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 operating 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 revenues 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.

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 distributors and other consumers of motor fuel. Also included in the wholesale segment are motor fuel sales to commission agent locations and sales and costs related to processing transmix. We distribute motor fuels across more than 30 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 our 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 sublease.

Retail Segment

Our retail segment primarily operates branded retail convenience stores across more than 20 states throughout the East Coast and Southeast regions of the United States with a significant presence in Texas, Pennsylvania, New York, Florida, and Hawaii. These stores offer motor fuel, merchandise, foodservice, and a variety of other services including car washes, lottery, automated teller machines, money orders, prepaid phone cards and wireless services. The operations of the Retail Divestment are included in discontinued operations in the following segment information. The remaining retail segment includes the Partnership’s ethanol plant, credit card services, franchise royalties, and its retail operations in Hawaii and the continental United States.

The following tables present financial information by segment for the years ended December 31, 2017, December 31, 2016 and December 31, 2015.

Segment Financial Data for the Year Ended December 31, 2017



	Wholesale Segment			Retail Segment			Intercompany Eliminations		Totals
	(in millions)
Revenue
Retail motor fuel	$	—		$	1,577				$	1,577
Wholesale motor fuel sales to third parties	9,278			—					9,278
Wholesale motor fuel sales to affiliates	55			—					55
Merchandise	—			571					571
Rental income	77			12					89
Other	50			103					153
Intersegment sales	1,472			125			(1,597	)	—
Total revenue	10,932			2,388			(1,597	)	11,723
Gross profit
Retail motor fuel	—			157					157
Wholesale motor fuel	535			—					535
Merchandise	—			185					185
Rental and other	116			115					231
Total gross profit	651			457					1,108
Total operating expenses	406			473					879
Operating income	245			(16		)			229
Interest expense, net	88			121					209
Income (loss) from continuing operations before income taxes	157			(137		)			20
Income tax benefit	(10		)	(296		)			(306		)
Income from continuing operations	167			159					326
Loss from discontinued operations, net of income taxes	—			(177		)			(177		)
Net income and comprehensive income	$	167		$	(18	)			$	149
Depreciation, amortization and accretion (1)	118			85					203
Interest expense, net (1)	88			157					245
Income tax benefit (1)	(10		)	(248		)			(258		)
EBITDA	363			(24		)			339
Non-cash compensation expense (1)	2			22					24
Loss on disposal of assets and impairment charges (1)	8			392					400
Unrealized gain on commodity derivatives (1)	(3		)	—					(3		)
Inventory fair value adjustments (1)	(24		)	(4		)			(28		)
Adjusted EBITDA	$	346		$	386				$	732
Capital expenditures (1)	$	71		$	106				$	177
Total assets (1)	$	3,130		$	5,214				$	8,344

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(1)	Includes amounts from discontinued operations.

Segment Financial Data for the Year Ended December 31, 2016



	Wholesale Segment			Retail Segment			Intercompany Eliminations		Totals
	(in millions)
Revenue
Retail motor fuel	$	—		$	1,338				$	1,338
Wholesale motor fuel sales to third parties	7,812			—					7,812
Wholesale motor fuel sales to affiliates	62			—					62
Merchandise	—			541					541
Rental income	76			12					88
Other	45			100					145
Intersegment sales	1,195			133			(1,328	)	—
Total revenue	9,190			2,124			(1,328	)	9,986
Gross profit
Retail motor fuel	—			163					163
Wholesale motor fuel	596			—					596
Merchandise	—			178					178
Rental and other	110			109					219
Total gross profit	706			450					1,156
Total operating expenses	390			621					1,011
Operating income (loss)	316			(171		)			145
Interest expense, net	59			102					161
Income (loss) from continuing operations before income taxes	257			(273		)			(16		)
Income tax expense (benefit)	5			(77		)			(72		)
Income (loss) from continuing operations	252			(196		)			56
Loss from discontinued operations, net of income taxes	—			(462		)			(462		)
Net income (loss) and comprehensive income (loss)	$	252		$	(658	)			$	(406	)
Depreciation, amortization and accretion (1)	94			225					319
Interest expense, net (1)	59			130					189
Income tax expense (benefit) (1)	5			(36		)			(31		)
EBITDA	410			(339		)			71
Non-cash compensation expense (1)	6			7					13
Loss (gain) on disposal of assets (1)	(3		)	683					680
Unrealized gain on commodity derivatives (1)	5			—					5
Inventory fair value adjustments (1)	(98		)	(6		)			(104		)
Adjusted EBITDA	$	320		$	345				$	665
Capital expenditures (1)	$	112		$	327				$	439
Total assets (1)	$	3,201		$	5,500				$	8,701

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(1)	Includes amounts from discontinued operations.

Segment Financial Data for the Year Ended December 31, 2015



	Wholesale Segment		Retail Segment			Intercompany Eliminations		Totals
	(in millions)
Revenue
Retail motor fuel	$	—	$	1,540				$	1,540
Wholesale motor fuel sales to third parties	10,104		—					10,104
Wholesale motor fuel sales to affiliates	20		—					20
Merchandise	—		544					544
Rental income	52		29					81
Other	28		113					141
Intersegment sales	1,407		124			(1,531	)	—
Total revenue	11,611		2,350			(1,531	)	12,430
Gross profit
Retail motor fuel	—		200					200
Wholesale motor fuel	384		—					384
Merchandise	—		179					179
Rental and other	74		143					217
Total gross profit	458		522					980
Total operating expenses	332		396					728
Operating income	126		126					252
Interest expense, net	54		13					67
Income from continuing operations before income taxes	72		113					185
Income tax expense	4		25					29
Income from continuing operations	68		88					156
Income from discontinued operations, net of income taxes	—		38					38
Net income and comprehensive income	$	68	$	126				$	194
Depreciation, amortization and accretion (1)	68		210					278
Interest expense, net (1)	55		33					88
Income tax expense (1)	4		48					52
EBITDA	195		417					612
Non-cash compensation expense (1)	4		4					8
Loss (gain) on disposal of assets (1)	1		(2		)			(1		)
Unrealized gain on commodity derivatives (1)	2		—					2
Inventory fair value adjustments (1)	78		20					98
Adjusted EBITDA	$	280	$	439				$	719
Capital expenditures (1)	$	65	$	426				$	491
Total assets (1)	$	2,926	$	5,916				$	8,842

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(1)	Includes amounts from discontinued operations.