Commitments and Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | 11. Commitments and Contingencies Senior Notes On October 21, 2021, ARKO Parent issued $450.0 million aggregate principal amount of 5.125% Senior Notes due 2029 (the “Senior Notes”), which are guaranteed, jointly and severally on an unsecured basis, by certain of ARKO Parent’s domestic subsidiaries, including the Company and certain of its subsidiaries (the “Guarantors”); however, neither GPMP nor any of its subsidiaries is a Guarantor. The indenture governing the Senior Notes (the “Indenture”) provides for customary events of default, including (subject in certain cases to customary grace and cure periods), nonpayment of principal or interest; covenant breaches; cross-defaults on other indebtedness and certain bankruptcy events, upon which the trustee or the holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding may accelerate all outstanding obligations thereunder. The Guarantors have unconditionally and irrevocably guaranteed, jointly and severally, on a senior unsecured basis, (a) the full and punctual payment of principal of and interest on the Senior Notes and all other monetary and performance obligations of ARKO Parent thereunder (collectively, the “Guaranteed Obligations”), with contribution rights among Guarantors based on their respective net assets. The Company believes that the likelihood of the Guarantors, including the Company, being required to make payments under the Guarantee Obligations is remote based on ARKO Parent’s current financial condition and anticipated financial performance, but that likelihood would increase if ARKO Parent’s financial condition deteriorates. The Indenture contains customary restrictive covenants that, among other things, generally limit the ability of ARKO Parent and substantially all of its subsidiaries, including the Guarantors, to create liens, pay dividends, acquire shares of capital stock, make payments on subordinated debt, sell assets, enter into transactions with affiliates, and incur indebtedness. The Senior Notes and the guarantees rank equally in right of payment with all of ARKO Parent’s and the Guarantors’ respective existing and future senior unsecured indebtedness and are effectively subordinated to all of ARKO Parent’s and the Guarantors’ existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness; and are structurally subordinated to any existing and future obligations of subsidiaries of ARKO Parent and the Company that are not Guarantors. Environmental Liabilities and Contingencies The Business is subject to certain federal and state environmental laws and regulations associated with sites at which it stores and sells fuel and other fuel products, as well as locations owned, leased, or where there is a contractual obligation that results in ARKO Parent or the Company being the tank operator or owner but are operated by third-party dealers. As of both March 31, 2026 and December 31, 2025, environmental obligations totaled $3.1 million. These amounts were recorded as other current and non-current liabilities on the condensed consolidated balance sheets. Environmental reserves have been established on an undiscounted basis based upon internal and external estimates in regard to each site. It is reasonably possible that these amounts will be adjusted in the future due to changes in estimates of environmental remediation costs, the timing of the payments or changes in federal and/or state environmental regulations. ARKO Parent maintains certain environmental insurance policies and participates in various state underground storage tank funds that entitle it and the Company to be reimbursed for remediation costs. Estimated amounts that will be recovered from the insurance policies and various state funds for the exposures totaled $1.8 million as of both March 31, 2026 and December 31, 2025, and were recorded as other current and non-current assets on the condensed consolidated balance sheets. Asset Retirement Obligation As part of the fuel operations at its proprietary cardlock locations, at most of the owned and leased dealer locations, at certain other dealer locations and third-party cardlock locations where the Company owns storage tanks or otherwise agreed to be contractually liable for tank maintenance, there are aboveground and underground storage tanks for which the Company is responsible. The future cost to remove a storage tank is recognized over the estimated remaining useful life of the storage tank, or if sooner, the termination of the applicable lease. A liability for the fair value of an asset retirement obligation with a corresponding increase to the carrying value of the related long-lived asset is recorded at the time a storage tank is installed. The estimated liability is based upon historical experience in removing storage tanks, estimated tank useful lives, external estimates as to the cost to remove the tanks in the future and current and anticipated federal and state regulatory requirements governing the removal of tanks, and discounted. The Company has recorded an asset retirement obligation of $49.4 million and $47.6 million as of March 31, 2026 and December 31, 2025, respectively. The current portion of the asset retirement obligation is included in other current liabilities on the condensed consolidated balance sheets. Legal Matters ARKO Parent and the Company are parties to various legal actions, as both plaintiffs and defendants, in the ordinary course of business. The Company’s management believes, based on estimations with support from legal counsel for these matters, that these legal actions are routine in nature and incidental to the operation of the Business and that it is not reasonably probable that the ultimate resolution of these matters will have a material adverse impact on the Business, financial condition, results of operations and cash flows. |