remediation expenses related to contamination associated with USTssubject to their jurisdiction. Such payments are always subject to a deductible paid by us, specified per incident caps and specified maximum annualpayments, which vary among the funds.Additionally, such funds may have eligibility requirements that not all of our sites will meet. To the extent state funds or other responsible parties do not payor delay payments for remediation, we will be obligated to make these payments, which, in the aggregate, could materially adversely affect our financialcondition and results of operations. We can give no assurance that these funds or responsible third parties are or will continue to remain viable. See Note 16of the notes to consolidated financial statements included elsewhere in this Form 10-K under the caption “Litigation Matters” for a discussion of certainallegations made against us related to the remediation activities of USTs.Motor fuel operations present risks of soil and groundwater contamination. In the future, we may incur substantial expenditures for remediation ofcontamination that has not been discovered at existing locations or locations which we may acquire. We regularly monitor our facilities for environmentalcontamination and record liabilities on our financial statements to cover potential environmental remediation and compliance costs when probable to occurand reasonably estimable. However, we can make no assurance that the liabilities we have recorded are the only environmental liabilities relating to ourcurrent and former locations, that material environmental conditions not known to us do not exist, that future laws or regulations will not impose materialenvironmental liability on us or that our actual environmental liabilities will not exceed our reserves. In addition, failure to comply with any environmentalregulations or an increase in regulations could materially and adversely affect our operating results and financial condition.Unfavorable weather conditions, the impact of climate change or other trends or developments in the regions in which we operate could adversely affectour business, financial condition and results of operations and reduce our ability to make distributions to unitholders.Our retail sites are located in regions throughout the U.S. that are susceptible to certain severe weather events and potential impacts of climate change, suchas hurricanes, severe thunderstorms, snowstorms, tornadoes and extreme heat and cold. Inclement weather conditions could damage our facilities, oursuppliers or could have a significant impact on consumer behavior, travel and retail site traffic patterns, as well as our ability to operate our retail sites. Wecould also be affected by regional occurrences, such as energy shortages or increases in energy prices, fires or other natural disasters. Besides these moreobvious consequences of severe weather, our ability to insure these locations and the related cost of such insurance may also affect our business, financialcondition, results of operations and cash available for distributions to our unitholders.We could be adversely affected if we are not able to attract and retain a strong management team.We are dependent on our ability to attract and retain a strong management team. If, for any reason, we are not able to attract and retain qualified seniorpersonnel, our business, financial condition, results of operations and cash flows could be adversely affected. We also are dependent on our ability to recruitqualified retail site and field managers. If we fail to attract and retain these individuals at reasonable compensation levels, our operating results may beadversely affected.We depend on three principal suppliers for the majority of our motor fuel. A disruption in supply or a change in our relationship with any one of themcould adversely affect our business, financial condition and results of operations and reduce our ability to make distributions to unitholders.ExxonMobil, BP and Motiva collectively supplied approximately 79% of our motor fuel purchases in 2016. We purchased approximately 30%, 25% and24% of its motor fuel from ExxonMobil, BP and Motiva, respectively. A change of motor fuel suppliers, a disruption in supply or a significant change inpricing with any of these suppliers could have a material adverse effect14on our business.We rely on our suppliers to provide trade credit terms to adequately fund our on-going operations.Our business is impacted by the availability of trade credit to fund motor fuel purchases and inventory purchases of our retail sites. An actual or perceiveddowngrade in our liquidity or operations could cause our suppliers to seek credit support in the form of additional collateral, limit the extension of tradecredit or otherwise materially modify their payment terms. Any material changes in the payments terms, including payment discounts, or availability of tradecredit provided by our principal suppliers could impact our liquidity, results of operations and cash available for distribution to our unitholders.Pending or future litigation could adversely affect our financial condition and results of operations. Litigation and publicity concerning motor fuel orfood quality, health and other issues could result in significant liabilities or litigation costs and cause consumers to avoid our retail sites.Retail site businesses can be adversely affected by litigation and complaints from customers or government agencies resulting from motor fuel or foodquality, illness or other health or environmental concerns or operating issues stemming from one or more locations. Additionally, we may become a party toindividual personal injury, off-specification motor fuel, products liability, consumer protection act, contract disputes, wage and hour unemployment claimsand other legal actions in the ordinary course of our business and we are occasionally exposed to industry-wide or class-action claims arising from theproducts we carry or industry-specific business practices. Adverse publicity about these allegations may negatively affect us, regardless of whether theallegations are true, by discouraging customers from purchasing motor fuel, merchandise or food at one or more of our retail sites. We could also incursignificant liabilities if a lawsuit or claim results in a decision against us. Even if we are successful in defending such litigation, our litigation costs could besignificant, and the litigation may divert time and money away from our operations and adversely affect our performance. Our defense costs and any resultingdamage awards may not be fully covered by our insurance policies. Please see Note 16 of the notes to the consolidated financial statements includedelsewhere in this Form 10-K.The dangers inherent in the storage and transport of motor fuel could cause disruptions and could expose us to potentially significant losses, costs orliabilities.We store motor fuel in storage tanks at our retail sites. These operations are subject to significant hazards and risks inherent in storing and transporting motorfuel. These hazards and risks include, but are not limited to, fires, explosions, traffic accidents, spills, discharges and other releases, any of which could resultin distribution difficulties and disruptions, environmental pollution, governmentally imposed fines or cleanup obligations, personal injury or wrongful deathclaims and other damage to our properties and the properties of others. Any such event could have a material adverse effect on our business, financialcondition, results of operations and cash available for distributions to our unitholders.We depend on transportation providers for the transportation of substantially all of our motor fuel. Thus, a change of providers or a significant change inour relationship with any of these providers could adversely affect our business, financial condition and results of operations and reduce our ability tomake distributions to unitholders.Substantially all of the motor fuel we distribute is transported from motor fuel terminals to gas stations by third party carriers. A change of transportationproviders, a disruption in service or a significant change in our relationship with any of these transportation carriers could have a material adverse effect onour business and results of operations.We are subject to federal, state and local laws and regulations that govern the product quality specifications of the motor fuel that we distribute and sell.Various federal, state and local agencies have the authority to prescribe specific product quality specifications to the sale of commodities. Changes inproduct quality specifications, such as reformulated fuels mandates, reduced sulfur content in refined petroleum products, or other more stringentrequirements for fuels, could reduce our ability to procure product and our sales volume, require us to incur additional handling costs, and/or require theexpenditure of capital. If we are unable to procure product or to recover these costs through increased sales, our ability to meet our financial obligationscould be adversely affected. Failure to comply with these regulations could result in substantial penalties.Our motor fuel sales in our Wholesale segment are generated under contracts that must be renegotiated or replaced periodically. If we are unable tosuccessfully renegotiate or replace these contracts, then our business, financial condition and results of operations and ability to make distributions tounitholders could be adversely affected.Our Wholesale segment’s motor fuel sales are generated under contracts that must be periodically renegotiated or replaced. As these contracts expire, theymust be renegotiated or replaced. We may be unable to renegotiate or replace these contracts when they expire, and the terms of any renegotiated contractsmay not be as favorable as the contracts they replace. Whether these15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 successfullyrenegotiate or replace our contracts or must renegotiate or replace them on less favorable terms, sales from these arrangements could decline and our ability tomake distributions to its unitholders could be adversely affected.We rely on our IT systems and network infrastructure to manage numerous aspects of our business, and a disruption of these systems could adversely affectour business, financial condition and results of operations and reduce our ability to make distributions to unitholders.We depend on our IT systems and network infrastructure to manage numerous aspects of our business and provide analytical information to management.These systems are an essential component of our business and growth strategies, and a serious disruption to them could significantly limit our ability tomanage and operate our business efficiently. These systems are vulnerable to, among other things, damage and interruption from power loss or naturaldisasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of data, security breaches and computerviruses, which could result in a loss of sensitive business information, systems interruption or the disruption of our business operations. To protect againstunauthorized access or attacks, we have implemented infrastructure protection technologies and disaster recovery plans, but there can be no assurance that atechnology systems breach or systems failure will not have a material adverse effect on our financial condition or results of operations.Our business and our reputation could be adversely affected by the failure to protect sensitive customer, employee or vendor data, whether as a result ofcyber security attacks or otherwise, or to comply with applicable regulations relating to data security and privacy.In the normal course of our business as a motor fuel and merchandise retailer, we obtain large amounts of personal data, including credit and debit cardinformation from our customers. While we have invested significant amounts in the protection of our IT systems and maintain what we believe are adequatesecurity controls over individually identifiable customer, employee and vendor data provided to us, a breakdown or a breach in our systems that results in theunauthorized release of individually identifiable customer or other sensitive data could nonetheless occur.Cyber attacks are rapidly evolving and becoming increasingly sophisticated. A successful cyber attack resulting in the loss of sensitive customer, employeeor vendor data could adversely affect our reputation, results of operations, financial condition and liquidity, and could result in litigation against us or theimposition of penalties. Moreover, a security breach could require that we expend significant additional resources to upgrade further the security measuresthat we employ to guard against cyber attacks.Our debt levels and debt agreement covenants may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.We have a significant amount of debt. At December 31, 2016, we had $467.2 million of total debt and $94.1 million of availability under the CrossAmericarevolving credit facility. Our credit agreement requires, among other things, that we have, after giving effect to any acquisition, at least $20.0 million, in theaggregate, of borrowing availability under the revolving credit facility and unrestricted cash on the balance sheet on the date of such acquisition. See “Item7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity—Debt” for a discussion of the terms of our amendedand restated credit facility entered into in March 2014, as amended in December 2016. Our level of indebtedness could have important consequences to us,including the following:•our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired orsuch financing may not be available on favorable terms;•covenants contained in our credit facility will require us to meet financial tests that may affect our flexibility in planning for and reacting to changesin our business, including possible acquisition opportunities;•we will need a substantial portion of our cash flow to make interest payments on our indebtedness, reducing the funds that would otherwise beavailable for operations, future business opportunities and distributions to unitholders;•our debt level will make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or theeconomy generally; and•our debt level may limit our flexibility in responding to changing business and economic conditions.16Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected byprevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating results are notsufficient to service our current or future indebtedness, we will be forced to take actions, such as reducing distributions, reducing or delaying our businessactivities, acquisitions, investments and/or capital expenditures, selling assets, restructuring or refinancing our indebtedness, or seeking additional equitycapital or bankruptcy protection. We may not be able to effect any of these actions on satisfactory terms, or at all.Our credit facility contains operating and financial restrictions that may limit our business, financing activities and ability to make distributions tounitholders.The operating and financial restrictions and covenants in our credit facility and any future financing agreements could adversely affect our ability to financefuture operations or capital needs or to engage, expand or pursue our business activities. For example, our credit facility may restrict our ability to:•make distributions if any potential default or event of default occurs;•incur additional indebtedness, including the issuance of certain preferred equity interests, or guarantee other indebtedness;•grant liens or make certain negative pledges;•make certain advances, loans or investments;•make any material change to the nature of our business, including mergers, consolidations, liquidations and dissolutions;•make certain capital expenditures in excess of specified levels;•acquire another company;•enter into a sale-leaseback transaction or certain sales or leases of assets;•enter into certain affiliate transactions; or•make certain repurchases of equity interests.Our credit facility will limit our ability to pay distributions upon the occurrence of the following events, among others:•failure to pay any principal when due or failure to pay any interest, fees or other amounts owing under our credit facility when due, subject to anyapplicable grace period;•failure of any representation or warranty in our credit agreement to be true and correct, and the failure of any representation or warranty in any otheragreement delivered in connection with our credit facility to be true and correct in any material respect;•failure to perform or otherwise comply with the covenants in our credit facility or in other loan documents beyond the applicable notice and graceperiod;•any default in the performance of any obligation or condition beyond the applicable grace period relating to any other indebtedness of more than$7.5 million;•failure of the lenders to have a perfected first priority security interest in the collateral pledged by any loan party;•the entry of one or more judgments in excess of $20.0 million, to the extent any payments pursuant to the judgment are not covered by insurance;•a change in ownership control of us or our General Partner (other than the change in control related to the Merger);•a violation of the Employee Retirement Income Security Act of 1974, or “ERISA”; and•a bankruptcy or insolvency event involving us or any of our subsidiaries.Our ability to comply with the covenants and restrictions contained in our credit facility may be affected by events beyond our control, including prevailingeconomic, financial and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.If we violate any of the restrictions, covenants, ratios or tests in our credit facility, the debt issued under the credit facility may become immediately due andpayable, and our lenders’ commitment to make17further loans to us may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, our obligationsunder our credit facility will be secured by substantially all of our assets, and if we are unable to repay our indebtedness under our credit facility, the lenderscould seek to foreclose on such assets.We may not be able to lease sites we own or sub-lease sites we lease on favorable terms and any such failure could adversely affect our business, financialcondition and results of operations and reduce our ability to make distributions to unitholders.We may lease and/or sub-lease certain sites to lessee dealers, commission agents, CST or to DMS where the rent expense is more than the lease payments. Ifwe are unable to obtain tenants on favorable terms for sites we own or lease, the lease payments we receive may not be adequate to cover our rent expense forleased sites and may not be adequate to ensure that we meet our debt service requirements. We cannot provide any assurance that the margins on ourwholesale distribution of motor fuels to these sites will be adequate to off-set unfavorable lease terms. The occurrence of these events could adversely affectour results of operations and cash available for distribution to our unitholders.The operations at sites we own or lease are subject to inherent risk, operational hazards and unforeseen interruptions and insurance may not adequatelycover any such exposure. The occurrence of a significant event or release that is not fully insured could adversely affect our business, financial conditionand results of operations and reduce our ability to make distributions to unitholders.The presence of flammable and combustible products at our sites provides the potential for fires and explosions that could destroy both property and humanlife. Furthermore, our operations are subject to unforeseen interruptions such as natural disasters, adverse weather and other events beyond our control. Motorfuels also have the potential to cause environmental damage if improperly handled or released. If any of these events were to occur, we could incursubstantial losses and/or curtailment of related operations because of personal injury or loss of life, severe damage to and destruction of property andequipment, and pollution or other environmental damage.We are not fully insured against all risks incident to our business. We may be unable to maintain or obtain insurance of the type and amount we desire atreasonable rates. As a result of market conditions, premiums and deductibles for certain of our insurance policies have increased and could escalate further. Insome instances, certain insurance could become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability forwhich we were not fully insured, it could have a material adverse effect on our financial position and ability to make distributions to unitholders.We are relying on DMI to indemnify us for any costs or expenses that we incur for environmental liabilities and third-party claims, regardless of when aclaim is made, that are based on environmental conditions in existence prior to the closing of the IPO at our Predecessor’s sites. To the extent escrowaccounts, insurance and/or payments from DMI are not sufficient to cover any such costs or expenses, our business, financial condition and results ofoperations and ability to make distributions to unitholders could be adversely affected.The Amended Omnibus Agreement provides that DMI must indemnify us for any costs or expenses that we incur for environmental liabilities and third-partyclaims, regardless of when a claim is made, that are based on environmental conditions in existence prior to the closing of the IPO at our Predecessor’s sites.DMI is the beneficiary of escrow accounts created to cover the cost to remediate certain environmental liabilities. In addition, DMI maintains insurancepolicies to cover environmental liabilities and/or, where available, participates in state programs that may also assist in funding the costs of environmentalliabilities. There are certain sites that were acquired by us in connection with the IPO with existing environmental liabilities that are not covered by escrowaccounts, state funds or insurance policies. As of December 31, 2016, DMI had an aggregate of approximately $1.0 million of environmental liabilities onsites acquired by us that are not covered by escrow accounts, state funds or insurance policies. To the extent escrow accounts, insurance and/or paymentsfrom DMI are not sufficient to cover any such costs or expenses, our business, liquidity and results of operations could be adversely affected.Risks Inherent in an Investment in UsCST controls, and after the Merger, Couche-Tard will control, us and may have conflicts of interest with us in the future.CST currently controls, and after the Merger, Couche-Tard will control, our General Partner, including the election of directors; decisions regarding mergers,consolidations or acquisitions, the sale of all or substantially all of our assets and other matters affecting our capital structure; and other significant decisionsthat could impact our financial results and the amount of cash available for distribution. In addition, CST may compete directly with us for futureacquisitions, which may conflict with our core strategy to grow our business and increase distributions to unitholders. As long as CST or Couche-Tardcontinues to own our General Partner, it will continue to be able to effectively control our decisions.18CST owns, and after the Merger, Couche-Tard will own, the sole member of our General Partner, which has sole responsibility for conducting our businessand managing our operations. Our General Partner and its affiliates, including CST, have conflicts of interest with us and limited fiduciary duties and theymay favor their own interests to the detriment of us and our unitholders.CST owns, and after the Merger, Couche-Tard will own, the sole member of and controls our General Partner and has and will have the ability to appoint allof the directors of our Board. Although our General Partner has a legal duty to manage in good faith, the executive officers and directors of our Board have afiduciary duty to manage our General Partner in a manner beneficial to its owner, CST or Couche-Tard, as applicable. Furthermore, certain officers of ourGeneral Partner are directors of our Board or officers of affiliates of our General Partner. Therefore, conflicts of interest may arise in the future between us andour unitholders, on the one hand, and our General Partner, on the other hand. In resolving these conflicts of interest, our General Partner may favor its owninterests and the interests of CST or Couche-Tard, as applicable, over our interests and the interests of our common unitholders. These conflicts include thefollowing situations, among others:•our General Partner is allowed to take into account the interests of parties other than us, such as CST, in resolving conflicts of interest, which has theeffect of limiting its fiduciary duty to our unitholders;•neither our Partnership Agreement nor any other agreement requires CST to pursue a business strategy that favors us;•some officers of our General Partner who will provide services to us will devote time to affiliates of our General Partner and may be compensated forservices rendered to such affiliate;•our Partnership Agreement limits the liability of and reduces fiduciary duties owed by our General Partner and also restricts the remedies available tounitholders for actions that, without the limitations, might constitute breaches of fiduciary duty;•except in limited circumstances, our General Partner has the power and authority to conduct our business without unitholder approval;•our General Partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and thecreation, reductions or increases of cash reserves, each of which can affect the amount of cash that is available for distribution to our unitholders, andto the holders of the IDRs;•our General Partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenancecapital expenditure, which reduces operating surplus. Such determination can affect the amount of cash available for distribution to our unitholdersand to the holders of the IDRs;•our General Partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowingis to make incentive distributions;•our Partnership Agreement permits us to distribute up to $15 million as operating surplus, even if it is generated from asset sales, non-workingcapital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions on the IDRs;•our Partnership Agreement does not restrict our General Partner from causing us to pay it or its affiliates for any services rendered to us or enteringinto additional contractual arrangements with its affiliates on our behalf;•our General Partner intends to limit its liability regarding our contractual and other obligations;•our General Partner may exercise its right to call and purchase our common units if it and its affiliates own more than 80% of our common units;•our General Partner controls the enforcement of obligations that it and its affiliates owe to us;•our General Partner decides whether to retain separate counsel, accountants or others to perform services for us;•the holders of our IDRs may transfer their IDRs without unitholder approval; and•our General Partner may elect to cause us to issue common units to the holders of our IDRs in connection with a resetting of the target distributionlevels related to the IDRs without the approval of the conflicts committee of the Board or the unitholders. This election may result in lowerdistributions to the common unitholders in certain situations.19The owner of our General Partner or the Board may modify or revoke our cash distribution policy at any time at their discretion. Our PartnershipAgreement does not require us to pay any distributions at all.The Board has adopted a cash distribution policy pursuant to which we intend to distribute quarterly an amount at least equal to the minimum quarterlydistribution 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 thepayment of our expenses. However, CST or Couche-Tard, as applicable, as the owner of our General Partner or the Board may change such policy at any timeat their discretion and could elect not to pay distributions for one or more quarters. In addition, our credit facility includes certain restrictions on our abilityto make distributions.In addition, our Partnership Agreement does not require us to pay any distributions at all. Accordingly, investors are cautioned not to place undue reliance onthe permanence of such a policy in making an investment decision. Any modification or revocation of our cash distribution policy could substantially reduceor eliminate the amounts of distributions to our unitholders. The amount of distributions we make, if any, and the decision to make any distribution at all willbe determined by CST or Couche-Tard, as applicable, as the owner of our General Partner of the Board, whose interests may differ from those of our commonunitholders.We rely on the employees of CST to provide key management services to our business pursuant to the Amended Omnibus Agreement. If our AmendedOmnibus Agreement is terminated, we may not be able to find suitable replacements to perform such services for us without interruption to our business orincreased costs.Under our Amended Omnibus Agreement, CST provides us with the personnel necessary to support our management, administrative and operating services,including accounting, tax, legal, internal audit, risk management and compliance, environmental compliance and remediation management oversight,treasury, information technology and other administrative functions, as well as the management and operation of our wholesale distribution and retailbusiness. If our Amended Omnibus Agreement is terminated, we may suffer interruptions to our business or increased costs to replace these services.The liability of DMI and CST is limited under our Amended Omnibus Agreement and we have agreed to indemnify DMI and CST against certainliabilities, which may expose us to significant expenses.The Amended Omnibus Agreement provides that we must indemnify DMI and CST for certain liabilities, including any liabilities incurred by CSTattributable to the operating and administrative services provided to us under the agreement, other than liabilities resulting from DMI’s or CST’s bad faith,fraud, or willful misconduct, as applicable.Our General Partner has and intends to limit its liability regarding our obligations.Our General Partner has and intends to limit its liability under contractual arrangements between us and third parties so that the counterparties to sucharrangements have recourse only against our assets, and not against our General Partner or its assets. Our General Partner may therefore cause us to incurindebtedness or other obligations that are nonrecourse to our General Partner. Our Partnership Agreement provides that any action taken by our GeneralPartner to limit its liability is not a breach of our General Partner’s fiduciary duties, even if we could have obtained more favorable terms without thelimitation on liability. In addition, we are obligated to reimburse or indemnify our General Partner to the extent that it incurs obligations on our behalf. Anysuch reimbursement or indemnification payments would reduce the amount of cash otherwise available for distribution to our unitholders.If we distribute a significant portion of our cash available for distribution to our partners, our ability to grow and make acquisitions could be limited.We may determine to distribute a significant portion of our cash available for distribution to our unitholders. In addition, we expect to rely primarily uponexternal financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansioncapital expenditures. To the extent we are unable to finance growth externally, distributing a significant portion of our cash available for distribution mayimpair our ability to grow.In addition, if we distribute a significant portion of our cash available for distribution, our growth may not be as fast as that of businesses that reinvest theircash available for distribution to expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or expansioncapital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unitdistribution level. There are no limitations in our Partnership Agreement or our new credit facility on our ability to issue additional units, provided there is nodefault under the credit facility, including units ranking senior to the common units. The incurrence of additional commercial borrowings or other debt tofinance our growth strategy would result in increased interest expense, which, in turn, may impact the cash available for distribution to our unitholders. Ourability to incur debt is limited by the Merger Agreement.20There are no limitations in our Partnership Agreement on our ability to issue units ranking senior to the common units.In accordance with Delaware law and the provisions of our Partnership Agreement, we may issue additional partnership interests that are senior to thecommon units in right of distribution, liquidation and voting. The issuance by us of units of senior rank may (i) reduce or eliminate the amount of cashavailable for distribution to our common unitholders; (ii) diminish the relative voting strength of the total common units outstanding as a class; or(iii) subordinate the claims of the common unitholders to our assets in the event of our liquidation.Our Partnership Agreement replaces, eliminates and modifies, as applicable, the duties, including the fiduciary duties, of our General Partner, the Boardor any committee thereof, and modifies the burden of proof in any action brought against the General Partner, the Board or any committee thereof.Our Partnership Agreement contains provisions that modify the duties of the General Partner, including the fiduciary duties of the General Partner, andrestricts the remedies available to unitholders for actions taken by our General Partner that might otherwise constitute breaches of fiduciary duty underDelaware partnership law. For example, our Partnership Agreement:•provides that whenever our General Partner, the Board or any committee of the Board makes a determination or takes, or declines to take, any otheraction in its capacity as the general partner of the Partnership, our General Partner is required to make such determination, or take or decline to takesuch other action, in good faith, and will not be subject to any higher standard under any Delaware Act, or any other law, rule or regulation, or atequity;•provides that any determination, act or failure to act by our General Partner will be deemed in good faith unless such party believed suchdetermination, other action or failure to act, given the totality of the circumstance, was adverse to the interests of the Partnership;•in any proceeding brought by the Partnership, any limited partner, or any Person who acquires an interest in a Partnership Interest or any otherPerson who is bound by the Partnership Agreement, challenging such action, determination or failure to act, the Person bringing or prosecuting suchproceeding shall have the burden of proving that such determination, action or failure to act was not in good faith;•provides that whenever the General Partner makes a determination or takes or declines to take any other action in its individual capacity as opposedto in its capacity as the general partner of the Partnership, whether under the Partnership Agreement or any other agreement contemplated thereby,then the General Partner, or any affiliate thereof, are entitled to the fullest extent permitted by law, to make such determination or to take or declineto take such other action free of any fiduciary duty, duty of good faith, obligation imposed by Delaware Act, law, rule or in equity to the Partnership,any limited partner or any Person who acquires an interest in a Partnership interest or any other Person who is bound by the Partnership Agreement.Examples of decisions that our General Partner may make in its individual capacity include:◦how to allocate business opportunities among us and its affiliates;◦whether to exercise its call right;◦whether to elect to reset target distribution levels; and◦whether or not to consent to any merger or consolidation of the Partnership or amendment to the Partnership Agreement.•provides that our General Partner and its officers and directors will not be liable for monetary damages to the Partnership or our limited partnersresulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdictiondetermining that our General Partner or its officers and directors, as the case may be, acted in bad faith or, in the case of a criminal matter, acted withknowledge that the conduct was criminal;•provides that the General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and otherconsultants and advisers selected by it, and any act taken or omitted in reliance upon the advice or opinion (including an opinion of counsel) ofsuch persons as to matters that the General Partner reasonably believes to be within such person’s professional or expert competence shall beconclusively presumed to have been done or omitted in good faith and in accordance with such advice or opinion; and•provides that our General Partner will not be in breach of its obligations under the Partnership Agreement or its fiduciary duties to us or our limitedpartners if a transaction with an affiliate or the resolution of a conflict of interest is:21•approved by the conflicts committee of the Board, although our General Partner is not obligated to seek such approval; or•approved by the vote of a majority of the outstanding common units, excluding any common units owned by our General Partner and itsaffiliates.By purchasing a common unit, a unitholder is treated as having consented to the provisions in the Partnership Agreement, including the provisions discussedabove.Our General Partner’s affiliates may compete with us.Our Partnership Agreement provides that our General Partner will be restricted from engaging in any business activities other than acting as our GeneralPartner and those activities incidental to its ownership interest in us. Except as provided in the Amended Omnibus Agreement, affiliates of our GeneralPartner are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with us.Pursuant to the terms of our Partnership Agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our General Partner,CST or Couche-Tard, as applicable, or any of their affiliates, including their executive officers and directors. Any such person or entity that becomes aware ofa potential transaction, agreement, arrangement or other matter that may be an opportunity for us will not have any duty to communicate or offer suchopportunity to us. Any such person or entity will not be liable to us or to any limited partner for breach of any fiduciary duty or other duty by reason of thefact that such person or entity pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or does not communicatesuch opportunity or information to us. This may create actual and potential conflicts of interest between us and affiliates of our General Partner and result inless than favorable treatment of us and our unitholders. Conflicts of interest may arise in the future between us and our unitholders, on the one hand, and theaffiliates of our General Partner and CST or Couche-Tard, as applicable, on the other hand. In resolving these conflicts, CST or Couche-Tard, as applicable,may favor their own interests over the interests of our unitholders.CST or Couche-Tard, as applicable, as the holder of our IDRs, may elect to cause us to issue common units to the holders of our IDRs in connection with aresetting of the target distribution levels related to the IDRs, without the approval of the conflicts committee of the Board or the holders of our commonunits. This could result in lower distributions to holders of our common units.The holder of our IDRs, has the right, at any time when the holders of our IDRs have received incentive distributions at the highest level to which they areentitled (50%) for each of the prior four consecutive fiscal quarters, to reset the initial target distribution levels at higher levels based on our distributions atthe time of the exercise of the reset election. Following such a reset election, the minimum quarterly distribution will be adjusted to equal the reset minimumquarterly distribution and the target distribution levels will be reset to correspondingly higher levels based on percentage increases above the reset minimumquarterly distribution.If the holder of our IDRs elects to reset the target distribution levels, it will be entitled to receive a number of common units. The number of common units tobe issued to the holder of our IDRs will equal the number of common units that would have entitled the holder of our IDRs to an aggregate quarterly cashdistribution in the prior quarter equal to the distributions to the holder of our IDRs on the IDRs in the prior quarter. It is possible that the holder of our IDRscould exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions that the holder of our IDRsreceives related to the IDRs and may, therefore, desire to be issued common units rather than retain the right to receive IDRs based on the initial targetdistribution levels. This risk could be elevated if our IDRs are transferred to another party. As a result, a reset election may cause our common unitholders toexperience a reduction in the amount of cash distributions that our common unitholders would have otherwise received had we not issued new common unitsto the holder of our IDRs in connection with resetting the target distribution levels.Holders of our common units have limited voting rights and are not entitled to elect our General Partner or its directors, which could reduce the price atwhich the common units will trade.Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limitedability to influence management’s decisions regarding our business. Unitholders will have no right on an annual or ongoing basis to elect our General Partneror its Board. The Board, including the independent directors, is chosen entirely by CST, as a result of its ownership of our General Partner, and not by ourunitholders. Unlike publicly traded corporations, we will not conduct annual meetings of our unitholders to elect directors or conduct other matters routinelyconducted at annual meetings of stockholders of corporations. As a result of these limitations, the price at which the common units will trade could bediminished because of the absence or reduction of a takeover premium in the trading price.22Even if holders of our common units are dissatisfied, they may not be able to remove our General Partner.If our unitholders are dissatisfied with the performance of our General Partner, they will have limited ability to remove our General Partner. The vote of theholders of at least 66 2 ⁄ 3 % of all outstanding common units voting together as a single class is required to remove our General Partner. As of February 24,2017, CST owns approximately 19.8% of our outstanding common units. The Topper Group, including DMI, owns approximately 23.0% of our outstandingcommon units. Pursuant to a voting agreement, dated October 1, 2014, the Topper Group agreed to vote such units in accordance with the recommendation ofthe Board, allowing CST or Couche-Tard, as applicable, to effectively block the removal of the General Partner. The voting agreement will remain in effect solong as Mr.Topper is a director or officer of our General Partner or the beneficial owner of 10% or more of the outstanding common units of the Partnership.Our General Partner interest or the control of our General Partner may be transferred to a third party without unitholder consent.Our General Partner may transfer its General Partner interest to a third party in a merger or in a sale of all or substantially all of its assets without the consent ofour unitholders. Furthermore, our Partnership Agreement does not restrict the ability of the members of our General Partner to transfer its membership interestsin our General Partner to a third party. The new members of our General Partner would then be in a position to replace the Board and executive officers of ourGeneral Partner with their own designees and thereby exert significant control over the decisions taken by the Board and executive officers of our GeneralPartner. This effectively permits a “change of control” without the vote or consent of the unitholders. See “Upon the closing of the Merger, Couche-Tard willcontrol us, and may have conflicts of interest with us” above.Our General Partner has a call right that may require unitholders to sell their common units at an undesirable time or price.If at any time our General Partner and its affiliates hold more than 80% of the common units, our General Partner will have the right, but not the obligation,which it may assign to any of its affiliates or to us, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price equal to thegreater of (1) the average of the daily closing price of the common units over the 20 trading days preceding the date three days before notice of exercise of thecall right is first mailed and (2) the highest per-unit price paid by our General Partner or any of its affiliates for common units during the 90-day periodpreceding the date such notice is first mailed. As a result, unitholders may be required to sell their common units at an undesirable time or price and may notreceive any return or a negative return on their investment. Unitholders may also incur a tax liability upon a sale of their units. Our General Partner is notobligated to obtain a fairness opinion regarding the value of the common units to be repurchased by it upon exercise of the call right. There is no restrictionin our Partnership Agreement that prevents our General Partner from issuing additional common units and exercising its call right. If our General Partnerexercised its call right, the effect would be to take us private and, if the units were subsequently deregistered, we would no longer be subject to the reportingrequirements of the Exchange Act. As of December 31, 2016, the Topper Group, including DMI, owned approximately 23.0% of our outstanding commonunits.The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public or private markets,including sales by the Topper Group, DMI or other large holders.As of February 24, 2017, we had 33,524,952 common units outstanding. Sales by the Topper Group, DMI or other large holders such as CST or Couche-Tard,as applicable, of a substantial number of our common units in the public markets, or the perception that such sales might occur, could have a material adverseeffect on the price of our common units or could impair our ability to obtain capital through an offering of equity securities. In addition, we have agreed toprovide registration rights to the Topper Group, including DMI. Under our Partnership Agreement and pursuant to a registration rights agreement that wehave entered into, the Topper Group and DMI have registration rights relating to the offer and sale of any units that they hold, subject to certain limitations.We may issue unlimited additional units without unitholder approval, which would dilute existing unitholder ownership interests.Our Partnership Agreement does not limit the number of additional limited partner interests, including limited partner interests that rank senior to thecommon units that we may issue at any time without the approval of our unitholders. The issuance of additional common units or other equity interests ofequal or senior rank could have the following effects:•our existing unitholders’ proportionate ownership interest in us will decrease;•the amount of cash available for distribution on each unit may decrease;•the risk that a shortfall in the payment of the minimum quarterly distribution will be borne by our common unitholders will increase;23•the ratio of taxable income to distributions may increase;•the relative voting strength of each previously outstanding unit may be diminished;•the claims of the common unitholders to our assets in the event of our liquidation may be subordinated; and•the market price of our common units may decline.We are limited by the Merger Agreement in additional units we may issue until the closing of the Merger, which could limit our ability to raise capital foracquisitions and expansion.Our General Partner’s discretion in establishing cash reserves may reduce the amount of cash available for distribution to unitholders.The Partnership Agreement requires our General Partner to deduct from operating surplus cash reserves that it determines are necessary to fund our futureoperating expenditures. The General Partner may reduce cash available for distribution by establishing cash reserves for the proper conduct of our business,to comply with applicable law or agreements to which we are a party or to provide funds for future distributions to partners. These cash reserves will affect theamount of cash available for distribution to unitholders.Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units.Our Partnership Agreement restricts unitholders’ voting rights by providing that any units held by a person or group that owns 20% or more of any class ofunits then outstanding, other than our General Partner and its affiliates, their transferees and persons who acquired such units with the prior approval of theBoard, cannot vote on any matter.Management fees and cost reimbursements due to our General Partner and CST for services provided to us or on our behalf will reduce cash available fordistribution to our unitholders. The amount and timing of such reimbursements will be determined by our General Partner.Prior to making any distribution on our common units, we will pay CST the management fee and reimburse our General Partner and CST for all out-of-pocketthird-party expenses they incur and payments they make on our behalf. Our Partnership Agreement provides that our General Partner will determine in goodfaith the expenses that are allocable to us. In addition, pursuant to the Amended Omnibus Agreement, CST will be entitled to reimbursement for certainexpenses that they incur on our behalf. Our Partnership Agreement does not limit the amount of expenses for which our General Partner and CST may bereimbursed. The reimbursement of expenses and payment of fees, if any, to our General Partner and CST will reduce the amount of cash available to paydistributions to our unitholders.Unitholders may have liability to repay distributions and in certain circumstances may be personally liable for the obligations of the partnership.Under certain circumstances, unitholders may have to repay amounts wrongfully returned or distributed to them. Under Section 17-607 of the DelawareRevised Uniform Limited Partnership Act (the “Delaware Act”), we may not make a distribution to our unitholders if the distribution would cause ourliabilities to exceed the fair value of our assets. Delaware law provides that for a period of three years from the date of the impermissible distribution, limitedpartners who received the distribution and who knew at the time of the distribution that it violated Delaware law will be liable to the limited partnership forthe distribution amount. Liabilities to partners on account of their partnership interests and liabilities that are non-recourse to the partnership are not countedfor purposes of determining whether a distribution is permitted.It may be determined that the right, or the exercise of the right by the limited partners as a group, to (i) remove or replace our General Partner, (ii) approvesome amendments to our Partnership Agreement or (iii) take other action under our Partnership Agreement constitutes “participation in the control” of ourbusiness. A limited partner that participates in the control of our business within the meaning of the Delaware Act may be held personally liable for ourobligations under the laws of Delaware, to the same extent as our General Partner. This liability would extend to persons who transact business with us underthe reasonable belief that the limited partner is a General Partner. Neither our Partnership Agreement nor the Delaware Act specifically provides for legalrecourse against our General Partner if a limited partner were to lose limited liability through any fault of our General Partner.The NYSE does not require a publicly traded partnership like us to comply with certain of its corporate governance requirements.Our common units are listed on the NYSE. Because we are a publicly traded partnership, the NYSE does not require us to have a majority of independentdirectors on our General Partner’s board of directors. Additionally, the NYSE does not require us as a publicly traded partnership to maintain a compensationcommittee or a nominating and corporate governance committee.24Accordingly, unitholders will not have the same protections afforded to certain corporations that are subject to all of the NYSE corporate governancerequirements. Please read “Management—Management of CrossAmerica Partners LP.”An increase in interest rates may cause the market price of our common units to decline and a significant increase in interest rates could adversely affectour ability to service our indebtedness.Like all equity investments, an investment in our common units is subject to certain risks. Borrowings under the credit facility will bear interest at variablerates. If market interest rates increase, such variable-rate debt will create higher debt service requirements, which could adversely affect our cash flow andability to make cash distributions. In exchange for accepting these risks, investors may expect to receive a higher rate of return than would otherwise beobtainable from lower-risk investments. Accordingly, as interest rates rise, the ability of investors to obtain higher risk-adjusted rates of return by purchasinggovernment-backed debt securities may cause a corresponding decline in demand for riskier investments generally, including yield-based equity investmentssuch as publicly traded limited partnership interests. Reduced demand for our common units resulting from investors seeking other more favorableinvestment opportunities may cause the trading price of our common units to decline.The interest rate on our credit facility is variable; therefore, we have exposure to movements in interest rates. A significant increase in interest rates couldadversely affect our ability to service our indebtedness. The increased cost could make the financing of our business activities more expensive. These addedexpenses could have an adverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.Tax RisksOur tax treatment depends in large part on our status as a partnership for U.S. federal income tax purposes and our otherwise not being subject to amaterial amount of U.S. federal, state and local income or franchise tax. If the IRS were to treat us as a corporation for U.S. federal income tax purposes orif we were to otherwise be subject to a material amount of additional entity level income, franchise or other taxation for U.S. federal, state or local taxpurposes, then our cash available for distribution to our unitholders would be substantially reduced.