| Segment Reporting |
10. Segment Reporting
The reportable segments were determined based on information reviewed by the chief operating decision maker for operational decision-making purposes and the segment information is prepared on the same basis that our chief operating decision maker reviews such financial information. The Company’s reporting segments are the retail segment, the wholesale segment and the GPMP segment. The Company defines segment earnings as operating income.
The retail segment includes the operation of a chain of retail stores, which includes convenience stores selling fuel products and other merchandise to retail customers. At its Company operated convenience stores, the Company owns the merchandise and fuel inventory and employs personnel to manage the store.
The wholesale segment supplies fuel to independent dealers, sub-wholesalers and bulk purchasers, on either a cost plus or consignment basis. For consignment arrangements, the Company retains ownership of the fuel inventory at the site, is responsible for the pricing of the fuel to the end consumer, and shares the gross profit with the independent outside operators.
The GPMP segment includes GPM Petroleum LP (“GPMP”) and primarily includes the sale and supply of fuel to GPM and its subsidiaries that sell fuel (both in the Retail and Wholesale segments) at GPMP’s cost of fuel (currently including taxes and certain transportation costs) plus a fixed margin (4.5 cents per gallon prior to October 1, 2020 and 5.0 cents per gallon thereafter) and the supply of fuel to a small number of independent outside operators and bulk purchasers.
The “All Other” segment includes the results of non-reportable segments which do not meet both quantitative and qualitive criteria as defined under ASC 280, Segment Reporting.
The majority of general and administrative expenses, depreciation and amortization, net other expenses, net interest and other financial expenses and income taxes are not allocated to the segments, as well as minor other income items including intercompany operating leases.
With the exception of goodwill, assets and liabilities relevant to the reportable segments are not assigned to any particular segment, but rather, managed at the consolidated level. All segment revenues were generated from sites within the U.S. and substantially all of the Company's assets were within the U.S.
Inter-segment transactions primarily included the distribution of fuel by GPMP to GPM and its subsidiaries that sell fuel (both in the Retail and Wholesale segments). The effect of these inter-segment transactions was eliminated in the condensed consolidated financial statements.
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Retail |
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Wholesale |
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GPMP |
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All Other |
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Total |
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For the Three Months Ended September 30, 2021 |
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(in thousands) |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel revenue |
|
$ |
847,869 |
|
|
$ |
730,847 |
|
|
$ |
1,643 |
|
|
$ |
— |
|
|
$ |
1,580,359 |
|
Merchandise revenue |
|
|
434,652 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
434,652 |
|
Other revenues, net |
|
|
14,488 |
|
|
|
5,275 |
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|
|
287 |
|
|
|
— |
|
|
|
20,050 |
|
Total revenues from external customers |
|
|
1,297,009 |
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|
736,122 |
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|
1,930 |
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|
|
— |
|
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2,035,061 |
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Inter-segment |
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— |
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|
|
— |
|
|
|
1,217,622 |
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|
317 |
|
|
|
1,217,939 |
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Total revenues from reportable segments |
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|
1,297,009 |
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|
736,122 |
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1,219,552 |
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|
317 |
|
|
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3,253,000 |
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Operating income |
|
|
75,285 |
|
|
|
5,837 |
|
|
|
24,593 |
|
|
|
317 |
|
|
|
106,032 |
|
Interest and financial expenses, net |
|
|
|
|
|
|
|
|
(3,894 |
) |
|
|
— |
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|
|
(3,894 |
) |
Income tax expense |
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|
|
|
|
|
|
|
|
|
(55 |
) |
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|
(55 |
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Income from equity investment |
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|
85 |
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|
85 |
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Net income from reportable segments |
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$ |
102,168 |
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For the Three Months Ended September 30, 2020 |
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Revenues |
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Fuel revenue |
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$ |
506,418 |
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$ |
32,468 |
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$ |
1,052 |
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$ |
— |
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$ |
539,938 |
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Merchandise revenue |
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|
403,665 |
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|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
403,665 |
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Other revenues, net |
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|
13,860 |
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|
2,409 |
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|
245 |
|
|
|
— |
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|
|
16,514 |
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Total revenues from external customers |
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|
923,943 |
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|
|
34,877 |
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|
|
1,297 |
|
|
|
— |
|
|
|
960,117 |
|
Inter-segment |
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|
— |
|
