Segment Reporting

12 Months Ended

Dec. 31, 2024

Segment Reporting

Segment Reporting

Note 21. Segment Reporting

The Partnership engages in the purchasing, selling, gathering, blending, storing and logistics of transporting petroleum and related products, including gasoline and gasoline blendstocks (such as ethanol), distillates (such as home heating oil, diesel and kerosene), residual oil, renewable fuels, crude oil and propane. The Partnership also receives revenue from convenience store and prepared food sales, rental income and sundries. The Partnership’s three operating segments are based upon the revenue sources for which discrete financial information is reviewed by the President and Chief Executive Officer, the chief operating decision maker (the “CODM”), to make key operating decisions and assess performance and include Wholesale, GDSO and Commercial.

An important measure used by the Partnership and the CODM to evaluate segment performance is product margin, which the Partnership defines as product sales minus product costs. The CODM principally uses product margin to allocate resources (including employees, property and financial or capital resources) for each segment, predominantly in the annual budget and forecasting processes. Based on the way the business is managed, components of indirect

operating costs included within selling and administrative expenses and corporate expenses are not allocated to the reportable segments.

The operating segments are also the Partnership’s reporting segments. The Commercial operating segment does not meet the quantitative metrics for disclosure as a reportable segment on a stand-alone basis as defined in accounting guidance related to segment reporting. However, the Partnership has elected to present segment disclosures for the Commercial operating segment as management believes such disclosures are helpful to the users of the Partnership’s financial information. The accounting policies of the segments are the same as those described in Note 2, “Summary of Significant Accounting Policies.”

In the Wholesale reporting segment, the Partnership engages in the logistics of selling, gathering, blending, storing and transporting refined petroleum products, gasoline blendstocks, renewable fuels, crude oil and propane. The Partnership transports these products by railcars, barges, trucks and/or pipelines pursuant to spot or long-term contracts. The Partnership sells home heating oil, branded and unbranded gasoline and gasoline blendstocks, diesel, kerosene and residual oil to retail and wholesale distributors. Generally, customers use their own vehicles or contract carriers to take delivery of the gasoline, distillates and propane at bulk terminals and inland storage facilities that the Partnership owns or controls or at which it has throughput or exchange arrangements. Ethanol is shipped primarily by rail and by barge.

In the GDSO reporting segment, gasoline distribution includes sales of branded and unbranded gasoline to gasoline station operators and sub jobbers. Station operations include (i) convenience store and prepared food sales, (ii) rental income from gasoline stations leased to dealers, from commissioned agents and from cobranding arrangements and (iii) sundries (such as car wash sales and lottery and ATM commissions).

In the Commercial segment, the Partnership includes sales and deliveries to end user customers in the public sector and to large commercial and industrial end users of unbranded gasoline, home heating oil, diesel, kerosene, residual oil and bunker fuel. In the case of public sector commercial and industrial end user customers, the Partnership sells products primarily either through a competitive bidding process or through contracts of various terms. The Partnership responds to publicly issued requests for product proposals and quotes. The Partnership generally arranges for the delivery of the product to the customer’s designated location. The Commercial segment also includes sales of custom blended fuels delivered by barges or from a terminal dock to ships through bunkering activity.

Summarized financial information for the Partnership’s reportable segments for the years ended December 31 is presented in the table below (in thousands):

	2024		2023		2022
Wholesale Segment:
Sales
Gasoline and gasoline blendstocks	$	6,541,224	$	5,897,428	$	6,408,184
Distillates and other oils (1)		4,176,681		3,715,888		4,455,309
Total	$	10,717,905	$	9,613,316	$	10,863,493
Product margin
Gasoline and gasoline blendstocks	$	181,802	$	105,165	$	106,982
Distillates and other oils (1)		110,430		96,747		180,715
Total	$	292,232	$	201,912	$	287,697
Gasoline Distribution and Station Operations Segment:
Sales
Gasoline	$	4,807,765	$	5,268,268	$	6,140,823
Station operations (2)		565,839		572,266		559,826
Total	$	5,373,604	$	5,840,534	$	6,700,649
Product margin
Gasoline	$	578,737	$	558,516	$	588,676
Station operations (2)		281,745		276,040		267,941
Total	$	860,482	$	834,556	$	856,617
Commercial Segment:
Sales	$	1,072,057	$	1,038,324	$	1,313,744
Product margin	$	31,354	$	31,722	$	40,973
Combined sales and Product margin:
Sales	$	17,163,566	$	16,492,174	$	18,877,886
Product margin (3)	$	1,184,068	$	1,068,190	$	1,185,287
Depreciation allocated to cost of sales		(126,172)		(94,550)		(87,638)
Combined gross profit	$	1,057,896	$	973,640	$	1,097,649

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

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

(3) 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 470 million gallons, 435 million gallons and 450 million gallons of the GDSO segment’s sales for the years ended December 31, 2024, 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.

