| SEC Schedule, Article 12-04, Condensed Financial Information of Registrant |
SCHEDULE I
ARKO Corp. (Parent Company Only)
Condensed Balance Sheets
(in thousands)
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As of December 31, |
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2023 |
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2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
27,220 |
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$ |
93,721 |
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Other current assets |
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11,983 |
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16,168 |
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Total current assets |
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39,203 |
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109,889 |
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Non-current assets: |
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Investment in subsidiaries |
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356,048 |
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312,708 |
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Loans to subsidiaries |
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450,000 |
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450,000 |
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Deferred tax asset |
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1,941 |
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2,239 |
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Total assets |
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$ |
847,192 |
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$ |
874,836 |
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Liabilities |
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Current liabilities: |
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Long-term debt, current portion |
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$ |
671 |
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$ |
1,145 |
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Other current liabilities |
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5,896 |
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17,364 |
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Total current liabilities |
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6,567 |
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18,509 |
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Non-current liabilities: |
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Long-term debt, net |
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444,432 |
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443,648 |
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Other non-current liabilities |
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20,092 |
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31,845 |
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Total liabilities |
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$ |
471,091 |
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$ |
494,002 |
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Series A redeemable preferred stock |
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100,000 |
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100,000 |
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Shareholders' equity |
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276,101 |
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280,834 |
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Total liabilities, redeemable preferred stock and shareholders' equity |
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$ |
847,192 |
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$ |
874,836 |
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The accompanying notes are an integral part of the condensed financial statements.
SCHEDULE I
ARKO Corp. (Parent Company Only)
Condensed Statements of Operations
(in thousands)
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For the Year Ended December 31, |
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2023 |
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2022 |
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2021 |
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Income: |
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Income from loans to subsidiaries and other investee |
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$ |
23,063 |
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$ |
23,645 |
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$ |
6,016 |
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23,063 |
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23,645 |
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6,016 |
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Expenses: |
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General and administrative |
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7,419 |
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7,437 |
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6,152 |
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7,419 |
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7,437 |
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6,152 |
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Income (loss) before interest and financial income (expenses) |
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15,644 |
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16,208 |
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(136 |
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Interest and other financial income |
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14,314 |
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1,577 |
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1,005 |
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Interest and other financial expenses |
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(25,106 |
) |
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(23,641 |
) |
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(10,855 |
) |
Income (loss) before income taxes |
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4,852 |
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(5,856 |
) |
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(9,986 |
) |
Income tax (expense) benefit |
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(249 |
) |
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3,579 |
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(2,771 |
) |
Equity income from subsidiaries |
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29,766 |
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74,024 |
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71,955 |
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Net income |
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$ |
34,369 |
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$ |
71,747 |
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$ |
59,198 |
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Series A redeemable preferred stock dividends |
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(5,750 |
) |
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(5,750 |
) |
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(5,735 |
) |
Net income attributable to common shareholders |
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$ |
28,619 |
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$ |
65,997 |
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$ |
53,463 |
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The accompanying notes are an integral part of the condensed financial statements.
SCHEDULE I
ARKO Corp. (Parent Company Only)
Condensed Statements of Cash Flows
(in thousands)
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For the Year Ended December 31, |
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2023 |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net income |
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$ |
34,369 |
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$ |
71,747 |
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$ |
59,198 |
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Adjustments to reconcile net income to net cash used in operating activities: |
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Equity income from subsidiaries |
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(29,766 |
) |
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(74,024 |
) |
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(71,955 |
) |
Deferred income taxes |
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298 |
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(164 |
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519 |
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Amortization of deferred financing costs and debt discount |
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785 |
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759 |
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152 |
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Foreign currency loss (gain) and interest related to intercompany balances |
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— |
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1,693 |
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(4,656 |
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Share-based compensation |
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1,172 |
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955 |
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|
868 |
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Fair value adjustment of financial liabilities |
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(10,520 |
) |
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(887 |
) |
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5,021 |
