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, | | | | 2024 | | 2023 | | Wholesale Segment: | | | | | | | | Sales | | | | | | | | Gasoline and gasoline blendstocks | | $ | 1,373,592 | | $ | 1,175,623 | | Distillates and other oils (1) | | | 1,265,756 | | | 1,283,800 | | Total | | $ | 2,639,348 | | $ | 2,459,423 | | Product margin | | | | | | | | Gasoline and gasoline blendstocks | | $ | 29,761 | | $ | 20,386 | | Distillates and other oils (1) | | | 19,659 | | | 32,747 | | Total | | $ | 49,420 | | $ | 53,133 | | Gasoline Distribution and Station Operations Segment: | | | | | | | | Sales | | | | | | | | Gasoline | | $ | 1,097,277 | | $ | 1,185,866 | | Station operations (2) | | | 130,168 | | | 127,166 | | Total | | $ | 1,227,445 | | $ | 1,313,032 | | Product margin | | | | | | | | Gasoline | | $ | 121,630 | | $ | 120,816 | | Station operations (2) | | | 66,087 | | | 62,730 | | Total | | $ | 187,717 | | $ | 183,546 | | Commercial Segment: | | | | | | | | Sales | | $ | 278,599 | | $ | 257,872 | | Product margin | | $ | 6,968 | | $ | 8,127 | | Combined sales and Product margin: | | | | | | | | Sales | | $ | 4,145,392 | | $ | 4,030,327 | | Product margin (3) | | $ | 244,105 | | $ | 244,806 | | Depreciation allocated to cost of sales | | | (28,970) | | | (22,742) | | Combined gross profit | | $ | 215,135 | | $ | 222,064 | |
(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 99 million gallons and 96 million gallons of the GDSO segment’s sales for the three months ended March 31, 2024 and 2023, 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, | | | | 2024 | | 2023 | | Combined gross profit | | $ | 215,135 | | $ | 222,064 | | Operating costs and expenses not allocated to operating segments: | | | | | | | | Selling, general and administrative expenses | | | 69,781 | | | 62,256 | | Operating expenses | | | 120,150 | | | 108,353 | | Amortization expense | | | 1,869 | | | 2,084 | | Net gain on sale and disposition of assets | | | (2,501) | | | (2,128) | | Total operating costs and expenses | | | 189,299 | | | 170,565 | | Operating income | | | 25,836 | | | 51,499 | | Loss from equity method investments | | | (1,379) | | | — | | Interest expense | | | (29,696) | | | (22,068) | | Income tax expense | | | (363) | | | (400) | | Net (loss) income | | $ | (5,602) | | $ | 29,031 | |
The Partnership’s foreign assets and foreign sales were immaterial as of and for the three months ended March 31, 2024 and 2023. 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, 2024 and December 31, 2023 (in thousands): | | | | | | | | | | | | | | | | | | | Wholesale | | | Commercial | | | GDSO | | | Unallocated (1) | | | Total | March 31, 2024 | | $ | 868,389 | | $ | — | | $ | 1,886,857 | | $ | 710,386 | | $ | 3,465,632 | December 31, 2023 | | $ | 862,850 | | $ | — | | $ | 1,910,058 | | $ | 673,103 | | $ | 3,446,011 |
(1) | Includes the Partnership’s proportional share of assets related to its equity method investments (see Note 10). |
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