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 taxpurposes. A publicly traded partnership, such as us, may be treated as a corporation for U.S. federal income tax purposes unless 90% or more of its grossincome 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 satisfythis requirement and, thus, be able to be treated as a partnership, rather than a corporation, for U.S. federal income tax purposes. However, a change in ourbusiness, or a change in current 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.If we were required to be treated as a corporation for U.S. federal income tax purposes or otherwise subject to entity-level taxation, then we would pay U.S.federal income tax on our taxable income at the corporate tax rate which, under current law, is a maximum of 35%. We would also likely pay state and localincome tax at varying rates. Distributions to our unitholders would generally be taxed again as either a dividend (to the extent of our current andaccumulated earnings and profits) and/or as taxable gain after recovery of a unitholder’s U.S. federal income tax basis in their units, and no income, gains,losses, deductions or credits would flow through to our unitholders. Because a U.S. federal income tax would be imposed upon us as a corporation, our cashavailable for distribution to our unitholders would be substantially reduced. Thus, treatment of us as a corporation would result in a material reduction in theanticipated cash flow and after-tax return to our unitholders, likely causing a substantial reduction in the value of our common units.At the state level, were we to be subject to federal income tax, we would also be subject to the income tax provisions of many states. Moreover, because ofwidespread state budget deficits and other reasons, several states are evaluating ways to independently subject partnerships to entity-level taxation throughthe imposition of state income taxes, franchise taxes and other forms of taxation. For example, we are required to pay Texas margin tax on our gross incomeapportioned to Texas. Imposition of any additional such taxes on us or an increase in the existing tax rates would reduce the cash available for distribution toour unitholders.Our Partnership Agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that results in us becoming subject to either:(a) entity-level taxation for U.S. federal, state, local and/or foreign income and/or withholding tax purposes to which we were not subject prior to suchenactment, modification or interpretation, and/or (b) an increased amount of one or more of such taxes (including as a result of an increase in tax rates), thenthe minimum quarterly distribution amounts and the target distribution amounts may be adjusted (i.e., reduced) to reflect the impact of that law on us.25We have subsidiaries that are treated as corporations for U.S. federal income tax purposes and are subject to entity-level U.S. federal, state and localincome and franchise tax.We conduct a portion of our operations and business through one or more direct and indirect subsidiaries that are treated as corporations for federal incometax purposes (including LGWS). We may elect to conduct additional operations through these corporate subsidiaries in the future. These corporatesubsidiaries are subject to corporate-level taxes, which reduce the cash available for distribution to us and, in turn, to unitholders. If the IRS were tosuccessfully assert that these corporations have more tax liability than we anticipate or legislation were enacted that increased the corporate tax rate, our cashavailable for distribution to unit holders would be further reduced.A significant amount of our income is attributable to our leasing of real property to DMS. If DMS were to become related to us for U.S. federal income taxpurposes, the real property rents that we receive from DMS would no longer constitute qualifying income and we would likely be treated as a corporationfor U.S. federal income tax purposes.A significant amount of our qualifying income is composed of real property rents from DMS attributable to the sites that DMS leases from us. In general, anyreal property rents that we receive from a tenant or sub-tenant of ours in which we, directly or indirectly, own or are treated as owning by reason of theapplication of certain constructive ownership rules: (a) at least 10% of such tenant’s or sub-tenant’s stock (voting power or value) in the case where suchtenant or sub-tenant is a corporation for U.S. federal income tax purposes, or (b) an interest of at least 10% of such tenant’s or sub-tenant’s assets or net profitsin the case where such tenant or sub-tenant is not a corporation for U.S. federal income tax purposes (as would be the case with respect to DMS), would notconstitute qualifying income. After applying certain constructive ownership rules, we will be treated as owning the 5% interest in the assets and net profits ofDMS that Joseph V. Topper, Jr. actually and constructively owns. If we were considered to directly or indirectly own an interest of 10% or more of the assetsor net profits of DMS, then the real property rents that we receive from DMS would no longer constitute qualifying income in which case, based on ourcurrent operations, we would likely no longer qualify to be treated as a “partnership” (and instead would be treated as a corporation) for U.S. federal incometax purposes.Our and DMS’ governing documents contain transfer restrictions designed to prevent us from being treated as directly or indirectly owning by reason of theapplication of constructive ownership rules an interest of 10% or more of DMS’ assets or net profits. We received an opinion of counsel at the closing of theIPO that transfer restrictions are generally enforceable under Delaware law, but a court could determine that these restrictions are inapplicable orunenforceable.The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrativechanges and differing interpretations, possibly on a retroactive basis.The present U.S. federal income tax treatment of publicly traded partnerships, including us, or of an investment in our common units may be modified byadministrative, legislative or judicial changes or differing interpretations at any time. For example, from time to time, members of Congress propose andconsider such substantive changes to the existing federal income tax laws that affect publicly traded partnerships. If successful, these proposals or othersimilar proposals could eliminate the qualifying income exception upon which we rely for our treatment as a partnership for U.S. federal income tax purposes.Any modification to the U.S. federal income tax laws may be applied retroactively and could make it more difficult or impossible for us to be treated as apartnership for U.S. federal income tax purposes. We are unable to predict whether any of these changes or other proposals will ultimately be enacted. Anysuch changes could negatively impact the value of an investment in our common units.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 contestwill 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 partnershipfor 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 positions wetake. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we take. A court may not agree with some orall of 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 cashavailable for distribution.Our unitholders are required to pay taxes on their share of income from us even if they do not receive any cash distributions from us.Our unitholders are required to pay U.S. federal income taxes and, in some cases, state and local taxes, on their allocable share of our taxable income and gaineven if they do not receive any cash distributions from us. Our unitholders may not receive cash distributions from us equal to their share of our taxableincome or even equal to the actual tax due with respect to that income.26Tax gain or loss on the disposition of our common units could be more or less than expected.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 taxbasis in those common units. Distributions per common unit in excess of a unitholder’s allocable share of our net taxable income result in a decrease in thatunitholder’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 thatunitholder, 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 theoriginal cost. Furthermore, a substantial portion of the amount realized, whether or not representing gain, may be taxed as ordinary income due to potentialrecapture of depreciation and amortization deductions and certain other items. In addition, because the amount realized includes a unitholder’s share of ournon-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.Tax-exempt organizations and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them.Investment in our common units by an organization that is exempt from U.S. federal income tax, such as employee benefit plans, individual retirementaccounts, and non-U.S. persons raises issues unique to them. For example, a substantial amount of our U.S. federal taxable income and gain constitute grossincome from an unrelated trade or business and the amount thereof allocable to a tax-exempt organization would be taxable to such organization as unrelatedbusiness taxable income. Distributions to a non-U.S. person that holds our common units will be reduced by U.S. federal withholding taxes imposed at thehighest applicable U.S. federal income tax rate and such non-U.S. person will be required to file U.S. federal income tax returns and pay U.S. federal incometax, to the extent not previously withheld, on his, her or its allocable share of our taxable income and gain. Any tax-exempt organization or a non-U.S. personshould consult its tax advisor before investing in our common units.Our unitholders are subject to state and local income taxes and return filing requirements in states and localities where they do not live as a result ofinvesting in our common units.In addition to U.S. federal income taxes, our unitholders will likely be subject to other taxes, such as state and local income taxes, unincorporated businesstaxes 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 notlive in any of those jurisdictions. Our unitholders will likely be required to file state and local income tax returns and pay state and local income taxes insome or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with those requirements. We currentlyconduct business in Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts,Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Tennessee,Texas, Virginia, West Virginia and Wisconsin. Each of these states (other than Florida and Texas) currently imposes a personal income tax on individuals(except that Tennessee only imposes a personal income tax on interest and dividends and New Hampshire only imposes a personal income tax on interest,dividends and gambling winnings) as well as an income, business profits and/or a franchise tax on corporations and other entities. We may own property orconduct 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 andforeign tax returns. Our counsel has not rendered an opinion on the state, local or non-U.S. tax consequences of an investment in our common units.We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS maychallenge this treatment, which could adversely affect the value of the common units.Because we cannot match transferors and transferees of common units, we will adopt depreciation and amortization positions that may not conform to allaspects of existing Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of U.S. federal income tax benefitsavailable to our unitholders. It also could affect the timing of these tax benefits or the amount of gain for U.S. federal income tax purposes from any sale ofcommon units and could have a negative impact on the value of our common units or result in audit adjustments to a unitholder’s U.S. federal income taxreturns.We prorate our items of income, gain, loss and deduction for U.S. federal income tax purposes and allocate them between transferors and transferees ofour common units each month based upon the ownership of our common units on the first business day of each month and as of the opening of theapplicable exchange on which our common units are listed, instead of on the basis of the date a particular common unit is transferred. The IRS maychallenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our common units each month based upon theownership of our common units on the first day of each month, instead of on the basis of the date a particular common unit is transferred. Althoughsimplifying conventions are contemplated by the Code and most publicly traded partnerships use similar simplifying conventions, the use of this methodmay not be permitted under existing Treasury Regulations as there is27no direct or indirect controlling authority on this issue. The Department of the Treasury and the IRS have issued Treasury Regulations that provide a safeharbor pursuant to which a publicly traded partnership may use a similar monthly simplifying convention to allocate tax items among transferor andtransferee unitholders. The Treasury Regulations do not specifically authorize the use of the proration method we have adopted. If the IRS were tosuccessfully challenge our proration method, we may be required to change the allocation of items of income, gain, loss and deduction among ourunitholders.If a unitholder loans their common units to a short seller to cover a short sale of common units, they may be considered to have disposed of those commonunits for U.S. federal income tax purposes. If so, the unitholder would no longer be treated for U.S. federal income tax purposes as a partner with respect tothose common units during the period of the loan and they may recognize gain or loss from such deemed disposition.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 bereportable by the respective unitholder, and any cash distributions received by the unitholder as to those common units could be fully taxable to them asordinary income. Our counsel has not rendered an opinion regarding the treatment of a unitholder where common units are loaned to a short seller to cover ashort sale of common units. Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan of their common units areurged to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their common units.We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between our General Partner and theunitholders. The IRS may challenge this treatment, which could adversely affect the value of the common units.When we issue additional units or engage in certain other transactions, our General Partner will determine the fair market value of our assets and allocate anyunrealized gain or loss attributable to our assets to the capital accounts of our unitholders and our General Partner. Although we may from time to timeconsult with professional appraisers regarding valuation matters, including the valuation of our assets, our General Partner will make many of the fair marketvalue determinations of our assets using a methodology based on the market value of our common units as a means to measure the fair market value of ourassets. Our methodology may be viewed as understating or overstating the value of our assets. In that case, there may be a shift of income, gain, loss anddeduction between certain unitholders and our General Partner, which may be unfavorable to such unitholders. The IRS may challenge our valuationmethods and allocations of income, gain, loss and deduction between our General Partner and certain of our unitholders.A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income, gain or loss being allocated to ourunitholders 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 anegative 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 ofadditional deductions.The sale or exchange of 50% or more of the total interest in our capital and profits within a twelve-month period will result in the termination of ourpartnership for U.S. federal income tax purposes.We will be considered to have technically terminated as a partnership for U.S. federal income tax purposes if there is a sale or exchange of 50% or more of thetotal interest in our capital and profits within a twelve-month period. For purposes of determining whether a technical tax termination has occurred, a sale orexchange of 50% or more of the total interest in our capital and profits could occur, if for example, when added to regular market trading, the Topper Group,which owns collectively approximately 23.0% of the total interest in our capital and profits, were to sell or exchange their collective interest in us within aperiod of twelve months. For purposes of determining whether the 50% threshold has been met, multiple sales of the same interest will be counted only once.Our technical termination would, among other things, result in the closing of our taxable year for all unitholders, which could result in us filing two U.S.federal income tax returns (and unitholders receiving two Schedule K-1s) for one calendar year. However, pursuant to an IRS relief procedure the IRS mayallow, among other things, a constructively terminated partnership to provide a single Schedule K-1 for the calendar year in which a termination occurs. Ourtechnical termination could also result in the re-starting of the recovery period for our assets (and, thus, result in a significant deferral of depreciation andamortization deductions allowable in computing our U.S. federal taxable income). In the case of a unitholder reporting on a taxable year other than a calendaryear, the closing of our taxable year may also result in more than twelve months of our taxable income or loss being includable in his taxable income for theyear of termination. Our technical termination, however, would not affect our classification as a partnership for U.S. federal income tax purposes but insteadwe would be treated as a new partnership for U.S. federal income tax purposes. If we were treated as a new partnership for U.S. federal income tax purposes, wewould be required to make new tax elections and could be subject to penalties if we were unable to determine that a technical termination occurred.28If the IRS were to contest the U.S. federal income tax positions we take, it may adversely impact the market for our common units, and the costs of any suchcontest would reduce distributable cash flow to our unitholders.As part of the Bipartisan Budget Act of 2015, legislation was passed requiring large partnerships to pay federal tax deficiencies at the partnership level,unless the partnership elects to take into account any federal tax deficiency by including the adjustment in the Form K-1s of the partners in the year in whichthe audit is completed. These rules differ from the current rules which require that the IRS to determine the deficiency at the partnership level, but collect thetax deficiency directly from the partners who were partners in the partnership in the taxable year that was audited. The new rules are effective for our 2015taxable year, but we may elect to apply the new rules to our 2016 or 2017 taxable yeas. We will evaluate the new audit rules and determine at a later datewhether or not to elect early application. We will also determine at a later date whether to pay the tax deficiency, if any, at the partnership level or to includethe adjustment in the Form K-1s of the partners.PROPERTIESThe following table shows the aggregate number of sites we owned or leased by customer groups at December 31, 2016: OwnedSites LeasedSites TotalSites Percentage ofTotal SitesLessee dealers227 241 468 53%Independent dealers— — — —CST74 — 74 8%DMS90 78 168 19%Commission agents45 55 100 11%Company operated retail sites65 11 76 9%Total501 385 886 100%We conduct business at sites located in Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland,Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, SouthDakota, Tennessee, Texas, Virginia, West Virginia and Wisconsin.The following table provides a history of our sites acquired, changes between customer groups or sold during 2016: LesseeDealers CST DMS Commission Agents CompanyOperated TotalNumber at beginning of period337 74 207 73 116 807Acquired57 — — 1 37 95Changes between customer groups85 — (33) 24 (76) —Sold(4) — — (1) — (5)Other(7) — (6) 3 (1) (11)Number at end of period(a) 468 74 168 100 76 886(a) This amount excludes 403 independent dealer sites and includes 28 closed sites and 71 sites where CrossAmerica only collects rent.Our principal executive offices are in Allentown, Pennsylvania in approximately 27,000 square feet of leased office space.ITEM 1B. UNRESOLVED STAFF COMMENTSNone.ITEM 3. LEGAL PROCEEDINGSWe are from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typicallyseek, among other things, compensation for alleged personal injury, breach of contract, property damages, environmental damages, employment-relatedclaims and damages, punitive damages, civil penalties or other losses, or injunctive29or declaratory relief. With respect to all such lawsuits, claims and proceedings, we record a reserve when it is probable that a liability has been incurred andthe amount of loss can be reasonably estimated. In addition, we disclose matters for which management believes a material loss is at least reasonably possible.None of these proceedings, separately or in the aggregate, are expected to have a material adverse effect on our consolidated financial position, results ofoperations or cash flows. In all instances, management has assessed the matter based on current information and made a judgment concerning its potentialoutcome, giving due consideration to the nature of the claim, the amount and nature of damages sought and the probability of success. Management’sjudgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.We are a co-defendant, together with our General Partner, CST and CST Services LLC, in a lawsuit brought by Charles Nifong, a former employee of CSTServices LLC who previously provided services to us as Chief Investment Officer and Vice President of Finance (Court of Common Pleas, Lehigh County,Pennsylvania, case number 2015-1003). The plaintiff alleges breach of contract and associated claims relating to his termination of employment and claimedseverance benefits under the EICP totaling approximately $1.6 million. We intend to contest the action vigorously. Under the EICP, we are obligated to payreasonable legal expenses incurred by the plaintiff in connection with this dispute whether we are successful in our defense or not.Additional information regarding legal proceedings is included in Note 16 to the financial statements.30PART IIITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIESAs of February 24, 2017, we had 33,524,952 common units outstanding, held by approximately 19 holders of record. Our common units are listed and tradeon the NYSE under the symbol “CAPL.” Included in the number of common units outstanding are 5,838,830 common units currently owned by CST, whichcannot be transferred absent registration with the SEC or an available exemption from the SEC’s registration requirements. See “Security Ownership ofCertain Beneficial Owners and Management and Related Unitholder Matters.”The following table sets forth, for the periods indicated, the high and low sales prices for our common units, as reported by the NYSE, and cash distributionspaid per common unit. The last reported sales price of our common units on the NYSE on February 24, 2017 was $26.38 per share. Common Unit Price Range Cash DistributionsDeclaredPer Unit High Low 2015 First Quarter $40.87 $32.03 $0.5425Second Quarter $35.89 $26.70 $0.5475Third Quarter $31.49 $20.00 $0.5625Fourth Quarter $27.69 $21.31 $0.57752016 First Quarter $26.65 $17.39 $0.5925Second Quarter $25.50 $22.50 $0.5975Third Quarter $26.95 $23.01 $0.6025Fourth Quarter $27.91 $24.07 $0.6075Cash Distribution PolicyGeneralThe Board has adopted a policy to make cash distributions per unit each quarter, in an amount determined by the Board following the end of such quarter. Ingeneral, we expect that cash distributed for each quarter will equal cash generated from operations less cash needed for maintenance capital expenditures,accrued but unpaid expenses (including the management fee to CST), reimbursement of expenses incurred by our General Partner, debt service and othercontractual obligations and reserves for future operating and capital needs or for future distributions to our partners. We expect that the Board will reserveexcess cash, from time to time, in an effort to sustain or permit gradual or consistent increases in quarterly distributions. Restrictions in our credit facilitycould limit our ability to pay distributions upon the occurrence of certain events. See “Item 7. Management’s Discussion and Analysis of Financial Conditionand Results of Operations—Liquidity and Capital Resources—Credit Facility.” The Board may also determine to borrow to fund distributions in quarterswhen we generate less cash available for distribution than necessary to sustain or grow our cash distributions per unit. The factors that we believe will be theprimary drivers of our cash generated from operations are changes in demand for motor fuels, the number of sites to which we distribute motor fuels, themargin per gallon we are able to generate at such sites and the profitability of sites we own and lease.Our cash distribution policy, established by our General Partner, is to distribute each quarter an amount at least equal to the minimum quarterly distributionof $0.4375 per unit on all units ($1.75 per unit on an annualized basis). The distribution declared by the Board in January 2017 was $0.6125 per unit (or$2.45 per unit on an annualized basis). Our General Partner may determine at any time that it is in the best interest of our Partnership to modify or revoke ourcash distribution policy. Modification of our cash distribution policy may result in distributions of amounts less than, or greater than, our minimum quarterlydistribution, and revocation of our cash distribution policy could result in no distributions at all. In addition, our credit facility includes certain restrictionson our ability to make cash distributions.31IDRsIDRs represent the right to receive an increasing percentage (15.0%, 25.0% and 50.0%) of our quarterly distributions from operating surplus after theminimum quarterly distribution and the target distribution levels (as described under Minimum Quarterly Distribution below) have been achieved. CST holdsour IDRs and has the right to transfer these rights at any time. The distributions declared since March 2014 exceed the 15% threshold and the distributionsdeclared since June 2015 exceed the 25% threshold.Minimum Quarterly DistributionIf cash distributions to our unitholders exceed $0.5031 per unit in any quarter, our unitholders and the holders of our IDRs, will receive distributionsaccording to the following percentage allocations:Total Quarterly Distribution Per Common and Subordinated Unit Marginal Percentage Interest in DistributionTarget Amount Unitholders Holders of IDRsabove $0.5031 up to $0.5469 85% 15%above $0.5469 up to $0.6563 75% 25%above $0.6563 50% 50%Quarterly distribution activity during 2016 was as follows:Quarter Ended Record Date Payment Date Cash Distribution (perunit) Cash Distribution (inmillions)March 31, 2016 February 12, 2016 February 24, 2016 $0.5925 $19.6June 30, 2016 May 19, 2016 May 31, 2016 $0.5975 $19.9September 30, 2016 August 8, 2016 August 15, 2016 $0.6025 $20.1December 31, 2016 November 4, 2016 November 15, 2016 $0.6075 $20.4We expect to continue the practice of paying quarterly cash distributions, though the timing, declaration, amount and payment of future distributions tounitholders will fall within the discretion of the Board. Our indebtedness also restricts our ability to pay distributions. As such, there can be no assurance wewill continue to pay distributions in the future.Subordination PeriodOn February 25, 2016, the subordination period under the Partnership Agreement ended. At that time, each outstanding subordinated unit converted into onecommon unit and as such participates pro rata with the other common units in cash distributions.Unregistered Sales of Equity Securities and Use of ProceedsWe issued an aggregate of 440,266 and 5,398,564 common units to CST in 2016 and 2015 as consideration for asset purchases and settlement of themanagement fee. These units are restricted and cannot be transferred absent registration with the SEC or an available exemption from the SEC’s registrationrequirements. These issuances were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended. See “Security Ownership of CertainBeneficial Owners and Management and Related Unitholder Matters.”32Common Unit Repurchase ProgramOn November 2, 2015, our Board approved a common unit repurchase program under Rule 10b-18 of the Exchange Act authorizing us to repurchase up to anaggregate of $25 million of the common units representing limited partner interests in the Partnership. Under the program, we may make purchases in theopen market after November 9, 2015 in accordance with Rule 10b-18 of the Exchange Act, or in privately negotiated transactions, pursuant to a trading planunder Rule 10b5-1 of the Exchange Act or otherwise. Any purchases will be funded from available cash on hand. The common unit repurchase program doesnot require us to acquire any specific number of common units and may be suspended or terminated by us at any time without prior notice. The purchases willnot be made from any officer, director or control person of CrossAmerica or CST. The Merger Agreement prohibits us from making any further repurchases ofour common units. The following table shows the purchases made during the year ended December 31, 2016:Period Total Number ofUnits Purchased Average Price Paidper Unit Total Cost of UnitsPurchased Amount Remainingunder the ProgramJanuary 1 - March 31, 2016 112,492 $24.47 $2,752,240 $18,644,689April 1 - June 30, 2016 20,971 $23.86 $500,413 $18,144,276July 1 - September 30, 2016 — $— $— $18,144,276October 1 - December 31, 2016 — $— $— $18,144,276January 1 - December 31, 2016 133,463 $3,252,653 $18,144,276CrossAmerica Common Unit Purchases by CSTOn September 21, 2015, CST announced that the independent executive committee of its board of directors approved a unit purchase program under Rule10b-18 of the Exchange Act, authorizing CST to purchase up to an aggregate of $50 million of the common units representing limited partner interests inCrossAmerica. The unit purchase program does not have a fixed expiration date and may be modified, suspended or terminated at any time at CST’sdiscretion. Through February 24, 2017, CST had purchased $19.8 million, or 804,667 common units, at an average price of $24.64 per common unit, whichcannot be transferred absent registration with the SEC or an available exemption from the SEC’s registration requirements. The Merger Agreement prohibitsCST from making any further purchases of CrossAmerica common units.Management Fee IssuanceAs approved by the independent conflicts committee of the Board and the executive committee of CST’s board of directors, the Partnership and CSTmutually agreed to settle, from time to time, a portion of the full amount due under the terms of the Amended Omnibus Agreement in newly issued commonunits representing limited partner interests in the Partnership. These issuances of common units were made in reliance on Section 4(a)(2) of the Securities Actof 1933, as amended. We issued the following common units to CST for the periods presented below under the terms of the Amended Omnibus Agreement:Quarter Ended Date of Issuance Number of Common Units IssuedJune 30, 2015 July 16, 2015 145,056September 30, 2015 October 26, 2015 114,256December 31, 2015 March 31, 2016 145,137March 31, 2016 May 9, 2016 83,218June 30, 2016 August 2, 2016 101,087September 30, 2016 October 27, 2016 110,824December 31, 2016 * 171,039* Expected to be issued on February 28, 201733ITEM 6. SELECTED HISTORICAL CONDENSED CONSOLIDATED AND CONDENSED COMBINED FINANCIAL DATAThe following selected financial data reflect the operating data for the periods and as of the dates indicated. On October 30, 2012, we completed our IPO. Atthe closing of our IPO, a portion of the business of our Predecessor and its subsidiaries and affiliates was contributed to us. As such, the results of ourPredecessor are not comparable to our results as certain assets were not contributed to us as they did not meet our strategic and geographic plan.To ensure a full understanding, you should read the selected financial data presented below in conjunction with “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations” and the financial statements and accompanying notes included elsewhere in this Form 10-K.34The financial data below are presented in thousands. Consolidated CrossAmerica Partners LP Combined LehighGas Entities(Predecessor)Period fromJanuary 1 toOctober 30, 2012 For the Year Ended December 31, Period fromOctober 31 toDecember 31, 2012 2016 2015 2014 2013 Income Statement Data: Total revenues(a) $1,869,806 $2,226,271 $2,664,868 $1,936,059 $311,774 $1,573,502 Operating income 32,171 26,017 8,640 30,177 881 15,148 Income (loss) from continuing operations after income taxes 10,715 11,462 (6,171) 18,070 (1,356) 2,805 Net income (loss) attributable to partners 10,704 11,441 (6,162) 18,070 (1,356) $3,114 Net income (loss) per common and subordinated unit-basic $0.22 $0.35 $(0.32) $1.18 $(0.09) n/a Net income (loss) per common and subordinated unit-diluted $0.22 $0.35 $(0.32) $1.18 $(0.09) n/a Operating Data: Wholesale Average motor fuel distribution sites 1,128 1,064 923 708 667 576 Gallons of motor fuel distributed (in millions) (b) 1,034.6 1,051.4 887.7 637.8 103.6 501.6 Motor fuel gross margin $54,112 $58,606 $60,606 $43,850 $9,936 $32,788 Motor fuel gross margin per gallon (c) $0.052 $0.056 $0.068 $0.069 $0.096 $0.065 Rent income(a) $74,955 $59,956 $47,348 $40,210 $5,178 $16,044 Retail Average total system sites 157 202 119 21 n/a n/a Gallons of motor fuel sold (in millions) 159.7 211.2 136.5 20.2 n/a n/a Motor fuel gross margin per gallon $0.053 $0.092 $0.059 $0.032 n/a n/a Merchandise gross margin percentage 24.6% 26.3% 30.6% n/a n/a n/a Other Financial Data (unaudited) Adjusted EBITDA(d) $103,634 $90,314 $61,424 $54,904 $2,992 $25,804 Distributable Cash Flow(d) $81,628 $69,733 $44,063 $39,296 $999 (e) Distributions paid per common unit $2.4000 $2.2300 $2.0800 $1.7273 $— (e) (a) Prior to 2016, we netted lease executory costs such as real estate taxes, maintenance, and utilities that we paid and re-billed customers against rental income on our statement ofoperations. During the first quarter of 2016, we began accounting for such amounts as rent income and operating expenses and reflected this change in presentationretrospectively back through 2014. This change resulted in a $10.8 million and $8.9 million increase in rent and other income and operating expenses for the wholesalesegment for the years ended December 31, 2015 and 2014, respectively. We did not reflect this change in 2013 or 2012.(b) Excludes gallons of motor fuel distributed to sites classified as discontinued operations with respect to the periods presented for our Predecessor.35(c) Fuel margin per gallon represents (1) total revenues from motor fuel sales, less total cost of revenues from motor fuel sales, divided by (2) total gallons of motor fueldistributed.(d) See reconciliation of non-GAAP measures under the heading “Management’s Discussion of Financial Condition and Results of Operations—Results of Operations—Non-GAAP Measures” below.(e) Results for these periods were not presented as these non-GAAP financial measures were not used at that time. Consolidated CrossAmerica Partners LP As of December 31, 2016 2015 2014 2013 2012 Balance Sheet Data: Cash and cash equivalents $1,350 $1,192 $15,170 $4,115 $4,768 Total current assets (a) 65,407 58,119 76,805 35,496 22,974 Total assets (a) (b) 931,989 861,444 598,446 391,621 317,851 Total current liabilities (a) 75,133 74,898 95,222 38,857 32,153 Long-term debt, excluding current portion (b) 465,119 403,714 226,815 173,509 183,751 Total liabilities (a) (b) 711,178 592,588 407,955 296,950 303,306 Total equity $220,811 $268,856 $190,491 $94,671 $14,545 (a) Balances as of December 31, 2013 and 2012 were not retrospectively adjusted for the adoption of ASU 2015-17, which related to the presentation of deferred taxes.(b) Balances as of December 31, 2013 and 2012 were not retrospectively adjusted for the adoption of ASU 2015-03, which related to the presentation of deferredfinancing costs.36ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMD&A is organized as follows:•CST’s Merger Agreement—This section provides information on the pending Merger.•Significant Factors Affecting Our Profitability—This section describes the significant impact on our results of operations caused by crude oilcommodity price volatility, seasonality and acquisition and financing activities.•Results of Operations—This section provides an analysis of our results of operations, including the results of operations of our businesssegments, for the years ended December 31, 2016, 2015 and 2014, an outlook for our business and non-GAAP financial measures.•Liquidity and Capital Resources—This section provides a discussion of our financial condition and cash flows. It also includes a discussion ofour debt, capital requirements and other matters impacting our liquidity and capital resources.•New Accounting Policies—This section describes new accounting pronouncements that we have already adopted, those that we are required toadopt in the future, and those that became applicable in the current year as a result of new circumstances.•Critical Accounting Policies Involving Critical Accounting Estimates—This section describes the accounting policies and estimates that weconsider most important for our business and that require significant judgment.37The following MD&A is intended to help the reader understand our results of operations and financial condition. This section is provided as a supplement to,and should be read in conjunction with, Items 1., 1A. and 8. (which includes our consolidated financial statements) included elsewhere in this Form 10-K.CST’s Merger AgreementUnder the terms of the Merger Agreement, Circle K Stores Inc. will, through its acquisition of CST, control CST’s interest in the General Partner and CST’s19.8% limited partner interest in us as well as all of the IDRs. The transaction is subject to the receipt of regulatory approvals in the United States andCanada. The transaction is currently expected to close in the second quarter of 2017. See CST’s Definitive Proxy Statement filed with the SEC on October 11,2016.Significant Factors Affecting our ProfitabilityThe Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross ProfitWholesale segmentThe prices paid to our motor fuel suppliers for wholesale motor fuel (which affects our cost of sales) are highly correlated to the price of crude oil. The crudeoil commodity markets are highly volatile, and the market prices of crude oil, and, correspondingly, the market prices of wholesale motor fuel, experiencesignificant and rapid fluctuations. We receive a fixed mark-up per gallon on approximately 87% of gallons sold to our customers. The remaining gallons areprimarily DTW priced contracts with our customers. These contracts provide for variable, market based pricing that results in motor fuel gross profit effectssimilar to retail motor fuel gross profits (as crude oil prices decline, motor fuel gross profit generally increases, as discussed in our Retail segment below). Theincrease in DTW gross profit results from the acquisition cost of wholesale motor fuel declining at a faster rate as compared to the rate retail motor fuel pricesdecline. Conversely, our DTW motor fuel gross profit declines when the cost of wholesale motor fuel increases at a faster rate as compared to the rate retailmotor fuel prices increase.Regarding our supplier relationships, a majority of our total gallons purchased are subject to discounts for prompt payment and other rebates and incentives,which are recorded within cost of sales. Prompt payment discounts are based on a percentage of the purchase price of motor fuel. As such, the dollar value ofthese discounts increase and decrease corresponding with motor fuel prices. Therefore, in periods of lower wholesale motor fuel prices, our gross profit isnegatively affected and, in periods of higher wholesale motor fuel prices, our gross profit is positively affected (as it relates to these discounts). Based on ourcurrent volumes, we estimate a $10 per barrel change in the price of crude oil would impact our overall annual wholesale motor fuel gross profit byapproximately $2.2 million related to these payment discounts.Retail segmentThe prices we pay for wholesale motor fuel are closely correlated to the price of crude oil. The crude oil commodity markets are highly volatile, and themarket prices of crude oil and wholesale motor fuel experience significant and rapid fluctuations. We attempt to pass along wholesale motor fuel pricechanges to our retail customers through “at the pump” retail price changes; however, market conditions do not always allow us to do so immediately. Thetiming of any related increase or decrease in “at the pump” retail prices is affected by competitive conditions in each geographic market in which we operate.As such, the prices we charge our customers for motor fuel and the gross profit we receive on our motor fuel sales can increase or decrease significantly andrapidly over short periods of time.Changes in our average motor fuel selling price per gallon and gross margin for the periods ended December 31, 2016 and 2015 are directly related to thechanges in crude oil and wholesale motor fuel prices over the same period. Variations in our reported revenues and cost of sales are, therefore, primarilyrelated to the price of crude oil and wholesale motor fuel prices and generally not as a result of changes in motor fuel sales volumes, unless otherwiseindicated and discussed below.We typically experience lower retail motor fuel gross profits in periods when the wholesale cost of motor fuel increases, and higher retail motor fuel grossprofits in periods when the wholesale cost of motor fuel declines rapidly.Seasonality Effects on VolumesOur business is subject to seasonality due to our wholesale and retail sites being located in certain geographic areas that are affected by seasonal weather andtemperature trends and associated changes in retail customer activity during different seasons. Historically, sales volumes have been highest in the secondand third quarters (during the summer months) and lowest during the winter months in the first and fourth quarters.38Impact of InflationInflation affects our financial performance by increasing certain of our operating expenses and cost of goods sold. Operating expenses include labor costs,leases, and general and administrative expenses. While our Wholesale segment benefits from higher terms discount as a result of higher fuel costs, inflationcould negatively impact our Retail segment as a result of higher motor fuel, merchandise and operating costs. Although we have historically been able topass on increased costs through price increases, there can be no assurance that we will be able to do so in the future.Acquisition and Financing ActivityOur results of operations and financial condition are also impacted by our acquisition and financing activities as summarized below.2016•On February 5, 2016, we purchased independent dealer and subwholesaler contracts from CST for $2.9 million. See Notes 3 and 15 of the notes tothe consolidated financial statements included elsewhere in this report for additional information.•On March 29, 2016, we closed on the acquisition of Franchised Holiday Stores and company operated liquor stores from S/S/G Corporation forapproximately $52.4 million, including working capital. See Note 3 of the notes to the consolidated financial statements included elsewhere in thisreport for additional information.•On July 7, 2016, CST provided an $18.2 million refund payment to us related to our interest in CST Fuel Supply. See Note 15 of the notes to theconsolidated financial statements included elsewhere in this report for additional information.•On September 27, 2016, we acquired the State Oil Assets located in the greater Chicago market for approximately $41.9 million, including workingcapital. See Note 3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.•On December 13, 2016, we amended our credit facility to provide additional flexibility to support achieving our growth strategy. See Note 12 of thenotes to the consolidated financial statements included elsewhere in this report for additional information.•On December 21, 2016, we sold the real property at 17 fee sites acquired in the State Oil Assets acquisition for $25.0 million in proceeds, which wereused to repay borrowings under the credit facility. We then leased these sites back under a triple net lease agreement. See Note 11 of the notes to theconsolidated financial statements included elsewhere in this report for additional information.2015•In January 2015, we closed on the purchase of a 5% limited partner equity interest in CST Fuel Supply for aggregate consideration of 1.5 millioncommon units. See Notes 3 and 16 of the notes to the consolidated financial statements included elsewhere in this report for additional information.•In January 2015, in connection with the joint acquisition by CST and the Partnership of 22 retail sites from Landmark, we acquired the real propertyof the 22 fee sites for $41.2 million. See Note 3 of the notes to the consolidated financial statements included elsewhere in this report for additionalinformation.•In February 2015, we closed on the purchase of all of the outstanding capital stock of Erickson and certain related assets for an aggregate purchaseprice of $83.8 million, including working capital. See Note 3 of the notes to the consolidated financial statements included elsewhere in this reportfor additional information.•In June 2015, we closed on the sale of 4.6 million common units for net proceeds of approximately $138.5 million. In July 2015, we closed on thesale of an additional 0.2 million common units for net proceeds of approximately $6.4 million in accordance with the underwriters’ option topurchase additional common units associated with the June offering. We used the proceeds to reduce indebtedness outstanding under our creditfacility. See Note 17 of the notes to the consolidated financial statements included elsewhere in this report for additional information.•In July 2015, we closed on the purchase of a 12.5% limited partner equity interest in CST Fuel Supply for aggregate consideration of 3.3 millioncommon units and cash in the amount of $17.5 million. See Notes 3 and 16 of the notes to the consolidated financial statements included elsewherein this report for additional information.39•In July 2015, we completed the purchase of real property at 29 NTIs from CST in exchange for an aggregate consideration of approximately 0.3million common units and cash in the amount of $124.4 million, with an aggregate consideration of $134.0 million on the date of closing. See Note3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.•In July 2015, we closed on the purchase of retail sites from One Stop and certain related assets for $45.0 million, including working capital. See Note3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.2014•In March 2014, we entered into an amended and restated credit agreement. The amended and restated credit facility is a senior secured revolvingcredit facility maturing March 4, 2019 with a total borrowing capacity of $550.0 million.•In April 2014, we acquired PMI for an aggregate purchase price of $73.5 million, including working capital, which resulted in the acquisition of 87retail sites in Virginia and West Virginia.•In May 2014, we completed our acquisition of 52 wholesale supply contracts, one sub-wholesaler contract, five fee sites, six leasehold sites andcertain other assets from affiliates of Atlas Oil Company for an aggregate purchase price of $39.2 million, including working capital.•In September 2014, we issued 4.1 million common units resulting in net proceeds of $135.0 million. We used the proceeds to reduce indebtednessoutstanding under our credit facility.•On October 1, 2014, CST completed the GP Purchase and we entered into the Amended Omnibus Agreement.•In November 2014, in connection with the joint acquisition by CST and the Partnership of Nice N Easy, we acquired the real property andunderground storage tanks relating to 23 fee sites and the fuel distribution agreements with respect to 25 Nice N Easy retail sites for $53.8 million.40Results of OperationsConsolidated Income Statement AnalysisBelow is an analysis of our consolidated statements of operations and provides the primary reasons for significant increases and decreases in the variousincome statement line items from period to period. Our consolidated statements of operations are as follows (in thousands): Year Ended December 31, 2016 2015 2014Operating revenues $1,869,806 $2,226,271 $2,664,868Cost of sales 1,714,239 2,056,807 2,539,967Gross profit 155,567 169,464 124,901 Income from CST Fuel Supply equity 16,048 10,528 —Operating expenses: Operating expenses 61,074 72,229 47,749General and administrative expenses 24,156 36,238 36,880Depreciation, amortization and accretion expense 54,412 48,227 33,285Total operating expenses 139,642 156,694 117,914Gain on sales of assets, net 198 2,719 1,653Operating income 32,171 26,017 8,640Other income, net 848 396 466Interest expense (22,757) (18,493) (16,631)Income (loss) before income taxes 10,262 7,920 (7,525)Income tax benefit (453) (3,542) (1,354)Consolidated net income (loss) 10,715 11,462 (6,171)Net income (loss) attributable to noncontrolling interests 11 21 (9)Net income (loss) attributable to CrossAmerica limited Partners 10,704 11,441 (6,162)Distributions to CST as holder of the incentive distribution rights (3,392) (1,390) (245)Net income (loss) available to CrossAmerica limited Partners $7,312 $10,051 $(6,407)41Year Ended December 31, 2016 Compared to Year Ended December 31, 2015Consolidated ResultsOperating revenues declined $356.5 million, or 16%, while gross profit declined $13.9 million, or 8%.Operating revenuesSignificant items impacting these results prior to the elimination of intercompany revenues were:•A $268.2 million, or 14%, decline in our Wholesale segment revenues primarily attributable to:◦A $254.2 million decline (95% of the total decline in Wholesale Segment operating revenues) attributable to a decrease in the wholesaleprice of our motor fuel. The average daily spot price of West Texas Intermediate crude oil decreased 11% to $43.29 per barrel during 2016,compared to $48.66 per barrel during 2015. The wholesale price of motor fuel is highly correlated to the price of crude oil.◦A $29.5 million decrease as a result of the divestiture of low margin wholesale fuel supply contracts and other assets acquired in the PMIacquisition, partially offset by the impact of the Erickson, One Stop, Franchised Holiday Stores and State Oil Assets acquisitions.◦Partially offsetting this decline was a $15.0 million increase primarily related to rental income associated with the acquisition from CST ofNTI retail sites in July 2015 and the State Oil Assets acquisition as well as converting company operated retail sites to lessee dealer sites.•A $205.2 million, or 31%, decline in our Retail segment revenues primarily attributable to:◦A decline of $44.6 million primarily attributable to a decrease in the retail price of our motor fuel driven by a decline in wholesale motorfuel prices as noted above.◦A decrease of $124.0 million from a 24% decrease in motor fuel volumes sold related to the conversion of company operated retail sites tolessee dealer sites during 2015 and 2016, partially offset by the incremental volume generated by the Franchised Holiday Storesacquisition.◦A $36.6 million decline in our merchandise revenues attributable to the conversion of company operated retail sites to lessee dealer sitesduring 2015 and 2016, partially offset by the incremental merchandise revenues generated by the Franchised Holiday Stores acquisition.Intersegment revenuesWe present the results of operations of our segments consistently with how our management views the business. Therefore, our segments are presented beforeintersegment eliminations (which consist of motor fuel sold by our Wholesale segment to our Retail segment). As a result, in order to reconcile to ourconsolidated change in operating revenues, a discussion of the change in intersegment revenues is included in our consolidated MD&A discussion.•Our intersegment revenues decreased $116.9 million, primarily attributable to the declines in price and volume discussed above.Cost of salesCost of sales declined $342.6 million as a result of the decline in the wholesale price and gallons sold of motor fuel as noted above. See “Results ofOperations—Segment Results” for additional gross profit analyses.Income from CST Fuel Supply equitySee “Results of Operations—Segment Results—Wholesale” for discussion.Operating expensesSee “Results of Operations—Segment Results” for additional operating expenses analyses.42General and administrative expensesGeneral and administrative expenses declined $12.1 million primarily attributable to the integration of prior year acquisitions and other cost savingsinitiatives, which reduced expenses by approximately $9.9 million. Additionally, equity-based compensation expense decreased $1.2 million as a result ofless equity awards being granted in 2016 as compared to 2015.Depreciation, amortization and accretion expenseDepreciation, amortization and accretion expense increased $6.2 million primarily driven by our 2015 and 2016 acquisitions.Interest expenseInterest expense increased $4.3 million due to additional borrowings during 2015 and 2016 to fund acquisitions.Income tax benefitWe recorded income tax benefits of $0.5 million and $3.5 million for 2016 and 2015, respectively. The decrease in the income tax benefit was primarily dueto a decrease in the loss generated by our corporate subsidiaries. In addition, we recorded a reduction in the valuation allowance of $0.2 million during 2015.43Year Ended December 31, 2015 Compared to Year Ended December 31, 2014Consolidated ResultsOperating revenues declined $438.6 million, or 16%, while gross profit increased $44.6 million, or 36%.Operating revenuesSignificant items impacting these results prior to the elimination of intercompany revenues were:•A $443.7 million, or 19%, decline in our Wholesale segment primarily attributable to:◦An $879.7 million decline attributable to a decrease in the wholesale price of our motor fuel. The average daily spot price of WTI crude oildecreased 48% to $48.66 per barrel for 2015, compared to $93.17 per barrel for 2014. The wholesale price of motor fuel is highly correlatedto the price of crude oil.◦Partially offsetting this decline was a $423.7 million increase primarily related to an 18.4% increase in volume from our 2014 and 2015acquisitions.◦Other revenues increased $13.0 million driven by additional rental income from the Nice N Easy, Landmark and NTI acquisitions, as well asour company operated retail sites being converted to lessee dealer sites during 2015.•A $160.1 million, or 31%, increase in our Retail segment primarily attributable to:◦An increase of $242.5 million from a 55% increase in motor fuel volumes sold related to the Erickson and One Stop acquisitions.◦A $101.1 million increase in our merchandise revenues attributable to retail site operations from our 2014 and 2015 acquisitions.◦Partially offsetting these revenue increases was a decline of $183.5 million primarily attributable to a decrease in the retail price of ourmotor fuel driven by a decline in wholesale motor fuel prices as noted above, as well as converting company operated retail sites toindependent dealer sites.Intersegment revenuesWe present the results of operations of our segments consistently with how our management views the business. Therefore, our segments are presented beforeintersegment eliminations (which consist of motor fuel sold by our Wholesale segment to our Retail segment). As a result, in order to reconcile to ourconsolidated change in operating revenues, a discussion of the change in intersegment revenues is included in our consolidated MD&A discussion.•Our intersegment revenues increased $155.0 million, primarily attributable to an increase in our Wholesale segment selling motor fuel to the retailsites acquired in the One Stop and the Erickson acquisitions, which are included in our Retail segment.Cost of salesCost of sales declined $483.2 million, primarily from the decline in wholesale gasoline prices, which were partially offset by an increase in volumespurchased by our 2014 and 2015 acquisitions. See “Results of Operations—Segment Results” for additional gross profit analyses.Income from CST Fuel SupplySee “Results of Operations—Segment Results—Wholesale” for discussion.Operating expensesSee “Results of Operations—Segment Results” for additional operating expenses analyses.44General and administrative expensesGeneral and administrative expenses declined $0.6 million for the year ended December 31, 2015, compared to the prior year, primarily attributable to a $6.8million decrease in stock based compensation related to the accelerated vesting as a result of the GP Purchase in 2014. This decrease was offset by highercosts associated with the Erickson and One Stop acquisitions in 2015.Depreciation, amortization and accretion expenseDepreciation, amortization and accretion expense increased $14.9 million for the year ended December 31, 2015 compared to the prior year, primarily drivenby our 2014 and 2015 acquisitions.Gains on sales of assets, netGains on sales of assets, net, increased $1.1 million for the year ended December 31, 2015, compared to the prior year. The net gain recognized for the yearended December 31, 2015 primarily related to the sale of individual sites and the divestiture of certain assets acquired in the PMI acquisition.Income tax benefitThe income tax benefit increased from $1.4 million for the year ended December 31, 2014 to $3.5 million for the year ended December 31, 2015. The incometax benefit for both periods was due primarily to losses reported by LGWS.45Segment ResultsWe present the results of operations of our segments consistent with how our management views the business. Therefore, our segments are presented beforeintersegment eliminations (which consist of motor fuel sold by our Wholesale segment to our Retail segment). These comparisons are not necessarilyindicative of future results.WholesaleThe following table highlights the results of operations and certain operating metrics of our Wholesale segment. The narrative following these tablesprovides an analysis of the results of operations of that segment (thousands of dollars, except for the number of distribution sites and per gallon amounts): Year Ended December 31, 2016 2015 2014Gross profit: Motor fuel–third party $29,242 $29,377 $31,193Motor fuel–intersegment and related party 24,870 29,229 29,413Motor fuel gross profit 54,112 58,606 60,606Rent and other(a) 58,672 45,757 34,321Total gross profit 112,784 104,363 94,927 Income from CST Fuel Supply equity(b) 16,048 10,528 —Operating expenses(a) (25,956) (26,091) (24,915)Adjusted EBITDA(c) $102,876 $88,800 $70,012 Motor fuel distribution sites (end of period):(d) Motor fuel–third party Independent dealers(e) 403 370 416Lessee dealers(f) 420 290 205Total motor fuel distribution–third party sites 823 660 621 Motor fuel–intersegment and related party DMS (related party)(g) 153 191 197CST (related party) 43 43 21Commission agents (Retail segment)(h) 95 66 75Company operated retail sites (Retail segment)(i) 73 115 87Total motor fuel distribution–intersegment and related party sites 364 415 380 Motor fuel distribution sites (average during the period): Motor fuel-third party distribution 749 626 565Motor fuel-intersegment and related party distribution 379 438 35846 Year Ended December 31, 2016 2015 2014 Total volume of gallons distributed (in thousands) 1,034,585 1,051,357 887,677 Motor fuel gallons distributed per site per day:(j) Motor fuel–third party Total weighted average motor fuel distributed– third party 2,204 2,422 2,391Independent dealers 2,363 2,733 2,656Lessee dealers 2,033 1,926 1,924 Motor fuel–intersegment and related party Total weighted average motor fuel distributed– intersegment and related party 2,914 2,899 2,657DMS (related party) 2,496 2,486 2,607CST (related party) 5,013 5,032 3,832Commission agents (Retail segment) 2,932 2,909 3,101Company operated retail sites (Retail segment) 2,723 2,824 2,271 Wholesale margin per gallon–total system $0.052 $0.056 $0.068Wholesale margin per gallon–third party sites(k) $0.046 $0.050 $0.058Wholesale margin per gallon–intersegment and related party $0.062 $0.063 $0.085(a)Prior to 2016, we netted lease executory costs such as real estate taxes, maintenance, and utilities that we paid and re-billed to customers on our statement of operations. Duringthe first quarter of 2016, we began accounting for such amounts as rent income and operating expenses and reflected this change in presentation retrospectively. This changeresulted in a $10.8 million and $8.9 million increase in rent and other income and operating expenses for the years ended December 31, 2015 and 2014, respectively.