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Segment Reporting
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Reporting

Note 14. 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 and independent dealers. 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.

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 site 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, other income, interest expense and income tax expense. Total assets by segment are not presented as management does not currently assess performance or allocate resources based on that data.

During the fourth quarter of 2022, we changed our segment reporting to our chief operating decision maker to simplify the assessment of performance of our segments. Prior to the fourth quarter, the wholesale segment included the wholesale fuel gross profit on intersegment sales by our wholesale segment to our retail segment. Likewise, the wholesale segment included an allocation of operating expenses related to the operation of our sites consistent with the allocation of the overall fuel gross profit.

Starting in the fourth quarter of 2022, the wholesale segment includes only the fuel gross profit on sales to lessee dealers and independent dealers and the retail segment includes the entire fuel gross profit on sales at our company operated and commission agent sites. Likewise, operating expenses are allocated to each segment based on estimates of the level of effort expended on our 1) lessee and independent dealer business in our wholesale segment; and 2) company operated and commission agent site business in our retail segment.

This change simplifies the assessment of performance of our segments and eliminates the intersegment sales inherent in our prior segment reporting.

We have recast the results of our segments for the three and nine months ended September 30, 2022 to be consistent with our new segment reporting.

During the three and nine months ended September 30, 2023, respectively, we converted one and 35 sites from lessee dealer and independent dealer sites in the wholesale segment to company operated sites in the retail segment.

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

 

 

 

Wholesale

 

 

Retail

 

 

Unallocated

 

 

Consolidated

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from fuel sales to external customers

 

$

616,470

 

 

$

479,192

 

 

$

—

 

 

$

1,095,662

 

Revenues from food and merchandise sales

 

 

—

 

 

 

88,681

 

 

 

—

 

 

 

88,681

 

Rent income

 

 

17,221

 

 

 

2,916

 

 

 

—

 

 

 

20,137

 

Other revenue

 

 

1,642

 

 

 

3,901

 

 

 

—

 

 

 

5,543

 

Total revenues

 

$

635,333

 

 

$

574,690

 

 

$

—

 

 

$

1,210,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

23,381

 

 

$

26,450

 

 

$

(25,686

)

 

$

24,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from fuel sales to external customers

 

$

653,905

 

 

$

518,356

 

 

$

—

 

 

$

1,172,261

 

Revenues from food and merchandise sales

 

 

—

 

 

 

76,136

 

 

 

—

 

 

 

76,136

 

Rent income

 

 

18,134

 

 

 

3,126

 

 

 

—

 

 

 

21,260

 

Other revenue

 

 

1,657

 

 

 

3,093

 

 

 

—

 

 

 

4,750

 

Total revenues

 

$

673,696

 

 

$

600,711

 

 

$

—

 

 

$

1,274,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

24,046

 

 

$

43,839

 

 

$

(28,246

)

 

$

39,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from fuel sales to external customers

 

$

1,719,330

 

 

$

1,337,453

 

 

$

—

 

 

$

3,056,783

 

Revenues from food and merchandise sales

 

 

—

 

 

 

237,613

 

 

 

—

 

 

 

237,613

 

Rent income

 

 

52,556

 

 

 

9,424

 

 

 

—

 

 

 

61,980

 

Other revenue

 

 

4,053

 

 

 

11,149

 

 

 

—

 

 

 

15,202

 

Total revenues

 

$

1,775,939

 

 

$

1,595,639

 

 

$

—

 

 

$

3,371,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

66,825

 

 

$

67,368

 

 

$

(73,085

)

 

$

61,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from fuel sales to external customers

 

$

2,032,950

 

 

$

1,519,923

 

 

$

—

 

 

$

3,552,873

 

Revenues from food and merchandise sales

 

 

—

 

 

 

212,417

 

 

 

—

 

 

 

212,417

 

Rent income

 

 

53,450

 

 

 

9,286

 

 

 

—

 

 

 

62,736

 

Other revenue

 

 

5,250

 

 

 

9,375

 

 

 

—

 

 

 

14,625

 

Total revenues

 

$

2,091,650

 

 

$

1,751,001

 

 

$

—

 

 

$

3,842,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

69,797

 

 

$

81,538

 

 

$

(80,905

)

 

$

70,430

 

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

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Receivables from fuel and merchandise sales

 

$

36,501

 

 

$

28,959

 

Receivables for rent and other lease-related charges

 

 

2,679

 

 

 

2,609

 

Total accounts receivable

 

$

39,180

 

 

$

31,568

 

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 revenue from such shortfalls 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 $10.4 million and $10.9 million at September 30, 2023 and December 31, 2022, respectively. Amortization of such costs is recorded against operating revenues and amounted to $0.5 million for each of the three months ended September 30, 2023 and 2022 and $1.4 million and $1.3 million for the nine months ended September 30, 2023 and 2022, respectively.

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