Sales and Disposition of Assets

9 Months Ended

Sep. 30, 2016

Sales and Disposition of Assets

Sales and Dispositions of Assets

Note 15.    Sales and Disposition of Assets

The following table provides the Partnership’s (gain) loss on sale and dispositions of assets for the three and nine months ended September 30, 2016 and 2015 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Periodic divestiture of gasoline stations	$	(139)	$	183	$	518	$	393
Strategic asset divestiture program - Mirabito Disposition		3,850		—		3,850		—
Strategic asset divestiture program - Real estate firm coordinated sale		(201)				(201)
Loss on assets held for sale		4,000		—		9,644		—
Other		(24)		497		155		937
Total	$	7,486	$	680	$	13,966	$	1,330

Periodic Divestiture of Gasoline Stations

As part of the routine course of operations in the GDSO segment, the Partnership may periodically divest certain gasoline stations.  The gain or loss on the sale, representing cash proceeds less net book value of assets at disposition, net of settlement and dispositions costs, is recorded in net loss on sale and disposition of assets in the accompanying consolidated statements of operations and amounted to a $0.1 million gain and a $0.2 million loss for the three months ended September 30, 2016 and 2015, respectively, and losses of $0.5 million and $0.4 million for the nine months ended September 30, 2016 and 2015, respectively.

Strategic Asset Divestiture Program

The Partnership identified certain non-strategic GDSO sites that are part of its Strategic Asset Divestiture Program (the “Divestiture Program”). 

Mirabito Disposition—On August 22, 2016, Drake Petroleum Company, Inc., an indirect wholly owned subsidiary of the Partnership, completed its sale to Mirabito Holdings, Inc. (“Mirabito”) of 30 gasoline stations and convenience stores located in New York and Pennsylvania (the “Drake Sites”) for an aggregate total cash purchase price of approximately $40.0 million (the “Mirabito Disposition”).  The Drake Sites are a portion of the sites that were acquired by the Partnership in connection with the acquisition of Warren on January 7, 2015 (see Note 2). 

The gain or loss on the sale, representing cash proceeds less net book value of assets at disposition, net of settlement and dispositions costs, is recorded in net loss on sale and disposition of assets in the accompanying consolidated statements of operations and amounted to a $3.9 million loss for the three and nine months ended September 30, 2016, including the derecognition of $12.8 million of GDSO goodwill.

Real Estate Firm Coordinated Sale—The Partnership has retained a real estate firm that is coordinating the sale of 84 non-strategic GDSO sites.  As of September 30, 2016, the Partnership completed the sale of 5 of these sites.  The gain or loss on the sale, representing cash proceeds less net book value of assets at disposition, net of settlement and dispositions costs, is recorded in net loss on sale and disposition of assets in the accompanying consolidated statements of operations and amounted to a $0.2 million gain for the three and nine months ended September 30, 2016, including the derecognition of $0.8 million of GDSO goodwill.  As of September 30, 2016, the criteria to be presented as held for sale was met for 36 of the remaining 79 sites.  In October 2016, such criteria was met for eight additional sites (see Note 20).

Loss on Assets Held for Sale

In conjunction with the periodic divestiture of gasoline stations and the sale of sites within the Divestiture Program, the Partnership may classify certain gasoline station assets as held for sale.

The Partnership classified 21 sites and 15 sites as held for sale at September 30, 2016 and December 31, 2015, respectively, which are periodic divestiture gasoline station sites.  The Partnership recorded impairment charges related to these assets held for sale in the amount of $0 and $0 for the three months ended September 30, 2016 and 2015, respectively, and $5.6 million and $0 for the nine months ended September 30, 2016 and 2015, respectively, which are included in net loss on sale and disposition of assets in the accompanying consolidated statements of operations. 

Additionally, the Partnership classified 36 sites associated with the real estate firm coordinated sale discussed above as held for sale at September 30, 2016.  The Partnership recorded impairment charges related to these assets held for sale in the amount of $4.0 million for the three and nine months ended September 30, 2016, which are included in net loss on sale and disposition of assets in the accompanying consolidated statements of operations.

Assets held for sale of $27.2 million and $7.4 million at September 30, 2016 and December 31, 2015, respectively, are included in property and equipment in the accompanying balance sheets.  Assets held for sale are expected to be sold within the next 12 months.

Other

The Partnership recognizes gains and losses on the sale and disposition of other assets, including vehicles, fixtures and equipment, and the gain or loss on such other assets are included in other in the aforementioned table.