Segment Reporting

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Reporting

16. Segment Reporting

Segment information is prepared on the same basis that our Chief Operating Decision Maker (“CODM”) reviews financial information for operational decision-making purposes. We operate our business in two primary segments, wholesale and retail, both of which are included as reportable segments. No operating segments have been aggregated in identifying the two reportable segments.

We allocate shared revenue and costs to each segment based on the way our CODM measures segment performance. Partnership overhead costs, interest and other expenses not directly attributable to a reportable segment are allocated based on segment gross profit. These costs were previously allocated based on segment EBITDA.

We report EBITDA and Adjusted EBITDA by segment as a measure of segment performance. We define EBITDA as net income before net interest expense, income tax expense and depreciation, amortization and accretion expense. We define Adjusted EBITDA to include adjustments for non-cash compensation expense, gains and losses on disposal of assets, unrealized gains and losses on commodity derivatives and inventory fair value adjustments.

Wholesale Segment

Our wholesale segment purchases motor fuel primarily from independent refiners and major oil companies and supplies it to our retail segment, to independently-operated dealer stations under long-term supply agreements, and to distributers and other consumers of motor fuel. Also included in the wholesale segment are motor fuel sales to consignment locations. We distribute motor fuels across 32 states throughout the East Coast and Southeast regions of the United States from Maine to Florida and from Florida to New Mexico, as well as Hawaii. Sales of fuel from the wholesale segment to our retail segment are delivered at cost plus a profit margin. These amounts are reflected in intercompany eliminations of motor fuel revenue and motor fuel cost of sales. Also included in our wholesale segment is rental income from properties that we lease or sub-lease.

Retail Segment

Our retail segment operates branded retail convenience stores across 21 states throughout the East Coast and Southeast regions of the United States from Maine to Florida and from Florida to New Mexico, as well as Hawaii. These stores offer motor fuel, merchandise, foodservice, and a variety of other services including car washes, lottery, ATM, money orders, prepaid phone cards, wireless services and movie rentals.

The following table presents financial information by segment for the three months ended March 31, 2016 and 2015:

Segment Financial Data

(in thousands)

	For the Three Months Ended March 31,
	2016												2015
	Wholesale			Retail			Intercompany Eliminations			Total			Wholesale			Retail			Intercompany Eliminations			Total
Revenues
Retail motor fuel sales	$	—		$	1,115,715					$	1,115,715		$	—		$	1,367,656					$	1,367,656
Wholesale motor fuel sales to third parties		1,495,874			—						1,495,874			2,436,502			—						2,436,502
Wholesale motor fuel sales to affiliates		7,129			—						7,129			644			—						644
Merchandise sales		—			524,094						524,094			—			483,123						483,123
Rental income		18,720			3,404						22,124			11,509			8,273						19,782
Other		5,941			31,436						37,377			5,612			29,069						34,681
Intersegment sales		70,901			—			(70,901	)		—			91,170			—			(91,170	)		—
Total revenues		1,598,565			1,674,649			(70,901	)		3,202,313			2,545,437			1,888,121			(91,170	)		4,342,388
Gross profit
Retail motor fuel		—			131,273						131,273			—			109,106						109,106
Wholesale motor fuel		151,159			—						151,159			130,981			—						130,981
Merchandise		—			166,379						166,379			—			148,201						148,201
Rental and other		23,367			26,565						49,932			15,565			37,239						52,804
Total gross profit		174,526			324,217						498,743			146,546			294,546						441,092
Total operating expenses		77,127			329,806						406,933			78,403			297,343						375,746
Income (loss) from operations		97,399			(5,589	)					91,810			68,143			(2,797	)					65,346
Interest expense, net		12,128			15,561						27,689			1,002			6,975						7,977
Income (loss) before income taxes		85,271			(21,150	)					64,121			67,141			(9,772	)					57,369
Income tax expense (benefit)		(748	)		2,860						2,112			1,041			7,022						8,063
Net income (loss) and comprehensive income (loss)	$	86,019		$	(24,010	)				$	62,009		$	66,100		$	(16,794	)				$	49,306
Depreciation, amortization and accretion		16,853			61,213						78,066			18,791			47,952						66,743
Interest expense, net		12,128			15,561						27,689			1,002			6,975						7,977
Income tax expense (benefit)		(748	)		2,860						2,112			1,041			7,022						8,063
EBITDA		114,252			55,624						169,876			86,934			45,155						132,089
Non-cash compensation expense		2,369			815						3,184			430			928						1,358
Loss (gain) on disposal of assets		(446	)		1,660						1,214			159			(190	)					(31	)
Unrealized loss (gain) on commodity derivatives		(2,725	)		—						(2,725	)		1,406			—						1,406
Inventory fair value adjustments		(11,222	)		(1,440	)					(12,662	)		(6,921	)		262						(6,659	)
Adjusted EBITDA	$	102,228		$	56,659					$	158,887		$	82,008		$	46,155					$	128,163
Capital expenditures	$	36,629		$	59,593					$	96,222		$	65,765		$	35,267					$	101,032
Total assets at end of period	$	2,883,721		$	5,918,921					$	8,802,642		$	2,925,842		$	5,915,977					$	8,841,819