(b)Represents income from our equity interest in CST Fuel Supply.(c)Please see the reconciliation of our segment’s Adjusted EBITDA to consolidated net income under the heading “Results of Operations—Non-GAAP Financial Measures.”(d)In addition, as of December 31, 2016 and 2015, we distributed motor fuel to 14 and 17 sub-wholesalers who distributed to additional sites.(e)The increase in the independent dealer site count was primarily attributable to 21 independent dealer contracts assigned to us by CST and 25 wholesale fuel supply contractsacquired in the State Oil Assets acquisition, partially offset by a net 13 terminated motor fuel supply contracts that were not renewed.(f)The increase in the lessee dealer site count was primarily attributable to converting 77 company operated retail sites in our Retail segment to lessee dealers in our Wholesalesegment in 2016 and the 49 sites acquired in the September 2016 State Oil Assets acquisition.(g)The decrease in the DMS site count was primarily due to sites converted to a third party lessee dealer or commission agent. Through the first five years of the lease with DMS,the lease agreement allows for a limited number of sites to be removed from the lease by each of DMS and us. This right generally expires October 31, 2017.(h)The increase in the commission agent site count was primarily attributable to 25 DMS sites being converted to commission agent sites in 2016.(i)The decrease in the company operated retail site count was primarily attributable to 77 company operated retail sites being converted to lessee dealer sites in 2016, partiallyoffset by the 31 Franchised Holiday Stores.(j)Does not include the motor fuel gallons distributed to sub-wholesalers. The decrease in independent dealer gallons sold per day are due to the divestiture of commercialwholesale supply contracts associated with the PMI acquisition, whereby gallons distributed are reduced but the site count is not affected.(k)Includes the wholesale gross margin for motor fuel distributed to sub-wholesalers.47Year Ended December 31, 2016 Compared to Year Ended December 31, 2015The results were driven by:Motor Fuel Gross profitThe $4.5 million decrease in motor fuel gross profit was due to a $3.6 million decline primarily from decreased payment discounts and incentives due to thedecline in motor fuel prices as a result of the decrease in crude oil and the remaining decline was primarily due to a decline in motor fuel gallons sold due tothe termination of commercial wholesale fuel supply contracts and disposing certain terminal assets acquired in the PMI acquisition, partially offset by theimpact of the Erickson, One Stop, Franchised Holiday Stores and State Oil Assets acquisitions. The average daily spot price of West Texas Intermediate crudeoil decreased 11% to $43.29 per barrel during 2016, compared to $48.66 during 2015. See “Significant Factors Affecting our Profitability—The Significanceof Crude Oil and Wholesale Motor Fuel Prices on Our Revenues, Cost of Sales and Gross Profit.”Rent and other gross profitRent and other margin increased $12.9 million primarily as a result of our acquisition from CST of NTI retail sites in July 2015 and the State Oil Assetsacquisition in September 2016, as well as converting company operated retail sites to lessee dealer sites.Income from CST Fuel Supply equityIncome from our investment in CST Fuel Supply increased $5.5 million as a result of the additional 12.5% equity interest we acquired in July 2015, partiallyoffset by CST’s sale of its California and Wyoming retail sites.Operating expensesOperating expenses decreased $0.1 million primarily from a $5.2 million cost savings associated with disposing of certain transportation and terminal assetsacquired in the PMI acquisition, partially offset by an increase in operating expenses driven by our acquisitions.Year Ended December 31, 2015 Compared to Year Ended December 31, 2014The results were driven by:Motor Fuel Gross profit•The decrease in gross profit was due to a decline of $13.2 million in our motor fuel gross profit primarily attributable to a decline in our paymentdiscounts and incentives, which are discussed under the heading “The Significance of Crude Oil and Wholesale Motor Fuel Prices on Our Revenues,Cost of Sales and Gross Profit” partially offset by an $11.1 million increase primarily attributable to an increase in motor fuel volume.Rent and other gross profit•Rent and other margin increased $11.4 million primarily from our acquisitions, including the acquisition and leaseback of NTIs with CST, as well asconverting company operated retail sites to lessee dealer sites.Income from CST Fuel Supply•We recorded $10.5 million of income from our investment in CST Fuel Supply, which we acquired in January (5%) and July (12.5%) of 2015.Operating expenses•Operating expenses increased $1.2 million primarily as a result of incremental operating expenses from our 2014 and 2015 acquisitions, partiallyoffset by the divestiture of certain PMI assets during 2015.48RetailThe following table highlights the results of operations and certain operating metrics of our Retail segment. The narrative following these tables provides ananalysis of the results of operations of that segment (thousands of dollars, except for the number of retail sites and per gallon amounts): Year Ended December 31, 2016 2015 2014Gross profit: Motor fuel $8,538 $19,444 $8,088Merchandise and services 30,068 41,690 17,598Other 4,073 4,014 4,394Total gross profit 42,679 65,148 30,080Operating expenses (35,118) (46,138) (22,834)Acquisition-related costs 212 — —Inventory fair value adjustments(a) 91 1,356 1,483Adjusted EBITDA(b) $7,864 $20,366 $8,729 Retail sites (end of period): Commission agents(c) 95 66 75Company operated retail sites(d) 76 116 87Total system sites at the end of the period 171 182 162Total system operating statistics: Average retail sites during the period(c)(d) 157 202 119Motor fuel sales (gallons per site per day) 2,780 2,862 3,148Motor fuel gross profit per gallon, net of credit card fees and commissions $0.053 $0.092 $0.059Commission agents statistics: Average retail sites during the period(c) 71 70 64Motor fuel sales (gallons per site per day) 2,875 2,957 3,086Motor fuel gross profit per gallon, net of credit card fees and commissions $0.018 $0.023 $0.003Company operated retail site statistics: Average retail sites during the period(d) 86 132 54Motor fuel sales (gallons per site per day) 2,701 2,812 3,221Motor fuel gross profit per gallon, net of credit card fees $0.085 $0.130 $0.123Merchandise and services sales (per site per day)(e) $3,790 $3,345 $2,902Merchandise and services gross profit percentage, net of credit card fees 24.6% 26.3% 30.6%(a)The inventory fair value adjustments represent the write-offs of the step-up in value ascribed to inventory acquired in the Franchised Holiday Stores acquisition for 2016, theErickson and One Stop acquisitions for 2015, and the PMI acquisition for 2014.(b)Please see the reconciliation of our segment’s Adjusted EBITDA to consolidated net income under the heading “Results of Operations—Non-GAAP Financial Measures”below.(c)The increase in the commission agent site count was primarily attributable to 25 DMS sites being converted to commission agent sites in 2016.(d)The decrease in retail sites relates to the conversion of 77 company operated retail sites to lessee dealer in 2016, partially offset by the 34 Franchised Holiday Stores acquired in2016.(e)Includes the results from car wash sales and commissions from lottery, money orders, air/water/vacuum services and ATM fees.49Year Ended December 31, 2016 Compared to Year Ended December 31, 2015Gross profit declined $22.5 million, while operating expenses declined $11.0 million.These results were impacted by:Gross profit•Our motor fuel gross profit decreased $10.9 million attributable to a 24% decrease in volume driven by the conversion of company operated retailsites acquired in prior acquisitions to lessee dealer sites during 2015 and 2016 and a 42% decrease in margin per gallon as a result of crude oil pricesbeing more volatile during the second half of 2015 than the second half of 2016 and the resulting impact on our motor fuel gross margin. The dailyspot price of WTI crude oil decreased approximately 35% during the last six months of 2015 compared to an increase of approximately 10% duringthe same period of 2016. See “Significant Factors Affecting our Profitability—The Significance of Crude Oil and Wholesale Motor Fuel Prices onOur Revenues, Cost of Sales and Gross Profit.”•Our merchandise and services gross profit declined $11.6 million as a result of the conversion of company operated retail sites to lessee dealer sitesin 2015 and 2016, partially offset by the incremental gross profit generated by the Franchised Holiday Stores acquisition. The decline in ourmerchandise gross profit percentage was the result of low gross margin items, such as cigarettes, comprising a higher percentage of our merchandisesales as a result of the change in product mix of our stores following our 2015 acquisitions and conversion of company operated retail sites to lesseedealer sites.Operating expenses•An $11.0 million decline in operating expenses attributable to the conversion of company operated retail sites to lessee dealer sites, partially offsetby the impact of the Erickson, One Stop and Franchised Holiday Stores acquisitions.Year Ended December 31, 2015 Compared to Year Ended December 31, 2014Gross profit increased $35.1 million, while operating expenses increased $23.3 million.These results were driven by:Gross profit•An $11.4 million increase in our motor fuel gross profit due to an increase in our cents per gallon gross profit associated with the lower wholesalecost of motor fuel and higher volumes associated with our acquisitions.•Our merchandise gross profit increased $24.1 million attributable to our acquisitions, while our merchandise gross profit percentage declined. Thedecline in our merchandise gross profit percentage was the result of low gross margin items, such as cigarettes, comprising a higher percentage of ourmerchandise sales as a result of our 2015 acquisitions. Additionally, we converted 52 company operated retail sites acquired in the PMI acquisitionto lessee dealer sites during 2015, and these sites generally had a higher gross profit product mix.Operating expenses•A $23.3 million increase in operating expenses attributable to our acquisitions.50Non-GAAP Financial MeasuresWe use non-GAAP financial measures EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio. EBITDA represents net incomeavailable to us before deducting interest expense, income taxes and depreciation, amortization and accretion. Adjusted EBITDA represents EBITDA asfurther adjusted to exclude equity funded expenses related to incentive compensation and the Amended Omnibus Agreement, gains or losses on sales ofassets, certain discrete acquisition related costs, such as legal and other professional fees and severance expenses associated with recently acquiredcompanies, and certain other discrete non-cash items arising from purchase accounting. Distributable Cash Flow represents Adjusted EBITDA less cashinterest expense, sustaining capital expenditures and current income tax expense. Distribution Coverage Ratio is computed by dividing Distributable CashFlow 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 byexternal users of our financial statements, such as investors and lenders. EBITDA and Adjusted EBITDA are used to assess our financial performance withoutregard to financing methods, capital structure or income taxes and the ability to incur and service debt and to fund capital expenditures. In addition, AdjustedEBITDA 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 fromthe 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 toinvestors in assessing the financial condition and results of operations. EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution CoverageRatio 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 theyexclude some but not all items that affect net income. Additionally, because EBITDA, Adjusted EBITDA, Distributable Cash Flow and Distribution CoverageRatio 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.51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 2014Net income (loss) available to CrossAmerica limited partners $7,312 $10,051 $(6,407)Interest expense 22,757 18,493 16,631Income tax (benefit) (453) (3,542) (1,354)Depreciation, amortization and accretion 54,412 48,227 33,285EBITDA 84,028 73,229 42,155Equity funded expenses related to incentive compensation and theAmended Omnibus Agreement(a) 16,060 14,036 11,958Gain on sales of assets, net (198) (2,719) (1,653)Acquisition-related costs(b) 3,318 4,412 7,481Working capital adjustment 335 — —Inventory fair value adjustments 91 1,356 1,483Adjusted EBITDA 103,634 90,314 61,424Cash 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 $2.08Distribution coverage ratio(e) 1.02x 1.08x 1.06x(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 tosettle 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 recentlyacquired businesses.(c)Under the First Amended and Restated Partnership Agreement of CrossAmerica, as amended, sustaining capital expenditures are capital expenditures made to maintain ourlong-term operating income or operating capacity. Examples of sustaining capital expenditures are those made to maintain existing contract volumes, including payments torenew existing distribution contracts, or to maintain our sites in conditions suitable to lease, such as parking lot or roof replacement/renovation, or to replace equipmentrequired 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 resultby 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 sowould be anti-dilutive.52 The following table reconciles our segment Adjusted EBITDA to consolidated Adjusted EBITDA presented in the table above (in thousands): Year Ended December 31, 2016 2015 2014Adjusted EBITDA - Wholesale segment $102,876 $88,800 $70,012Adjusted EBITDA - Retail segment 7,864 20,366 8,729Adjusted EBITDA - Total segment $110,740 $109,166 $78,741 Reconciling items: Elimination of intersegment profit in ending inventorybalance 104 (47) (106)General and administrative expenses (24,156) (36,238) (36,880)Other income, net 848 396 466Equity funded expenses related to incentive compensationand the Amended Omnibus Agreement 16,060 14,036 11,958Working capital adjustment 335 — —Acquisition-related costs 3,106 4,412 7,481Net (income) loss attributable to noncontrolling interests (11) (21) 9IDR distributions (3,392) (1,390) (245)Consolidated Adjusted EBITDA $103,634 $90,314 $61,42453Liquidity and Capital ResourcesLiquidityOur principal liquidity requirements are to finance our operations, fund acquisitions, service our debt and pay distributions to our unitholders and IDRdistributions. We expect our ongoing sources of liquidity to include cash generated by our operations and borrowings under the revolving credit facility and,if available to us on acceptable terms, issuances of equity and debt securities. We regularly evaluate alternate sources of capital, including sale-leasebackfinancing of real property with third parties, to support our liquidity requirements.Our ability to meet our debt service obligations and other capital requirements, including capital expenditures, acquisitions, and partnership distributions,will depend on our future operating performance, which, in turn, will be subject to general economic, financial, business, competitive, legislative, regulatoryand 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, increasedexpenses, 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 revolving credit facility and access to capital markets andalternate sources of funding to meet our financial commitments, debt service obligations, contingencies, anticipated capital expenditures, and partnershipdistributions. However, we are subject to business and operational risks that could adversely affect our cash flow. A material decrease in our cash flows wouldlikely produce an adverse effect on our borrowing capacity as well as our ability to issue additional equity and/or debt securities.Cash FlowsThe following table summarizes cash flow activity (in thousands): Year Ended December 31, 2016 2015 2014Net Cash Provided by Operating Activities $79,440 $64,487 $28,531Net Cash Used in Investing Activities $(96,906) $(311,518) $(156,150)Net Cash Provided by Financing Activities $17,624 $233,053 $138,674Operating ActivitiesNet cash provided by operating activities increased $15.0 million in 2016 compared to 2015, driven primarily by incremental cash flow generated by ouracquisitions. In addition, we settled $3.2 million more in management fees in equity with CST in 2016 compared to 2015.Net cash provided by operating activities increased $36.0 million in 2015 compared to 2014, driven by incremental cash flow generated by our acquisitions.In addition, we settled $8.9 million in management fees in equity in 2015 whereas all management fees were paid in cash in 2014.Investing ActivitiesDuring 2016, $94.2 million of cash was used in the Franchised Holiday Stores and State Oil Assets acquisitions and $2.9 million for independent dealer andsubwholesaler contracts purchased from CST. We also incurred $20.8 million of capital expenditures and received $17.5 million in proceeds from the refundpayment related to CST's sale of the California and Wyoming assets. See Note 15 of the notes to consolidated financial statements included elsewhere in thisForm 10-K.During 2015, $167.8 million of cash was used in the Landmark, Erickson and One Stop acquisitions and $141.9 million on the acquisitions of CST’s NTIsand CST Fuel Supply equity interests. We also had $10.2 million in capital expenditures.During 2014, $163.6 million of cash was used in the PMI, Atlas and Nice N Easy acquisitions and $14.0 million in capital expenditures. We received $15.7million in proceeds on our sales of the lubricant business acquired as part of the PMI acquisition and the wholesale fuel supply contracts to DMI.54Financing ActivitiesDuring 2016, we paid $83.6 million in distributions and purchased $3.3 million in common units under our common unit purchase program. We received$25.0 million in proceeds on the sale-leaseback transaction and had $83.1 million in net borrowings under our credit facility to fund our acquisitions.During 2015, we received $144.9 million in net proceeds on equity offerings and $158.0 million in net borrowings under our credit facility to fund ouracquisitions. We paid $66.1 million in distributions and purchased $3.6 million in common units under our common unit purchase program.During 2014, we received $135.0 million in net proceeds on equity offerings and $54.1 million in net borrowings under our credit facility to fund ouracquisitions. We also paid $41.5 million in distributions.Refund payment related to CST sale of California and Wyoming assetsOn July 7, 2016, as approved by the independent executive committee of the board of directors of CST, CST provided a refund payment to the purchase pricepaid by us for our interest in CST Fuel Supply. The total refund payment received by us was approximately $18.2 million. See Note 15 of the notes toconsolidated financial statements included elsewhere in this Form 10-K.DistributionsDistribution activity for 2016 was as follows:Quarter Ended Record Date Payment Date Cash Distribution (perunit) Cash Distribution (inthousands)December 31, 2015 February 12, 2016 February 24, 2016 $0.5925 $19,618March 31, 2016 May 19, 2016 May 31, 2016 $0.5975 $19,910June 30, 2016 August 8, 2016 August 15, 2016 $0.6025 $20,125September 30, 2016 November 4, 2016 November 15, 2016 $0.6075 $20,359December 31, 2016 February 6, 2017 February 13, 2017 $0.6125 $20,534IDRsDuring 2016 and 2015, we distributed $3.4 million and $1.4 million to CST with respect to the IDRs.Expiration of the Subordination PeriodIn accordance with the terms of the Partnership Agreement, on February 25, 2016, the first business day after the payment of the fourth quarter 2015distribution of $0.5925 per unit, the subordination period under the Partnership Agreement ended. At that time, each of the 7,525,000 outstandingsubordinated units converted into one common unit and now participate in distributions pro rata with other common units.DebtAs of December 31, 2016, our consolidated debt and capital lease obligations consisted of the following (in thousands):$550 million revolving credit facility $441,500Note payable 822Capital lease obligations 28,455Total debt and capital lease obligations 470,777Current portion 2,100Noncurrent portion 468,677Deferred financing fees (3,558)Total $465,119Our revolving credit facility is secured by substantially all of our assets. Our borrowings under the revolving credit facility had a weighted-average interestrate of 3.53% as of December 31, 2016 (LIBOR plus an applicable margin, which was 3.25% as of December 31, 2016). Letters of credit outstanding atDecember 31, 2016 totaled $6.5 million. The credit facility is secured by55substantially all of the assets of CrossAmerica and its subsidiaries. The amount of availability under the revolving credit facility at February 24, 2017, was$84.2 million. In connection with future acquisitions, the revolving credit facility requires, among other things, that we have, after giving effect to suchacquisition, at least, in the aggregate, $20 million of borrowing availability under the revolving credit facility and unrestricted cash on the balance sheet onthe date of such acquisition. We are required to maintain a total leverage ratio (as defined in the revolving credit facility) for the most recently completed fourfiscal quarters of less than or equal to 4.50 : 1.00, except for the first three full fiscal quarters following a material acquisition with a ratio of 5.00 : 1.00, and aconsolidated interest coverage ratio (as defined in the revolving credit facility) of greater than or equal to 2.75 : 1.00. As of December 31, 2016, we were incompliance with these financial covenant ratios. The computation of our total leverage ratio allows for a pro forma application of the EBITDA (as defined inthe revolving credit facility) of acquired entities and was 4.16 : 1.00 as of December 31, 2016.In December 2016, the credit facility was amended as summarized below:•Modified certain terms to permit the acquisition of the Partnership’s general partner indirectly by Couche-Tard;•Reduced the threshold for qualifying as a “material acquisition” from $50 million to $30 million;•Extended the time period from two to three quarters that the leverage ratio following a material acquisition can be 5.00 : 1.00;•Created further flexibility to conduct sale leaseback transactions;•Increased swing-line loan capacity from $10 million to $25 million; and•Certain other operational and technical amendments.Renegotiation of Rocky Top Purchase ObligationIn connection with the Rocky Top acquisition that we completed in September 2013, we entered into a deferred seller financing arrangement, whichobligated us to purchase certain sites over a 5-year period for an average $5.2 million per year beginning in 2016 at an approximately 7.7% capitalizationrate. In June 2016, we renegotiated the terms with the sellers, eliminating the deferred seller financing obligation and agreeing to terms of a new lease of theassets for an initial term of 15 years and 8 months with four renewal options of five years each. Under this triple net lease, annual rent is initially $1.8 millionbased on a 6.5% capitalization rate and increases 1.5% per year. However, because of the continuing involvement we have with the sites through the leaseand sublease of the properties, we recorded the liability on our balance sheet at fair value on the date of the reclassification, which approximated its carryingvalue. During the second quarter of 2016, we reclassified the liability from debt and capital lease obligations to accrued expenses and other current liabilitiesand other noncurrent liabilities on the balance sheet.Sale Leaseback TransactionIn December 2016, we sold the real property at 17 sites acquired through the State Oil Assets asset acquisition for cash proceeds of $25.0 million, which wereused to repay borrowings on the credit facility. We leased these properties for an initial term of 15 years with three renewal options of approximately fiveyears each. Under the triple net lease, annual rent is initially $1.6 million based on a 6.5% capitalization rate and increases every 5 years based on inflation.Because of the continuing involvement we have with the sites through the lease and sublease of the properties, we recorded a liability for the proceedsreceived and will amortize this liability over the lease term as rent payments are made.Capital ExpendituresWe make investments to expand, upgrade and enhance existing assets. We categorize our capital requirements as either sustaining capital expenditures,growth capital expenditures or acquisition capital expenditures. Sustaining capital expenditures are those capital expenditures required to maintain our long-term operating income or operating capacity. Acquisition and growth capital expenditures are those capital expenditures that we expect will increase ouroperating income or operating capacity over the long term. We have the ability to fund our capital expenditures by additional borrowings under ourrevolving credit facility or, if available to us on acceptable terms, issuing additional equity, debt securities or other options, such as the sale of assets. Withthe significant decline in energy prices since 2014, access to the capital markets has tightened for the energy and MLP industries as a whole, which hasimpacted our cost of capital and our ability to raise equity and debt financing at favorable terms. Our ability to access the capital markets may have an impacton our ability to fund acquisitions. We may not be able to complete any offering of securities or other options on terms acceptable to us, if at all.56The following table outlines our consolidated capital expenditures and acquisitions for the years ended December 31, 2016, 2015 and 2014 (in thousands): Year Ended December 31, 2016 2015 2014Sustaining capital $798 $1,318 $3,104Growth 19,978 8,865 10,868Acquisitions 97,134 309,702 163,562Total consolidated capital expenditures and acquisitions $117,910 $319,885 $177,534Contractual ObligationsOur contractual obligations as of December 31, 2016 are summarized below (in thousands): Payments Due by Period 2017 2018 2019 2020 2021 Thereafter TotalLong-term debt $57 $765 $441,500 $— $— $— $442,322Interest payments on debt 15,484 15,470 2,575 — — — 33,529Capital lease obligations 2,803 2,894 2,986 3,080 3,175 18,590 33,528Operating lease obligations 17,348 15,375 13,810 11,569 9,093 39,138 106,333Management fees 10,272 10,272 7,704 — — — 28,248Sale leaseback obligations 6,515 6,603 6,670 6,647 6,738 69,672 102,845Other liabilities — 4,887 1,461 1,270 611 38,637 46,866Total consolidated obligations $52,479 $56,266 $476,706 $22,566 $19,617 $166,037 $793,671Interest Payments on DebtSuch amounts include estimates of interest expense related to our credit facility assuming a 3.5% interest rate.Capital Lease ObligationsWe have certain retail site properties under capital leases. Capital lease obligations in the table above include both principal and interest.Operating Lease ObligationsThe operating lease obligations include leases for land, office facilities and retail sites. Operating lease obligations reflected in the table above include alloperating leases that have initial or remaining non-cancelable terms in excess of one year, and are not reduced by minimum rentals to be received by us undersubleases. In addition, such amounts do not reflect contingent rentals that may be incurred in addition to minimum rentals.Our principal executive offices are in Allentown, Pennsylvania, in an office space leased by CST, for which the rent is charged to us as a cost under theAmended Omnibus Agreement. Future lease payments on this office lease are included within operating lease obligations.Sale Leaseback ObligationsThe payments in the table above represent payments on sale-leaseback transactions for which the sale was not recognized as a result of the continuinginvolvement with the sites. As such, the table above includes the payments under the lease.Management FeesThe payments in the table above represent contractually obligated payments under the Amended Omnibus Agreement. See Note 15 of the notes toconsolidated financial statements included elsewhere in this report for additional information.57Other LiabilitiesOther liabilities include asset retirement obligations described in Note 11 of the notes to the consolidated financial statements included elsewhere in thisForm 10-K and excludes other liabilities whose payment period or amount is not determinable. For purposes of reflecting amounts for asset retirementobligations in the table above, we have made our best estimate of expected payments based on information available as of December 31, 2016.Under the terms of various supply agreements, the Partnership is obligated to minimum volume purchases measured in gallons of motor fuel. Future minimumvolume purchase requirements are 385 million gallons in 2017, reducing to 25 million gallons in 2021. Future minimum volume purchase requirements from2022 through 2024 total 75 million gallons. The aggregate dollar amount of the future minimum volume purchase requirements is dependent on the futureweighted average wholesale cost per gallon charged under the applicable supply agreements. The amounts and timing of the related payment obligationscannot reasonably be estimated reliably. As a result, payment of these amounts has been excluded from the table above. See Note 16 of the notes to theconsolidated financial statements included elsewhere in this report for additional information.Off-Balance Sheet ArrangementsThe Amended Omnibus Agreement contingently requires us to perform environmental remediation work as further discussed in Note 14 of the notes to theconsolidated financial statements included elsewhere in this report. We also have operating leases and motor fuel purchase commitments as previouslydiscussed in “Contractual Obligations” and in Note 16 of the notes to the consolidated financial statements included elsewhere in this Form 10-K.Other Matters Impacting Liquidity and Capital ResourcesConcentration of CustomersFor the year ended December 31, 2016, we distributed approximately 16% of our total wholesale distribution volumes to DMS and its affiliates and received26% of our rent income from DMS and its affiliates. For the year ended December 31, 2016, we distributed 8% of our total wholesale distribution volumes toCST and received 21% of our rent income from CST. For the year ended December 31, 2016, we received 9% of our rent income from a lessee dealer thatoperates many of the sites acquired through the PMI and One Stop acquisitions.For the year ended December 31, 2015, we distributed approximately 17% of our total wholesale distribution volumes to DMS and its affiliates and received36% of our rent income from DMS and its affiliates. For the year ended December 31, 2015, we distributed 7% of our total wholesale distribution volumes toCST and received 17% of our rent income from CST. See Note 15 of the notes to the consolidated financial statements included elsewhere in this Form 10-K.CrossAmerica Common Unit OfferingOn June 19, 2015, we closed on the sale to the public of 4.6 million common units for net proceeds of approximately $138.5 million. On July 16, 2015, weclosed on the sale of an additional 0.2 million common units for net proceeds of approximately $6.4 million in accordance with the underwriters’ option topurchase additional common units. See Note 15 of the notes to the consolidated financial statements included elsewhere in this report for additionalinformation.Partnership Common Unit Purchases by CSTOn September 21, 2015, CST announced that the independent executive committee of its board of directors approved a common unit purchase program underRule 10b-18 of the Exchange Act, authorizing CST to purchase up to an aggregate of $50 million of the common units representing limited partner interestsin the Partnership. The unit purchase program does not have a fixed expiration date and may be modified, suspended or terminated at any time at CST’sdiscretion. CST made no purchases under the common unit purchase program during the year ended December 31, 2016. From inception until December 31,2016, CST had purchased $19.8 million, or 804,667 common units, at an average price of $24.64 per common unit, which common units cannot betransferred absent registration with the SEC or an available exemption from the SEC’s registration requirements. The Merger Agreement precludes CST frommaking any further purchases of CrossAmerica common units.58Common Unit Repurchase ProgramIn November 2015, the Board approved a common unit repurchase program under Rule 10b-18 of the Exchange Act authorizing us to repurchase up to anaggregate of $25 million of the common units representing limited partner interests in the Partnership. Under the program, we may make purchases in theopen market in accordance with Rule 10b-18 of the Exchange Act, or in privately negotiated transactions, pursuant to a trading plan under Rule 10b5-1 ofthe Exchange Act or otherwise. Any purchases will be funded from available cash on hand. The common unit repurchase program does not require us toacquire any specific number of common units and may be suspended or terminated by us at any time without prior notice. The purchases will not be madefrom any officer, director or control person of the Partnership or CST. The Merger Agreement precludes us from making any further repurchases of ourcommon units. The following table shows the purchases made through December 31, 2016:Period Total Number ofUnits Purchased Average Price Paidper Unit Total Cost of UnitsPurchased Amount Remainingunder the ProgramJanuary 1 - December 31, 2015 154,158 $23.37 $3,603,071 $21,396,929January 1 - March 31, 2016 112,492 $24.47 $2,752,240 $18,644,689April 1 - June 30, 2016 20,971 $23.86 $500,413 $18,144,276July 1 - September 30, 2016 — $— $— $18,144,276October 1 - December 31, 2016 — $— $— $18,144,276Total 287,621 $6,855,724 $18,144,276We did not repurchase any common units under the plan subsequent to December 31, 2016.Purchase of CST Fuel Supply Equity InterestsIn January 2015 and again in July 2015, we closed on the purchase of a 5% and 12.5%, respectively, limited partner equity interest in CST Fuel Supply foraggregate consideration of 4.8 million common units and cash in the amount of $17.5 million. See Notes 3 and 15 of the notes to the consolidated financialstatements included elsewhere in this report for additional information.Acquisition of Landmark AssetsIn January 2015, in connection with the joint acquisition by CST and CrossAmerica of 22 retail sites from Landmark, we acquired the real property of the 22fee sites for $41.2 million. See Note 3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.Acquisition of EricksonIn February 2015, we closed on the purchase of all of the outstanding capital stock of Erickson and certain related assets for an aggregate purchase price of$83.8 million, including working capital and net of cash acquired. See Note 3 of the notes to the consolidated financial statements included elsewhere in thisreport for additional information.Purchase of NTI retail sitesIn July 2015, we completed the purchase of real property at 29 NTIs from CST in exchange for an aggregate consideration of approximately 0.3 millioncommon units and cash in the amount of $124.4 million, with an aggregate consideration of $134.0 million on the date of closing. See Note 3 of the notes tothe consolidated financial statements included elsewhere in this report for additional information.Acquisition of One StopIn July 2015, we closed on the purchase of retail sites from One Stop and certain related assets for $45.0 million, including working capital and net of cashacquired. See Note 3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.59Purchase of Wholesale Fuel Supply Contracts from CSTIn February 2016, CST sold 21 independent dealer contracts and 11 subwholesaler contracts to us for $2.9 million.See Note 3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.Acquisition of Franchised Holiday StoresOn March 29, 2016, we closed on the acquisition of 31 Franchise Holiday Stores and 3 company operated liquor stores from S/S/G Corporation forapproximately $52.4 million, including working capital. Of the 34 company operated retail sites, 31 are located in Wisconsin and 3 are located in Minnesota.The acquisition was funded by borrowings under our credit facility.See Note 3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.Acquisition of State Oil AssetsOn September 27, 2016, we acquired certain assets of State Oil Company located in the greater Chicago market for approximately $41.9 million, includingworking capital.See Note 3 of the notes to the consolidated financial statements included elsewhere in this report for additional information.ContingenciesLegal MattersSee Note 16 under the caption “Litigation Matters” of the notes to the consolidated financial statements included elsewhere in this Form 10-K for adiscussion of our legal matters.Environmental MattersSee Note 14 under the caption “Environmental Matters” of the notes to the consolidated financial statements included elsewhere in this Form 10-K for adiscussion of our environmental matters.Quarterly Results of OperationsSee Note 22 included elsewhere in this Form 10-K for financial and operating quarterly data for each quarter of 2016 and 2015.OutlookThis outlook section does not take into account or give any effect to the impact of CST’s proposed Merger on our business. See “Item 1A. Risk Factors—Thepending Merger could adversely impact our business and strategic plans for growth.”As a result of our recent acquisitions, we expect our total motor fuel volume sold for 2017 to be higher than 2016 volumes. While the U.S. energy markets,including wholesale and retail motor fuel prices, are likely to continue to be volatile in the coming year, crude prices increased in the latter part of 2016 andhave remained at those levels in early 2017, which supports the payment terms discount component of our motor fuel gross margin on an absolute basis whilethis price increase negatively impacts our retail motor fuel gross margin in our Retail Segment. We expect our rent income to increase in 2017 based on ourrecent acquisitions and our expectation that we will continue to convert company operated retail sites to lessee dealers.We will continue to evaluate acquisitions on an opportunistic basis. Additionally, we will pursue acquisition targets that fit into our strategy. Whether wewill be able to execute acquisitions will depend on market conditions, availability of suitable acquisition targets at attractive terms, accretive to ourunitholders, and our ability to finance such acquisitions on favorable terms.60New Accounting PoliciesFor information on recent accounting pronouncements impacting our business, see Note 2 included elsewhere in this Form 10-K.61Critical Accounting Policies Involving Critical Accounting EstimatesWe prepare our financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires us to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statementsand the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. See Note 2 of the notes to theconsolidated financial statements included elsewhere in this Form 10-K for a summary of our significant accounting policies.Critical accounting policies are those we believe are both most important to the portrayal of our financial condition and results, and require our mostdifficult, subjective or complex judgments, often because we must make estimates about the effect of matters that are inherently uncertain. Judgments anduncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using differentassumptions. We believe the following policies to be the most critical in understanding the judgments that are involved in preparing our financial statements.Revenue RecognitionWe recognize revenues from wholesale motor fuel sales when motor fuel is delivered to the customer. The purchase and delivery of motor fuels generallyoccurs on the same day. We recognize revenues from retail sales when motor fuel is sold to the customer. We record inventory from the time of the purchase ofmotor fuels from third party suppliers until the retail sale to the end customer.We recognize revenue from leasing arrangements ratably over the term of the underlying lease. Renewals are not assumed unless reasonably assured.Revenues from retail food and merchandise sales are recognized net of applicable provisions for discounts and allowances upon delivery, generally at thepoint of sale.Accounts receivable primarily result from the sale of motor fuels to customers and rental fees for retail sites. The majority of our accounts receivable relate tomotor fuel sales that can generally be described as high volume and low margin activities. Credit is extended to a customer based on an evaluation of thecustomer’s financial condition. In certain circumstances collateral may be required from the customer. Receivables are recorded at face value, without interestor discount.The provision for bad debts is generally based upon a specific analysis of aged accounts while also factoring in any new business conditions that mightimpact the historical analysis, such as market conditions and bankruptcies of particular customers. Bad debt provisions are included in selling, general andadministrative expenses.We review all accounts receivable balances on at least a quarterly basis and provide an allowance for doubtful accounts based on historical experience andon a specific identification basis.LGW collects motor fuel taxes, which consist of various pass through taxes collected from customers on behalf of taxing authorities, and remits such taxesdirectly to those taxing authorities. LGW’s accounting policy is to exclude the tax collected and remitted from wholesale revenues and cost of sales andaccount for them as liabilities. LGWS’s retail sales and cost of sales include motor fuel taxes as the taxes are included in the cost paid for motor fuel andLGWS has no direct responsibility to collect or remit such taxes to the taxing authorities.Business CombinationsWe account for business combinations in accordance with the guidance under ASC 805–Business Combinations. Acquisitions of assets or entities thatinclude inputs and processes and have the ability to create outputs are accounted for as business combinations. The purchase price is recorded for assetsacquired and liabilities assumed based on fair value. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired isrecorded as goodwill. The income statement includes the results of operations for each acquisition from their respective date of acquisition.Determining the fair value of these items requires management’s judgment, the utilization of independent valuation experts and involves the use ofsignificant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and assetlives, among other items. The judgments made in the determination of the estimated fair value assigned to the assets acquired, the liabilities assumed and anynoncontrolling interest in the investee, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financialstatements in periods after acquisition, such as through depreciation and amortization. For more information on our acquisitions and application of theacquisition method, see Note 3 to the consolidated and statements included elsewhere in this Form 10-K.62GoodwillGoodwill represents the excess of cost over the fair value of assets of businesses acquired. Goodwill is not amortized, but instead is tested for impairment atthe reporting unit level at least annually, and more frequently if events and circumstances indicate that the goodwill might be impaired. The annualimpairment testing date of goodwill is October 1.In performing our annual impairment analysis, ASC 350–20, Intangibles–Goodwill and Other, allows us to use qualitative factors to determine whether it ismore likely than not (likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount, including goodwill.If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit exceeds its carryingamount, no further testing is necessary. However, if we determine that it is more likely than not that the fair value of a reporting unit is less than its carryingamount, then we perform the first step of the two-step goodwill impairment test.In the first step of the goodwill impairment test, the reporting unit’s carrying amount (including goodwill) and its fair value are compared. If the estimated fairvalue of a reporting unit is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an “implied fairvalue” of goodwill. The determination of our “implied fair value” requires us to allocate the estimated fair value of the reporting unit to the assets andliabilities of the reporting unit. Any unallocated fair value represents the “implied fair value” of goodwill, which is compared to the corresponding carryingvalue. If the “implied fair value” is less than the carrying value, an impairment charge would be recorded.At December 31, 2016, we had $89.1 million of goodwill recorded in our segments. After assessing the totality of events and circumstances, and consideringvaluation data of our reporting units as provided by a third party independent appraisal firm, we determined that it is more likely than not that the fair valueof our reporting units exceed their carrying amounts and therefore goodwill is not impaired at December 31, 2016.Asset Retirement ObligationsWhen we install or acquire USTs, we recognize the estimated future cost to remove our USTs over their estimated useful lives. We record a discountedliability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long-lived asset at the time aUST is installed. We depreciate the amount added to property and equipment and recognize accretion expense in connection with the discounted liabilityover the remaining life of the UST.We base our estimates of such future costs on our prior experience with removal and include normal and customary costs we expect to incur associated withUST removal. We compare our cost estimates with our actual removal cost experience on an annual basis, and when the actual costs we experience exceed ouroriginal estimates, we will recognize an additional liability for estimated future costs to remove the USTs. Because these estimates are subjective and arecurrently based on historical costs with adjustments for estimated future changes in the associated costs, the dollar amount of these obligations could changeas more information is obtained.As of December 31, 2016 and 2015, our liabilities related to the removal of USTs recorded in the consolidated financial statements were $27.8 million and$23.5 million, respectively. A 10% change in our estimate of anticipated future costs for removal of USTs as of December 31, 2016 would change our assetretirement obligation by approximately $3.4 million. See also Note 11 under the caption “Asset Retirement Obligations” of the notes to the consolidatedfinancial statements included elsewhere in this Form 10-K.Environmental LiabilitiesAs of December 31, 2016 and 2015, our environmental reserves recorded in the consolidated financial statements were $4.2 million and $2.8 million,respectively. These environmental reserves represent our estimates for future expenditures for remediation and related litigation associated with contaminatedretail sites as a result of releases (e.g. overfills, spills and releases) and are based on current regulations, historical results and certain other factors.Environmental liabilities that we have recorded are based on internal and external estimates of costs to remediate retail sites. Factors considered in theestimates of the liability are the expected cost and the estimated length of time to remediate each contaminated site. Estimated remediation costs are notdiscounted because the timing of payments cannot be reasonably estimated. Reimbursements under state trust fund programs are recognized when receivedbecause such amounts are insignificant. The adequacy of the liability is evaluated quarterly and adjustments are made based on updated experience atexisting retail sites, newly identified retail sites and changes in governmental policy. A 10% change in our estimate of future costs related to environmentalliabilities recorded as of December 31, 2016 would change our environmental liabilities and operating expenses by $0.4 million.63See also Note 14 under the caption “Environmental Matters” of the notes to the consolidated financial statements included elsewhere in this Form 10-K.Tax MattersAs a limited partnership, we are not subject to federal and state income taxes. Income tax attributable to CrossAmerica’s taxable income, which may differsignificantly from income for financial statement purposes, is assessed at the individual level of the unit holder. CrossAmerica is subject to a statutoryrequirement that non-qualifying income, as defined by the Internal Revenue Code, cannot exceed 10% of total gross income for the calendar year. If non-qualifying income exceeds this statutory limit, we would be taxed as a corporation. The non-qualifying income did not exceed the statutory limit in anyperiod.Certain activities that generate non-qualifying income are conducted through our wholly owned taxable corporate subsidiary, LGWS. Current and deferredincome taxes are recognized on the earnings of LGWS. Deferred income tax assets and liabilities are recognized for the future tax consequences attributableto temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measuredusing enacted tax rates.Valuation allowances are initially recorded and reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred taxasset. We consider a number of factors in assessing the realization of a deferred tax asset, including the reversal of temporary differences, future taxableincome and ongoing prudent and feasible tax planning strategies. The amount of deferred tax assets ultimately realized may differ materially from theestimates utilized in the computation of valuation allowances and may materially impact the financial statements in the future. Our valuation allowance atDecember 31, 2016 and 2015 was $5.5 million and $5.4 million, respectively.64ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKMarket RiskWe purchase gasoline and diesel fuel from several suppliers at costs that are subject to market volatility. These purchases are generally made pursuant tocontracts or at market prices established with the supplier. We do not currently engage in hedging activities for these purchases due to our pricing structurethat allows us to generally pass on price changes to our customers and related parties.Interest Rate RiskAs of December 31, 2016, we had $441.5 million outstanding on our revolving credit facility. Our outstanding borrowings bear interest at LIBOR plus anapplicable margin, which was 3.25% at December 31, 2016. Our borrowings had a weighted-average interest rate at December 31, 2016 of 3.53%. A onepercentage point change in our average rate would impact annual interest expense by approximately $4.4 million.Commodity Price RiskWe have not historically hedged or managed our price risk with respect to our commodity inventories (gasoline and diesel fuel), as the time period betweenthe purchases of our motor fuel inventory and the sales to our customers is very short.Regarding our supplier relationships, a majority of our total gallons purchased are subject to discounts for prompt payment and other rebates and incentives,which are recorded within cost of sales. Prompt payment discounts are based on a percentage of the purchase price of motor fuel. As such, the dollar value ofthese discounts increase and decrease corresponding with motor fuel prices. We have not historically hedged or managed our price risk with respect to theseterms discounts. Based on our current volumes, we estimate a $10 per barrel change in the price of crude oil would impact our annual wholesale motor fuelgross profit by approximately $2 million related to these payment discounts.Foreign Currency RiskOur operations are located in the U.S., and therefore are not subject to foreign currency risk.65ITEM 8. FINANCIAL STATEMENTSMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGThe SEC, as required by Section 404 of the Sarbanes-Oxley Act, adopted rules requiring companies to file reports with the SEC to include a managementreport on such company’s internal control over financial reporting in its Form 10-K. In addition, our independent registered public accounting firm mustattest to our internal control over financial reporting.The management of CrossAmerica is responsible for establishing and maintaining adequate internal control over financial reporting. This internal controlsystem was designed to provide reasonable assurance to the company’s management and Board of Directors regarding the preparation and fair presentation ofpublished financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systemsdetermined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. CrossAmericamanagement assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2016. In making this assessment, it usedthe criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework, 2013version. Based on our assessment, we believe that, as of December 31, 2016, the company’s internal control over financial reporting is effective based onthose criteria.Attestation Report of the Independent Registered Public Accounting FirmGrant Thornton LLP, our independent registered public accounting firm, has audited our internal control over financial reporting as of December 31, 2016.Their report dated February 27, 2017, expressed an unqualified opinion on our internal control over financial reporting, which begins on page 68 of thisreport.66REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard of DirectorsGeneral Partner and Limited Partners of CrossAmerica Partners LPWe have audited the accompanying consolidated balance sheets of CrossAmerica Partners LP (a Delaware Limited Partnership) and subsidiaries (the“Partnership”) as of December 31, 2016 and 2015, and the related consolidated statements of operations, changes in partners’ capital and comprehensiveincome, and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of thePartnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditsprovide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CrossAmerica PartnersLP and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2016 in conformity with accounting principles generally accepted in the United States of America.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Partnership’s internalcontrol over financial reporting as of December 31, 2016, based on criteria established in the 2013 Internal Control-Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 27, 2017 expressed an unqualified opinion./s/ GRANT THORNTON LLPArlington, VirginiaFebruary 27, 201767REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMBoard of DirectorsGeneral Partner and Limited Partners of CrossAmerica Partners LPWe have audited the internal control over financial reporting of CrossAmerica Partners LP (a Delaware Limited Partnership) and subsidiaries (the“Partnership”) as of December 31, 2016, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). The Partnership’s management is responsible for maintaining effective internal control overfinancial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sReport on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reportingbased on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testingand evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considerednecessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based oncriteria established in the 2013 Internal Control-Integrated Framework issued by COSO.