Segment Reporting

3 Months Ended

Mar. 31, 2017

Segment Reporting

Segment Reporting

Note 15.    Segment Reporting

Summarized financial information for the Partnership’s reportable segments is presented in the table below (in thousands):

	Three Months Ended
	March 31,
	2017		2016
Wholesale Segment:
Sales
Gasoline and gasoline blendstocks	$	505,704	$	342,729
Crude oil (1)		103,528		148,502
Other oils and related products (2)		616,567		419,009
Total	$	1,225,799	$	910,240
Product margin
Gasoline and gasoline blendstocks	$	15,385	$	16,362
Crude oil (1)		6,892		(2,373)
Other oils and related products (2)		29,873		25,249
Total	$	52,150	$	39,238
Gasoline Distribution and Station Operations Segment:
Sales
Gasoline	$	767,636	$	616,103
Station operations (3)		75,596		85,185
Total	$	843,232	$	701,288
Product margin
Gasoline	$	67,155	$	65,387
Station operations (3)		38,895		42,925
Total	$	106,050	$	108,312
Commercial Segment:
Sales	$	201,753	$	139,284
Product margin	$	4,189	$	6,910
Combined sales and Product margin:
Sales	$	2,270,784	$	1,750,812
Product margin (4)	$	162,389	$	154,460
Depreciation allocated to cost of sales		(22,362)		(24,401)
Combined gross profit	$	140,027	$	130,059

(1) Crude oil consists of the Partnership’s crude oil sales and revenue from its logistics activities.

(2) Other oils and related products primarily consist of distillates, residual oil and propane.

(3) Station operations primarily consist of convenience store sales and rental income.

(4) Product margin is a non-GAAP financial measure used by management and external users of the Partnership’s consolidated financial statements to assess its business.  The table above includes a reconciliation of product margin on a combined basis to gross profit, a directly comparable GAAP measure. 

Approximately 113 million gallons and 111 million gallons of the GDSO segment’s sales for the three months ended March 31, 2017 and 2016, respectively, were supplied from petroleum products and renewable fuels sourced by the Wholesale segment.  Except for natural gas, predominantly all of the Commercial segment’s sales are sourced by the Wholesale segment.  These intra-segment sales are not reflected as sales in the Wholesale segment as they are eliminated. 

A reconciliation of the totals reported for the reportable segments to the applicable line items in the consolidated financial statements is as follows (in thousands):

	Three Months Ended
	March 31,
	2017		2016
Combined gross profit	$	140,027	$	130,059
Operating costs and expenses not allocated to operating segments:
Selling, general and administrative expenses		36,787		34,984
Operating expenses		67,213		72,236
Amortization expense		2,261		2,509
Net (gain) loss on sale and disposition of assets		(11,862)		6,105
Total operating costs and expenses		94,399		115,834
Operating income		45,628		14,225
Interest expense		(23,287)		(22,980)
Income tax benefit		164		920
Net income (loss)		22,505		(7,835)
Net loss attributable to noncontrolling interest		441		811
Net income (loss) attributable to Global Partners LP	$	22,946	$	(7,024)

The Partnership’s foreign assets and foreign sales were immaterial as of and for the three months ended March 31, 2017 and 2016.

Segment Assets

The Partnership’s terminal assets are allocated to the Wholesale and Commercial segments, and its retail gasoline stations are allocated to the GDSO segment.  Due to the commingled nature and uses of the remainder of the Partnership’s assets, it is not reasonably possible for the Partnership to allocate these assets among its reportable segments.

The table below presents total assets by reportable segment at March 31, 2017 and December 31, 2016 (in thousands):

		Wholesale		Commercial		GDSO		Unallocated		Total
March 31, 2017	$	729,855	$	125	$	1,253,019	$	345,330	$	2,328,329
December 31, 2016	$	830,662	$	134	$	1,294,568	$	438,656	$	2,564,020