The following tables provide the Partnership’s significant segment operating expenses for each reportable segment that are regularly provided to the CODM, as well as a reconciliation of the totals reported for the reportable segments to the applicable line items in the consolidated financial statements for the years ended December 31 (in thousands):

	Year Ended December 31, 2024
	Wholesale		GDSO		Commercial		Consolidated
Sales	$	10,717,905	$	5,373,604	$	1,072,057	$	17,163,566
Cost of products		10,425,673		4,513,122		1,040,703		15,979,498
Product margin		292,232		860,482		31,354		1,184,068
Operating expenses allocated to operating segments:
Wages and benefits (1)		44,775		121,325		—		166,100
Occupancy costs (2)		22,927		105,585		—		128,512
Transactional operating costs (3)		—		92,938		—		92,938
Maintenance (4)		46,873		43,005		—		89,878
Other segment operating expenses		16,439		21,460		—		37,899
Total operating expenses allocated to operating segments	$	131,014	$	384,313	$	—		515,327
Operating expenses not allocated to operating segments:
Depreciation allocated to cost of sales								126,172
Selling, general and administrative expenses								292,073
Amortization expense								8,275
Net gain on sale and disposition of assets								(9,494)
Long-lived asset impairment								492
Total operating expenses not allocated to operating expenses								417,518
Operating income								251,223
Loss from equity method investments								(1,514)
Interest expense								(134,773)
Income tax expense								(4,609)
Net income							$	110,327

(1) Includes salary and wages, payroll taxes, fringe benefits and other employee expenses

(2) Includes rent and leases expenses, property taxes and utilities

(3) Includes commissions and credit card fees

(4) Includes maintenance and repairs, environmental and seasonal site maintenance expenses

	Year Ended December 31, 2023
	Wholesale		GDSO		Commercial		Consolidated
Sales	$	9,613,316	$	5,840,534	$	1,038,324	$	16,492,174
Cost of products		9,411,404		5,005,978		1,006,602		15,423,984
Product margin		201,912		834,556		31,722		1,068,190
Operating expenses allocated to operating segments:
Wages and benefits (1)		22,717		122,346		—		145,063
Occupancy costs (2)		13,515		103,118		—		116,633
Transactional operating costs (3)		—		94,518		—		94,518
Maintenance (4)		17,936		45,320		—		63,256
Other segment operating expenses		8,760		22,397		—		31,157
Total operating expenses allocated to operating segments	$	62,928	$	387,699	$	—		450,627
Operating expenses not allocated to operating segments:
Depreciation allocated to cost of sales								94,550
Selling, general and administrative expenses								273,733
Amortization expense								8,136
Net gain on sale and disposition of assets								(2,626)
Total operating expenses not allocated to operating expenses								373,793
Operating income								243,770
Income from equity method investments								2,503
Interest expense								(85,631)
Income tax expense								(8,136)
Net income							$	152,506

(1) Includes salary and wages, payroll taxes, fringe benefits and other employee expenses

(2) Includes rent and leases expenses, property taxes and utilities

(3) Includes commissions and credit card fees

(4) Includes maintenance and repairs, environmental and seasonal site maintenance expenses

	Year Ended December 31, 2022
	Wholesale		GDSO		Commercial		Consolidated
Sales	$	10,863,493	$	6,700,649	$	1,313,744	$	18,877,886
Cost of products		10,575,796		5,844,032		1,272,771		17,692,599
Product margin		287,697		856,617		40,973		1,185,287
Operating expenses allocated to operating segments:
Wages and benefits (1)		22,218		114,510		—		136,728
Occupancy costs (2)		13,518		102,179		—		115,697
Transactional operating costs (3)		—		96,297		—		96,297
Maintenance (4)		19,161		49,048		—		68,209
Other segment operating expenses		9,051		19,289		—		28,340
Total operating expenses allocated to operating segments	$	63,948	$	381,323	$	—		445,271
Operating expenses not allocated to operating segments:
Depreciation allocated to cost of sales								87,638
Selling, general and administrative expenses								263,112
Amortization expense								8,851
Net gain on sale and disposition of assets								(79,873)
Total operating expenses not allocated to operating expenses								279,728
Operating income								460,288
Interest expense								(81,259)
Income tax expense								(16,822)
Net income							$	362,207

(1) Includes salary and wages, payroll taxes, fringe benefits and other employee expenses

(2) Includes rent and leases expenses, property taxes and utilities

(3) Includes commissions and credit card fees

(4) Includes maintenance and repairs environmental and seasonal site maintenance expenses

None of the Partnership’s customers accounted for greater than 10% of total sales for years ended December 31, 2024, 2023 and 2022.

The Partnership’s foreign assets and foreign sales were immaterial as of and for the years ended December 31, 2024, 2023 and 2022.

Segment Assets

The Partnership’s terminal assets are allocated to the Wholesale segment, 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 December 31 (in thousands):

		Wholesale		GDSO		Commercial		Unallocated (1)		Total
December 31, 2024	$	1,333,102	$	1,859,417	$	—	$	595,679	$	3,788,198
December 31, 2023	$	862,850	$	1,910,058	$	—	$	673,103	$	3,446,011

(1) Includes the Partnership’s equity method investments (see Note 17).