Segment Reporting

9 Months Ended

Sep. 30, 2022

Segment Reporting

Segment Reporting

Note 13.    Segment Reporting

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Wholesale Segment:
Sales
Gasoline and gasoline blendstocks	$	1,623,599	$	1,371,621	$	5,046,457	$	3,696,677
Other oils and related products (1)		886,877		451,172		3,242,031		1,641,250
Crude oil (2)		90		13,194		2,272		47,128
Total	$	2,510,566	$	1,835,987	$	8,290,760	$	5,385,055
Product margin
Gasoline and gasoline blendstocks	$	54,260	$	22,458	$	93,009	$	62,379
Other oils and related products (1)		25,716		22,625		130,690		54,580
Crude oil (2)		(646)		(2,814)		(6,706)		(10,662)
Total	$	79,330	$	42,269	$	216,993	$	106,297
Gasoline Distribution and Station Operations Segment:
Sales
Gasoline	$	1,631,078	$	1,151,251	$	4,721,475	$	2,930,446
Station operations (3)		158,953		134,126		419,159		357,452
Total	$	1,790,031	$	1,285,377	$	5,140,634	$	3,287,898
Product margin
Gasoline	$	187,994	$	112,446	$	432,732	$	294,001
Station operations (3)		73,614		65,269		200,719		176,567
Total	$	261,608	$	177,715	$	633,451	$	470,568
Commercial Segment:
Sales	$	326,150	$	202,546	$	1,019,541	$	483,429
Product margin	$	10,389	$	3,916	$	31,042	$	10,807
Combined sales and Product margin:
Sales	$	4,626,747	$	3,323,910	$	14,450,935	$	9,156,382
Product margin (4)	$	351,327	$	223,900	$	881,486	$	587,672
Depreciation allocated to cost of sales		(22,948)		(20,842)		(65,393)		(61,537)
Combined gross profit	$	328,379	$	203,058	$	816,093	$	526,135

(1) Other oils and related products primarily consist of distillates and residual oil.

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

(3) Station operations consist of convenience store and prepared food sales, rental income and sundries.

(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 111 million gallons and 123 million gallons of the GDSO segment’s sales for the three months ended September 30, 2022 and 2021, respectively, and 318 million gallons and 342 million gallons of the GDSO segment’s sales for the nine months ended September 30, 2022 and 2021, respectively, were supplied from petroleum products and renewable fuels sourced by the Wholesale segment. The Commercial segment’s sales were predominantly 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				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Combined gross profit	$	328,379	$	203,058	$	816,093	$	526,135
Operating costs and expenses not allocated to operating segments:
Selling, general and administrative expenses		65,123		54,674		182,274		155,029
Operating expenses		119,549		92,151		327,307		260,848
Amortization expense		2,118		2,742		6,734		8,138
Net loss (gain) on sale and disposition of assets		292		(192)		(81,468)		(675)
Long-lived asset impairment		—		—		—		188
Total operating costs and expenses		187,082		149,375		434,847		423,528
Operating income		141,297		53,683		381,246		102,607
Interest expense		(19,047)		(19,660)		(61,577)		(60,339)
Income tax expense		(10,811)		(386)		(14,938)		(789)
Net income	$	111,439	$	33,637	$	304,731	$	41,479

The Partnership’s foreign assets and foreign sales were immaterial as of and for the three and nine months ended September 30, 2022 and 2021.

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 September 30, 2022 and December 31, 2021 (in thousands):

		Wholesale		Commercial		GDSO		Unallocated		Total
September 30, 2022	$	606,227	$	—	$	1,918,464	$	450,571	$	2,975,262
December 31, 2021	$	739,523	$	—	$	1,655,475	$	436,167	$	2,831,165