|
|
— |
|
|
|
352,363 |
|
|
|
335 |
|
|
|
352,698 |
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Total revenues from reportable segments |
|
|
923,943 |
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|
|
34,877 |
|
|
|
353,660 |
|
|
|
335 |
|
|
|
1,312,815 |
|
Operating income |
|
|
62,221 |
|
|
|
1,674 |
|
|
|
9,360 |
|
|
|
335 |
|
|
|
73,590 |
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Interest and financial expenses, net |
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|
|
|
|
|
|
|
(745 |
) |
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|
(184 |
) |
|
|
(929 |
) |
Income tax expense |
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|
|
|
|
|
|
|
|
|
|
(54 |
) |
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|
(54 |
) |
Loss from equity investment |
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|
(24 |
) |
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|
(24 |
) |
Net income from reportable segments |
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$ |
72,583 |
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Retail |
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Wholesale |
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GPMP |
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All Other |
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Total |
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For the Nine Months Ended September 30, 2021 |
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(in thousands) |
|
Revenues |
|
|
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|
|
|
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|
|
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Fuel revenue |
|
$ |
2,192,889 |
|
|
$ |
1,946,856 |
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|
$ |
4,324 |
|
|
$ |
— |
|
|
$ |
4,144,069 |
|
Merchandise revenue |
|
|
1,220,298 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,220,298 |
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Other revenues, net |
|
|
48,717 |
|
|
|
15,426 |
|
|
|
806 |
|
|
|
— |
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|
|
64,949 |
|
Total revenues from external customers |
|
|
3,461,904 |
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|
|
1,962,282 |
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|
|
5,130 |
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|
|
— |
|
|
|
5,429,316 |
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Inter-segment |
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|
— |
|
|
|
— |
|
|
|
3,130,015 |
|
|
|
951 |
|
|
|
3,130,966 |
|
Total revenues from reportable segments |
|
|
3,461,904 |
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|
|
1,962,282 |
|
|
|
3,135,145 |
|
|
|
951 |
|
|
|
8,560,282 |
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Operating income |
|
|
186,847 |
|
|
|
14,137 |
|
|
|
68,326 |
|
|
|
951 |
|
|
|
270,261 |
|
Interest and financial expenses, net |
|
|
|
|
|
|
|
|
(11,594 |
) |
|
|
— |
|
|
|
(11,594 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
(166 |
) |
|
|
(166 |
) |
Income from equity investment |
|
|
|
|
|
|
|
|
|
|
|
105 |
|
|
|
105 |
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Net income from reportable segments |
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|
|
|
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|
|
|
|
|
|
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$ |
258,606 |
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|
|
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|
|
|
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For the Nine Months Ended September 30, 2020 |
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|
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Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel revenue |
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$ |
1,424,823 |
|
|
$ |
82,687 |
|
|
$ |
2,981 |
|
|
$ |
— |
|
|
$ |
1,510,491 |
|
Merchandise revenue |
|
|
1,119,041 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,119,041 |
|
Other revenues, net |
|
|
39,175 |
|
|
|
4,999 |
|
|
|
639 |
|
|
|
— |
|
|
|
44,813 |
|
Total revenues from external customers |
|
|
2,583,039 |
|
|
|
87,686 |
|
|
|
3,620 |
|
|
|
— |
|
|
|
2,674,345 |
|
Inter-segment |
|
|
— |
|
|
|
— |
|
|
|
961,666 |
|
|
|
2,713 |
|
|
|
964,379 |
|
Total revenues from reportable segments |
|
|
2,583,039 |
|
|
|
87,686 |
|
|
|
965,286 |
|
|
|
2,713 |
|
|
|
3,638,724 |
|
Operating income |
|
|
160,399 |
|
|
|
2,732 |
|
|
|
25,430 |
|
|
|
2,713 |
|
|
|
191,274 |
|
Interest and financial expenses, net |
|
|
|
|
|
|
|
|
(2,513 |
) |
|
|
(161 |
) |
|
|
(2,674 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
(259 |
) |
|
|
(259 |
) |
Loss from equity investment |
|
|
|
|
|
|
|
|
|
|
|
(435 |
) |
|
|
(435 |
) |
Net income from reportable segments |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
187,906 |
|
A reconciliation of total revenues from reportable segments to total revenues on the condensed consolidated statements of operations is as follows:
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For the Three Months
Ended September 30, |
|
|
For the Nine Months
Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Total revenues from reportable segments |
|
$ |
3,253,000 |
|
|
$ |
1,312,815 |
|
|
$ |
8,560,282 |
|
|
$ |
3,638,724 |
|
Other revenues, net |
|
|
(38 |
) |
|
|
(39 |
) |
|
|
(123 |
) |
|
|
(112 |
) |
Elimination of inter-segment revenues |
|
|
(1,217,939 |
) |
|
|
(352,698 |
) |
|
|
(3,130,966 |
) |
|
|
(964,379 |
) |
Total revenues |
|
$ |
2,035,023 |
|
|
$ |
960,078 |
|
|
$ |
5,429,193 |
|
|
$ |
2,674,233 |
|
A reconciliation of net income from reportable segments to net income on the condensed consolidated statements of operations is as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, |
|
|
For the Nine Months
Ended September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
(in thousands) |
|
Net income from reportable segments |
|
$ |
102,168 |
|
|
$ |
72,583 |
|
|
$ |
258,606 |
|
|
$ |
187,906 |
|
Amounts not allocated to segments: |
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues, net |
|
|
(38 |
) |
|
|
(39 |
) |
|
|
(123 |
) |
|
|
(112 |
) |
Store operating expenses |
|
|
1,118 |
|
|
|
(673 |
) |
|
|
2,370 |
|
|
|
(2,366 |
) |
General and administrative expenses |
|
|
(31,941 |
) |
|
|
(24,720 |
) |
|
|
(89,011 |
) |
|
|
(62,427 |
) |
Depreciation and amortization |
|
|
(20,187 |
) |
|
|
(14,328 |
) |
|
|
(66,017 |
) |
|
|
(44,526 |
) |
Other income (expenses), net |
|
|
56 |
|
|
|
(1,381 |
) |
|
|
(2,811 |
) |
|
|
(7,290 |
) |
Interest and other financial expenses, net |
|
|
(10,851 |
) |
|
|
(9,667 |
) |
|
|
(44,399 |
) |
|
|
(29,464 |
) |
Income tax expense |
|
|
(4,740 |
) |
|
|
(4,618 |
) |
|
|
(12,119 |
) |
|
|
(4,912 |
) |
Net income |
|
$ |
35,585 |
|
|
$ |
17,157 |
|
|
$ |
46,496 |
|
|
$ |
36,809 |
|
|