Segment Reporting

3 Months Ended

Mar. 31, 2023

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
	March 31,
	2023		2022
Wholesale Segment:
Sales
Gasoline and gasoline blendstocks	$	1,175,623	$	1,420,226
Distillates and other oils (1)(2)		1,283,800		1,357,477
Total	$	2,459,423	$	2,777,703
Product margin
Gasoline and gasoline blendstocks	$	20,386	$	(2,285)
Distillates and other oils (1)(2)		32,747		49,373
Total	$	53,133	$	47,088
Gasoline Distribution and Station Operations Segment:
Sales
Gasoline	$	1,185,866	$	1,276,961
Station operations (3)		127,166		115,892
Total	$	1,313,032	$	1,392,853
Product margin
Gasoline	$	120,816	$	114,886
Station operations (3)		62,730		58,097
Total	$	183,546	$	172,983
Commercial Segment:
Sales	$	257,872	$	329,982
Product margin	$	8,127	$	8,141
Combined sales and Product margin:
Sales	$	4,030,327	$	4,500,538
Product margin (4)	$	244,806	$	228,212
Depreciation allocated to cost of sales		(22,742)		(21,974)
Combined gross profit	$	222,064	$	206,238

(1) Distillates and other oils (primarily residual oil and crude oil).

(2) Segment reporting results for the three months ended March 31, 2022 have been reclassified within the Wholesale segment to conform to the Partnership’s current presentation. Specifically, results from crude oil previously shown separately are included in distillates and other oils as results from crude oil are immaterial.

(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 96 million gallons and 101 million gallons of the GDSO segment’s sales for the three months ended March 31, 2023 and 2022, 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
	March 31,
	2023		2022
Combined gross profit	$	222,064	$	206,238
Operating costs and expenses not allocated to operating segments:
Selling, general and administrative expenses		62,256		56,281
Operating expenses		108,353		99,233
Amortization expense		2,084		2,499
Net gain on sale and disposition of assets		(2,128)		(4,911)
Total operating costs and expenses		170,565		153,102
Operating income		51,499		53,136
Interest expense		(22,068)		(21,474)
Income tax expense		(400)		(1,177)
Net income	$	29,031	$	30,485

The Partnership’s foreign assets and foreign sales were immaterial as of and for the three months ended March 31, 2023 and 2022.

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, 2023 and December 31, 2022 (in thousands):

		Wholesale		Commercial		GDSO		Unallocated		Total
March 31, 2023	$	553,783	$	—	$	1,908,210	$	462,753	$	2,924,746
December 31, 2022	$	738,995	$	—	$	1,944,135	$	477,755	$	3,160,885