Segment Reporting

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Reporting

Note 16. SEGMENT REPORTING

We conduct our business in two segments: 1) the Wholesale segment and 2) the Retail segment. The wholesale segment includes the wholesale distribution of motor fuel to lessee dealers, independent dealers, commission agents, DMS (through the closing of the acquisition of retail and wholesale assets as further described under “Prior Year Acquisitions” in Note 1) and company operated retail sites. We have exclusive motor fuel distribution contracts with lessee dealers who lease the property from us. We also have exclusive distribution contracts with independent dealers to distribute motor fuel but do not collect rent from the independent dealers. Similar to lessee dealers, we had motor fuel distribution and lease agreements with DMS (through the closing of the acquisition of retail and wholesale assets). The Retail segment includes the retail sale of motor fuel at retail sites operated by commission agents and the sale of convenience merchandise items and the retail sale of motor fuel at company operated sites. A commission agent is a retail site where we retain title to the motor fuel inventory and sell it directly to our end user customers. At commission agent retail sites, we manage motor fuel inventory pricing and retain the gross profit on motor fuel sales, less a commission to the agent who operates the retail site. Similar to our Wholesale segment, we also generate revenues through leasing or subleasing real estate in our Retail segment.

Unallocated items consist primarily of general and administrative expenses, depreciation, amortization and accretion expense, gains on dispositions and lease terminations, net, and the elimination of the Retail segment’s intersegment cost of revenues from motor fuel sales against the Wholesale segment’s intersegment revenues from motor fuel sales. The profit in ending inventory generated by the intersegment motor fuel sales is also eliminated. Total assets by segment are not presented as management does not currently assess performance or allocate resources based on that data.

The following table reflects activity related to our reportable segments (in thousands):

	Wholesale		Retail		Unallocated			Consolidated
Three Months Ended September 30, 2021
Revenues from fuel sales to external customers	$	565,022	$	337,214	$	—		$	902,236
Intersegment revenues from fuel sales		260,713		—		(260,713	)		—
Revenues from food and merchandise sales		—		58,283		—			58,283
Rent income		18,441		3,057		—			21,498
Other revenue		795		2,310		—			3,105
Total revenues	$	844,971	$	400,864	$	(260,713	)	$	985,122
Operating income (loss)	$	39,496	$	2,007	$	(28,915	)	$	12,588
Three Months Ended September 30, 2020
Revenues from fuel sales to external customers	$	339,277	$	183,617	$	—		$	522,894
Intersegment revenues from fuel sales		128,478		—		(128,478	)		—
Revenues from food and merchandise sales		—		46,266		—			46,266
Rent income		17,144		2,603		—			19,747
Other revenue		290		1,825		—			2,115
Total revenues	$	485,189	$	234,311	$	(128,478	)	$	591,022
Operating income (loss)	$	34,500	$	296	$	(11,104	)	$	23,692
Nine Months Ended September 30, 2021
Revenues from fuel sales to external customers	$	1,493,614	$	794,826	$	—		$	2,288,440
Intersegment revenues from fuel sales		604,043		—		(604,043	)		—
Revenues from food and merchandise sales		—		141,330		—			141,330
Rent income		54,350		8,482		—			62,832
Other revenue		2,658		6,480		—			9,138
Total revenues	$	2,154,665	$	951,118	$	(604,043	)	$	2,501,740
Operating income (loss)	$	97,645	$	3,253	$	(81,012	)	$	19,886
Nine Months Ended September 30, 2020
Revenues from fuel sales to external customers	$	860,737	$	369,594	$	—		$	1,230,331
Intersegment revenues from fuel sales		254,850		—		(254,850	)		—
Revenues from food and merchandise sales		—		83,178		—			83,178
Rent income		55,275		7,584		—			62,859
Other revenue		1,705		3,046		—			4,751
Total revenues	$	1,172,567	$	463,402	$	(254,850	)	$	1,381,119
Income from CST Fuel Supply equity interests	$	3,202	$	—	$	—		$	3,202
Operating income	$	94,984	$	1,022	$	11,447		$	107,453

From the date of conversion of the 46 company operated sites to dealer operated sites in the third quarter of 2019 through April 14, 2020, we did not have any company operated sites.

Receivables relating to the revenue streams above are as follows (in thousands):

	September 30,		December 31,
	2021		2020
Receivables from fuel and merchandise sales	$	34,794	$	23,800
Receivables for rent and other lease-related charges		5,211		5,650
Total accounts receivable	$	40,005	$	29,450

Performance obligations are satisfied as fuel is delivered to the customer and as merchandise is sold to the consumer. Many of our fuel contracts with our customers include minimum purchase volumes measured on a monthly basis, although such revenue is not material. Receivables from fuel are recognized on a per-gallon rate and are generally collected within 10 days of delivery.

The balance of unamortized costs incurred to obtain certain contracts with customers was $9.9 million and $8.3 million at September 30, 2021 and December 31, 2020, respectively. Amortization of such costs is recorded against operating revenues and amounted to $0.4 million and $0.3 million for the three months ended September 30, 2021 and 2020 and $1.1 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively.

Receivables from rent and other lease-related charges are generally collected at the beginning of the month.