Acquisitions Acquisitions (Notes)

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

ACQUISITIONS

Acquisition of State Oil Assets

On September 27, 2016, we closed on the acquisition of 57 controlled sites (56 fee sites and 1 leased site) and certain other assets of State Oil Company, being operated as 55 lessee dealer accounts and 2 non-fuel tenant locations, as well as 25 independent dealer accounts located in the greater Chicago market for approximately $41.8 million, including working capital.

The preliminary fair value of the assets acquired and liabilities assumed on the date of acquisition were as follows (in thousands):

Current assets (excluding inventories)	$	914
Inventories	150
Property and equipment	35,291
Intangibles	6,530
Other noncurrent assets	2,720
Current liabilities	(1,261		)
Asset retirement obligations	(1,897		)
Other long-term liabilities	(623		)
Total consideration, net of cash acquired	$	41,824

The $3.4 million fair value of the notes receivable, which is included within current and other noncurrent assets, was based on an income approach using relevant market participant assumptions.

The fair value of property and equipment, which consisted of land, buildings and equipment, was based on a cost approach. The buildings and equipment are being depreciated on a straight-line basis, with estimated remaining useful lives of 20 years for the buildings and 5 to 10 years for equipment.

The $4.9 million fair value of the wholesale fuel distribution rights included in intangibles was based on an income approach and management believes the level and timing of cash flows represent relevant market participant assumptions. The wholesale fuel distribution rights are being amortized on a straight-line basis over an estimated useful life of approximately 10 years.

The $1.6 million fair value of the wholesale fuel supply agreements was based on an income approach, and management believes the level and timing of cash flows represent relevant market participant assumptions. The wholesale fuel supply agreements are being amortized over an estimated useful life of approximately 10 years.

Management is reviewing the valuation and confirming the result to determine the final purchase price allocation.

Acquisition of Franchised Holiday Stores

On March 29, 2016, we closed on the acquisition of 31 franchised Holiday stores and 3 liquor stores from S/S/G Corporation for approximately $52.4 million, including working capital. Of the 34 stores, 31 are located in Wisconsin and 3 are located in Minnesota. The acquisition was funded by borrowings under our credit facility.

The preliminary fair value of the assets acquired and liabilities assumed on the date of acquisition were as follows (in thousands):

Current assets (excluding inventories)	$	41
Inventories	3,536
Property and equipment	33,055
Intangibles	7,710
Goodwill	9,126
Current liabilities	(56		)
Asset retirement obligations	(1,062		)
Total consideration, net of cash acquired	$	52,350

The fair value of inventory was estimated at retail selling price less estimated costs to sell and a reasonable profit allowance for the selling effort.

The fair value of property and equipment, which consisted of land, buildings and equipment, was based on a cost approach. The buildings and equipment are being depreciated on a straight-line basis, with estimated remaining useful lives of 20 years for the buildings and 5 to 10 years for equipment.

The $6.5 million fair value of the wholesale fuel distribution rights included in intangibles was based on an income approach and management believes the level and timing of cash flows represent relevant market participant assumptions. The wholesale fuel distribution rights are being amortized on a straight-line basis over an estimated useful life of approximately 10 years.

The $1.0 million fair value of the discount related to lease agreements with below average market value was based on an income approach, and management believes the level and timing of cash flows represent relevant market participant assumptions. These intangible assets are being amortized on a straight-line basis over the term of the respective lease agreements, with an estimated weighted average useful life of 5 years.

Goodwill recorded is primarily attributable to the end-customer relationships not eligible for recognition as an intangible asset. Of the goodwill recorded, $1.8 million was assigned to the Wholesale segment and $7.3 million was assigned to the Retail segment. Goodwill deductible for tax purposes amounted to $29.0 million.

Operating revenues since the date of acquisition were $28.8 million and $57.5 million for the three and nine months endedSeptember 30, 2016, respectively.

Management is reviewing the valuation and confirming the result to determine the final purchase price allocation.

Finalization of Purchase Accounting associated with the Erickson Acquisition

In the first quarter of 2016, we recorded a $1.1 million receivable related to a working capital settlement as agreed to with the sellers, reducing net consideration and resulting goodwill. We finalized the purchase accounting for this acquisition with the receivable related to the working capital settlement being the only adjustment recorded in 2016.

Purchase of Wholesale Fuel Supply Contracts from CST

In February 2016, we purchased 21 independent dealer contracts and 11 subwholesaler contracts from CST for $2.9 million. This transaction was approved on behalf of the Partnership by the independent conflicts committee of the Board and by the executive committee of the board of directors of CST. See Note 10 of the Condensed Notes to Consolidated Financial Statements for additional information.

Pro Forma Results

Our pro forma results, giving effect to the State Oil, Franchised Holiday Stores, Erickson and One Stop acquisitions and assuming an acquisition date of January 1, 2015 for each acquisition, would have been (in thousands, except per unit amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Total revenues	$	522,651	$	691,994	$	1,494,733	$	2,077,333
Net income (loss)	$	1,948	$	9,191	$	4,884	$	3,512
Net income (loss) per limited partnership unit	$	0.03	$	0.26	$	0.07	$	0.10