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financialstatements of the Partnership as of and for the year ended December 31, 2016, and our report dated February 27, 2017 expressed an unqualified opinion onthose financial statements./s/ GRANT THORNTON LLPArlington, VirginiaFebruary 27, 201768CROSSAMERICA PARTNERS LPCONSOLIDATED BALANCE SHEETS(Thousands of Dollars, except unit data) December 31, December 31, 2016 2015ASSETS Current assets: Cash $1,350 $1,192Accounts receivable, net of allowances of $487 and $1,090, respectively 29,251 21,953Accounts receivable from related parties 12,975 11,003Inventories 13,164 15,739Assets held for sale 2,111 3,288Other current assets 6,556 4,944Total current assets 65,407 58,119Property and equipment, net 677,329 628,564Intangible assets, net 80,760 82,315Goodwill 89,109 80,821Other assets 19,384 11,625Total assets $931,989 $861,444LIABILITIES AND EQUITY Current liabilities: Current portion of debt and capital lease obligations $2,100 $7,608Accounts payable 34,903 32,577Accounts payable to related parties 9,958 8,350Accrued expenses and other current liabilities 15,705 16,545Motor fuel taxes payable 12,467 9,818Total current liabilities 75,133 74,898Debt and capital lease obligations, less current portion 465,119 403,714Deferred tax liabilities, net 42,923 43,609Asset retirement obligations 27,750 23,165Other long-term liabilities 100,253 47,202Total liabilities 711,178 592,588Commitments and contingencies Equity: CrossAmerica Partners’ Capital Common units—(33,524,952 and 25,585,922 units issued and outstanding atDecember 31, 2016 and December 31, 2015, respectively) 221,044 374,458Subordinated units—affiliates (0 and 7,525,000 units issued and outstanding atDecember 31, 2016 and December 31, 2015, respectively) — (105,467)Total CrossAmerica Partners’ Capital 221,044 268,991Noncontrolling interests (233) (135)Total equity 220,811 268,856Total liabilities and equity $931,989 $861,444See Notes to Consolidated Financial Statements.69CROSSAMERICA PARTNERS LPCONSOLIDATED STATEMENTS OF OPERATIONS(Thousands of Dollars, Except Unit and Per Unit Amounts) Year Ended December 31, 2016 2015 2014Operating revenues(a) $1,869,806 $2,226,271 $2,664,868Costs of sales(b) 1,714,239 2,056,807 2,539,967Gross profit 155,567 169,464 124,901 Income from CST Fuel Supply equity interests 16,048 10,528 —Operating expenses: Operating expenses 61,074 72,229 47,749General and administrative expenses 24,156 36,238 36,880Depreciation, amortization and accretion expense 54,412 48,227 33,285Total operating expenses 139,642 156,694 117,914Gain on sales of assets, net 198 2,719 1,653Operating income 32,171 26,017 8,640Other income, net 848 396 466Interest expense (22,757) (18,493) (16,631)Income (loss) before income taxes 10,262 7,920 (7,525)Income tax benefit (453) (3,542) (1,354)Consolidated net income (loss) 10,715 11,462 (6,171)Less: net income (loss) attributable to noncontrolling interests 11 21 (9)Net income (loss) attributable to CrossAmerica limited Partners 10,704 11,441 (6,162)IDR distributions (3,392) (1,390) (245)Net income (loss) available to CrossAmerica limited Partners $7,312 $10,051 $(6,407)Net income (loss) per CrossAmerica limited partner unit: Basic earnings (loss) per common unit $0.22 $0.35 $(0.32)Diluted earnings (loss) per common unit $0.22 $0.35 $(0.32)Basic and diluted earnings (loss) per subordinated unit $0.22 $0.35 $(0.32)Weighted-average CrossAmerica limited partner units: Basic common units 32,159,156 21,462,665 12,402,938 Diluted common units 32,216,004 21,561,403 12,402,938Basic and diluted subordinated units 1,151,366 7,525,000 7,525,000Total diluted common and subordinated units 33,367,370 29,086,403 19,927,938 Distribution paid per common and subordinated units $2.4000 $2.2300 $2.0800Distribution declared (with respect to each respective period) per common and subordinated units $2.4200 $2.2800 $2.1100 Supplemental information: (a) Includes excise taxes of: $79,537 $99,339 $64,942(a) Includes revenues from fuel sales to related parties of: $373,037 $458,731 $764,509(a) Includes income from rentals of: $80,594 $65,431 $52,513(b) Includes expenses from fuel sales to related parties of: $359,820 $445,237 $735,202(b) Includes expenses from rentals of: $19,656 $17,024 $15,078See Notes to Consolidated Financial Statements.70CROSSAMERICA PARTNERS LPCONSOLIDATED STATEMENTS OF CASH FLOWS(Thousands of Dollars)(Unaudited) Year Ended December 31, 2016 2015 2014Cash flows from operating activities: Consolidated net income (loss) $10,715 $11,462 $(6,171)Adjustments to reconcile net income (loss) to net cash flows provided by operatingactivities: Depreciation, amortization and accretion expense 54,412 48,227 33,285Amortization of deferred financing fees 1,666 1,475 2,780Amortization of below market leases, net 198 394 236Provision for losses on doubtful accounts 36 521 618Deferred income taxes (686) (6,116) (1,760)Equity-based employees and directors compensation expense 3,927 5,119 11,958Amended Omnibus Agreement fees: settled in common units 12,133 8,917 —Gain on sales of assets, net (198) (2,719) (1,653)Gain on settlement of capital lease obligations (132) (25) (393)Erickson working capital adjustment 335 — —Changes in working capital, net of acquisitions (2,966) (2,768) (10,369)Net cash provided by operating activities 79,440 64,487 28,531Cash flows from investing activities: Proceeds from sale of property and equipment 2,682 6,409 3,504Proceeds from sale of lubricants business — — 10,001Proceeds from sale of wholesale fuel supply contracts and assignment of leases to DMI — — 5,700Capital expenditures (20,776) (10,183) (13,972)Principal payments received on notes receivable 794 1,958 2,179Refund payment related to the sale by CST of California and Wyoming assets 17,528 — —Cash paid in connection with acquisitions, net of cash acquired (94,234) (167,777) (163,562)Cash paid to CST in connection with acquisitions (2,900) (141,925) —Net cash used in investing activities (96,906) (311,518) (156,150)Cash flows from financing activities: Borrowings under the revolving credit facility 214,788 369,495 353,144Repayments on the revolving credit facility (131,699) (211,484) (299,074)Proceeds from issuance of common units — 144,939 135,032Proceeds from sale leaseback transactions 25,035 — —Repurchases of common units (3,252) (3,603) —Payments of long-term debt and capital lease obligations (2,262) (1,983) (2,048)Payments of sale leaseback obligations (734) (682) (534)Debt issuance costs (694) — (3,918)Repayments from related party — 2,465 (2,465)Distributions paid on distribution equivalent rights (45) (13) —Distributions paid to holders of the IDRs (3,392) (1,390) (245)Distributions paid to noncontrolling interests (109) (125) (22)Distributions paid on common and subordinated units (80,012) (64,566) (41,196)Net cash provided by financing activities 17,624 233,053 138,674Net increase (decrease) in cash 158 (13,978) 11,055Cash at beginning of period 1,192 15,170 4,115Cash at end of period $1,350 $1,192 $15,170See Notes to Consolidated Financial Statements.71CROSSAMERICA PARTNERS LPCONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL AND COMPREHENSIVE INCOME(Thousands of Dollars, Except Unit and Per Unit Amounts) Limited Partners’ Interest CommonUnitholders SubordinatedUnits - Affiliates GeneralPartner’sInterest IncentiveDistributionRights NoncontrollingInterest Equity Units Dollars Units Dollars Dollars Dollars Dollars DollarsBalance at December 31, 2013 11,097,348 $168,659 7,525,000 $(73,988) $— $— $— $94,671Vesting of incentive and director awards, net of units withheld for taxes 200,356 6,100 — — — — — 6,100Proceeds of equity offering and overallotment exercise, net of issuance costs 4,140,000 135,032 — — — — — 135,032Sale of wholesale fuel supply contracts and assignment of leases to DMI — 1,558 — 764 — — — 2,322Net income (loss) and comprehensive income (loss) — (3,988) — (2,419) — 245 (9) (6,171)Distributions paid — (25,544) — (15,652) — (245) (22) (41,463)Balance at December 31, 2014 15,437,704 281,817 7,525,000 (91,295) — — (31) 190,491Vesting of incentive and director awards, net of units withheld for taxes 96,812 3,261 — — — — — 3,261Issuance of units to CST for the payment of fees due under the Amended Omnibus Agreement 259,312 7,200 — — — — — 7,200Issuance of units to CST in connection with sale of fuel supply interests and purchase of NTIs 5,139,252 163,292 — — — — — 163,292Distributions to CST in connection with sale of fuel supply interests — (182,092) — — — — — (182,092)Repurchase of common units (154,158) (3,603) — — — — — (3,603)Proceeds of equity offering and overallotment exercise, net of issuance costs 4,807,000 144,939 — — — — — 144,939Net income and comprehensive income — 7,442 — 2,609 — 1,390 21 11,462Distributions paid — (47,798) — (16,781) — (1,390) (125) (66,094)Balance at December 31, 2015 25,585,922 374,458 7,525,000 (105,467) — — (135) 268,856Vesting of incentive and director awards, net of units withheld for taxes 107,227 2,606 — — — — — 2,606Conversion of subordinated units 7,525,000 (109,673) (7,525,000) 109,673 — — — —Issuance of units to CST for the payment of fees due under the Amended Omnibus Agreement 468,645 11,245 — — — — — 11,245Distributions to CST in connection with the purchase of independent dealer and subwholesaler contracts — (2,900) — — — — — (2,900)Refund payment related to the sale of California and Wyoming assets (28,379) 17,528 — — — — — 17,528Repurchase of common units (133,463) (3,252) — — — — — (3,252)Net income and comprehensive income — 7,059 — 253 — 3,392 11 10,715Distributions paid — (75,598) — (4,459) — (3,392) (109) (83,558)Other — (429) — — — — — (429)Balance at December 31, 2016 33,524,952 $221,044 — $— $— $— $(233) $220,811See Notes to Consolidated Financial Statements.72CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 1. DESCRIPTION OF BUSINESS AND OTHER DISCLOSURESCST’s Merger AgreementUnder the terms of the Merger Agreement, Circle K Stores Inc. will, through its acquisition of CST, control CST’s interest in the General Partner and CST’s19.8% limited partner interest in CrossAmerica as well as own all of the IDRs. The transaction is subject to the receipt of regulatory approvals in the UnitedStates and Canada. The transaction is currently expected to close in the second quarter of 2017.Description of BusinessOn October 1, 2014, CST completed the GP Purchase and the IDR Purchase. After the GP Purchase, the name of Lehigh Gas Partners LP was changed toCrossAmerica Partners LP and the name of our General Partner was changed from Lehigh Gas GP LLC to CrossAmerica GP LLC. The General Partner managesour operations and business activities. The General Partner is managed and operated by the executive officers of the General Partner, under the oversight ofthe Board. As a result of the GP Purchase, CST controls the General Partner and has the right to appoint all members of the Board.Our business consists of:•the wholesale distribution of motor fuels;•the retail distribution of motor fuels to end customers at retail sites operated by commission agents or us;•the owning or leasing of retail sites used in the retail distribution of motor fuels and, in turn, generating rental income from the lease or sublease ofthe retail sites; and•the operation of retail sites.The financial statements reflect the consolidated results of the Partnership and its wholly owned subsidiaries. Our primary operations are conducted by thefollowing consolidated wholly owned subsidiaries:•LGW, which distributes motor fuels on a wholesale basis and generates qualified income under Section 7704(d) of the Internal Revenue Code;•LGPR, which functions as our real estate holding company and holds the assets that generate rental income that is qualifying under Section7704(d) of the Internal Revenue Code; and•LGWS, which owns and leases (or leases and sub-leases) real estate and personal property used in the retail distribution of motor fuels, as well asprovides maintenance and other services to its customers. In addition, LGWS distributes motor fuels on a retail basis and sells conveniencemerchandise items to end customers at company operated retail sites and sells motor fuel on a retail basis at retail sites operated by commissionagents. Income from LGWS generally is not qualifying income under Section 7704(d) of the Internal Revenue Code.As part of our business strategy with CST, we intend, when favorable market conditions exist and pending approval by the Board’s independent conflictscommittee and the approval of the executive committee of the board of directors of CST and mutual agreement upon terms and other conditions, to purchaseequity interests at fair market value in CST Fuel Supply, over time. The Merger Agreement prohibits, among other things, CST from selling its tangible andintangible properties or assets to us between August 21, 2016 and completion of the Merger. As such, there can be no assurance we will be able to purchaseequity interests in CST Fuel Supply in the future. As of December 31, 2016, our total equity interest in CST Fuel Supply was 17.5%. See Note 15 fordiscussion of the July 2016 refund of a portion of the purchase price paid in 2015 by the Partnership to CST Fuel Supply associated with the reduction inwholesale distribution volume resulting from CST’s sale of its California and Wyoming assets.73CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSAdditionally, we have previously issued common units as consideration in the purchase of equity interests in CST Fuel Supply and the real propertyassociated with some of CST’s NTI retail sites. We have previously issued, and may continue to issue, common units as payment for charges and expensesincurred under the Amended Omnibus Agreement. There is no obligation for the General Partner to accept Partnership common units in lieu of cash foramounts due under the Amended Omnibus Agreement. Pursuant to a unit purchase program announced in September 2015, CST has also acquired ourcommon units through open market purchases. Through December 31, 2016, after giving effect to these transactions, CST owned 19.8% of our limited partnerinterests.Concentration RiskFor the years ended December 31, 2016, 2015 and 2014, we distributed approximately 16%, 17% and 25% of our total wholesale distribution volumes toDMS and its affiliates and DMS and its affiliates accounted for approximately 26%, 36% and 47% of our rental income, respectively. For more informationregarding transactions with DMS and its affiliates, see Note 15.For the year ended December 31, 2016, our wholesale business purchased approximately 30%, 25% and 24% of its motor fuel from ExxonMobil, BP andMotiva (Shell), respectively. For the year ended December 31, 2015, our wholesale business purchased approximately 30%, 26% and 26% of its motor fuelfrom ExxonMobil, BP and Motiva (Shell), respectively. For the year ended December 31, 2014, our wholesale business purchased approximately 37%, 28%and 22% of its motor fuel from ExxonMobil, BP and Motiva (Shell), respectively. No other fuel suppliers accounted for 10% or more of our motor fuelpurchases in 2016, 2015 or 2014.Valero supplied substantially all of the motor fuel purchased by CST Fuel Supply during all periods presented. During the years ended December 31, 2016and 2015, CST Fuel Supply purchased approximately 1.8 billion and 1.9 billion gallons, respectively, of motor fuel from Valero.For the years ended December 31, 2016 and 2015, we distributed 8% and 7% of our total wholesale distribution volume to CST retail sites that are notsupplied by CST Fuel Supply and received 21% and 17% of our rental income from CST, respectively.For the year ended December 31, 2016, we received 9% of our rental income from a lessee dealer that operates certain of the retail sites acquired through thePMI and One Stop acquisitions.Note 2. SIGNIFICANT ACCOUNTING POLICIESPrinciples of ConsolidationThese consolidated financial statements were prepared in accordance with U.S. GAAP. These financial statements include the consolidated accounts ofCrossAmerica and subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.ReclassificationsCertain reclassifications were made to prior year lease executory costs to conform to the current year presentation, as discussed further in Note 21. Suchreclassifications had no effect on net income or total equity for any periods.Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.Actual results and outcomes could differ from those estimates and assumptions. On an ongoing basis, management reviews its estimates based on currentlyavailable information. Changes in facts and circumstances could result in revised estimates and assumptions.Cash and Cash EquivalentsWe consider all short-term investments with maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents arestated at cost, which, for cash equivalents, approximates fair value due to their short-term maturity. We are potentially subject to financial instrumentconcentration of credit risk through our cash and cash equivalents. We maintain cash and cash equivalents with several major financial institutions. We havenot experienced any losses on our cash equivalents.ReceivablesAccounts receivable primarily result from the sales of motor fuels to customers and rental fees for retail sites. The majority of our accounts receivable relate toour motor fuel sales that can generally be described as high volume and low margin activities. Credit74CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSis extended to a customer based on an evaluation of the customer’s financial condition. In certain circumstances collateral may be required from the customer.Receivables are recorded at face value, without interest or discount.The provision for bad debts is generally based upon a specific analysis of aged accounts while also factoring in any new business conditions that mightimpact the historical analysis, such as market conditions and bankruptcies of particular customers. Bad debt provisions are included in selling, general andadministrative expenses.We review all accounts receivable balances on at least a quarterly basis and provide an allowance for doubtful accounts based on historical experience andon a specific identification basis.InventoriesMotor fuel inventory consists of gasoline, diesel fuel and other petroleum products and is stated at the lower of average cost or market using the first-in, first-out method. No provision for potentially obsolete or slow-moving inventory has been made. We record inventory from the time of the purchase of motor fuelsfrom third party suppliers until the retail sale to the end customer.Food and merchandise inventory is valued at the lower of average cost or market using the first-in, first-out method.Property and EquipmentProperty and equipment is recorded at cost. Property and equipment acquired through a business combination is recorded at fair value. Depreciation isrecognized using the straight-line method over the estimated useful lives of the related assets, including: 10 to 20 years for buildings and improvements and5 to 30 years for equipment. Amortization of leasehold improvements is based upon the shorter of the remaining terms of the leases including renewal periodsthat are reasonably assured, or the estimated useful lives, which generally range from 7 to 10 years.Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Maintenance and repairs are chargedto operations as incurred. Gains or losses on the disposition of property and equipment are recorded in the period the sale meets the criteria for recognition.Impairment of AssetsLong-lived assets, which include property and equipment and finite-lived intangible assets, are tested for recoverability whenever events or changes incircumstances indicate that the carrying amount of the asset may not be recoverable. A long-lived asset is not recoverable if its carrying amount exceeds thesum of the undiscounted cash flows expected to result from its use and eventual disposition. If a long-lived asset is not recoverable, an impairment loss isrecognized for the amount by which the carrying amount of the long-lived asset exceeds its fair value, with fair value determined based on discountedestimated net cash flows or other appropriate methods.Business CombinationsWe account for business combinations in accordance with the guidance under ASC 805–Business Combinations. Acquisitions of assets or entities thatinclude inputs and processes and have the ability to create outputs are accounted for as business combinations. The purchase price is recorded for assetsacquired and liabilities assumed based on fair value. The excess of the fair value of the consideration conveyed over the fair value of the net assets acquired isrecorded as goodwill. The income statement includes the results of operations for each acquisition from their respective date of acquisition.Determining the fair value of these items requires management’s judgment, the utilization of independent valuation experts and involves the use ofsignificant estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and assetlives, among other items. The judgments made in the determination of the estimated fair value assigned to the assets acquired, the liabilities assumed and anynoncontrolling interest in the investee, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financialstatements in periods after acquisition, such as through depreciation and amortization. For more information on our acquisitions and application of theacquisition method, see Note 3.Debt Issuance CostsDebt issuance costs that are incurred in connection with the issuance of debt are deferred and amortized to interest expense using the straight line method(which approximates the effective interest method) over the contractual term of the underlying indebtedness. Debt issuance costs are classified as a reductionof the associated liability.75CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSGoodwillGoodwill represents the excess of cost over the fair value of net assets of businesses acquired. Goodwill is not amortized, but instead is tested for impairmentat the reporting unit level at least annually, and tested for impairment more frequently if events and circumstances indicate that the goodwill might beimpaired. Our annual impairment testing date is October 1.In its annual impairment analysis, an entity can use qualitative factors to determine whether it is more likely than not (likelihood of more than 50%) that thefair value of a reporting unit is less than its carrying amount, including goodwill.If after assessing the totality of events or circumstances an entity determines that it is more likely than not that the fair value of a reporting unit is greater thanits carrying amount, then performing the two-step test is unnecessary. However, if we determine that it is more likely than not that the fair value of a reportingunit is less than its carrying amount, we then perform the first step of the two-step goodwill impairment test.In the first step of the goodwill impairment test, the reporting unit’s carrying amount (including goodwill) and its fair value are compared. If the estimated fairvalue of a reporting unit is less than the carrying value, a second step is performed to compute the amount of the impairment by determining an “implied fairvalue” of goodwill. The determination of our “implied fair value” requires us to allocate the estimated fair value of the reporting unit to the assets andliabilities of the reporting unit. Any unallocated fair value represents the “implied fair value” of goodwill, which is compared to the corresponding carryingvalue. If the “implied fair value” is less than the carrying value, an impairment charge would be recorded.No goodwill was impaired for any period presented.Intangible AssetsIntangible assets are recorded at fair value at the date of acquisition. Intangible assets associated with wholesale fuel supply contracts, wholesale fueldistribution rights and trademarks are amortized over 10 years. Covenants not to compete are amortized over the shorter of the contract term or 5 years.Intangible assets associated with above and below market leases are amortized over the lease term, which approximates 5 years. Intangible assets with definiteuseful lives are amortized over their respective estimated useful lives and reviewed for impairment if we believe that changes or triggering events haveoccurred that could have caused the carrying value of the intangible assets to exceed its fair value. Intangible assets with indefinite lives are not amortized,but are tested for impairment annually or more frequently if events and circumstances indicate that the intangible assets might be impaired.Environmental MattersLiabilities for future remediation costs are recorded when environmental assessments from governmental regulatory agencies and/or remedial efforts areprobable and the costs can be reasonably estimated. Other than for assessments, the timing and magnitude of these accruals generally are based on thecompletion of investigations or other studies or a commitment to a formal plan of action. Environmental liabilities are based on best estimates of probableundiscounted future costs using currently available technology and applying current regulations, as well as our own internal environmental policies, withoutestablishing a range of loss for these liabilities. Environmental liabilities are difficult to assess and estimate due to uncertainties related to the magnitude ofpossible remediation, the timing of such remediation and the determination of our obligation in proportion to other parties. Such estimates are subject tochange due to many factors, including the identification of new retail sites requiring remediation, changes in environmental laws and regulations and theirinterpretation, additional information related to the extent and nature of remediation efforts and potential improvements in remediation technologies.Amounts recorded for environmental liabilities have not been reduced by possible recoveries from third parties.Asset Retirement ObligationsWe record a liability, which is referred to as an asset retirement obligation, at fair value for the estimated cost to remove USTs used to store motor fuel atowned and leased retail sites at the time we incur that liability, which is generally when the UST is installed or upon entering the lease. We record adiscounted liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long-lived asset. Wedepreciate the amount added to property and equipment and recognize accretion expense in connection with the discounted liability over the estimatedremaining life of the UST. Accretion expense is reflected in depreciation, amortization and accretion expense. We base our estimates of the anticipated futurecosts for removal of a UST on our prior experience with removal. Removal costs include the cost to remove the USTs, soil remediation costs resulting fromthe spillage of small quantities of motor fuel in the normal operations of our business and other miscellaneous costs. We review our assumptions forcomputing the estimated liability for the removal of USTs on an annual basis. Any change in estimated cash flows is reflected as an adjustment to the liabilityand the associated asset.76CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSSegment ReportingWe present our segment reporting in accordance with ASC 280–Segment Reporting and engage in both the wholesale and retail distribution of motor fuels,primarily gasoline and diesel fuel. We present our results to our chief operating decision maker segregated between wholesale and retail activities. As a result,we are deemed to conduct our business in two segments: 1) the wholesale segment and 2) the retail segment. The class of customer and gross margins aresufficiently different between these two businesses to warrant two reportable segments. See Note 21 for additional information.Revenue RecognitionRevenues are recorded upon delivery of the products to our customers, by which the price is fixed, title to the products is transferred and payment has eitherbeen received or collection is reasonably assured.Revenues from leasing arrangements for which we are the lessor are recognized ratably over the term of the underlying lease.Lease AccountingWe account for leases in accordance with ASC 840–Leases. We lease certain retail sites from third parties under long-term arrangements with variousexpiration dates. U.S. GAAP requires leases be evaluated and classified as either operating or capital for financial reporting purposes. The lease term used forlease evaluation includes option periods only in instances in which the exercise of the option period can be reasonably assured and failure to exercise suchoptions would result in an economic penalty. Minimum lease payments are expensed on a straight-line basis over the term of the lease including renewalperiods that are reasonably assured at the inception of the lease. In addition to minimum lease payments, certain leases require additional contingentpayments based on sales volume or future inflation.We are the lessee in certain sale-leaseback transactions for certain retail sites, and as we have continuing involvement in the underlying retail sites, or thelease agreement has a repurchase feature, the sale-leaseback arrangements are accounted for as financing transactions.Income TaxesOur wholly owned taxable subsidiaries recognize deferred income tax assets and liabilities for the expected future income tax consequences of temporarydifferences between financial statement carrying amounts and the related income tax basis.Income tax attributable to our earnings and losses, excluding the earnings and losses of our wholly owned taxable subsidiaries, are assessed at the individuallevel of the unitholder. Accordingly, we do not record a provision for income taxes other than for those earnings and losses generated or incurred by ourwholly owned taxable subsidiaries.Tax positions not meeting the more-likely-than-not recognition threshold at the financial statement date may not be recognized or continue to be recognizedunder the accounting guidance for income taxes. Where required, we recognize interest and penalties for uncertain tax positions in income taxes.Valuation allowances are initially recorded and reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred taxasset. Management considers a number of factors in assessing the realization of a deferred tax asset, including the reversal of temporary differences, futuretaxable income and ongoing prudent and feasible tax planning strategies. The amount of deferred tax assets ultimately realized may differ materially from theestimates utilized in the computation of valuation allowances and may materially impact the financial statements in the future.Cost of SalesWe include in our cost of sales all costs we incur to acquire motor fuel and merchandise, including the costs of purchasing, storing and transporting inventoryprior to delivery to our customers. A component of our cost of sales is the discount for prompt payment and other rebates, discounts and incentives offered byour suppliers. Prompt payment discounts from suppliers are based on a percentage of the purchase price of motor fuel and the dollar value of these discountsvaries with motor fuel prices. Cost of sales does not include any depreciation of our property and equipment, as these amounts are included in depreciation,amortization and accretion expense on our statements of income.Motor Fuel TaxesLGW collects motor fuel taxes, which consist of various pass through taxes collected from customers on behalf of taxing authorities, and remits such taxesdirectly to those taxing authorities. LGW’s accounting policy is to exclude the taxes collected and remitted from wholesale revenues and cost of sales andaccount for them as liabilities. LGWS’s retail sales and cost of sales include motor77CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSfuel taxes as the taxes are included in the cost paid for motor fuel and LGWS has no direct responsibility to collect or remit such taxes to the taxingauthorities.Earnings Per Common UnitIn addition to the common and subordinated units, we have identified the IDRs as participating securities and compute income per unit using the two-classmethod under which any excess of distributions declared over net income shall be allocated to the partners based on their respective sharing of incomespecified in the Partnership Agreement. Net income per common unit applicable to limited partners (including common and subordinated unitholders) iscomputed by dividing the limited partners’ interest in net income, after deducting any incentive distributions, by the weighted-average number ofoutstanding common and subordinated units. As discussed in Note 17, all subordinated units converted to common units in the first quarter of 2016.Financial InstrumentsOur financial instruments include cash, accounts receivable, payables, our credit facilities, capital lease obligations, and trade payables. The estimated fairvalues of these financial instruments approximate their carrying amounts, except for certain debt as discussed in Note 12.New Accounting PronouncementsIn May 2014, the FASB issued ASU 2014-09–Revenue from Contracts with Customers (Topic 606), which results in comprehensive new revenue accountingguidance, requires enhanced disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that isrecognized, and develops a common revenue standard under U.S. GAAP and International Financial Reporting Standards. Specifically, the core principle ofthe guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange for those goods and services. With the issuance of ASU 2015-1, which deferred theeffective date by one year, this guidance is effective January 1, 2018. Early adoption is permitted, but no earlier than January 1, 2017. The guidance can beapplied either retrospectively to each prior reporting period presented, or as a cumulative-effect adjustment as of the date of adoption. Management iscurrently evaluating this new guidance, including how it will apply the guidance at the date of adoption. We do not anticipate adopting this guidance early.In February 2016, the FASB issued ASU 2016-02–Leases (Topic 842). This standard modifies existing guidance for reporting organizations that enter intoleases to increase transparency by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasingarrangements. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018, and requires a modifiedretrospective approach to adoption. Early adoption is permitted. Management continues to evaluate the impact of this new guidance, but the adoption willhave a material impact on our balance sheet. We do not anticipate adopting this guidance early. We intend to apply each of the practical expedients inadopting this new guidance.In March 2016, the FASB issued ASU 2016-09–Compensation–Stock Compensation (Topic 718): Improvements to Employee Share-Based PaymentAccounting. This standard is issued as part of a simplification initiative involving several aspects of the accounting for share-based payment transactions,including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The approach to adoption is dependent upon whichamendments are applicable. Early adoption is permitted. Management is currently evaluating the impact of this new guidance in addition to the timing ofadoption.In January 2017, the FASB issued ASU 2017-01–Business Combinations (Topic 805): Clarifying the Definition of a Business. This standard clarifies thedefinition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions(or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill andconsolidation. ASU 2017-01 is effective for public fiscal years and interim periods within those years beginning after December 15, 2017. Early adoption ispermitted. Management is currently evaluating the impact of this new guidance in addition to the timing of adoption.In January 2017, the FASB issued ASU 2017-04–Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This standardremoves Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fairvalue, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for a Company's annual or any interim goodwill impairment tests in fiscalyears beginning after December 15, 2019. Early adoption is permitted. Management is currently evaluating the impact of this new guidance in addition to thetiming of adoption.78CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCertain other new financial accounting pronouncements have become effective for our financial statements and the adoption of these pronouncements willnot affect our financial position or results of operations, nor will they require any additional disclosures.Note 3. ACQUISITIONSPurchase of Wholesale Fuel Supply Contracts from CSTIn February 2016, we purchased 21 independent dealer contracts and 11 subwholesaler contracts from CST for $2.9 million. This transaction was approved onbehalf of us by the independent conflicts committee of our Board and by the executive committee of the board of directors of CST. See Note 15 of theCondensed Notes to Consolidated Financial Statements for additional information.Acquisition of Franchised Holiday StoresOn March 29, 2016, we closed on the acquisition of 31 Franchised Holiday Stores and 3 liquor stores from S/S/G Corporation for approximately $52.4million, including working capital. Of the 34 stores, 31 are located in Wisconsin and 3 are located in Minnesota. The acquisition was funded by borrowingsunder our credit facility.The fair value of the assets acquired and liabilities assumed on the date of acquisition were as follows (in thousands):Current assets (excluding cash and inventories)$41Inventories3,536Property and equipment33,055Intangibles7,710Goodwill9,126Current liabilities(56)Asset retirement obligations(1,062) Total consideration, net of cash acquired$52,350The fair value of inventory was estimated at retail selling price less estimated costs to sell and a reasonable profit allowance for the selling effort.The fair value of property and equipment, which consisted of land, buildings and equipment, was based on a cost approach. The buildings and equipment arebeing depreciated on a straight-line basis, with estimated remaining useful lives of 20 years for the buildings and 5 to 10 years for equipment.The $6.5 million fair value of the wholesale fuel distribution rights included in intangibles was based on an income approach and management believes thelevel and timing of cash flows represent relevant market participant assumptions. The wholesale fuel distribution rights are being amortized on a straight-linebasis over an estimated useful life of approximately 10 years.The $1.0 million fair value of the discount related to lease agreements with below average market value was based on an income approach, and managementbelieves the level and timing of cash flows represent relevant market participant assumptions. These intangible assets are being amortized on a straight-linebasis over the term of the respective lease agreements, with an estimated weighted average useful life of 5 years.Goodwill recorded is primarily attributable to the end-customer relationships not eligible for recognition as an intangible asset. Of the goodwill recorded,$1.8 million was assigned to the Wholesale segment and $7.3 million was assigned to the Retail segment. Goodwill deductible for tax purposes amounted to$29.0 million.Operating revenue since the date of acquisition was $82.7 million for the year ended December 31, 2016.79CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSAcquisition of State Oil AssetsOn September 27, 2016, we closed on the acquisition of 57 controlled retail sites (56 fee sites and 1 leased site) and certain other assets of State Oil Company,being operated as 55 lessee dealer accounts and 2 non-fuel tenant locations, as well as 25 independent dealer accounts located in the greater Chicago marketfor approximately $41.9 million, including working capital.The preliminary fair value of the assets acquired and liabilities assumed on the date of acquisition were as follows (in thousands):Current assets (excluding cash and inventories)914Inventories210Property and equipment35,291Intangibles6,530Other noncurrent assets2,720Current liabilities(1,261)Asset retirement obligations(1,897)Other long-term liabilities(623) Total consideration, net of cash acquired$41,884The $3.4 million fair value of the notes receivable, which is included within current and other noncurrent assets, was based on an income approach usingrelevant market participant assumptions.The fair value of property and equipment, which consisted of land, buildings and equipment, was based on a cost approach. The buildings and equipment arebeing depreciated on a straight-line basis, with estimated remaining useful lives of 20 years for the buildings and 5 to 10 years for equipment.The $4.9 million fair value of the wholesale fuel distribution rights included in intangibles was based on an income approach and management believes thelevel and timing of cash flows represent relevant market participant assumptions. The wholesale fuel distribution rights are being amortized on a straight-linebasis over an estimated useful life of approximately 10 years.The $1.6 million fair value of the wholesale fuel supply agreements was based on an income approach, and management believes the level and timing of cashflows represent relevant market participant assumptions. The wholesale fuel supply agreements are being amortized over an estimated useful life ofapproximately 10 years.Operating revenues since the date of acquisition were $24.6 million for the year ended December 31, 2016.Management is reviewing the valuation and confirming the result to determine the final purchase price allocation.Purchase of CST Wholesale Fuel Supply Equity InterestsIn January 2015, we closed on the purchase of a 5% limited partner equity interest in CST Fuel Supply in exchange for approximately 1.5 million commonunits with an aggregate consideration of $60.0 million on the date of closing. In July 2015, we closed on the purchase of an additional 12.5% limited partnerequity interest in CST Fuel Supply in exchange for approximately 3.3 million common units and cash in the amount of $17.5 million, with an aggregateconsideration of approximately $110.9 million on the date of closing. These transactions were approved by the independent conflicts committee of the Boardand the executive committee of, and full board of directors of, CST. Because these transactions were between entities under common control, the excess of thepurchase price paid by CrossAmerica over the carrying value recorded on CST’s balance sheet in the amount of $170.0 million is recorded as a distribution toCST in our consolidated equity. See Note 15 for additional information regarding the refund payment related to CST’s sale of California and Wyomingassets.CST Fuel Supply distributes motor fuel primarily to CST’s retail sites at its cost plus a fixed margin of $0.05 per gallon and has 0 material net assets. CSTFuel Supply distributed approximately 1.8 billion and 1.9 billion gallons of motor fuel during the years ended December 31, 2016 and 2015, respectively.Acquisition of LandmarkIn January 2015, CST and CrossAmerica jointly purchased 22 retail sites from Landmark. CrossAmerica purchased the real property of the 22 fee sites for$41.2 million. During the fourth quarter of 2015, we finalized the valuation of Landmark, the results of which are reproduced in the table below.80CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSLGWS leases the acquired real property to CST under triple net leases at a lease rate per annum of 7.5% of the fair value of the leased property on theacquisition date and LGW distributes wholesale motor fuel to CST for these retail sites under long term agreements with a fuel gross profit margin ofapproximately $0.05 per gallon.The following table summarizes the fair values of the assets acquired at the acquisition date (in thousands):Property and equipment$24,977Deferred tax assets3,147Goodwill13,085 Total consideration$41,209The fair value of property and equipment, which consisted of land, buildings and equipment, was based on a cost approach. The buildings and equipment arebeing depreciated on a straight-line basis, with estimated useful lives of 20 years.Acquisition of EricksonIn February 2015, we closed on the purchase of all of the outstanding capital stock of Erickson and separate purchases of certain related assets with anaggregate purchase price of $80.8 million, net of $3.0 million of cash acquired. These transactions resulted in the acquisition of a total of 64 retail siteslocated in Minnesota, Michigan, Wisconsin and South Dakota.The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):Current assets (excluding cash and inventories)$4,202Inventories8,484Property and equipment75,028Intangible assets14,010Goodwill26,235Current liabilities(16,233)Deferred tax liabilities(28,438)Asset retirement obligations(2,204)Other liabilities(273) Total consideration, net of cash acquired$80,811The fair value of inventory was estimated at retail selling price less estimated costs to sell and a reasonable profit allowance for the selling effort.The fair value of property and equipment, which consisted of land, buildings and equipment, was based on a cost approach. The buildings and equipment arebeing depreciated on a straight-line basis, with estimated remaining useful lives of 15 years for the buildings and 5 to 30 years for equipment.The $11.7 million fair value of the wholesale fuel distribution rights included in intangibles was based on an income approach and management believes thelevel and timing of cash flows represent relevant market participant assumptions. The wholesale fuel distribution rights are being amortized on a straight-linebasis over an estimated useful life of approximately 10 years.Goodwill recorded is primarily attributable to the deferred tax liabilities arising from the application of purchase accounting. In 2016, we received $0.8million related to a working capital settlement, reducing net consideration and resulting goodwill. As of December 31, 2015, $9.4 million of the goodwillrecorded was assigned to the Wholesale segment and $17.9 million was assigned to the Retail segment. As a result of converting a portion of these retail sitesto lessee dealer sites and the resulting reduction in future cash flows in the Retail segment and the expected increase in future cash flows that will be receivedby the Wholesale segment subsequent to the date of conversion, $5.2 million of the goodwill assigned to the Retail segment at December 31, 2015 wasreassigned to the Wholesale segment. See Note 9 for additional information.Purchase and Lease Back of NTIs with CSTIn July 2015, we completed the purchase of real property at 29 NTIs from CST in exchange for approximately 0.3 million common units and cash in theamount of $124.4 million, for an aggregate consideration of $134.0 million on the date of closing. We leased the real property associated with the NTIs backto CST and CST will continue to operate the retail sites pursuant to a triple net81CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSlease at a lease rate of 7.5%, per annum of the fair value of the property at lease inception. This transaction was approved by the independent conflictscommittee of the Board and the executive committee of, and full board of directors of, CST. We accounted for the transactions as entities under commoncontrol.Acquisition of One StopIn July 2015, we completed the purchase of the 41 company operated One Stop retail site network based in Charleston, West Virginia, along with fourcommission agent sites, nine dealer fuel supply agreements and one freestanding franchised QSR for approximately $44.6 million in cash, net of cashacquired.The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in thousands):Current assets (excluding cash and inventories)$1,138Inventories4,764Property and equipment40,651Intangible assets6,032Goodwill279Other assets132Current liabilities(3,617)Asset retirement obligations(1,421)Other liabilities(3,318) Total consideration, net of cash acquired$44,640The fair value of inventory was estimated at retail selling price less estimated costs to sell and a reasonable profit allowance for the selling effort.The fair value of property and equipment, which consisted of land, buildings and equipment, was based on a cost approach. The buildings and equipment arebeing depreciated on a straight-line basis, with estimated remaining useful lives of 20 years for the buildings and 7 to 30 years for equipment.The $4.4 million fair value of the wholesale fuel distribution rights included in intangibles was based on an income approach and management believes thelevel and timing of cash flows represent relevant market participant assumptions. The wholesale fuel distribution rights are being amortized on a straight-linebasis over an estimated useful life of approximately 10 years.The $1.0 million fair value of the wholesale fuel supply agreements was based on an income approach, and management believes the level and timing of cashflows represent relevant market participant assumptions. The wholesale fuel supply agreements are being amortized on an accelerated basis over an estimateduseful life of approximately 10 years.Pro Forma ResultsOur pro forma results, giving effect to the State Oil Assets, Franchised Holiday Stores, Erickson and One Stop acquisitions and assuming an acquisition dateof January 1, 2015 for each acquisition, would have been (in thousands, except per unit amounts): Year Ended December 31, 2016 2015 (unaudited)Total revenues $1,996,205 $2,613,011Net income $7,208 $6,739Net income per limited partnership unit $0.11 $0.1882Note 4. ASSETS HELD FOR SALEWe have classified four and seven retail sites as held for sale at December 31, 2016 and 2015, respectively. These assets are expected to be sold within a yearof the date they were initially classified as held for sale. Assets held for sale were as follows (in thousands): December 31, December 31, 2016 2015Land $882 $1,695Buildings and site improvements 1,054 1,558Equipment and other 702 1,225Total 2,638 4,478Less accumulated depreciation (527) (1,190)Assets held for sale $2,111 $3,288During the third quarter of 2015, we sold one site for $1.8 million, resulting in a gain of $1.3 million. In addition, we divested certain assets acquired in thePMI acquisition through several transactions occurring throughout 2015. For the year ended December 31, 2015, total proceeds from these sales amounted to$3.1 million, resulting in net gains of $1.5 million.Note 5. FAIR VALUE MEASUREMENTSGeneralWe measure and report certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell anasset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). U.S. GAAP specifies a three-levelhierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in activemarkets (i.e., observable inputs) and the lowest priority to data lacking transparency (i.e., unobservable inputs). An instrument’s categorization within the fairvalue hierarchy is based on the lowest level of significant input to its valuation. The following is a description of the three hierarchy levels.Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Activemarkets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricinginformation on an ongoing basis.Level 2—Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of theasset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assetsor liabilities in inactive markets.Level 3—Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilitieswhose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readilyobservable from objective sources.Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers betweenany levels in 2016 or 2015.As further discussed in Note 18, we have accrued for unvested phantom units and vested and unvested profits interests as a liability and adjust that liabilityon a recurring basis based on the market price of our common units each balance sheet date. Such fair value measurements are deemed Level 1 measurements.The fair value of our accounts receivable, notes receivable, and accounts payable approximated their carrying values as of December 31, 2016 and 2015 dueto the short-term maturity of these instruments. The fair value of the revolving credit facility approximated its carrying values of $441.5 million as ofDecember 31, 2016 and $358.4 million as of December 31, 2015, due to the frequency with which interest rates are reset and the consistency of the marketspread.Nonfinancial assets, such as property and equipment, and nonfinancial liabilities are recognized at their carrying amounts in our balance sheets. U.S. GAAPdoes not permit nonfinancial assets and liabilities to be remeasured at their fair values on a recurring basis. However, U.S. GAAP requires the remeasurementof such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property and equipment, intangible assets orgoodwill. In addition, if such an event83CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSoccurs, U.S. GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized inincome in the period the remeasurement occurred.Note 6.RECEIVABLESChanges in the allowance for doubtful accounts consisted of the following (in thousands): Year Ended December 31, 2016 2015 2014Balance as of beginning of year $1,090 $754 $136Increase in allowance charged to expense 36 521 618Accounts charged against the allowance, net of recoveries (639) (185) —Balance as of end of year $487 $1,090 $754Notes receivable from lessee dealers totaled $3.5 million and $0.8 million as of December 31, 2016 and 2015, respectively, and are included in other currentassets and other assets on the consolidated balance sheets.Note 7. INVENTORIESInventories consisted of the following (in thousands): December 31, 2016 2015Retail site merchandise $8,374 $11,354Motor fuel 4,790 4,385Inventories $13,164 $15,739Note 8. PROPERTY AND EQUIPMENTProperty and equipment, net consisted of the following (in thousands): December 31, 2016 2015Land $280,400 $251,632Buildings and site improvements 346,834 318,530Leasehold improvements 9,095 8,867Equipment and other 169,245 140,264Construction in progress 3,173 3,666Property and equipment, at cost 808,747 722,959Accumulated depreciation and amortization (131,418) (94,395)Property and equipment, net $677,329 $628,564Other in the table above consists primarily of the assets related to our asset retirement obligations and computer hardware and software.Approximately $581.7 million of property and equipment, net was used for leasing purposes at December 31, 2016.We are the lessee in certain sale-leaseback transactions for certain retail sites, and because we have continuing involvement in the underlying retail sites, orthe lease agreement has a repurchase feature, the sale-leaseback arrangements are accounted for as lease financing obligations. The table above includes theseretail sites, as well as certain leases accounted for as capital leases. The total cost and accumulated amortization of property and equipment recorded by usunder sale leaseback transactions and capital leases was $101.0 million and $23.9 million, respectively, at December 31, 2016 and $58.4 million and $17.0million, respectively, at December 31, 2015.84CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSSee Note 13 for future minimum rental payments on capital lease obligations and Note 11 for future minimum rental payments on sale-leaseback obligations.Depreciation expense, including amortization of assets recorded under sale-leasebacks and capital lease obligations, was approximately $39.5 million, $33.7million and $22.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.In addition to the business combinations discussed in Note 3 and the divestitures discussed in Note 4, we sold 4 retail sites during 2014, resulting in a gain of$1.7 million.Note 9. GOODWILLChanges in goodwill during the year ended December 31, 2016 consisted of the following (in thousands): WholesaleSegment Retail Segment ConsolidatedBalance at December 31, 2015$61,548 $19,273 $80,821Acquisitions1,720 6,568 8,288Reassignment6,489 (6,489) —Balance at December 30, 2016$69,757 $19,352 $89,109Our business model includes the conversion of retail sites from company operated retail sites to lessee dealers. As a result of these conversions, there is areduction in future cash flows in the Retail segment and an expected increase in future cash flows that will be received by the Wholesale segment subsequentto the date of conversion. The effect of these conversions, for the period ended December 31, 2016, is a $6.5 million reassignment of goodwill originallyassigned to the Retail segment to the Wholesale segment.Note 10. INTANGIBLE ASSETSIntangible assets consisted of the following (in thousands): December 31, 2016 December 31, 2015 Gross Amount AccumulatedAmortization Net CarryingAmount Gross Amount AccumulatedAmortization Net CarryingAmountWholesale fuel supplycontracts/rights $118,201 $(44,298) $73,903 $105,181 $(32,498) $72,683Trademarks 1,094 (685) 409 2,494 (1,264) 1,230Covenant not to compete 4,131 (2,503) 1,628 3,911 (1,600) 2,311Below market leases 12,081 (7,261) 4,820 11,181 (5,090) 6,091Total intangible assets $135,507 $(54,747) $80,760 $122,767 $(40,452) $82,315Intangible assets associated with wholesale fuel supply contracts/rights are amortized over 10 years using either an accelerated or straightline amortizationmethod as appropriate. Trademarks are amortized over 5 years. Covenants not to compete are amortized over the shorter of the contract term or 5 years.Intangible assets associated with above and below market leases are amortized over the lease term, which approximates 5 years.Amortization expense, including amortization of above and below market lease intangible assets, which is classified as rent expense, was $13.7 million,$13.4 million and $11.3 million for the years ended December 31, 2016, 2015 and 2014, respectively. Aggregate amortization expense is expected to be$13.6 million, $12.6 million, $10.1 million, $9.9 million, and $9.5 million for the years ending December 31, 2017, 2018, 2019, 2020 and 2021,respectively.85Note 11. ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIESAccrued expenses consisted of the following (in thousands): December 31, 2016 2015Equity-based incentive compensation $1,758 $3,266Professional fees 464 804Taxes other than income 7,177 3,311Accrued interest 993 898Termination benefits 151 1,561Acquisition costs — 400Current portion of sale leaseback obligations 856 734Current portion of environmental liabilities 1,602 903Other 2,704 4,668Total accrued expenses $15,705 $16,545Other long-term liabilities consisted of the following (in thousands): December 31, 2016 2015Environmental liabilities $2,567 $1,850Security deposits 9,443 7,176Above market leases 4,841 6,691Sale leaseback obligations, net of deferred financing fees 77,412 26,918Other 5,990 4,567Total other long-term liabilities $100,253 $47,20286Sale Leaseback ObligationsWe are the lessee in certain sale-leaseback transactions for certain retail sites that expire through 2032, and as we have continuing involvement in theunderlying retail sites, or the lease agreement has a repurchase feature, the sale-leaseback arrangements are accounted for as lease financing obligations. Inlieu of recognizing rent expense for the lease rental payments, we record interest expense, which amounted to $3.3 million, $2.4 million and $2.5 million for2016, 2015 and 2014, respectively. The future minimum lease payments under sale leaseback financing obligations as of December 31, 2016 are as follows(in thousands): Sale LeasebackObligations2017 $6,5152018 6,6032019 6,6702020 6,6472021 6,738Thereafter 69,672Total future minimum lease payments 102,845Less interest component 70,371Present value of minimum lease payments 32,474Plus net book value of property at end of lease 20,410Plus deferred gain to be recognized at end of lease 26,261Gross sale leaseback obligations 79,145Current portion 856Long-term portion 78,289Deferred financing costs, net 877Long-term portion, net of deferred financing costs $77,412Renegotiation of Rocky Top Purchase ObligationIn connection with the Rocky Top acquisition completed in September 2013, we entered into a deferred seller financing arrangement, which obligated us topurchase certain retail sites over a 5-year period for an average of $5.2 million per year beginning in 2016 at an approximately 7.7% capitalization rate. InJune 2016, we renegotiated the terms with the sellers, eliminating the deferred seller financing obligation and agreeing to terms of a new lease of the assets foran initial term of 15 years and 8 months with four renewal options of five years each. Under this triple net lease, annual rent is initially $1.8 million based ona 6.5% capitalization rate and increases 1.5% per year. However, because of the continuing involvement we have with the retail sites through the lease andsublease of the properties, we recorded the liability on our balance sheet at fair value on the date of the reclassification, which approximated its carryingvalue. During the second quarter of 2016, we reclassified the liability from debt and capital lease obligations to lease financing obligations within accruedexpenses and other current liabilities and other noncurrent liabilities on the consolidated balance sheet. See Note 12 for additional information.Sale Leaseback TransactionIn December 2016, we sold the real property at 17 retail sites acquired through the State Oil Assets acquisition for cash proceeds of $25.0 million, which wereused to repay borrowings on the credit facility. We lease these properties for an initial term of 15 years with three renewal options of approximately five yearseach. Under the triple net lease, annual rent is initially $1.6 million based on a 6.5% capitalization rate and increases every 5 years based on inflation.Because of the continuing involvement we have with the retail sites through the lease and sublease of the properties, we recorded a liability for the proceedsreceived and will amortize this liability over the lease term as rent payments are made.Asset Retirement ObligationsEnvironmental laws in the U.S. require the permanent closure of USTs within one to two years after the USTs are no longer in service, depending on thejurisdiction in which the USTs are located. We have estimated that USTs at our owned retail sites will remain in service approximately 30 years and that wewill have an obligation to remove those USTs at that time. For our leased retail sites, our lease agreements generally require that we remove certainimprovements, primarily USTs and signage, upon87termination of the lease, and so an asset retirement obligation is incurred upon entering the lease. There are no assets that are legally restricted for purposes ofsettling our asset retirement obligations.A rollforward of our asset retirement obligation is below (in thousands): December 31, 2016 2015Beginning balance $23,484 $19,109Recognition of asset retirement obligations 3,205 4,098Changes in estimated cash flows or settlement dates (291) (591)Accretion 1,403 1,189Obligations settled (51) (321)Total balance 27,750 23,484Current portion, classified within accrued expenses and other current liabilities — 319Long-term portion, classified within noncurrent other liabilities $27,750 $23,165Note 12. DEBTOur balances for long-term debt and capital lease obligations are as follows (in thousands): December 31, 2016 2015$550 million revolving credit facility $441,500 $358,412Financing obligation associated with Rocky Top acquisition — 26,250Note payable 822 876Capital lease obligations 28,455 30,248Total debt and capital lease obligations 470,777 415,786Current portion 2,100 7,608Noncurrent portion 468,677 408,178Deferred financing fees (3,558) (4,464)Noncurrent portion, net of deferred financing fees $465,119 $403,714The following represents principal payments on debt and future minimum lease payments on capital lease obligations for the next five years (in thousands): Debt Capital LeaseObligations Total2017 $57 $2,803 $2,8602018 765 2,894 3,6592019 441,500 2,986 444,4862020 — 3,080 3,0802021 — 3,175 3,175Thereafter — 18,590 18,590Total future minimum lease payments 442,322 33,528 475,850Less interest component — 5,073 5,073Present value of minimum lease payments 442,322 28,455 470,777Current portion 57 2,043 2,100Long-term portion $442,265 $26,412 $468,67788CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSRenegotiation of Rocky Top Purchase ObligationAs discussed in Note 11, we renegotiated the terms of a deferred seller financing obligation that obligated us to purchase certain retail sites. As a result,during the second quarter of 2016, we reclassified the liability associated with this financing obligation from debt and capital lease obligations to leasefinancing obligations included within accrued expenses and other current liabilities and other noncurrent liabilities on the consolidated balance sheet. SeeNote 11 for additional information.Capital Lease ObligationsIn May 2012, the Predecessor Entities entered into a 15-year master lease agreement with renewal options of up to an additional 20 years with Getty. Pursuantto the lease, the Predecessor Entities leased 105 retail sites in Massachusetts, New Hampshire and Maine. The lease was assigned to the Partnership. InDecember 2012, the agreement was amended to add an additional 25 retail sites in New Jersey. Since then, the agreement has been amended from time to timeto add an insignificant number of additional retail sites. We pay fixed rent, which increases 1.5% per year. In addition, the lease requires contingent rentpayments based on gallons of motor fuel sold. During the initial 3.5 years of the lease, we were required to make capital expenditures of at least $1.0 millionat the New Jersey retail sites, which requirement has been met.Because the fair value of the land at lease inception was estimated to represent more than 25% of the total fair value of the real property subject to the lease,the land element of the lease was analyzed for operating or capital treatment separately from the rest of the property subject to the lease. The land element ofthe lease was classified as an operating lease and all of the other property was classified as a capital lease. As such, future minimum lease payments areincluded in both the capital lease obligations table above as well as the operating lease table in Note 13.Through December 31, 2016, certain retail sites have been or are in the process of being terminated from the lease. Any property and equipment or capitallease obligations associated with these retail sites were removed from the balance sheet, which resulted in a gain of $0.4 million for 2014, which is classifiedas a reduction of rent expense.Credit FacilityThe credit facility is a senior secured revolving credit facility maturing on March 4, 2019, with a total borrowing capacity of $550.0 million, under whichswing-line loans may be drawn up to $25.0 million and standby letters of credit may be issued up to an aggregate of $45.0 million. The credit facility may beincreased, from time to time, upon our written request, subject to certain conditions, up to an additional $100.0 million. Letters of credit outstanding atDecember 31, 2016 and 2015 totaled $6.5 million and $16.0 million, respectively. The amount of availability at December 31, 2016 under the revolvingcredit facility, after taking into account outstanding letters of credit and debt covenant constraints, was $94.1 million. In connection with future acquisitions,the revolving credit facility requires, among other things that we have, after giving effect to such acquisition, at least $20.0 million, in the aggregate, ofborrowing availability under the revolving credit facility and unrestricted cash on the balance sheet on the date of such acquisition. All obligations under thecredit facility are secured by substantially all of the assets of the Partnership and its subsidiaries.Outstanding borrowings under the revolving credit facility bear interest at LIBOR plus an applicable margin, which was 3.25% at December 31, 2016. Ourborrowings had a weighted-average interest rate of 3.53% at December 31, 2016.We are required to comply with certain financial covenants under the credit facility. We are required to maintain a total leverage ratio (as defined) for themost recently completed four fiscal quarters of less than or equal to 4.50 : 1.00, except for periods following a material acquisition. The total leverage ratioshall not exceed 5.00 : 1.00 for the first three full fiscal quarters following the closing of a material acquisition. The ratio shall not exceed 5.50 : 1.00 uponthe issuance of Qualified Senior Notes (as defined) in the aggregate principal amount of $175.0 million or greater. We are also required to maintain a seniorleverage ratio (as defined) after the issuance of Qualified Senior Notes of $175.0 million or greater of less than or equal to 3.00 : 1.00 and a consolidatedinterest coverage ratio (as defined) of at least 2.75 : 1.00.The credit facility prohibits us from making distributions to our unitholders if any potential default or event of default occurs or would result from thedistribution, or we are not in compliance with our financial covenants. In addition, the credit facility contains various covenants which may limit, amongother things, our ability to grant liens; create, incur, assume, or suffer to exist other indebtedness; or make any material change to the nature of our business,including mergers, liquidations, and dissolutions; and make certain investments, acquisitions or dispositions.In December 2016, the credit facility was amended as summarized below:•Modified certain terms to permit the acquisition of our general partner indirectly by Couche-Tard;•Reduced the threshold for qualifying as a “material acquisition” from $50 million to $30 million;89CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTS•Extended the time period from two to three quarters that the leverage ratio following a material acquisition can be 5.00 : 1.00;•Created further flexibility to conduct sale leaseback transactions;•Increased swing-line loan capacity from $10 million to $25 million; and•Certain other operational and technical amendments.In connection with the December 2016 amendment, we incurred $0.7 million in deferred financing costs.Note PayableIn connection with the June 2013 acquisition of certain retail sites in Florida noted previously, we issued a $1.0 million note payable with interest at 4.0%.The note matures July 1, 2018, at which time a balloon payment for all outstanding principal and any unpaid interest is due. The loan is secured by all thereal and personal property at these retail sites.Note 13. OPERATING LEASESOperating Leases of Retail Sites as LesseeWe lease retail sites from third parties under certain non-cancelable operating leases that expire from time to time through 2030.The future minimum lease payments under operating leases as of December 31, 2016 were as follows (in thousands): 2017 $17,3482018 15,3752019 13,8102020 11,5692021 9,093Thereafter 39,138Total future minimum lease payments $106,333The future minimum lease payments presented above do not include contingent rent based on future inflation, future revenues or volumes, or amounts thatmay be paid as reimbursements for certain operating costs incurred by the lessor. Most lease agreements include provisions for renewals.Contingent rent expense, based on gallons sold, was approximately $2.1 million, $1.3 million and $1.0 million for 2016, 2015 and 2014, respectively.Operating Leases of Retail Sites as LessorMotor fuel stations are leased to tenants under operating leases with various expiration dates ranging through 2031.The future minimum lease payments under non-cancelable operating leases with third parties, CST and DMS as of December 31, 2016 were as follows (inthousands): Third Parties CST DMS Total2017 $31,947 $14,483 $15,541 $61,9712018 25,564 14,483 15,801 55,8482019 19,694 14,483 16,038 50,2152020 15,869 14,483 16,278 46,6302021 14,157 14,483 16,522 45,162Thereafter 47,152 48,273 107,579 203,004Total future minimum lease payments $154,383 $120,688 $187,759 $462,83090CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThrough the first five years of the lease with DMS, the lease agreement allows for a limited number of sites to be removed from the lease by each of DMS andus. This right generally expires October 31, 2017.The future minimum lease payments presented above do not include contingent rent based on future inflation, future revenues or volumes of the lessee, oramounts that may be received as tenant reimbursements for certain operating costs. Most lease agreements include provisions for renewals.Deferred rent income from straight-line rent relates to the cumulative amount by which straight-line rental income recorded to date exceeds cash rents billedto date under the lease agreement and totaled $5.6 million and $3.6 million at December 31, 2016 and 2015, respectively.Note 14. ENVIRONMENTAL MATTERSWe currently own or lease retail sites where refined petroleum products are being or have been handled. These retail sites and the refined petroleum productshandled thereon may be subject to federal and state environmental laws and regulations. Under such laws and regulations, we could be required to remove orremediate containerized hazardous liquids or associated generated wastes (including wastes disposed of or abandoned by prior owners or operators), toremediate contaminated property arising from the release of liquids or wastes into the environment, including contaminated groundwater, or to implementbest management practices to prevent future contamination.We maintain insurance of various types with varying levels of coverage that is considered adequate under the circumstances to cover operations andproperties. The insurance policies are subject to deductibles that are considered reasonable and not excessive. In addition, we have entered intoindemnification and escrow agreements with various sellers in conjunction with several of their respective acquisitions, as further described below. Financialresponsibility for environmental remediation is negotiated in connection with each acquisition transaction. In each case, an assessment is made of potentialenvironmental liability exposure based on available information. Based on that assessment and relevant economic and risk factors, a determination is madewhether to, and the extent to which we will assume liability for existing environmental conditions.The table below presents a rollforward of our environmental liability (in thousands): December 31, 2016 2015Beginning balance $2,753 $1,074Provision for new environmental losses — 1,228Changes in estimates for previously incurred losses 1,951 781Payments (535) (330)Ending balance 4,169 2,753Current portion 1,602 903Long-term portion $2,567 $1,850At December 31, 2016, we were indemnified by third-party escrow funds, state funds or insurance totaling $4.2 million, which are recorded asindemnification assets. State funds represent probable state reimbursement amounts. Reimbursement will depend upon the continued maintenance andsolvency of the state. Insurance coverage represents amounts deemed probable of reimbursement under insurance policies.The estimates used in these reserves are based on all known facts at the time and an assessment of the ultimate remedial action outcomes. We will adjust lossaccruals as further information becomes available or circumstances change. Among the many uncertainties that impact the estimates are the necessaryregulatory approvals for, and potential modifications of remediation plans, the amount of data available upon initial assessment of the impact of soil or watercontamination, changes in costs associated with environmental remediation services and equipment and the possibility of existing legal claims giving rise toadditional claims.Environmental liabilities related to the contributed retail sites have not been assigned to us, and are still the responsibility of certain of the PredecessorEntities. Under the Amended Omnibus Agreement, certain of the Predecessor Entities must indemnify us for any costs or expenses that we incur forenvironmental liabilities and third-party claims, regardless of when a claim is made, that are based on environmental conditions in existence at contributedretail sites prior to the closing of the IPO. Certain of the Predecessor Entities are beneficiaries of escrow accounts created to cover the cost to remediate certainenvironmental liabilities. In addition, certain of the Predecessor Entities maintain insurance policies to cover environmental liabilities and/or, whereavailable, participate91in state programs that may also assist in funding the costs of environmental liabilities. Certain retail sites that were contributed to us were identified as havingexisting environmental liabilities that are not covered by escrow accounts, state funds or insurance policies. For more information on the Amended OmnibusAgreement, see Note 15.The following table presents a summary rollforward for 2016 of the Predecessor Entities’ environmental liabilities associated with retail sites contributed tous, on an undiscounted basis (in thousands): December 31, 2016 2015Beginning balance $7,027 $7,584Changes in estimates for previously incurred losses 316 539Payments (1,243) (1,096)Ending balance $6,100 $7,027A significant portion of the Predecessor Entities’ environmental reserves have corresponding indemnification assets. The breakdown of the indemnificationassets as of December 31, 2016 is as follows (in thousands): December 31, 2016 2015Escrowed funds $1,198 $1,400State funds 2,431 3,038Insurance coverage 1,455 580Total indemnification assets $5,084 $5,018Note 15. RELATED-PARTY TRANSACTIONSTransactions with CSTFuel Sales and Rental IncomeWe sell wholesale motor fuel under a master fuel distribution agreement to 43 CST retail sites and lease real property on 74 retail sites to CST under a masterlease agreement each having initial 10-year terms. The fuel distribution agreement provides us with a fixed wholesale mark-up per gallon. The master leaseagreement is a triple net lease.Revenues from wholesale fuel sales and real property rental income from CST were as follows (in thousands): Year Ended December 31, 2016 2015 2014Revenues from motor fuel sales to CST $118,745 $135,813 $13,186Rental income from CST $17,188 $11,422 $546Receivables from CST were $4.4 million and $2.3 million at December 31, 2016 and 2015, respectively, related to these transactions.Amended Omnibus Agreement and Management FeesWe incurred $15.9 million, $15.3 million and $2.5 million for the years ended December 31, 2016, 2015 and 2014, respectively, including incentivecompensation costs and non-cash stock-based compensation expense under the Amended Omnibus Agreement, which are recorded as a component ofoperating expenses and general and administrative expenses in the statement of operations. Effective January 1, 2016, the fixed billing component of themanagement fee under the Amended Omnibus Agreement was increased to $856,000 per month, which was approved on our behalf by the independentconflicts committee of the Board and by the executive committee of the board of directors of CST. At the end of each calendar year, we and CST have theright to negotiate a reduction or increase to the amounts due under the Amended Omnibus Agreement for such year. CST and we also have the right tonegotiate the amount of the annual management fee as circumstances require. Amounts payable to CST related to these transactions were $10.0 million and$8.3 million at December 31, 2016 and 2015, respectively. See Note 17 for additional information on the settlement of amounts due under the AmendedOmnibus Agreement that were settled in our common units.92CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCST Fuel Supply Equity InterestsCST Fuel Supply provides wholesale motor fuel distribution to the majority of CST’s U.S. Retail retail sites on a fixed markup per gallon. We owned a 17.5%total interest in CST Fuel Supply at December 31, 2016 and 2015. We account for the income derived from our equity interest of CST Fuel Supply as“Income from CST Fuel Supply equity” on our statement of operations, which amounted to $16.0 million and $10.5 million for the years ended December 31,2016 and 2015, respectively.Purchase of Wholesale Fuel Supply Contracts from CSTIn February 2016, we purchased 21 independent dealer contracts and 11 subwholesaler contracts from CST for $2.9 million with historic annual volumes ofapproximately 20 million gallons. This transaction was approved on our behalf by the independent conflicts committee of the Board and by the executivecommittee of the board of directors of CST. Since this was a transaction between entities under common control, the $2.9 million purchase price wasaccounted for as a distribution recorded in partners’ capital.We purchase the fuel supplied to these 32 retail sites from CST Fuel Supply, of which we own a 17.5% interest, and resell the wholesale motor fuel to theindependent dealers and subwholesalers. We purchased $20.4 million of motor fuel from CST Fuel Supply for the year ended December 31, 2016 inconnection with these 32 retail sites.Refund payment related to CST sale of California and Wyoming AssetsIn July 2016, CST provided a refund payment to us related to our 17.5% interest in CST Fuel Supply resulting from the sale by CST of 79 retail sites inCalifornia and Wyoming to 7-Eleven, Inc. and its wholly-owned subsidiary, SEI Fuel Services, Inc., to which CST Fuel Supply no longer supplies motorfuel. The purpose of the refund payment was to make us whole for the decrease in the value of our interest in CST Fuel Supply arising from sales volumedecreases. The total refund payment received by us, as approved by the independent conflicts committee of the Board and by the executive committee of theboard of directors of CST, was approximately $18.2 million ($17.5 million in cash with the remainder in CrossAmerica common units owned by CST) andwas accounted for as a contribution to equity.IDR and Common Unit DistributionsWe distributed $3.4 million and $1.4 million to CST related to its ownership of our IDRs and $15.5 million and $8.1 million related to its ownership of ourcommon units during the years ended December 31, 2016 and 2015.Wholesale Motor Fuel Sales and Real Estate RentalsRevenues from motor fuel sales and rental income from DMS and its affiliates were as follows (in thousands): Year Ended December 31, 2016 2015 2014Revenues from motor fuel sales to DMS and itsaffiliates $254,292 $322,918 $676,210Rental income from DMS and its affiliates $21,208 $23,474 $25,083Receivables from DMS and its affiliates totaled $8.6 million and $7.3 million at December 31, 2016 and 2015, respectively.Revenues from rental income from Topstar was $0.5 million, $0.5 million and $0.7 million for the years ended December 31, 2016, 2015 and 2014,respectively.We lease real estate from certain entities affiliated with Joseph V. Topper, Jr. Rent expense paid to these entities was $0.9 million, $0.9 million and $0.8million for the years ended December 31, 2016, 2015 and 2014, respectively.Maintenance and Environmental CostsCertain maintenance and environmental monitoring and remediation activities are performed by a related party of Joseph V. Topper, Jr. as approved by theindependent conflicts committee of the Board. We incurred charges with this related party of $1.6 million, $1.3 million, and $1.4 million for the years endedDecember 31, 2016, 2015 and 2014, respectively.93CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSAircraft Usage CostsFrom time to time, we lease, on a non-exclusive basis, aircraft owned by a group of individuals that includes Joseph V. Topper, Jr. and John B. Reilly, III,members of our Board, as previously approved in August 2013 by the independent conflicts committee of the Board. CrossAmerica incurred an immaterialamount of lease costs related to these aircraft in 2016. Lease costs incurred by us for use of these aircraft were $0.2 million and $0.3 million for the yearsended 2015 and 2014, respectively.Principal Executive OfficesOur principal executive offices are in Allentown, Pennsylvania. Through February 2016, we subleased office space from CST that CST leased from DMI.Since February 2016, we have subleased office space from CST that CST leased from an affiliate of John B. Reilly, III, a director of our Board. Themanagement fee charged by CST to us under the Amended Omnibus Agreement incorporates this rental expense, which amounted to $0.1 million and $0.2million for the years ended December 31, 2016 and 2015, respectively. In addition, we paid amounts directly to DMI and the affiliate of J.B. Reilly, IIIamounting to $0.5 million, $0.2 million and $0.1 million for the years ended December 31, 2016, 2015 and 2014, respectively.Note 16. COMMITMENTS AND CONTINGENCIESPurchase CommitmentsThe future minimum volume purchase requirements under the existing supply agreements are approximate gallons, with a purchase price at prevailing marketrates for wholesale distributions. We purchased approximately 869.6 million, 884.6 million and 869.5 million gallons of motor fuel under the existing supplyagreements for the years ended December 31, 2016, 2015 and 2014, respectively. The following provides total annual future minimum volume purchaserequirements (in thousands of gallons):2017385,2712018316,3622019284,454202032,749202125,000Thereafter75,000Total1,118,836In the event for a given contract year we fail to purchase the required minimum volume, the underlying third party’s exclusive remedies (depending on themagnitude of the failure) are either termination of the supply agreement and/or a financial penalty per gallon based on the volume shortfall for the given year.We did not incur any significant penalties for the periods presented.Litigation MattersWe are from time to time party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typicallyseek, among other things, compensation for alleged personal injury, breach of contract, property damages, environmental damages, employment-relatedclaims and damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to all such lawsuits, claims andproceedings, we record a reserve when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In addition, wedisclose matters for which management believes a material loss is at least reasonably possible. None of these proceedings, separately or in the aggregate, areexpected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. In all instances, management hasassessed the matter based on current information and made a judgment concerning its potential outcome, giving due consideration to the nature of the claim,the amount and nature of damages sought and the probability of success. Management’s judgment may prove materially inaccurate, and such judgment ismade subject to the known uncertainties of litigation.We are a co-defendant, together with our General Partner, CST and CST Services LLC, in a lawsuit brought by Charles Nifong, a former employee of CSTServices LLC who previously provided services to us as Chief Investment Officer and Vice President of Finance (Court of Common Pleas, Lehigh County,Pennsylvania, case number 2015-1003). The plaintiff alleges breach of contract and associated claims relating to his termination of employment and claimedseverance benefits under the EICP totaling approximately $1.6 million. We intend to contest the action vigorously. Under the EICP, we are obligated to payreasonable legal expenses incurred by the plaintiff in connection with this dispute whether we are successful in our defense or not.94CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 17. PARTNERS’ CAPITALIn 2016, we issued 107,227 common units (net of units withheld for income taxes) as a result of the vesting of phantom units and conversion of profitsinterests previously issued primarily to CST employees who provide services principally to CrossAmerica. See Note 18 of the notes to the consolidatedfinancial statements for additional information.In January 2015, we issued 1,497,946 common units to a subsidiary of CST in connection with the acquisition of a 5% interest in CST Fuel Supply. SeeNotes 3 and 15 of the notes to the consolidated financial statements for additional information.In March 2015, we issued 90,671 common units (net of units withheld for income taxes) as a result of the vesting of phantom units previously issuedprimarily to CST employees who provide services principally to CrossAmerica. See Note 18 of the notes to the consolidated financial statements foradditional information.On June 19, 2015, we closed on the sale of 4.6 million common units for net proceeds of approximately $138.5 million. On July 16, 2015, CrossAmericaclosed on the sale of an additional 0.2 million common units for net proceeds of approximately $6.4 million in accordance with the underwriters’ option topurchase additional common units associated with the June offering. CrossAmerica used the net proceeds from this offering to reduce indebtednessoutstanding under its revolving credit facility.On July 1, 2015, we issued 3,303,208 of our common units to a subsidiary of CST in connection with the acquisition of an additional 12.5% equity interestin CST Fuel Supply. See Notes 3 and 15 of the notes to the consolidated financial statements for additional information.On July 1, 2015, we issued 338,098 of our common units to subsidiaries of CST in connection with the acquisition of real property at 29 NTIs. See Note 3 ofthe notes to the consolidated financial statements for additional information.Common Units Issued to CST as Consideration for Amounts Due Under the Terms of the Amended Omnibus AgreementAs approved by the independent conflicts committee of the Board and the executive committee of CST’s board of directors, the Partnership and CSTmutually agreed to settle, from time to time, some or all of the amounts due under the terms of the Amended Omnibus Agreement in newly issued commonunits representing limited partner interests in the Partnership. We issued the following common units to CST as consideration for amounts due under theterms of the Amended Omnibus Agreement:Period Date of Issuance Number of Common Units IssuedQuarter ended June 30, 2015 July 16, 2015 145,056Quarter ended September 30, 2015 October 26, 2015 114,256Quarter ended December 31, 2015 March 31, 2016 145,137Quarter ended March 31, 2016 May 9, 2016 83,218Quarter ended June 30, 2016 August 2, 2016 101,087Quarter ended September 30, 2016 October 27, 2016 110,824Quarter ended December 31, 2016 * 171,039* Expected to be issued on February 28, 201795CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCommon Unit Repurchase ProgramIn November 2015, the Board approved a CrossAmerica common unit repurchase program under Rule 10b-18 of the Exchange Act authorizing us torepurchase up to an aggregate of $25.0 million of the common units representing limited partner interests in the Partnership. Under the program, we maymake purchases in the open market in accordance with Rule 10b-18 of the Exchange Act, or in privately negotiated transactions, pursuant to a trading planunder Rule 10b5-1 of the Exchange Act or otherwise. Any purchases will be funded from available cash on hand. The CrossAmerica common unit repurchaseprogram does not require us to acquire any specific number of our common units and may be suspended or terminated by us at any time without prior notice.The purchases will not be made from any officer, director or control person of the Partnership or CST. The Merger Agreement prohibits us from making anyfurther repurchases of our common units. The following table shows the purchases made through December 31, 2016:Period Total Number ofUnits Purchased Average Price Paidper Unit Total Cost of UnitsPurchased Amount Remainingunder the ProgramJanuary 1 - December 31, 2015 154,158 $23.37 $3,603,071 $21,396,929January 1 - March 31, 2016 112,492 $24.47 $2,752,240 $18,644,689April 1 - June 30, 2016 20,971 $23.86 $500,413 $18,144,276July 1 - September 30, 2016 — $— $— $18,144,276October 1 - December 31, 2016 — $— $— $18,144,276Total 287,621 $6,855,724 $18,144,276CST Purchases of CrossAmerica Common UnitsOn September 21, 2015, CST announced that the independent executive committee of its board of directors approved a CrossAmerica common unit purchaseprogram under Rule 10b-18 of the Exchange Act, authorizing CST to purchase up to an aggregate of $50 million of the common units representing limitedpartner interests in CrossAmerica. The common unit purchase program does not have a fixed expiration date and may be modified, suspended or terminated atany time at CST’s discretion.CST made no purchases under the unit purchase program during the year ended December 31, 2016. From inception until December 31, 2016, CST hadpurchased $19.8 million, or 804,667 common units, at an average price of $24.64 per common unit, which units cannot be transferred absent registration withthe SEC or an available exemption from the SEC’s registration requirements. The Merger Agreement prohibits CST from making any further purchases ofCrossAmerica common units.DistributionsQuarterly distribution activity for 2016 was as follows:Quarter Ended Record Date Payment Date Cash Distribution (perunit) Cash Distribution (inthousands)March 31, 2016 May 19, 2016 May 31, 2016 $0.5975 $19,618June 30, 2016 August 8, 2016 August 15, 2016 $0.6025 $19,910September 30, 2016 November 4, 2016 November 15, 2016 $0.6075 $20,125December 31, 2016 February 6, 2017 February 13, 2017 $0.6125 $20,359Conversion of Subordinated UnitsOn February 25, 2016, the first business day after the payment of the distribution of $0.5925 per unit for the fourth quarter 2015, the subordination periodunder the Partnership Agreement ended. At that time, each outstanding subordinated unit converted into one common unit and participates pro rata with theother common units in cash distributions.96CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 18. EQUITY-BASED COMPENSATIONCrossAmerica Equity-Based AwardsThe maximum number of common units that may be delivered with respect to awards under the Plan is 1,505,000. Generally, the Plan provides for grants ofrestricted units, unit options, performance awards, phantom units, unit awards, unit appreciation rights, distribution equivalent rights, and other unit-basedawards, with various limits and restrictions attached to these awards on a grant-by-grant basis. The Plan is administered by the Board or a committee thereof.The Board may terminate or amend the Plan at any time with respect to any common units for which a grant has not yet been made. The Board also has theright to alter or amend the Plan or any part of the Plan from time to time, including increasing the number of common units that may be granted, subject tounitholder approval as required by the exchange upon which common units are listed at that time; however, no change in any outstanding grant may be madethat would adversely affect the rights of a participant with respect to awards granted to a participant prior to the effective date of such amendment ortermination, except that the Board may amend any award to satisfy the requirements of Section 409A of the Internal Revenue Code. The Plan will expire onthe tenth anniversary of its approval, when common units are no longer available under the Plan for grants or upon its termination by the Board, whicheveroccurs first.In March 2014, we contributed our investments in our operating subsidiaries and certain other assets and liabilities to LGP Operations. Since March 2014,LGP Operations granted profits interests, which are represented by Class B Units in LGP Operations. Upon vesting, Class B Unitholders will be entitled toreceive cash distributions proportionate to those received by common unitholders. Class B Units are redeemable two years after they were granted, subject tocertain limitations, for cash or common units of CrossAmerica at the discretion of the Board.Because the Class B Units are an interest in the equity of LGP Operations, they represent a noncontrolling interest from our perspective. As such, the Class BUnits are presented as a noncontrolling interest on the balance sheet and the Class B Unitholders’ interest in the net income of LGP Operations is presented asnet income attributable to noncontrolling interests on the statement of operations.We record equity-based compensation as a component of general and administrative expenses in the statements of operations. Compensation expense for theyears ended December 31, 2016, 2015 and 2014 was $1.3 million, $3.0 million and $11.4 million, respectively.In connection with the GP Purchase, as specified in the EICP, all unvested awards held by executive officers and other participants (as defined under theEICP) vested on October 1, 2014. The incremental charge recorded in 2014 associated with the accelerated vesting of these awards was approximately $4.5million.There were no grants of equity-based awards in 2016 to employees.It is the intent of CrossAmerica to settle the phantom units upon vesting by issuing common units and to settle the profits interests upon conversion by thegrantee by issuing common units. However, the awards may be settled in cash at the discretion of the Board.Since we grant awards to employees of CST, and since the grants may be settled in cash, unvested phantom units and vested and unvested profits interestsreceive fair value variable accounting treatment. As such, they are measured at fair value at each balance sheet reporting date and the cumulativecompensation cost recognized is classified as a liability, which is included in accrued expenses and other current liabilities on the consolidated balancesheet. The balance of the accrual at December 31, 2016 and 2015 totaled $1.8 million and $3.3 million, respectively. The weighted average period overwhich compensation expense related to nonvested awards will be recognized was approximately five months as of December 31, 2016.CST AwardsIn addition to our equity-based awards previously discussed, CST also granted equity-based awards of approximately 102,000 and 163,000 for the yearsended December 31, 2016 and 2015, respectively, which were granted to certain employees of CST for services rendered on our behalf. Expense associatedwith these awards that was charged to us under the Amended Omnibus Agreement was $2.3 million and $2.2 million for the years ended December 31, 2016and 2015, respectively.97CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSAwards to Members of the BoardDuring 2016, we also granted the following awards to members of the Board as a portion of director compensation: Phantom UnitsNon-vested at beginning of period11,476Granted5,364Vested(11,476)Non-vested at end of period5,364Note 19. NET INCOME PER LIMITED PARTNER UNITUnder the Partnership Agreement, a subsidiary of CST, as the holder of CrossAmerica’s IDRs, has an interest in distributions from CrossAmerica that areincreasing percentages starting at 15% of quarterly distributions out of the operating surplus (as defined in our Partnership Agreement) in excess of $0.5031per limited partner unit.In addition to the common units, we have identified the IDRs as participating securities and compute income per unit using the two-class method underwhich any excess of distributions declared over net income shall be allocated to the partners based on their respective sharing of income as specified in thePartnership Agreement. Net income per unit applicable to limited partners (including common and subordinated unitholders) is computed by dividing thelimited partners’ interest in net income (loss), after deducting the IDRs, by the weighted-average number of outstanding common units.As discussed in Note 17, on February 25, 2016, the subordinated units converted into common units and participates pro-rata with the other common units incash distributions.98CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe following tables provide a reconciliation of net income (loss) and weighted-average units used in computing basic and diluted net income (loss) perlimited partner unit for the following periods (in thousands, except unit and per unit amounts): Year Ended December 31, 2016 2015 2014 Common Units Subordinated Units Common Units SubordinatedUnits Common Units SubordinatedUnitsNumerator: Distributions paid(a) $75,598 $4,459 $47,798 $16,781 $25,544 $15,652Allocation of distributions in excess of netincome(b) (68,539) (4,206) (40,356) (14,172) (29,532) (18,071)Limited partners’ interest in net income (loss) -basic 7,059 253 7,442 2,609 (3,988) (2,419)Adjustment for phantom units — — 9 — — —Limited partners’ interest in net income (loss) -diluted $7,059 $253 $7,451 $2,609 $(3,988) $(2,419) Denominator: Weighted average limited partnership unitsoutstanding - basic 32,159,156 1,151,366 21,462,665 7,525,000 12,402,938 7,525,000Adjustment for phantom units 56,848 — 98,738 — — —Weighted average limited partnership unitsoutstanding - diluted 32,216,004 1,151,366 21,561,403 7,525,000 12,402,938 7,525,000 Net income (loss) per limited partnership unit -basic $0.22 $0.22 $0.35 $0.35 $(0.32) $(0.32)Net income (loss) per limited partnership unit -diluted $0.22 $0.22 $0.35 $0.35 $(0.32) $(0.32)(a)Distributions paid per unit were $2.40, $2.23 and $2.08 during the years ended December 31, 2016, 2015 and 2014, respectively.(b)Allocation of distributions in excess of net income is based on a pro rata proportion to the common and subordinated units as outlined in the PartnershipAgreement.Note 20. INCOME TAXESAs a limited partnership, we are not subject to federal and state income taxes, however our corporate subsidiaries are subject to income taxes. Income taxattributable to our taxable income, which may differ significantly from income for financial statement purposes, is assessed at the individual limited partnerunit holder level. We are subject to a statutory requirement that non-qualifying income, as defined by the Internal Revenue Code, cannot exceed 10% of totalgross income for the calendar year. If non-qualifying income exceeds this statutory limit, we would be taxed as a corporation. The non-qualifying income didnot exceed the statutory limit in any period presented. The reported amounts of our assets, net of the reported amounts of our liabilities, was less than therelated tax basis of assets and liabilities by $9.1 million at December 31, 2016 and greater than the related tax basis by $12.6 million at December 31, 2015.Certain activities that generate non-qualifying income are conducted through LGWS. LGWS is a tax paying corporate subsidiary of ours that is subject tofederal and state income taxes. Current and deferred income taxes are recognized on the earnings of LGWS. Deferred income tax assets and liabilities arerecognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets andliabilities and their respective tax bases and are measured using enacted tax rates.99CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSComponents of income tax expense related to net income were as follows (in thousands): Year Ended December 31, 2016 2015 2014Current: U.S. federal $309 $1,630 $141U.S. state (75) 944 265Total current 234 2,574 406 Deferred: U.S. federal (1,369) (4,279) (1,963)U.S. state 682 (1,837) 203Total deferred (687) (6,116) (1,760)Income tax benefit $(453) $(3,542) $(1,354)The difference between the actual income tax provision and income taxes computed by applying the U.S. federal statutory rate to earnings (losses) beforeincome taxes is attributable to the following (in thousands): Year Ended December 31, 2016 2015 2014Consolidated income (loss) from continuing operations before income taxes - all domestic$10,262 $7,920 $(7,525)(Income) loss from continuing operations before income taxes of non-taxable entities(13,408) (18,409) 325Loss from continuing operations before income taxes of corporate entities$(3,146) $(10,489) $(7,200)Federal income tax benefit at statutory rate(1,070) (3,566) (2,448)Increase (decrease) due to: Nondeductible expenses(37) 198 3,094Tax on gains not recognized for book income1,104 — —Change in valuation allowance67 (247) (1,972)State income taxes, net of federal income tax benefit40 (343) (28)Non-taxable refund(589) — —Other32 416 —Total income tax benefit$(453) $(3,542) $(1,354)100CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows (in thousands): December 31, 2016 2015Deferred income tax assets: Deferred rent expense $1,244 $747Above market lease liability 895 1,516Capital lease and sale leaseback financing obligations 22,557 23,129Asset retirement obligations 9,445 7,619Other assets 1,625 1,935Total deferred income tax assets 35,766 34,946Less: Valuation allowance (5,495) (5,428)Net deferred income tax assets $30,271 $29,518 Deferred income tax liabilities: Deferred rent income 982 781Property and equipment 67,523 57,566Intangibles 3,832 13,078Other 857 1,702Total deferred income tax liabilities 73,194 73,127Net deferred income tax liabilities $42,923 $43,609The change in the balance sheet deferred tax accounts reflects deferred income tax expense and the deferred tax impact of purchase accounting.The valuation allowance at December 31, 2016 relates primarily to the uncertainty of the availability of future profits to realize the tax benefit of the existingdeductible temporary differences. We believe that we will generate sufficient future taxable income to realize the benefits related to the remaining deferredtax asset. The valuation allowance increase primarily relates to the change in the expected deferred tax rate. In conjunction with our ongoing review of ouractual results and anticipated future earnings, we continuously reassess the possibility of releasing the valuation allowance on its deferred tax assets. It isreasonably possible that a significant portion of the valuation allowance will be released within the next twelve months.Changes in the valuation allowance account consisted of the following (in thousands): Year Ended December 31, 2016 2015 2014Balance at beginning of period$5,428 $5,675 $7,093Charged to costs and expense67 (247) (1,418)Balance at end of period$5,495 $5,428 $5,675We provide tax reserves for federal, state and local and uncertain tax positions. The development of these tax positions requires subjective, critical estimatesand judgments about tax matters, potential outcomes and timing. Although the outcome of potential tax examinations is uncertain, in management’sopinion, adequate provisions for income taxes have been made for potential liabilities resulting from these reviews. If actual outcomes differ materially fromthese estimates, they could have a material impact on our financial condition and results of operations. Differences between actual results and assumptions, orchanges in assumptions in future periods, are recorded in the period they become known. To the extent additional information becomes available prior toresolution, such accruals are adjusted to reflect probable outcomes.As of December 31, 2016 and 2015, we did not have unrecognized tax benefits. Our practice is to recognize interest and penalties related to income taxmatters in income tax expense. We had no material interest and penalties for the years ended December 31, 2016, 2015 and 2014.101CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSWe file income tax returns with the U.S. federal government as well as the many state jurisdictions in which we operate. The statute remains open for tax years2013 through 2015; therefore, these years remain subject to examination by federal, state and local jurisdiction authorities.Note 21. SEGMENT REPORTINGWe conduct our business in two segments: 1) the Wholesale segment and 2) the Retail segment. The wholesale segment includes the wholesale distributionof motor fuel to lessee dealers, independent dealers, commission agents, DMS, CST and company operated retail sites. We have exclusive motor fueldistribution contracts with lessee dealers who lease the property from us. We also have exclusive distribution contracts with independent dealers to distributemotor fuel but do not collect rent from the independent dealers. Similar to lessee dealers, we have motor fuel distribution agreements with DMS and CST andcollect rent from both. The Retail segment includes the sale of convenience merchandise items, the retail sale of motor fuel at company operated retail sitesand the retail sale of motor fuel at retail sites operated by commission agents. A commission agent is a retail site where we retain title to the motor fuelinventory and sell it directly to our end user customers. At commission agent retail sites, we manage motor fuel inventory pricing and retain the gross profiton motor fuel sales, less a commission to the agent who operates the retail site.As part of our evaluation of the economic performance of our retail sites, we will from time to time convert company owned retail sites from our Retailsegment to lessee dealers in our Wholesale segment. We have converted 77 company operated retail sites from our Retail segment to lessee dealers in ourWholesale segment in each of 2016 and 2015. As such, we no longer generate revenues from the retail sale of motor fuel or merchandise at these storessubsequent to the date of conversion and we no longer incur retail operating expenses related to these retail sites. However, we continue to supply these retailsites with motor fuel on a wholesale basis pursuant to the fuel supply contract with the lessee dealer. Further, we continue to own/lease the property and earnrental income under lease/sublease agreements with the lessee dealers under triple net leases. The lessee dealer owns all motor fuel and conveniencemerchandise and retains all gross profit on such operating activities.Prior to 2016, we netted lease executory costs such as real estate taxes, maintenance, and utilities that we paid and re-billed to customers against rentalincome on our statement of operations. During the first quarter of 2016, we began accounting for such amounts as rent income and operating expenses andreflected this change in presentation retrospectively. This change resulted in a $10.8 million and $8.9 million increase in both rent income and operatingexpenses for the wholesale segment for the years ended December 31, 2015 and 2014, respectively.Unallocated items consist primarily of general and administrative expenses, depreciation, amortization and accretion expense, gains on sales of assets, net,and the elimination of the Retail segment’s intersegment cost of revenues from motor fuel sales against the Wholesale segment’s intersegment revenues frommotor fuel sales. The profit in ending inventory generated by the intersegment motor fuel sales is also eliminated. Total assets by segment are not presentedas management does not currently assess performance or allocate resources based on that data.102CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe following table reflects activity related to our reportable segments (in thousands): Wholesale Retail Unallocated ConsolidatedYear Ended December 31, 2016 Revenues from fuel sales to external customers $1,325,563 $339,758 $— $1,665,321Intersegment revenues from fuel sales 242,399 — (242,399) —Revenues from food and merchandise sales — 122,084 — 122,084Rent income 74,955 5,639 — 80,594Other revenue 1,807 — — 1,807Total revenues $1,644,724 $467,481 $(242,399) $1,869,806 Income from CST Fuel Supply Equity $16,048 $— $— $16,048Operating income (loss) $102,876 $7,561 $(78,266) $32,171 Year Ended December 31, 2015 Revenues from fuel sales to external customers $1,492,425 $508,335 $— $2,000,760Intersegment revenues from fuel sales 359,294 — (359,294) —Revenues from food and merchandise sales — 158,716 — 158,716Rent income 59,956 5,475 — 65,431Other revenue 1,254 110 — 1,364Total revenues $1,912,929 $672,636 $(359,294) $2,226,271 Income from CST Fuel Supply Equity $10,528 $— $— $10,528Operating income (loss) $88,800 $19,010 $(81,793) $26,017 Wholesale Retail Unallocated ConsolidatedYear Ended December 31, 2014 Revenues from fuel sales to external customers $2,104,128 $449,344 $— $2,553,472Intersegment revenues from fuel sales 204,276 — (204,276) —Revenues from food and merchandise sales — 57,603 — 57,603Rent income 47,348 5,165 — 52,513Other revenue 837 443 — 1,280Total revenues $2,356,589 $512,555 $(204,276) $2,664,868 Operating income (loss) $70,012 $7,246 $(68,618) $8,640103CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 22. QUARTERLY FINANCIAL DATA (UNAUDITED)The following table summarizes quarterly financial data for the years ended December 31, 2016 and 2015 (in thousands): 2016 Quarter Ended March 31 June 30 September 30 December 31Operating revenues $367,740 $512,644 $487,950 $501,472Gross profit $37,190 $40,515 $39,138 $38,724Operating income $5,921 $9,356 $9,993 $6,901Net income attributable to partners $1,767 $3,626 $2,989 $2,322Basic earnings per common unit(a) $0.03 $0.08 $0.06 $0.04Diluted earnings per common unit(a) $0.03 $0.08 $0.06 $0.04 2015 Quarter Ended March 31 June 30 September 30 December 31Operating revenues $480,457 $650,136 $627,802 $467,876Gross profit $37,727 $41,171 $50,969 $39,597Operating income (loss) $(433) $3,674 $14,830 $7,946Net income (loss) attributable to partners $(2,966) $30 $10,163 $4,214Basic earnings (loss) per common unit(a) $(0.13) $(0.01) $0.29 $0.11Diluted earnings (loss) per common unit(a) $(0.13) $(0.01) $0.29 $0.11(a)Earnings (loss) per common unit amounts are computed independently for each of the quarters presented. Therefore, the sum of the quarterly earnings pershare amounts may not equal the annual earnings per share amounts.Note 23. SUPPLEMENTAL CASH FLOW INFORMATIONIn order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilitiesas follows (in thousands): Year Ended December 31, 2016 2015 2014Decrease (increase): Accounts receivable$(6,052) $5,381 $1,914Accounts receivable from related parties(2,104) (2,428) 3,928Inventories4,960 9,857 3,235Other current assets2,345 3,092 743Other assets(7,643) (1,356) (3,159)Increase (decrease): Accounts payable2,132 (12,339) (20,438)Accounts payable to related parties(1,851) 6,867 583Motor fuel taxes payable2,649 (1,652) 2,553Accrued expenses and other current liabilities(1,239) (11,772) 431Other long-term liabilities3,837 1,582 (159)Changes in working capital, net of acquisitions$(2,966) $(2,768) $(10,369)The above changes in current assets and current liabilities may differ from changes between amounts reflected in the applicable balance sheets for therespective periods due to acquisitions.104CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTSSupplemental disclosure of cash flow information (in thousands): Year Ended December 31, 2016 2015 2014Cash paid for interest$21,127 $16,689 $14,134Cash paid for income taxes, net of refunds received$808 $5,023(a) $632(a) Includes $2.6 million in income tax liabilities assumed in acquisitions.Supplemental schedule of non-cash investing and financing activities (in thousands): Year Ended December 31, 2016 2015 2014Sale of property and equipment in Section 1031 like-kind exchangetransactions$(2,232) $(322) $(4,670)Acquisition of equity investment in CST Fuel Supply funded byissuance of common units$— $384 $—Acquisition of property through foreclosure on note receivable$— $930 $—Removal of property and equipment and capital lease obligation forretail sites terminated from Getty lease$(810) $(1,333) $(1,613)Changes in estimate of asset retirement obligations$(291) $(591) $16,877Issuance of capital lease obligations and recognition of asset retirement obligation related to Getty lease$1,223 $— $—Amended Omnibus Agreement fees settled in our common units$11,245 $7,200 $—Units issued to CST as consideration for the NTIs and the equity interest in CST Fuel Supply$— $163,292 $—Note 24. TERMINATION BENEFITSAs a result of the continued integration of certain processes and systems for our recently acquired businesses, we committed to a workforce reductionaffecting certain employees in our Retail segment and have accrued substantially all termination costs as of December 31, 2016.A rollforward of the liability for severance and other termination benefits is as follows (in thousands):Balance at December 31, 2015 $1,665Provision for termination benefits (included in general and administrative expenses) 435Termination benefits paid (1,845)Balance at December 31, 2016 $255105ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A. CONTROLS AND PROCEDURES(a) Evaluation of Disclosure Controls and ProceduresOur management has evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosurecontrols and procedures (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934) as of the end of the period covered by this report, and hasconcluded that our disclosure controls and procedures were effective as of December 31, 2016.Internal Control over Financial Reporting(a) Management's Report on Internal Control over Financial ReportingThe management report on our internal control over financial reporting appears in Item 8 on page 66 of this report, and is incorporated herein by reference.(b) Attestation Report of the Independent Registered Public Accounting FirmGrant Thornton LLP’s report on our internal control over financial reporting appears in Item 8 on page 68 of this report, and is incorporated herein byreference.