Discontinued Operations (Notes)

6 Months Ended

Jun. 30, 2019

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

On April 6, 2017, certain subsidiaries of the Partnership (collectively, the “Sellers”) entered into an Asset Purchase Agreement (the “7-Eleven Purchase Agreement”) with 7-Eleven, Inc. (“7-Eleven”) and SEI Fuel Services, Inc., a wholly-owned subsidiary of 7-Eleven (“SEI Fuel,” and, together with 7-Eleven, referred to herein collectively as “Buyers”). On January 23, 2018, we completed the disposition of assets pursuant to the Amended and Restated Asset Purchase Agreement entered by and among Sellers, Buyers and certain other named parties for the limited purposes set forth therein, pursuant to which the parties agreed to amend and restate the 7-Eleven Purchase Agreement to reflect commercial agreements and updates made by the parties in connection with consummation of the transactions contemplated by the 7-Eleven Purchase Agreement. Under the 7-Eleven Purchase Agreement, as amended and restated, we

sold a portfolio of 1,030 company-operated retail fuel outlets, together with ancillary businesses and related assets to Buyers for approximately $3.2 billion (the “7-Eleven Transaction”). Subsequent to the closing of the 7-Eleven Transaction, previously eliminated wholesale motor fuel sales to the Partnership's retail locations are reported as wholesale motor fuel sales to third parties. Also, the related accounts receivable from such sales are no longer eliminated from the consolidated balance sheets and are reported as accounts receivable.

In connection with the closing of the transactions contemplated by the 7-Eleven Purchase Agreement, we entered into a Distributor Motor Fuel Agreement dated as of January 23, 2018, as amended (the “Supply Agreement”), with 7-Eleven and SEI Fuel. The Supply Agreement consists of a 15-year take-or-pay fuel supply arrangement. For the period from January 1, 2018 through January 22, 2018, we recorded sales to the sites that were subsequently sold to 7-Eleven of $199 million that were eliminated in consolidation. We received payments on trade receivables from 7-Eleven of $1.1 billion and $1.9 billion during the three and six months ended June 30, 2019, respectively, and $979 million and $1.6 billion during the three and six months ended June 30, 2018, respectively, subsequent to the closing of the sale.

On January 18, 2017, with the assistance of a third-party brokerage firm, we launched a portfolio optimization plan to market and

sell 97 real estate assets. Real estate assets included in this process are company-owned locations, undeveloped greenfield sites and other excess real estate. Properties are located in Florida, Louisiana, Massachusetts, Michigan, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Texas and Virginia. The properties will be sold through a sealed-bid sale. Of the 97 properties, 51 have been sold and five continue to be marketed by the third-party brokerage firm. Additionally, 32 were sold to 7-Eleven and nine are part of the approximately 207 retail sites located in certain West Texas, Oklahoma and New Mexico markets which are operated by a commission agent. The results of these operations (the real estate optimization assets, together with the 7-Eleven Transaction, the “Retail Divestment”) have been reported as discontinued operations for all periods presented in the consolidated financial statements. All other footnotes present results of the continuing operations.

The Partnership has concluded that it meets the accounting requirements for reporting the financial position, results of operations and cash flows of the Retail Divestment as discontinued operations.

The Partnership had no assets or liabilities associated with discontinued operations as of June 30, 2019 or December 31, 2018.

The results of operations associated with discontinued operations are presented in the following table:



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
	(in millions)
Revenues:
Motor fuel sales	$	—	$	—		$	—	$	256
Non motor fuel sales (1)	—		—			—		93
Total revenues	—		—			—		349
Cost of sales and operating expenses:
Cost of sales	—		—			—		305
General and administrative	—		5			—		7
Other operating	—		—			—		57
Lease expense	—		—			—		4
Loss on disposal of assets	—		38			—		61
Total cost of sales and operating expenses	—		43			—		434
Operating loss	—		(43		)	—		(85		)
Interest expense, net	—		—			—		2
Loss on extinguishment of debt	—		—			—		20
Loss from discontinued operations before income taxes	—		(43		)	—		(107		)
Income tax expense (benefit)	—		(17		)	—		156
Loss from discontinued operations, net of income taxes	$	—	$	(26	)	$	—	$	(263	)

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(1)

Non motor fuel sales includes merchandise sales totaling $89 million for the six months ended June 30, 2018.