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Other operating activities, net |
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(116 |
) |
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— |
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— |
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Changes in assets and liabilities: |
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Decrease (increase) in other current assets |
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4,856 |
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(11,542 |
) |
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(1,586 |
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(Decrease) increase in other current liabilities |
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(2,910 |
) |
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6,752 |
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3,713 |
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Net cash used in operating activities |
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$ |
(1,832 |
) |
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$ |
(4,711 |
) |
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$ |
(8,726 |
) |
Cash flows from investing activities: |
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Loans to investees |
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$ |
— |
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$ |
— |
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$ |
(450,000 |
) |
Repayments of loans to subsidiaries and other investees |
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— |
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40,000 |
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— |
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Distribution from subsidiary |
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— |
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28,109 |
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— |
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Net cash provided by (used in) investing activities |
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— |
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68,109 |
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(450,000 |
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Cash flows from financing activities: |
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Proceeds from issuance of long-term debt, net |
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— |
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— |
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442,737 |
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Payment of merger transaction issuance costs |
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— |
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— |
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(4,773 |
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Common stock repurchased |
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(33,694 |
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(40,042 |
) |
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— |
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Dividends paid on common stock |
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(14,272 |
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(10,893 |
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— |
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Dividends paid on redeemable preferred stock |
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(5,750 |
) |
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(5,750 |
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(5,892 |
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Payment of Ares Put Option |
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(9,808 |
) |
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— |
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— |
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Repayment of long-term debt |
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(1,145 |
) |
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(1,500 |
) |
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(2,017 |
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Net cash (used in) provided by financing activities |
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(64,669 |
) |
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(58,185 |
) |
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430,055 |
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Net (decrease) increase in cash and cash equivalents and
restricted cash |
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(66,501 |
) |
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5,213 |
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(28,671 |
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Cash and cash equivalents, beginning of year |
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93,721 |
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88,508 |
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117,179 |
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Cash and cash equivalents, end of year |
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$ |
27,220 |
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$ |
93,721 |
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$ |
88,508 |
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The accompanying notes are an integral part of the condensed financial statements.
SCHEDULE I
ARKO Corp. (Parent Company Only)
Condensed Statements of Cash Flows (cont’d)
(in thousands)
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For the Year Ended December 31, |
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2023 |
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2022 |
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2021 |
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Supplementary cash flow information: |
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Cash received for interest |
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$ |
25,623 |
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$ |
26,028 |
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$ |
1,404 |
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Cash paid for interest |
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23,089 |
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24,610 |
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14 |
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Cash paid for taxes |
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— |
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|
735 |
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6,175 |
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Supplementary noncash activities: |
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Prepaid insurance premiums financed through notes payable |
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671 |
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1,145 |
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1,765 |
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Issuance of shares |
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— |
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— |
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3,000 |
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The accompanying notes are an integral part of the condensed financial statements.
ARKO Corp. (Parent Company Only)
Notes to Condensed Financial Statements
1. General
The condensed financial statements represent the financial information required by SEC Regulation S-X Rule 5-04 for ARKO Corp. (the “Company”), which requires the inclusion of parent company only financial statements if the restricted net assets of consolidated subsidiaries exceed 25% of total consolidated net assets as of the last day of its most recent fiscal year. As of December 31, 2023, the Company’s restricted net assets of its consolidated subsidiary, GPM Investments, LLC (“GPM”), were approximately $747.6 million and exceeded 25% of the Company’s total consolidated net assets. The primary restrictions as of December 31, 2023 were driven by GPM’s financing agreement with PNC which restrict the transfer of non-cash assets from GPM to the Company. This financing agreement also includes restrictions on distributions according to which, among other things, GPM’s ability to distribute is subject to certain conditions as defined in the underlying agreement. For more information about GPM’s financing agreement with PNC, refer to Note 12 to the consolidated financial statements.
2. Summary of Significant Accounting Policies
The accompanying condensed financial statements have been prepared to present the financial position, results of operations and cash flows of the Company on a stand-alone basis as a holding company. Investments in subsidiaries are accounted for using the equity method. The condensed parent company only financial statements should be read in conjunction with the Company's consolidated financial statements.
3. Long-Term Debt
Senior Notes
On October 21, 2021, the Company completed a private offering of $450 million aggregate principal amount of 5.125% Senior Notes due 2029 (the “Senior Notes”), pursuant to a note purchase agreement dated October 14, 2021, by and among the Company, certain of the Company’s wholly owned domestic subsidiaries (the “Guarantors”), and BofA Securities, Inc., as representative of the several initial purchasers named therein. The Senior Notes are guaranteed, on an unsecured senior basis, by all of the Guarantors. Refer to Note 12 to the consolidated financial statements for further details.
Insurance Premium Notes
The debt outstanding related to premium financing agreements are due within one year. Refer to Note 12 to the consolidated financial statements for further details.
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