(c) Changes in Internal Control over Financial ReportingThere were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) thatoccurred during the quarter ended December 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control overfinancial reporting.106ITEM 9B. OTHER INFORMATIONNone.107Part IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEManagementOur General Partner manages our operations and activities on our behalf. The sole member of our General Partner is owned by CST, which gives it sole andexclusive authority over our General Partner. All of our executive officers and those who provide management and services to the Partnership are employedby an affiliate of CST.The Board of our General Partner oversees our management, operations and activities. The Board has seven members, three of whom, Gene Edwards, Justin A.Gannon and John B. Reilly, III, the Board has determined to be independent as defined under the independence standards established by the NYSE and theExchange Act. These directors, whom we refer to as independent directors, are not officers or employees of our General Partner or its affiliates, and have beendetermined by the Board to be otherwise independent of CST and its affiliates.Our General Partner is not elected by our unitholders and is not subject to re-election on a regular basis. Unitholders are not entitled to elect the directors ofour General Partner or directly or indirectly participate in our management or operations. CST appoints all members to the Board.Our General Partner owes a fiduciary duty to our unitholders. However, our Partnership Agreement contains provisions that limit the fiduciary duties that ourGeneral Partner owes to our unitholders. Our General Partner is liable, as general partner, for all of our debts (to the extent not paid from our assets), except forindebtedness or other obligations that are made specifically nonrecourse to it. Whenever possible, our General Partner intends to incur indebtedness or otherobligations that are nonrecourse. Except as described in our partnership agreement and subject to its fiduciary duty to act in good faith, our General Partnerhas exclusive management power over our business and affairs.Directors and Executive OfficersThe Partnership does not directly employ any of the persons responsible for managing or operating the Partnership. We are managed and operated by theBoard and the executive officers appointed by our General Partner who are employees of an affiliate of CST. The following table shows information for thedirectors of our General Partner and our executive officers appointed by our General Partner.Directors and Executive Officers of the General Partner Name Age Position with our General PartnerCurrent Directors and Executive Officers Kimberly S. Lubel 52 Chairman of the BoardGene Edwards 60 DirectorJustin A. Gannon 67 DirectorJohn B. Reilly, III 55 DirectorJoseph V. Topper, Jr. 61 DirectorJeremy L. Bergeron 44 Director, PresidentClayton E. Killinger 56 Director, Executive Vice President and Chief Financial OfficerDavid F. Hrinak 61 Executive Vice President and Chief Operating OfficerHamlet T. Newsom, Jr. 50 Vice President, General Counsel, Chief Compliance Officer and Corporate SecretarySteven M. Stellato 42 Vice President, Chief Accounting OfficerOur General Partner’s directors hold office until the earlier of their death, resignation, removal or disqualification or until their successors have been electedand qualified. Our executive officers serve at the discretion of the Board. In selecting and appointing directors to the Board, CST, as the owner of the solemember of our General Partner, does not apply a formal diversity policy or set of guidelines. However, when appointing new directors, CST as the owner ofthe sole member of our General Partner, will108consider each individual director’s qualifications, skills, business experience and capacity to serve as a director, as described below for each director, and thediversity of these attributes for the Board as a whole.Kimberly S. Lubel was appointed Chairman of the Board in October 2014. Ms. Lubel has been a member of the CST Board since November 2012, chairmanof the CST Board since April 2013, and has served as CST’s Chief Executive Officer and President since January 2013. Prior to her roles at CST, Ms. Lubelserved in various executive management roles at Valero Energy Corporation (NYSE: VLO), including as Executive Vice President and General Counsel fromApril 2006 to November 2012, where she led complex acquisitions and transactions and oversaw legal, environmental, health and safety, ad valorem tax,government affairs and project execution departments. Ms. Lubel also served as Vice President of Legal Services from January 2003 to April 2006 andManaging Counsel prior to January 2003. During her tenure at Valero Energy Corporation, Ms. Lubel was the lead lawyer on over $18 billion of acquisitions,helping grow the company from a small, regional refiner to one of international scope. Prior to joining Valero Energy Corporation in 1997, Ms. Lubelspecialized in mergers and acquisitions with the law firm of Kelly, Hart & Hallman from 1991 to 1997. Since 2011, she has served as a director of the board ofWPX Energy, Inc. (NYSE:WPX), a publicly traded company focusing on extraction of oil and natural gas. Ms. Lubel was named to Fortune’s 50 MostPowerful Women in 2013 and again in 2015, and was named Retail Leader of the Year by Convenience Store News in 2014. Ms. Lubel holds bachelor’sdegrees in Spanish and in International Studies from Miami University (Ohio), Master of Arts degree in International Relations from Baylor University, andher Juris Doctor degree from the University of Texas School of Law. She is also a 2009 graduate of the Stanford Executive Program.Gene Edwards was appointed as a director of the Board and chairman of the conflicts committee in October 2014. Mr. Edwards served as Executive VicePresident and Chief Development Officer of Valero Energy Corporation (NYSE: VLO) until his retirement in April 2014. Mr. Edwards began his 32-yearcareer with Valero Energy Corporation as an Analyst in Planning & Economics and spent his tenure with Valero Energy Corporation in various managerialpositions, including Planning and Economics, Refinery Operations, Business Development, and Marketing. He was a director of the CST Board from May2013 until December 2013. Mr. Edwards has served as a director of the board of Green Plains Inc. (NASDAQ: GPRE) since June 2014 where he serves as amember of the audit committee and compensation committee. He also serves as a director of the board of PBF Energy Inc. (NYSE: PBF) since July 2014 wherehe serves on the nominating and governance committee. Mr. Edwards holds a bachelor’s degree in Chemical Engineering from Tulane University and aMaster’s degree in Business Administration from the University of Texas at San Antonio.Justin A. Gannon was appointed as a director of the Board and chairman of the audit committee in October 2014. Mr. Gannon has acted as an independentconsultant and private investor since September 2013. From February 2003 through August 2013, Mr. Gannon served in various roles at Grant Thornton LLP,including as National Leader of Merger and Acquisition Development from June 2011 through August 2013, Central Region Managing Partner from January2010 through June 2011, Office Managing Partner in Houston, Texas from August 2007 through June 2011 and Office Managing Partner in Kansas City,Missouri from August 2005 to July 2007. From 1971 through 2002, Mr. Gannon worked at Arthur Andersen LLP. Since December 1, 2014, Mr. Gannon hasserved on the board of directors of California Resources Corporation (NYSE: CRC) where he serves as chair of the audit committee and member of thecompensation committee. He is a former chairman of the board of directors of American Red Cross Chapters in the Tulsa, Oklahoma and San Antonio, Texasareas. Mr. Gannon received a bachelor’s degree in Accounting from Loyola Marymount University and is a Certified Public Accountant licensed inCalifornia (inactive) and Texas.John B. Reilly, III was appointed as a director of the Board in May 2012. Mr. Reilly has also served as the President of City Center Investment Corp sinceMay 2011. Prior to then, he was President of Landmark Communities and Managing Partner of Traditions of America since 1998. Mr. Reilly has thirty yearsof experience in commercial and residential real estate development and planning, finance management and law. Mr. Reilly serves as a trustee of LafayetteCollege and also served as the chairman of the board of trustees for the Lehigh Valley Health Network. He holds a Juris Doctor degree from FordhamUniversity Law School and a bachelor’s degree in economics from Lafayette College. He is a Certified Public Accountant and a member of the PennsylvaniaBar Association.Joseph V. Topper, Jr. served as President and Chief Executive Officer of the General Partner from October 2012 to March 26, 2015. Mr. Topper resigned asPresident effective March 26, 2015 and his term as Chief Executive Officer ended on September 30, 2015. Mr. Topper also served as chairman of the Boardfrom October 28, 2012 through September 30, 2014. Mr. Topper has 26 years of management experience in the wholesale and retail fuel distributionbusiness. In 1987, Mr. Topper purchased his family’s retail fuel business and five years later founded DMI (formerly known as Lehigh Gas Corporation),where he was the Chief Executive Officer since 1992. Mr. Topper currently serves as chairman of the board of trustees for Villanova University and the boardof directors for Lehigh Valley PBS. He served on the CST Board from October 2014 until December 2016. He is the past President of the board of directors forLehigh Valley PBS and the Lehigh Valley PBS Foundation. He also served as a board member for the Good Shepherd Rehabilitation Hospital in Allentown.Mr. Topper holds a Master’s degree of Business Administration from Lehigh University and a bachelor’s degree in Accounting from Villanova University.Mr. Topper is also a Certified Public Accountant.109Jeremy L. Bergeron was appointed President of our General Partner in March 2015 and director of the Board in October 2015. Prior to his current position,Mr. Bergeron served as the Senior Vice President of Integration & Development Operations for CST and he served as Vice President and Treasurer for CSTsince its spin-off from Valero Energy Corporation (NYSE: VLO) in 2013. Mr. Bergeron was with Valero Energy Corporation for 17 years and held severalpositions, including Vice President of Insurance and Corporate Safety Director. He earned a bachelor’s degree of Business Administration in Managementand Information Systems from the University of the Incarnate Word and a Master of Business Administration from the University of Texas at San Antonio. Heis also a 2014 graduate of the Stanford Executive Program.Clayton E. Killinger was appointed as a director of our Board in October 2014. Mr. Killinger has served as our Executive Vice President and Chief FinancialOfficer since March 2015. He also serves as Executive Vice President and Chief Financial Officer of CST. He was appointed Senior Vice President and ChiefFinancial Officer of CST effective January 1, 2013. Previously, he served in various roles at Valero Energy Corporation (NYSE: VLO), including as SeniorVice President and Controller from July 2007 until January 2013 and as Vice President and Controller from January 2003 until July 2007. Prior to joiningValero Energy Corporation in December 2001, Mr. Killinger was a partner with Arthur Andersen LLP, having joined that firm in 1983. In August 2015, Mr.Killinger joined the board of directors of the general partner of GreenPlains Partners LP (NASDAQ: GPP) where he serves as the Chairman of its auditcommittee and is a member of its conflicts committee. Mr. Killinger is a Certified Public Accountant, with a bachelor’s degree of Business Administration inAccounting from the University of Texas at San Antonio, where he graduated summa cum laude.David F. Hrinak was appointed Executive Vice President and Chief Operating Officer of our General Partner in October 2014. Previously, he served asPresident of our General Partner since May 2012. Mr. Hrinak was the President of DMI from September 2010 until May 2012. From 2005 until September2010, Mr. Hrinak served as the Vice President of Wholesale for DMI. Mr. Hrinak has 36 years of experience in the wholesale and retail fuel distributionbusiness. Prior to joining DMI, Mr. Hrinak was the branded wholesale manager at ConocoPhillips.Hamlet T. Newsom, Jr. was appointed Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer of our General Partner in March2015. Mr. Newsom previously served as Vice President, Associate General Counsel and Assistant Secretary of iHeartMedia, Inc., iHeartCommunications, Inc.,iHeartMedia Capital I, LLC and Clear Channel Outdoor Holdings, Inc. from August 2009 until March 2015. Mr. Newsom holds a Juris Doctor degree fromSouthern Methodist University Law School and a bachelor’s degree in History from Duke University.Steven M. Stellato was appointed Vice President and Chief Accounting Officer in June 2015 and, since May 2016, he also served as Vice President andController of CST. From 2009 to 2015, Mr. Stellato served as Vice President and Controller of Energy Transfer Partners, LP (“Energy Transfer”). Prior tojoining Energy Transfer, Mr. Stellato was a Senior Manager at the public accounting firm of KPMG LLP from 2001 to 2009, focusing on clients in the energyindustry. Before joining KPMG LLP, Mr. Stellato held various management positions with a large retail grocery company in South Texas for over 10 years.Mr. Stellato is a Certified Public Accountant and holds a bachelor’s degree in Accounting from the University of Texas at San Antonio.Director IndependenceSection 303A of the NYSE Listed Company Manual provides that limited partnerships are not required to have a majority of independent directors. TheBoard has adopted a policy that the Board has at all times at least three independent directors or such higher number as may be necessary to comply with theapplicable federal securities law requirements. For the purposes of this policy, “independent director” has the meaning set forth in Section 10A(m)(3) of theExchange Act, any applicable stock exchange rules and the rules and regulations promulgated in the Partnership governance guidelines available on itswebsite www.crossamericapartners.com. The Board has determined that Messrs. Edwards, Gannon and Reilly meet the requirements for independence underthe applicable rules and regulations of the SEC and NYSE.Composition of the BoardThe Board consists of seven members. The Board holds regular and special meetings at any time as may be necessary. Regular meetings may be held withoutnotice on dates set by the Board from time to time. Special meetings of the Board or meetings of any committee thereof may be held at the request of theChairman of the Board or a majority of the Board (or a majority of the members of such committee) upon at least two days (if the meeting is to be held inperson) or 24 hours (if the meeting is to be held telephonically) prior oral or written notice to the other members of the Board or committee or upon suchshorter notice as may be approved by the directors or members of such committee. A quorum for a regular or special meeting will exist when a majority of themembers are participating in the meeting either in person or by telephone conference. Any action required or permitted to be taken at a meeting of the Boardor at any committee may be taken without a meeting if such action is evidenced in writing and signed by a majority of the members of the Board.110Committees of the BoardThe Board has an audit committee and a conflicts committee. The charter for each of the committees can be found in its entirety on the Partnership’s websiteat www.crossamericapartners.com under the “Corporate Governance” tab in the “Investors” section. As a limited partnership, we are not required by NYSErules to have a compensation committee or a nominating and corporate governance committee. The Board held seven meetings in 2016, and each directorattended 100% of the Board and respective committee meetings while she or he was a director.Audit CommitteeEffective October 1, 2014, Justin A. Gannon, Gene Edwards and John B. Reilly, III were appointed as members of the audit committee of the Board.Mr. Gannon is the chair of the audit committee. The audit committee is comprised entirely of directors who meet the financial literacy standards of the NYSEand the Exchange Act. The rules and regulations established by the NYSE and the Exchange Act also generally require that our audit committee consistentirely of independent directors. The Board has determined that Messrs. Edwards, Gannon and Reilly meet the independence standards required of auditcommittee members by the NYSE and the Exchange Act. The Board has determined that Messrs. Edwards, Gannon and Reilly meet the financial literacystandards of directors who serve on the audit committee, and Mr. Gannon is an “audit committee financial expert” as defined by SEC rules. The auditcommittee assists the Board in its oversight of the integrity of our financial statements and our compliance with legal and regulatory requirements,Partnership policies and controls, the independent auditor’s qualifications and independence, the performance of the Partnership’s internal audit function andrisk assessment and risk management. The audit committee has sole authority with respect to the appointment, retention, compensation, evaluation, oversightof the work and termination of our independent auditors and has the authority to obtain advice and assistance from outside legal, accounting or otheradvisors as the audit committee deems necessary to carry out its duties and receives appropriate funding, as determined by the audit committee, from thePartnership for such advice and assistance. The audit committee held four meetings during 2016.Conflicts CommitteeEffective October 1, 2014, Gene Edwards, Justin A. Gannon and John B. Reilly, III were appointed as members of the conflicts committee. Mr. Edwards is thechair of the conflicts committee. Pursuant to our Partnership Agreement, the members of the conflicts committee may not be officers or employees of ourGeneral Partner or directors, officers or employees of its affiliates, must not be holders of any ownership interest in the General Partner or any of its affiliates,other than Partnership units, that is determined by the Board of Directors, after reasonable inquiry, to be likely to have an adverse impact on the ability ofsuch director to fulfill his or her obligations as a member of the Conflicts Committee, and must meet the independence standards established by the NYSEand the Exchange Act to serve on an audit committee of a board of directors. The Board has determined that Messrs. Edwards, Gannon and Reilly qualify toserve on the conflicts committee. The conflicts committee is responsible for reviewing specific matters that the Board believes may involve conflicts ofinterest between the General Partner and its affiliates and the Partnership. The conflicts committee determines if the resolution of such conflict is fair andreasonable to the Partnership. The conflicts committee held five meetings during 2016.Meeting of Independent Directors and Communications with DirectorsAt most of the scheduled meetings of the audit committee and conflicts committee of the Board, all of our independent directors met in an executive sessionof independent directors without participation by management. The chairman of each of the committees presides over each executive session of theindependent directors. Any independent director may request that additional executive sessions of the independent directors be held, and the presidingindependent director for the previous session will determine whether to call any such meeting.Unitholders or interested parties may communicate directly with the Board, any committee of the Board, any independent director, or any one director, bysending written correspondence by mail addressed to the Board, committee or director to the attention of our Corporate Secretary at the following address:c/o Corporate Secretary, CrossAmerica Partners LP, 19500 Bulverde Road, Suite 100, San Antonio, Texas 78259. Communications are distributed to theBoard, committee of the Board, or director, as appropriate, depending on the facts and circumstances outlined in the communication. Commercialsolicitations or communications will not be forwarded.Meetings of UnitholdersOur Partnership Agreement provides that the General Partner manages and operates us and that, unlike holders of common stock in a corporation, unitholdersonly have limited voting rights on matters affecting our business or governance as set forth in our Partnership Agreement. Accordingly, we do not holdannual meetings of unitholders.111Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires members of the Board and executive officers, and beneficial owners of more than 10% of a class of our equitysecurities registered pursuant to Section 12 of the Exchange Act (collectively, the “Reporting Persons”), to file reports of beneficial ownership and reports ofchanges in beneficial ownership of such securities with the SEC. Reporting Persons are required by SEC regulations to furnish to us copies of allSection 16(a) forms filed with the SEC.SEC regulations require us to identify in this Form 10-K anyone who filed a required report late during the most recent fiscal year. Based on our review offorms we received, or written representations from Reporting Persons stating that they were not required to file these forms, we believe that during 2016 allSection 16(a) filing requirements were satisfied on a timely basis.Code of Ethics and Business ConductThe Board has adopted a Code of Ethics and Business Conduct that applies to directors of the General Partner and our executive officers. Our General Partneralso expects all employees of CST providing services to or for the benefit of the Partnership and its operating subsidiaries to adhere to the Code of Ethics andBusiness Conduct. Amendments to or waivers from the Code of Ethics and Business Conduct can be found on CrossAmerica Partners’ website at www.crossamericapartners.com under the “Corporate Governance” tab in the “Investors” section. The Board has also adopted Corporate GovernanceGuidelines that outline important policies and practices regarding our governance, which can also be found in its entirety on CrossAmerica Partners’ websiteat www.crossamericapartners.com under the “Corporate Governance” tab in the “Investors” section. Requests for print copies of the Code of Ethics andBusiness Conduct and/or the Corporate Governance Guidelines may be directed to Investor Relations at info@crossamericapartners.com or to InvestorRelations, CrossAmerica Partners LP, 515 Hamilton Street, Suite 200, Allentown, PA 18101 or made by telephone at (610) 625-8005. The informationcontained on, or connected to, our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered part of this orany other report that we file with or furnish to the SEC.Reimbursement of Expenses of Our General PartnerExcept as otherwise set forth in our Amended Omnibus Agreement, our Partnership Agreement requires us to reimburse our General Partner for all direct andindirect expenses it incurs or payments it makes on our behalf and all other expenses reasonably allocable to us or otherwise incurred by our General Partnerin connection with operating our business. The Partnership Agreement does not limit the amount of expenses for which our General Partner and its affiliatesmay be reimbursed. These expenses include (without limitation) salary, bonus, incentive compensation and other amounts paid to persons who performservices for us or on our behalf and expenses allocated to our General Partner by its affiliates. Our General Partner is entitled to determine in good faith theexpenses that are allocable to us. Please read “Item 13. Certain Relationships and Related Party Transactions and Director Independence -AmendedOmnibus Agreement.”ITEM 11. EXECUTIVE COMPENSATIONCOMPENSATION DISCUSSION AND ANALYSISOverviewWe do not directly employ or compensate any of our executive officers, including our named executive officers (“NEOs”), or other personnel who provideservices necessary for managing our business. Our General Partner also does not directly employ any of its executive officers or other personnel. For the fiscalyear ending December 31, 2016, all executive officers, including our NEOs, and other personnel who provide services to or on behalf of the Partnership areemployees of and compensated directly by an affiliate of CST. Under our Partnership Agreement, the General Partner manages our operations and activitieson our behalf.As described elsewhere in this Form 10-K, pursuant to the terms of the Amended Omnibus Agreement, an affiliate of CST provides services to us and we payCST a management fee, which in 2016 was $856,000 per month plus a variable fee of between zero for the first 500 million gallons, $0.003 for the next 500million gallons and $0.0020 for all gallons above one million for wholesale fuel distribution and $0.015 per gallon for retail fuel distribution at sites weoperate. At the end of each calendar year, we and CST have the right to negotiate a reduction or increase to the amounts due under the Amended OmnibusAgreement for such year. CST and we also have the right to negotiate the amount of the annual management fee as circumstances require. In addition, thePartnership is required to reimburse CST for certain outsourced services to be provided by CST to or on behalf of the Partnership under the AmendedOmnibus Agreement. The management fee, which is approved by the conflicts committee of the Board, covers the cash compensation for the servicesprovided by our NEOs to us.112As the Partnership is supported by employees of an affiliate of CST, the Compensation Committee of the CST Board (the “CST Compensation Committee”)has ultimate decision-making authority with respect to the total compensation of our NEOs. All or a portion of such compensation may be allocated forreimbursement under the Amended Omnibus Agreement.Named Executive OfficersFor the fiscal year ended December 31, 2016, our NEOs were:•Jeremy L. Bergeron, President•Clayton E. Killinger, Executive Vice President and Chief Financial Officer•David F. Hrinak, Executive Vice President and Chief Operating Officer•Hamlet T. Newsom, Jr., Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer •Steven M. Stellato, Vice President and Chief Accounting OfficerExcept for the management fee we pay to CST under the Amended Omnibus Agreement, we do not otherwise pay or reimburse any compensation amounts toor for our NEOs and except with respect to awards that may be granted by CST and/or the Partnership under their respective Plans, which are discussed inmore detail below under the section “Elements of Executive Compensation-Long-Term Incentive Compensation: Equity Awards.”Compensation Objectives and PhilosophyThe CST Compensation Committee determines the compensation of executive officers of CST and certain designated employees of the Partnership, whichincludes our NEOs.The compensation philosophy for our NEOs has been driven by the need to recruit, motivate and retain top talent both in the short-term and long-term. Thesame compensation philosophy has been applied to all levels of managerial employees. The CST Compensation Committee also considers other factors,which included internal pay equity and consistency and the NEO’s job responsibilities, management experience, individual contributions, number of years inhis or her position and recent compensation adjustments, as well as other relevant considerations (with no particular weighting assigned to any of thesefactors). Our emphasis on variable or “at risk” components of incentive pay results in actual compensation based on the achievement of the objectivesestablished in our annual and long-term incentive plans. While the CST Compensation Committee believes that each compensation component should beconsidered separately and that payments or awards derived from one component should not negate or reduce payments or awards derived from othercomponents, the components are considered within the context of each executive’s total compensation.Elements of Executive CompensationThe core elements of the executive compensation program are base salary, short-term incentives (in the form of annual performance-based cash incentives)and long-term incentives (in the form of performance and time-vested equity awards). The CST Compensation Committee has adopted guidelines forallocating compensation among base salary, short-term incentive compensation and long-term incentive compensation, between cash and non-cashcompensation, and among different forms of non-cash compensation, as shown in the table below. CST’s executive compensation program is evaluated on anongoing basis and is adapted, as necessary, to ensure continued alignment between long-term company performance and executive compensation.The compensation for our NEOs reflected in the 2016 Summary Compensation Table was paid by CST, some or all of which was allocated to us under theAmended Omnibus Agreement as discussed below.113Elements of Executive CompensationType of Payment/BenefitPurposeBase salaryFixed cash payments with each executivegenerally eligible for annual increaseTo attract and retain qualified executivesShort-term incentive compensationVariable annual cash payment tied to keyperformance metrics and targets, and individualperformance assessmentsTo motivate and reward performance of keybusiness and financial metrics to deliverreturns to Partnership unitholders and CSTshareholdersLong-term incentive compensationCST RSUs, CST Stock Options and CST MSUsTo align long-term interests of NEOs withthose of the Partnership’s unitholders and CSTshareholdersBase SalaryThe CST Compensation Committee approved the following salary increases for our NEOs for the 2016 fiscal year:Name2015 AnnualBase Salary 2016 AnnualBase Salary % IncreaseJeremy L. Bergeron$375,000 $385,000 2.7%Clayton E. Killinger$640,500 $656,500 2.5%David F. Hrinak$363,868 $371,300 2.0%Hamlet T. Newsom$310,000 $318,000 2.6%Steven M. Stellato$275,000 $279,400 1.6%Short-Term Incentive Compensation: Annual Performance-Based Cash IncentiveThe short-term incentive program is one of the key components of the “at-risk” compensation offered to our executives. An annual performance-based cashincentive program is utilized to reward short-term performance achievements. Such incentives are also intended to motivate and reward executives for theircontributions toward meeting financial and strategic goals. In March 2016, the CST Board, based on the recommendation of the CST CompensationCommittee, approved performance metrics for the 2016 short-term incentive plan. In determining the goals and weighting of the 2016 performance metricsfor the 2016 short-term incentive plan, the CST Compensation Committee first set quantitative performance goals that encouraged executive officers to focuson priorities that are directly tied to the Partnership’s and CST’s financial results or operational performance.114The short-term incentive program was composed of the following performance metrics for the fiscal year ended December 31, 2016:2016 Performance Metrics% WeightWhy Performance Metric Is UsedPayout RangeCST Brands Total Non-Fuel GrossMargin Dollars50%Total Non-Fuel Gross Margin represents the total non-fuel gross profitdollars for the CST retail stores. A major strategic goal for CST is to increasethe contribution of non-fuel margins to 70% of overall gross profit,including food and merchandise, by enhancing offerings of made to orderfood, proprietary food and private label programs and an expandedselection of store merchandise, including food, beverage and snackcategories. We believe this performance metric aligns the short-termincentive objectives with the long-term strategies of CST by (i) improvinginside store profitability levels and increasing the number of customers thatvisit the CST network, and (ii) promoting merchandise gross profit growththrough the pursuit of quality convenience store acquisitions thatcontribute to the core asset base, and organic new store growth.0 - 200%Consolidated EBITDA (CST and thePartnership)25%This metric measures the EBITDA for both the Partnership and CST on aconsolidated basis, which is a reflection of how well the Partnership andCST are performing overall against the established goals, representing aholistic view of the Partnership’s and CST’s strategies.0 - 200%CrossAmerica Partners Distributionsper Unit (pro-forma coverage ratio >1.0)25%The Partnership’s distributions per common unit represent the amount ofcash distributed to our common unitholders, including CST. We believethis performance metric aligns the growth of cash distribution year overyear with the long-term strategy of both the Partnership and CST. CST owns100% of the IDRs and receives distributions from us under these IDRs aswell as distributions as a result of CST’s ownership of common units in thePartnership.0 - 200%As determined by the CST Compensation Committee, each of these performance metrics has a threshold, target and maximum level for the performance year.The maximum incentive award payable to our executive officers under the short-term incentive program for the fiscal year ended December 31, 2016, basedon the performance metrics described above, is 200% of their respective incentive award targets. NEOs were required in 2016 to complete the CST TimeProgram, which requires our executive officers to perform five 6-hour shifts at CST retail sites or CrossAmerica operations, was a requirement in 2016 to beeligible to participate in the 2016 short-term incentive plan.115Below is a table that explains the short-term incentive award targets, achievement factor and the short-term incentive approved and paid in 2016 forexecutive officers:Name and Principal Position2016 Base SalaryTarget Short-TermIncentive as a % of BaseSalaryShort-TermIncentive PotentialTarget at 100%2016 Short-TermIncentive PaymentApproved (1)Jeremy L. BergeronPresident$385,00065%$250,250$225,225Clayton E. Killinger Executive Vice President and ChiefFinancial Officer$656,50075%$492,375$443,138David F. Hrinak Executive Vice President and ChiefOperating Officer$371,30060%$222,780$200,502Hamlet T. Newsom, Jr. Vice President, General Counsel,Corporate Secretary and ChiefCompliance Officer$318,00050%$159,000$143,100Steven M. Stellato Vice President and Chief AccountingOfficer$279,40050%$139,700$125,730(1)The amounts in this column represent the approved values by the CST Compensation Committee for the total cash payout earned under the CST short-term incentive plan forthe 2016 fiscal year, which were calculated using CST’s achievement factor of 90% for our NEOs.Long-Term Incentive Compensation: Equity AwardsThe long-term incentive program is another key component of “at-risk” compensation and is intended to reward longer-term performance and growth. Long-term incentive awards are granted each year in conjunction with the review of other elements of total compensation. Individual determinations of awardtargets are made based on additional factors such as each executive officer’s experience and contribution to the Partnership’s and CST’s success and internalpay equity.Grants of CST Equity AwardsIn 2016, our NEOs received grants under the CST Brands, Inc. 2013 Amended and Restated Omnibus Stock and Incentive Plan in the form of CST RSUs,options to purchase CST common stock (“CST Stock Options”) and CST Market Share Units (“CST MSUs”). CST Stock Options and CST RSUs generallyvest in equal annual installments over a period of three years from the date of grant, and CST MSUs vest 100% three years from the date of grant. Each CSTMSU represents a contingent right at vesting to receive one share of CST’s common stock based on CST’s stock price performance over a three-yearperformance period. The target CST MSU award is set at 120% of the Beginning Stock Price, as defined in the award agreement. The CST MSUs cliff vestthree years from the date of grant and the target award will be earned if the Ending Stock Price, as defined in the award agreement, is 120% of the BeginningStock Price at the end of the three-year performance period. The number of CST MSU awards earned can increase up to 175% of the target award if the EndingStock Price is 175% or greater than the Beginning Stock Price. A threshold 50% of target award is earned if the Ending Stock Price is 67% of the BeginningStock Price, with awards forfeited entirely if stock price performance is below this level. The number of MSUs earned based on the CST’s stock performancewill be further adjusted up to plus/minus 20% based on the 2018 cash flow return on capital employed (“ROCE”) performance of New-to-Industry Stores builtin 2014 and 2015. The performance range for the modifier is 12%-18% ROCE for the year 2018, with earned CST MSUs adjusted -20% if ROCE is below therange and earned CST MSUs adjusted up to +20% if ROCE is above the range, with straight-line interpolation in between. The maximum number of CSTMSUs earned cannot exceed 200% of the target award.Effect of the Merger - Treatment of CST Equity AwardsCST Stock Options. At the completion of the Merger, each CST Stock Option that is outstanding immediately prior to the completion of the Merger, whethervested or unvested, will become fully vested and be converted into the right to receive a cash payment equal to the product of (1) the number of shares ofCST common stock subject to such CST Stock Option as of the completion of the Merger and (2) the excess of the merger consideration over the exerciseprice.CST Restricted Shares. At the completion of the Merger, each CST restricted share that is outstanding immediately prior to the completion of the Merger,whether vested or unvested, will become fully vested and will be converted into the right to receive a116cash payment equal to the product of (1) the number of shares of CST common stock as of the completion of the Merger and (2) the merger consideration.CST RSUs. At the completion of the Merger, each award of CST RSUs that is outstanding immediately prior to the completion of the Merger, whether vestedor unvested, will become fully vested and be converted into the right to receive a cash payment equal to the product of (1) the number of shares of CSTcommon stock subject to such award as of the completion of the Merger and (2) the merger consideration.For purposes of unvested CST MSUs, which are CST RSUs that vest based on performance goals related to the price of CST common stock, in accordancewith the award agreements, performance goals will be deemed satisfied based on the merger consideration.Grants of CrossAmerica Equity AwardsOur General Partner previously adopted the Plan for employees, officers, consultants and directors of our General Partner and its affiliates who performservices for us. The Plan provides for the grant of restricted units, unit options, performance awards, phantom units, unit awards, unit appreciation rights,distribution equivalent rights and other unit-based awards. In 2016, no CrossAmerica equity awards were granted to executive officers. Only non-employeedirectors of the Board received CrossAmerica equity award grants in the form of phantom units for their service on the Board.Phantom UnitsA phantom unit represents a notional common unit granted under the Plan, which, upon vesting, entitles the holder of the phantom units to receive either acommon unit or an amount of cash equal to the fair market value of a common unit at the time of vesting. All or a portion of the phantom units may be settledin common units or cash at the discretion of the Board. Phantom unit awards issued in April 2015 or thereafter are accompanied by tandem distributionequivalent rights that entitle the holder to cash payments equal to the amount of distribution authorized to be paid to the holder of common units. Prior toApril 2015, phantom unit awards were issued without distribution equivalent rights.Profits InterestsProfits interests are represented by Class B Units in our wholly owned subsidiary, LGP Operations, and are designed to constitute “profits interests” within themeaning of the Internal Revenue Code, and published Internal Revenue Service guidance. Class B Units generally will not be taxed at the time of grant,though the holder will be required to report on his/her income tax return his/her allocable share of LGP Operations’ income, gain, loss, deduction and credit,regardless of whether LGP Operations makes a distribution of cash. Instead, such units are generally taxed upon at disposition of the unit or upon the receiptof distributions of money to the extent that such amounts received exceed the holder’s tax basis in the units. Generally, no deduction is available to thePartnership or LGP Operations upon the grant, vesting or disposition of the Class B Units. The profits interests are subject to vesting schedules determined bythe Board. Holders of vested Class B Units are entitled to receive distributions from LGP Operations generally on the same terms as our unitholders. VestedClass B Units are redeemable for cash or our common units at the discretion of the Board, beginning on the second anniversary of the grant date at aconversion ratio of not greater than 1:1. In February 2016, the Board approved the redemption of 31,027 profits interests for our common units forparticipants who elected to redeem their awards after two years from the date of grant.Other BenefitsOur NEOs are eligible to participate in the CST Brands Savings Plan, which consists of two components (i) a qualified “Safe Harbor” 401(k) retirement plan,and (ii) a discretionary profit sharing plan. All contributions made under CST’s 401(k) plan are 100% vested at all times. In 2016, CST suspended thediscretionary profit-sharing plan, which offered a contribution to employee who met eligibility.Our NEOs are also eligible to participate in the CST Brands Excess Savings Plan (the “Excess Savings Plan”), which is a non-qualified deferred compensationprogram that provides benefits to CST employees whose annual contributions to CST Brands Savings Plan are subject to regulatory limitations. All balancesunder the Excess Savings Plan are maintained in the books and records of CST and earnings are credited to a participant’s accumulated savings accountunder the plan in an amount equal to the prime rate as quoted in the Wall Street Journal on January 1 of the then current year, plus 1%. As with the CSTBrands Savings Plan, participants are 100% vested at all times in any CST contributions credited to their Excess Savings Plan accounts.In addition, effective January 1, 2016, all eligible employees, including our NEOs, were able to participate in the CST Employee Stock Purchase Plan(“ESPP”), in which participants in the ESPP elected to purchase shares of CST’s common stock in up to two series of offerings conducted pursuant to theprocedures set forth in the ESPP at a purchase price that was 85% of the fair market117value of one share of CST’s common stock on the first or last trading day of the offering period. Pursuant to the Merger Agreement, there will be no ESPPoffering periods in 2017.Effective January 1, 2016, certain employees, including our NEOs, were eligible to participate in the CST Nonqualified Deferred Compensation Plan (the“NQDC”) pursuant to which NEOs were allowed the opportunity to defer up to 75% of their base salary, up to 100% of their annual bonus and up to 100% oftheir annual grant of CST RSUs for that calendar year. Pursuant to the Merger Agreement, the CST Compensation Committee approved the termination of theNQDC upon closing of the Merger. All deferrals of base salary and excess savings plan accounts are 100% vested and vesting of deferrals of other bonus orequity awards is determined in accordance with the terms of the applicable awards.Our NEOs also receive the same benefits as those generally available to other employees of CST. Both CST subsidized and voluntary benefit programs areprovided and include medical, dental, vision, life insurance and disability coverage.Other Compensation Policies and PracticesInsider Trading PolicyWe maintain an insider trading policy (the “Insider Trading Policy”) that governs trading in our units by directors of the Board and executive officers of theGeneral Partner and CST, as well as certain other employees who may have regular access to material non-public information about us. These policies includepre-clearance requirements for all trades and periodic trading “black-out” periods designed with reference to our quarterly financial reporting schedule.Restrictions on Hedging, Pledging and Other TransactionsOur Insider Trading Policy prohibits (a) speculative transactions such as short sales, puts, calls or other similar derivative transactions, hedging ormonetization transactions with respect to the Partnership securities; (b) holding securities of the Partnership in a margin account; and (c) pledging Partnershipsecurities as collateral for loans. Transactions that are otherwise prohibited by our Insider Trading Policy may be approved by the General Counsel of theGeneral Partner, as the compliance officer of our Insider Trading Policy. Compliance with these policies is monitored by the Board. A copy of our InsiderTrading Policy is available in its entirety on the CrossAmerica Partners’ website at www.crossamericapartners.com under the “Corporate Governance” tab inthe “Investors” section.Clawback PolicyWe have adopted a “clawback” policy that applies to any bonuses and other incentive and equity compensation awarded to our executive officers. Thispolicy provides that, in the event of a material restatement of the Partnership’s financial results due to material noncompliance with certain financialreporting requirements, the Board, or the appropriate committee of the Board, will review all such incentive compensation and, if such incentivecompensation would have been lower had it been calculated based on the restated results, the Board, or the appropriate committee of the Board, will (to theextent permitted by law and as appropriate under the circumstances) use reasonable efforts to seek to recover for the benefit of the Partnership all or a portionof such incentive compensation, subject to a three-year look-back period. In July 2015, the SEC proposed new Rule 10D-1 under the Exchange Act toimplement the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2012, or the Dodd-Frank Act, which requiresthe SEC to adopt rules relating to the disclosure of a company’s compensation recovery, or “clawback,” policies in connection with an accountingrestatement. Once the SEC issues final rules regarding clawback policies, we intend to review and, if necessary, amend our policy to comply with such rules.Impact of Regulatory RequirementsWe are a limited partnership and not a corporation for U.S. federal income tax purposes. Therefore, we believe that the compensation paid to the NEOs is notsubject to the deduction limitations under Section 162(m) of the Internal Revenue Code and therefore is generally fully deductible for U.S. federal incometax purposes.Non-Qualified Deferred Compensation. Certain payments under the Partnership’s Executive Income Continuity Plan (the “EICP”) may be subject to the taxrules applicable to non-qualified deferred compensation arrangements of the American Jobs Creation Act of 2004. We believe we are in compliance with suchstatutory provisions.Accounting for Stock-Based Compensation. We account for stock-based compensation in accordance with the requirements of FASB ASC Topic 718 for allof our stock-based compensation plans. See Note 18 of the notes to our consolidated financial statements included in this Annual Report on Form 10-K forthe year ended December 31, 2016, for a discussion of all assumptions made in the calculation of this amount.118Risk AssessmentThe CST Compensation Committee oversees the risk assessment of the compensation programs, policies and practices for all employees. A discussion of thisrisk assessment is included in CST’s Compensation Discussion and Analysis in Part III of CST’s Form 10-K for the year ended December 31, 2016, which isavailable on the SEC’s website at www.sec.gov.Compensation Committee Report*The members of the Board have reviewed and discussed the Compensation Discussion and Analysis included in this Annual Report on Form 10-K withmanagement and, based on such review and discussions and such other matters the Board deemed relevant and appropriate, the Board has approved theinclusion of the Compensation Discussion and Analysis in this Annual Report on Form 10-K.Members of the Board:Kimberly S. LubelJeremy L. BergeronGene EdwardsJustin A. GannonClayton E. KillingerJohn B. Reilly, IIIJoseph V. Topper, Jr.*As a publicly traded limited partnership, we are not required to and do not have a compensation committee. Accordingly, the Compensation CommitteeReport required by Item 407(e)(5) of Regulation S-K is given by the Board as specified by Item 407(e)(5)(i) of Regulation S-K.The foregoing compensation committee report is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference intoany of the Partnership’s filings under the Securities Act, or the Exchange Act, respectively, whether made before or after the date of this annual report on Form10-K and irrespective of any general incorporation language therein.119Compensation Decisions for 20172017 Short-Term Incentive Plan for our NEOsThe CST Compensation Committee recently approved two sets of performance metrics for the 2017 short-term incentive plan, one set to be used if the closingof the Merger occurs in 2017, and one set to be used if the closing of the Merger does not occur in 2017. If the Merger closes in 2017, the first set ofperformance metrics for the four months ending April 30, 2017 include (i) 50% weighting of CST’s actual non-fuel gross margin dollars compared to budgetfor the period ending April 30, 2017; and (ii) 50% weighting of CST and the Partnership’s actual consolidated EBITDA compared to CST’s budget for theperiod ending April 30, 2017 (the “2017 STIP Merger Scenario”).If the Merger does not close in 2017, the second set of performance metrics for the year ending December 31, 2017 are (i) 50% weighting of CST’s actual non-fuel gross margin dollars compared to CST’s budget for the 2017 fiscal year; (ii) 25% weighting of CST and the Partnership’s actual consolidated EBITDAcompared to budget for the 2017 fiscal year; and (iii) 25% weighting of the increase in CrossAmerica’s distribution per unit for the 2017 fiscal year (“2017STIP No Merger Scenario”). Participation in the CST Time Program by our NEOs is a requirement that must be met to be eligible to participate in the 2017STIP No Merger Scenario.Short-Term Incentive Plan for our NEOs 2016 Base Salary2016 STI PlanTarget as a %of Base Salary2017 Base Salary2017 STI Plan Target as a % of Base SalaryJeremy L. Bergeron$385,00065%$396,50065%Clayton E. Killinger$656,50075%$656,50075%David F. Hrinak$371,30060%$380,60060%Hamlet T. Newsom, Jr.$318,00050%$327,50050%Steven M. Stellato$279,40050%$285,00050%2017 STIP Merger ScenarioThe following table describes each performance metric, the percentage of the aggregate short-term incentive attributable to each performance metric and thereason for its inclusion in the 2017 STIP Merger Scenario in case that the Merger closes in 2017:2017 Performance Metrics% WeightWhy Performance Metric Is UsedPayout RangeCST Brands Total Non-Fuel GrossMargin versus budget for the periodending April 30, 201750%Total Non-Fuel Gross Margin represents the total non-fuel gross profitdollars for the CST retail stores. A major strategic goal for CST is toincrease the contribution of non-fuel margins to 70% of overall grossprofit, including food and merchandise, by enhancing offerings of made toorder food, proprietary food and private label programs and an expandedselection of store merchandise, including food, beverage and snackcategories. We believe this performance metric aligns the short-termincentive objectives with the long-term strategies of CST by (i) improvinginside store profitability levels and increasing the number of customersthat visit the CST network, and (ii) promoting merchandise gross profitgrowth through the pursuit of quality convenience store acquisitions thatcontribute to the core asset base, and organic new store growth.0 - 200%Consolidated Earnings BeforeInterest, Taxes, Depreciation andAmortization (EBITDA) versus budgetfor the period ending April 30, 201750%This metric measures the EBITDA for both the Partnership and CST on aconsolidated basis, which is a reflection of how well the Partnership andCST are performing overall against the established goals, representing aholistic view of the Partnership’s and CST’s strategies. This performancemetric is a key driver of unitholder return over time.0 - 200%1202017 STIP No Merger ScenarioThe following table describes each performance metric, the percentage of the aggregate short-term incentive attributable to each performance metric and thereason for its inclusion in the 2017 STIP No Merger Scenario in case that the Merger does not close in 2017:2017 Performance Metrics% WeightWhy Performance Metric Is UsedPayout RangeCST Brands Total Non-Fuel GrossMargin versus budget for the yearending December 31, 201750%Total Non-Fuel Gross Margin represents the total non-fuel gross profitdollars for the CST Brands retail stores. A major strategic goal of CST is toincrease its non-fuel margins to 70% of overall gross profit, including foodand merchandise, by enhancing our offerings of made to order food,proprietary food and private label programs and an expanded selection ofstore merchandise, including food, beverage and snack categories. Webelieve this performance metric aligns the short-term incentive objectiveswith the long-term strategies of CST by (i) improving our inside storeprofitability levels and increasing the number of customers that visit ourstores, and (ii) promoting merchandise gross profit growth through thepursuit of quality convenience store acquisitions that contribute to thecore asset base, and organic new store growth.0 - 200%Consolidated Earnings BeforeInterest, Taxes, Depreciation andAmortization (EBITDA) versus budgetfor the year ending December 31,201725%This metric measures the EBITDA for both CST and CrossAmerica PartnersLP on a consolidated basis, which is a reflection of how well CST isperforming overall against its established goals, representing a holisticview of the CST’s strategies. This performance metric is a key driver ofunitholder return over time.0 - 200%CrossAmerica Partners LPDistributions per Unit (with aminimum pro-forma coverage ratio of1.0) for the year ending December 31,201725%The Partnership’s distributions per common unit represent the amount ofcash distributed to our common unitholders, including CST. We believethis performance metric aligns the growth of cash distribution year overyear with the long-term strategy of both the Partnership and CST. CSTowns 100% of the IDRs and receives distributions from us under theseIDRs as well as distributions as a result of CST’s ownership of commonunits in the Partnership.0 - 200%Merger Related DecisionsThe Merger Agreement provides that, during the period from August 21, 2016 until the earlier of the termination of the Merger Agreement or theconsummation of the Merger, CST will conduct its business in the ordinary course of business consistent with past practice, and CST will use all reasonableefforts to keep available the services of key employees of CST, including our NEOs. Among the reasonable efforts consistent with past practice included inthe Merger Agreement are merit raises and increases in compensation our NEOs, payment of the 2016 short-term incentive plan, establishment of the 2017short-term incentive plan, granting of time-based RSUs under the 2017 long-term incentive plan (only if the Merger does not close by February 15, 2017),and engagement of third-party experts to perform analysis and provide recommendations regarding Section 280G and Section 4999 of the Code to mitigateany issues resulting from application of Section 280G and Section 4999 of the Code in order to avoid the loss of the Company's income tax deduction withrespect to any excess parachute payments, as well as to maximize the net after-tax proceeds received by any individual subject to these sections.2017 NEO Long-Term Incentive PlanFor 2017, the CST Compensation Committee approved the grant of equity awards in the form of CST RSUs for our NEOs, which will vest in equal annualinstallments over a period of three years from the date of grant. At the completion of the Merger, each 2017 award of CST RSUs will be converted into theright to receive a cash payment equal to the product of (x) the number of shares of CST common stock subject to such award as of the completion of theMerger and (y) the merger consideration, but such award will remain subject to the same vesting terms and payment schedule as those set forth in the originalRSU award agreement; provided that, upon completion of the Merger, such award will vest in full upon an involuntary termination of employment withoutcause, or termination for “Good Reason”, or termination due to death, “Disability” or “Retirement.”121Summary Compensation TableThe following table sets forth certain information with respect to compensation of our NEOs. Except for the management fee we paid to CST under theAmended Omnibus Agreement, we did not pay or reimburse any cash compensation amounts to or for our NEOs in 2016.Name and Principal PositionYearSalary ($)Bonus ($)Stock Awards ($)(1)(2)Options Awards ($)(1)(3)Non-Equity IncentivePlan Compensation($)(4)Change in PensionValue and Non-qualified DeferredCompensationEarnings ($)(5)(6)All OtherCompensation ($)(7)Total ($)Jeremy L. Bergeron President2016385,00021,600449,235224,595225,2255,27914,5171,325,4512015359,29621,600248,082175,219224,2503,98674,8411,107,274 Clayton E. Killinger Executive VicePresident and ChiefFinancial Officer of CSTand CrossAmerica2016656,500—962,955481,442443,13817,36813,7602,575,1632015654,981—488,041732,015438,75016,48917,6172,347,893 David F. HrinakExecutive VicePresident, ChiefOperations Officer2016371,30050,000259,968129,966200,5024,25213,6481,029,6362015361,11850,000491,003211,408196,500—2,4211,312,4502014309,808—258,444———26,231594,483 Hamlet T. Newsom,Jr.(8)Vice President, GeneralCounsel, CorporateSecretary and ChiefCompliance Officer2016318,000—137,85468,915143,1002,12011,307681,2962015236,301—88,554132,714117,750—9,925585,244 Steven M. Stellato(8)Vice President, ChiefAccounting Officer2016279,400—121,11660,554125,73057610,994598,3702015156,737—28,02542,00273,500—6,269306,533 (1)The amounts shown represent the grant date fair value of awards for each of the fiscal years shown computed in accordance with Financial Accounting Standards BoardAccounting Standards Codification Topic 718, Compensation-Stock Compensation. See Note 18 of the notes of the consolidated financial statements included in CST'sAnnual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC for a discussion of all assumptions made in the calculation of this amount.(2)See the Grants of Plan-Based Awards table for more information regarding CST RSUs and CST MSUs awarded in 2016.(3)For information about valuation assumptions for CST Stock Option awarded in 2016, refer to the footnotes in the Grants of Plan-Based Awards table.(4)The amounts in this column represent cash payment earned under the 2014, 2015 and 2016 short-term incentive programs.(5)The amounts in this column represent the change in value in the Excess Savings Plan for fiscal years 2014, 2015 and 2016. See the Non-Qualified Deferred Compensationtable for additional information for 2016.(6)The Company does not sponsor any pension benefit plans and none of our NEOs contribute to such a plan.(7)The amounts listed as “All Other Compensation” for 2016 are composed of these items:122All Other CompensationBergeron Killinger Hrinak Newsom StellatoCST Savings Plan Company Matching Contribution10,600 10,600 10,600 10,600 10,600Premiums for personal liability insurance3,917 3,160 3,048 707 394Total All Other Compensation14,517 13,760 13,648 11,307 10,994(8)Mr. Newsom was appointed to his position with our General Partner in March 2015. Mr. Stellato was appointed to his position with our General Partner in June 2015.Bergeron Executive Retention AgreementIn September 2015, CST entered into an executive retention agreement with Mr. Bergeron (as amended in 2016 to include a change in control provision) inconnection with his appointment as our President, including relocation assistance and an annual retention bonus of $21,600, as long as Mr. Bergeron residesin Allentown, PA as a CST employee.Hrinak Executive Retention AgreementIn April 2015, CST entered into an executive retention agreement with Mr. Hrinak that included (i) an award of CST RSUs in the amount of $350,000 ofwhich two installments vested on October 1, 2015 and October 1, 2016 with one remaining installment to vest on October 1, 2017; and (ii) $150,000 in cashpayable in three equal annual installments of which two installments were paid on October 1, 2015 and October 1, 2016 with one installment to be paid onOctober 1, 2017. Mr. Hrinak must remain an employee of CST on each of the dates for the remaining installments of CST RSUs to vest and to receive the cashpayment.Grants of Plan-Based AwardsThe following table provides information regarding grants of plan-based awards to our NEOs during fiscal year 2016. All awards during fiscal year 2016 werein the form of CST RSUs, CST Stock Options and CST MSUs. Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)Estimated Future Payouts Under EquityIncentive Plan Awards (2)All Other StockAwards: Numberof Shares ofStock or Units(#) (3) All Other OptionAwards: Numberof SecuritiesUnderlyingOptions (#) (4) Exercise orBase Price ofOptionAwards($/Sh)(5)Grant DateFair Valueof Stockand OptionAwards($)(6)NameGrant DateThreshold($)Target ($)Maximum($)Threshold(#)Target (#)Maximum(#) Jeremy L.Bergeron—2,503250,250500,500 3/8/2016 2,7385,47610,952 $224,582 3/8/2016 5,796 $224,653 3/8/2016 20,307 38.76$224,595Clayton E.Killinger—4,924492,375984,750 3/8/2016 5,87011,73923,478 $481,440 3/8/2016 12,423 $481,515 3/8/2016 43,530 38.76$481,442David F. Hrinak—2,228222,780445,560 3/8/2016 1,5853,1696,338 $129,967 3/8/2016 3,354 $130,001 3/8/2016 11,751 38.76$129,966Hamlet T.Newsom, Jr.—1,590159,000318,000 3/8/2016 8401,6803,360 $68,900 3/8/2016 1,779 $68,954 3/8/2016 6,231 38.76$68,915Steven M.Stellato—1,397139,700279,400 3/8/2016 7381,4762,952 $60,534 3/8/2016 1,563 $60,582 3/8/2016 5,475 38.76$60,554123(1)The amounts in these columns represent the potential payouts under the CST 2016 short-term incentive program, which were earned based on performance for the 2016fiscal year. The threshold payout is the minimum amount payable, the target payout represents the amount payable for achieving the target level of performance, and themaximum payout represents the maximum amount payable, under the CST 2016 short-term incentive program.(2)Represents an award of CST MSUs under the CST long-term incentive program. These CST MSUs vest in full three (3) years from the date of grant. A threshold 50% oftarget awards is earned if the Ending Stock Price (as defined in the CST MSU award agreement) is 67% of the Beginning Stock Price (as defined in the CST MSU awardagreement), with awards forfeited entirely if stock price performance is below this level. The maximum number of CST MSUs earned cannot exceed 200% of the targetaward. CST dividend payments for CST MSUs would be paid once CST MSUs vest and the number of CST MSUs earned is calculated based on performance metrics underthe CST MSU award agreement.(3)Represents an award of CST RSUs under the CST long-term incentive program. These CST RSUs vest in one-third (1/3) increments each year for three (3) years on theanniversary of the grant date. CST dividend equivalent payments on CST RSUs are paid as and when dividends are declared and paid on CST's outstanding common stock.(4)Represents an award of CST Stock Options under the CST long-term incentive program. These CST Stock Options vest in one-third (1/3) increments each year for threeyears on the anniversary of the grant date.(5)The exercise price is the mean of the high and low reported sales price per share on the NYSE of CST's common stock on the date of grant. Under the CST Brands, Inc.Amended and Restated 2013 Omnibus Stock and Incentive Plan, the exercise price for CST Stock Options granted cannot be less than the mean of the high and low reportedsales price per share on the NYSE of CST’s common stock on the date of grant.(6)The amounts shown represent the grant date fair value of awards for each of the fiscal years shown computed in accordance with Financial Accounting Standards BoardAccounting Standards Codification Topic 718, Compensation-Stock Compensation. See Note 18 of the notes of the consolidated financial statements included in CST'sAnnual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC for a discussion of all assumptions made in the calculation of this amount.Outstanding Equity Awards at Fiscal Year EndThe following table provides information regarding the number of outstanding equity awards held by our NEOs at December 31, 2016. Option Awards (1)Stock AwardsNameNumber ofSecuritiesUnderlyingUnexercisedOptionsExercisable (#)Number ofSecuritiesUnderlyingUnexercisedOptionsUnexerciseable (#)OptionExercisePrice ($)OptionExpiration DateNumber ofShares or Unitsof Stock ThatHave NotVested (#) (2) Market Valueof Shares orUnits of StockThat Have NotVested ($)(3)Equity IncentivePlan AwardsNumber ofUnearnedShares, Units,or Other RightsThat Have NotVested (4)Equity IncentivePlan Awards:Market orPayout Value ofUnearnedShares, Units orOther RightsThat Have NotVestedJeremy L. Bergeron 2,732(5) 68,819 Clayton E. Killinger25,000—29.5305/6/2023 33,36216,68131.2453/10/20246,294(6) 303,056 22,61445,22841.4053/12/20257,858(7) 378,363 43,53038.7603/8/202612,423(8) 598,167 11,739481,440David F. Hrinak6,53113,06241.4053/12/20252,270(9) 109,301 2,634(10) 126,827 11,751—38.7603/8/20263,354(11) 161,495 3,169129,967Hamlet T. Newsom, Jr. 78031,989 Steven M. Stellato 90437,075 124(1)The amounts in the Option Awards section represent awards of CST Stock Options.(2)CST Stock Options vest in one-third (1/3) increments each year for three years on the first, second and third anniversaries of the date of grant.(3)The amounts in the Stock Awards section include Phantom Units, CST RSUs and CST MSUs.(4)The unvested portion of these CST MSU awards will vest in full three (3) years from the date of grant, or at completion of the Merger, whichever comes first.(5)For CST RSUs, the amount in this column is based upon a fair market value of $48.15 per share, which was the fair market value of CST’s common stock on December 30,2016. For the Partnership's phantom units, the amount in this column is based upon a fair market value of $25.16 per unit, which was the price of the Partnership’s commonunit on December 30, 2016.(6)Represent awards of CST RSUs. The unvested portion of this award will vest on March 10, 2017.(7)Represent awards of CST RSUs. The unvested portion of this award will vest in two equal installments on March 12, 2017 and March 12, 2018, or at completion of theMerger, whichever comes first.(8)Represent awards of CST RSUs. The unvested portion of this award will vest in three equal annual installments on March 8, 2017, March 8, 2018 and March 8, 2019, or atcompletion of the Merger, whichever comes first.(9)Represent awards of CST RSUs. The unvested portion of this award will vest in two equal installments on March 12, 2017 and March 12, 2018, or at completion of theMerger, whichever comes first.(10)Represent awards of CST RSUs. The unvested portion of this award will vest on October 1, 2017.(11)Represent awards of CST RSUs. The unvested portion of this award will vest in three equal installments on March 8, 2017, March 8, 2018 and March 8, 2019, or atcompletion of the Merger, whichever comes first.Option Exercises and Equity VestedThe following table sets forth information regarding vesting of phantom unit and profits interests awards of the Partnership as well as CST RSUs and CSTStock Options for our NEOs for the fiscal year ended December 31, 2016. Option AwardsStock AwardsNameNumber of Shares orUnits Acquired onExercise(#) Value Realized onExercise ($)Number of Shares orUnits of StockAcquired on Vesting(#) Value Realized onVesting ($)Jeremy L. Bergeron47,133(1)486,79820,956(2)1,113,439Clayton E. Killinger 29,556(3)1,103,093David F. Hrinak 6,948(4)247,556Hamlet T. Newsom, Jr.18,198(5)118,7395,109(6)241,379Steven M. Steallato9,558(7)86,1713,081(8)148,427(1)As approved by the Compensation Committee, 47,133 outstanding CST Stock Options were vested and exercised on December 27, 2016.(2)Represents an amount that includes one third (1/3) of a CST RSU award vested on March 10, 2016, representing 860 shares of CST common stock, one third (1/3) of a CSTRSU award vested on March 12, 2016, representing 940 shares of CST common stock, a CST restricted stock award vested in full on May 6, 2016, representing 1,500 sharesof CST common stock, and, as approved by the Compensation Committee, a CST RSU award granted on March 10, 2014 vested in full on December 23, 2016, representing860 shares of CST common stock, two thirds (2/3) of a CST RSU award granted on March 12, 2015 vested in full on December 23, 2016, representing 1,880 shares of CSTcommon stock, a CST RSU award granted on March 8, 2016 vested in full on December 23, 2016, representing 5,796 shares of CST common stock, and a CST MSU awardgranted on March 8, 2016 vested in full on December 23, 2016, representing 7,775 shares of CST common stock. In addition, one third (1/3) of an award of phantom unitsin the Partnership vested on April 14, 2016, representing 1,345 common units of the Partnership.(3)Represents an amount that includes one third (1/3) of a CST RSU award vested on March 10, 2016, representing 6,294 shares of CST common stock; one third (1/3) of aCST RSU award vested on March 12, 2016, representing 3,929 shares of CST common stock; a restricted stock award vested in full on May 6, 2016, representing 10,000shares of CST common stock, and one third (1/3) of a CST restricted stock award vested on May 6, 2016, representing 9,333 shares of CST common stock.(4)Represents an amount that includes one third (1/3) of a CST RSU award vested on March 12, 2016, representing 1,135 shares of common CST stock; and one third (1/3) ofa CST RSU award vested on October 1, 2016, representing 2,634 shares of common CST stock.(5)As approved by the Compensation Committee, 18,198 outstanding CST Stock Options were vested and exercised on December 27, 2016.(6)Represents an amount that includes one third (1/3) of a CST RSU award vested on March 23, 2016, representing 467 shares of CST common stock; and as approved by theCompensation Committee, two CST RSU awards granted on March 23, 2015 vested on December 23, 2016, representing 1,585125shares of CST common stock, a CST RSU award granted on March 8, 2016 vested on December 23, 2016, representing 1,779 shares of CST common stock, and a CSTMSU award granted on March 8, 2016 vested in full on December 23, 2016 representing 1,278 shares of CST common stock.(7)As approved by the Compensation Committee, 9,558 outstanding CST Stock Options were vested and exercised on December 27, 2016.(8)As approved by the Compensation Committee, a CST RSU award granted on June 1, 2015 vested on December 23, 2016, representing 706 shares of CST common stock, aCST RSU award granted on March 8, 2016 vested on December 23, 2016, representing 1,563 shares of CST common stock, and a CST MSU award granted on March 8,2016 vested in full on December 23, 2016 representing 812 shares of CST common stock.Non-Qualified Deferred CompensationExcess Savings PlanCST established the Excess Savings Plan, which is a non-qualified deferred compensation program to provide benefits to CST employees whose annualcontributions to the CST Brands Savings Plan (a qualified 401(k) plan) are subject to the regulatory limitations. Under the Excess Savings Plan, CST makesannual contributions in the first quarter of each year for the previous fiscal year. Some of our NEOs participated in the Excess Savings Plan during the fiscalyear ended December 31, 2016. The following table provides information concerning the contributions, earnings, withdrawals and distributions in the ExcessSavings Plan during the fiscal year ended December 31, 2016NameExecutive contributionsin last FY($)Registrant contributionsin last FY($)(1)Aggregate Earning inlast FY ($)(1)Aggregatewithdrawals/distributions($)Aggregate balance atlast FYE ($)Jeremy L. Bergeron—5,096183—9,264Clayton E. Killinger—15,6601,708—54,697David F. Hrinak—4,252——4,252Hamlet T. Newsom, Jr.—2,120——2,120Steven M. Stellato—576——576(1)The sum of the amounts included in these columns is included in the "Change in Pension Value and Non-qualified Deferred Compensation Earning" for 2016 in theSummary Compensation Table for each NEO.Non-Qualified Deferred Compensation PlanPursuant to the NQDC, our NEOs were offered to defer up to 75% of their base salary, up to 100% of their annual bonus and up to 100% of their annual grantof CST RSUs for the calendar year. All deferrals of base salary are 100% vested and vesting of deferrals of other bonus or equity awards is determined inaccordance with the terms of the applicable awards.NameExecutive contributionsin last FY($)(1)Registrant contributionsin last FY($)Aggregate Earning inlast FY ($)Aggregatewithdrawals/distributions($)Aggregate balance atlast FYE ($)Jeremy L. Bergeron—————Clayton E. Killinger—————David F. Hrinak—————Hamlet T. Newsom, Jr.207,144———207,144Steven M. Stellato—————(1)All amounts in this column are included in the values reflected in the Summary Compensation Table for 2016 in the income category from which they were deferred.Potential Payments upon Termination or Change in ControlOur NEOs may be entitled to certain payments upon termination of their employment under certain circumstances, in each case, as more fully describedbelow. Any such payments that are to be made in cash will be subject to reimbursement under the Amended Omnibus Agreement.Executive Income Continuity Plan (the “EICP”)The Partnership adopted the EICP on May 28, 2014 (as further amended) for all persons who are designated as executive officers of the General Partner byresolution of the Board (the “Officers”) and any persons who provide management services to the126Partnership and are designated as plan participants by the Board are eligible to participate in the EICP (each a “Participant”). Messrs. Bergeron, Killinger,Hrinak, Newsom and Stellato are each designated as “Officers” under the EICP.The EICP provides that if an Officer is terminated from providing management services to the Partnership or the General Partner other than due to death,disability, retirement, cause or voluntary resignation (other than for good reason (as defined in the EICP)) (a “Termination”), then such Officer is entitled toreceive a severance payment, paid in 12 equal monthly installments, equal to the sum of (i) the Officer’s annual salary as of the date of termination, plus(ii) the amount of the Officer’s annual target bonus under the applicable annual incentive compensation plan in place at the time the termination occurs (thesum of (i) and (ii), the “Compensation Amount”). In addition, the Officer (and his dependents, as applicable) will receive the continuation of their medical,dental and other benefits for a period of one year from the date of termination, all unvested awards under the Partnership’s Plan held by such Officer shall vestimmediately upon Termination and the Officer is also entitled to be reimbursed for outplacement services for one year subsequent to the Termination, and, incertain circumstances, reimbursement of relocation expenses and legal fees and expenses (all such benefits, the “Continued Benefits”). If the Termination ofan Officer occurs in connection with, or within 24 months after, a change in control of the Partnership (which includes the consummation of the transactionscontemplated by the Merger Agreement), then the Officer will receive a severance payment, paid in a single lump sum in cash, equal to 2.99 times theCompensation Amount.In addition, Messrs. Bergeron, Killinger, Newsom and Stellato are also each parties to a Separation Agreement with CST (“CST Separation Agreement”),which provides severance benefits upon a qualifying termination of employment from CST. If the employment of an executive of CST were terminated byCST without cause or by the executive for good reason within two years following a change in control of CST (such as the Merger), the executive would beentitled to the following:ŸSeverance Payment. A cash severance payment equal to the product of (a) 2.0 (for Messrs. Killinger and Bergeron) and 1.5 (for Messrs. Newsomand Stellato), multiplied by (b) the sum of the executive’s annual base salary plus target annual short term incentive opportunity, which severancepayment is payable in a lump sum;Ÿ Prorated Target Annual Short-Term Incentive. A cash payment equal to the executive’s target annual short term incentive opportunity for the yearof termination, prorated for the portion of the year elapsed as of the last day of the month of termination, which payment is payable in a lump sum;and,Ÿ Ancillary Benefits. Continued medical, dental and other insurance benefits for a period of three years from the date of termination on the samebasis as immediately prior to the date of termination, or if such continued coverage is not permitted by applicable plans or law, a lump sum paymentequal to the value of CST’s contribution for such coverage, and reimbursement of costs incurred in connection with a move back to the executive’soriginal work location prior to the change in control and of reasonable outplacement expenses in seeking comparable employment during the firstyear following the date of termination.As a condition of receiving the severance benefits under the CST Separation Agreements, each of the executives must execute a release of claims and comply,for one year following the date of termination, with restrictive covenants concerning non-competition and non-solicitation of employees, as well as perpetualconfidentiality and non-disparagement covenants.In the event that a termination in connection with a change in control that triggers payment under both the CST Separation Agreement and the EICP, theEICP provides that payments and benefits would be the greater of those provided in either of the CST Separation Agreement or EICP, with the exception ofMr. Killinger. The EICP limits Mr. Killinger’s aggregate cash severance payments under the EICP and his CST Separation Agreement to no more than 2.0times the cash severance payable under his CST Separation Agreement and the greater of other payments and benefits provided in either the CST SeparationAgreement or the EICP.All payments due under the EICP will be conditioned on the execution by the Participant of a release and non-disparagement agreement. All payments andbenefits paid under the EICP are the financial responsibility of the Partnership.If amounts payable to an Officer under the EICP (together with any other amounts that are payable by the Partnership as a result of a change in control(collectively, the “Payments”) exceed the amount allowed under Section 280G of the Code for such Officer, thereby subjecting the Officer to an excise taxunder section 4999 of the Code, then the Payments shall either be: (i) reduced to the level at which no excise tax applies, such that the full amount of thePayments would be equal to three times the Officer’s “base amount” (as defined in the Code), or (ii) paid in full, which would subject the Officer to the excisetax. The Partnership will determine, in good faith, which outcome produces the best net after tax position for an Officer, but the Partnership will not provideany gross-up payments for excise taxes.Under the Merger Agreement, CST could engage an expert (a) to perform calculations regarding Sections 280G and 4999 of the Code and (b) to recommendand implement strategies to mitigate any issues resulting from application of Sections 280G and 4999 of the Code and to maximize the net after-tax proceedsreceived by any individual subject to Section 4999 of the Code. As127contemplated in the Merger Agreement, CST reasonably determined that the consummation of the Merger would not occur in 2016 and in order to mitigatethe impact of Section 4999 of the Code. Based on the recommendations of its consultants, CST accelerated the vesting of CST equity awards, and thepayment of annual incentive awards in respect of 2016, into 2016, for Messrs. Bergeron, Newsom and Stellato.The table below estimates the amount of compensation and benefits to be provided to each of our NEOs in the event of termination of such NEO’semployment under certain circumstances, pursuant to the terms of the EICP. These amounts are estimates of the amounts that would be paid or provided toour NEOs upon termination of employment or a change in control had the termination occurred on December 31, 2016. The actual amounts can only bedetermined at the time of such NEO’s separation from CST. Accordingly, if termination had taken place prior to December 31, 2016, the amounts payablewith respect to the short-term incentive program would have been reduced to reflect the pro rata portion of the NEO’s annual target short-term incentiveaward.NameSeverance BenefitTermination by the CompanyWithout Cause (other than forGood Reason) ($) (1)Termination by the Company forGood Reason or Without Causein Connection with a Change ofControl ($) (2)Jeremy L. BergeronSeparation Payment1,270,5001,899,398 Short-Term Incentive Program250,250250,250 Long-Term Incentive Program 131,546 Health Benefits47,20491,611Clayton E. KillingerSeparation Payment2,297,7504,595,500 Short-Term Incentive Program492,375492,375 Long-Term Incentive Program 802,631 Health Benefits48,32194,963David F. HrinakSeparation Payment594,0801,776,299 Short-Term Incentive Program222,780222,780 Long-Term Incentive Program 216,674 Health Benefits44,31982,957Hamlet T. Newsom, Jr.Separation Payment954,0001,426,230 Short-Term Incentive Program159,000159,000 Long-Term Incentive Program 56,661 Health Benefits43,27979,837Steven M. StellatoSeparation Payment828,2001,253,109 Short-Term Incentive Program139,700139,700 Long-Term Incentive Program 61,809 Health Benefits27,87033,610(1)Represents the sum of (i) a severance payment to each NEO (except for Mr. Hrinak) under the officer's CST Separation Agreement equal to the product of (a) 1.0multiplied by (b) the sum of the NEO's annual base salary plus target annual short-term incentive opportunity; plus (ii) a severance payment to each NEO (including Mr.Hrinak) under the EICP of (a) 1.0 multiplied by (b) the sum of the NEO’s annual base salary plus target annual short-term incentive opportunity.(2)Represents the sum of (i) a severance payment to each NEO (except for Mr. Hrinak) under the officer's CST Separation Agreement equal to the product of (a) 2.0 (forMessrs. Bergeron and Killinger) or 1.5 (for Messrs. Newsom and Stellato), multiplied by (b) the sum of the NEO’s annual base salary plus target annual short-termincentive opportunity; plus (ii) a severance payment to each NEO (including Mr. Hrinak) according to the terms of the EICP in which due to the cap on paymentsapplicable to (a) Mr. Killinger, his severance payment under the EICP is equal to the severance payment under his CST Separation Agreement; (b) Mr. Hrinak, hisseverance payment under the EICP is 2.99 multiplied by the sum of his annual salary plus target annual short-term incentive opportunity; and (c) Messrs. Bergeron,Newsom and Stellato, the sum of each of their respective severance payments under the EICP and the CST Separation Agreements cannot exceed 2.99 multiplied by thesum of each of their annual salary plus target annual short-term incentive opportunity for each.128Director CompensationOverviewIn connection with the GP Purchase, CST agreed to cause the appointment of Mr. Topper as a director of the General Partner for a period of at least five years,commencing on October 1, 2014 or until a change in control of CST, including circumstances in which CST no longer controls the General Partner. Further,Mr. Topper may be removed from the Board in certain circumstances where cause exists.On December 31, 2016, the following were members to the Board: Kimberly S. Lubel, Chief Executive Officer, President and Chairman of the CST Board;Jeremy L. Bergeron, President of our General Partner; Clayton E. Killinger, Executive Vice President and Chief Financial Officer of CST and our GeneralPartner; John B. Reilly, III; Joseph V. Topper, Jr.; Gene Edwards and Justin A. Gannon, as non-employee directors of the board of directors of our GeneralPartner.Director Compensation for Fiscal Year 2015Each non-employee director received cash compensation of $60,000 per year (paid on a quarterly basis). The chairman of each of the audit committee andconflicts committee received additional cash compensation of $10,000 per the fiscal year ended December 31, 2016 (paid on a quarterly basis).In November 2016, each non-employee director received an award of 1,341 phantom units in an amount equal to $35,000 based on the closing price of thePartnership’s common units on the date of grant as compensation for six months of service beginning October 1, 2016. Such phantom units will be fullyvested on the one-year anniversary of the grant date and include the payment made by the Partnership of distribution equivalent rights equal to the amount ofdistributions authorized to be paid to holders of common units of the Partnership.Our directors are reimbursed for all out-of-pocket expenses in connection with attending meetings of the Board or its committees. To the extent permittedunder Delaware law, each director is fully indemnified by us for actions associated with being a director.The following table provides the compensation amounts for each of our non-employee directors for the fiscal year ended December 31, 2016.NameFees Earned or Paidin Cash ($)Stock or Unit Awardsand Option Awards($)(1)All OtherCompensation ($)Total ($)Kimberly S. Lubel(2)————Joseph V. Topper, Jr. (3)60,00035,000—95,000John B. Reilly III (3)60,00035,000—95,000Clayton E. Killinger(2)————Gene Edwards(3) (4)70,00035,000—105,000Justin A. Gannon(3) (4)70,00035,000—105,000Jeremy L. Bergeron(2)————(1)Under the incentive award program, the directors will have the ability to elect to receive either phantom units or profits interests. Phantom units and profits interests can beconverted to common units or cash, at the discretion of the Board.(2)Ms. Lubel and Messrs. Killinger and Bergeron are employees of CST and did not receive any compensation for their services as directors of the Board for the year endedDecember 31, 2016.(3)As part of the compensation to non-employee directors for the period October 1, 2016 to March 31, 2017, each of Messrs. Edwards, Gannon, Reilly and Topper received anequity grant of 1,341 phantom units of the Partnership based upon a fair market value of $26.10 per unit, which was the NYSE closing price of our common units onNovember 10, 2016. Each of these phantom units will vest in one installment on the anniversary of the date of grant. These phantom unit awards were accompanied by tandemdistribution equivalent rights that entitle the holder to cash payments equal to the amount of unit distributions authorized to be paid to the holders of Partnership common units.(4)Messrs. Edwards and Gannon received additional cash compensation of $10,000 per year for their service as chairmen of the conflicts committee and audit committee,respectively.129Compensation Committee Interlocks and Insider ParticipationNone of the directors or executive officers of our General Partner served as members of the compensation committee of another entity that has or had anexecutive officer who served as a member of our Board during the year ended December 31, 2016. As previously noted, we do not have a separatecompensation committee. Decisions regarding the compensation of our NEOs are made, as applicable, by CST’s Compensation Committee.ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERSAs of February 24, 2017, the following table sets forth the beneficial ownership of our common and subordinated units of:•Each person known by us to be a beneficial owner of more than 5% of our outstanding common units;•Our General Partner;•Each NEO and director of the Board; and•All of the executive officers and directors of the Board, as a group. Beneficial Ownership of Common UnitsName of Beneficial OwnerNumber of Units Percent of Class Greater than 5% Stockholders Harvest Fund Advisors LLC 3,220,349(1) 9.606%Oppenheimer Funds, Inc. 2,728,357(2) 8.138%CrossAmerica GP LLC —(3) — Dunne Manning Inc. (fka Lehigh Gas Corporation) 3,782,216(4)(5) 11.282%Energy Realty Partners, LLC 1,854,943(4)(5) 5.533%CST Brands, Inc. 14,394,385(6) 42.936%Directors Jeremy L. Bergeron 10,123(7) * Gene Edwards 19,916 * Clayton E. Killinger — * Justin A. Gannon 6,916 * Kimberly S. Lubel 5,600 * John B. Reilly, III 878,029(8) * Joseph V. Topper, Jr. 7,750,888(4)(5)(9)(10) 23.120%Named Executive Officers David F. Hrinak 37,466 * Hamlet T. Newsom — * Steven M. Stellato — * Directors and executive officers as a group (10 persons) 8,708,938 25.978%*The percentage of units beneficially owned does not exceed one percent of the common units outstanding130(1)Harvest Fund Advisors LLC has (i) sole power to vote 3,220,349 common units and (ii) sole power to dispose of 3,186,676 common units, based on its Schedule 13F-HR filed on February 10, 2017. The address for Harvest Fund Advisors LLC is 100 W. Lancaster Avenue, Suite 200, Wayne, PA 19087. (2)Oppenheimer Funds, Inc. has (i) sole power to vote 2,728,357 common units and (ii) sole power to dispose of 2,728,357 common units, based on its Schedule 13F-HRfiled on February 14, 2017. The address for Oppenheimer Funds, Inc. is Two World Financial Center, 225 Liberty Street, New York, NY 10281. (3)CrossAmerica GP LLC is the general partner of the Partnership and is wholly owned by CST. (4)In connection with the GP Purchase, Mr. Topper entered into a Voting Agreement dated as of October 1, 2014 by and among Mr. Topper, the Topper Trust, DunneManning Inc., an entity wholly owned by the 2004 Irrevocable Agreement of Trust of Joseph V. Topper, Sr. for which Mr. Topper is the trustee (the “Topper Trust”and collectively, the “Topper Entities”), and CST (the “Voting Agreement”), pursuant to which each of the Topper Entities agrees that at any meeting of the holders ofshares of CST common stock or common units or subordinated units of the Partnership, it will vote or cause to be voted such Topper Entities’ shares or units, asapplicable, in accordance with the recommendation of the board of directors of CST or the Board, respectively. The Voting Agreement will remain in effect withrespect to any Topper Entities for so long as any such Topper Entities is (a) a director or officer of CST or affiliate thereof, including the Partnership, (b) the beneficialowner of more than 3% of the outstanding common stock of CST or (c) the beneficial owner of 10% or more of the outstanding common units or subordinated units ofthe Partnership. (5)The common units shown as beneficially owned by Joseph V. Topper, Jr. include units beneficially owned by entities that are controlled by Mr. Topper, includingDunne Manning Inc. and Energy Realty Partners, LLC. The units that are beneficially owned by Mr. Topper by way of his control of Dunne Manning Inc. and EnergyRealty Partners, LLC are also shown as beneficially owned by those entities in the table above. The units shown as beneficially owned by Mr. Topper include 28,947common units to be issued upon the conversion of vested profits interests in March 2017. See “Item Executive Compensation-Compensation Discussion and Analysis-Elements of Executive Compensation-Profits Interests” for a description of the profits interests. (6)By virtue of the Voting Agreement described above, these amounts include 7,748,960 common units that are owned by Mr. Topper and beneficially owned by entities thatare controlled by Mr. Topper, including Dunne Manning Inc. and Energy Realty Partners, LLC. The common units that are beneficially owned by Mr. Topper by way ofhis control of Dunne Manning Inc. and Energy Realty Partners, LLC are also shown as beneficially owned by those entities in the table above. (7)Consists of 8,778 common units and 1,345 phantom units that will vest on April 14, 2017. Each phantom unit represents a contingent right to acquire common units. (8)Mr. Reilly may be deemed to share beneficial ownership of 738,501 common units beneficially owned by the 2008 Irrevocable Agreement of Trust of John B. Reilly,Jr. (the “Reilly Trust”) in his capacity as one of two trustees of the Reilly Trust. (9)Mr. Topper, as director of the Board, former President and Chief Executive Officer of our General Partner and sole director of Dunne Manning Inc. and as a trustee ofa trust that is the sole shareholder of Dunne Manning Inc., may be deemed to have beneficial ownership of the units beneficially owned by Dunne Manning Inc. Theunits beneficially owned by Dunne Manning Inc. are included in the number of common units shown as beneficially owned by Mr. Topper in the table above. (10)Mr. Topper, as the sole manager and indirect owner of Energy Realty Partners, LLC, may be deemed to have beneficial ownership of the units beneficially owned byEnergy Realty Partners, LLC. The units beneficially owned by Energy Realty Partners, LLC are included in the number of units shown as beneficially owned by Mr.Topper in the table above. Securities Authorized For Issuance under Equity Compensation PlansThe following table summarizes information about our equity compensation plans as of December 31, 2016:Plan Category Number of securities to beissued upon exercise ofoutstanding options,warrants and rights (1) Weighted-averageexercise price ofoutstanding options,warrants and rights Number of securitiesremainingavailable for futureissuanceunder equitycompensation plansEquity compensation plans approved bysecurity holders: Lehigh Gas Partners LP 2012 Incentive AwardPlan 90,169 n/a 778,090See Note 18 of the notes to the consolidated financial statements included elsewhere in this report for a discussion of the material terms of the Plan.Merger of the Owner of Our General PartnerOn August 21, 2016, CST, the owner of the sole member of our General Partner, entered into the Merger Agreement. As a result, Circle K Stores Inc., asubsidiary of Couche-Tard, will, through its acquisition of CST, control CST’s interest in the General Partner and CST’s 19.8% limited partner interest inCrossAmerica as well as all of the IDRs. The Merger is currently expected to close in the second quarter of 2017.Under the EICP, the Merger is considered a change in control event. Any participants in the EICP who experience a qualifying termination event upon orfollowing consummation of the Merger will be entitled to payments described under “Item 12-Potential Payments Upon Termination or Change in Control”and certain benefits from us, which could be material and adversely affect the amount of cash available for distribution to our unitholders.131ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCEAs of February 24, 2017, CST owned 19.8% of the Partnership’s outstanding units and, pursuant to a voting agreement with Joseph V. Topper, Jr. and certainaffiliates, has voting control over an additional 23.1% of the Partnership’s outstanding units. CST also owns the IDRs.As of February 24, 2017, Mr. Topper owned or controlled 23.1% of the Partnership’s outstanding units, the voting for which is controlled by CST.As of February 24, 2017, John B. Reilly, III owned or controlled 2.6% of the Partnership’s outstanding units.The following is a description of transactions, since January 1, 2016, to which the Partnership was or is a party, in which the amount involved exceeds$120,000 and in which a director, executive officer, holder of more than 5% of our common units or any member of their immediate family had or will have adirect or indirect material interest, other than the arrangements that are described under “Item 12-Potential Payments Upon Termination or Change inControl.” The terms of the transactions and agreements disclosed in this section were determined by and among related parties and, consequently, are not theresult of arm’s length negotiations. Such terms are not necessarily at least as favorable to the parties to these transactions and agreements as the terms whichcould have been obtained from unrelated third parties.Distributions and Payments to our General Partner and Certain Related PartiesThe following table summarizes the distributions and payments to be made by us to our General Partner and certain related parties in connection with theongoing operation of our business and distributions and payments that would be made by us if we were to liquidate in accordance with the terms of ourpartnership agreement.Operational Stage Distributions We will generally make cash distributions to the unitholders, including CST, its affiliates, Messrs. Topper andReilly and their respective affiliates.Assuming we have sufficient cash available for distribution to pay the full minimum quarterly distribution onall of our outstanding units for four quarters, CST and its affiliates, Messrs. Topper and Reilly and theirrespective affiliates would receive an annual distribution of $26.7 million, collectively, on their commonunits.If distributions exceed the minimum quarterly distribution and other higher target levels, CST, as the holder ofthe IDRs, is entitled to increasing percentages of the distributions, up to 50.0% of the distributions above thehighest target level.Cash distributions to our General Partner, DMI and its affiliates, Messrs. Topper and Reilly and their respectiveaffiliates amounted to $36.0 million in 2016. Payments to our General Partnerand its affiliates We pay CST a management fee, which in 2016 was $856,000 per month plus a variable fee of between zeroand $0.003 per gallon for wholesale fuel distribution and $0.015 per gallon for retail fuel distribution at siteswe operate. In addition, the Partnership is required to reimburse CST for certain outsourced services to beprovided by CST to or on behalf of the Partnership. The Partnership incurred $15.9 million in managementfees under the Amended Omnibus Agreement for the year ended December 31, 2016. CST and CrossAmericahave the right to negotiate the amount of the management fee on an annual basis, or more often ascircumstances require. Liquidation Stage Liquidation Upon our liquidation, the partners, including our General Partner, is entitled to receive liquidatingdistributions according to their particular capital account balances.Ownership of Our General PartnerSince October 1, 2014, CST has indirectly owned all of the membership interests of our General Partner.132Agreements with CST and its AffiliatesOn October 1, 2014, in connection with the GP Purchase, we entered into certain agreements with CST and its affiliates, as described in more detail below.Amended Omnibus AgreementCrossAmerica entered into the Amended and Restated Omnibus Agreement on October 1, 2014, by and among CrossAmerica, the General Partner, DMI, DMS,CST Services LLC (“CST Services") and Joseph V. Topper, Jr. (the “Amended Omnibus Agreement”).. The terms of the Amended Omnibus Agreement wereapproved by the conflicts committee of our Board. Pursuant to the Amended Omnibus Agreement, CST Services agrees, among other things, to provide, orcause to be provided, to the Partnership certain management services.We incurred $15.9 million and $15.3 million in charges for the years ended December 31, 2016 and 2015, respectively, including incentive compensationcosts and non-cash stock-based compensation expense under the Amended Omnibus Agreement.Amounts payable to CST related to these transactions were $10.0 million at December 31, 2016. At the end of each calendar year, we and CST have the rightto negotiate a reduction or increase to the amounts due under the Amended Omnibus Agreement for such year. CST and we also have the right to negotiatethe amount of the annual management fee as circumstances require. CrossAmerica and CST mutually agreed to settle certain amounts due under the terms ofthe Amended Omnibus Agreement in newly issued common units representing limited partner interests in CrossAmerica. As a result in 2016 and 2015, weissued 440,266 and 259,312 limited partner units of CrossAmerica to CST Services valued at $11.2 million and $7.2 million, respectively. CST andCrossAmerica agreed to settle $4.5 million of the fourth quarter 2016 management fee in limited partner units. See Note 15 of the notes to our consolidatedfinancial statements included in this Annual Report on Form 10-K for the year ended December 31, 2016 for additional information.Management Services and Term. Pursuant to the Amended Omnibus Agreement, CST provides us and our General Partner with management, administrativeand operating services. These services include accounting, tax, legal, internal audit, risk management and compliance, environmental compliance andremediation management oversight, treasury, information technology and other administrative functions. CST provides the Partnership and our GeneralPartner with personnel necessary to carry out these services and any other services necessary to operate the Partnership’s business as requested by thePartnership. We do not have any obligation to directly compensate the officers of our General Partner or employees of CST; however, the Partnershipreimburses CST under the Amended Omnibus Agreement for its services to the General Partner and Partnership, as described in this section.The initial term of the Amended Omnibus Agreement is five years and will automatically renew for additional one year terms unless any party provideswritten notice to the other parties 180 days prior to the end of the then annual term. The Partnership has the right to terminate the agreement at any time upon180 days’ prior written notice.Fees and Reimbursements. We pay CST a management fee for providing services, which in 2016 was $856,000 per month plus a variable fee of between zeroand $0.003 for wholesale fuel distribution and $0.015 per gallon for retail fuel distribution at sites we operate. Services provided by, or on behalf of, CST, notoutsourced to an independent third party, include accounting; administrative; billing and invoicing; books and record keeping; budgeting, forecasting, andfinancial planning and analysis; management (including the management and oversight of the MLP’s wholesale motor fuel distribution and real estatebusiness consistent with past practice); operations; payroll; contract administration; maintenance of internal controls; financial reporting, including SECreporting and compliance; office space; purchasing and materials management; risk management and administration of insurance programs; informationtechnology (includes hardware and software existing or acquired in the future for which title is retained by CST); in-house legal; compensation, benefits andhuman resources administration; cash management; corporate finance, treasury credit and debt administration; employee training; and miscellaneousadministration and overhead expenses. In addition, the Partnership is required to reimburse CST for certain outsourced services to be provided by CST to oron behalf of the Partnership, as set forth in the Amended Omnibus Agreement.Rights of First Refusal. The Amended Omnibus Agreement provides that Mr. Topper, DMI and DMS agree, and are required to cause their controlled affiliatesto agree, that for so long as Mr. Topper is an officer or director of the General Partner or CST, if (a) Mr. Topper, DMI, DMS, or any of their controlled affiliateshave the opportunity to acquire assets used, or a controlling interest in any business primarily engaged, in the wholesale motor fuel distribution or retail gasstation operation businesses, and (b) the assets or businesses proposed to be acquired have a value exceeding $5.0 million in the aggregate, then Mr. Topper,DMI, DMS, or their controlled affiliates will offer such acquisition opportunity to the Partnership and give the Partnership a reasonable opportunity toacquire, at the same price plus any related transaction costs and expenses, such assets or business, either before or promptly after the consummation of suchacquisition by Mr. Topper, DMI, DMS, or their controlled affiliates. The decision to acquire or not acquire any such assets or businesses requires the approvalof the conflicts committee of the Board. Any assets or businesses that the Partnership does not acquire pursuant to the right of first refusal may be acquiredand operated by Mr. Topper,133DMI, DMS, or their controlled affiliates.Rights of First Offer. The Amended Omnibus Agreement provides that Mr. Topper, DMI and DMS agree, and are required to cause their controlled affiliatesto agree, for so long as Mr. Topper is an officer or director of the General Partner or CST, to notify the Partnership of their desire to sell any of their assets orbusinesses if (a) Mr. Topper, DMI, DMS, or any of their controlled affiliates, decides to attempt to sell (other than to another controlled affiliate ofMr. Topper, DMI or DMS) any assets used, or any interest in any business primarily engaged, in the wholesale motor fuel distribution or retail gas stationoperation businesses, to a third party and (b) the assets or businesses proposed to be sold have a value exceeding $5.0 million in the aggregate. Prior toselling such assets or businesses to a third party, Mr. Topper, DMI and DMS are required to negotiate with the Partnership exclusively and in good faith for areasonable period of time in order to give the Partnership an opportunity to enter into definitive documentation for the purchase and sale of such assets orbusinesses on terms that are mutually acceptable to Mr. Topper, DMI, DMS, or their controlled affiliates, and the Partnership. If the Partnership andMr. Topper, DMI, DMS, or their controlled affiliates have not entered into a letter of intent or a definitive purchase and sale agreement with respect to suchassets or businesses within such period, Mr. Topper, DMI, DMS, and their controlled affiliates, have the right to sell such assets or businesses to a third partyfollowing the expiration of such period on any terms that are acceptable to Mr. Topper, DMI, DMS, or their controlled affiliates, and such third party. Thedecision to acquire or not to acquire assets or businesses pursuant to this right requires the approval of the conflicts committee of the Board.Review of Management Fee. At the end of each calendar year, we have the right to submit to CST a proposal to reduce the amount of the management fee forsuch year if we believe that the services performed by CST do not justify payment of the amount of management fees paid by us for such year. In addition,CST has the right, at the end of each calendar year, to submit to us a proposal to increase the amount of the management fee for such year if CST believes thatthe services performed by CST justify an increase in the management fee. If any such proposal is submitted, we will negotiate with CST to determine if themanagement fee for such year should be reduced or increased, and, if so, the amount of such reduction or increase. In addition, upon a material change in ourstructure or our business, the conflicts committee of our General Partner will review the management fee. If the conflicts committee determines that, based ona change in our structure or our business, the management fee should be modified or otherwise altered, we will negotiate with CST to determine theappropriate modification or alteration of the management fee. Effective January 1, 2016, the fixed component of the management fee was increased to$856,000 per month, which was approved by the executive committee of the CST Board and the conflicts committee of the Board.General Indemnification; Limitation of Liability. Pursuant to the Amended Omnibus Agreement, we are required to indemnify CST for any liabilities incurredby CST attributable to the management, administrative and operating services provided to us under the agreement, other than liabilities resulting from CST’sbad faith, fraud, or willful misconduct. In addition, CST is required to indemnify us for any liabilities we incur as a result of CST’s bad faith, fraud, or willfulmisconduct in providing management, administrative and operating services under the Amended Omnibus Agreement. Other than indemnification claimsbased on CST’s bad faith, fraud, or willful misconduct, CST’s liability to us for services provided under the Amended Omnibus Agreement cannot exceed$5,000,000 in the aggregate.Fuel Sales and Rental IncomeWe sell wholesale motor fuel under a master fuel distribution agreement to 43 CST retail sites and lease real property on 74 retail sites to CST under a masterlease agreement, each having initial 10-year terms. The fuel distribution agreement provides us with a fixed wholesale mark-up per gallon. The master leaseagreement is a triple net lease.Revenues from motor fuel sales and real property rental income from CST were as follows (in thousands): Year Ended December 31, 2016 2015Revenues from fuel sales to CST $118,745 $135,813Rental Income from CST $17,188 $11,422Receivables from CST were $4.4 million and $2.3 million at December 31, 2016 and 2015, respectively, related to these transactions.Purchase (“Drop Down”) of CST Wholesale Fuel Supply Equity InterestsIn January 2015, we closed on the purchase of a 5% limited partner equity interest in CST Fuel Supply in exchange for approximately 1.5 million commonunits with an aggregate consideration of $60.0 million on the date of closing. In July 2015, we closed on the purchase of an additional 12.5% limited partnerequity interest in CST Fuel Supply in exchange for approximately 3.3 million common units and cash in the amount of $17.5 million, with an aggregateconsideration of approximately $110.9 million on the134date of closing. These transactions were approved by the conflicts committee of our Board and the executive committee of and full CST Board.CST Fuel Supply distributes motor fuel primarily to CST’s retail sites at its cost plus a fixed margin of $0.05 per gallon and has no material net assets. CSTFuel Supply distributed approximately 1.8 billion and 1.9 billion gallons of motor fuel during the years ended December 31, 2016 and 2015, respectively.For the year ended December 31, 2016, we recorded income of $16.0 million from CST Fuel Supply.Refund payment related to CST sale of California and Wyoming AssetsIn July 2016, CST provided a refund payment to us related to our 17.5% interest in CST Fuel Supply resulting from the sale by CST of 79 retail sites inCalifornia and Wyoming to 7-Eleven, Inc. and its wholly-owned subsidiary, SEI Fuel Services, Inc., to which CST Fuel Supply no longer supplies motor fuel.The purpose of the refund payment was to make us whole for the decrease in the value of our interest in CST Fuel Supply arising from sales volume decreases.The total refund payment received by the Partnership, as approved by the conflicts committee of the Board and by the executive committee of the CSTBoard, was approximately $18.2 million ($17.5 million in cash with the remainder in CrossAmerica common units owned by CST) and was accounted for as acontribution to equity.Purchase of New to Industry retail sites (“NTIs”) from CSTIn July 2015, we completed the purchase of real property at 29 NTIs from CST in exchange for approximately 0.3 million common units and cash in theamount of $124.4 million, for an aggregate consideration of $134.0 million on the date of closing. We leased the real property associated with these NTIsback to CST and CST continued to operate the sites pursuant to a triple net lease at a lease rate of 7.5%, per annum, of the fair value of the property. Thistransaction was approved by the conflicts committee of the Board and the executive committee of the CST Board and the full CST Board. We accounted forthe transactions as entities under common control.Purchase of Wholesale Fuel Supply Contracts from CSTIn February 2016, we purchased 21 independent dealer contracts and 11 subwholesaler contracts from CST for $2.9 million with historic annual volumes ofapproximately 20 million gallons. This transaction was approved on our behalf by the conflicts committee of the Board and by the executive committee ofthe CST Board. Since this was a transaction between entities under common control, the $2.9 million purchase price was accounted for as a distributionrecorded in partners’ capital.We purchase the fuel supplied to these 32 sites from CST Fuel Supply, in which we own a 17.5% interest, and resell the wholesale motor fuel to theindependent dealers and subwholesalers. We purchased $20.4 million of motor fuel from CST Fuel Supply for the year ended December 31, 2016 inconnection with these 32 sites.Agreements with DMI and AffiliatesDMI is affiliated with our former President and Chief Executive Officer and current director of the Board, Mr. Topper.Lease Agreements for our Principal Executive OfficesOur principal executive offices are in Allentown, Pennsylvania. Through February 2016, we subleased office space from CST that CST leased from DMI.Since February 2016, we have subleased office space from CST that CST leased from an affiliate of John B. Reilly, III, a director of our Board. Themanagement fee charged by CST to the Partnership, under the Amended Omnibus Agreement, incorporates this rental expense, and amounted to $0.1 millionand $0.2 million for 2016 and 2015, respectively. In addition, we paid amounts directly to DMI and the affiliate of J.B. Reilly, III amounting to $0.5 millionand $0.2 million for 2016 and 2015, respectively.Agreements with DMSDMS is affiliated with our former President and Chief Executive Officer and current director of the Board, Mr. Topper.DMS is an operator of convenience stores that purchases substantially all of its motor fuel requirements from us on a wholesale basis. DMS also leases certainretail site real estate from us in accordance with a master lease agreement between DMS and CrossAmerica.Revenues from fuel sales and rental income from DMS and its affiliates were as follows (in thousands):135 Year Ended December 31, 2016 2015Revenues from fuel sales to DMS and its affiliates $254,292 $322,918Rental income from DMS and its affiliates $21,208 $23,474Motor fuel is sold to DMS at our cost plus a fixed mark-up per gallon. Receivables from DMS totaled $8.6 million and $7.3 million at December 31, 2016and 2015, respectively.Wholesale Fuel Supply Agreement with DMSIn connection with the IPO, the Partnership and DMS entered into a PMPA Franchise Agreement pursuant to which the Partnership is the exclusive distributorof motor fuel to all sites operated by DMS for a period of 15 years. We have the right to impose the brand of fuel that is distributed to DMS. There are nominimum volume requirements that DMS is required to satisfy. We charged DMS the DTW prices for each grade of product in effect at the time title to theproduct passes to DMS. The conflicts committee of the Board shall, no less than annually, review the DTW prices charged to DMS to ensure that the pricesare not below reasonable market rates charged to similarly situated or otherwise comparable third-party sites over a representative period of time. We have aright of first refusal in connection with any proposed transfer by DMS of its interest in the wholesale supply agreement. The wholesale supply agreementcontains cross-default provisions with each lease agreement with DMS.We entered into an Amendment to the PMPA Franchise Agreement, effective as of October 1, 2014, by and between LGW, a subsidiary of the Partnership, andDMS (the “Wholesale Fuel Supply Agreement Amendment”) pursuant to which the pricing terms were amended. Prior to the Wholesale Fuel SupplyAgreement Amendment, the agreement provided that we charge DMS DTW pricing, which provided for a variable cent-per-gallon margin for each grade ofproduct in effect at the time title to the product passed to DMS. The Wholesale Fuel Supply Agreement Amendment amends the pricing terms of theagreement to provide for rack plus pricing.Lease Agreement with DMSOn May 28, 2014, we entered into a master lease agreement with DMS, with an effective date of June 1, 2014, which consolidated multiple individual leasesthen in effect between DMS and the Partnership into a single master lease agreement. We entered into two amendments to the master lease agreement onOctober 1, 2015 and October 22, 2015. Effective February 1, 2016, we entered into an amendment to the master lease agreement. The master lease agreement,and amendments thereto, have been approved by the conflicts committee of the Board.Maintenance and Environmental CostsCertain maintenance and environmental monitoring and remediation activities are undertaken by Synergy Environmental, Inc., an entity affiliated with Mr.Topper as approved by the conflicts committee of the Board. We paid $1.6 million and $1.3 million to this related party for the years ended December 31,2016 and 2015, respectively.Other Related Party TransactionsLease and Supply Agreements with other Related PartiesThe Partnership leases certain motor fuel stations to TopStar, a related party of Mr. Topper, under cancelable operating leases. Rent income under theseagreements was $0.5 million for the years ended December 31, 2016 and 2015.The Partnership leases certain motor fuel stations from related parties of Mr. Topper, under cancelable operating leases. Rent expense under these agreementswas $0.9 million for the years ended December 31, 2016 and 2015.Aircraft UsageFrom time to time, we use aircrafts owned by a group of individuals that includes Mr. Topper under lease agreements between a CST affiliate and such groupof individuals. These arrangements were approved in March 2015 and June 2015 by the nominating and governance committee of the CST Board becauseMr. Topper served as a director of the CST Board at the time. We paid $0.2 million to this related party for the year ended December 31, 2015.136Zimri DM, LLCIn connection with our purchase of PMI in May 2014, we divested the PMI lubricants business, which was subsequently purchased by a company affiliatedwith Mr. Topper. (“Zimri”). PMI provided certain services to Zimri pursuant to a transition services agreement. All services have been terminated and noreceivable amounts are outstanding.Review, Approval and Ratification of Related Person TransactionsThe Board has adopted a Code of Ethics and Business Conduct that provides that the Board or its authorized committee will periodically review all relatedperson transactions that are required to be disclosed under SEC rules and, when appropriate, initially authorize or ratify all such transactions. In the event thatthe Board or its authorized committee considers ratification of a related person transaction and determines not to so ratify, the Code of Ethics and BusinessConduct provides that our management will make all reasonable efforts to cancel or annul the transaction.The Code of Ethics and Business Conduct provides that, in determining whether or not to recommend the initial approval or ratification of a related persontransaction, the Board or its authorized committee should consider all of the relevant facts and circumstances available, including (if applicable) but notlimited to: (i) whether there is an appropriate business justification for the transaction; (ii) the benefits that accrue to us as a result of the transaction; (iii) theterms available to unrelated third parties entering into similar transactions; (iv) the impact of the transaction on a director’s independence (in the event therelated person is a director, an immediate family member of a director or an entity in which a director or an immediately family member of a director is apartner, shareholder, member or executive officer); (v) the availability of other sources for comparable products or services; (vi) whether it is a singletransaction or a series of ongoing, related transactions; and (vii) whether entering into the transaction would be consistent with the Code of Ethics andBusiness Conduct.Director IndependenceFor a discussion of the independence of the Board, please see “Item 10. Directors, Executive Officers and Corporate Governance Management.”ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe audit committee of the board of directors of our General Partner selected Grant Thornton LLP, or Grant Thornton, an independent registered publicaccounting firm, to audit our consolidated financial statements for the year ended December 31, 2016. The audit committee’s charter requires the auditcommittee to approve in advance all audit and non-audit services to be provided by our independent registered public accounting firm. All services reportedin the audit, audit-related, tax and all other fees categories below with respect to this Annual Report on Form 10-K for the year ended December 31, 2016were approved by the audit committee.The following table summarizes the aggregate Grant Thornton fees that were allocated to us for independent auditing, tax and related services for each of thelast two fiscal years (in thousands): Year Ended December 31, 2016 2015Audit fees (1)$1,334 $1,420Audit-related fees (2)— —Tax fees (3)— —All other fees (4)— —Total$1,334 $1,420137(1) Audit fees represent amounts billed for each of the years presented for professional services rendered in connection with those services normallyprovided in connection with statutory and regulatory filings or engagements including comfort letters, consents and other services related to SECmatters. In 2015, Grant Thornton provided services related to our equity offerings.(2) Audit-related fees represent amounts billed in each of the years presented for assurance and related services that are reasonably related to theperformance of the annual audit or quarterly reviews.(3) Tax fees represent amounts billed in each of the years presented for professional services rendered in connection with tax compliance, tax advice andtax planning.(4) All other fees represent amounts billed in each of the years presented for services not classifiable under the other categories listed in the table above.No such services were rendered by Grant Thornton during 2016 or 2015.Audit Committee Approval of Audit and Non-audit ServicesThe audit committee of the board of directors of our General Partner has adopted a pre-approval policy with respect to services which may be performed byGrant Thornton. This policy lists specific audit-related services as well as any other services that Grant Thornton is authorized to perform and sets out specificdollar limits for each specific service, which may not be exceeded without additional audit committee authorization. The audit committee reviews the policyat least annually in order to approve services and limits for the current year. Any service that is not clearly enumerated in the policy must receive specific pre-approval by the audit committee prior to engagement.Part IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a) 1. Financial Statements. The following consolidated financial statements of CrossAmerica Partners, LP are included in Part II, Item 8 of this Form 10-K: PAGEReport of Independent Registered Public Accounting Firm 67Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015 69Consolidated Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014 70Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014 71Consolidated Statements of Partners’ Capital and Comprehensive Income for the Three Years Ended December 31, 2016, 2015 and 2014 72Notes to Consolidated Financial Statements 732. Financial Statement Schedules and Other Financial Information. No financial statement schedules are submitted because either they areinapplicable or because the required information is included in the consolidated financial statements or notes thereto.3. EXHIBITS. Filed as part of this Form 10-K are the following exhibits:Exhibit No.Description2.1Fuel Supply Contribution Agreement, dated as of June 15, 2015, by and among CST Brands, Inc., CST Services LLC and CrossAmericaPartners LP (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with theSecurities and Exchange Commission on June 15, 2015) 2.2Real Estate Contribution Agreement, dated as of June 15, 2015, by and among CST Brands, Inc., CST Diamond Holdings LLC, BigDiamond, LLC, Skipper Beverage Company, LLC, CST Shamrock Stations, Inc., CST Arizona Stations, Inc., CrossAmerica Partners LPand Lehigh Gas Wholesale Services, Inc. (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K for CrossAmericaPartners LP, filed with the Securities and Exchange Commission on June 15, 2015) 1382.3Master Lease Agreement, dated October 1, 2014, by and among Lehigh Gas Wholesale Services, Inc., as Landlord, and CAPL OperationsI, LLC and CST Services LLC, as Tenants, as subsequently amended by Amendment to Master Lease Agreement, dated April 13, 2015,and Second Amendment to Master Lease Agreement, dated June 15, 2015 (incorporated by reference to Exhibit 2.3 to the Current Reporton Form 10-Q for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on August 8, 2015) 2.4Form of Addendum to Master Lease Agreement (incorporated by reference to Exhibit 2.4 to the Quarterly Report on Form 10-Q forCrossAmerica Partners LP, filed with the Securities and Exchange Commission on August 8, 2015) 2.5Fuel Distribution Agreement, dated January 1, 2015, by and among CST Marketing and Supply LLC, and certain subsidiaries of CSTServices LLC (incorporated by reference to Exhibit 2.5 to the Quarterly Report on Form 10-Q for CrossAmerica Partners LP, filed with theSecurities and Exchange Commission on August 8, 2015) 3.1Certificate of Limited Partnership of Lehigh Gas Partners LP (incorporated herein by reference to Exhibit 3.1 to the RegistrationStatement on Form S-1 for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on May 11, 2012) 3.2Certificate of Amendment to Certificate of Limited Partnership of Lehigh Gas Partners LP (incorporated by referenced to Exhibit 3.1 tothe Current Report on Form 8-K for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on October 3, 2014) 3.3First Amended and Restated Agreement of Limited Partnership of Lehigh Gas Partners LP, dated October 30, 2012, by and among LehighGas Partners LP, Lehigh Gas GP LLC and Lehigh Gas Corporation (incorporated herein by reference to Exhibit 3.1 to the Current Reporton Form 8-K for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on October 30, 2012) 3.4First Amendment to First Amended and Restated Agreement of Limited Partnership of Lehigh Gas Partners LP, dated as of October 1,2014 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with the Securitiesand Exchange Commission on October 3, 2014) 3.5Second Amendment to First Amended and Restated Agreement of Limited Partnership of CrossAmerica Partners LP, dated as ofDecember 3, 2014 (incorporated by reference herein to Exhibit 3.1 to the Current Report on Form 8-K for CrossAmerica Partners, filedwith the Securities and Exchange Commission on December 9, 2014) 10.1Omnibus Agreement, dated as of October 30, 2012, by and among Lehigh Gas Partners LP, Lehigh Gas GP LLC, Lehigh Gas Corporation,Lehigh Gas-Ohio, LLC and Joseph V. Topper, Jr. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K forCrossAmerica Partners LP, filed with the Securities and Exchange Commission on October 30, 2012) 10.2Amendment to Omnibus Agreement, dated as of May 1, 2014, by and among Lehigh Gas Partners LP, Lehigh Gas GP LLC and LehighGas Corporation (incorporated by referenced to Exhibit 10.1 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed withthe Securities and Exchange Commission on May 1, 2014) 10.3Amended and Restated Omnibus Agreement, dated as of October 1, 2014, by and among Lehigh Gas Partners LP, Lehigh Gas GP LLC,Lehigh Gas Corporation, CST Services, LLC and Lehigh Gas-Ohio LLC (incorporated by reference to Exhibit 10.2 to the Current Reporton Form 8-K for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on October 3, 2014) 10.4*Amendment effective January 1, 2016 of the Amended and Restated Omnibus Agreement, dated as of October 1, 2014, by and amongLehigh Gas Partners LP, Lehigh Gas GP LLC, Lehigh Gas Corporation, CST Services, LLC and Lehigh Gas-Ohio LLC. 10.5Third Amended and Restated Credit Agreement, dated as of March 4, 2014, by and among the Lehigh Gas Partners LP, as borrower,certain domestic subsidiaries of Lehigh Gas Partners LP from time to time party thereto, the lenders party thereto, and RBS Citizens, N.A.,KeyBank National Association and Wells Fargo Securities, LLC, as joint lead arranger and joint bookrunners, Wells Fargo Bank NationalAssociation, as co-syndication agent, and KeyBank National Association, as co-syndication agent, Bank of America, N.A., asdocumentation agent, Manufacturers and Traders Trust Company, as documentation agent, Manufacturers And Traders Trust Company, asco-documentation agent, Royal Bank of Canada, as co-documentation agent, Santander Bank, N.A., as co-documentation agent, andCitizens Bank of Pennsylvania, as administrative agent for the lenders thereunder (incorporated by reference to Exhibit 10.1 to theCurrent Report on Form 8-K for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on March 6, 2014) 13910.6First Amendment to Third Amended and Restated Credit Agreement, dated as of July 2, 2014, by and among Lehigh Gas Partners LP,certain domestic subsidiaries of Lehigh Gas Partners LP, the lenders from party thereto, and Citizens Bank of Pennsylvania, asadministration agent for the lenders thereunder (incorporated by referenced to Exhibit 10.1 to the Current Report on Form 8-K forCrossAmerica Partners LP, filed with the Securities and Exchange Commission on July 3, 2014) 10.7Waiver, Second Amendment to Third Amended and Restated Credit Agreement and Joinder, dated as of September 30, 2014, by andamong Lehigh Gas Partners LP and Lehigh Gas Wholesale Services, Inc., certain domestic subsidiaries of Lehigh Gas Partners LP, thelenders party thereto, and Citizens Bank of Pennsylvania, as administrative agent for the lenders thereunder (incorporated by reference toExhibit 10.1 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with the Securities and Exchange Commission onOctober 3, 2014) 10.8Third Amendment to Third Amended and Restated Credit Agreement dated as of July 26, 2016 (incorporated by referenced to Exhibit10.1 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on December19, 2016) 10.9Fourth Amendment to Third Amended and Restated Credit Agreement dated as of December 13, 2016 (incorporated by referenced toExhibit 10.2 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with the Securities and Exchange Commission onDecember 19, 2016) 10.10Amendment to PMPA Franchise Agreement, dated as of October 1, 2014, by and between Lehigh Gas Wholesale LLC and Lehigh Gas-Ohio, LLC (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with theSecurities and Exchange Commission on October 3, 2014) 10.11Voting Agreement, dated as of October 1, 2014, by and among CST Brands, Inc., Joseph V. Topper, Jr., The 2004 Irrevocable Agreementof Trust of Joseph V. Topper, Sr. and Lehigh Gas Corporation (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K For CrossAmerica Partners LP, filed with the Securities and Exchange Commission on October 3, 2014) 10.12Lehigh Gas Partners LP 2012 Incentive Award Plan, dated as of July 27, 2012 10.13Form of Lehigh Gas Partners LP 2012 Incentive Award Plan Award Agreement for Phantom Units granted to executive officers fromMarch 15, 2013 (incorporated herein by reference to Exhibit 10.6(a) to the Annual Report on Form 10-K for CrossAmerica Partners LP,filed with the Securities and Exchange Commission on March 28, 2013) 10.14Form of Lehigh Gas Partners LP 2012 Incentive Award Plan Award Agreement for Profits Interests with immediate vesting, granted todirectors from March 14, 2014 (incorporated by reference to Exhibit 10.6(b) to the Current Report on Form 8-K for CrossAmerica PartnersLP, filed with the Securities and Exchange Commission on March 10, 2014) 10.15Form of Lehigh Gas Partners LP 2012 Incentive Award Plan Award Agreement for Profits Interests, with one year vesting, granted todirectors from March 14, 2014 (incorporated by reference to Exhibit 10.6(c) to the Current Report on Form 8-K for CrossAmerica PartnersLP, filed with the Securities and Exchange Commission on March 10, 2014) 10.16Form of Lehigh Gas Partners LP 2012 Incentive Award Plan Award Agreement for Profits Interests granted to executive officers fromMarch 14, 2014 (incorporated by reference to Exhibit 10.6(d) to the Current Report on Form 8-K for CrossAmerica Partners LP, filed withthe Securities and Exchange Commission on March 10, 2014) 10.17Form of Lehigh Gas Partners LP 2012 Incentive Award Plan Award Agreement for Phantom Units for Executive Officers with distributionequivalent rights (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for CrossAmerica Partners LP, filedwith the Securities and Exchange Commission on August 8, 2015) 10.18Form of Lehigh Gas Partners LP 2012 Incentive Award Plan Award Agreement for Phantom Units for Non-Employee Directors withdistribution equivalent rights from December 10, 2015 10.19Lehigh Gas Partners LP Executive Income Continuity Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-Kfor CrossAmerica Partners LP, filed with the Securities and Exchange Commission on May 30, 2014) 10.20Lehigh Gas Partners LP Executive Income Continuity Plan (as amended) (incorporated by reference to Exhibit 10.2 to the QuarterlyReport on Form 10-Q for CrossAmerica Partners LP, filed with the Securities and Exchange Commission on November 7, 2014) 14010.21*First Amendment to Amended and Revised CrossAmerica Partners LP Executive Income Continuity Plan, dated September 14, 2016 10.22Employment Agreement, dated as of October 1, 2014, by and between CST Services LLC and Joseph V. Topper, Jr. (incorporated byreference to Exhibit 10.5 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with the Securities and ExchangeCommission on October 3, 2014) 10.23Master Lease Agreement, dated May 28, 2014, by and among LGP Realty Holdings LP, Lehigh Gas Wholesale Services, Inc. and LehighGas-Ohio, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K for CrossAmerica Partners LP, filed with theSecurities and Exchange Commission on May 30, 2014) 10.24GP Purchase Agreement, dated as of August 6, 2014, by and among Lehigh Gas Corporation, CST GP, LLC and CST Brands, Inc.(incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K for CrossAmerica Partners LP, filed with the Securitiesand Exchange Commission on February 27, 2015) 10.25IDR Purchase Agreement, dated as of August 6, 2014, by and among The 2004 Irrevocable Agreement of Trust of Joseph V. Topper, Sr.,The 2008 Irrevocable Agreement of Trust of John B. Reilly, Jr., CST Brands Holdings, LLC and CST Brands, Inc. (incorporated byreference to Exhibit 10.21 to the Annual Report on Form 10-K for CrossAmerica Partners LP, filed with the Securities and ExchangeCommission on February 27, 2015) 10.26Contribution Agreement, dated as of December 16, 2014, by and among CST Brands, Inc., CST Services LLC and CrossAmerica PartnersLP (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K for CrossAmerica Partners LP, filed with the Securitiesand Exchange Commission on February 27, 2015) 21.1 *List of Subsidiaries of CrossAmerica Partners LP 23.1 *Consent of Grant Thornton LLP 31.1 *Certification of Principal Executive Officer of CrossAmerica GP LLC as required by Rule 13a-14(a) of the Securities Exchange Actof 1934 31.2 *Certification of Principal Financial Officer of CrossAmerica GP LLC as required by Rule 13a-14(a) of the Securities Exchange Actof 1934 32.1*†Certification of Principal Executive Officer of CrossAmerica GP LLC pursuant to 18 U.S.C. §1350 32.2*†Certification of Principal Financial Officer of CrossAmerica GP LLC pursuant to 18 U.S.C. §1350 101.INS *XBRL Instance Document 101.SCH *XBRL Taxonomy Extension Schema Document 101.CAL *XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB *XBRL Taxonomy Extension Label Linkbase Document 101.PRE *XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF *XBRL Taxonomy Extension Definition Linkbase Document*Filed herewith†Not considered to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.141SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.CROSSAMERICA PARTNERS LPBy: CROSSAMERICA GP LLC, its General PartnerBy: /s/ Jeremy L. Bergeron Jeremy L. BergeronPresident(On behalf of the registrant, and in the capacity ofprincipal executive officer)Date: February 27, 2017Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities indicated on February 27, 2017.SignatureTitle /s/ Kimberly S. LubelChairman of the Board of DirectorsKimberly S. Lubel /s/ Jeremy L. BergeronPresident and Director(Principal Executive Officer)Jeremy L. Bergeron /s/ Clayton E. KillingerChief Financial Officer and Director(Principal Financial Officer)Clayton E. Killinger /s/ Steven M. StellatoChief Accounting Officer(Principal Accounting Officer)Steven M. Stellato /s/ Gene EdwardsDirectorGene Edwards /s/ Justin A. GannonDirectorJustin A. Gannon /s/ Joseph V. Topper, JR.DirectorJoseph V. Topper, JR. /s/ John B. Reilly, IIIDirectorJohn B. Reilly, III142Exhibit 10.4AMENDMENTTOAMENDED AND RESTATED OMNIBUS AGREEMENTThis Amendment to Amended and Restated Omnibus Agreement (the “Amendment”) is entered into on, and effective as of,January 1, 2016 (the “Effective Date”), and is by and among CrossAmerica Partners LP (formerly known as Lehigh Gas Partners LP),a Delaware limited partnership (the “MLP” or the “Partnership”), CrossAmerica GP LLC (formerly known as Lehigh Gas GP LLC),a Delaware limited liability company and the general partner of the MLP (the “General Partner”), Dunne Manning Inc. (formerlyknown as Lehigh Gas Corporation), a Delaware corporation (“LGC”), CST Services LLC, a Delaware limited liability company(“CST”), and, for purposes of Article X of the Agreement only, Dunne Manning Stores, LLC (formerly known as Lehigh Gas-Ohio,LLC), a Delaware limited liability company (“LGO”), and, for purposes of Section 2.5, Article X and Article XI of the Agreementonly, Joseph V. Topper, Jr. (“Topper”). The above-named entities are sometimes referred to in this Agreement each as a “Party” andcollectively as the “Parties.” Capitalized terms used and not otherwise defined in this Amendment shall have the respective meaningsascribed to such terms in Section 1.1 of the Agreement.RECITALS:WHEREAS, the Parties are parties to that certain Amended and Restated Omnibus Agreement with an effective date ofOctober 1, 2014 (the “Agreement”); andWHEREAS, the Parties wish to amend certain provisions of the Agreement as set forth below pursuant to Section 12.6 of theAgreement.NOW, THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, andfor other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree asfollows:1.Section 5.1(a) is hereby amended and replaced in its entirety as follows:5.1 Management Fee.(a) The Partnership shall pay CST a management fee for providing the Services in an amount equal to (i) $856,000per month (the “Base Management Fee”) plus (ii) the Variable Wholesale Rate (as defined below) times each gallon of wholesalemotor fuel distributed by the Partnership and its subsidiaries per month (the “Variable Wholesale Management Fee”) plus (iii) $0.015for each gallon of retail motor fuel sold by the Partnership and its subsidiaries through their commission agents per month (the“Variable Retail Management Fee,” together with the Variable Wholesale Management Fee, the “Variable Management Fee”). The“Variable Wholesale Rate” shall be zero ($0.00) for the first 500 million gallons in the applicable calendar year, $0.0030 for the next500 million gallon in such year, and $0.0020 for all gallons above 1,000 million gallons in such year. The Base Management Fee andthe Variable Management Fee are collectively referred to as the “Management Fee.” The Base Management Fee shall be due andpayable, in advance, on the first Business Day of each month. The Variable Management Fee shall be paid by the Partnership to CSTas soon as practicable upon receipt by the General Partner of an invoice from CST setting forth the Variable Management Fee owed bythe Partnership to CST. If requested by the General Partner,1CST’s invoice for the Variable Management Fee shall provide reasonably detailed documentation supporting the gallons of motor fueldistributed reflected on such invoice. Notwithstanding the foregoing, the General Partner and CST, at their discretion, may waive all orany portion of the Management Fee to the extent that all or a portion of the management services provided hereunder are eitherpurchased from another party or not required by the Partnership.2.Miscellaneous. The provisions of the Agreement shall remain in full force and effect except as expressly amended andmodified as set forth in this Amendment. This Amendment and the rights and obligations of the parties hereunder shall be governed byand interpreted, construed and enforced in accordance with the laws of the State of Delaware without regard to any choice of lawprinciples. This Amendment may be executed in one or more counterparts, each of which shall be an original and all of which shallconstitute but one and the same document.[Remainder of Page Intentionally Left Blank]2IN WITNESS WHEREOF, the Parties have executed this Amendment on, and effective as of, the Effective Date.CROSSAMERICA PARTNERS LPBy: CrossAmerica GP LLC, its General PartnerBy: /s/ Jeremy L. Bergeron Jeremy L. BergeronPresidentCROSSAMERICA GP LLCBy: /s/ Jeremy L. Bergeron Jeremy L. BergeronPresidentDUNNE MANNING INC.By: /s/ Joseph V. Topper, Jr. Joseph V. Topper, Jr.Chief Executive OfficerCST SERVICES LLCBy: /s/ Kimberly S. Lubel Kimberly S. LubelPresident and Chief Executive OfficerFOR PURPOSES OF ARTICLE X OF THE AGREEMENTDUNNE MANNING STORES, LLCBy: /s/ Crislyn Sheeler Crislyn SheelerGeneral Manager FOR PURPOSES OF SECTION 2.5, ARTICLE X, AND ARTICLE XI OF THEAGREEMENT/s/ Joseph V. Topper, Jr. Joseph V. Topper, Jr.3Exhibit 10.21First Amendment to Amended and Revised CrossAmerica Partners LPExecutive Income Continuity Plan1. Purpose. The purpose of this Executive Income Continuity Plan (this “Plan”) is to retain the services of executives and otherkey employees who provide management services to CrossAmerica Partners LP and its subsidiaries (the “Partnership”) and its generalpartner, CrossAmerica GP LLC (the “GP”, collectively with the Partnership, the “Company”) and to reinforce and encourage thecontinuing attention, dedication and loyalty of these executives without the distraction of concern over the possibility of involuntary orconstructive termination of employment resulting from unforeseen developments, by providing income continuity for a limited period.This Plan is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), theregulations thereunder and related guidance issued by the Internal Revenue Service (“IRS”).2. Definitions. Unless the context otherwise requires, the following terms shall have the meanings respectively indicated:(a) “2012 Plan” shall mean the Lehigh Gas Partners LP 2012 Incentive Award Plan, or any successor incentive award plans, asfrom time to time in effect.(b) “Annual Bonus” shall have the meaning set forth in Section 5(e) of this Plan.(c) “Award” shall mean any and all awards granted under the 2012 Plan including, without limitation, options, unit appreciationrights, restricted units, phantom units, profits interest, substitute awards, performance awards, unit awards, other unit based awards andany tandem distribution equivalent rights granted with respect to an award.(d) “Board” shall mean the board of directors of the GP.(e) “Cause” shall mean (i) the willful and continued failure by a Participant substantially to perform such Participant’s duties withthe Company (other than any such failure resulting from such Participant’s incapacity due to physical or mental illness), after a demandfor substantial performance is delivered to the Participant by the Company which specifically identifies the manner in which theCompany believes that the Participant has not substantially performed such Participant’s duties, or (ii) the willful engaging by theParticipant in conduct demonstrably injurious to the Company. For purposes of this definition, no act, or failure to act, on the part of aParticipant shall be considered “willful” unless done, or omitted to be done, by such Participant without reasonable belief that suchParticipant’s action or omission was in the best interests of the Company and was lawful.(f) A “Change in Control” shall be deemed to have occurred upon the occurrence of one of the following events: (i)Any one person, or more than one person acting as a group, acquires ownership of either (A) the common and subordinated units ofCrossAmerica Partners LP (“Units”), or (B) the membership interests of the GP (“Membership Interests”) that, together with Units orMembership Interests, as applicable, held by such person or group, constitutes more than 50% of either the total fair market value ortotal voting power of either the Units or the Membership Interests, as applicable.1 (ii)Any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date ofthe most recent acquisition by such person or persons) ownership of Units or Membership Interests possessing thirty-five percent(35%) or more of the total voting power of the Company; or (iii)A majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is notrecommended by CST Brands, Inc.; or (iv)Any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date ofthe most recent acquisition by such person or persons) assets from the Partnership that have a total gross fair market value equal to ormore than sixty percent (60%) of the total gross fair market value of all of the assets of the Partnership immediately prior to suchacquisition; or (v)The consummation of the transactions contemplated by the Agreement and Plan of Merger, by and among Circle K Stores Inc., UltraAcquisition Corp. and CST Brands, Inc., dated as of August 21, 2016.(g) “Company” shall mean the Partnership and CrossAmerica GP LLC, collectively.(h) “Date of Termination” shall mean (i) if the Services of a Participant are terminated by death, the date of such Participant’sdeath, (ii) if the Participant retires, the date of such Participant’s retirement, (iii) if such Services are terminated other than for Cause orother than as a result of Disability, the date specified in the Notice of Termination, (iv) if such Services are terminated for Disability,the date of such Participant’s Disability, (v) if such Services are terminated by the Participant for Good Reason, the date specified inthe Notice of Termination, (vi) if the Participant’s Services are terminated following a Change in Control, the date in the Notice ofTermination, and (vii) otherwise shall be the last day such Participant provides Services to the Company.(i) “Disability” shall mean that a Participant is unable to engage in any substantial gainful activity by reason of any medicallydeterminable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period ofnot less than twelve (12) months.(j) “Good Reason” shall mean the occurrence of any of the following: (A) a material diminution in the Participant’s basecompensation and/or target Annual Bonus; (B) a material diminution in the Participant’s authority, duties, or responsibilities; (C) amaterial diminution in the authority, duties, or responsibilities of the supervisor to whom the Participant is required to report, includinga requirement that the Participant report to a corporate officer or employee instead of reporting directly to the board of directors of theGP; (D) a material diminution in the budget over which the Participant retains authority; (E) a material change in the geographiclocation at which the Participant must perform the Services; and (F) any other action or inaction that constitutes a material breach byCompany of the agreement under which the Participant provides services. Notice of Termination by a Participant for “Good Reason”shall not be effective unless all of the following conditions are satisfied: (i) the occurrence of the condition which would otherwiseconstitute Good Reason under this Section 2(j) of this Plan must have arisen without the Participant’s consent; (ii) such condition mustremain uncorrected for 30 days after receipt by the Company of a notice of the existence of such condition from the Participant inaccordance with Section 10 of this Plan; and (iii) the date of Participant’s termination of Service must occur within 90 days after theinitial existence of the condition specified in such notice.(k) “I.C. Plan” means the existing system of annual bonuses (cash, equity or a combination thereof) payable to Participants,pursuant to which annual target bonuses are established based upon job levels and2payments of bonuses as a percentage of such targets are made based upon CST Brands, Inc., Partnership and/or individualperformance.(l) “Multiplier” shall mean (i) in the case of each Officer, the number 2.99; and (ii) in the case of each other Participant, suchnumber set forth adjacent to such Participant’s name in Schedule A which in no event shall exceed 2.99 (in the cases of each of (i) and(ii), subject to the asterisked footnote to Schedule A).(m) “Notice of Termination” shall mean a notice which indicates the specific basis for termination of the Services of a Participantrelied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide such basis. The Notice ofTermination shall also include the date of termination.(n) “Officer(s)” shall mean who is designated as an executive officer of the Company or Partnership by resolution of the Board.(o) “Participant” shall mean the Officers and any other person, who is an employee of CST Services, LLC, who is included in themembership of this Plan as provided in Section 3 of this Plan.(p) “Prospective Change in Control” shall have the meaning as defined in Section 12(b) of this Plan.(q) “Service,” as used in Section 5 of this Plan, shall mean the provision of management services to the Company.3. Membership. All Officers shall be Participants. The Board may designate any other person, who provides Services, as aParticipant. Such Participant and the Multiplier applicable to such Participant shall be set forth in Schedule A, attached hereto andmade a part hereof. After a person becomes a Participant, such Participant’s membership in this Plan shall continue until such person’sdeath or retirement, termination by the Company or CST Services, LLC for Cause or Disability, or termination by such Participantother than for Good Reason.4. Termination. Each Participant shall be entitled to receive the income continuation payments provided for in Section 5 of thisPlan upon termination of such Participant’s Services (including, without limitation, the termination of the Omnibus Agreement betweenCST Services, LLC and the Company) unless such termination is (a) because of the Participant’s death, Disability or retirement, (b) bythe Company or CST Services, LLC for Cause, or (c) by such Participant for any reason (other than for Good Reason which occurswithin one hundred twenty (120) days prior to the termination); provided that, if Notice of Termination is given prior to a Change inControl, such Participant shall have signed and delivered, in form and substance satisfactory to the Company’s counsel, a non-disparagement agreement, and a waiver, effectively waiving all claims against the Company (including its directors, officers,employees and agents) arising out of such Participant’s employment with CST Services, LLC and the provision of Services, other thanclaims for payment post-termination under the terms of this Plan and employee benefit and compensation plans of the Company orCST Services, LLC, as applicable, such waiver, and non-disparagement agreement to be delivered no later than the later of thirty(30) days following (i) the date of Notice of Termination, or (ii) written request therefor by the Company, provided the Company mustrequest same no later than three (3) months after the date of the Notice of Termination. For all purposes of this Plan, a Participant shallbe considered to have terminated his Services with the Company when Participant incurs a “separation from service” with theCompany within the meaning of section 409A(a)(2)(A)(i) of the Code and applicable administrative guidance issued thereunder.5. Income Continuation and Vesting.3(a) Except as otherwise provided in Section 5(c) of this Plan, upon the termination of an Officer’s Services, pursuant to Section 4of this Plan, (a) the GP shall pay to such Participant in cash the sum of such Participant’s annual base salary at the rate in effect at thetime Notice of Termination is given plus such Participant’s Annual Bonus, in equal monthly installments over a twelve (12) monthperiod following the Date of Termination in the case of Officers, and (b) notwithstanding any provision to the contrary in any Awardagreement, all of such Participant’s Awards shall vest immediately on the date that the Notice of Termination is given.(b) Except as otherwise provided in Section 5(c) of this Plan, upon the termination of a Participant’s Services other than those ofan Officer, pursuant to Section 4 of this Plan, (a) the GP shall pay to such Participant in cash the sum of one-half of such Participant’sannual base salary at the rate in effect at the time Notice of Termination is given plus one-half of such Participant’s Annual Bonus, inequal monthly installments over a six (6) month period following the Date of Termination in the case of Participants, and(b) notwithstanding any provision to the contrary in any Award agreement, all of such Participant’s Awards shall vest immediately onthe date that the Notice of Termination is given.(c) Upon the termination of a Participant’s Services pursuant to a Notice of Termination given after, or in connection with, aChange in Control and before the second anniversary of such Change in Control, pursuant to Section 4 of this Plan, the GP shall payto such Participant the product of (A) the sum of (x) the Participant’s annual base salary at the rate in effect at the time Notice ofTermination is given, plus (y) the Participant’s Annual Bonus times (B) the Multiplier, payable in a lump sum in cash following theDate of Termination, subject to Subsection (d) of this Section. Notwithstanding any provision to the contrary in any Award agreement,upon the occurrence of a Change in Control, all Awards to Participants shall vest immediately on the date that the Change in Control iseffective.(d) All payments under subsections (a), (b) and (c) of this Section 5 of this Plan shall commence, or be paid, on the first businessday of the seventh month after the Participant’s Date of Termination except as otherwise specifically provided in such subsections.Payments that would have been made during the six-month period following the Participant’s Date of Termination shall be paid to theParticipant on the first business day of the seventh month after the Participant’s Date of Termination, without interest.(e) As used in this Plan, “Annual Bonus” means the annual target bonus under the I.C. Plan attributable to the Participant in effectat the time the Notice of Termination is given. Notwithstanding the foregoing, if termination occurred for Good Reason as specified inSection 2(j)(A) of this Plan, the termination payments provided for in subsection 5(a) or (b) shall be calculated using the annual basesalary and Annual Bonus as in effect immediately before the reduction of such annual base salary or Annual Bonus.6. Other Payments. Upon termination of a Participant’s Services pursuant to Section 4 of this Plan, the GP shall, in addition to thepayments provided for in Section 5 of this Plan, pay to the Participant:(a) All relocation payments incurred in connection with Section 2(j)(E) of this Plan and all legal fees and expenses incurred by theParticipant as a result of such termination (including all such fees and expenses, if any, incurred in contesting or disputing any suchtermination or in seeking to obtain or enforce any right or benefit provided by this Plan or in connection with any tax audit orproceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder); and4(b) During the period of one (1) year following the Date of Termination in the case of an Officer and during the period of six(6) months following the Date of Termination in the case of all other Participants, all reasonable expenses incurred by the Participant inseeking comparable employment with another employer to the extent not otherwise reimbursed to the Participant, including, withoutlimitation, the fees and expenses of a reputable out placement organization, and reasonable travel, telephone and office expenses.Any payments pursuant to this Section 6 shall be made by the Company upon or as soon as practicable following receipt ofsupporting documentation reasonably satisfactory to the Company (but in any event not later than the close of the Participant’s thirdtaxable year following the taxable year in which the Date of Termination occurs). In no event shall any payment be made to Participantfor fees and expenses incurred after the close of the Participant’s second taxable year following the taxable year in which the Date ofTermination occurs7. Maintenance of Other Benefit Plans. For a period of three (3) years (one year if not in connection with a Change in Control)following an Officer’s Date of Termination and for a period of one (1) year (six months if not in connection with a Change in Control)following the Date of Termination in the case of a Participant who is not an Officer, the Company shall cause the Participant’semployer to maintain in full force and effect, for the continued benefit of each Participant entitled to receive, or who received,payments pursuant to Section 5 of this Plan, comprehensive medical and dental insurance, group life insurance (but not includingdisability coverage) on the same basis as such Participant participated immediately prior to the Date of Termination, unless theParticipant’s continued participation is not permitted under the general terms and provisions of such plans and programs or applicablelaw. Continued benefits provided pursuant to the preceding sentence shall be subject to the following requirements: (a) continuedprovided during one taxable year of the Participant shall not affect the continued benefits provided during any other taxable year of theParticipant, (b) any reimbursement of an eligible expense with respect to a continued benefit shall be made on or before the last day ofthe Participant’s taxable year in which the expense was incurred and (c) the right to a continued benefit shall not be subject toliquidation or exchange for another benefit.8. No Mitigation. No Participant shall be required to mitigate the amount of any payment provided for under this Plan by seekingother employment or otherwise, nor shall the amount of any payment so provided for be reduced by any compensation earned by anyParticipant as the result of employment by another employer, by retirement benefits or by offset against any amount claimed to beowed by the Participant to the Company.9. Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation orotherwise) to all or substantially all of the business and assets of the Company, by a written agreement, to expressly assume and agreeto carry out the provisions of this Plan in the same manner and to the same extent that the Company would be required to carry themout if no such succession had occurred.10. Notice. Any notice expressly provided for under this Plan shall be in writing, shall be given either manually or by mail,telegram, telex, telefax or cable, and shall be deemed sufficiently given, if and when received by CST Services, LLC at its offices atOne Valero Way, San Antonio, Texas 78249, Attention: General Counsel, or by any Participant at the address on the records of theCompany for such Participant, or if and when mailed by registered mail, postage prepaid, return receipt requested, addressed to theCompany or the Participant to be notified at such address. Either the Company or any Participant may, by notice to the other, changeits address for receiving notices. 511. Funding. All payments provided for under this Plan for Participants (including those who have retired) shall not be funded orsecured, and no trust shall be created hereunder. Payments under this Plan shall become fully vested and non-forfeitable upon thetermination of a Participant’s Services except for termination where a Participant not be entitled to income continuation payments asprovided in Section 4 or as otherwise provided in any waiver, and non-disparagement agreement entered into pursuant to Section 4 ofthis Plan.12. Amendment and Termination.(a) The Board may at any time or from time to time amend or terminate this Plan. No such amendment or termination mayadversely affect any vested benefits hereunder; and, provided further, that after a Change in Control, this Plan may not be amended orterminated without the consent of all persons who were Participants as of the date of such Change in Control (including those whohave retired).(b) In addition, no amendment or termination made within one (1) year before a Change in Control and made while a ProspectiveChange in Control is pending may adversely affect any benefit that might at any time be or become owing hereunder to a person who,immediately prior to the commencement of such Prospective Change in Control, was a Participant, without the consent of such person(other than a benefit to any such person who is the person, or part of the group, making the offer, or negotiating to make the offer,which constitutes the Prospective Change in Control). As used herein, the term “Prospective Change in Control” means (i) any offerpresented, directly or indirectly, to the Board which, if consummated, would constitute a Change in Control, or (ii) any negotiationwith the Board or any committee or representative thereof to make such an offer (including the unilateral announcement of the terms onwhich such an offer would be made).13. Claim and Appeal Procedure. This Section 13 of this Plan shall not apply after there has been a Change in Control.The Company shall appoint a person or persons to adjudicate claims and appeals under this Plan (the “Administrator”). TheAdministrator shall provide adequate notice in writing to any Participant or to any beneficiary (the “Claimant”) whose claim forbenefits under this Plan has been denied. The Administrator’s notice to the Claimant shall set forth:(a) The specific reason for the denial;(b) Specific references to pertinent Plan provisions upon which the Administrator based its denial;(c) A description of any additional material and information that is needed;(d) That any appeal the Claimant wishes to make of the adverse determination must be in writing to the Administrator withinseventy-five (75) days after receipt of the Administrator’s notice of denial of benefits. The Administrator’s notice must further advisethe Claimant that the Claimant’s failure to appeal the action to the Administrator in writing within the seventy-five (75) day period willrender the Administrator’s determination final, binding and conclusive; and(e) The name and address to whom the Claimant may forward an appeal.If the Claimant should appeal to the Administrator, the Claimant, or the Claimant’s duly authorized representative, may submit, inwriting, whatever issues and comments the Claimant or the Claimant’s duly authorized representative feels are pertinent. The Claimant,or the Claimant’s duly authorized6representative, may review pertinent Plan documents. The Administrator shall re-examine all facts to the appeal and make a finaldetermination as to whether the denial of benefits is justified under the circumstances. The Administrator shall advise the Claimant ofits decision within sixty (60) days of the Claimant’s written request for review, unless special circumstances (such as a hearing) wouldmake the rendering of a decision within the sixty (60) day limit unfeasible, but in no event shall the Administrator render a decisionrespecting a denial for a claim of benefits later than one hundred twenty (120) days after its receipt of a request for review. TheAdministrator’s notice to the Claimant shall set forth:(i) The specific reason for the denial;(ii) Specific references to pertinent Plan provisions upon which the Administrator based its denial; (iii) A statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, alldocuments, records, and other information relevant to the Claimant’s claim; and(iv) A statement that the Claimant has a right to bring a civil action under Section 502(a) of ERISA.14. Governing Law. This Plan, and the rights and obligations of the Company and the Participants hereunder, shall be construedand governed in accordance with the law of the Commonwealth of Pennsylvania.15. Partial Invalidity. If any provision of this Plan is determined to be invalid or unenforceable, such invalidity or unenforceabilityshall not affect the remaining provisions of this Plan, which shall remain in effect in accordance with its terms.16. Certain Excise Taxes. Notwithstanding anything to the contrary in this Plan, if Participant is a “disqualified individual” (asdefined in section 280G(c) of the Code), and the payments and benefits provided for under this Plan, together with any other paymentsand benefits which Participant has the right to receive from the Company or any of its affiliates, would constitute a “parachutepayment” (as defined in section 280G(b)(2) of the Code), then the payments and benefits provided for under this Plan shall be either(a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Participant from the Companyand its affiliates will be one dollar ($1.00) less than three times Participant’s “base amount” (as defined in section 280G(b)(3) of theCode) and so that no portion of such amounts and benefits received by Participant shall be subject to the excise tax imposed by section4999 of the Code, or (b) paid in full, whichever produces the better net after-tax position to Participant (taking into account anyapplicable excise tax under section 4999 of the Code and any other applicable taxes). The reduction of payments and benefitshereunder, if applicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in which suchpayment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing,to the extent necessary, through to such payment or benefit that would be made first in time) and, then, reducing any benefit to beprovided in-kind hereunder in a similar order. The determination as to whether any such reduction in the amount of the payments andbenefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made orprovided, and through error or otherwise, that payment or benefit, when aggregated with other payments and benefits from theCompany (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three timesParticipant’s base amount, then Participant shall immediately repay such excess to the Company upon notification that an overpaymenthas been made. Nothing in this Section 16 shall require the Company to be responsible for, or have any liability or obligation withrespect to, Participant’s excise tax liabilities under section 4999 of the Code.7 By: CrossAmerica Partners LP and CrossAmerica GP LLC By: CrossAmerica GP LLC, for itself and as general partner By: /s/ Jeremy L. Bergeron September 14, 2016 Jeremy L. BergeronPresident DATE 8Schedule A Any and all persons elected as an officer of the GP by resolution of the Board2.99* Karen Yeakel2.99 Leti Andrade2.99 Sean Wolf2.99 Heather Davis2.99 Jon Benfield2.99 Tom Caverly2.99 *In the event that, within a twelve month period, both a termination of a Participant’s Services described in Section 5(c) of this Planand a termination of such Participant’s Services described in Section 3(b) of any applicable Separation Agreement with CST Brands,Inc. occur, then (i) Clayton E. Killinger’s aggregate payments under Section 5(c) of this Plan and Section 3(b)(i) of his SeparationAgreement with CST Brands, Inc. shall not exceed two times his payments under Section 3(b)(i) of his Separation Agreement withCST Brands, Inc. and (ii) the aggregate payments and benefits to each other Participant who has a Separation Agreement with CSTBrands, Inc. under such Separation Agreement and under this Plan shall not exceed the greater of the payments and benefits providedunder such Separation Agreement and the payments and benefits provided under this Plan. In addition, solely with respect to theOfficer participants subject to this paragraph, Good Reason, as defined in Section 2(j) of this Plan, would include a reduction of theirAnnual Bonus by 50% or more.9Exhibit 21.1CROSSAMERICA GP LLC ENTITIESNAME OF ENTITYJurisdictionCAP OPERATIONS, INC.DelawareCAP WEST VIRGINIA HOLDINGS, LLCDelawareCHESTNUT STREET AND LINE STREET MIFFLINBURG, LLCDelawareCOBBLER’S CREEK LLCDelawareCROSSAMERICA FINANCE CORP.DelawareCROSSAMERICA PARTNERS LPDelawareDELG – UST I, LLCDelawareERICKSON OIL PRODUCTS, INC.WisconsinEXPRESS LANE, INC.FloridaFLLG – UST I, LLCDelawareFREEDOM VALU CENTERS, INC.WisconsinHARLEYSVILLE GAS STATION, LLCDelawareI-95 & MARKET ST. MARCUS HOOK, LLCPennsylvaniaKYLG – UST I, LLCDelawareLANSDALE GAS STATION LLCDelawareLEHIGH GAS WHOELSALE LLCDelawareLEHIGH GAS WHOLESALE SERVICES, INC.DelawareLGP OPERATIONS LLCDelawareLGP REALTY HOLDINGS GP LLCDelawareLGP REALTY HOLDINGS LPDelawareM & J OPERATIONS, LLCWest VirginiaMALG – UST I, LLCDelawareMALG - UST II, LLCDelawareMELG – UST I, LLCDelawareMINNESOTA NICE HOLDINGS INC.DelawareNHLG – UST I, LLCDelawareNJLG – UST I, LLCDelawareNTI DROP DOWN ONE, LLCDelawareNTI DROP DOWN THREE, LLCDelawareNTI DROP DOWN TWO, LLCDelawareNYLG – UST I, LLCDelawareOHLG – UST I, LLCDelawarePALG – UST I, LLCDelawarePALG – UST II, LLCDelawarePALG – UST III, LLCDelawarePALG – UST IV, LLCDelawarePALG – UST IX, LLCDelawarePALG – UST V, LLVDelawarePALG – UST VI, LLCDelawarePALG – UST VII, LLCDelawarePALG – UST VIII, LLCDelawarePETROLEUM MARKETERS, INCORPORATEDVirginiaPM PROPERTIES, INC.VirginiaPM TERMINALS, INC.VirginiaPM TRANSPORT, INC.VirginiaROUTE 313 & 113 DUBLIN, LLCDelaware1 | PageSTOP IN FOOD STORES, INC.Virginia100 EAST UWCHLAN AVE. EXTON, LLCPennsylvania100 YORK JENKINTOWN LLCDelaware1001 BALTIMORE AVE. EAST LANDSDOWNE, LLCPennsylvania103 N. POTTSTOWN PIKE EXTON, LLCPennsylvania1095 S. WEST END BLVD. QUAKERTOWN, LLCDelaware1110 MACARTHUR ROAD WHITEHALL, LLCDelaware1130 BALTIMORE PIKE GLEN MILLS, LLCPennsylvania1229 MCDADE BLVD. WOODLYN, LLCPennsylvania123 NORTH PINE LANGHORNE, LLCPennsylvania1266 E. OLD LINCOLN HWY. LANGHORNE, LLCPennsylvania1419 W. MAIN ST. LANSDALE, LLCPennsylvania15 MAIN STREET WATSONTOWN, LLCDelaware1595 CENTRAL AVE COLONIE, LLCNew York200 W. MONTGOMERY AVE. ARDMORE, LLCPennsylvania201 W. GERMANTOWN PIKE NORRISTOWN, LLCPennsylvania2134 NORTHAMPTON ST. EASTON LLCDelaware2200 BABCOCK BLVD PITTSBURGH, LLCDelaware2306 LYCOMING CREEK ROAD WILLIAMSPORT, LLCDelaware2311 N TRIPHAMMER RD LANSING, LLCNew York234-248 N. 63RD ST. PHILADELPHIA, LLCPennsylvania2401 HAVERFORD ROAD ARDMORE, LLCPennsylvania2405 ROUTE 286, PITTSBURGH, LLCDelaware2501 BRIGHTON AVE PITTSBURGH, LLCDelaware2700 LEECHBURG RD LOWE BURRELLDelaware301 S. KEMP ST. LYONS, LLCPennsylvania3101 N. BROAD ST. PHILADELPHIA, LLCPennsylvania3221 ROUTE 22 BRANCHBURG, LLCDelaware335 FRANKLIN MILLS CIRCLE PHILADELPHIA, LLCPennsylvania3727 LINCOLN THORNDALE LLCDelaware415 SOUTH MAIN STREET SHENANDOAH, LLCPennsylvania4200 WHITAKER AVE. PHILADELPHIA, LLCPennsylvania4616 MCKNIGHT RD PITTSBURGH, LLCDelaware507 ALLEGHENY AVE OAKMONT, LLCDelaware5250 TORRESDALE AVE., PHILADELPHIA, LLCPennsylvania528 ALTAMONT BOULEVARD FRACKVILLE, LLCPennsylvania53 W FAYETTE ST UNIONTOWN, LLCDelaware555 NORTH YORK HATBORO LLCDelaware5700 HOMEVILLE RD WEST MIFFLIN, LLCDelaware5716 HULMEVILLE ROAD BENSALEM, LLCPennsylvania600 S. OAK ROAD PRIMOS SECANE, LLCPennsylvania606 MONTGOMERY AVE. NARBERTH, LLCPennsylvania6816 EASTON ROAD PIPERSVILLE, LLCDelaware7424 WEST CHESTER PIKE UPPER DARBY, LLCPennsylvania759 CHESTER PIKE PROSPECT PARK, LLCPennsylvania799 VALLEY FORGE PHOENIXVILLE LLCDelaware9996 BUSTLETON AVE. PHILADELPHIA, LLCPennsylvania2 | PageExhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe have issued our reports dated February 27, 2017, with respect to the consolidated financial statements and internal control over financial reportingincluded in the Annual Report of CrossAmerica Partners LP on Form 10-K for the year ended December 31, 2016. We consent to the incorporation byreference of said reports in the Registration Statements of CrossAmerica Partners LP on Form S-3 (File No. 333-214713 and File No. 333-192035) and onForm S-8 (File No. 333-184651)./s/ GRANT THORNTON LLPArlington, VirginiaFebruary 27, 2017Exhibit 31.1CERTIFICATION PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, Jeremy Bergeron, certify that:1.I have reviewed this annual report on Form 10-K of CrossAmerica Partners LP;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the registrant’s internal control over financial reporting.5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: February 27, 2017 /s/ Jeremy BergeronJeremy BergeronPresident[Principal Executive Officer]CrossAmerica GP LLC(as General Partner of CrossAmerica Partners LP) Exhibit 31.2CERTIFICATION PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, Clayton E. Killinger, certify that:1.I have reviewed this annual report on Form 10-K of CrossAmerica Partners LP;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materiallyaffect, the registrant’s internal control over financial reporting.5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting.Date: February 27, 2017 /s/ Clayton E. KillingerClayton E. KillingerExecutive Vice President and Chief Financial OfficerExhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with this Annual Report on Form 10-K of CrossAmerica Partners LP (the “Partnership”) for the year ended December 31, 2016, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Jeremy Bergeron, President of CrossAmerica GP LLC, the General Partner of thePartnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that, to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of thePartnership.Date: February 27, 2017 /s/ Jeremy BergeronJeremy BergeronPresident[Principal Executive Officer]CrossAmerica GP LLC(as General Partner of CrossAmerica Partners LP)This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by theSarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1964, as amended.A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished tothe Securities and Exchange Commission or its staff upon request. Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with this Annual Report on Form 10-K of CrossAmerica Partners LP (the “Partnership”) for the year ended December 31, 2016, as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Clayton E. Killinger, Executive Vice President and Chief Financial Officer ofCrossAmerica GP LLC, the General Partner of the Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Actof 2002 that, to my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of thePartnership.Date: February 27, 2017 /s/ Clayton E. KillingerClayton E. KillingerExecutive Vice President and Chief Financial OfficerThis certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by theSarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1964, as amended.A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished tothe Securities and Exchange Commission or its staff upon request.

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